1955-07-26

Hon. W. E. Harris (Minister of Finance):: Last evening there was some question about the hours of sitting, and I should like to move, by leave:
That the provisions of standing order 7 in relation to the hour of adjournment be suspended for this day's sitting.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, is the Minister of Trade and Commerce in a position to give the house a report on the damage to the NRX reactor at Chalk River?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Yes. The account that was given to the press last evening is quite correct. In doing some experimental work for another country, we were testing out a uranium rod with a new type of insulation. There was a leak in the insulation, and the heavy water became contaminated. It is a matter of perhaps two weeks to get rid of the contamination. The physical structure of the pile was not injured, but it is necessary to close down for two weeks for purposes of decontamination. No one was injured; in fact I understand that no one in the plant knew what had happened.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, I should like to ask a question of the Minister of Justice. Is the minister now in a position to answer my question of July 13, when I ask him if he would consider an investigation into the Canadian sugar industry?


Hon. Stuart S. Garson (Minister of Justice):: Yes. I might say in reply to the hon. member's question that the combines branch maintains
general surveillance over the acquisition by one company of another, where there are few companies in an industry, or where the proportion of trade accounted for by the parties to the acquisition is large.
In accordance with this practice the combines branch is making the usual preliminary and informal inquiries to ascertain whether the transaction to which my hon. friend referred may raise a question under the Combines Investigation Act.



PASSAMAQUODDY PROJECT


[Stage Direction]
On the orders of the day:
Mr. A. W. Stuarl (Charlotte):: Mr. Speaker, I should like to ask a question of the Secretary of State for External Affairs. Would the minister care to comment on recent press dispatches regarding action being taken by the government of the United States to complete the survey in connection with the Passamaquoddy tidal project?


Hon. L. B. Pearson (Secretary of Stale for External Affairs):: Mr. Speaker, my hon. friend was good enough to give me notice of his question. The situation in regard to this matter seems to be as follows. While the United States Senate has approved the expenditure of $3 million to determine the economic feasibility of the Passamaquoddy project the rules committee of the House of Representatives recently deferred further action until the next session of congress.
As I have said to the house on previous occasions, if as a result of the passage of this resolution the United States government wishes to request the international joint commission to undertake a survey, the Canadian government would be prepared to give sympathetic consideration to a proposal for a joint reference to the commission by both governments. A joint reference would have the effect of indicating that Canada is interested and co-operative and not merely giving reluctant consent.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Hon. George C. Marler (Minister of Transport):: Mr. Speaker, on Saturday last the

Inquiries of the Ministry hon. member for Winnipeg North Centre (Mr. Knowles) drew my attention to a telegram he had received from the international association of machinists, lodge 189, protesting against further lay-offs by the Canadian National Railways at Winnipeg, and asked that these representations be brought to the attention of the management.
In reply to my inquiry, the management has informed me that the lay-offs in question affect three men and are part of the staff reduction initiated last May in connection with the discontinuance of steam locomotive repairs at the Fort Rouge main shops.
The hon. member for Winnipeg South (Mr. Trainor) asked a supplementary question regarding diesel repair work at the Fort Rouge shops. I think he will find the situation in this respect was fully explained in an answer I gave on April 20 last to the hon. member for Winnipeg North.



INCREASED UNITED STATES APPROPRIATION FOR DISPOSAL OF SURPLUS FARM CROPS

[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, may I ask the Minister of Trade and Commerce, or the Secretary of State for External Affairs, whether the government has taken note of the bill now before the United States congress and passed this week by the Senate and sent on to the House of Representatives, to raise from $700 million to $1,500 million the appropriation for disposal of surplus farm products abroad in return for local currencies? What steps in the government taking to make representations in the light of this measure, which is so important to Canada?


Clarence Decatur Howe: Mr. Speaker, the government cannot make general representations. We make representations about any particular transaction that seems to violate the rules of sound trading. Obviously, we can hardly protest against any appropriation that the congress of the United States votes to its government.


Donald Methuen Fleming: May we take it, Mr. Speaker, that the government has not made any representations to the state department at Washington in regard to this very large increase in the appropriation, in a matter that is of such great concern to Canada?


Clarence Decatur Howe: I feel personally that it would be quite inappropriate for the government to protest the amount of the appropriation. We can protest against the way in which the appropriation is used, and
[Mr. Marler.l

we do protest from time to time whenever we think that our legitimate trading rights are being invaded.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, in view of the
unavoidable and greatly regretted absence of the Postmaster General, I wish to direct a question to the Prime Minister. In view of the report in the press today of the third large post office theft in the province of Ontario, making the total in that province alone some $200,000 in the last nine months, will the Prime Minister consider the advisability of an inquiry into the security methods of the post office? I need not point out that we have had presented to us the evidence of a widespread series of thefts right across the country. The circumstances are such that it would seem consideration should be given to the general problem of security for the protection of the post office staff themselves as well as the public treasury.
Righl Hon. L. S. St. Laureni (Prime Minister):	I can assure the Leader of the
Opposition that the security measures taken by the post office are under constant review. Every time a theft occurs the circumstances of the case are considered and serious consideration is given by the R.C.M.P. to the security measures in existence and to the question as to whether or not what has happened in an individual case would indicate some possibility of improving the safeguard against similar occurrences.
We all regret that there should be any thefts at all in the post office, but hon. gentlemen will well know that the losses due to thefts in the post office are quite insignificant when compared with the losses that occur in banks. I think the security measures taken by the post office are quite as efficient as those taken by the banks, and I think those that are taken by the banks are dictated by the prudent wisdom of the Canadian Bankers' Association to do everything possible to avoid those thefts, even though the cost of the security measures might exceed the probable losses that can arise from crimes of that nature. I think it is in the public interest not to be parsimonious in expenditures made to avoid the occasions and possibilities of those crimes. They are not crimes against individual institutions; they are crimes against the Canadian public.


George Alexander Drew: Will the Prime Minister not agree that there is a very marked difference between the situation of the banks and the

post office? The banks are called upon to handle cash in large quantities for the convenience of their customers and also for payrolls. Similar circumstances do not arise in connection with post offices and I would think that the Prime Minister (Mr. St. Laurent) would agree that the circumstances are entirely different and that a comparison for that reason cannot be made. I would hope that the Prime Minister would give consideration to the desirability of some special inquiry into this whole matter of security because of the problem it raises for the staffs of our post offices as well as for those who might be affected by the direct robbery.


Mr. Si. Laurent:: Special inquiry is going on all the time and I do not know of any better method of making inquiry and considering the system in force than the very close co-operation that exists between the post office authorities and the R.C.M.P. With respect to the comparison with the banks, of course individual cases frequently involve much more money when a robbery is committed against a bank than when it is committed against a post office. However, it is a matter of degree and the essentials of the operations are much the same whatever be the amount of loot secured.


George Alexander Drew: I do not wish to extend this unduly, but I would point out that in Welland recently a theft amounted to $78,000. That seems to be a substantial sum by any test, and particularly it seems to be a very large sum to be on hand in a post office when the demands for available cash and money orders or other negotiable property would not seem to be of that scale.


Mr. St. Laurent:: Of course, the cash would represent both the sale of stamps and money deposited with the post office against money orders that are purchased by those who want to forward money in a manner that involves the guarantee of safety for the person concerned by the Post Office Department.


Mr. H. O. White (Middlesex East):: May I
direct a question to the Minister of Justice. Were the R.C.M.P. asked to assist in the investigation of recent post office losses in the province of Quebec?


Stuart Sinclair Garson: Mr. Speaker, I do not maintain that detailed supervision over the R.C.M.P. which would permit me to answer a question of that sort without notice. I should think, however, that they would not assist in such an investigation. The detection of crime in a province is under the jurisdiction of the provincial police and it would be only in the event of their
Supply-Mines and Technical Surveys calling in the mounted police or the post office calling in the mounted police that the mounted police would act.

The house in committee of supply, Mr, Robinson (Simcoe East) in the chair.
DEPARTMENT OF MINES AND TECHNICAL SURVEYS Administration services-
208. Departmental administration. $487,991.


Mr. Nicholson:: Has the minister a statement to make this morning?


Mr. Prudham:: Mr. Chairman, last evening the hon. member for Mackenzie referred to an argument which had developed between himself and the hon. member for Churchill some months ago when the bill in regard to the Department of Northern Affairs and National Resources was before the house. The controversy seemed to centre around a report issued by the Department of Mines and Technical Surveys on December 10, 1953, relative to the process of ore separation used by the Hudson Bay Mining and Smelting Company of Flin Flon. The hon. member was good enough to send a copy of that report over to me last evening and I have now had time to read it and would make the following comment.
In 1921 the mines branch made preliminary laboratory scale tests on the treatment of Flin Flon ore. This gave promising results indicating that a satisfactory separation process could be achieved. In 1925, the Whitney interests of New York acquired the property. In a paper entitled "History of Development and Organization at Flin Flon Mine, Manitoba", prepared by Mr. W. A. Green of the Hudson Bay Mining and Smelting Company and published in the transactions of the Canadian Institute of Mining and Metallurgy, the following statements are made:
Results of small experimental tests which we (Whitney interests) had made on the ore prior to the examination of the property (in June 1925) led us to believe that a satisfactory treatment might be obtained.
Having assured ourselves of the presence of the ore and available power, our next step was to prove, by more extensive laboratory tests, the correctness of our belief that a successful method of treatment for the ore could be worked out. Accordingly, 300 tons of ore was shipped from Flin Flon to Denver, Colorado, to the research laboratories of the Metals Exploration Company, a company belonging to the Whitney interests.
A report of Mr. S. P. Lowe, who carried out the experimental work, contains the following quotation:
Flotation testing of Flin Flon ore was started in the Denver laboratory of Complex Ore Recoveries Company in March 1926. There had been a considerable amount of flotation testing previously which had shown possibilities of success, and it
6780	HOUSE OF
Supply-Mines and Technical Surveys was felt that, with the increased knowledge of flotation and the comparatively new reagents then available, flotation held out the best prospects for a successful treatment of this ore.
The pilot plant runs, treating two tons a day, were completed on July 1, 1926, and on August 1, 1926, it was decided to instal a 25-ton pilot flotation plant at Flin Flon.
This (pilot) mill was operated until March 10, 1928, treating ore from various parts of the mine. The pilot plant was started again in July 1928, and operated until February 1929, when it was permanently shut down.
It was found that before an efficient separation of the economic minerals was obtained, the removal of talc was a necessity. This was in line with the recommendations made by the mines branch in 1922.
Thus although the preliminary tests were made by the mines branch, the pilot plant tests which led to the establishment of the 3,000-ton mill at Flin Flon were carried out by the company. It is obvious, therefore, that the final result was a joint effort in which the mines branch made a significant preliminary contribution, but the final result was brought about by tests and pilot plant operation on the part of the company.
The hon. member for Mackenzie also referred to a speech made by me at Flin Flon on February 24, 1954. He alleged that I repudiated the report of the mines branch and took the part of the hon. member for Churchill in this argument. I was able to find the notes of my speech, and the following is an extract from the introductory remarks which I made at that time. I was speaking of the hon. member for Churchill, who represents that riding, and I said the following:
Those of you who follow Hansard will know that Mr. Weaver earlier in the present session of parliament tangled with an opposition member. It was a good-natured dispute over whether the federal government mines branch or the private enterprisers responsible for the Flin Flon development were entitled to the major share of the credit for working out the metallurgical process on which your development here has been so largely based.
In his address to the House of Commons, your member was able to accomplish what few of us would dare to even attempt. He left everyone quite happy, including the mines branch and his parliamentary opponent. That sort of thing, after all, is the acid test of statesmanship.


Alexander Malcolm Nicholson: I am very glad, Mr. Chairman, that this has been the result of the night's work by the minister and his officials. It confirms exactly what I said, namely that the minister, while at Flin Flon, repudiated the advice which his officials had given me and which I accepted in good faith and brought to the attention of parliament. The minister, when he got as far away as Flin Flon, felt that he could come down on the side of the hon. member for Churchill who contradicted me in the House of Commons.


Mr. Martin:: Carried.


Alexander Malcolm Nicholson: No, Mr. Chairman, it is not carried. When I suggested last night that it was not going to carry, I did not mean that it would not ultimately carry but I certainly meant that it was not going to carry last night at 10.15 with unanimous consent. Last night the minister said that he could not understand very well. As reported at page 6771 of Hansard this is exactly what he said:
This is a report by an engineer, a scientist. The hon. member for Churchill is an engineer, and personally I would not be able to interpret the report and say whose argument is more valid or if there is a conflict between the two statements.
I am sorry if the minister cannot understand the reports prepared by his officials. I suggest that he get some elementary school teachers on his staff who can prepare and draft a report which the minister can understand. He said further:
I do not think many members in the house would be able to do so.
I suggest that he speak for himself and not for his colleagues. He said further:
Why not call it a draw?
I can appreciate the minister's desire to call it a draw. I am not going to labour this matter unduly, Mr. Chairman, but I ask him to follow me closely and see if he can understand these remarks that I made on December 8 last. I had previously expressed my personal appreciation of the contribution that the Hudson Bay Mining and Smelting Company had made to Canada, to the province of Saskatchewan and to my own constituency. I then went on to give his department some credit that I thought they deserved but the minister does not think so. I said:
When the ore was discovered a number of years ago it was recognized immediately as a very rich ore being composed of 3-2 per cent copper, 4-0 per cent zinc, 1-06 per cent silver and 0-075 ounces of gold. When this ore was discovered there was no known process that would enable any mining corporation in Canada or the United States to separate these valuable deposits

If the minister has followed me, I hope he understands that language. I continued:
*-and it was here in Ottawa in the old department of mines and resources that civil servants worked out a process that later made it possible for the Hudson Bay Mining and Smelting Company to proceed with this very large development.
I was not attempting to give the department of mines and resources credit for building a $50 million plant. All I was saying was that when this valuable ore was discovered there was no process known in Canada or the United States whereby it would be possible to separate these valuable

ores. I hope the minister will not tell me that he could not understand that language.
I ask him if he understands the language used by the hon. member for Churchill. Speaking later on that night, the hon. member for Churchill said:
One of the reasons I rise tonight is to correct something the hon. member for Mackenzie (Mr. Nicholson) said.
I ask the minister if he can understand that sentence. I gather that he can. The hon. member continued:
In speaking of the Hudson Bay Mining and Smelting Company he said that their process had been worked out here in Ottawa.
I hope the minister can understand that sentence. The next one is as follows:
Far be it from me to take anything away from the Department of Mines and Technical Surveys in Ottawa,-
I hope the minister can understand that language.
-but credit must be given where credit is due.
I hope the minister understands that. I have said credit should be given to the department of mines and resources which had in the first place established that these valuable ore deposits could be separated.
The next sentence reads:
This is one process that was worked out by private industry.
Now, either I was wrong in saying it was worked out by the department of mines or I was not. The hon. member for Churchill says I was wrong. I repeat the quotation:
This is one process that was worked out by private industry. It was worked out not in this country at all, but somewhere in the vicinity of Arizona. Many tons of ore from the Hudson Bay Mining and Smelting Company were shipped by rail down to a university in Utah or in Arizona, and the process was worked out at that time.
Then, I interrupted by saying:
Will the hon. member say who worked out the process?
I was hoping the member for Churchill would say Mr. Anderson, who was with the department of mines at the time, and who would get some credit, but not a word of credit to Mr. Anderson, who is now retired.
The hon. member for Churchill said:
The name most commonly connected with it is that of Professor Coolbough.
As I explained last night, after the hon. member for Churchill made his interjection, and I am a very good friend of the member for Churchill and rate him very highly as a mining and metallurgical engineer, naturally I felt rather embarrassed at having made the statement which the hon. member for Churchill said was incorrect. The next day I telephoned the officials in the minister's
Supply-Mines and Technical Surveys department who had given me the information the previous day, and I drew their attention to what I said in Hansard and what the hon. member for Churchill had said; and the four-page report which the minister had before him was prepared. I noted that he merely read some abbreviated remarks from the report, and several of the sentences-


George Prudham: Why do you not put it on Hansard now?


Alexander Malcolm Nicholson: There is no need to put it on Hansard. It was put on Hansard a year ago.


George Prudham: Are you afraid of it?


Alexander Malcolm Nicholson: No, I am not afraid of it. All I ask is that the minister clarify it. Since he cannot understand the language, I suggest that he ask some of his officials to clarify the statement.


George Prudham: That is exactly what I did this morning.


Alexander Malcolm Nicholson: I cannot agree. The minister cannot understand English very well if that is the best the department could do.


George Prudham: You are getting a little off base now.


Alexander Malcolm Nicholson: After the hon. member for Churchill had contradicted what I said in the chamber, I asked those who were responsible for giving me the information to merely say whether I was right or wrong. If I was wrong, all they would have to say would be, "We are sorry, but the member for Mackenzie has been misinformed and the member for Churchill is correct." The minister has still refused to make that sort of statement. He has given an abbreviation of the longer statement.


George Prudham: Would the hon. member allow me to repeat the last paragraph of what I said this morning? "Thus, although the preliminary tests were made by the mines branch, the pilot plant tests which led to the establishment of the 3,000-ton mill at Flin Flon were carried out by the company. It is obvious, therefore, that the final result was a joint effort in which the mines branch made a significant preliminary contribution, but the final result was brought about by tests and pilot plant operations on the part of the company".


Alexander Malcolm Nicholson: In none of my remarks did I cast any reflection on the Hudson Bay mining company or suggest that this company did not deserve a great deal of credit for the investigation-


An hon. Member:: Carried.
6732	HOUSE OF
Supply-Minis and Technical Surveys


Alexander Malcolm Nicholson: This is not going to carry. We have an item calling for the spending of $3 million, and my purpose in bringing the matter up recently is-


Mr. Dickey:: What is your purpose?


Alexander Malcolm Nicholson: Well, if the hon. member was listening-


John Horace Dickey: It is to carry on a personal feud, that is all.


Alexander Malcolm Nicholson: No, it is not. There is an item calling for the expenditure of $3 million, and on one occasion I am trying to advance an argument to support the contention that we had some return for this; we had the Hudson Bay Mining and Smelting Company developed, which, according to information that was given me by the department some years ago, would not have taken place if the original experimental work had not been done by mines and resources in Ottawa.


John Horace Dickey: The minister just said that.


Alexander Malcolm Nicholson: The hon. member for
Churchill says I am wrong. The minister read a speech which he gave in Flin Flon which corroborated what the hon. member alleged.


George Prudham: No, it did not.


Alexander Malcolm Nicholson: At Flin Flon the major part of what the minister said was to prove what a very able member the hon. member for Churchill is, and I agree, and how he tangled with the hon. member for Mackenzie and got the best of the argument.


George Prudham: I did not say that at all.


John Horace Dickey: You are carrying on a personal argument between yourself and the hon. member for Churchill.


Alexander Malcolm Nicholson: I am sure that a reading of Hansard will support my claim that the minister, while he was at Flin Flon, came down clearly on the side of the hon. member for Churchill. That is all right with me. All I want him to do is to do that publicly in the chamber, here, to say that when I spoke on December 8, 1953, and gave his department credit for doing this original work, I was wrong. That is all I want him to do.


John Horace Dickey: He says you are right.


Alexander Malcolm Nicholson: He should say that the department did not do the work.


George Prudham: I did not say that.


Alexander Malcolm Nicholson: If the minister will admit that his officials gave me misleading information and that my remarks in Hansard as they appear on December 8, 1953, were misleading


and I placed the Hudson Bay mining company in a position which was unfair to them- the hon. member for Churchill has been employed by the Hudson Bay mining company; he is a very able engineer on their staff. I can understand his loyalty is a very real one to the Hudson Bay Mining and Smelting. I want to make my position clear. I have had very happy relationships with this company. As I said on December 8, 1953, I think it is one of the best of the big companies in Canada, and I still stand by that. I merely want the minister to state that his officials who gave me information, when I visited the department some years ago regarding this work, gave me wrong information, and that the chief of the mineral dressing section who prepared the four-page report for me a year ago gave me misleading information which I did not understand, and that instead of this report supporting my claim that this work had been done by the department this report was intended to give the impression that the member for Churchill was right and the original work had been done by Hudson Bay Mining and Smelting. That is all I want the minister to do.


The Chairman:: Shall the item carry?


Alexander Malcolm Nicholson: No, Mr. Chairman; the minister has a responsibility to make it clear that the member for Churchill was right and the officials of his department-


William Alfred Robinson: Order. The hon. member appears to be under a misapprehension as to the function of the committee of supply. A few moments ago I heard the hon. member say, "I want the minister to state", so and so. Now, of course that is impossible. The hon. member cannot direct the minister to state anything. He may quite properly ask a question which the minister will answer to the best of his ability, but certainly the hon. member cannot direct the minister to answer a question in a certain way.
Now, I feel that this discussion has gone fairly far. I feel it has become repetitious. I feel that the minister, on the opening of proceedings, gave an answer to anything which the hon. member has raised in the interval. Therefore, perhaps we might let the matter rest at that point.


Mr. Gillis:: There comes a time in personal arguments when a counsellor should be called in. I listened with great attention, both last night and this morning, to the hon. member for Mackenzie. I think he has a legitimate reason for doing what he is doing. What the hon. member for Mackenzie has been trying to do so far has been to justify the existence of the department which has

conducted basic research for most of the industrial development in Canada. In my judgment, without the geological surveys, the mapping and a lot of the basic research in minerals, there would not be very many industries in this country today. All the hon. member for Mackenzie was doing was reporting to the house on a return he received from the minister's department indicating that the basic work in research that enabled the development at Flin Flon to take place was done by the Department of Mines and Technical Surveys right here in Ottawa. I think the hon. member should be commended for that, because we hear many arguments on the street that most of these departments do not justify their existence.
Of course we can understand the hon. member for Churchill, who is employed by that particular company, wanting to give the kudos to the company. But as I listened to the minister this morning I was convinced that he was in error in what he said at Flin Flon in connection with this argument, because in the last paragraph of the statement he read he admitted that the original work in breaking down those ores was done by the Department of Mines and Technical Surveys. Later on, because of that basic work, the company picked it up, continued on from there and put in the development.
As an impartial observer this morning, and having listened to the evidence, I say the hon. member for Mackenzie should be quite satisfied, because the statement on record from the minister indicates that the hon. member for Churchill was wrong in giving all the credit to the mining company at Flin Flon. The fact is that the basic work had been done by the Department of Mines and Technical Surveys, and that is admitted in the minister's statement this morning. The record now vindicates the persistent attitude taken by the hon. member for Mackenzie, and I think he was quite right in taking that attitude. It was a personal matter, and was aggravated by the minister when he made the kind of speech-


George Prudham: I did not make any controversial statement at all.


Clarence Gillis: Well, if the minister will read it again, perhaps he will feel differently.


George Prudham: I will be pleased to read it again, right now.


Clarence Gillis: No, do not read it again now. We understand it now. You might start this whole thing all over again.


Walter Edward Harris: I take it you are stopping it; thank you very much.
26, 1955	6783
Supply-Mines and Technical Surveys


Clarence Gillis: I believe the record is now clear, and that the hon. member for Mackenzie can take that record any time, anywhere, and justify the argument he made.


Stuart Sinclair Garson: Then, can you persuade him to stop debating it, if it is all clear?


Clarence Gillis: The hon. member was right in stating that a section of the minister's department has done an excellent job in doing the basic work that is necessary for the development of an industry in this country.


George Prudham: Just a final word. This type of work is going on all the time in the mines branch and in industry. I was down to Bathurst, New Brunswick, a week or ten days ago, and the same problem is being struggled with there. They have a large ore body but, as yet, there is no separation process suitable for that ore. The mines branch is working on it, and the company is working on it. The company has established a pilot plant for preliminary tests, and some day they will find the answer. We hope it will be soon. Whether the mines branch or the company gets the credit does not really matter, so long as a solution is found to the unlocking of the minerals in that ore. Now, I do not see any sense in carrying this discussion further. Certainly I am not in between these two gentlemen in their argument. I give credit to the mines branch for doing a good job, and also to the private company; and I think we should let it go at that.


Mr. Leboe:: I think the committee will understand the confused state I was in last evening, and my position this morning. However, I promise that I will not be more than five minutes. I hold in my hand a piece of diatomaceous earth taken from the Cariboo which is used in filtering, in modern polishes and for insulation. I shall pass it on to the minister when I have finished what I am about to say.
What I shall say today will be connected with coal and gas as related to this particular product; so I do not want anyone to think that I am bringing in the coal board or the trans-Canada gas line in my remarks. This product is related to the development of thermo-electrical power in that it is an excellent insulator and can be used extensively in the insulation of pipe in connection with the production of thermo-electrical power from coal, as well as for the insulation of boilers.
We understand the newest method of producing thermo-electricity from coal is with the high-pressure water-tube boilers with turbines, either single-stage or multiple-stage,

Supply-Mines and Technical Surveys with a cooling agent where the water is pumped back into the boiler, and circulated. I think a great deal of hope can be held out for the coal industry when the coal can be brought in under a cheap enough method of production. I also believe there is a future for this particular product, as it relates to the natural gas situation.
When the green light is turned on for the construction of the gas line from Fort St. John to the Pacific northwest we are going to find that the cheap power we will have in gas will enable the development of an industry for the processing and drying of this diatomaceous earth. We expect therefore that a great deal of interest will be shown in the large deposits of this earth in that area.
When item No. 210 is called, I shall have some questions to ask the minister.


[Stage Direction]
Item agreed to.
Geological surveys-
216. Administration, operation and maintenance, including the expenses of the national advisory committee on research in the geological sciences, an amount of $1,875 for Canada's share of the cost of the committee on mineral resources and geology, London, England, and an amount of $25,000 for grants in aid of geological research in Canadian universities, $2,394,637.
Clarence Gillis: In his booklet, described as a summary of activities for 1954, I find under the heading of geological surveys a short paragraph which points out that the department mapped and did exploration work on some 850 square miles of northern Cape Breton island. From time to time the press has led us to believe that there is a possibility of mineral development in that area. I was wondering if the minister has at hand any report indicating just what progress is being made in that area, and if there is a possibility of mineral development there.


George Prudham: About ten days ago I was in north Cape Breton island and made it a point to visit some of the areas where they are endeavouring to develop mines. They certainly have showings of base metals, but as yet there is no really large producing mine. Our geological survey, reconnaissance survey of the park area, showed some traces of mineralization, but owing to the very heavy forest cover there and the heavy overburden, it is very difficult to make a close survey from the air, or even from the surface. Because the forest growth is so dense, about the only way that prospectors can enter that territory is by following up the streams and observing the rocks on both sides.
In one area that I visited I saw the original discovery rock, which was not larger than one of these desks. It just so happened
[Mr. Leboe.l
that the man walking up the creek bed saw that rock and took a chip off it and decided that it was a worth-while showing. As a result the area around was looked at and some diamond drilling was done. The mining company thought enough of the area to spend a considerable amount of money to try to prove what was there. No doubt there are other similar deposits. The trouble is to find them. I think the area warrants some further prospecting.


[Stage Direction]
Item agreed to.
221. Administration, operation and maintenance, including Canada's annual contribution of $4,200 to the international hydrographic bureau, $2,830,784.
Mr. Barnett:: I have one or two questions I should like to ask the minister. Does the Canadian hydrographic service operate any vessels which are owned by the department, or are all their vessels chartered?


George Prudham: One hydrographic service is engaged in charting our coasts and inland waters, measuring tidal currents and levels, and issuing charts and tables for shipping. We have three vessels on the Pacific coast and four major ships on the eastern coast. Also, for the past several years we have chartered two boats for northern work. On the eastern coast we also have several smaller boats on inland waters, including the great lakes, and Great Slave lake. In fact, we use about 16 boats in all in our work in making soundings for charts.


Thomas Speakman Barnett: One further related question: Are these vessels that are operated under the Canadian hydrographic service part of the complement of vessels under the air rescue plan, which is co-ordinated by the air force?


George Prudham: No, they are not an integral part of that service.


Thomas Speakman Barnett: Is that because they are not a suitable type of vessel to be drawn in under that arrangement, or is it because they are not operated on a year-round basis?


George Prudham: They would certainly come to the assistance of anyone in distress, but that is not part of their regular duties. They operate in remote areas to a large extent and away from the ordinary shipping lanes.


Thomas Speakman Barnett: Perhaps I should explain to the minister; he may not have been in the house when I raised this question on one or two previous occasions. Quite frankly, what I am trying to get is a picture of the situation in respect of air-sea rescue, which last year the Minister of Transport claimed to be an adequate substitute for a coastguard, and which position was also taken this year by

the Minister of National Defence. For example, I do know that the vessels operated by the Department of Fisheries are working under this plan; also the vessels operated by the R.C.M.P. That is the reason I wanted to find out whether or not the vessels owned and operated by this service were also participating in the air-sea rescue plan. Can the minister look into that matter and give us some further explanation as to why the hydrographic service vessels are not available under this particular plan? I am not suggesting that he necessarily do it before this item carries. I should like to have the information.


George Prudham: I shall be pleased to do that, Mr. Chairman.


[Stage Direction]
Item agreed to.
Mines branch-
678. Mines branch administration-further amount required, $2,500.
Mr. Herridge:: Mr. Chairman, I want hon. members opposite to realize I have been most restrained in order to have two or three minutes on this item. This item provides for the employment by this branch of members of the corps of commissionaires, and naturally, since we are using the services of the corps of commissionaires, hon. members should be concerned about their wages and working conditions.
I just want to bring a few things to the attention of the committee because the government passes minutes of the treasury board as regards the wages to be paid to the corps of commissionaires and the hours of work and working conditions. We should make certain that these old veterans, particularly when they are employed by various government departments, receive a decent deal. The Canadian Legion is very concerned about the welfare of these veterans, about their salaries and their working conditions, and discussed the matter at some length at the last national convention. They passed a resolution urging an upward revision of the wages of the members of the Canadian corps of commissionaires and that these be made standard in all provinces.
In addition to that, a number of good responsible people in Ottawa have come to me, who are quite concerned about the corps of commissionaires, and that they shall serve the purpose of the founder. This corps was founded on February 13, 1859, by the late Captain Walters, because he witnessed the distress of former veterans of the charge of the light brigade. Its original purpose was to provide employment for older and disabled veterans who could not get satisfactory employment in other ways. It was first
26, 1955	6785
Supply-Mines and Technical Surveys organized in Canada in 1934 and, I understand, reorganized in 1937. At the present time we have a British Columbia branch which was organized in 1924, which still remains independent and carries on according to the British traditions of the corps. We have two sections in Ontario, one centred in Ottawa and the other in Toronto.
I just want to mention that I understand the Department of Labour and the Department of Veterans Affairs co-operate with the corps and do all they can to find employment for older veterans who are suitable for this type of work. At the present time I understand about 6,000 of these veterans are employed either by the government or by industry in Canada. That is all to the good. I hope the number increases. However, the Canadian Legion was concerned about the wages.
I notice that according to the minute of treasury board of February 8, 1955, the basic wages have been revised. They now go from a minimum of 75 cents an hour to a maximum of $1.15. Well, the 75 cents an hour looks pretty small to me, especially in view of the fact that I understand these men are required to pay 8 cents or 9 cents an hour out of that to the corps itself for administration. I trust that there is no one being employed by this department at the 75 cents per hour rate, that everyone is getting at least the $1.15 rate. On February 8, 1955, the treasury board passed a minute concerned with the regulations governing the services of this corps, and in that I find the following:
That the normal work week of a commissionaire, which shall not exceed fifty-six hours, shall be determined by the corps, and no payment shall be made under the agreement in respect of services performed by any commissionaire for any period in excess of the normal work week so determined:
In that connection I want to mention that it has been brought to my attention that in some cases these men are working 16 hours a day and according to this agreement there would be no overtime. In addition, the normal work week of these older veterans is 56 hours. I am rising today at the request of responsible people who believe that that is not in accord with Canadian practice and labour legislation.
Responsible people have brought to my attention that there are retired R.C.M.P. personnel who have been taken into the corps. That is all right from my point of view provided they have had active or long service in the armed forces. Six months ago I had brought to my attention that the corps here in Ottawa was actually employing a civilian. I brought that to the attention of the proper authorities mighty quickly and they soon corrected that situation. I am

Supply-Secretary of State informed that there are retired R.C.M.P. and permanent force officers with large long-service pensions who are employed in the corps, and at the same time I was informed last winter that there were quite a number of veterans walking the streets of Ottawa without employment. As a large employer of the members of the corps of commissionaires the minister's department should see that these veterans are employed at proper rates. The Department of Labour and the Department of Veterans Affairs should see that the purposes of the founder of this corps, to provide employment for needy and disabled veterans, are carried out. To have a man working for 75 cents an hour less the 8 or 9 cents which has to be paid for administrative purposes to the corps, and to have a work week as long as that indicated, is not in accord with Canadian labour laws and regulations. We in this house must not permit our older veterans to be exploited in this type of work.


George Prudham: Mr. Chairman, I wish to assure the hon. member that this department is not exploiting the corps of commissionaires. We employ them to do work at two buildings and I understand the rate is $1.03 per hour. The department deals directly with their association; we do not deal or have anything to do with the individual worker. I understand that the maximum work week permitted under the rules of their association is 44 hours. As to how they are employed or what shifts are worked, that is decided by their own association. We find them very satisfactory and are pleased to have them doing our work.


[Stage Direction]
Item agreed to.

[Stage Direction]
420. Departmental administration, $254,215.
Mr. Hamilton (Notre Dame de Grace):: Mr. Chairman, one of the responsibilities of the Secretary of State is the handling of parliamentary returns asked for by this house. I have noticed from time to time that there seems to be considerable delay between the times returns are first asked for officially by this house and the time the information becomes available, and I have wondered whether these delays are necessary. From time to time I have noticed also that the information tabled by the Secretary of State in answer to a return is far removed from what one would expect in answer to the specific questions posed in the return. I think that with respect to these parliamentary returns the Secretary of State has been from time to time somewhat less efficient and capable than we would hope. I am going
[Mr. Herridge.l
to select a particular return made at my request as an example of what happens.
The original questions were made an order for return on March 10, 1955. Those questions asked for certain information about the travelling expenses of ministers. The return was tabled on June 23, a lapse of three and a half months. The information contained in the return enables us to see approximately what happened. In the first place there was two weeks' delay between the time the order for return was passed by this house and the time the Secretary of State passed it on to the departments, because he requested this information under date of March 23. We find next that the departments concerned were exceedingly lax in sending back their information to the Secretary of State. As far as I can see, no attempts whatever were made to follow up. Let me give the committee the details of when this information was returned to the Secretary of State, keeping in mind the fact that he requested it on March 23.
We find that the Department of Labour replied promptly the next day on March 24 and sent in their information. Then we find that the next return came three weeks later on April 15 from trade and commerce. Then defence production on April 28; the Prime Minister's office on May 26; external affairs on June 6; transport on June 7; finance on June 17; national defence on June 23. In other words, we have a situation where the Secretary of State requested certain information and when it was not forthcoming apparently he or his department did nothing about prodding the departments to obtain this information. I would point out also that two additional departments made returns which did not even bear a date to indicate when the information was forwarded to the Secretary of State. I would suggest that it was at least his responsibility to have checked back in those particular cases to see that the information sent to him was dated. Furthermore, I would point out to you that I have listed only 12 departments. An additional eight departments did not reply to the question in any way whatsoever. They are the departments of citizenship and immigration, fisheries, justice, mines and technical surveys, national revenue, post office, public works and veterans affairs.


Mr. Pinard:: Does the hon. member say there was no answer at all or that a negative answer was offered by these departments?


Mr. Hamilton (Noire Dame de Grace):: That is the point I was coming to. I said in these particular cases there was no answer at all, not a negative answer. I am very glad the minister asks me to emphasize that. It is

possible to argue in respect to certain questions that they obviously do not apply to certain departments, and the Secretary of State could be justified under those circumstances in using his discretion and saying that these departments did not reply because the question obviously is not applicable. But at this point let me put on the record the particular question concerned in this order for return, in order that we can see whether or not a reply, either affirmatively containing information or negatively indicating that no information was available, would be expected. The question was in two parts:
1.	Between January 1, 1954 and January 31, 1955, how many trips, paid for in whole or in part by the public treasury and/or using transport supplied by the public service, or national defence department, were made by ministers of the crown to points other than in Canada?
2.	For each trip (a) who made it; (b) to where; (c) for what purpose; (d) what expenses were collected from the public treasury in respect thereof; (e) if national defence or other publicly owned transport was involved, between what points was it used?
That obviously is a return which could apply to any minister of the crown. One would logically expect that every minister of the crown would answer it. I can point out to the Secretary of State that in at least one case the fact that a negative return was not received and that no return was received meant that certain of the information requested was not tabled in this house.
The Minister of Public Works had made extensive travels in Europe during the period covered by this return. His department made no attempt whatsoever to reply to this request for information. Subsequently, when the return was tabled, I made an attempt to find out why this was so, by means of personal conversations. I do not think there is any objection to pointing out to the house at this point the reason. The Minister of Public Works felt that, since he had gone to Europe on behalf of the Department of Trade and Commerce, they should make the return on his behalf. The Department of Trade and Commerce, with whom I have not followed up the situation, have for reasons unknown to me given us no information whatsoever in connection with the trip of the Minister of Public Works.
In respect of these other departments, I am quite unaware at this moment as to whether or not their ministers have travelled outside Canada, and as to the other information requested. Despite the fact that this was an order for return made by the authority of the house, it is quite possible that these gentlemen have been jaunting around the countryside outside Canada and, for whatever
Supply-Secretary of State reasons seem right to them, have decided they will not tell the house anything about it.


Walter Edward Harris: On a point of order, I must say that I did not for a short while follow my hon. friend in his present argument, but do I understand that he is, on the estimates of the Secretary of State, who is the officer who makes the returns to the house, complaining of the conduct of other ministers?


William McLean Hamilton: Mr. Chairman, I think that in my preliminary remarks I made it quite clear that this was criticism directed at the Secretary of State for not adequately dealing with orders for returns passed by this house and for not securing the information requested by this house.


Roch Pinard: It is not the duty of the Secretary of State to do so.


William McLean Hamilton: My
observations were directed toward that end.


Walter Edward Harris: Mr. Chairman, then I do object on a point of order to the discussion going further, because the Secretary of State is charged only with the responsibility of collating the returns from various departments. He has no authority over a minister to require that he do thus or so. That is the responsibility of the minister concerned. For that reason the discussion of the returns, other than a return with respect to the Department of the Secretary of State, is out of order.


William McLean Hamilton: Mr. Chairman, with all respect to the point of order, I can see that if I was specifically criticizing the information contained in one of these departmental-


Walter Edward Harris: You would criticize it on the estimates of the minister about whom you have the complaint.


William McLean Hamilton: am aware of that.


The Deputy Chairman:: Order. I think the situation really is not difficult. Orders for returns are filed in this house by the Secretary of State. Criticism of the Secretary of State or his officials for delay or incompleteness of the return, in so far as the responsibility is that of the Secretary of State, is of course in order, but criticism of the actions or the forms of information given to the Secretary of State by other ministers should, of course, be made under the estimates of the minister concerned. I do not think that we are very far apart. I think the hon. member for Notre Dame de Grace is making his complaint as of the

Supply-Secretary of State Secretary of State, and I think he can do that without involving criticism of other ministers whose estimates are not before the house and who are therefore not in a position to reply.


Roch Pinard: Surely the hon. gentleman also understands that, since it is not the responsibility of the Secretary of State to secure the information but simply to advise each of the ministers that such information is required, criticism as to delay also must take into consideration the fact that, before I get this information, it is left entirely up to each minister in each department to see to it that an answer is relayed to the Secretary of State to be officially tabled.


William McLean Hamilton: am afraid the Secretary of State and I have a somewhat different interpretation of his basic responsibility in respect of these returns. I would not argue for a moment that it is the Secretary of State's responsibility to vouch for the correctness of the information or even perhaps some of the details of the information, but I would suggest that he does have the responsibility of getting the information requested in an order for return by this house-at least some information. If we accept the argument of the Secretary of State in this connection we are rapidly coming to a situation in which nobody is responsible for collating the information and seeing that returns asked for by this house are dealt with. It is the Secretary of State's responsibility to collate this information when it is obtained and to table it in this house.
I therefore suggest that since he is the man who is going to table information of this nature, when it affects more than one department of government he certainly is the man who should see that the information is available for tabling at some point. Otherwise those of us who ask questions which are made an order for return covering more than one department are left in an almost untenable position because we would have to be questioning 20 ministers in this case as to why the information was not being made available. We would have no point of contact. We would be just as much justified in questioning the Minister of Trade and Commerce or the Minister of National Defence as in questioning the Secretary of State.
But in any event, Mr. Chairman, I suggest most strongly, first, that the Secretary of State in this particular instance-and, I would be quite sure, in other instances as well- has been responsible for an unreasonable delay between the time an order for return is passed here in the house and the time it is transmitted to the department concerned.
[The Deputy Chairman.]
In this particular case the delay was two weeks. For those who may not realize what is required of the Secretary of State, may I say this. He has a standard form which is filled in on a typewriter and which is transmitted to the department concerned. It is a very simple matter. It is not one that requires concentration or great effort. Second, I would say that the Secretary of State, once he has sent out this information, makes no attempt whatsoever to see that the information is returned within a reasonable limit. He just sits here complacently and waits until other people get around to making the information available to him. Third, I would say-as proved by this particular case-that the Secretary of State does not check the information returned to him in order to make sure that the interested departments have replied. Fourth, arising from this entire situation, we have specifically here a case where the Secretary of State has tabled a return which is incomplete and in which-and there can be no argument about this one whatsoever-he has been asked for information concerning all government departments. He has tabled a return containing information from only 12 government departments. He has tabled that on his own authority and therefore, obviously, he has given the House of Commons less information than that which was asked. I have already pointed out that in at least one case among the missing departments information should have been forthcoming and that therefore the Secretary of State, had he pressed for a nil return in these cases, would have procured the information requested by the House of Commons.
Without going into detail at all, Mr. Chairman, and because I realize it is not the responsibility of the Secretary of State, I would just say that in many cases in this particular return the information which he has tabled has been factually unsatisfactory and very definitely not an answer to the questions asked in the return. It is his view-with which I do not agree-that he has no responsibility to see that the information which he tabled is at least reasonably coherent in the light of the questions asked. He feels that that is someone else's responsibility. I suggest that for the proper order of the business of the House of Commons, since the Secretary of State is the individual responsible for collating and channelling this information, it is not too unreasonable to ask that he might see that the questions asked are also answered in the information which he tables for the house.
In summation, Mr. Chairman, having set forth the deficiencies in respect of this department and its work on orders for returns, I would say that this is an extremely serious

situation. Orders tor returns are not made by one party or by one individual. They are a request for information on behalf of the entire house. Under this information, believing it to be dependable, true and complete, many of us are prepared to base statements and speeches, and do so. When we find a situation in which the information is not forthcoming for three and a half months, we are handicapped. When we are left in the position that the information tabled is incomplete, we are handicapped. When we are left in the position that the information, even if ostensibly complete, is not that requested, we are handicapped. I think that the Secretary of State could do a great deal to improve the business of this house and to supply us with the information we wanted if he would do his job properly and conscientiously instead of in the slap-happy manner that has been evidenced in this particular case.


Roch Pinard: I am
not too much surprised at the tone which my hon. friend has chosen to adopt in his remarks. We are constantly hearing him make criticism, sometimes for the sake of criticism. I did not want to interrupt him during his remarks but I felt that this whole speech of his was out of order because it does not concern the administration of my department. The only responsibility that the Secretary of State has is to see to it that, when they are ready, returns are tabled supplying answers given by each department. He is charged with a special responsibility of course when a question concerns a department or agency for which he is responsible to the House of Commons. I might possibly quote here a passage from Bourinot, fourth edition, which explains the duties of the Secretary of State in that regard. This reference will be found at page 248 of the fourth edition of Bourinot:
Returns in Answer.-As soon as these addresses and orders have been passed by the house, they are engrossed and forwarded immediately by the Clerk of the house to the Secretary of State, who will send them to the proper department or officer for the necessary answer.
This job has been done by a very reliable officer of my department who has done it for the last 20 years and against whom there was never any criticism voiced at any time, according to my information. Bourinot goes on to say this:
When the department or person, whose duty it is to furnish the information, has prepared it, he will return it to the Secretary of State, who will take the earliest opportunity of laying it before parliament through the medium of a minister of the crown. It is the practice for each minister in the House of Commons to present the returns relative to his own department.
In my opinion this criticism voiced by the hon. member for Notre Dame de Grace and
Supply-Secretary of State directed at me is not a fair one. Although it is not my duty to press each of my colleagues for answers I have tried, to the best of my ability, to see to it that returns would not be delayed unduly. I shall be pleased to look into the case to which he has referred and to ascertain whether or not there is any responsibility with which I should be charged in this case.


Clarence Gillis: I should like to ask the Secretary of State a question in connection with this same matter he is discussing. On July 4 an order for return was passed in my name. We shall adjourn in a day or two. I have not received that information. As I say, we shall adjourn in a day or two-


Walter Edward Harris: Today.


Herbert Wilfred Herridge: That is what you think.


Clarence Gillis: I said a day or two, and I am just trying to sow that idea in the minister's mind. I will not get that information before the house adjourns, and I should like to know whether that motion dies with this session or .whether I will receive that information when it is available?


Roch Pinard: When no return was tabled during the same session that used to be the end of it, but under the rules now an answer will be given at the next session of parliament.


[Stage Direction]
Item agreed to.
422.	Trade marks division, including a contribution of $2,400 to the international office for the protection of industrial property, $164,341.
Donald Methuen Fleming: This item deals with the trade marks division which is one of the divisions that produces a revenue. The last available annual report is for the year ended March 31, 1954, so that our information from the official report is not very fresh. If the minister will look at page 15 of that last annual report, he will see the revenue accruing from the trade marks office. I wonder if he has now information for the fiscal year ended March 31, 1955, so that we can ascertain whether the revenue continued to increase as in recent years?


Roch Pinard: The answer is that the amount up to March 31, 1955, was $222,028.83.


Donald Methuen Fleming: That is a very substantial increase over the previous year which, in round figures, was $159,000. This looks like the largest increase in one year over a previous year.


Roch Pinard: There was an increase in fees.


Donald Methuen Fleming: With the coming into force of the new act?


Roch Pinard: Yes.

Supply-Secretary of State


Donald Methuen Fleming: What is the position in regard to staff and office accommodation for the trade marks office?


Roch Pinard: I will try to get this information and supply it to my hon. friend later.


Donald Methuen Fleming: Is there any difficulty about it?


Roch Pinard: No, it depends on what my hon. friend is referring to. Has he anything in mind that he would like to know?


Donald Methuen Fleming: I should like the minister to report to the committee first of all on the staff, as to the adequacy of the staff, and secondly as to the adequacy of the accommodation.


Roch Pinard: I had a number of interviews with the registrar of trade marks and although, like many other departments, they are anxious to get a little more space because of the increased work of the department, they feel that they can manage for the time being. So far as the staff is concerned, there was an increase because of the increase in the number of applications. If my hon. friend consults the annual report he will see that there was a very large increase in the number of applications. They have to be processed, so there had to be a certain increase in personnel.


Donald Methuen Fleming: That is my point. The increase in revenue has coincided with an increase in the fees as a result of the coming into force of the new act. Also, there has been an increase in the volume of the applications. Now, the first factor would not necessitate any increase in staff. The second factor might, since this is a department that is giving service to the public, and a department that receives substantial revenue, the public then being entitled to service in return for the fees paid.
My question is directed to obtaining information as to whether the staff arrangements, in the light of the increased volume of the work, are going to be adequate to give the public the service to which it is entitled when paying such fees?


Roch Pinard: I am informed, Mr. Chairman, that although there has been an increase in staff from 36 employees in 1954-55 to 48 at the present time, they still expect to keep the same service in operation over the present year, although this service might probably be a little less efficient than it was over last year.


Mr. Richard (Ottawa East):: I would not want to let this opportunity pass without commending the trade marks office staff.
I know that my hon. friend has referred to


this question in order to be helpful, but one must bear in mind that it was only last year the new Trade Marks Act came into force. During the past year there has been a great rush of applications. Certain applications, such as assignments, had to be filed before June 1 of this year, so I do not think the trade marks office could be expected to increase the staff just for the original rush. Under the circumstances, I feel that the service has been fairly good. The big difficulty, in so far as staff is concerned, is that personnel cannot be trained overnight. As one who practises before that office, I am confident that, if the directives of the officers in charge of the trade marks office are followed after the act has been in force for some time, the public at large will be satisfied.
At this time I should like to ask the Secretary of State if he has anything to report on the royal commission on patents, trade marks and copyrights. I understand that that commission has been sitting for some time now. I have been receiving copies of the proceedings, and they are rather costly. I am sorry somebody could not print them and make them available more cheaply. They are very costly in their present form. They have cost me over $250 to date, and I hope the inquiry will be completed soon so it will not cost me too much more. Perhaps the minister will tell us if the work is almost completed, and whether we may expect results soon?


Roch Pinard: There is a special item covering this royal commission that is presently making a study of patents, trade marks and industrial designs. Recently I had an interview with Chief Justice Ilsley and the members of the commission. I may say that the commission is not of the view that a preliminary report should be made. They would rather wait to write a final report. Although the work is progressing normally, it is not expected it will be terminated before at least a year. I am sorry if this disappoints my hon. friend, but he will understand that there is still a lot of work to do. In fact, the commission has not begun work on trade marks as yet, and it is expected they will have hearings in the fall at which time they will consider trade marks and also receive representations resulting from discussions on questions of principle that were raised during the previous sittings.
I may say, and I am sure the committee will agree with me, that I have full confidence in the commission and the work that is being done by Chief Justice Ilsley and his associates. I am confident that when the final report is made it will be of great assistance in the possible revision of this legislation.


[Stage Direction]
Item agreed to.

423.	Bureau for translations, $1,122,139.
Mr. Macdonnell:: I want to ask the minister for a word of explanation on the item on page 515, outside translators' fees. I am interested in knowing how far our own facilities go, and when we have to go outside.


Roch Pinard: Mr. Chairman, not only in connection with the translation work for the House of Commons but also for the department there is a big rush during the session. This would mean that those employees who are working on an annual basis would have, during that part of the year, more work than they could do. So that during the rush they ask for assistance from outside translators.


James MacKerras Macdonnell: In other words, this is additional work of the same kind. I had thought it might involve some special or remote type of work.


Roch Pinard: There is the necessity of hiring employees outside, too, when we are dealing with translations from foreign languages, and where the staff is not in a position to do that work.


[Stage Direction]
Item agreed to.
Patent and copyright office-
424.	Administration division, $131,335.
Donald Methuen Fleming: Mr. Chairman, this brings us to the patent and copyright office, and I have some questions to ask the minister in regard to this particular office.
The patent office is, of course, by far the largest of the three branches which include the patent, copyright and trade marks offices. It also is by far the largest revenue producer, as well as the one that presents the most work to the staff concerned.
The hon. member for Ottawa East has asked some questions about the royal commission, and the minister has indicated that we cannot look for a report from it for probably another year. That may be disappointing news to hon. members; at the same time we must recognize that this is a large field and, knowing the chairman as we do, I have no doubt the commission will undertake its task thoroughly.
However, I should like to go back to the same points in relation to the patent and copyright branch as I raised in connection with the trade marks office. I refer to the question of service to the public. Here we are dealing with branches that do charge fees to the public, and raise substantial revenues from that source. Therefore those who have business to do with these offices are entitled to as prompt and effective service as it is reasonable to expect.
Turning to the subject of revenues, I find in the last available annual report of the
Supply-Secretary of State department that, for the fiscal year ended March 31, 1954, the receipts in round figures totalled $869,000, of which sum $848,000 was yielded by the patents branch and $21,000 from the copyright and industrial designs branch.
In the first place I would ask the minister to give us comparable figures for the fiscal year ended March 31, 1955, after which I shall go on to make further comments with respect to the matter of surpluses and deficits.
Page 19 of the annual report indicates that this particular office yielded surpluses to the consolidated revenue fund in the first six years of the 10-year period there reviewed. Those surpluses ran up as high as $319,000 in the fiscal year 1947-48. However, in the last four of this 10-year period, commencing with 1950-51 and ending with 1953-54, the branch in each year has shown a deficit. So my second question is; What was the result of operations in the fiscal year ended March 31, 1955? Was it a surplus or a deficit? May I just add that this era of deficits, which began in 1950-51, almost coincided with the commencement of the printing of the patents. It had begun only a short time before that, and no doubt it has entered into the expenditures of the department, and has had not a little to do with turning the annual surplus position into one of a deficit. However, we shall await the minister's answer on that point.
I turn now to the question of service. Hon. members who were in the house in 1947, particularly those who served on the banking and commerce committee of that year, will recall the extended review of the operations in the patent office conducted by that committee. At that time the backlog for patents was very substantial. The commissioner of patents of that time was complaining that his appropriations and authority did not permit him to recruit the staff he needed to give the puolic the service to which it was entitled, and he pointed out that he was sorely hampered as well by lack of accommodation.
Hon. members will recall the extended discussion which took place at that time in the house and the committee. Naturally those of us who took part in that discussion, and others since, are interested in knowing what the subsequent trend has been in these important factors which have a bearing upon the service this office is in a position to give to the public.
First of all there is the question of delays. I am sure the minister will agree with me that while the process of patenting is never one characterized by break-neck speed in any jurisdiction, nevertheless there is a limit to be tolerated by the public who are paying

Supply-Secretary of State substantial fees to the office. The report of the office as incorporated in the minister's report for the year does not set forth the number of cases in the backlog. I suggest this is proper information for us to seek from him now. So that we may test the progress the department is making in coping with the backlog, I think the minister should tell the committee about the backlog of applications on file, at all stages of processing in, let us say, the last five years. Then we shall be in a position to judge whether the backlog is growing or being reduced.
If one refers to page 17 of the minister's annual report for the fiscal year ended March 31, 1954, one sees figures that suggest that the backlog, far from being reduced, is actually increasing. I am not saying that the figures on this table are conclusive on the subject of the backlog; the table is not set up to show the backlog at a glance. Nevertheless these are relevant figures I have drawn from the table to which I have referred. In the fiscal year 1953-54 applications for patents totalled 18,565. Some few were disposed of in other ways. But we see that the applications reported in the same fiscal year aggregated 14,524. Applications allowed aggregated 10,016, and patents issued totalled 9,405.
As I say, these figures are not set up in the table with a view to indicating a backlog. Nevertheless, there is enough of relevancy in the figures to suggest that the backlog, instead of being reduced, is actually increasing.
I am not unmindful of the fact, as drawn from this table, that the volume of applications being handled by the department is increasing. I presume the minister will be able to give us the number of applications received in the fiscal year ended March 31, 1955. The total for the fiscal year ended March 31, 1954, was, I believe, an all-time record. That figure of 18,565 to which I have drawn attention is 2,000 more than in any previous year. I wish to be fair about this. We are not unmindful-


Roch Pinard: That record has been broken this year.


Donald Methuen Fleming: I am not surprised at that. In fairness, I am not unmindful of the fact that the volume of work falling on the patent office is growing. I would ask the minister whether he will give us the backlog of applications in all stages of processing for say the last five years. I presume he has the figure at the end of the fiscal year in each case. That will enable us to judge the progress that is being made in dealing with that backlog.
Also bearing on that matter of backlog is the question of how many applications have

been allowed to remain in some stages of processing. I hope the minister will be able to give us some information as to the number of years that some of the applications-
I am thinking now of the maximum period-have been pending before the department sc that we may judge as to whether provision adequate to ensure service to the public is being made.
Now, sir, bearing on the question of delay on the one hand, or service to the public on the other, there are, I suppose, two questions. One is the question of staff; the other the question of accommodation. These are both questions that engaged the interest and the very active concern of the banking and commerce committee in 1947. We know that following those hearings some provision was made for an increase in office accommodation. Since that time there have been some increases in the staff of the department, the technical staff as well as the clerical staff. But I shall be mistaken, Mr. Chairman, if the increases in technical staff particularly have kept pace with the increase in the volume of business with which the branch is dealing.
I hope the minister will give us an adequate statement with regard to steps that have been taken to supply the branch with the accommodation it requires, both office accommodation and also storage accommodation; and second, what steps are being taken to ensure that there will be adequate staff available, both technical and clerical.
Sir, it is not always that one emphasizes the necessity of what might sometimes amount to increases in staff, but here we are dealing with offices that produce a revenue

in this case, a quite substantial revenue-paid by those who are doing business with this office and are accordingly entitled to service from it. Therefore, I hope the minister will be in a position to give the committee the rather extensive information for which I have asked.


Jean-Thomas Richard: Before the
Secretary of State answers I should like to say how pleased I am at the different attitude which has been taken in the past few years by the house with regard to the patent office. I think it is time the people realized that the patent office is not primarily a revenue-producing branch. It should not be a revenue-producing branch. It should be a service to the public.
The great difficulty with our patent system in Canada today is this. We have a very complicated Patent Act, and a very good one, Mr. Chairman. It is almost a duplicate of what exists in the United States. Parts of it are taken from the British system where they provide an extensive service at the cost of

the public. The United States patent office is not a revenue-producing system; it is a very costly office.
In this country, as I have said, we have been trying to promote a patent act which would require extensive offices and services such as exist in Great Britain and in the United States. Until the public and parliament realize that this is a costly business and that it should be carried on, I do not think we shall cure some of the evils which necessarily go along with the patent system in Canada. Of course, I understand that these are the type of things that the royal commission is inquiring into. But I want to bring to the attention of the committee once again the fact that we have a complicated patent act in this country. To put it into proper practice would require an extensive office such as exists in the United States and in Great Britain and we cannot have that until parliament is willing to pay the shot for that office.
At the present time we have delays in that office. They are owing to the fact that we have not provided the patent office with a sufficiently extensive staff to get results. In the United States, for example, the examiner is not supposed to pass upon one or two applications a day. They would never pass upon 10,000 or 12,000 applications in a year with the small staff of examiners we have here. In the United States the examiners pass one case probably every three days.
There is another angle to the United States system. The inventors realize, and the patent office insists upon, the fact that trained people should prepare patent applications. It is a technical matter. We have not insisted too much in the past upon the people hiring technical men to prepare their applications. Many of the delays in the patent office are owing to the fact that patent applications are not properly prepared and also owing to the fact that people take as long as possible to answer reports from the patent office within the delays allowed. Therefore, I hope that when the Secretary of State answers some of these questions he will say that in the future he intends-perhaps it would have to wait until the commission has reported-to put boldly before parliament the fact that if we want service in this country in the patent office we must not look at what is the revenue from the public but that we are going to pay the actual cost of providing that service.


Roch Pinard: In the first place, I should like to answer a few of the questions asked by the hon. member for Eglinton. He has dealt with the revenue position. He asked for the revenues for the year 1954-55. The revenue from patents, trade marks and copyrights totalled the sum of $1,329,631.71.
Supply-Secretary of State


Donald Methuen Fleming: Excuse me. Can the minister give the figures for the purpose of comparison of patents and copyrights, not including trade marks? The figures that I was dealing with were of patents and copyrights alone. I was referring to pages 19 and 20 of his last previous annual report.


Roch Pinard: The breakdown for patents is $1,107,296.73 as against $869,055.08 for 195354. It is expected that there will be a surplus this year of $2,594 from the patent and copyright office, which is the first surplus in the last four or five years.


Donald Methuen Fleming: That is for the fiscal year ended March 31, 1955?


Roch Pinard: That is right. The hon. member also referred to the delays in obtaining patents which are complained about by the public, but I think he himself gave the answer. It is extremely difficult to obtain the services of qualified examiners who must be graduate engineers. During the last year this recruiting did not produce very good results as the number of examiners which the department succeeded in obtaining was less than the preceding year. The result is that the backlog to which my hon. friend referred increased this year and has now reached over 60,000. Great efforts are being made to reduce this as much as possible by obtaining the services of examiners. I may say I am informed that a delay of three and a half years is what the public must also expect in the United States.
The hon. member for Ottawa East suggested that this service should be given to the public and that the department should not operate on a revenue basis, but I do not know that that would be a sound proposal. The conditions as to recruiting are about the same in Canada as in the United States. I am informed that that country finds it extremely difficult to get examiners of patents. I do not know that I have on hand the other information requested by my hon. friend but I shall try to secure it and give it to him later.


Walter Edward Harris: The remaining supplementary items apply to the patent and copyright office and perhaps we could dispose of those, then adjourn and go on with other branches of this department after lunch.


Donald Methuen Fleming: I have one or two observations to make on the statement just made by the Secretary of State. I understand that he is going to obtain some of the further information I asked for and perhaps he might be able to provide this when we come back at 2.30 p.m. I asked for the backlog at the

Supply-Secretary of State end of each of the last five years and I asked also the number of years that some of these applications have been pending. I wish to know the maximum period that some of these have actually been pending.


Roch Pinard: My hon. friend will understand that that information as to the backlog is not available for each year. It might take more than a few hours to obtain it, but I shall be pleased to get it and send it to my hon friend if it is of interest.


Donald Methuen Fleming: I have some further comments which will take but a moment or two.


Alexander Malcolm Nicholson: If we are going to continue to meet after ten o'clock surely we are not going through now to 2:30 p.m. There are other members of the committee who have some questions to ask.
At one o'clock the committee took recess.
The committee resumed at 2.30 p.m.


Edward Turney Applewhaite: On Department of Secretary of State, item 424.


Roch Pinard: Mr. Chairman, before recess the hon. member for Eglinton asked me a few questions to which I have not yet given complete answers. He was asking the number of applications filed. For the current fiscal year the total number is 19,446, which, of course, is an increase over the preceding year. He also asked about the pending cases in the patent office. The pending cases for the year 1952-53, to April 1 of that year, totalled 58,852. This figure increased to 63,558 for the year 1953-54. For the current year it has reached the figure of 69,616.
I might say that all these pending cases cannot be considered as cases that are not being actually processed. Out of that figure there are at least 20,000 which cannot be considered as backlog. They are cases that are actually being processed by the patent office. As I said before, it has been extremely difficult to recruit personnel for the office. I might inform the committee that there is an open competition organized by the civil service commission which tries to recruit personnel. This open competition lasts from November till September of each year. To give an example to the committee of how difficult it is to recruit engineers as patent examiners, I may say that about six weeks ago the commission advertised in about 200 Canadian newspapers to try to recruit qualified engineers.
As a result of this advertising 92 inquiries were made, and only two applications were

actually filed. They are now being examined by the civil service commission. It is quite disappointing to find that, although advertising was done throughout Canada, an unsatisfactory result was achieved and that only two applications were actually received out of a total number of 92 who inquired about the competition. Not only here in Canada but also in the United States and the United Kingdom, the same difficulties arise in so far as recruitment of personnel is concerned.
This is one of the main reasons why there is quite a delay before the applications are processed and before the actual patents are issued. The normal delay should be about two years. It is not expected that in any competent patent office an application could be processed under that minimum of two years. Actually the period is three and a half years, but it is expected that with additional efforts another group of qualified examiners may be obtained, which would relieve the situation considerably.
The hon. member for Eglinton might be interested in having this information about space, to which he alluded during his remarks. Actually the patent office is in need of space, but it is expected that by the beginning of October the moving of a unit of the printing bureau to the new printing office in Hull will make available for the patent office space of about 7,000 square feet which, it is felt by the division, will be enough to suit the needs for the current year at least.


Donald Methuen Fleming: Mr. Chairman, some of these figures that the minister has given, I am sure, contain some very startling information. When I indicated that I thought we would find that the backlog of applications had risen in recent years, I had no thought whatever that we would find that the backlog had risen to these very large figures. In 1947, when the banking and commerce committee was reviewing this whole problem, including the problem of the backlog, the volume of the backlog at that time, as I recall it, stood at approximately
28,000	cases. That means that in these intervening eight years the backlog has increased to 70,000 in round figures.


Roch Pinard: I am sorry to interrupt, but I am informed that the figure to which my hon. friend has just referred of some 28,000 as a backlog for the year 1947 is actually incorrect. In fact, it referred only to cases that had not been processed. The actual figure of the backlog at that time was about 45,000, I am told.


Donald Methuen Fleming: 
Roch Pinard: To refer to that case in which an application has been on the files of the department for over 20 years I do not think justifies the conclusion which my hon. friend has arrived at, because it is a special case. It would be unfair simply to say that there could be a number of cases that would present the same circumstances. In fact out of the number I have mentioned of 69,616, 13,685 are over 2J years on the files.


Donald Methuen Fleming: Over what?


Roch Pinard: Supply-Secretary of State young engineers as soon as they graduate. However, it is hoped that some progress will be made.


Donald Methuen Fleming: I think the minister was not following what I was saying, Mr. Chairman. When he broke in on me I was saying that I am not going to draw inferences from one fact or facts with regard to one application because, with regard to each of these longstanding applications there may be some particular circumstances that help to explain that long delay. I quite recognize the fact that we must judge by the whole picture the reasonableness of the length of time required to process. I was hoping that the minister might be able to give us the number of applications that have been pending for, say, more than five years. That would be not unreasonable. I have carefully noted his statement that 3j years is the average. I have made my comment on that matter.


Roch Pinard: So far as applications are concerned that were filed prior to January, 1951, there are 1,087.


Alexander Malcolm Nicholson: I was interested in the discussion with regard to salaries for these patent examiners. Will the minister indicate the qualifications needed? These salaries would appear to me to be extremely low having regard to the type of work required. A short time ago we were discussing the estimates of the Minister of Mines and Technical Surveys and I referred to a geolpgist, a friend of mine, who had been in that department for 20 years but who left the department to go with the Shell Oil Company at double the salary. He had about 20 years' service in the Department of Mines and Technical Surveys but he started in with the Shell Oil Company at double the salary he was receiving in the government service. If we are going to obtain people to do this work, it would appear to me that they must be paid salaries in line with those paid by private industry. Will the minister indicate what qualifications he requires of a grade 1 examiner?


Roch Pinard: The only qualification-and it is the difficult one, I suppose, to obtain-is that the applicant must be a graduate engineer from a recognized university. That is the only qualification. He receives his training in the patent office. If he is a qualified graduate engineer he may enter the service and then he receives his training there. But it just so happens that amongst those who are graduate engineers, as I said before, only 92 inquiries were made about that competition. Out of those only two made application to enter the service.


Mr. Small:: In reading the debate in 1947 and the discussion that took place in the banking and commerce committee at that time, I find that the commissioner outlined three or four things that he thought would make for improvement of the situation existing at that time. He had about 27 examiners and he thought that if he had 50 he would overtake the backlog. He now has 107. His complaint also at that time was that he did not have sufficient office space or room. He said he thought that if he had 50,000 square feet the accommodation would be ample to process the patents going through. We just had the information from the minister this afternoon that 7,000 extra square feet were obtained this year. What is the total office accommodation as to the number of square feet now?


Roch Pinard: The total is 42,000 square feet.


Robert Hardy Small: It is still a great deal short of what the commissioner asked for at that particular time and he would probably need much more now. He outlined the difficulty he had in obtaining recruits and their training for the office. In the details here I note that where you had 50 patent examiners, grade 1, last year you are down to 42 this year. Then in the next grade, grade 2, you had 15 last year whereas you have 28 this year. That makes a sum total of 70 as compared with 65 in those two groups last year. For instance, you have either promoted them up to grades 3 and 4 or you have 30 in the classification that you call grade 3 and grade 4. The whole story is revealed here in what you call class 5. Last year you had 14 patent examiners in this grade, and today you have only seven, and you are making provision for salaries at $7,200. The complaint of the commissioner in 1947 was that he had difficulty in obtaining patent examiners because they could not find accommodation to live in Ottawa. Of course that was under war conditions. Here you have a situation where you have trained examiners who reach grade 5, and the salary is $7,200. You only have seven of that grade remaining. Where have the others gone? Is it because the salary is not sufficient to retain them?


Roch Pinard: It is the result of the classification of some of these positions. As the hon. gentleman will see, the civil service commission reclassified some of these positions from grade 4 to grade 5.


Robert Hardy Small: I can see that there are promotions taking place, but when you get near the top bracket or grade 5 you find that last year you had 14 and this year you only have seven. They have not been promoted to

grade 6, because if you revert to the previous page you find that you have only one grade 6 patent examiner and you have none in grade 7, whereas you had one last year. You seem to have lost your best man.


Roch Pinard: This is dealt with by the civil service commission, and is the result of the yearly reclassification that they make. I think that amongst the 20 patent examiners you have there, you will find some whose maximum salary is the same as the minimum salary for grade 5.


Robert Hardy Small: I am not trying to hamper or criticize, but rather to point out that what the commissioner was complaining about in 1947 is continuing. You are not providing sufficient salary to retain your competent men. After you bring them to the top, evidently $7,200 is not going to be enough to retain these men. According to these figures you have lost seven of your top men.


[Stage Direction]
Item agreed to.
427. To provide for special expenditure in connection with a commission under the Inquiries Act to inquire into the working of the Patent Act, the Copyright Act, the Industrial Designs Act and other related legislation, $35,000.
Donald Methuen Fleming: May I ask the Secretary of State if the royal commission is inquiring into the operation of the patent office, the copyright branch or the trade marks branch, or is the commission confining itself simply to the law? I raise that question because it might be of interest to know whether the commission is inquiring into such subjects as we have been discussing here this afternoon, namely the adequacy of personnel, the adequacy of the remuneration to attract competent personnel to the technical services in these branches, the adequacy of accommodation and similar questions.


Roch Pinard: I think the best answer to that would be for my hon. friend to read the order in council. I will send him a copy of it this afternoon.


Donald Methuen Fleming: Probably the minister could tell me, in a word, whether the terms of reference are broad enough to permit the royal commission to inquire into these related questions?


Roch Pinard: The order of reference does affect any matter that falls within the legislation to which the hon. member has referred. For instance, it deals with incentive; if there is sufficient incentive for the public to have the full benefit of the legislation, and that would be an item that would cover the subject referred to by the hon. member.
Supply-Secretary of State


Donald Methuen Fleming: I am not quite clear yet, if the minister will be patient with me. Will he be a little more explicit as to just what the royal commission is doing? I take it from his answer the terms of reference of the commission are broad enough to permit them to inquire into the operation of these various branches. Is the royal commission actually undertaking the study of the sort of things we have been discussing here today?


Roch Pinard: I will read the order of reference as it appears in the order in council:
Establishing a commission of inquiry under the authority of part I of the Inquiries Act, to inquire as to whether federal legislation relating in any way to patents of invention, industrial designs, copyright and trade marks affords reasonable incentives to invention and research, to the development of literary and artistic talent, to creativeness, and to making available to the Canadian public scientific, technical, literary and artistic creations and their applications, adaptations and uses, in a manner and on terms adequately safeguarding the paramount public interest, the whole in the light of present-day economic conditions, scientific, technical and industrial developments, trade practices and any other relevant factors or circumstances, including practices under or related to the said legislation and any relevant international convention to which Canada is a party; to submit to the governor in council a report on its findings, with any recommendations that may appear to it advisable for changes in the said legislation.
I think if we refer to those terms we shall find that the things the hon. gentleman has mentioned may be relevant factors that could be dealt with by the commission.


[Stage Direction]
Item agreed to.
Public Printing and Stationery-
346. Departmental administration, $489,936.
John Borden Hamilton: think perhaps I should like to say first of all that I read with a great deal of interest and satisfaction a story in a recent issue of External Affairs which told how an employee of the printing bureau in Ottawa, Mr. B. E. Rothwell, had gone to Korea and in association with the United Nations group there established a large and apparently extremely well run printing plant for the production of educational material under very difficult conditions. I think the fact that Mr. Rothwell was asked to undertake this job is a tribute to the calibre and capabilities of many people we have in the government service in Canada.
I have one question in connection with printing, and I would be grateful if the minister could answer it. Within a few days of each other there appeared two announcements asking for bindery people. Apparently some persons were required for service in


Roch Pinard: I am informed, Mr. Chairman, that the rates and salaries of the printers are first revised by treasury board and then confirmed by the civil service commission.


John Borden Hamilton: The
minister says they are paid on the salary rates prevailing in the region of Montreal. However, we have a difference here between those two points. One is at $1.02J and the other is 971 cents. That is for a bindery girl.


Jean-Thomas Richard: The rates are higher in Ottawa than in Montreal.


Mr. Winch:: I would ask the minister to
go into a little more detail in the matter of the status of employees of the queen's printer and the stationery department. The minister has just said that the rates are based on the established rates for the city of Montreal. Are they union rates? Are the technicians in the queen's printer branch, such as linotype operators and those engaged in the printing trades, union or non-union? If they are union employees are they paid union rates? If they are paid union rates, are the rates established by the civil service commission or on a regular basis of negotiation between the union and the employer? If they are union rates, how is it we do not have the union tag on all the printing material which comes from the queen's printer?


Roch Pinard: I am informed that the rates prevailing in the bureau of the queen's printer are based on the rates established between printers and the members of the typographical union in the region of Montreal, and that they are approved as such by the civil service commission.


Harold Edward Winch: Are the rates in Montreal
lower than in Ottawa or Toronto?


An hon. Member:: Yes.


Harold Edward Winch: When was Montreal chosen
as the basis for the rates to be paid in the branch of the queen's printer?


Roch Pinard: That was not a decision arrived at by the queen's printer. It was a

decision arrived at by treasury board. It is based on the medium of salary that should be paid, and as the result of a contract with members of the union in the region of Montreal, who are in great enough numbers for the government to consider the rate justifiable.


Harold Edward Winch: Are employees of the queen's printer members of the union in Montreal?


Roch Pinard: Some are, and some are not.


Harold Edward Winch: Do you have a union shop?
Has there been any request for negotiation for the purpose of establishing a union shop?


Roch Pinard: No; there has not been any
such request.


John Borden Hamilton: 
Roch Pinard: There may have been a change in rate in the meantime.


William McLean Hamilton: Does the minister say there was a change?


Roch Pinard: I do not know. I do not
know even the classification for which the advertisement was made. But if the hon. member will send me the notices I will look into it and let him know.


William McLean Hamilton: I
would point out to the minister that, for the third time, I have told him the classification is that of bindery girl. I said in my original remarks that it was the classification of bindery girl, and again when I asked my question I said it had that classification. Now the minister tells me he does not know the classification, and I tell him again that it is that of bindery girl.


Roch Pinard: I am told there are different rates for each of these groups of employees. It would be better if I had the notices in my possession, so that I could examine them, and give the information to my hon. friend later.


William McLean Hamilton: 
Roch Pinard: Because they are employed in different locations.


William McLean Hamilton: In
other words, there are two different rates for the same position, depending upon location?


Roch Pinard: Yes, depending upon the location of the position.


William McLean Hamilton: will send the notices to the minister, to see if perhaps he can think of a third answer, since we have had two already.


[Stage Direction]
Item agreed to.
Civil service commission-
84. Salaries and contingencies ol the commission, $2,604,535.
Harold Edward Winch: I would appreciate it if the minister would give the committee a detailed exposition as to the authority and the policy of administration of the civil service commission, as it relates to all civil servants of the federal government. All the ministers are in charge of their departments, and in those departments they have hundreds of thousands of employees. The salaries for those employees are set out in the estimates of each department.
Do I take it that there is some form of over-all control by the civil service commission? How far does the administration and authority of the commission go in the matter of hours of work, wages, overtime rates of pay, regular rates of pay and the like, so far as civil servants are concerned? That information along general lines would be welcomed by hon. members, I am sure.
But I should like to bring this discussion to a more particularized basis. I am told that when a person is taken on the strength of the protective security staff in the House of Commons he is taken on as a temporary employee. However, after having served for five sessions, I believe it is, he goes on a permanent basis. I presume there must be some jurisdiction and authority by the civil service commission over this staff, because they are civil servants.
I would appreciate it if the minister would inform us as to whether or not any serious consideration is being given to placing the protective security staff at all times throughout the year on a 40-hour week. I know that nominally they are supposed to work a 40-hour week, but when the house is in
Supply-Secretary of State session they cannot follow that regulation. And when we have a situation such as we have had in the last seven weeks, when the house has been meeting at eleven o'clock in the morning, and sitting through until ten o'clock, or later, in the evening, it would seem that these men are putting in at least four hours of overtime each day. Already they have accumulated 112 hours of overtime. I do not think it is right when the house is sitting for a period of approximately seven months. I think it is going to increase as the years go by; for as the population of Canada increases the work of the House of Commons will increase. Why should a condition be allowed to continue under which these men as civil servants are not entitled to, or are not receiving in fact, the same rights and hours of work a week as the majority of the civil servants in Canada, and as the majority of the employees in private concerns in Canada?
As I say, these men now have approximately 112 hours of overtime at this session. How are they to be paid for that overtime? I was interested, and I asked them that question and they said: "We do not know and we cannot find out." Are they to be paid in cash, or are they going to have time off? Personally, I think they would prefer the money; personally, I think they ought to get the money. They ought to know, after they have worked 112 hours overtime, whether they are going to get their money or their time off. If they are going to get time off, is it going to be on a decent and responsible basis so that they can plan ahead and take advantage of the 112 hours, or is it to be at the whim and will of the government as to when they can take the time off? It is a most unfortunate situation that employees of the government, in this case, the employees of the House of Commons, who are actually here at the service of the House of Commons and the Senate, should be in the position in which they find themselves at the present time. Therefore, I sincerely hope that the Secretary of State will give us the general picture of the power or the authority of the administration or of the civil service commission. In particular, will he tell us whether or not they are going ahead with some definite plan to employ the additional three or four men who are required so as to guarantee all through the year that the protective staff have the 40-hour week?
Second, are these men going to be paid for the 112 hours they have already put in, the money that is their due, or is some definite and decent arrangement to be made so that these men can have the time off?


Roch Pinard: I thank the hon. member for what he has said. I appreciate the remarks

Supply-Secretary of State he has made about the protective staff of the House of Commons and the Senate. This is a matter which surely affects also the privileges of this house and of the other place. I suppose they are matters that must also be studied by both Speakers of the two places. The problem has been raised. I am grateful to the hon. member for having brought it up. I have great sympathy for the men whose position he has explained.
I am informed that the men are generally paid on a days-off basis instead of getting extra salary for the extra work. In any event, I shall be pleased to bring this matter to the attention of the Speakers of both places and of the commission.


Harold Edward Winch: Has the commission any
authority at all over this matter?


Roch Pinard: It has authority if it receives requests from the House of Commons or from the Senate; otherwise it is not within the authority of the commission to intervene.


Harold Edward Winch: Has it any authority to receive a request from the employees to interest itself in the matter?


Roch Pinard: I am sure it has to be channelled through the Speakers of the two places. The requests have to be made through the Speakers of the two places.


Harold Edward Winch: I should now like to deal with a different matter. It must come under this item because it has to do with civil service insurance. I presume civil service insurance comes under the civil service commission?


Roch Pinard: That would be the finance department.


Harold Edward Winch: Fine; I shall raise it there.


Herbert Wilfred Herridge: I wish to ask the Secretary of State a few questions. Can he explain to the house what is the procedure in procuring personnel for various departments? First of all, who decides that a certain position is necessary? How is it done? How do they proceed to procure persons suitable to fill the positions? How long does it usually take after a department requests that a certain position be filled before that position is filled by the civil service commission?


Roch Pinard: The information is along these lines. The deputy minister of each department decides whether a new employee is needed or an additional position is necessary in the department. He so informs the civil service commission. Then it does have to receive the approval of treasury board. After it has been approved by treasury board the civil service commission is informed and then a competition is organized and advertised. The selection is then made by the civil

service commission. So far as delays are concerned, it depends on the nature of the position and the difficulty of recruiting the proper person required for the job.


Herbert Wilfred Herridge: Does the situation ever arise where a deputy minister says that he requires a certain employee in his department and the civil service commission say, "We do not think you require this employee" and do not supply the person?


Roch Pinard: Yes, it does happen.


Alexander Malcolm Nicholson: Yesterday when the estimates of the Department of Labour were before us I suggested to the acting minister that an investigation should be made into the civil service commission in connection with the administration of the Canada Fair Employment Practices Act. I have in my hand one of the many circulars that have been distributed recently in connection with positions. It says:
Married women may apply, but will be listed for temporary appointment only unless they can satisfy the commission that they are required to be self-supporting. An affidavit to this effect must accompany the application.
I should like the minister to explain in more detail just how it is decided that married women may apply for employment if they are required to be self-supporting? It seems to me that this is based on the assumption that Canada has just a very limited piece of pie available, and cannot make a larger pie. When my wife and I were first married she used to make quite small pies, but big enough for the two of us. But as the children came along she obtained larger pie plates and made larger pies and more pies. This has interest to me. If married women want to work they should not be prevented from working. If any department decides that a married woman is incapable, then they should have the right to fire her. Certainly, in this day and age, there should be no discrimination on the basis of one's marital status. Can the minister explain why we have the regulation? How do you determine whether a woman requires work to be self-supporting?


Roch Pinard: I might inform my hon. friend that this situation is under review at the moment. Possibly there may be a change, but it is under study.


Alexander Malcolm Nicholson: My criticism is that it has been decided. Here is government policy. When did it become government policy?


Roch Pinard: That has been the past practice, but it is now being reviewed.


Alexander Malcolm Nicholson: It has been the policy since when?


Roch Pinard: Since 1939.


Alexander Malcolm Nicholson: It was never changed during the war?


Roch Pinard: Yes, it was changed during the war.


Alexander Malcolm Nicholson: If it was changed during the war, that is what I am complaining about. Who was responsible for making the change during the war? It was decided that for the sake of the common good married women should be encouraged to work. I submit that in peacetime the more people who work the more work there will be and the higher the standard of living will be for all the Canadian people. Who had the responsibility for making the decision that married women cannot get jobs unless-


Roch Pinard: During the war, for obvious reasons.


Alexander Malcolm Nicholson: Has an order in council been passed? Who has been responsible for making this change?


Roch Pinard: An order in council was passed to revert to the former position.


Alexander Malcolm Nicholson: Will the minister table the order in council?


Roch Pinard: I will.


Mr. Regier:: I think this is the proper time once again to register a protest that not all civil servants in Canada employed by this government are being given the benefit of the five-day 40-hour week. We have uttered this protest on other occasions. It must be done continuously until the day comes when this government will not only consider itself as an average employer in the community in which it operates but will make up its mind to be a model employer in all the communities across Canada. I fail to see any equity in the position of one civil servant having to work a 44-hour week while another civil servant doing exactly the same type of work is required to work only a 40-hour week simply because he happens to live in a different area. I realize it would mean an increase in the cost of operating government but it is an increase which all organized labour would heartily endorse and the people would be glad to pay for. We should like to see the government of Canada lead the way in providing adequate working conditions.


Roch Pinard: As my hon. friend no doubt knows, about 90 per cent of the civil service are now on the five-day, 40-hour week basis. The policy of the government is to increase gradually the number when industrial conditions are such that an increase is justified.
Supply-Secretary of State


Erhart Regier: Is a new policy being announced by the minister when he says that they are gradually increasing the number? Is it the intention of the government to eventually have all civil servants on a five-day week?


Roch Pinard: That has been the practice, to gradually increase the number when industrial conditions in a given locality justify it.


Mr. Montgomery:: The minister has just said that the government follows the practice of paying the wages paid by industry in the area and I should like to direct the minister's attention to a condition which exists in my constituency. The customs and immigration employees in part of the area are on a five-day week while those in another part are not. I took up this matter and the explanation given was that industry in part of the area was not on a 40-hour week. I know that area as well as anyone in the department, and whoever is giving that information to the civil service commission is not giving correct information.
Industry in the area consists of lumbering, railroading, hydroelectric and things like that and there is no justification for this discrimination. The civil service commission must have got some information which is not correct. I complained earlier but was put off with the statement that this was going to go through. The point is that for months customs and immigration officers have been discriminated against and I submit that that is wrong. There must be something wrong with the information coming to the commission because there is no justification for this treatment.


Roch Pinard: There is no special method by which the commission obtains its information and any information coming to the commission is dealt with. The practice is for these requests to go to the commission through the unemployment insurance commission. If my hon. friend wishes to supply me with full information I will be glad to take it up with the civil service commission.


Herbert Wilfred Herridge: Can the Secretary of State tell me whether the civil servants in the Trail area are working the same number of hours per week as the employees of Consolidated Mining and Smelting Company?


Roch Pinard: I shall have to look into the matter and supply the information later.


Herbert Wilfred Herridge: I think it would bear
investigation.
6802	HOUSE OF
Supply-Secretary of State


Alexander Malcolm Nicholson: I understand that the offices of the minister's department are in the Jackson building, which is shared with the Department of National Health and Welfare. When staffs are sent home on account of hot weather do all ministers clear with the Secretary of State, who has jurisdiction over the civil service, or does each department make its own decision?


Roch Pinard: They all clear with each department.


Alexander Malcolm Nicholson: Can the Secretary of State indicate the total number of hours that have been lost this summer in all departments because of the hot weather?


Roch Pinard: That information may be supplied by the Minister of National Health and Welfare. I am not in a position to state just what money has been lost.


Erhart Regier: We were very glad to hear the other day that penitentiary employees are to be put on the 40-hour week on September 1. Can the minister state what other classes of civil servants are not now on the 40-hour week?


Roch Pinard: Hospitals, asylums and other institutions of that kind.


Erhart Regier: Why have those civil servants not been granted the 40-hour week?


Roch Pinard: The matter is under consideration at the present time.


Herbert Wilfred Herridge: Has the civil service been able to recruit all the professional personnel that it requires?


Roch Pinard: I gave engineers as an example. It is extremely difficult to find qualified engineers for our patents branch. I am told that there is also difficulty in recruiting professional men for other jobs.


Herbert Wilfred Herridge: Is this difficulty caused by the fact that the salaries paid by private industry are larger and that many of our engineers are going to the United States? I met three in the last six months who obtained employment in the United States shortly after graduation.


Roch Pinard: I am told that it is simply because of the greater need. The salaries paid are about the same as those paid by industry.


Herbert Wilfred Herridge: There is a general shortage?


Roch Pinard: There is a greater need
throughout the country.


Thomas Speakman Barnett: Is the civil service commission responsible for setting the wage rates and working conditions of casual employees?


Roch Pinard: Prevailing rates are a matter for the treasury board.


Thomas Speakman Barnett: Why is not the prevailing rate principle applied to casual employees? If I might give one example, in the evidence given in the industrial relations committee with respect to casual employees of the unemployment insurance commission, it was indicated that the same rate was paid right across the country, regardless of what prevailing rate might exist in a certain area. I wonder how that sort of decision is arrived at.


Roch Pinard: The conditions of employment so far as casual employees are concerned are settled between the civil service commission and the unemployment insurance commission.


Thomas Speakman Barnett: Why is it that the prevailing rate principle does not apply under those circumstances? For example, why should the commission, let us say, in a certain area in British Columbia, when it is attempting to recruit casual employees to deal with the peak periods of unemployment in its various offices, be in a position where it is compelled to pay substandard wages in contrast to those prevailing in the area for comparable work?


Roch Pinard: The casual rates, I am told, vary according to the locality. If the hon. member has a special case in mind, and will supply me with the information, I shall be pleased to look into it.


Thomas Speakman Barnett: The reason I have raised the question is that that point was brought out in one of the meetings of the industrial relations committee this year when it was considering the unemployment insurance bill. I forget all the details of how the question came up, but it was stated there that the rate for casual employees was the same right across the country. The last remark of the minister would seem to indicate that it varies as between different localities.


Roch Pinard: It varies according to localities.


Thomas Speakman Barnett: How do you reconcile this statement?


Roch Pinard: I do not know who made the statement at the time.


[Stage Direction]
Item agreed to.
DEPARTMENT OF NATIONAL REVENUE Customs and excise divisions-
2S6. General administration, $3,294,791.
Hon. J. J. McCann (Minister of National Revenue):: Mr. Chairman, I just wish to make a short preliminary statement with reference to this division of the department's activities. The estimates we are submitting cover the operation of the customs and excise divisions

of the Department of National Revenue, consisting of the headquarters branches at Ottawa, their field officers and some 271 ports, 25 outports and 130 out-offices situated throughout the country.
This division was responsible for the collection of revenue amounting to over $1,449 million in the fiscal year ending March 31, 1955. As the house is aware, the greatest part of this revenue is derived through the control of imported goods, the collection of customs duties, excise and sales taxes, excise duties on alcohol and tobacco products, as well as revenue derived from seizures, penalties, etc.
I think the house will agree with me that in this division, which is responsible for raising so large a part of the revenue upon which the whole framework of government is supported, any arbitrary reduction of staff or money could result in inadequate customs and excise examination and supervision with attendant loss of revenue to the crown, and would indeed be false economy.
Whilst there is a decrease of $204,850 in vote 289, construction or acquisition of buildings, works, land and new equipment, over last year, there is an over-all increase in the estimates of $931,741. The greatest part of this is accounted for by salaries and wages, the remainder being made up of such things as living allowances, commissionaire service, travelling expenses, rental accommodation, cartage, repairs and upkeep of buildings and works, etc.
With this short preliminary statement, I think we can proceed to a more detailed examination of the different items. I shall be very happy to answer any questions which come along.


James MacKerras Macdonnell: Mr. Chairman, I have every intention of following the minister's admirable example of being very brief. I should like to ask him one or two general questions first. There was a time a few years ago when the customs and excise department had work to do for other departments on such matters as foreign exchange, import quotas and that kind of thing. Do those duties still exist, or have they mainly come to an end?


James Joseph McCann: Mr. Chairman, the ones that we took on during the war have, but we still have partial administration of something like 40 other different acts.


James MacKerras Macdonnell: I shall not ask the minister to give a list of them, but could he indicate one or two of the important duties that still have to be discharged for other departments?
50433-430}
Supply-National Revenue


James Joseph McCann: Principally for the Department of Agriculture, the Department of Trade and Commerce and the Department of National Health and Welfare.


James MacKerras Macdonnell: I should also like to ask the minister a question about smuggling. It is an old topic, and I should like to see how it stands now, particularly the smuggling of cigarettes. He will be familiar with the publication I have here in my hand presented by the Tobacco Marketing Association of Ontario, and if he has not a copy of it here I shall read briefly from it indicating the extent that smuggling has reached. It says that they reckoned that in 1952-53 there was smuggling of about 1-5 billion cigarettes- "smugs", as they are called-and that that has now substantially decreased. Would the minister indicate what he considers the situation to be at the moment?


James Joseph McCann: Mr. Chairman, I do not
think it is possible to say how many cigarettes have been smuggled, but the figures we have indicate a very sharp falling off in the smuggling of cigarettes. In 1952, when it was about at a maximum, there were
24,839,000	cigarettes seized. That dropped off in 1953 to 13,194,000, and in 1954, I am glad to say, there were less than 40 per cent of that, the number being 5,081,098.


James MacKerras Macdonnell: I shall ask one more question and then I shall give someone else a chance. The minister will remember the legislation that was passed something over a year ago in connection with special dumping from the United States in relation to the end-of-the-run prices, as they were called. He will remember that he has told us already that a considerable number of agents of the department were appointed to tour the United States and to keep track of what is being accomplished. Would he say something about that too?


James Joseph McCann: Mr. Chairman, the hon. gentleman refers to the application of section 35(6), which has to do with the valuation for duty purposes. I may say that up to April 30, 1955, 311 calls were made on exporters with a view to appraising under this section. On many of those occasions our officers had several importations of different things under review. In some cases investigation proved that there had been no decline in price during the six months' period, or the weighted average price was the same as or lower than the selling price to the Canadian importer. In others, decline in the price of raw materials justified the lower price. In a number of instances it was found that the importations required adjustment under other provisions of the law.

Supply-National Revenue
Then it has been estimated that the number of appraisals and the commodities affected were as follows:	cotton fabrics, drapery
fabrics, ladies' clothing, men's clothing, nets and laces, refrigerators, synthetic fabrics and towels. The special duty that was paid in those instances has been very considerable.


Alexander Malcolm Nicholson: Some time ago I referred to the royal commission on customs and excise back in 1926. I realize that this might be ancient history, but I wonder whether the minister has any information available to indicate what prosecutions took place as a result of this inquiry, for example, in connection with Prairie Drug Company of Regina and some of the other firms such as Canada Drug, Yorkton Distributors and Dominion Distributors.
Some recommendations were made with regard to prosecutions at that time. I have been looking through Hansard for a number of years, but I do not seem to be able to find out what happened as a result of the findings and recommendations of this royal commission. Is the minister able to give us any details?


James Joseph McCann: That matter goes back a period of 30 years. I could hardly be expected to have the details of what happened at that time. But I may say there have been prosecutions and that fines have been paid. If the hon. gentleman has some specific companies with reference to which he wants to have the details, we shall be glad to try to supply him with that information.


Edward Turney Applewhaite: Shall the item carry?


Donald Methuen Fleming: No. There are several points I should like to raise. First of all, the income tax appeal board has had something to say in recent days about some evidence introduced by the department in cases before that board. I have before me a Canadian Press report of July 8, which reads as follows:
The income tax appeal board has chided the revenue department for strange tactics in introducing an income tax return as evidence in an unsuccessful attempt to defend a government tax decision.
Usually tax returns are secret. Revenue department officials said later it is the first time they had introduced such evidence before the board but had done so because they believed it essential.
Reference is made to the case of-


James Joseph McCann: Has this matter to do with customs and excise?


Edward Turney Applewhaite: I was just going to raise that point. Unless it is leading up to a reference to the customs and excise branch, would the hon. member agree that we clear up the customs and excise branch item? Then I will call the taxation division.
[Mr. McCann.1


Donald Methuen Fleming: Thank you, Mr. Chairman. Is the minister in a position to indicate to the committee whether the customs facilities in Toronto are in a position now to give improved service over that given in the past? I had occasion to bring to the attention of the department several months ago delays in clearing parcels which had been the matter of complaint on the part of brokerage firms and commercial houses there. Is the minister now in a position to indicate that the department will have at its disposal adequate accommodation so as to give to the public the service to which it should be entitled?


James Joseph McCann: Mr. Chairman, I may say that we are not at all satisfied with the facilities we have at Toronto. In a growing city like that they should be increased. We have made representations to the proper department, namely the Department of Public Works, and I think that matter is being given serious consideration. At present the building that is occupied there is for the customs and excise divisions and for the income tax division. Already plans are made and I think tenders are called or are being called for a new income tax office. When that accommodation is supplied it will leave room for better facilities where we are on Front street in Toronto.


Donald Methuen Fleming: About how soon does the minister expect to take over that additional accommodation?


James Joseph McCann: I would not say. It would probably be a matter of a couple of years before we can get into that new income tax office.


Donald Methuen Fleming: Cannot something be done to accelerate the filling of the need the minister has indicated? Two years is a long time. The growth of the city and the expansion of business there has been going on at an extremely rapid rate. The inconveniences and delays being suffered by the commercial houses as a result of the inadequate accommodation is becoming increasingly serious. If we must wait two years for any amelioration of the present conditions I think there is something decidedly wrong. Surely something can be done to improve this situation in a shorter space of time than that.


James Joseph McCann: I am told that something has been done to improve the situation. It is one that is ever in the minds of our officials. Just as soon as changes can be made, they will be made.


Edward Turney Applewhaite: Shall the item carry?


Donald Methuen Fleming: I turn to another matter. My attention was drawn to what apparently is a

practice in the department with the publication last month of order in council P.C. 1955935, dated June 23, 1955. This is an order in council containing regulations governing payments for assistance in respect of offences against the customs laws and the Excise Act.
Under these regulations the Minister of National Revenue is permitted to pay any person for information or other aid given by that person in respect of offences against the customs laws and the Excise Act. Then there are detailed provisions as to the amount; for instance, 25 per cent of the net proceeds of any seizure, forfeiture or penalty where the net proceeds do not exceed $5,000, together with percentages of the excess over $5,000; and then percentages of the value of domestic goods seized and forfeited and so on, with quite a variety of provisions.
I should like to ask the minister how long it has been the practice of the department to make payments to persons for information and aid given in respect of offences against the customs laws and the Excise Act, how extensive the payments have been in recent years, and how the scale of payments set forth in the new regulations compares with the scale in effect hitherto.


James Joseph McCann: Mr. Chairman, this has been a practice for a great many years, I think almost since confederation. I am happy to say that it is not used a great deal and that the amount we pay out in moieties is inconsiderable as compared with the revenue collected. I may state that no money now is paid to any officers or officials of the department.


Donald Methuen Fleming: What was the amount paid in the last fiscal year, for example?


James Joseph McCann: I am told that it was only a few hundred dollars all told in the last year.


Donald Methuen Fleming: My other question is this. How does the scale of percentages and payments set forth in the new regulations compare with that in effect heretofore?


James Joseph McCann: I am informed that the scale is practically the same, and that to which you have referred is just a rewriting of the regulations.


James MacKerras Macdonnell: Will the minister add a word to what he said on the precautions against the end-of-the-line dumping? Is it correct that the valuation for duty is on the basis of the sale in the country of origin over a period of six months, and not at the time of export? If so, how is that done?


James Joseph McCann: That is right; it is over a period of six months.
Supply-National Revenue


James MacKerras Macdonnell: That means you have to go to the further trouble of getting prices over the whole period and averaging them?


James Joseph McCann: Yes, the weighted average over a period of six months.


James MacKerras Macdonnell: What is the situation with regard to diplomatic clearances, the goods of diplomats coming in? What happens to their effects?


James Joseph McCann: Goods brought in by diplomats are admitted free of customs duties and taxes and without examination; that is diplomatic immunity. This refers to all countries. Our people, when they go to foreign countries, are given exactly the same privilege.


James MacKerras Macdonnell: The minister has already answered my next question. Our own people returning get the same privilege?


James Joseph McCann: Supposing a Canadian diplomat goes to the United States or Europe, the same privileges are given to him as we give to representatives of those countries coming into Canada. They pay no customs duties or taxes on the goods that they bring in. There is one exception to that, and that is automobiles. If an automobile were purchased by a diplomat he gets that immunity provided the automobile is not sold within a period of two years.


James MacKerras Macdonnell: Do our own returning members of the external affairs department get any concession with their effects which they may accumulate abroad?


James Joseph McCann: Yes. People returning to this country get an exemption from taxation provided that they have been away from the country a year or over, and provided the goods have been in their possession for a period of six months. They cannot dispose of these goods within a period of 12 months, otherwise they would have to pay tax. This applies not only to diplomats but to Canadian citizens coming back to their own country.


James MacKerras Macdonnell: What is the situation with regard to premises occupied under lease by the Department of National Revenue? Is the rental paid by the department or by the Department of Public Works?


James Joseph McCann: It is always paid by public works.


Donald Methuen Fleming: Referring to the matter of payments made to persons rendering aid or furnishing information in the course of the enforcement of the provisions of the Excise Act or similar taxing acts, will the minister indicate where in the details of the estimates there is any provision made for payments

Supply-National Revenue to informers? I do not see any item dealing expressly with it, and I should like to know what provision has been made this year for such payments?


James Joseph McCann: I think, Mr. Chairman, that comes under the heading of law and other costs, customs, excise seizures. The amounts are given under the details for general administration. It starts off with total salaries and wages; living allowances, law and other costs-


Donald Methuen Fleming: How much out of this item of $130,000 for law and other costs has been set up for this particular use?


James Joseph McCann: Well, the experience has been that the amount paid is so small there is no specific amount set up for it. It is included in this amount. As I said before, it is only a matter of a few hundred dollars. My officials tell me that last year the amount was not more than a few hundred dollars.


Mr. Pearkes:: Could the minister say whether any special exemptions are given to members of the armed forces with respect to the amount of goods they may bring into this country after being stationed abroad?


James Joseph McCann: Exactly the same conditions pertain, to members of the armed forces as those which I set out a few minutes ago.


James MacKerras Macdonnell: I want to ask the minister regarding a principle which one finds in several sections of the act. I refer to section 132 which says that any officer, having first made an oath before a justice of the peace that he has reasonable cause to suspect that goods liable to forfeiture-and so on-may enter. Now, that is an officer of the national revenue department.


James Joseph McCann: An officer of the customs and excise division.


James MacKerras Macdonnell: I wish the minister would say a word as to the operation of that power which his official has, just as if he were an officer of a police force. I do not want to dwell on it particularly, but I want to know whether it operates smoothly or whether it runs us into difficulties?


James Joseph McCann: We have no trouble in that particular regard. I am told that it is usually done on the basis of a writ, so that gives the authority. Under the definition in the Customs Act an officer means a person employed in the administration or enforcement of the act, and this includes a member of the Royal Canadian Mounted Police. They act as our officers in a great many instances.


James MacKerras Macdonnell: I am very interested in what the minister said. You do, in fact,

usually avail yourselves of a writ. In other words, you do not rely wholly on this section?


James Joseph McCann: In the event of an emergency, when it is not possible to obtain a writ, the officer has authority under this section to act in that capacity.


Donald Methuen Fleming: Has the department given consideration to some other approach to the collection of duties on very small purchases? For instance, I have before me one where the purchase was only a matter of several dollars and the collection of duty yielded only a dollar or two. Obviously in those cases, if one attempted to isolate the cost of collection, it does not pay. On the other hand, I quite appreciate that there must be one rule applicable to all. Has any consideration been given, apart from the existing exemptions in relation to purchases by persons who have been in the United States for 48 hours and are bringing goods back in their baggage, to exemption in those cases of small purchases where it obviously is not worth while for the department to attempt to collect the very small amount of duty involved?


James Joseph McCann: We are an administrative department entirely. We have not that authority. If the law said that there would be exemptions up to $5 or so, we would do that. We have an arrangement working in some places whereby we make it easier for the ordinary citizen who has an invoice for a book or something of that sort, and which goes to the customs postal branch. In the city of Montreal, for instance, instead of having that person go down to the customs office and pay his tax, we have made arrangement with the postal authorities whereby the tax is collected at his home. This is experimental within the last two or three years, and we hope that in due time it may be extended to many more places.


Donald Methuen Fleming: Would there be any serious administrative difficulty involved? I can appreciate that perhaps this problem might fall on the shoulders of the Minister of Finance rather than those of the Minister of National Revenue. But is there any serious administrative problem involved if some exemption in the case of small purchases were introduced?


James Joseph McCann: No, it would make it that much easier for us in the handling of a lot of small parcels. It would be a convenience and I am sure it would have an effect upon the revenue because, as you know, many muckles make a mickle.


[Stage Direction]
Item agreed to.

Customs and excise divisions-
28V. Inspection, investigation and audit services, $3,491,435.
George Randolph Pearkes: Would the minister explain the difference in responsibility between a port and an outport? My reason for asking is that I have received complaints from what I believe is now an outport from the port of Victoria, namely Sidney, on Vancouver island. At one time I believe it was classified as a port, but it is now classified as an outport. The result is, I am told, that articles arriving by airmail at the airport of Patricia bay, which is exactly one mile from Sidney, have to be taken to Victoria, a distance of about 20 miles, and then brought back to Sidney, if the recipient of that parcel happens to be a resident of Sidney. There seems to be no facility for the delivery of parcels from the airport to the village of Sidney, although I believe Sidney is now an outport and, in the past, was a port, as far as customs duties are concerned.
A considerable number of tourists arrive by boat and are dealt with through the customs port at Sidney. But this does not seem to apply to those who arrive by air, who must have their parcels sent in to Victoria.


James Joseph McCann: Whether a place is a port or an outport is a matter of departmental designation. There should be no difficulty in the matter the hon. member has referred to. We will have it looked into and will try to clear it up to his satisfaction.


George Randolph Pearkes: Would the minister give consideration to the advisability of restoring Sidney to the status of a port?


James Joseph McCann: Yes, we will give consideration to it.


[Stage Direction]
Item agreed to.
Customs and excise divisions-
289. Construction or acquisition of buildings, works, land and new equipment, $845,150.
James MacKerras Macdonnell: The minister has explained that where it is a case of the rental of buildings, the Department of Public Works pays. On the other hand apparently the department is acquiring land for its own purposes, to construct its own buildings. Is that correct?


James Joseph McCann: We do a certain amount of temporary building at smaller ports. For instance, along the international boundary line between Canada and the United States there are lots of places where a highway intersects and we must have either a fulltime or a part-time officer in charge. The matter of construction might involve a small
Supply-National Revenue building of perhaps $10,000. We would construct such a building, ask for the appropriation, and have the right to do so.
But when it comes to the construction of a large building in a large port such as Vancouver or Toronto we would make a requisition to the Department of Public Works to supply the facilities for us. In a great many places we may occupy a building occupied by another department of government. Hon. members will have noticed, travelling across the country, that very often the post office building in a location may have facilities upstairs for customs and excise. We try to be as economical as we can in that regard. But in the smaller places we do the actual construction, under provisions set out in our own department.


James MacKerras Macdonnell: Then the distinction is not really a matter of principle, but is more or less by guess and by God.


James Joseph McCann: Oh, no.


James MacKerras Macdonnell: I am referring to the dividing line between where you carry on under your own steam and where you have the Department of Public Works set you up in business.


James Joseph McCann: It depends entirely upon the size of the building and the requirements of the point involved. For instance, we would not think of constructing a building that would cost, let us say, $100,000 or perhaps a million dollars. But when it comes to a smaller place where only a few thousand dollars would be involved, we would go ahead. And we have found over the years that we have done this with perhaps greater expedition than it could be done by any other department. It is for that reason we have adopted that policy.


James MacKerras Macdonnell: I am not going to press it further; but I still think my definition is the best one that has been given thus far.


[Stage Direction]
Item agreed to.
Taxation division-
290. General administration, $2,524,429.
James Joseph McCann: I wish to make a brief statement.
To assist hon. members in their consideration of the taxation division's estimates, I should like to comment briefly on the more significant features of the operations and the estimates of the division.
As set out on page 49 of the estimates, the amount of $27,539,017 will be required to operate the taxation division for the 1955-56 fiscal period. This figure represents an increase of $1,372,024 over the amount provided for the last fiscal year. To function during

Supply-National Revenue the next fiscal period, the income tax appeal board will need $80,790, which is $5,870 more than last year.
Although the division was able to effect reductions totalling $107,350 in certain allotments, an increase of $1,386,624 in salaries and wages is mainly responsible for the higher estimates this year. The total payroll provided for in these estimates is $24,142,967. As at April 1, 1955, the total regular staff of the division was 6,301 as compared with 6,134 at the same date last year. In addition, 1,207 seasonal employees were on strength at April 1 this year, compared with 1,164 last year.
The increase in the amount requested is due principally to the mounting volume of work being processed in the district offices, necessitating more full time and seasonal staff in the coming year. There is still need of additional permanent staff with the qualifications required to perform the work of the division. The division is continuing its efforts to seek out and hire technical personnel who will bring the staff up to the strength necessary to do the work required of it, and extensive recruiting is expected to fill some 400 vacant positions through 1955-56. During the year 1954-55, the total revenue collected by this division amounted to $2,458 million. If you add that to the figure that I gave for the customs and excise division, which was $1,499 million, you have a total collection in the Department of National Revenue of over $4 billion, and I submit that that is a big job and it is one that requires constant supervision, efficient and hard-working staff, and that it extends from Newfoundland to Vancouver and Victoria and up to the Yukon. All told, we have 27 divisions. When we consider that the total tax withheld at the source from income payments was $875 million, it follows that $1,583 million, the balance of the total revenue collected, was due to the work of our assessing and collecting staffs. In the light of these figures, hon. members will appreciate the importance of bringing the strength of the staff to a level permitting the prompt and efficient operation of the division.
The policy of hiring temporary employees to handle returns during the heavy filing period has proven most successful. The peak work-load coinciding with the bulk filing period from February to May is promptly handled, as evidenced by the 1,350,000 refunds mailed out by April 30, 1955. This indicates that one-half of the 2f million refund cheques issued annually are issued prior to the final date for filing the returns. The remainder are issued during May or later, according to when the taxpayer files his return.

The number of seasonal employees which we plan to use this fiscal year is 1,257, an increase of 82 over last year's estimate; but as the period of employment has been shortened, the cost of hiring these seasonal employees therefore remains about the same as last year.
To give some indication of the work performed in the division, there were 4,794,363 individual returns received and processed during the year ending March 31, 1954. This represents an increase of approximately
280,000	returns received during this period over the number received during the previous 12-month period.
The number of corporation returns received during the year ending March 31, 1955, was 68,522 as compared with 64,805 during the preceding 12-month period.
Besides salaries and wages, only two other allotments show increases of any significance over last year's estimates. Provision has been made for an additional $28,000 in travelling expenses in the general administration vote. This item provides for the expenditures incurred by headquarters staff in visiting the district offices for the purpose of direction and inspection. The additional amount will be required because it is planned to step up the coverage of district offices. Similarly, the allotment for postage in district offices has been increased by $35,000 over last year's estimates, as increased expenditures are anticipated.
It has been possible to effect a reduction of $42,000 in the provision for office machine equipment. The equipment modernization program currently in progress is intended to simplify accounting procedures and to make the method of handling crown funds as efficient as possible. The provision for office stationery and supplies has also been reduced by $20,000.
Hon. members will be interested to hear that the plans to open a new district office in Rouyn are going ahead. This office should be in full operation before the close of the fiscal period.
On February 14, in reply to a question by the hon. member for Okanagan Boundary, I stated that a district taxation office would be opened in the interior of British Columbia but that its exact location had not yet been decided. My officials have now completed a study of the factors involved, such as the area to be administered, population growth and road, rail and airline facilities, and recommend that the new office be situated in the city of Penticton to administer the counties of Kootenay and Yale. Penticton has been selected as the most suitable location from

which to provide the best possible service and convenience to taxpayers in this important area which has a population of some 204,000 people and embraces 54,000 square miles.
It is not anticipated that the new district office can begin operations until the end of 1956. Suitable premises must be secured, the office must be staffed, and the necessary transfer of files and records must be made from the Vancouver district office which now administers the area.
With respect to the income tax appeal board, there is an increase of $5,870 in the appropriation required. This is mainly due to the fact that the board, consisting of four members, has been divided into two-member sittings. This procedure has accelerated the number of hearings and consequently the cost of travel and the use of court reporters will increase. There were 404 appeals filed in the calendar year 1954, and 381 were disposed of by the board during the same period. As of April 1, 1955, there was a total of 212 appeals outstanding, including 43 which are on the reserve list awaiting judgments on similar cases, or for previous years, in the exchequer court or in the supreme court.
In this brief statement I have endeavoured to bring out the more significant points related to the taxation division's estimates. If hon. members wish, I shall make answers to any questions.
There is one point I want to add, which is not included in this statement, which I think is very significant. Our whole appropriation here is to the extent of approximately $65 million. Last year, by reason of reassessment, we collected $72-3 million additional.


James MacKerras Macdonnell: Mr. Chairman, however painful our personal association may be with the income tax division, we do recognize that it does a big job and with a very considerable amount of efficiency. I was struck with two or three of the figures, particularly the number of refunds running into the millions. I suppose the answer to that is that the department, in its regulations when it is dealing with deductions at the source, has to play safe. I presume that is the reason, and perhaps the minister will say the inescapable reason, why you must have these literally millions of refunds.
I was interested in what the minister had to say about the recruiting of personnel. I wish he would say a word or two more about that and tell us just the kind of people they are looking for and the method that they are taking. He might also say a word as to the number of refund cheques which are outstanding and not claimed. I think it amounted to 75,000 some years ago. I am
Supply-National Revenue wondering what the story has been since then and whether it has been found possible to get on the track of those entitled and cut down the number.


James Joseph McCann: The hon. gentleman expressed it well when he said that we are supposed to play safe. That is one of the reasons. There are other reasons which enter into the matter of refunds. For instance, the marital status of a lot of people changes; their exemptions change; their deductions for church and other purposes change; their medical expenses change; and it is these changes that make the great number of refunds that have to be paid back. What I wish to say is that they are paid back very promptly, and what I wish to reiterate is this. The peak-load coincided with the bulk filing period from February to May and is promptly handled, as evidenced by the fact that 1,350,000 refunds were mailed out by April 30. That is the due date; but many people, in order to get their refunds, make their returns in January, February and March and either get their refunds in cash or have them applied to their 1955 return in this instance. In the calendar year 1954 there were 2,722,000 refund cheques mailed to taxpayers with a round dollar value of $18 million. Of those only 15,580 cheques were in the first instance returned undelivered, but of this number 11,300 were subsequently delivered to the current addresses, leaving about 4,300 cheques still on hand having a dollar value of $120,000.


James MacKerras Macdonnell: Is that for the year or is that cumulative?


James Joseph McCann: That is for the year. During 1954, 99-8 per cent of the cheques were delivered, representing 99-9 per cent of the money. Despite the difficulty imposed by the time lag there remain only 65,512 undelivered refundable portion cheques for a gross value of $3 million. That has reference to the compulsory savings principle which was in effect in 1944.
With regard to staff, we always look for competent staff to do the work. We like assessors who have a C.A. or public accountant's degree. We make it our business to attempt to employ temporarily during the summer months young men who are taking this particular course with a view to having them become employees of the department when they have completed the course. We canvass the universities with a view to having them direct to the Department of National Revenue people who are training themselves in this type of work. They make excellent assessors and as they prove their worth they can increase their grades through competitive

Supply-National Revenue examinations from grade 1 to chief assessors or they can take administrative posts in the department.


James MacKerras Macdonnell: Does the department get any substantial number of recruits from other government departments?


James Joseph McCann: No, I cannot say that very many come from other departments. When competitive examinations are held they are held within the department and if a man from another department takes part and his standing is equal I would say that the man from within the department would be more likely the one chosen for the position.


Mr. Monteith:: The minister mentioned 1,257 seasonal employees.


James Joseph McCann: A total of 1,200 seasonal employees were on strength at April 1 compared with 1,164 last year.


Jay Waldo Monteith: I thought the minister mentioned 1,257 as being the estimated number for this year. Would that include the summer employees or are those employees taken on during the busy season from the end of April?


James Joseph McCann: Those are clerical employees who are employed during the rush when people are filing their applications. There is an increase to 1,207 from 1,164.


Jay Waldo Monteith: Would that include the students and so on employed during the summer months?


James Joseph McCann: The number we take on during the summer months is in the neighbourhood of 100.


Jay Waldo Monteith: The minister mentioned that some $875 million came from taxes deducted at the source, and then he said that the collection and assessing department was responsible for the balance of $1,583 million.


James Joseph McCann: That is right.


Jay Waldo Monteith: I can understand the taxes deducted at the source, but I cannot understand the collection and assessing department being responsible for the balance. Would not a lot of that be automatically filed with the tax returns? The minister mentioned a figure of some $70 million obtained by reassessments, which I think would represent the amount that the department had collected by actually going out after it and the rest would be paid automatically by the taxpayers, both corporation and individual.


James Joseph McCann: No, I cannot quite agree with that. The $875 million plus the $1,583 million gives the total collection of $2,458 million. It follows that the $1,583 million was collected

through the work of the assessing and collecting staff. Not everyone sending in a return sends in all the money with it and you have a problem of collecting it. While a person may make a return he does not pay all the taxes at that time and a lot of our work is in getting them to pay the balance.


Jay Waldo Monteith: Does the minister mean to say that approximately two-thirds of this $2,458 million has to be collected? Surely that cannot be right. Surely more than one-third of the total tax revenue comes in when the tax returns are filed. You do not have to collect it.


James Joseph McCann: It all depends on what the hon. member means by collecting. We do not in all instances have to go out and take it out of them. I am trying to point out that $875 million was deducted by the employer at the source and sent in to the Department of National Revenue. The other was collected by means of notices or what was sent in as final payment or payments in quarterly instalments. For instance, members of parliament have deductions made from their allowances and those are sent in. But a member may have investment income or be paying quarterly instalments. Many people are lax and have to be reminded that their payments are due. Receipts have to be sent out, and all of this is included in the process of collection.


Jay Waldo Monteith: I appreciate that. I was just wondering about the two-thirds.


Mr. Zaplitny:: Mr. Chairman, while we are on this item-


James Joseph McCann: Mr. Chairman, perhaps I can anticipate the question which the hon. member for Dauphin wants to bring up. When he spoke on this matter I promised that I would make a statement, and I think perhaps it would facilitate matters if I made it before he asks any questions.
I undertook on April 20 to reply to a question raised by the hon. member for Dauphin regarding certain remissions of income tax granted by orders in council to the Aluminum Company of Canada Limited, the Bell Telephone Company of Canada, the Saguenay Power Company Limited and the Gatineau Power Company. As I have previously advised, the Income War Tax Act and the Income Tax Act contained provisions which prohibited a taxpayer from deducting, as an expense of doing business when computing his income, any corporation tax as defined by regulation.
"Corporation tax" was defined at considerable length in three orders in council; P.C. 332,

dated January 30, 1948, P.C. 953, dated March 6, 1948, and P.C. 5948, dated December 23, 1948. The tax imposed by the province of Quebec, commonly referred to as the "Quebec education tax" was deemed by the officials of my department to fall within the definition contained in the above-mentioned orders in council, and accordingly the amount of such tax was disallowed as a deduction when computing the income of the four companies in question. That is the first point to note. The result was that appeals were taken by these companies, in which appeals they disputed the disallowance of this tax.
These appeals were first argued before the income tax appeal board by Saguenay Power Company Limited and Gatineau Power Company. By agreement the hearing of the appeals of the Bell Telephone Company of Canada and Aluminum Company of Canada Limited was held in abeyance to await the outcome of the Saguenay Power Company Limited and Gatineau Power Company appeals.
There were two issues before the income tax appeal board. First, were the orders in council defining "corporation tax" within the authority of the governor in council and therefore valid? Second, if this question was answered in the affirmative, did the Quebec education tax fall within the terms of the orders in council? The income tax appeal board with all members present, and after hearing argument which lasted five days, had no hesitation in unanimously allowing the taxpayers' appeals and in holding that the governor in council had, in passing the orders in council defining corporation tax, exceeded its power and that accordingly such orders in council were ultra vires.
After giving the matter due consideration it was decided that it was advisable to have the decision of the income tax appeal board reviewed by a higher court, and accordingly an appeal was taken to the exchequer court, where the decision of the board was reversed in a judgment handed down by Mr. Justice Cameron on January 24, 1953. Very shortly after the decision of the exchequer court had been issued, parliament repealed the section of the Income Tax Act about which the controversy had arisen. The repeal was to take effect for the 1953 and subsequent taxation years.
Under ordinary circumstances, all school taxes imposed on property used in a business are treated as a proper deduction when determining the profits of that business, and in view of the fact that the Quebec education tax was imposed for the purpose of improving the financial position of the schools in the province of Quebec, it was felt that there was an element of discrimination in disallowing this particular tax imposed by one province,
Supply-National Revenue due to the fact that it was deemed to fall within the meaning of "corporation tax" as defined by order in council.
Immediately prior to the repeal of the controversial section of the Income Tax Act, the Gatineau Power Company and Saguenay Power Company Limited served upon the department a notice to the effect that it was their intention to appeal the decision of the exchequer court to the Supreme Court of Canada. The matter in issue in the appeals, being solely that of the interpretation of this particular section in the statute, and that section having been repealed, the outcome of the litigation before the Supreme Court of Canada would have no effect in the assessment of taxes for subsequent years.
Accordingly when the companies submitted an offer that a settlement be made of the matters in question on the basis that in computing income for the years under appeal, 1946 to 1952 inclusive, one-half of the amounts of the Quebec education tax be allowed as a deduction, it was thought to be a matter which should be given very serious consideration.
Consultations took place between the Department of Finance, the Department of Justice and my department with the following factors in particular being considered. First: the uncertainty regarding the outcome of the further litigation in view of the fact that the income tax appeal board and the exchequer court had expressed diametrically opposite views on the matters in issue. Second: income taxes in the total amount of $3,989,456.22 were involved in the dispute between the Department of National Revenue and the four companies referred to by the member for Dauphin.
It was appreciated that there was a chance that a decision unfavourable to the department might be given by the Supreme Court of Canada which would result in the loss to the revenue of the total amount of the tax involved. Accordingly when an offer of a compromise settlement was made by the taxpayers, the government considered it advisable to ensure the collection of $1,994,728.11 in taxes, being 50 per cent of the total, rather than risk the loss of the total amount.
That is the reasoning on which it was based. It appeared to the government at the time it agreed to a settlement that it was quite justified in doing so, and we have had no reason subsequently to change that opinion, in view of the uncertainty of the outcome of the litigation, the nature of the school tax involved, the repeal by this house of the statutory provision concerning which the controversy had arisen, and the large amount of tax which might have been lost to the revenue.

Supply-National Revenue
Once the decision had been made to settle on this basis with the two companies who had appealed to the Supreme Court of Canada, the same basis of settlement on this item of expense was made available to all other taxpayers with respect to assessments then under appeal or which were open to the appeal procedure.
I think that clearly outlines the whole situation, and I should be very glad to listen to the comments of the hon. member for Dauphin or to any questions he may have. I hope his understanding of the matter is clearer now than it was when he brought up the question in the house.


Frederick Samuel Zaplitny: Mr. Chairman, I want to
thank the minister for his statement, and to assure him that in anything I have to say on this question I have no desire to carry on any kind of vendetta against the minister himself, but I still question the wisdom of the decision that was made. I think that on the basis of the very facts as recited by the minister himself.
What the minister did not include in his statement was the basis on which the exchequer court handed down its decision. He did say that the views of the exchequer court and of the income tax appeal board were diametrically opposed, that is to say that the decisions were opposed. That, of course, is the natural outcome of the fact that the decision of the income tax appeal board was reversed by the higher court. It was the only conclusion you could reach.
It is interesting to note that on the arguments that were presented to the income tax appeal board, which the minister has already mentioned, Mr. Justice Cameron of the exchequer court had some very definite views to express in handing down his judgment. I think it is a matter of public interest that we should have that on record, and that the members of this house should be in a position to judge whether the final decision arrived at by the government was a wise one.
The minister has already pointed out that there were two particular matters that the income tax appeal board took into consideration. One was whether the tax imposed by the Quebec legislature, in passing what is referred to as the education act, was actually a corporation tax. The other was whether the governor in council, in passing the order in council which defined what a corporation tax is within the meaning of paragraph (o) of subsection 1 of section 6 of the Income War Tax Act exceeded its powers by defining that as a corporation tax. We know the decision reached by the income tax appeal board. But when we come to the exchequer


court, I would judge offhand that the opinions expressed by the judges of the higher court should carry considerable weight not only in the minds of the members of this house but of the government itself.


Gage Workman Montgomery: They are not as good.


Frederick Samuel Zaplitny: Apparently in this case it was not considered as good. But it is rather strange that on a matter which was submitted to a higher court for decision and when that decision was rendered in favour of the government, the government should be the first body to question the wisdom of that decision. Apparently they were more inclined to agree with the income tax appeal board which ruled against the government, and whose decision became the subject of an appeal to a higher court, than they are to agree with the same higher court to which they appealed for a reversal of the decision.
It seems a strange position to take, particularly when the issue raised was so thoroughly considered and so explicitly stated in the judgment of the exchequer court. For example, on going through the judgment I find that Mr. Justice Cameron referred to the argument raised by the counsel for the companies concerned. Incidentally, the subject matter of this particular judgment had to do with the Shawinigan Water and Power Company, which was used as a test case, the facts being the same in relation to the companies we have been discussing.
To begin with, he pointed out that in one respect at least-and there were others-even the counsel for the various companies concerned did not agree among themselves. He pointed out that while some of the counsel argued that the Income War Tax Act-that is the section of the act we are discussing now, being section 6, subsection 1, paragraph (o)- was ultra vires of the Canadian parliament, counsel for two of the companies did not agree and did not question the validity of that legislation, a circumstance which makes it quite plain that even the counsel for the companies concerned were not in agreement as to the argument they were using in challenging the validity of the legislation.
He pointed out that counsel for the Ottawa Valley Power Company, for example, and for the MacLaren-Quebec Power Company did not join with the counsel for the other companies in arguing that this particular paragraph and section were ultra vires of the Canadian parliament. Further, he pointed out that at no point did counsel for any company successfully challenge, or even make any attempt to challenge, the contention that the governor in council did in fact have the

power and authority as granted to it in the Income War Tax Act to define the term "corporation tax". That term was an extremely important matter in this argument, because the whole argument was based on the question of what is a corporation tax and what is not. While counsel for these companies argued that the education act in the province of Quebec was not in fact a corporation tax, the Minister of National Revenue, through his counsel and his representatives, argued the very opposite, namely that it was a corporation tax because it was so designed by order in council-I believe it is No. 5948 of December 23, 1948-and in previous orders in council which the minister quoted in his statement.
Mr. Justice Cameron pointed out quite clearly that in no respect was the power challenged-that is the power of parliament to delegate authority to the governor in council-to define the term "corporation tax" as used in paragraph (o) of that section. Then he went further and pointed out that under section 91, subsection 3 of the British North America Act, it is explicitly stated that the parliament of Canada has power for-
3. The raising of money by any mode or system of taxation.
From that it certainly follows that if the parliament of Canada has that power to raise money by any mode of taxation, then this parliament has power to pass legislation which shall define what is deductible and what is not deductible under that form of taxation.
He also gave this as his opinion-and I should like to put it on record-that in spite of the constitutional argument that was raised as to the validity of, first of all, the legislation itself and then the order in council passed by virtue of that legislation:
I can find nothing to support the respondent's-
Being the Shawinigan Water and Power Company.
-submission that the purpose and object of enacting paragraph (o) in its final form was to prevent a province from exercising its constitutional powers of direct taxation by levying a corporation tax; or that it encroaches or trespasses upon the exclusive powers of the government of a province or a municipality to raise revenue by direct taxation for maintaining its schools. The constitutional powers of a non-agreeing province and of its municipalities were not affected in the slightest degree by the passage of paragraph (o).
The term "non-agreeing" of course refers to those provinces which had not yet entered into dominion-provincial agreements with the federal government. Then in summing up his decision and stating the decision of the court, he did so in these words:
In my opinion it was competent for parliament to enact paragraph (o) of section 6 (1) of the
Supply-National Revenue Income War Tax Act. and I must therefore reject the submission of counsel for the respondent that it is ultra vires.
Then further, on the specific argument as to whether the tax in question was in fact a corporation tax within the meaning of the legislation as defined by the governor in council, he states:
My opinion, therefore, is that the payments in question made by the respondent fall within the definition of "specific corporation tax" as found in the regulation and do not fall within any of the exceptions contained therein.
That establishes the fact that it was a corporation tax. Then going on further Mr. Justice Cameron gives the final decision in these words:
For the reasons given the appeal herein will be allowed, the decision of the income tax appeal board set aside, and the assessment made upon the respondent by the minister will be affirmed. The appellant is entitled to be paid its costs after taxation.
It will be interesting to learn whether the minister was successful in collecting his costs in that particular case in the exchequer court. But having stated the other half of the information as given by the minister, 1 should now like to refer to the reasons given by the minister for the action they took.
Let us get the picture clearly. Here was a situation in which certain legislation was passed by this parliament, and its constitutionality was challenged in the arguments before the exchequer court and before the income tax appeal board. A higher court, that is the exchequer court, ruled very clearly that there was no possibility of the legislation being invalid. It was quite within the power of this parliament to pass that legislation, and it was quite within the power of this parliament to grant authority to the governor in council to define the terms of the corporation tax. Therefore there seemed to be no reason at all for the Minister of National Revenue, who incidentally was the one who ordered the appeal to the exchequer court in the first place, to disregard the decision of the exchequer court.
In giving some of the reasons why the government reversed itself on this question, the minister stated that parliament repealed the particular paragraph to which I have referred in 1953. Let us go to the statutes, and see what actually was done when the government introduced this legislation in 1953 to repeal the paragraph in question. I do not want to confuse things by naming the old section because it began with the Income War Tax Act and then went over to the Income Tax Act and the sections are a little different, but the paragraph had to do with disallowance of the deductions of these companies.

Supply-National Revenue
That was deleted in 1953, and it stated very clearly in the amendment itself that it was to apply to 1953 and subsequent years. In other words the deletion of that particular section of the act had absolutely no influence and no bearing whatever on what took place in 1946 and in 1952. I am sure the minister would be the first to acknowledge that. From any point of view it would be impossible to argue that the deletion of that paragraph in 1953 could have any legal, or for that matter even any moral, effect on the case in dispute. The tax in dispute had to do with moneys paid over to the government of Quebec from 1946 to 1952, and the decisions made by the Department of National Revenue in this case in that same period; it had nothing to do with anything that took place after January 1, 1953. On the other hand, the minister gave that as one of the reasons the government decided to reverse itself and agree to the remission to these corporations of these sums of money.
While I am on that question, I think it might be interesting to note the total amount of these remissions. The minister gave some figures, but the total amount actually remitted covered a group of 14 companies, and was done by two orders in council. The first one is dated February 18, 1954, being order in council P.C. 1954-27/218, and that one covered 12 companies. The total amounted to $2,662,562.07. The second order in council was passed on March 10, 1954, and covered two companies, the total remission being $378,792.71. The grand total for these remissions amounts to $3,041,354.78.
The question that arises is this. Why should the government, after having taken the trouble to consolidate all the expenditures of the company, come to a decision to appeal the decision of the income tax appeal board to a higher court, and after having made that appeal successfully and received a judgment in its favour then turn around and remit over $3 million to these corporations? Now the minister tells us it was only half that amount.


James Joseph McCann: The remission was 50 per cent of the amount.


Frederick Samuel Zaplitny: According to the information contained in the orders in council the remission itself amounts to over $3 million. Just so we will be sure about this, perhaps I should put on the record the names of the companies and the amounts actually remitted.
Here is order in council P.C. 1954-27/218, and I shall read it in full:
Certified to be a true copy of a minute of a meeting of the treasury board, approved by his excellency the governor general in council, on the 18th February 1954.
The board recommend that authority be granted, under the provisions of section 22 of the Financial
[Mr. Zaplitny.l
Administration Act, for remission of taxes in the amounts detailed hereunder, paid by the following companies under the provisions of the Income War Tax Act and the Income Tax Act:
Company	Amount
Canadian Light & Power Company

Gatineau Power Company	 496,772.60
MacLaren-Quebec Power Company	 204,972.69
Northern Quebec Power Company
Limited		 43,172.02
Ottawa Valley Power Company	 83,694.85
Saguenay Power Company Limited ....	576,598.15
St. Maurice	Power Corporation	 164,151.50
Shawinigan Water & Power Company ..	528,169.40
Southern Canada Power Company
Limited		 4,131.12
Aluminum Company of Canada Limited 549,697.68 Electric Reduction Company of Canada
Limited		 387.10
Pembroke Electric Light Company
Limited		 5,165.05
If my addition is correct that adds up to $2,662,562.07. Then in addition to that, on March 10, 1954, an order in council was passed covering the Bell Telephone Company of Canada, $371,659.68, and La Compagnie Telephone du Saguenay-Quebec, $7,133.03. This made a total of $378,792.71, and when added to the previous subtotal made a grand total of $3,041,354.78.


James Joseph McCann: I have not any doubt at all that my hon. friend's figures are correct. The sum I mentioned was with reference to the four companies who entered the appeal. I am quite satisfied that as a matter of record a copy of the orders in council go on Hansard. I have no doubt you have copies.


William Alfred Robinson: It being five o'clock, the
house will proceed to the consideration of private and public bills.
At five o'clock the Speaker resumed the chair.



PRIVATE BILLS

[Stage Direction]
On the order:
House in committee on Bill No. 480 (Letter 1-16 of the Senate), intituled: "An act for the relief of Claude Ferron". (Without amendment) .-Mr. Hunter.
Mr. David A. Croll (Spadina):: Mr. Speaker, may I suggest that perhaps order No. 18 might be called before order No. 17, if there is no objection. There may be objection to order No. 17, but I think there is far less likelihood of objection to order No. 18. I suggest we deal with that first.


Mr. Deputy Speaker:: Order. The assistant clerk has called order No. 17. Would it be agreeable to the house to have order No. 17 stand until later this day-


Erhart Regier: No, it is not agreeable.


Mr. Deputy Speaker:: Perhaps the hon. member would allow me to complete what I was saying before indicating his disapproval.



CLAUDE FERRON

[Stage Direction]
The house in committee on Bill No. 480, tor the relief of Claude Ferron-Mr. Hunter-Mr. Robinson (Simcoe East) in the chair.
On clause 1-Marriage dissolved.
Mr. Caslleden:: Before this clause carries, we have something to say which may be of importance. Many hon. members do not appear to understand why hon. members in this group have been opposing divorce cases so vehemently. Some of them we have put on record to expose, so far as we can, the fact that injustices are being done under the present procedure.


William Alfred Robinson: Order. May I point out to the hon. member that we are discussing an act for the relief of Claude Ferron, and that we are on clause 1 thereof. We are not discussing divorce procedure, and I must ask the hon. member to adhere strictly to the rule of relevancy.


George Hugh Castleden: I am very glad to have your ruling, Mr. Chairman. I shall endeavour to show how the evidence in the Ferron case demonstrates just how unjust the procedure is, and why we think something should be done to change this sort of procedure.
The Ferron case was heard by the Senate committee in the ordinary way on May 30, and was sent forward to this house. The evidence in this case reveals a condition of affairs in connection with the handling of divorce which in my opinion lessens the prestige of parliament. The procedure followed in this case is one which I believe should not be permitted in the House of Commons. In the present instance the Senate committee recommended the granting of a divorce on evidence which was at least questionable. The charge was not substantiated, so far as the evidence was concerned.
That evidence was given by two girls, one of whom at the time of the offence was 17 years of age, and the other only 14. The offence was alleged to have been committed two or three years before the hearing before the committee. Meantime the petitioner had had opportunity to be in touch with these girls. In fact the evidence before the Senate committee showed that the petitioner, who is a doctor, had treated one of these girls for a nervous complaint, and was still treating her.
The petitioner had applied to the Quebec courts for a separation, and this had been granted. Then apparently he wished to obtain a divorce, and the evidence of these two young girls is the basis upon which he placed his application. It was proven in the
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Senate committee that this was so, and anyone who wishes may read it. All I wish to say in this connection is that there are about 450 of these divorce cases coming before both houses of parliament every year, and the evidence would sicken almost anyone. The type of investigation is just disgusting.


An hon. Member:: Order.


George Hugh Castleden: I shall go a little more slowly and choose my words more carefully. The older of the two girls, who gave the main evidence, was proved before the Senate committee to have committed perjury right in the court. She admitted later that the evidence she gave was wrong, and that is the only evidence we have.
The other girl was only 14 years of age. I shall read some of this evidence to the committee. I shall begin with the evidence of the doctor himself, and set out some of the bases upon which he applied for divorce. The fact that the Senate committee could recommend a divorce in such case is, so far as I am concerned, proof that the whole procedure is wrong. I turn to page 15 of the evidence where we find Senator Roebuck, chairman of the committee, saying the time had come to state exactly when it was that his wife had left. Then Mr. Riel, who was counsel, said:
They have given us an affidavit; they are here, the two girls.
Then the witness, the petitioner, said:
Well, when I realized what they told me I asked the lawyer, but-
And then, before the answer was completed, Senator Roebuck asked:
Q. By looking at the affidavits can't you tell when you learned?
A. Well, it is about a week after.


Mr. Reinke:: What page is that?


George Hugh Castleden: Page 15 of the report of the Senate divorce committee. Then the report continues:


Mr.   Riel@: Shall I file these affidavits, Mr. Chairman?


William Alfred Robinson: If you have the girls here, we do not want their affidavits. It was merely to refresh his memory.
Then Mr. Riel asked:
Q. Now did you approve or condone the adultery committed by your wife?
A. No, I don't.
Q. Now, did you connive-do you understand what it means to connive-arrange with your wife to commit adultery?
A. No, I didn't.
By the Chairman (Senator Roebuck) :
Q. You did not encourage it or facilitate it?
A. In any way, sir.
By Mr. Riel:
Q. Have you forgiven your wife?
A. No, sir.

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Q. Are you forgiving her now?
A. No.
Q. Would you be ready to take her back?
A. No.
Q. Is there any collusion between you and your wife in order to obtain this divorce?
A. No, sir.
Q. What led up to your separation?
A. I beg your pardon, senator?
It is quite evident from the evidence that Dr. Ferron did not forgive his wife and did not wish to take her back. It is equally evident from the evidence why she was defending herself. The wife said that in no case would she take the doctor back. She denied the offence in every way. She swore she had not committed any offence.
When she was before the committee of the house we asked her what was the reason for contesting the divorce. She said, "I do not want to live with him." She wished only to protect her name against the slander and against something which was supposed to have occurred and which was not true. Her only reason for contesting the divorce was to protect her good name. I maintain, Mr. Chairman, that on the basis of the evidence given and on the basis of the fact that the lawyer for the petitioner in this case did not think it even worth while or necessary to bring in the co-respondent to give evidence in the case, an average judge anywhere in Canada would have dismissed the case on the grounds of insufficient evidence.


Russell Earl Reinke: Nonsense.


George Hugh Castleden: The whole purpose of these committees is to evaluate the evidence, I suppose, and deal with the divorce cases of people in two provinces who have no other recourse. I mention this case not because I am trying to defend either one or the other of the parties. I am trying to pick out evidence given here to show that when parliament deals with this kind of thing, justice is not being served.


Mr. Pickersgill:: Surely this is a general discussion of the subject of divorce, which is quite out of order on this bill.


Some hon. Members:: Question.


Mr. Ellis:: Read the evidence; read every word of it.


Some hon. Members:: Question.


George Hugh Castleden: After the bill came up in the Senate the case was dealt with by a committee of that house and a committee of this house, which is now regarded as a kind of legal court under amendments to the Criminal Code. If it is a court of justice, then it should act as any other court and try to give justice. One of the main requisites of a court is that it should be presided over

by an impartial judge. The committee of this house was presided over by-


John Whitney Pickersgill: Mr. Chairman, could we have a decision on the point of order I raised?


William Alfred Robinson: Order. I did not rise before, because I thought the hon. member would come back to the clause under consideration. The minister's point of order is well taken, that these remarks are general and that discussion on this clause must be strictly relevant to the clause itself. I must ask the hon. member to observe our rule of strict relevancy in committee.


George Hugh Castleden: Yes, Mr. Chairman, if that is the wish of the committee.


John Whitney Pickersgill: That is the rule.


George Hugh Castleden: If it is the rule of the house or the ruling of the chairman that we should not discuss the relevancy, or the basis upon which these two committees work in deciding the case. Probably I should say finally, with regard to our own little kangaroo court, that even on the evidence that was given, when the vote of the members was taken they voted 9 to 10 for granting the petition. That shows how close the decision was of the members who were sitting on the committee.


Russell Earl Reinke: Give us a chance to vote now.


George Hugh Castleden: Why should we, without studying the case and giving the people of Canada the opportunity to see the kind of thing that is going on in this house? I am trying to protect the good name of parliament, and I am trying to stop this disgraceful thing that is going on. It can be stopped if the government will only set up a court.


William Alfred Robinson: Order. I rose practically simultaneously with the hon. member when he commenced his remarks, and made it very clear that we were not on this clause discussing matters of procedure. I made it very clear that I was going to ask him to observe strict relevancy on this clause. May I make it equally clear that I do not intend to rise again. The hon. member knows full well, and has been in the house long enough to recognize, the rule of relevancy. I think he knows his remarks are not relevant. I must impress upon him that it is necessary to speak with relevancy on this clause.


George Hugh Castleden: I should like to point out that I was merely replying to a question or a suggestion from the other side of the house. I shall return to the case, because I want to show why we should not oppose the granting of the petition in the Ferron case.


Walter Edward Harris: Hear, hear; "should not
oppose it".


George Hugh Castleden: Why we are going to oppose the granting of this petition.


Walter Edward Harris: That is different.


George Hugh Castleden: Why we are going to oppose the granting of this petition, because of the conflicting evidence given in the Senate committee and before the committee of the House of Commons. In the House of Commons committee evidence was given by several of the witnesses to the effect that the co-respondent in this case was intoxicated at the time of his arrival on the day the offence was supposed to have been committed, some three or four years prior to the time the evidence was given. On page 19 of the evidence the following questions and answers appear:
Q. Would you tell the honourable senators the facts you have known about an adultery?
A. It was in August, 1951. We were out in St. Eustache sur le Lac for the summer.
By the Chairman (Senator Roebuck):
Q. That is, the family was there, the doctor, his wife and you?
A. That's right, and the little girl. There was one afternoon, a Saturday afternoon, Mrs. Ferron sent me out to the restaurant at Roger Beach to phone Dr. Ferron to see if he was coming out that night. At the time my brother had come to see me for the week end. Before we left she had given him a few drinks and he was drunk.
The evidence before our committee was that the man was drunk on his arrival. One of the witnesses said that.


Russell Earl Reinke: That is not what it says here. It says here that she gave him a few drinks and he was drunk. He could have been drunk for days. It is only your interpretation of it.


George Hugh Castleden: She said she had given him some drinks and he was drunk. That is what she said in the committee.


Russell Earl Reinke: It does not say that. It says she had given him a few drinks and he was drunk.


George Hugh Castleden: I would like to have your interpretation of the whole case; I am sure it would be very valuable. If my hon. friend turns to page 22 of the evidence he will find the following questions asked in crossexamination:
Q. What time did your brother arrive at the Ferron home?
A. He arrived early Saturday morning.
Q. Is it not true that he was intoxicated when he came there?
A. No, he was not.
Does that satisfy my hon. friend?


Russell Earl Reinke: It is exactly the same as the other question.
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George Hugh Castleden: Some said he was drunk on arrival. She said he was not drunk when he came there.


Russell Earl Reinke: The hon. member has not
shown by any evidence that he was drunk on arrival.


George Hugh Castleden: The evidence given in the committee was to the effect that he was drunk on arrival. Look at page 24 of the evidence.
Q. Would you mind saying what kind of treatment you were given by Dr. Ferron?
A. I am still being treated for my nerves.
Q. You had a child, did you?
A. No, I did not.
And again:
The Chairman (Senator Roebuck) :	Are you
alleging any impropriety on the part of Dr. Ferron in this connection?


Mr.   Pager@: No.


William Alfred Robinson: Then I do not think we need to hear it. Does it affect the credibility of the witness?


Mr.   Pager@: It affects the credibility of the witness, yes.


William Alfred Robinson: Well, I think you are going a long way. We will hear it if you insist on it, but I think you are going a long way.


Mr.   Pager@: I may be, but it won't take me long to come back.


William Alfred Robinson: Go ahead, we will hear what you have to say.
By Mr. Pager:
Q. Would you mind saying what kind of treatment you were given by Dr. Ferron?
A. I am still being treated for my nerves.
Q. You had a child, did you?
A. No, I did not.
Q. Did you not testify in court that you had a child?
A. I never said any such thing.
And again:
Q. Did you see the respondent, Mrs. Ferron, intoxicated or drinking to excess at any time during that year?	.
A. Yes, I did. Mrs. Ferron was always drinking; it would be easier to count the times she was sober.
That evidence is quite evidently vindictive, and the evidence we had in committee was just as vindictive. I am merely stating that before we arrive at any judgment, full evidence should be given by these persons. In fact in the committee the lawyer for the petitioner suggested that the committee should adjourn so he could bring further evidence. Every possible bit of evidence should be heard by any court, and in this case I think there has been insufficient evidence on which to pass judgment. That is why I spoke against the granting of this petition on the evidence that we have. I suggest to hon. members that this kind of petition should not be brought before the committee of either house.


Alexander Malcolm Nicholson: Mr. Chairman, this is one of those difficult decisions which hon. members have to make, especially those who sat in

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the miscellaneous private bills committee. I am sure we were impressed by the fact that Dr. Ferron was a young doctor, but his wife certainly made a much better witness than was expected. When I read the evidence I suggested that the committee have a look at this case. It was alleged that Mrs. Ferron had been a drug addict and a heavy drinker. I knew nothing more about her, but I thought when she came before the committee she made a very good witness.
Both the people involved are Roman Catholics who have very definite views with regard to the desirability of divorce. When the matter was before the house previously I made some reference to the conflicting evidence which the doctor gave regarding the use of drugs in connection with the treatment of his wife. At one stage it was alleged that he was treating his wife intravenously when her father arrived. Members of the committee were interested in hearing that Mrs. Ferron had undergone a serious operation back in 1945 in one of the well known Montreal hospitals. This was the evidence her husband gave:
Q. When did the narcotics start?
A. She was operated on in Notre Dame hospital in I think around 1945, and as far as I know I think she started being a drug addict after that. They probably gave her too much narcotics while in hospital, and she took the habit out of that. I remember when I was in hospital I had to forbid the nurse to give them, because personally I thought they were giving her too much narcotics. I asked the nurse to stop them. After that I noticed once in a while there was some narcotics ampules disappearing from my case; and I found syringes and needles everywhere in the house. When I realized that I had her treated twice in hospital to try to get rid of that, but she always started back. On many occasions she signed my name on a prescription.
This unfortunate woman admitted that following her serious operation she developed the habit, but through the assistance of her husband and her father and the skilful personnel in two hospitals in Quebec she was cured. I am sure all members felt that here was a woman who deserved some encouragement from the parliament of Canada after having made a real worth-while effort to overcome this unfortunate addiction.
The evidence brought before us on which we were to base our judgment was presented by two girls who were wards of the welfare department of the province of Quebec. One girl was 14 years of age and the other 17 years of age four years ago, when this alleged incident occurred. The hon. member for Yorkton has pointed out that the girls gave conflicting evidence. I realize that a person can tell a lie, but when he admits telling falsehoods to and misleading the Senate committee by giving evidence on which judgment is to be based, that evidence should be

examined pretty carefully. The evidence given by one of these girls as to the time the brother arrived was as follows:
Q. What time did your brother arrive at the Ferron home?
A. He arrived early Saturday morning.
Q. Is it not true that he was intoxicated when he came there?
A. No, he was not.
The other girl who was 14 years of age at that time, now 18 years, testified as follows:
Q. Do you recall or remember at what time he arrived at the Ferron's home that particular date?
A. No, I didn't. It was in the afternoon.
Q. He arrived in the afternoon?
A. Yes.
While they seemed to remember some details quite clearly, other details they did not remember. It is unusual that one of them should remember so clearly that the brother arrived in the morning, while the other one said that he arrived in the afternoon. The sister was questioned as to whether the brother was intoxicated when he arrived, and I quote again from page 22:
Q. Do you remember in what state he was?
A. Yes. he was intoxicated.
Q. While he was at Mrs. Ferron's home did he have other drinks?
A. Not that I remember.
Q. When you say he was intoxicated, exactly what degree of intoxication was he in?
A. Well, he was drunk.
Q. He was drunk?
A. Yes.
Q. Was he drunk enough to have difficulties to master his language?
A. Well, yes.
Q. Do you remember at what time he left the house that day?
A. No, I don't.
I think hon. members should examine that conflicting evidence quite carefully. The hon. member for Yorkton mentioned the conflicting evidence the main witness gave in connection with the older girl. She was asked if she was being treated by the doctor while at the home:
Q. Weren't you treated at one time by Dr. Ferron?
A. Was I treated?
Then the lawyer said:


Mr.   Riel@: That was not asked in examination in chief.


William Alfred Robinson: It does not necessarily follow that it must come from examination in chief. I do not see any significance in it at the moment, whether the witness was or was not treated, but I am relying on counsel not to ask questions in which there is no significance. It is very easy for the witness to answer the question.
Then the chairman asked:
Q. Were you treated by Dr. Ferron?
A. While I was living there, no.
By Mr. Pager:
Q. After you left?
A. A little while later I was.

Q. Would you mind saying what kind of treatment-


William Alfred Robinson: Now, what is the significance?


Mr.   Pager@: Well, I will have to give testimony myself, I will have to say what I know right away. She had a child.


Mr.   Riel@: That should have been alleged in the petition.


Mr.   Pager@: We have a witness here.
Senator Barbour: Is it in connection with this child?


Mr.   Pager@: Not directly, but maybe indirectly. She may have some sort of a debt to Dr. Ferron.
Then later:
By Mr. Pager:
Q. Would you mind saying what kind of treatment you were given by Dr. Ferron?
A. I am still being treated for my nerves.
Q. You had a child, did you?
A. No, I did not.
Q. Did you not testify in court that you had a child?
A. I never said any such thing.
Q. Why did you leave the Ferron home?
A. Because I was constantly fighting with Mrs. Ferron.
Then the lawyer for the petitioner realized that this was very serious evidence, and he asked her:
Q. Witness, I don't know if you heard the question asked by Mr. Pager. He asked you if you had a child and if you had been treated by Dr. Ferron:	Is that what you meant?


William Alfred Robinson: She denied it; I don't think there is any necessity of going over it.


Mr.   Riel@: I want to know if she understood the question.
The Chairman (Senator Roebuck) : She thoroughly understood it and answered it very emphatically. As far as this committee is concerned you don't need to go further into that matter with this witness.
By the Chairman (Senator Roebuck) :
Q. Witness, I would like to be perfectly clear about what you told Dr. Ferron about the incident you have described to us. You said this was after the separation, but can you not fix it a little more definitely than that?
A. I don't remember when it was, I know he had already started a separation.
Q. But had the separation gone through?
A. It was going through.
Later on Mr. Riel, counsel for the petitioner, said:
Before the witness leaves the stand, I should like to make a statement. The doctor is here. It is possible the question asked by Mr. Pager took her by surprise, and she is bashful about it. But the doctor treated her for a child that she had, so I think there must be some misunderstanding.
The Chairman (Senator Roebuck) : Go ahead and clear it up.


Mr.   Riel@: I want to ask this girl if she correctly understood what Mr. Pager asked her. I understand that she denied about the child. I put my question to her, and she has not answered it.


William Alfred Robinson: She did not answer it because I stopped her. Go ahead and clear the matter up.
By Mr. Reil:
Q. You have to state the truth even if it affects your own feelings.
A. All right, yes, I had a child, but it had nothing to do with Dr. Ferron, if that is what they are getting at.
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By the Chairman (Senator Roebuck):
Q. How long since did that happen?
A. Three years last January.
Q. Was that prior to your going to the Ferrons?
A. That I had the child?
Q. Yes.
A. I had the child after I left the Ferrons.
By Senator Barbour:
Q. That is shortly after you left?
A. Yes; I left in December and I had the child in January.
By Mr. Riel:
Q. You were pregnant when you were at the Ferrons?
A. Yes.
I think we all feel it is unfortunate that a medical doctor should come to parliament asking that we accept evidence that would lead to the granting of a divorce on the testimony of two girls who were so very young, and one of whom certainly did not tell the truth. She had been well coached between the time she gave evidence before the Senate and when we heard her. One of the members asked her about this statement, and she had a very clever reply that a 20-year-old girl would never think of. It was the answer a very smart lawyer would put into the girl's mouth. There was no apology whatever for having misled the Senate or for having a prepared reply. That disposed of the matter as far as that was concerned.
There are still two more matters I should like to mention. Counsel for the petitioner introduced two pieces of evidence which, in my opinion, were most unfortunate. I have not read all the evidence in connection with these Senate divorce cases, but I am sure the Senate would not have printed the language this girl used in trying to besmear Mrs. Ferron. Of course Mrs. Ferron denied the allegations completely. I thought it was unfortunate, but her lawyer consented to her introducing this evidence. I could tell from the attitude of a number of members that they thought this was most unfortunate.
The other piece of evidence which counsel tried to introduce and which was rejected by our committee-and by a very small majority of the committee-was an affidavit which counsel for the petitioner had secured a few days previously. The co-respondent named in this particular divorce case was alleged to be 19 four years ago, when this incident occurred and he has been with the air force. When the case was heard before the Senate counsel pointed out that a notice had been sent to the brother mentioning that he was being named in it, and the law of the country required that he should be informed as to what was going on. I am reading from page 32:


Mr.   Riel@: According to the practice, I have sent a registered letter to Ronald Leonard at his station of the R.C.A.F., Comox Island, B.C., notifying him that he was the respondent in this case.

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The Chairman (Senator Roebuck) : You mean that the case would be heard today?


Mr.   Riel@: Today, that is right-at least I do not say that in the letter. I will read the letter, if I may:
"The above mentioned Dr. Claude Ferron has petitioned the Senate of Canada and the House of Commons for the granting of a divorce law dissolving his marriage with his wife Marielle Guibord.
"The petition for the obtention of this divorce is based on an act of adultery that he alleged his wife committed with you, during a week end of August 1951, at their summer chalet in St. Eustache, province of Quebec.
"Be hereby notified of the said allegation; we do not want to bring your name in the testimony without you knowing it."
Now, Mr. Chairman, I think that it would have been much more appropriate if this young man in the air force, who apparently was in Montreal last week or the week before, had been subpoenaed to appear before the Senate when the case was being heard. I understand that in his affidavit he intimated that he could not be at the Senate hearing, but he does not know. After all, the parliament of Canada is supreme. If this parliament asks someone in the air force to appear on a given day, I am sure the Minister of National Defence is most anxious that the responsible officers in charge make it possible for any person in the Department of National Defence to be here and clear his good name. So far as the evidence is concerned, no effort was made to have the co-respondent brought either to the Senate committee or to the committee of this house.
The other detail that I think is significant is this. While this air force person was being questioned, or while an affidavit was being prepared, no effort whatsoever was made to contact counsel for the defendant so that if this evidence were submitted, counsel for the defendant would have a chance to examine and cross-examine. I think the fact that a real effort was not made to have the co-respondent appear before the Senate committee or before the House of Commons committee was quite significant.
The young girls, when they were before the Senate committee, had different evidence to give from that which they gave while they were before our committee. Again I am sorry I am not able to refer to the evidence given before our committee. I submit that next year we should make provision for stenographic reports of what is presented to our committee, because there has been a good deal of conflicting evidence presented this year. As I recall it, these girls gave conflicting evidence before the Senate committee. They said there was one girl along with them when the expedition took place to the restaurant, when they were going to

phone. Before our committee the number had increased from one to three others, to about five girls who were there.
According to the evidence the young chap was so drunk when his sister left that he had his head down on the table and was falling asleep. He was in such bad shape that she thought he should go to bed. Her bed was right nearby, apparently. But she was not able to get her brother to bed. The girls were away, one said for 20 minutes and the other said half an hour but not over half an hour; and when they returned this amazing evidence was all available.
It is extremely difficult for me to believe that this alleged incident could occur when and how it was described. However, I do not know anything about that. The members of this house must decide whether they accept the statement of this girl, who did perjure herself, and that of another youngster 14 years of age, or that of Mrs. Ferron who denied most emphatically that there was one iota of truth in it.
In view of the fact that both Dr. Ferron and his wife are Roman Catholics, and the fact that they undertook some years ago to go through life together, for richer or poorer, in sickness or in health, and to make a go of it, I think it would be a great pity if at this stage, when apparently Mrs. Ferron has made a real come-back, this divorce should be granted.
I see no great injustice that will be done to Dr. Ferron if we refuse to pass this divorce. If, as he alleges, his wife is not behaving as a married woman should behave, I am sure he would be able to get further evidence that might be more convincing than the evidence he brought before the Senate and House of Commons committees. I might say that we have had quite a busy year with respect to divorce. There were 407 cases. I suggest that we have a good look at those cases, and that some of those who think this bill should be carried should give some good reasons why, in their opinion, the evidence of these two girls should be accepted and the statements of Mrs. Ferron should oe rejected.


Russell Earl Reinke: On a point of order, Mr. Chairman, may I say this. It is quite obvious that the C.C.F. members are talking this bill out. I should like to ask the hon. member for Yorkton a question if I may. It is this. Did he refer to the Senate subcommittee as our little kangaroo court?


George Hugh Castleden: I was not referring to that committee. I was referring to the committee of this house that sat as a court without evidence being given.


Russell Earl Reinke: Are you referring to the members of that committee as a kangaroo court?


George Hugh Castleden: I said it would be a sort of kangaroo court.


Russell Earl Reinke: Mr. Chairman, I would ask that that statement be withdrawn, because I submit it is disrespectful to members of the committee who sat hearing this divorce case.


George Hugh Castleden: My opinion of the way that court has been carried on there is-


William Alfred Robinson: Order.


Russell Earl Reinke: I would ask the hon. member to withdraw that expression. It is disrespectful to the members of the committee.


George Hugh Castleden: I do not have to do what you tell me to do, fortunately.


William Alfred Robinson: Order.


George Hugh Castleden: No disrespect was intended to the members of parliament who sat on that committee.


Russell Earl Reinke: You have said yourself that it was our little kangaroo court.


George Hugh Castleden: No disrespect was intended.


William Alfred Robinson: Order. I must apologize to the committee. I apparently missed some words which were used by the hon. member for Yorkton. If I had apprehended them at the time they were used, I would have drawn them to his attention. If he referred to any group of members of this house or any committee of this house as a kangaroo court, then, having regard to the general understanding of the expression "kangaroo court", I think he must withdraw those words.


George Hugh Castleden: Mr. Chairman, I want to assure you that if I have used any words which may have been considered as disrespectful to the members of this house and to the members of the committee, I am quite willing to withdraw them. In substitution for the words "kangaroo court", I would say it is a court that I consider to be a most improper court.


William Alfred Robinson: Order. Does the hon. member wish to leave on the record of Hansard an imputation that any committee of this house is an improper court? I am sure the hon. member, on reflection, will also wish to withdraw those words. I am not going to direct him to do so because I do not think the word "improper" is unparliamentary. However, I do not believe he is showing proper respect to this house of parliament when he uses that language.
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George Hugh Castleden: I still maintain that I do not think it is a proper court, but I shall be glad to withdraw the word if it will satisfy the chairman.


Mr. Cameron (High Park):: First of all I wish to thank the hon. member for Mackenzie for the fairness with which he presented his case. I do not think he presented all the evidence and weighed it as a committee of this house should have it weighed for them when dealing with this matter.
The hon. member for Yorkton used the words "impartial judge". I was almost on the point of getting to my feet to find out whether he was suggesting that I was not an impartial judge, having acted as chairman. However, on reflection I decided he did not mean that.
I think this committee should know the procedure followed by the committee on miscellaneous private bills. The petitioner and the respondent were both present. They were both represented by counsel. Both counsel had an opportunity to examine their witnesses and to cross-examine the witness on the other side. Each member of the committee was given an opportunity to ask any questions he desired of the witnesses. When the case was concluded, counsel for both sides were given a chance to sum up the evidence and make their observations and their appeal to the committee. After counsel had done that, then the committee members were given an opportunity to discuss the merits of the case and make up their own minds. This was the procedure followed, and I think it was fair and impartial.
May I say, Mr. Chairman, that as acting chairman of the committee on that occasion I made no observations whatever. I took no part in the proceedings except to rule. I did suggest to the committee that they had three alternatives to consider. First of all they could believe the evidence of the witnesses for the petitioner. Second, they could believe the witnesses for the respondent. Whichever set of witnesses they believed, that would be the judgment they would have to make. If they were in any doubt, then they should dismiss the petition.
Some suggestion has been made and I think probably there has been an implication of some unfairness to the petitioner. One of his witnesses had become pregnant while living at his home. The evidence given by both the petitioner and the respondent was that the doctor was asked to take care of her and this child. In other words the respondent asked her husband to fulfil his functions as a physician in respect to this particular witness. Then the hon. member

Private Bills-Divorce
ior Yorkton suggested that counsel tor the petitioner ask for an adjournment. This was due to the fact that when certain evidence by way of affidavit was presented to the committee I, as chairman, thought that was unfair. The hon. member then suggested an adjournment to counsel. I pointed out to him that I did not think that was the time for an adjournment. It was his responsibility to have his witnesses there, and the fact a witness was not there was his responsibility. I did not think the committee should adjourn. It may have been that if it had gone to a vote the committee would have overruled me. At any rate, the evidence was ruled out and it was not heard.
There is some suggestion, too, about the condition in which this co-respondent was when he arrived. The fact is that the respondent herself admitted that when he came to the house she herself had given him liquor to drink.


George Hugh Castleden: Did she give evidence to
that effect?


Alan John Patrick Cameron: Very definitely; she had given him beer or some other liquor. She was not sure what it was.
Then something was made of a certain bit of evidence given by one of the witnesses for the petitioner, and there was a suggestion that it was given to defame the character of the respondent. Perhaps the hon. member for Mackenzie will recall that was only brought out as an incidental. She stated why she hurried back again. A certain incident had happened before, so she thought she would come back sooner than otherwise she might have. She came back, and it was only under considerable pressure that she gave the evidence which was brought out by her counsel against my advice. I will say to the hon. member for Mackenzie that if anything could have shaken my belief in the credibility of the witness it was that fact. But on reflection I have come to the conclusion that it did not shake my credibility, and that it did not go to the root of the matter.
There was some mention about the time they were away. The two witnesses for the petitioner stated they were away at least half an hour. The respondent said they were away 20 minutes. There is no real conflict as to what took place. The co-respondent was apparently in an intoxicated or semi-intoxicated condition just at this particular time. When Mrs. Ferron was giving her evidence she said that one of the witnesses for the petitioner, the sister of the co-respondent, had tried to get him to go to bed. He was angry and fighting with her. She said she had told the two witnesses to go and find

her husband and she would try to put their brother to bed. In other words she sent everybody out of that house. They went away, and then came back.
There is no dispute about the respondent being in the bedroom with the co-respondent. She said she had her shorts on and she shoved him back on the bed. The two girls came in, the sisters of the co-respondent. The doors were not locked-and they walked in to the bedroom door and opened it, and they say they saw the respondent and co-respondent lying on the bed unclothed.
When I weighed all the evidence in my own mind I came to the conclusion that it was reasonable to conclude that adultery had been committed. If I had voted, as I said I did not vote in the committee, I would have voted for the granting of the divorce.


Alexander Malcolm Nicholson: I would hasten to say to the hon. member for High Park that he did a good job as chairman, and if I could ask him to make all these decisions it would be quite satisfactory to me. So long as we collectively have to make the decision I think we should examine these cases very carefully.


An hon. Member:: Give us a chance, then.


Erhart Regier: I believe the whole point of the case was supplied to us by the hon. member for High Park, when he said that he had come to a reasonable conclusion. I have always been led to believe that if there is any possibility of doubt, then the defendant should be given the benefit of that doubt. In this one particular case I do not think any of us is able to say with any amount of certainty what actually did or did not take place. In this case the lady had been ill. I have always thought that the marriage vow to live together in sickness and in health meant what it said. I find it very difficult to give my consent to the husband's petition to be relieved from the responsibility of his marriage at a time when his wife has just passed through such a serious illness.
According to the evidence these people were married on October 7, 1944. That is not very long ago, less than 11 years. The lady has been ill for a number of years. I think all the evidence points to the fact this is a hasty move, to be already petitioning for a divorce.
May I call it six o'clock, Mr. Chairman?


George Hugh Castleden: From the point of view of personal privilege, before we rise I want to say in connection with the remarks of the hon. member for High Park that I had no intention of casting any reflection on his handling of the case. I was just saying what could happen in such a court. After all, he

was acting for the man who sponsored the bill, but there was no personal reflection on his handling of the case.
Clause stands.
Progress reported.


Mr. Deputy Speaker:: Shall the house
resume the business which was interrupted at five o'clock?

The house in committee of supply, Mr. Robinson (Simcoe East) in the chair.



DEPARTMENT OF NATIONAL REVENUE

[Stage Direction]
Taxation division-
290. General administration, $2,524,429.
William Alfred Robinson: It being six o'clock, I do leave the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Frederick Samuel Zaplitny: Mr. Chairman, when the committee rose at five o'clock to consider certain private bills I had established certain facts in connection with the remission of certain taxes of 14 corporations. I had established that the total amount remitted by two orders in council amounted to a little more than $3 million, and the minister is in agreement with that. I had also established that the legislation under which this tax money had been collected had been upheld by the Exchequer Court of Canada. I had established that of the 14 companies concerned, only nine made appeals to the income tax appeal board and only two of them carried their appeals to the supreme court; but that the appeal to the supreme court was not heard because in the meantime the government had agreed to remit one-half of the tax liability of these companies. I had established that this had happened after the amendment passed in 1953 to the Income Tax Act, but before any hearings were heard by the supreme court.
I come now to 'the reasons set out by the Minister of National Revenue in his reply as to why this rather strange action was taken. I want to say, first, I am glad the minister stated in his reply that he had consulted with various departments. I think he mentioned specifically the Department of Finance and the Department of Justice, and he may have mentioned others. I say this because I want to make it quite clear that I am not singling out the Minister of National Revenue for any particular criticism. This was a decision by the government. The Minister of National Revenue is responsible, of course, for recom-
Supply-National Revenue mending to the government the sort of action that should be taken in matters affecting his department. But the decision to make these remissions was made by the government as a whole; therefore what I have to say refers to all the government.
The reasons given by the minister were three in number. First of all he drew attention to the fact that in 1953 an amendment had been made to the Income Tax Act which deleted paragraph (o) from section 6(1) of the Income War Tax Act as it had been amended since the act was passed. He pointed out that the effect of that amendment was that after it went into effect the disallowance of these deductions would no longer be in effect.
I would like to establish this quite firmly, because that is a major reason given by the minister. Before I examine that reason I should like to refer hon. members to the amendment to the Income Tax Act which appears in chapter 40 of the statutes for 1952-53. They will find that the amendment which deleted the paragraph I have mentioned is in these words, and I quote from the act:
This section is applicable to the 1953 and subsequent taxation years.
That is, the deleting amendment was to take effect for 1953 and subsequent years. I wish to make that perfectly clear, because I think it is very material to our argument to have it established firmly that the amendment passed by parliament in 1953 had nothing whatever to do with any tax liability or any legislation dealing with that type of deduction in previous years, that is from 1946 to 1952. It applied, as is stated so specifically in the act, to 1953 and subsequent years, whereas the tax liability in dispute was in respect of the years from 1946 to 1952. Therefore they are two entirely different fields, having nothing whatever to do with each other.
The question is this. Why does the minister give that as one of the considerations in the mind of the government when they decided to remit the $3 million of public moneys to these 14 companies? I regret the Minister of Finance is not in his seat at the moment, because I would like to ask him if he goes along with that kind of reasoning. I would be very much surprised if he did, because it must be fresh in the memories of hon. members here that it was only a few weeks ago that several hon. members suggested that a refund be made to automobile dealers with respect to excise tax for which they are liable, the tax having been reduced in this year's budget. And it will be recalled it was the Minister of Finance who, no doubt after careful consideration, got up in the House of Commons and said it was not traditional and it was unprecedented to make

Supply-National Revenue action of that kind retroactive. On that ground he refused to consider further the question of refunds of that tax, because he argued that the new tax would be applicable only from the date of the budget.
But, strangely enough, in this particular case not only is it made retroactive for a few months but it went back seven years. And they used as one of their chief arguments in making the decision to remit these taxes that since the act had been amended and that particular paragraph no longer applied, therefore by virtue of that legislation the moneys collected, or at least 50 per cent of them, should be refunded to these companies. That is a very interesting argument. In a way I am glad it is on the record. At some future time we may have occasion to refer to that kind of reasoning again.
The second reason given was the alleged uncertainty of the outcome of the appeal that had been taken by two of the 14 companies to the supreme court. I say the "alleged uncertainty" because surely on the basis of the facts as they have been revealed so far there seems no possibility of any reasonable doubt. I ask hon. members to consider that the Minister of National Revenue told us that he carried on consultations with the Minister of Finance, with the Department of Justice, and no doubt with the law officers of the crown before the decision to remit those taxes was arrived at. I would be very much surprised if he had not carried on consultations with those same departments and with the law officers of the crown before he launched his appeal from the decision of the income tax appeal board to the Exchequer Court of Canada.
Certainly the minister must have been pretty firmly convinced by those advisers as to why the government was perfectly within its right in having levied and collected that tax, and having disallowed the deduction which was claimed by these companies. Certainly if there had been any doubt or any uncertainty that would have been the moment at which it would have registered itself. But there was no uncertainty because only one thing was in dispute, namely whether in fact the tax referred to was a corporation tax. That was the question on which the case was pretty well based.
I say the minister certainly must not have been in any doubt, because here are his own words in the submission made to the exchequer court. In referring to this tax he said:
That the alleged amounts paid by the appellant-
In this case it was the Shawinigan Water and Power Company of the province of Quebec.
-to the province of Quebec for the year in question under and by virtue of the provisions of the
[Mr. Zaplitny.l
said act of the province of Quebec entitled "An act to ensure the progress of education", were payments of corporation taxes.
I wonder whether the minister now wishes to withdraw from that position, or does he still believe they were payments of corporation taxes? I wonder what his colleagues and his advisers thought about it at that time? Did they agree with the minister that these were payments of corporation taxes and, if so, that they were legitimate assessments upon the incomes of those companies? If the minister still holds to that opinion today- and I see no reason why he should not, because the learned judge of the exchequer court upheld that view-then by what reasoning did he reverse himself, and how did his advisers reverse themselves into thinking there was some uncertainty about it; and how did he become so loath to take a chance on these two appeals to the supreme court that he would rather take the easy way out and say, "Well, after all, this is only the taxpayers' money. We can give them a few million dollars and everybody will be happy." That is the kind of thinking that seems to have gone into that particular reason.
Then we come to the third reason given by the minister, and I think this is the grand-daddy of them all. He said it was felt-mind you, Mr. Chairman, it was not a legal opinion -by some that there might be an element of discrimination in the previous legislation which had been repealed in 1953. That is really a strange one, because if we were to start to make remissions of taxes on the basis of the feeling that it may have been discriminatory legislation and therefore we should make some remissions after we repealed it, the minister can easily imagine the position he would find himself in.
Let me give a few examples. Suppose the Minister of Finance, in bringing down a new budget, decided to lower the tariff rates on certain items which are purchased by people, say in western Canada. Let us take ethylene glycol as an example, which goes into the making of antifreeze. Certainly it could be argued that it was a discriminatory tax since it involved the raising of - the price of the product to the people who had to buy it. After the new budget had been brought in, following the same logic the government should then be prepared to remit to those people who had paid the customs duty 50 per cent of the amount paid. If they want to be consistent with what they have done the government should say, "We are aware of the fact that we had a piece of discriminatory legislation. Now we have repealed it and we want to keep you happy; we want to treat you in the same way as we treated those 14

corporations. So we are kicking back to you 50 per cent of the money you paid in customs duties."
I could refer to the freight rate situation. In the few years I have been here I have heard numerous speeches-and we continue to hear them-on the discriminatory freight rates that exist in certain parts of the country. In fact three years ago the first step was taken in an attempt to equalize freight rates in certain parts of Canada. When that was done what happened to all the freight money that had been paid by various industries and individuals? Could anyone argue, and would the government have considered the argument in this house for one moment, that because of the discrimination that had existed, refunds or remissions should be made to the people who had allegedly been under discrimination?
That argument would have been laughed out of this House of Commons by the Minister of Finance. He probably would not have taken the trouble to reply to it; yet that is the kind of argument, that is the kind of reason, which was given by the Minister of National Revenue as the excuse for taking over $3 million out of the public treasury and handing it back to 14 corporations to make amends for the feeling that there might have been some discrimination.
Well, if there was any discrimination, Mr. Chairman, I say the responsibility for it would lie on the doorstep of the government, because it was their legislation in the first place. They introduced it in the house; they argued for it. They took it even as far as the exchequer court to justify it. Now they say it might have been discriminatory and so, in order to whitewash their souls of any feeling of discrimination against these poor corporations, some of which make over $4 million in profit a year, they dipped into the public treasury and handed back $3 million and said, "Well, let us forget it and be good friends in the future."
In the same way it could even be argued that certain income taxes paid by individuals should be remitted to them. I can remember many occasions when hon. members argued that certain income tax rates, regulations, laws, were of a discriminatory nature. Later on parliament took action to change the legislation or to remove the discrimination. In how many cases, as a result of that, did the government offer and agree to make any remission to the people who had paid income taxes under that so-called discrimination? That is the kind of argument used.
Yet may I remind the committee that in this particular case, because it was felt-and we do not even know by whom it was felt- that it was discriminatory, or it might be
Supply-National Revenue discriminatory, the government was quite willing by order in council to get rid of $3 million from the public treasury. The sum of $3 million in relation to the billions the minister mentioned in his report today may sound like a small amount of money, but $3 million is a lot of money in any man's language. When one considers how many income tax inspectors are tearing around the prairie provinces, how many of those snoopers there are checking every bank account, every back yard and every barnyard to see if they can get a few dollars out of the farmers, one realizes that it would take quite a few of them and quite a lot of work and a lot of wages and travelling and expense money to get back that $3 million which was so cheerfully handed back to these 14 corporations on the basis of three weak-kneed arguments.
As I said a while ago, I am not singling out the Minister of National Revenue in making these criticisms, because it was a decision by the government. However, the minister is charged with the responsibility for the taxation division of his department, and this action was taken on his recommendation and advice. The deed has been done, and I do not suppose this committee can do very much about it at this time. However, I think a protest should be registered on behalf of the taxpayers of Canada.
I have no hesitation in saying that in my opinion at least the action of the government in this case had all the earmarks of a highhanded disregard for the decision of a higher court to which they themselves had carried an appeal and which had ruled in their favour. To me it almost constituted playing fast and loose with the public treasury, and I can regard it in no other way than as a grand give-away show. Perhaps the government should buy themselves some television time and put on a show which could be called, "Come and get it; you don't have to be a Liberal, but if you are it helps." Or perhaps they should organize a football team, because I have never seen a bigger kickback than this. To me it is a classic example of the public interest being sacrificed on the altar of expediency.


James Joseph McCann: Mr. Chairman, I should like to say just a word in reply to the hon. gentleman. Basically this was a question of settling a lawsuit. The hon. gentleman has covered most of the reasons for this. It would be presumptuous on my part to attempt to argue legal points, even though they have been brought up by a layman like the hon. member for Dauphin. The government takes responsibility for this submission, and the Department of National Revenue was the instrument by which it was put through.

Supply-National Revenue
In Quebec this was called not a corporation tax but an education tax. It is called a corporation tax in my argument here because it was applied to corporations. I just want to repeat what I think is one of the strongest arguments for the action we took. Under ordinary circumstances all school taxes imposed on property used in business are treated as proper deductions when determining the profits of that business. In view of the fact that the Quebec education tax was imposed for the purpose of improving the financial position of schools in the province it was felt that there was an element of discrimination in disallowing this particular tax imposed by one province, due to the fact that it was deemed to fall within the meaning of corporation tax.
I am not in this job to squander the revenues of Canada, and it was just as repugnant to me to have to give back $3 or $4 million in this particular instance as it would be to anyone else to have to remit money. I think the position the government took in settling this on the basis of a remission of 50 per cent was good business. I would much sooner take a chance, as we did in this instance, and get half the tax than to go to the supreme court and possibly lose it all.


Frederick Samuel Zaplitny: May I refer the minister to the words contained in the judgment of Mr. Justice Cameron in which he discussed this question of whether it was a corporation tax. He said:
My opinion, therefore, is that the payments in question made by the respondent fall within the definition of "specific corporation tax" as found in the regulation and do not fall within any of the exceptions contained therein.
The minister has referred to his own statement, but he has put a slightly different interpretation on this and I am quite certain that mine is correct. The minister was arguing not that it was a corporation tax because he called it that, but that it was in fact and in law a corporation tax, not only a corporation tax on the statute books of Canada but a corporation tax where it was paid. Has the minister withdrawn from that position? Is he prepared to argue now that it was in fact a corporation tax, or does he wish to take the other side of the argument posed before the exchequer court and argue that it was an education tax?


Thomas Speakman Barnett: I was quite interested when the minister said the province had called this tax by a certain name. In British Columbia we have a tax which some of us call a sales tax, but when it was introduced it was called a social security and municipal aid tax. Just because a provincial government chooses to


call it something else would not exclude the possibility of it being a sales tax. I was trying to follow the reasoning of the minister when he suggested that because a province put a certain label on a tax, that made it something other than it would ordinarily be considered to be.


Harry Oliver White: Mr. Chairman, the minister's estimates have been running along quite nicely and I am wondering whether at this late hour I should take up any time, but there are two or three matters I want to bring to the minister's attention in connection with income tax as it applies to individuals. A different situation exists, depending on which side of the fence you are. If you are imposing a tax things may not look too bad, but if the tax is being imposed upon you then things look a little different.


James Joseph McCann: I happen to be on both sides.


Harry Oliver White: That is true. I am speaking for my constituents. As I have said many times before, these people are no different from hundreds and thousands of taxpayers across Canada. We hear expressions such as the bamboo curtain, the iron curtain and so on, but the minister's department has a curtain of terror. When a taxpayer gets a notice from the department he is not too certain just what is going to happen. We have read of the gestapo and what happens in totalitarian countries, we have read of the inquisition of many years ago, but I have had people come to me who have received notices from the department and I do not think they could be any more in fear if they were going to be charged by the gestapo.
The very thing which the hon. member for Dauphin has just mentioned, the wide discretionary powers of the minister, creates a certain amount of doubt and suspicion in the minds of the taxpayers as to whether everyone is being treated alike. I think a bit of public relations work on the part of the minister's department would be advantageous. I notice that the costs of the department are $65 million, but $4,000 million were collected and it would appear from this that the department is being efficiently operated.
Just to give the committee an idea of how this works, a young man in my constituency started farming for himself four or five years ago. He was quite successful during the first three years. He employed an accountant and placed all his figures before him. As a single man he realized that probably he would be liable to some tax. He did not try to evade anything. He paid whatever tax was due.
This went on for three years. Last year was a bad year, and he was not able to

harvest his crops. I know he had a 100-acre farm he rented, and the crop he planted never came up. What came up in the spring he could not harvest in the fall because of wet weather. In other words he took a beating. This spring he is facing just as serious a situation because of the drought.
The department notified him that an alleged error had occurred back in the first and second years and now he is being asked for several hundred dollars. He has borrowed all the money he can borrow to keep himself going and plant a crop this year, which he may not harvest, and now he is asked for hundreds of dollars to pay an income tax account. Whether it is the income tax department's error or his, surely those accounts could have been looked over. I can understand them missing a year, but to come along four years later, I think, is ridiculous.
Then there is the case of estates. The minister's department cannot lose. They can wait these things out, and when a death occurs they can say to the estate, "Here is your net worth, and here is the tax you paid. You owe us so much." I know of a case where the widow said "I can't fight it. I am not going to employ a lawyer to fight it. I'll just have to pay it." I have known the family for years and I know very well in my own heart that they did not owe it, but they paid it.
You and I have all heard of people who possess the Midas touch. Everything they touch turns to wealth. But the minister's department, whilst it has the Midas touch, also has the Judas touch. There are cases where the officials of his department have gone to some taxpayer they thought was delinquent and in the guise of aiding him have asked him, "How much stuff did you use on your farm?" He will say, "A few hundred dollars worth." They ask, "How much did it cost you to operate your car?" He says it was probably so much. They are thinking all the time that these are deductible costs. They ask, "How much would it cost you to live for a week?" They arrive at a figure, and what actually happens is that he is putting himself in a spot where his income is apparently greater than it is. In a word, sometimes the department betrays these fellows.
I venture to say that 90 per cent of all the individual incomes under $10,000 in the Dominion of Canada could be alleged to be in error. If the figures of any single business were given to 10 chartered accountants they would come up with 10 different answers.


An hon. Member:: Oh, no.


Harry Oliver White: I do not care what the minister thinks. If they were given
Supply-National Revenue to 10 officials of your department they would come up with 10 different answers. I maintain that all the individual returns where the income was $10,000 or under should be processed so that a receipt is given each year within 12 months. It can be done just as well within 12 months as within five years. When several years go by, as far as farmers are concerned they cannot recall what transactions went on. The same applies to many small businesses. My hon. friend from Perth is quite proud, of course, of the Shakespearean festival there. If I were going to draw any comparisons, I think Shakespeare said, "Life is a stage, and every man plays a part." I would not need to mention that to my constituents. They would tell me the part that the hon. minister plays with success.
I hope that before the next session of parliament rolls around, changes will be made so these income tax returns for those in the lower income brackets will be processed within the year and a final receipt given. Many hon. members have made tax returns and received an acknowledgment from the department, and think they have a receipt. Such is not the case. If the department fails to bring about these changes, I shall be tempted to introduce a resolution at the next session looking toward that end.


Donald Methuen Fleming: There are a few points I should like to lay before the committee. The first relates to the matter I began to raise at one stage this afternoon. My comment arises out of a Canadian Press dispatch of July 8, reading as follows:
The income tax appeal board has chided the revenue department for strange tactics in introducing an income tax return as evidence in an unsuccessful attempt to defend a government tax decision.
Usually tax returns are secret. Revenue department officials said later it is the first time they had introduced such evidence before the board but had done so because they believed it essential*.
I do not need to go into the facts of the case. That extract from the Canadian Press report sufficiently draws attention to the point. It may be that this was done without due consideration. It may be that the department does not intend to repeat it, but I think we should have an assurance from the minister on the point.


James Joseph McCann: Mr. Chairman, I am familiar with the case the hon. gentleman refers to. It was a case where a taxpayer claimed to write off a trade debt that was owed by his brother. The income tax return of his brother was introduced so the brother could pay that debt. The income tax appeal board held that that evidence was not admissible. The department will be bound by the decision

Supply-National Revenue of the board in presenting cases to this board and the courts in future. The mistake was that, as evidence, they introduced a return from his brother by whom the debt was owed, showing that the brother was in a position to pay it. The taxpayer who put in the return attempted to write it off as a bad debt. He should not have taken that position until it was absolutely proven that it was a bad debt. In this particular instance evidence was produced that the brqther had sufficient funds to pay his debt. But, as I say, the department will be bound by the decision of the board in presenting cases to the board and the courts in future, and they will not use that type of evidence. It will have to be decided whether or not that was a debt that could be written off or held until he could pay.


Donald Methuen Fleming: I am glad to have the minister's assurance on that point. As he has indicated, the decision of the income tax appeal board was quite clear on the point. I think it must have surprised most people to find that the department had attempted to introduce the return as evidence; but in view of the assurance of the minister that it will not be attempted in the future, I intend to say no more on the point.


James Joseph McCann: It just goes to prove what I have been arguing lately with regard to the secrecy provision. I admit that inadvertently in this particular instance the secrecy provision was technically violated.


Donald Methuen Fleming: Violated by the department itself.


James Joseph McCann: We are not infallible.


Donald Methuen Fleming: The other point relates to pension funds. Pension funds are becoming more common on the part of a great many corporations. I understand it to be a rule laid down by the department-which, after all, has a fairly effective control over these employer-employee pension funds-that no trustee may invest more than 15 per cent of its funds in common stocks. My question to the minister is whether that rule is applied to pension funds established by crown corporations.


James Joseph McCann: I see no reason why the law or the regulations, whichever it is, should not apply to crown corporations the same as to any other corporation. I cannot say at the moment whether there have been any violations of that rule.


Donald Methuen Fleming: I do not know the name of the crown corporation referred to, but in a bulletin entitled "Employee Benefit Plan Bulletin" published monthly by William M. Mercer Limited, this being the bulletin for


the month of March, 1955, there appears a short article entitled "Canadian Pension Fund Yields" in which I find this paragraph:
One pension fund which showed the highest yield was that of a crown corporation where the trustee was authorized to invest up to 30 per cent in Canadian common stocks. Since the employer is a crown corporation the trust agreement can and does disregard the Department of National Revenue's 15 per cent limitation on common stock holdings.
As I say, I do not know what particular crown corporation is there referred to. However, I agree with the minister that there is no reason why crown corporations setting up pension funds should not be bound by the same rules as those applicable to any other corporation. It is certainly not a case in which there should be any preference or discrimination in favour of crown corporations.
I take it that the minister is not aware of the case. In bringing it now before the committee and to the attention of the minister, I would ask the minister's assurance that he will look into the pension funds of all these crown corporations, and that if there are any that exceed the rule that is applied to other employer-employee funds, they will be brought into line so that all will be treated alike at the 15 per cent maximum.


James Joseph McCann: I personally and my officers have no recollection of any crown corporation making application to deviate from any of the rules that are applicable to other pension funds.


Donald Methuen Fleming: Then will the minister give us his assurance that he will review these pension funds of crown corporations?


James Joseph McCann: Yes.


Donald Methuen Fleming: And that if he finds any of them to be out of line, he will bring them into line?


James Joseph McCann: The matter of pension funds is under review at this time between the Department of Finance and the Department of National Revenue.


Donald Methuen Fleming: And you will bring them into line?


James Joseph McCann: Yes.


Clarence Gillis: I should like some information also on an agreed pension plan as it applies to a municipality. This pension plan I have in mind was set up in 1946. When it was set up it was understood by the employees and the municipality-it is under the annuities branch-that the amount of money the town would have to put in to set up the fund could be written off over a period of 10 years, plus the provision that the employee was to pay 5 per cent of his income and that the town was to contribute a like amount. The

understanding in 1946 was that both the town's contribution and the employee's contribution could be written off for tax purposes. In the case of a corporation, as suggested by the hon. member for Eglinton, the corporation has a right to deduct for tax purposes its contribution to a pension plan. But a municipality, not being taxable, has no way of getting an offset for that amount of money.
That understanding went along fine up until about a year ago when the auditors went into the town, checked over the matter and decided that this was not right, that the town was not right in permitting the employee to deduct the 5 per cent that was contributed by the town. The argument the town puts up is that that 5 per cent it is putting in, were it not paid in to a pension plan, would likely have been given to the employees by way of wage increases and so on. Then they argue that, in the second place, that pension, when it is paid ultimately, is taxable and that it should not be taxed at both ends. It is not a complicated matter. I think the municipality which sets up an agreed pension plan such as that should at least get the same benefits as those enjoyed by a corporation.
I am not going to elaborate on that matter any further. I think the deputy minister of taxation is going to have that particular case on his desk, if he has not received it already. I would suggest that the application of tax offset in relation to pension plans that municipalities set up is a matter at which another look should be taken. I think maybe the act, as it is today, can be interpreted to permit the revision of that plan in accordance with the district office's decision. I do not think the treatment accorded is just, and I believe there is a great imposition on the municipality as the situation now stands.


James Joseph McCann: Is it your contention that the amount of money the employee pays into the pension fund and also the amount of money the municipality pays in should be deductible for the purpose of that person's income tax?


Clarence Gillis: Exactly.


James Joseph McCann: The difficulty is this. If you are dealing with a corporation, you are dealing with a taxable body. But if you are dealing with a municipal body, it is not a taxable body at all. But when the pension is paid, it is taxable. He is allowed, when he pays in to deduct that payment as an expense, you might say, from his income.


Clarence Gillis: Why should not the municipality get the same benefits?


James Joseph McCann: Because one is a corporation.
Supply-National Revenue


Clarence Gillis: Why should a corporation get it?


James Joseph McCann: Because one is a taxable corporation and the other is not.


Clarence Gillis: That is not the fault of the municipality. That is a fault of the law.


James Joseph McCann: But that is the law.


John Horace Dickey: Then let us make them taxable.


Clarence Gillis: That is the point about which I am asking now. When the act was drafted, that particular angle was lost sight of.


James Joseph McCann: That is not right.


Clarence Gillis: I say it is time for an adjustment. In this particular case those who set up the fund made the decision that this could be done in this way; then, four or five years later, they come back and say, "That is wrong; we are going to change that; we are disallowing that" and they are going back for a couple of years on it and imposing penalties on the employee who is the innocent bystander.
I merely mention the matter so the minister may know about it, because his deputy minister will likely be seeing him on this particular case. While you can interpret the law in that way today I think it was a mistake, when the law was written, that some line of demarcation was not drawn as between corporations that are taxable and municipal bodies that are not taxable. If that 5 per cent contributed by the town was not going into a pension fund to provide for the future, it likely would be going to the employee by way of increased wages.


James Joseph McCann: We shall look into the matter.


Clarence Gillis: Thank you.


Herbert Wilfred Herridge: Mr. Chairman, I am going to say what I have to say on these estimates in one shot. I see the minister smiling, but he may not smile so much when he sees the length of the shot.


James Joseph McCann: As long as it is not a shotgun.


Herbert Wilfred Herridge: I just want to say this before dealing with the question I particularly raise with the minister. The minister and the officials of this department have a most important and exacting duty to perform, which we all recognize is not too popular at times. I remember just shortly after the war I ran into numerous instances of what I thought was a certain degree of carelessness or slipshod work on the part of employees of the department. I presume that arose from the fact you had to expand the department very rapidly during the war.
I must say that in my opinion the quality of the staff and its efficiency has improved continuously throughout the years. I do want to express my appreciation of the courtesy

Supply-National Revenue of the minister and his officials, and of the employees of the department, when I have been seeking information or when I have had occasion to bring matters to their attention where people thought they were unfairly treated or had certain complaints to make with regard to assessment or collection. I think we have to realize that all government activities depend entirely on the satisfactory functioning of the Department of National Revenue. On that account it does play a very important part in the government of this country.
Now, having said that, I want to refer to a matter that is of great concern and importance to a good many of the workingmen I have the honour to represent. Pension plans are becoming very general in large industries in Canada, more particularly since the conclusion of the second world war. Industrial workers have a great interest in these plans, their terms and their satisfactory operation. The employees of the Consolidated Mining and Smelting Company are a group of those workers who have given increasing consideration to their company's pension plan throughout the years, and have come to the conclusion that some improvement could be made in it. On that account, quite recently they had a study made of the whole situation by some very competent men who are members of the union. They presented their case to the union membership, and as a result authorized a delegation to come to Ottawa to deal with this matter.
On Wednesday, May 11, the co-ordinating committee of the union, representing the union negotiating committee, met with the Minister of Fisheries. The meeting was attended also, I think, by the hon. member for Kootenay East, the hon. member for Nickel Belt, the hon. member for Yukon and two members of the Department of Finance. The union placed before these gentlemen their views on this whole situation, and as a result of the very thorough discussion of this matter so important to their membership they were advised to write to the Minister of Finance.
I am going to read the letter into the record. It is a lengthy letter, but I think it is one of the best explanations of the situation I have seen since the problem arose. I think the union officials must be commended for the excellent and clear way in which they presented this case to the Minister of Finance.


James Joseph McCann: Unless the hon. member wants to give it to the house by putting it on Hansard, we have a copy of the letter in the department.


Herbert Wilfred Herridge: I thank the minister for his kind suggestion, but the rest of the members have not copies. Many of the unions in the

country have not copies. I do not usually read at such great length, but the letter has such importance that I think I am justified in putting it on the record so all members of the house will have an opportunity to study the careful analysis made of this pension plan situation by the union officials concerned. Therefore I now read to the house this letter. It is addressed to Hon. Walter Harris, Minister of Finance, Parliament Buildings, Ottawa, Canada. I understand a copy of the letter was turned over later to the Minister of National Revenue as coming more correctly under his jurisdiction. The letter reads as follows:
Dear Sir.
The Hon. Mr. James Sinclair, Minister of Fisheries, with whom we had an interview today. May 12th, suggested that we refer the matter set out below to you. It concerns the pension plans of International Nickel Company of Canada and Consolidated Mining and Smelting Company of Canada.
Locals 480 (Trail), 598 (Sudbury), 637 (Port Colborne) and 651 (Kimberley), representing 24,000 hourly employees of the above two companies, have for some time been concerned with a number of features of the pension plans of these two companies. These features are of course of great importance to the employees affected; we believe they are also of interest to the government. There is one feature in particular which does not appear to be in conformity with the principles and rules respecting pension plans issued by the taxation division of the Department of National Revenue and which constitutes a serious injustice.
This is the book to which they are referring. It was issued generally throughout Canada.
These plans are "non-contributory", the company alone making contributions to the respective pension funds established under the plans. Since the companies' contributions are exempt from corporation income tax at rates which have been fairly high over the past years, the amounts which the companies have saved in taxes to the federal government as a result of these contributions are very considerable. Of the $25-6 million in the C.M. & S. pension fund at the end of 1954, $10-9 million represent taxes saved on contributions made since 1941. Of the $72-0 million in the INCO pension fund, $27-8 million represent taxes saved in the same way since 1941. It may thus be said that the government and people of Canada have a very large stake in these pension plans and the funds established thereunder. Consequently, they have a very legitimate interest in the manner in which these funds are administered and in ensuring that the benefits of the plans do in fact contribute to the security and welfare of the employees who are covered by them. The principles and rules referred to above derive their importance from this point of view. Moreover, the companies always point out that when they grant a wage increase, they must also increase their contributions to the pension plans, since the pensions which are earned and paid upon retirement are calculated as a percentage of wages. Evidently, the companies consider pensions as an element of remuneration to which, therefore, the employees should have the same right and security as they have to their wages. This is far from being so, however.
In the foreword to the booklet of principles and rules issued by the taxation division, the Minister of National Revenue states:

"The approval of employees' superannuation or pension funds or plans will be governed by the principles and rules published herewith. These will extend and apply to the continuing approval of plans now operating as well as those which may be established in the future."
Part 10 (b) of the principles and rules reads as follows:
"The right provided by employer contributions must vest in the employee within a determinable period, and particularly on the attainment by the employee of an age which would prejudice him in the event of severance from employment. Therefore, vesting should be absolute upon attaining age 50, subject to a minimum period not exceeding 20 years of service or participation".
The above language gives the strong impression of having the force of law.
Notwithstanding the above, neither the INCO nor C.M. & S. pension plans provides for vesting rights of individual employees in respect of whom contributions have been made by the companies. It is true that these contributions are irrevocable and cannot be used for any other purpose than the payment of pensions. However, the administration of the plans, and indeed also the rules and regulations governing them, are wholly in the hands of officials of the companies appointed for that purpose by the respective boards of directors; the employees represented by the union having no say in the matter whatever. As a result these officials have the power
". . .to amend the rules and regulations in any particular, or discontinue or suspend or reduce such pensions and other benefit payments ... in whole or in part". (Section 11-rules and regulations INCO retirement system).
In other words, they have the power to exclude from benefits large numbers or even the majority of the employees on whose behalf the pension plans are supposedly established and thus, possibly, to defeat the reason of public policy for which the company contributions to the plans are exempt from taxation.
In particular, part 10 (b) quoted above would seem to require more than that the company contributions should be irrevocable. In our view, the real meaning of "vesting" as used above is that the individual employee should have the right to retain his equity in the fund, in the event of being severed from employment. This right should be unconditional and absolute at the latest when the employee reaches age 50, after a minimum period of service not to exceed 20 years. In the great majority of "contributory" plans the employer's contributions to the pension fund are so vested in the individual employees. However, the employee's right to his equity in the fund should not depend upon whether these contributions have been matched by contributions of his own; whether the employees contribute or not should make no difference to what happens to the employer's contributions and the employees' rights thereto:	In other words, vesting rights for
individual employees should be established irrespective of whether the plan is "contributory" or "non-contributory". However both the INCO and C.M. & S. pension plans specifically deny any vesting rights. Section 3 of the rules and regulations of the INCO retirement system states:
"The membership (in the system) of any employee shall terminate upon the cessation of his employment by the companies for any cause whatever, or upon his becoming a pensioner". (Absence from the service of the companies due to leave of absence, lay-off on account of lack of work or other acceptable cause for more than a year, constitutes cessation of employment.)
If a man is discharged after many years' service the penalty incurred in the loss of his accumulated
Supply-National Revenue pension rights is one of extreme and wholly unjustified severity. In the event of lay-offs, the employees not only lose their current income in the form of wages, but also their rights to future income after retirement, in the form of pensions. On the other hand, if vesting rights were guaranteed in accordance with the income tax rule quoted above, this would facilitate the mobility of labour and give to workers somewhat greater possibilities of advancing themselves by moving to new jobs. The lack of vesting rights in the INCO and C.M. & S. plans is a serious injustice and hardship to the employees whom we represent. We respectfully submit that it should be rectified at an early date.
Finally, with regard to the age of retirement; the INCO pension plan provides for voluntary retirement at 65, and compulsory retirement at 70. The corresponding ages in the C.M. & S. plan are 60 and 65, provided the employees started work before 1940. In our view, considering the exhausting work and extreme hazards involved in the mining and smelting industry these retirement ages should be lowered and should be less than those found in pension plans in other industries. Consideration might be given to this point in establishing appropriate standards for the approval by the government of plans in the various industries, and in particular when INCO and C.M. & S. plans again come up for approval.
All of which is respectfully submitted, on behalf of; International union of mine, mill and smelter workers. "A. King" president, local 480; "M. Solski" president, local 598; "R. Methot" president, local 637; "C. Thompson" president, local 651.
I have read that letter into the record at length because I think it is an excellent statement of the position as it affects the employees at this time. I understand the government has given consideration to the representations made by the unions on this question. I understand it is under careful study and investigation, and that later a report will be made on the whole situation.


James Joseph McCann: I am familiar with the situation. On June 23 I addressed a letter to Mr. King, president of the international union of mine, mill and smelter workers, in which I said that a copy of his letter of the 12th ultimo to my colleague the Minister of Finance had been forwarded to me, and that I had considered the representations with officials of the taxation department. I shall not quote the whole of the letter, but the closing paragraph says:
I should advise you, however, that early in this year I gave instructions to my staff to prepare a study of pension plans in so far as the Income Tax Act is concerned having in mind possible amendments to the act, and regulations, and this is proceeding. No change in present practice will occur until this study has been completed.
So the matter is under advisement and consideration at the present time.


Herbert Wilfred Herridge: I wish to thank the minister for that information, and I am pleased to know that the matter is receiving serious consideration and study.
Before resuming my seat I wish again to emphasize the fact that the development of

Supply-National Revenue pension plans throughout the years, and particularly their development in recent years since the second world war, indicates more than ever to members of this group that what we really need in Canada to give the industrial worker the security he should have, so far as pensions are concerned, and to give him the opportunity for mobility of labour, is a national industrial pension scheme in which there will be a standard of rules and a standard of procedure applying to industry throughout Canada.


Jay Waldo Monteith: In connection with the appeal board case to which the hon. member for Eglinton referred a moment ago, I should like to ask concerning the exact procedure on bad debts. My understanding is that the income tax division does allow bad debt reserves and bad debt write-offs. How are they to know about this unless they go into the files? They may do this, for all I know; I am not familiar with their practice. How are they to know as to whether or not a bad debt is actually bad? If at any time in the future a debt which has been written off as bad is collected, they collect on it. They do collect income tax in those circumstances. Does the department go into other files to determine whether or not a man can pay a debt, not as to whether or not he will pay it?


James Joseph McCann: Generally they do not do that. It is not the practice to go into other people's files. In this particular instance the man's own brother was involved, and it was to verify whether or not it was actually a bad debt. But it is not the practice to go into other people's files to get that kind of information.


Jay Waldo Monteith: What is the percentage of income tax collections? I think the minister mentioned earlier that $70 million had been raised by reassessment. Is that correct?


James Joseph McCann: Yes, about that amount; $72 or $73 million.


Jay Waldo Monteith: What percentage of that $73 million is made up of interest and penalties?


James Joseph McCann: Taxes and penalties are kept separate, but the interest is not. This amount of $72 million would not include interest charges.


Jay Waldo Monteith: But the penalties would be in there?


James Joseph McCann: Yes, they would.


Jay Waldo Monteith: What percentage of the $72 million would be penalties?


James Joseph McCann: I think we have that information on record, but I do not have it here.


Jay Waldo Monteith: The minister also mentioned that there had been 404 appeals in the last year. How does that compare with previous years? Is it increasing or decreasing, or is it approximately the same?


James Joseph McCann: Income tax appeals for 1954: appeals filed, 404; allowed in part or in full, 189; dismissed, 224. Let me give the years from 1949, when the board was first set up. In 1949 there were 122 appeals; in 1950, 423; in 1951, 469; in 1952, 293; in 1953, 393; and in 1954, 404. It keeps pretty constant.


Jay Waldo Monteith: I think that answers my question. I have one more point I should like to ask the minister about. If I am correct, in his preliminary statement he mentioned that something like 1,200,000 refunds had been made up to the end of April. Am I correct?


James Joseph McCann: That is correct.


Jay Waldo Monteith: I think the minister also said that the returns for the year 1954 were in the neighbourhood of 200,000 greater.


James Joseph McCann: Yes.


Jay Waldo Monteith: Than the year before?


James Joseph McCann: And 2,000 or 3,000 greater for corporations.


Jay Waldo Monteith: Who makes up the tables for income tax deductions at the source?


James Joseph McCann: The Department of National Revenue. Is that what the hon. member means?


Jay Waldo Monteith: Yes. Are they based on a prescribed rate set by the Department of Finance, or does the Department of National Revenue decide the rate at which these deductions are made?


James Joseph McCann: It is the decision of the Department of National Revenue in conjunction with the Department of Finance.


Jay Waldo Monteith: There is something wrong here. As I recall it, when these deductions first came into force they were based on something like 90 per cent of the expected income tax that would be payable by the individual for the whole year. We now find that there are 200,000 odd individual income tax returns and 1,200,000 odd refunds are made. It seems to me that a great deal of book work could have been avoided if the deduction rate were still based on a somewhat lower figure. We all know, as the minister himself mentioned earlier, there are medical expenses, donations, and all these things that come off the final return which cannot be taken into consideration when the deduction is arranged. It seems to me there could be a lot less collection costs and a lot less work in the department if the deduction

rate were again reduced to some such figure as 90 per cent. I should like to have the minister's comment on that.


James Joseph McCann: Well, experience has shown that if you are collecting only 90 or 95 per cent of the amount owed, much more work would be involved in collecting that extra percentage than it is to collect an amount that is almost 100 per cent, and in the event of changes necessitating a refund, to make that refund. I can give the hon. member a little more information.
In the 1953 taxation year, the latest for which we have complete figures, there were
4.857.000	returns filed. Out of this number, 54 per cent of the taxpayers were entitled to a refund and the remainder either had no balance to pay or a balance to pay. These figures cover all taxpayers, including wage earners, business proprietors, farmers and those with investment income. The refund problem, however, relates mainly to wage earners and in the remainder of this statement I refer only to that class of taxpayer.
With respect to wage earners, there were approximately 3,967,000 returns filed for 1953. Of these, 2,518,000 taxpayers, roughly 63 per cent, were entitled to a refund and the average refund was $49.94, which amounted to a total of $125,749,000 to be refunded. Of the 37 per cent-that is the difference between 63 per cent and 100 per cent-of wage earners who were not entitled to a refund, there were
1.254.000	who had a balance to pay at the end of the year. The average amount of this balance was $56.34, and the total amount of the balance paid was $70,634,000.
To state the position in 1953 very briefly, therefore, 63 per cent of the wage earners qualified for a refund averaging some $50, 31 per cent of the wage earners owed a balance of tax averaging $56, and 6 per cent of the wage earners filed returns even though there was no tax payable and no deduction at the source. If the division were to deduct less tax at the source at the time the wages were earned, it would reduce the number and the amount of the refunds. At the same time, the department cannot overlook the fact that this step would simultaneously increase the number of those who have a balance due which already exceeds the amount of the average refund.
In respect of those who have a balance due, only two-thirds in practice pay the amount with their returns, leaving one-third or roughly 412,000 wage earners with an unpaid account which is subject to collection action. If these 412,000 taxpayers do not pay their account voluntarily within two months after receiving their assessment notice, it 50433-432
Supply-National Revenue becomes necessary for the division to garnishee their wages or take other positive steps to effect collection, and the department is hesitant over increasing this problem for the sake of diminishing the number and amount of refunds. We are thinking not only of ourselves in this regard but also of the wage earner who is indebted to us, and of the employer who may eventually be required to carry out a garnishee.
In 1948 the taxation division based their tax deduction tables on withholding 95 per cent of the apparent tax. This resulted in 50 per cent of the wage earners having refunds and 45 per cent of the wage earners having balances owing at the time of filing. Those having difficulty in settling their account with the department frequently stated that they thought their tax was fully paid by withholdings and, if this was not so, that they would prefer to have it that way. When the division did increase the tax deduction tables to take almost the full tax at the source, we received very little criticism from wage earners. In fact we know there are a great number of wage earners who at the present time deliberately understate the amount of their allowable personal expenses so as to throw themselves into a refund position at the end of the year.
I think that is about a full explanation. Hon. members will realize there are some circumstances which would cause refunds even if the rate of tax deduction were dropped back to, say, 90 per cent. There are in excess of 120,000 marriages a year, 400,000 births, and 120,000 deaths a year in Canada. In a very high percentage of these cases the taxpayer would be entitled to a refund even if the withholding tax were set at 90 per cent. In addition, a reasonable amount of charitable donations or union dues would throw a man into a refund position at 90 per cent if his personal exemptions are close to his total income for the year. Sickness and interrupted employment are two other factors which will give rise to refunds under any reasonable level of withholdings.
Based on past experience we do not believe that any net advantage is gained by wage earners as a whole through reducing the level of withholdings, and there is a disadvantage to the department and to the employer. Hon. members can see from this statement that this matter has been given careful study and analysis. We believe the system in vogue at the present time gives the best advantages to both the department and the taxpayer.


Jay Waldo Monteith: I can see the department definitely feels that the percentage of the deductions should not be decreased. I am

Supply-National Revenue not going to quarrel with that statement at the moment, but I am just wondering whether a report of this type might not be made available to the members.


James Joseph McCann: It will be in Hansard now.


Jay Waldo Monteith: It will be now, but if we could have something of this nature before us prior to coming to the estimates I think we could go over the estimates with a much clearer picture of just what exists.


James Joseph McCann: I made a similar statement last year. Perhaps my hon. friend did not read it, or he has forgotten it.


Thomas Speakman Barnett: I must say that from my observations many of these wage earners who are subject to income tax deduction would agree with the statement made by the minister. I think that is borne out by the high percentage of deduction arrangements which on balance may more often result in refunds. However, the fact that refunds are created does bring about a certain problem, and it is in connection with this that I rise at this stage.
I have in my hand a clipping from the Vancouver Sun of February 26 last which is headlined, "Loggers sell tax refunds for 50 cents on dollar. Scheme startling but wholly legal." At one point in the news story it states that the income tax officials in Vancouver were horrified and shocked by the scheme. The article goes on to indicate that as. far as they were aware at that particular time there was not much they could do about it. The dispatch goes on to describe how the scheme works, and I think it might be of interest to hon. members from other parts of the country if I quoted this briefly so they may be alerted to the possibility of a similar racket being started in their parts of the country. The article reads:
Here's how it works:
Fred Fieber, secretary of local 1-71, international woodworkers of America, estimates there are between 4,000 and 5,000 loggers in the Vancouver area who have been out of work since the fall lay-off. Most of them will be rehired in April or May when bush operations again swing into high gear.
In the meantime, they and their families are living on what moneys they saved last year.
Loggers are not noted financiers.
Most of them, Fieber points out, are currently short of ready cash.
Most of them also have a nice nest egg owed them by the income tax branch in the form of refunds on the deducted-at-source taxes they paid during the months they worked last year.
These two factors, the loggers' need of cash and the refunds due from Ottawa, are the props for the racket.
The scene is a second-floor office in a dingy side street in downtown Vancouver.
Then the article goes on to describe how the scheme was operated. It was simply a

matter of the individual to whom a refund was due giving to the operators of this scheme a power of attorney to collect his income tax refund. He would turn over his slip indicating what he had coming, and then would be paid by the operator on the basis of 50 cents on the dollar. I imagine the department here in Ottawa must have had some report on this situation which I think the minister will agree is a most unfortunate development. I was wondering whether the minister could give any report at this time as to what action the government has considered taking to deal with this situation. If not, I might have one or two further questions to ask.


James Joseph McCann: We are familiar with the situation which was brought to our attention by the district office in Vancouver. It is a matter of a man having a slip which entitles him to a refund, and which he sells for cash at a discount. That led to another racket, where these things were forged and sold. That was about the time we caught up with it. There is no law to prevent a taxpayer from borrowing on the security of his refund. It is like pawning a watch, where you borrow money and sometimes you go back and pick up your watch and sometimes you do not.
That is what happened here. A man had a refund slip, and there was no law to prevent him from borrowing $10 on one that was worth $25, and probably taking that $10 and moving to another part of the country and the other fellow getting the benefit. This practice leaves the discount operator and the department open to fraud. However, I may say that I think we have the matter well in hand, and it will be closely watched another year when the refunds come around.


Thomas Speakman Barnett: I am not too disappointed at the report the minister has given, because I think there are few hon. members who would quarrel with a man having the right' to assign his refund if circumstances warranted him doing so. However, I think it is important that some consideration should be given to devising some practical means of making this sort of thing less likely to develop. I have had some discussion on this with people at the coast.
I should like to know the reason for the time lag which occurs before these men can get their refunds. I am not suggesting that there is undue delay in the department, as I think most hon. members will agree that there has been a considerable speed-up in paying refunds over the situation of a few years ago. What is the deadline for a firm sending in the T.4 slips to the department?


James Joseph McCann: February 28; for 1954 it would be February 28, 1955.


Thomas Speakman Barnett: Is there any reason why there should be a gap of two months between the end of the year and the time of filing these slips? I think that is probably the reason this problem has been created. Could not that deadline be moved up say to January 31?


James Joseph McCann: You have to give the employer an opportunity to do this work. With the Christmas season and all that we do not think he has too much time. In fact some claim that it is not enough. A man cannot discount his refund until he has the T.4 slip.


Thomas Speakman Barnett: I have had some experience in making up payrolls, and with the type of records kept by most business firms I do not think two months from the end of December are needed in order to total up their payrolls. I know it may be nice to have this extra time, but is there any real reason why it could not be shoved ahead? I believe the employer could get in the slips just as well. There is a tendency on the part of all of us to leave these things go. I think the minister will agree that this is a most unfortunate situation. If the men had been able to get their full refunds a month or six weeks earlier than they were in fact getting them, the problem would not exist.


James Joseph McCann: This is the first time I have heard a complaint from anyone that the time was too long. The average complaint is that it is not long enough. Take, for instance, the average taxpayer, any one of us. We have until the end of April. There are many people who cannot make it in four months and want longer. It is the same thing with reference to the returns from employers when they have to deduct from the wages at the source, send in the money and make the return for the year. Two months, in my judgment, is not too much. The majority of complaints have been that it is not long enough.


Thomas Speakman Barnett: I quite agree that the majority of complaints received would have been along those lines. I know perfectly well how easy it is for time to slip by during that interval, but I should like to ask if the minister would have his department give serious study to this question.
That was a serious situation. As far as I am able to perceive from the report the minister has given and the study I have made of the situation, it was the time lag that created the problem. If the deadline date were moved up, then it would be entirely on the responsibility of the individual taxpayer as to when he was getting a refund. I feel that two 50433-432i
Supply-National Revenue months is an unnecessarily long time. I hope the minister will take that under consideration.


Alexander Malcolm Nicholson: When this item was before this house a year ago in the closing hours of the session, the hon. member for Winnipeg North Centre raised a case in connection with a case in the United States. Nine men were apparently indicted in the United States for evading $16,400,000 in United States income tax. It happened that three of those men were Canadians. They were Isadore J. Klein, Albert McLennan and George Norgan, all of Vancouver. These three and the brother of one of them seemed to have tumbled on a very fortunate device in 1944. They each put $1,000 into the kitty and in the course of 10 years apparently, under the name of United Distillers, their investment of $4,000 pyramided to something over $20 million.
When the item was before us last year the Minister of National Revenue intimated that his department was on the lookout for these gentlemen and had collected a good deal. The hon. member for Winnipeg North Centre suggested that in the light of the very serious problem in the United States, the Department of National Revenue might review its file to see whether the Canadian exchequer might be enriched. Could the minister make any statement as to whether he acted on the suggestion of the hon. member for Winnipeg North Centre?


James Joseph McCann: Just to the effect that every cent owing to the Canadian treasury in taxes from that particular case has been paid.


Alexander Malcolm Nicholson: Would the minister go a little further? The hon. member for Winnipeg North Centre discussed the matter a year ago. Could the minister indicate whether any additional funds have been collected on this account that was before the United States courts at the time? It seems to me that $16,-
400,000	was a very large amount of tax. The hon. member for Winnipeg North Centre thought the minister could have another look at that question to see what action had been taken. On page 6595 of Hansard for last year the hon. member for Winnipeg North Centre made what appeared to be a reasonable suggestion.


James Joseph McCann: You are referring to United States tax. I do not know whether or not that has been collected. I have made sure that the Canadian tax was collected.


Alexander Malcolm Nicholson: No. The minister admitted a year ago that he was quite familiar with the case when he said:
Would it satisfy the hon. gentleman if I told him that as far as the Canadian taxpayers are concerned, returns have been made, assessments

Supply-National Revenue
have been made and the tax in full collected. It was one of the largest amounts of taxes from that type of business that were ever collected in this country. The crown has been protected.
After the minister made that statement, the hon. member for Winnipeg North Centre suggested that was still not good enough, that there was still gold in them thar hills and that the minister might go exploring again. Could the minister indicate whether he has found any more gold?


James Joseph McCann: I cannot make any further statement except that every dollar due to Canada has been paid. We feel quite sure we have explored every avenue, that all the tax has been paid according to the assessment that was made, and that we have not had occasion to revise it or the necessity of reviewing it.


Alexander Malcolm Nicholson: The hon. member for Winnipeg North Centre referred to a case in Vancouver as follows:
Mrs. Netta Bell, widow of Nat Bell, and their two children, Angela and Jack, are asking $2J, million as their share of the $25 million profits made by United Distillers.
The minister seemed to be familiar with this case at the time. There was a dispatch in the Vancouver Sun of May 11 of last year that said:
The Bells allege that through intervention of Canadian income tax authorities $15 million of the huge profits was returned to the company, and they say this was used to purchase shares in the company in the names of secret nominees.
At that time the hon. member for Winnipeg North Centre said:
Can the minister explain that startling statement? I do not think he would want to slough it off. The Bells allege that through the intervention of the Canadian income tax authorities $15 million of the huge profits was returned to the company. What does that mean?
The minister replied:
I am familiar with the case but I would not like to make a comment on a lawsuit and allegation of that type while the matter is still under consideration.
That was a year ago.


James Joseph McCann: The position is practically the same. It is a lawsuit. It is still under litigation, and I would not care to make any comment while it is under litigation.


Alexander Malcolm Nicholson: These are very large
amounts.


James Joseph McCann: It is a large amount, sure.


Alexander Malcolm Nicholson: Since the Bells allege that through intervention of Canadian income tax authorities $15 million of the huge profits was returned to the company, and they say this was used to purchase shares in the company

in the names of secret nominees, it appears to me that these are very serious allegations. A year has passed since the matter was discussed, and I think the minister should indicate what is causing the delay in reaching a settlement. Why cannot some decision be reached?


James Joseph McCann: I do not think it is in order for the hon. gentleman to be discussing this case at all when it is still before the courts. "Sub judice", I think, is the term that is given to it.


Edward Turney Applewhaite: Of course if that is the case the merits of a case actually before the courts cannot be discussed. I had not realized, when the hon. member brought up this case, that it was a case still before the courts. That, of course, is a well established rule.


Erhart Regier: Mr. Chairman, I should like to endorse the suggestion made by the hon. member for Comox-Alberni in the matter of refunds. This money really belongs to the taxpayer. Whilst the minister claims that two months is necessary both for the filing of returns to the income tax office and for supplying the employee with the slip showing his earnings and showing his deductions, I notice that in his regulations the minister makes the companies remit within 10 days of the end of each month the amount of income tax deducted from the employees during the preceding month. It seems to me to be a little inconsistent on the one hand to say that companies should have their office procedure sufficiently streamlined to be able to remit within 10 days any moneys owing to the government, and yet say that the same employers need two whole months in which to complete returns for the year.
I have filled in enough of these returns to know that it is a simple matter for any office which has any accounting system whatsoever worthy of the name to have these T.4 slips completed and the returns made to the local income tax office. We are not asking that the companies be not given the ordinary six months in which to file their own income tax returns to the government. This is merely an interim return, as it were, with regard to the wages they have paid and the deductions they have made at the source. I think the working people of Canada, and notably those who are unemployed in the winter months, would be able to get their refunds into their own hands much sooner if only one month's time were given to the employers to get out these slips. I feel that it would be a great help to many of the working people during the winter months. I am hoping the minister has not lightly cast aside what I consider to

be an excellent recommendation made by the hon. member for Comox-Alberni.
I want to ask the minister for some information on the matter raised by the hon. member for Dauphin. The information I should like to get initially at least is this. How is it that orders in council were passed providing for refunds to 14 companies? How is it that it was not 8 companies or 144 companies? The province of Quebec is very large. I am sure there must be thousands of companies having to file returns with the income tax department. What made it exactly 14? How did the minister know who had a refund owing him under his policy?


James Joseph McCann: The Quebec education tax was applicable only to those corporations that were public utilities. As will be seen in the order in council, they were power companies, including the Bell Telephone Company. It did not apply to all corporations in Quebec. It specified the corporations that it did apply to, and they were power companies and public utilities. They included such companies, for instance, as the Bell Telephone Company, the Aluminum Company of Canada, the Saguenay Power Company, the Gatineau Power Company. That is the answer. It applied only to those 12 companies.


Erhart Regier: In that case I think the answer is quite satisfactory. It is an obvious one. Can the minister then state that no company that applied for similar treatment was refused, or whether there were some applications for a similar deal that were turned down?


James Joseph McCann: It was only paid to those companies who made the appeal. The companies that made the appeal were Canadian Light and Power Company, Gatineau Power Company, MacLaren-Quebec Power Company, Northern Quebec Power Company Limited, Ottawa Valley Power Company, Saguenay Power Company, St. Maurice Power Corporation, Shawinigan Water and Power Company, Southern Canada Power Company, Aluminum Company of Canada Limited, Electric Reduction Company of Canada, Ltd., Pembroke Electric Company Limited whose head office is in Pembroke but whose plant is in the province of Quebec, Bell Telephone Company and the Imperial Oil Company. The other list includes St. Lawrence Paper Company, St. John's Power Company, Brompton Pulp and Paper Company, St. Lawrence Corporation, Quebec North Shore, Consolidated Paper -these were all small amounts-James Mac-Laren Company, Anglo-Canadian Pulp and Paper Company.
Generally speaking this tax was applied to companies who made their money out of the
Supply-National Revenue natural resources. They put on this extra tax which was to be applied for educational purposes, and in Quebec it was called the Quebec education tax. Not all the companies affected were active in the appeal, but they did give notice of appeal. But the test case was made on behalf of the four companies, the ones that were named before.


Erhart Regier: The minister now reads out a list of companies that I at least had not heard of before. I wonder could he amplify that a bit? Exactly what list was he referring to? Were those the companies that paid this tax, or were those the companies that received the refund from the government?


James Joseph McCann: They all paid the tax when they were assessed. That was a decision of the department, that it was not a deductible expense. The income tax appeal board heard the case. It went against them. Then an appeal was taken to the exchequer court in the name of all these companies, by four companies. They all gave notice. The companies that got the refund gave notice. They gave what was called notice of objection to the assessment.


Erhart Regier: I quite understand that. From what the minister says I understand that a settlement was then arrived at and that suitable refunds were made under order in council. However, the list that is given in the two orders in council does not include nearly all the companies whose names the minister has read out. Were there any refunds made in any other way than by these two orders in council that specifically named only 14 companies?


James Joseph McCann: Perhaps it would be best if I read the order in council. The hon. member for Dauphin I think referred to only one order in council.


Erhart Regier: Two.


James Joseph McCann: There were three orders in council. Order in council P.C. 1954-27/218 reads as follows:
Certified to be a true copy of a minute of a meeting of the treasury board, approved by his excellency the governor general in council, on the 18th February, 1954.
The board recommend that authority be granted, under the provisions of section 22 of the Financial Administration Act for remission of taxes in the amounts detailed hereunder, paid by the following companies under the provisions of the Income War Tax Act and the Income Tax Act:
Then there are enumerated 12 companies and the amounts of money. That order in council is signed by the clerk of the privy council.


Erhart Regier: Then we have two other orders in council enumerating other companies. In

Supply-National Revenue that case the member for Dauphin gave us the names of the companies and the amounts involved in those orders in council. I think the minister, in order to give a clear picture and a fair picture of the whole transaction, should now inform us how many firms were included in the third order in council, and the whole amount of money involved in that third order in council.


James Joseph McCann: All these orders in council have already been tabled and the hon. gentleman can look them up. According to the regulations, orders in council as passed are tabled by the Prime Minister at the end of definite periods. I think it is every month.


Erhart Regier: If that is going to be the attitude I assure the minister that we usually do our homework and necessary research, and we shall do our utmost to let the Canadian taxpayers know about that third order in council which he seems to hesitate to put on the record.


Mr. Mcllraiih:: It is a public document.


Erhart Regier: So far the minister has not given a very good answer, and I would ask for that information along with the other information. I feel that I have been somewhat misled in connection with the charges made on more than one occasion in the house about these two orders in council. The minister has several times replied, and never until now has he indicated that there were any other refunds.


James Joseph McCann: That is not correct. In the statement I read I said there were three orders in council, and if the hon. gentleman is familiar with procedure here he knows that these orders in council have been tabled. Now, it would be easy to table all these again, with all these figures and names, but that has already been done. He has an opportunity, if he wants to do a little research work, to look these up and find out for himself just what they are. There is nothing secret about them.


Frederick Samuel Zaplitny: Perhaps I could come to the assistance of the minister. I think all the hon. member for Burnaby-Coquitlam wants and what this committee would like to have is the total number of companies involved and the total amount of money involved in these three orders in council. This should not be difficult. The figures are there available; why not put them on the record so they will be given with the other information given earlier today?


James Joseph McCann: I would like to recommend to the hon. gentleman that he look up the Auditor General's report. These are all published in it.


Frederick Samuel Zaplitny: I know; that is where I got them in the first place.


James Joseph McCann: I could add these all up and put all these figures on the record, but that has already been done. There is no necessity for doing it a second time.


Frederick Samuel Zaplitny: Has the minister any objection to telling us the total number of companies involved?


James Joseph McCann: I could do it very easily.


Frederick Samuel Zaplitny: And perhaps the total amounts involved.


James Joseph McCann: Here is the first order in council, P.C. 1954-27/218, dated February 18, 1954, and there are 12 companies and the amounts. The next order in council is 1954-16/329, dated March 10, 1954, with two companies named.	The next one is P.C.
1954-24/621, dated April 29, with one company, Imperial Oil Limited, named. The next one is P.C. 1954-26/893 dated June 17, 1954. The next one is P.C. 1954-12/1660 dated November 3, 1954. There are about 25 companies there, and the amounts. The next one is P.C. 1954-25/1904, and it amended order in council P.C. 1954-12/1660 to include the companies listed below. There are 7 companies, and the amount is around $10,000.
With these numbers the hon. gentleman can look that up in the Auditor General's report or he can ask for the orders in council which have already been tabled.


An hon. Member:: Just playing politics.


Frederick Samuel Zaplitny: We are not playing politics with the money in the public treasury, which is more than the hon. member can say for his government. However, Mr. Chairman, I want to ask another question now which has nothing to do with a number of companies concerned. Would the minister inform the committee as to whose initiative it was upon which these remissions were made? Was the offer to settle on a 50-50 basis made by the companies concerned, or was that offer made by the government to the companies?


James Joseph McCann: It was made by the companies concerned, and the initiative for drawing up the orders was undertaken jointly by the Minister of Finance, the Minister of Justice and the Minister of National Revenue.


Frederick Samuel Zaplitny: Some time earlier I drew attention to the fact that the exchequer court in handing down its judgment had awarded costs to the Minister of National Revenue. I should like to know, first of all, what those costs amounted to, and whether the department has been successful in collecting those costs.


James Joseph McCann: I cannot give offhand what the costs amounted to, but I presume they have been collected because we are pretty good collectors.


Erhart Regier: I cannot quite let this go. After the minister's final reply, and after a number of requests, I can easily understand why the hesitation existed and the advice to do our research work. We are left in the position now that we do not know whether $3 million was involved, or $13 million or $33 million, so we will have to save that for another day.
However, I should like to raise this issue now. I have done enough research to find out that the government did have authority to make these refunds. Apparently there is a section in the Financial Administration Act, I believe it is, which gives them the authority to make such refunds by order in council. Section 22 of that act reads:
The governor in council, on the recommendation of the treasury board, whenever he considers it in the public interest, may remit any tax, fee or penalty.
I am assuming it was under that authority these orders in council were passed. In other words the government will have to persuade the country that this actually was in the public interest. I know it is often said that the law is an ass. However, as a layman I have always been led to believe that regardless of whether or not the law is an ass we have to obey each and every law until such time as it is amended. I do not believe anything can be said for this type of settlement in any way, shape or form. I think it is either unfair to the companies concerned or it is unfair to the general taxpayers of Canada. Either the companies owe this money or the companies do not owe this money, according to the law as it ought to be interpreted by the courts of Canada in case of a dispute. Either these companies had the whole of this tax refund coming to them or they had no refund coming to them. I know that is the way the department does business with ordinary individuals.
I have yet to hear of the Department of National Revenue sizing up a farmer or a small merchant and finding that he owes them so many thousands of dollars in income tax, then having the income tax department shake its head and say, "Well, now, we might not be able to collect this money. Maybe if we made a deal and offered to have an order in council passed giving a refund of half of it, he will come through."
These investigations are carried on by certain persons; and I do not call them snoopers, because I think they are doing good work. They do the work assigned to them. However, some of these investigations extend over
Supply-National Revenue a long period of months. I have yet to hear of an investigator being authorized to say to a farmer, "We think you owe the government $2 million, and we also think if we worked hard enough and long enough at it we would be able to get that $2 million. However, the possibility does exist that at the end of our research we will find that you do not owe us anything. So how about a settlement for half the amount?"
The minister has called it a gamble. I do not like that reference from a minister of the crown. Here is public money that belongs to the people of Canada. Either it belongs to them or, by law, it does not belong to them. Yet the Minister of National Revenue admits taking a gamble with the taxpayers' money. All I can do is express my grave resentment at that attitude toward money that either belongs to the company, in the first place, and should not have been paid at all, or the whole of it belongs to the people of Canada.


Alfred Claude Ellis: Mr. Chairman, I have always been under the impression that gambling was an offence under the Criminal Code. Therefore I was surprised to hear the Minister of National Revenue tell the committee that in this particular case, when the government had been supported by the exchequer court, they thought there might be the possibility of a reversed decision by the supreme court and therefore they decided to gamble and to make a deal with the companies for 50 per cent of the tax moneys owing.
The hon. member for Burnaby-Coquitlam was quite correct when he suggested that if a farmer, for example, got into a dispute with the Department of National Revenue regarding income tax and offered the department 50 per cent, he would certainly get short shrift. The idea is utterly absurd, and I am quite concerned about the basis upon which this decision was made. Because, after all, there is a great deal of money involved here.
In view of the fact that Mr. Justice Cameron of the exchequer court made it quite clear that in his judgment the tax in Quebec was, in effect, a corporation tax, and there was no doubt whatsoever in his mind as to the status of the tax, it is difficult to understand why the government felt it had such a weak case and had to settle on this basis. Surely when the government's position was supported by the exchequer court, and in view of the pronouncement by Mr. Justice Cameron that the tax was a corporation tax, it is amazing that the Department of National Revenue should have seen fit to make a deal of this kind.

Supply-National Revenue
This was a deal involving three or four million dollars of the taxpayers' money. I mention that amount although we are not clear as to how much money is involved. The minister should have given a forthright answer to the question asked by the hon. member for Burnaby-Coquitlam. After all, hundreds of questions are asked in committee when the information is available from some other source. Just because the information is available from some other source does not prevent members in the committee, when the estimates are under consideration, from asking the minister questions.
The minister took the trouble to read the order in council, and he mentioned certain firm names; but he left out the most important information. He left out the total amount of remissions made, and that is the kind of information we want. It is money that should belong to the people of Canada; and I, for one, am not satisfied with the statement made by the minister. I think he ought to make it clear to this committee, and state the ground upon which the department decided to reach a settlement with these companies on a 50-50 basis. He admitted that it was on the initiative of the companies.
I suggest no corporation is going to come to the government and offer a deal of that kind if it is satisfied it has a strong case. The only answer the minister can give us is that they have taken a gamble. They were supported by the exchequer court; there is no question about that at all. The minister suggests they were afraid that if the matter were carried to the supreme court the decision might be reversed, and on that basis he was willing to gamble and to sacrifice nearly $4 million which rightfully belonged to the taxpayers of Canada.
I ask the minister to tell the committee on whose advice this step was taken; because in my judgment that advice was not sound. And since it involves such a large amount of money I think this committee has every right to expect a full and complete answer from the minister.


William Alfred Robinson: Shall the item carry?


Some hon. Members:: Carried.


Frederick Samuel Zaplitny: Before leaving this item I would ask the minister whether he is going to give us the total number of companies involved and the total amount of remissions involved, or whether he is refusing to give that information. If he refuses, then of course we cannot go further. But we would like to have it on record as to whether he is willing to give that information or refuses to give it.


James Joseph McCann: I never have refused to give the information.


Frederick Samuel Zaplitny: I am asking for it.


James Joseph McCann: All I have said is that the information has been given already, and I have never heard in this House of Commons anyone asking for a second copy of an order in council to be tabled. This has all been tabled in the house, the amount and everything else.


Frederick Samuel Zaplitny: I am not asking that an order in council be tabled. If the information is available to the minister at this moment I suggest that he give it to us. The minister has referred to an order in council concerned in this case. I point out to him that his officials are before him, and it would be only a matter of a minute or two to add up the figures, add up the number of companies, and put it on the record at this time. That is a perfectly reasonable request; and if he refuses to do so then his refusal is on record, and that is as far as we can go.


[Stage Direction]
Item agreed to.
Canadian Broadcasting Corporation-
International shortwave broadcasting service-
56. Maintenance and operation including authority to credit to the appropriation revenue from the rental of facilities in Radio-Canada building and at Sackvllle, New Brunswick, to an amount of $215,000 and to re-expend these moneys for the purposes of the international service, $1,614,625.
James Joseph McCann: Mr. Chairman, the item you have just called is the first in the appropriations for the Canadian Broadcasting Corporation. It is not my purpose at this time to make any extended remarks with reference to the C.B.C. Hon. members who are interested may turn to Hansard for March 7 and 8 and they will find in detail the statement I made concerning the terms of reference of the committee to be set up to go into matters connected with radio broadcasting. I need not repeat those terms of reference.
Suffice it to say that the sittings of the committee, which were 35 in number, were very interesting, and I believe every detail concerning the Canadian Broadcasting Corporation was gone into at that time. This first item has to do with the international shortwave service. In this connection I would quote briefly from the minutes of proceedings of the committee for May 5 and 6. The chairman of the board of governors was on the witness stand, and questions were being asked with respect to the international service. The chairman of the board of governors said:
Perhaps I could give an explanation and then the general manager could enlarge upon it. In this service the corporation-unlike the case with regard to the national service-is in effect an agent for the government in carrying out international

broadcasting, that is broadcasting to countries other than Canada or the United States. The funds are provided from government sources by direct vote.
The service was started in the latter part of the war partly to provide broadcasting for Canadian troops overseas and also to broadcast at that time to friends in Europe, in occupied countries and in some neutral countries as part of the war effort, and also to do information work. After the war the service naturally changed emphasis to some extent and was extended to more general broadcasting to a number of western European countries including Czechoslovakia. A service was begun in Spanish and Portuguese in South America to provide Canadian information there. It developed during the years and finally reached the stage which it has now reached.
The service to most of the western European countries started with the war. The Dutch and French services, the German, Italian and weekly Finnish services, the Czech service, which was one of the early ones, the Polish service was added -I think I mentioned the Italian service-then the Ukrainian part was added to the Russian service fairly recently.
The broadcasts go out from the big transmitting station at Sackville and reach Europe very successfully-the signal received in Europe is as good as any from North America. They reach South America quite well and they can also reach Australia and New Zealand to which countries we have been transmitting weekly broadcasts. That was about the extent of the service last year.
Then a decision was made to reduce the cost of these transmissions,-
The reduced cost is the amount of money that hon. members see in the estimates, which shows a reduction of about $600,000 from what was spent a year ago.
Then a decision was made to reduce the cost of these transmissions, and the services to western European countries have in the last month or two been reduced at considerable saving. The services to the Scandinavian countries, the Netherlands and Italy are to be reduced to only small services at week ends. The Finnish service has been dropped. The French and English services have been reduced and the service to the Latin-American countries has also been reduced, but the actual time spent in broadcasting to countries beyond the "iron curtain" has been increased and better listening times provided for the services in Russian, Ukrainian, Polish and Czechoslovakian. That is a very quick outline of the service.
I just bring this to the attention of the committee because of the fact that by the reduction of services we propose to save something in the neighbourhood of $600,000 a year.
The committee held very satisfactory meetings. A report was drawn up which was not unanimous but which made certain recommendations. I have no doubt that those who follow me in the debate will make reference to that report, and I am going to leave most of the discussion to my fellow members of the committee.


Donald Methuen Fleming: Mr. Chairman, there are this year actually four items in the estimates that pertain to the Canadian Broadcasting Corporation. They are numbers 56 and 57, which relate to the international shortwave
Supply-National Revenue broadcasting service, No. 641 in the supple-mentaries, which also relates to the shortwave broadcasting service, and then No. 785 which proposes a loan of $8,500,000 to the Canadian Broadcasting Corporation, to be applied in payment of expenditures to cover capital costs of television installations and to support the development of the services.
Sir, the minister has made reference to the sittings of the committee. I should like to make a comment first of all about attitudes toward the Canadian Broadcasting Corporation. The Canadian Broadcasting Corporation has many friends in this house, and whatever may be our views on policy-and there are strong views taken on policy both in the field of regulation of radio broadcasting and in the policy now applied in reference to television, as well as in questions relating to finance-none the less I think we all recognize that the Canadian Broadcasting Corporation has leading it men of competence, men who are deeply attached to the corporation and its objectives; and I think those of us who have had the privilege of sitting on this committee on broadcasting always look forward to these meetings and the opportunities they afford of delving into the affairs of this important corporation.
As to the committee itself, I should like to pay this word of tribute to my friend the chairman, the hon. member for Portneuf. He conducted the meetings from the chair with discretion, good temper and benevolence, and there was a good feeling in the committee. I will not say there were not occasions in that committee when differences of opinion as to what was properly within the scope of the committee's reference gave rise to sharp exchanges; but when some hon. members supporting the government showed allergies every time any suggestion of bringing in reports was put forward, I must absolve the chairman. In his duties he was fair and benevolent.
The report which was tabled in the house on June 17, and is to be found at pages 763-5 o' Votes and Proceedings, was not unanimous. There were some sections of that report which we of the Conservative party did support, but there were a number of sections in the report against which we were obliged to vote, and the report itself was a majority report. We voted against it.
I should like to say in general, sir, that I think it is opportune that even though this hour is very late and the stage of this session is very advanced, there should be even this limited opportunity for debate, because I am convinced-and I have sat on every one of these committees on broadcasting since 1945-that we are rapidly approaching a juncture where there are important changes
6842	HOUSE OF
Supply-National Revenue that are bound to be made. There are some issues that are becoming clearer, it seems to me, than ever before; the issues of freedom, of competition, of parliamentary control and some sense of restraint and responsibility in regard to the expenditure of public moneys. I am not going to be so bold as to make excessive predictions, but I shall be a very surprised person, sir, if some quite material changes in government policy do not develop within the next year or year and a half in relation to this whole question of broadcasting and television.
At the present time there are three major issues that are apparent. The first is the issue as to the separate regulatory tribunal. The second is the issue as to the government's policy of monopoly in television; and the third, and by no means least important issue, is the colossal rate at which expenditures, particularly on television, at the expense of the taxpayer are mounting up.
Now, sir, it is not unfair to say that those errors and unsound features in government policy against which we in Her Majesty's loyal opposition have been this long time warning the house are becoming more manifest now than ever; and the system has, because of the weight of its own colossal cost and the unsoundness of certain features of government policy, come to the point where some change must be made. I am convinced that some change will be made. There are other issues, but they do not rank with these three in importance.
I should like to touch briefly upon some of the highlights that stand out in connection with these three issues.
First of all in regard to the basis of regulation and control and licensing in the field of radio broadcasting and television, the official opposition sought to place its views in this respect before the committee in the form of an amendment. That amendment was defeated by a vote of 9 to 6. I would point out that in addition to the votes of the Conservative members of the committee, that particular amendment commanded the support of the Social Credit members and also of one Liberal member, the hon. member for Burnaby-Rich-mond. That amendment sets forth the position of the Conservative party in reference to this matter of regulation, control and licensing in the field of radio and television. It reads:
It is unnecessary and unsound that C.B.C. should continue to license, regulate and control privately-owned broadcasting stations. The committee proposes that these functions should be detached from C.B.C., and should be conferred upon a separate regulatory tribunal appointed by the governor-in-council and operating in the public interest. This will leave C.B.C. free to concentrate all its efforts on its own operation of the national system of broadcasting. The separate regulatory (Mr. Fleming.]

tribunal should deal with all questions of licensing, regulation and control as applied to all forms of broadcasting, whether public or private, and whether of sound or television. This will ensure justice and fair play for all forms of broadcasting.
There are many precedents to support this proposal of an independent regulatory tribunal. The Australian broadcasting system is organized on precisely that basis. Here in Canada we have a board of transport commissioners which regulates the operations of the railways, whether publicly-owned or privately-owned. No one would suggest that the C.N.R., in addition to carrying on its own operations, should be authorized by law to regulate and control the operations of the C.P.R. and other privately-owned railways in Canada. Yet that would be the counterpart of the present system of radio broadcasting control in Canada today. Similarly, the air transport board licenses and regulates all forms of civil aviation in Canada. No one would suggest that the publicly-owned Trans-Canada Air Lines, in addition to carrying on its own operations, should have complete power to license and control all privately-owned forms of civil aviation in Canada. Yet that also would be the counterpart of our present system of radio broadcasting in Canada.
The danger of monopoly is great under any circumstances. It is particularly threatening when applied to such a vitally important medium for the dissemination of thought and opinion.
To those who say you cannot make a comparison in this regard with two transcontinental railway systems I would reply, Very well. Perhaps a comparison in the field of civil aviation is closer, because there you have a government-owned transcontinental aviation system and a privately-owned system which is not transcontinental in the sense that it is competitive with the publicly-owned system. It seems to me that there you have a fair basis of comparison. No one whom I know of in this house suggests that Trans-Canada Air Lines should be given regulatory power over Canadian Pacific Air Lines. We were told in the committee that about one-third of the time of the board and executive of the corporation is devoted to affairs pertaining to licensing, regulation and control over the privately-owned stations. We contend that if the C.B.C. is relieved of this obligation the public interest will be served, and on the other hand the C.B.C. will have a freer hand to go ahead and make a success of its operation of the national system.
On this matter of licensing I should make this comment, because it engaged the attention of the committee. In all the years the Canadian Broadcasting Corporation has been the body which has reviewed applications for licences-the practice is for the Department of Transport to refer every application to the Canadian Broadcasting Corporation for review-there has been only one instance where the Department of Transport departed from the recommendation of the corporation within recent times and that was in connection with an application from St. John's, Newfoundland.

to set up a privately-owned television station there. When the Canadian Broadcasting Corporation weighed and reviewed that application it decided that it would like to have that channel for the opening of a C.B.C. television station there, and it made that recommendation to the Department of Transport. But in that one case, described as unique by the officials of the Department of Transport, the government did not give effect to the recommendation of the C.B.C. But the fact was that the C.B.C., as the licensing review body, found itself in the position where it was weighing its own interests against the interests of a private applicant seeking to be licensed to operate a television station on that particular channel in St. John's. The case points to the fundamental duality of C.B.C. interests in the present system.
On May 19, as reported on page 3909 of Hansard, I put the following question to the Prime Minister:
May I ask the Prime Minister if the government is contemplating the appointment of a royal commission to review the basis of regulation and control of radio broadcasting in Canada?
The Prime Minister replied:
I can say to the hon. gentleman that the government is contemplating the appointment of a commission, but that does not mean that any decision about an immediate appointment has been reached.
The government should make up its mind on what it is going to do in this matter. There is general expectation that the appointment of a royal commission will be made. I think the Minister of National Revenue owes it to the committee to tell us whether that royal commission is going to be appointed. The present system under which the corporation is placed in the position of being competitor, judge, jury and executioner is not good. This set-up has not been attacked alone by the Conservative party; it has been attacked as well within the Liberal party itself. Last March the advisory council of the national Liberal federation met in Ottawa, and a Canadian Press dispatch of March 30 revealed that the federation recommended "that the government appoint a commission to consider bringing Canadian radio and television broadcasting under an independent regulatory tribunal".
That is not the first recommendation of this nature which has emanated from some organ within the Liberal party. The young Liberals have come forward with similar recommendations, and in the face of most strenuous efforts put forward by ministers of the crown in an effort to staunch this flow of liberal ideas among young Liberals. To illustrate the matter a little further, Professor Marcus Long, who is I believe a member
Supply-National Revenue of the executive of the national Liberal federation and with whose ideas I do not hold in all respects, had this to say on this very issue. I refer to a Canadian Press dispatch of March 23, which reads as follows:
Marcus Long, associate professor of philosophy at the University of Toronto, said today he would support the formation of an independent commission controlling radio and television in Canada to avoid the potential evils of government control.
The same gentleman was quoted a few days later in a Canadian Press dispatch of April 13 from Vancouver to the following effect:
Dr. Marcus Long of Toronto, one of Canada's top education authorities, said today he believes the Canadian Broadcasting Corporation is defeating its own aim of achieving a high level of entertainment by its control over radio and television.
Dr. Long, professor of philosophy at the University of Toronto, said in an interview here he favors an independent regulatory commission for radio and television in this country.
Then further:
"I am opposed to any more government control than is necessary," he said. "If it is necessary to err between control and freedom, it is better to err on the side of freedom. That is, increase the number of private stations rather than increase government monopoly and control."
Mr. Long said under present controls, private stations are "getting away with murder because the C.B.C. is afraid to enforce its own regulations: afraid that it mignt look like political pressure. An independent regulatory board could do the job without suspicion."
Now, sir, there are the comments of some outstanding Liberals on this subject.
The next issue on which I should like to pass comment tonight is the government policy of monopoly in the field of television. I do not need to go back and read the history of the control of television in Canada. I attempted to do so when speaking to the house on March 8 and on occasions in earlier sessions. But it will be remembered that the first period in government policy was the period of delay, when the government would not permit anybody to develop television in Canada or to risk his money in that field. The second stage was the pre-emption by the government of the plums in the form of the channels available, one in each of the six major metropolitan areas of Canada. The third stage went along with that. Having pre-empted the plums, the policy of the government then became to impose upon all of Canada what is in effect the policy of local monopoly in television. It poses under the title of the "single service coverage policy"-a very euphonious title which masks or disguises the ugly features of monopoly.
Government policy in this field has been declared on two occasions on behalf of the

Supply-National Revenue government by the Minister of National Revenue. Those occasions were December 8, 1952, and March 30, 1953. We were told in the committee that government policy remains unchanged. There were some Liberal members of the committee who looked for the emergence of some change in government policy, but it is evident that thus far at any rate there has been no change in the government policy of aiding, abetting and imposing monopoly.
However, there is another feature of this matter that calls for comment. It is the boast of the Canadian Broadcasting Corporation that it follows not government policy or government dictate but parliamentary policy and parliamentary dictate. The policy of the government in relation to the imposition of a monopoly in the field of television has never been approved by the Canadian parliament. On this occasion the government had a clear course open to it. If it wanted parliamentary approval of its monopolistic policy it had an opportunity to seek it by bringing forward a motion for the adoption of the report of the committee on broadcasting, because that report in effect gave sanction to the government's monopolistic policy. But the government has carefully eschewed that.
I asked Mr. Dunton in the committee what policy the C.B.C. is applying in relation to television licensing. His answer was the policy enunciated by the minister on December 8, 1952, and March 30, 1953. I have to say in the light of the facts, therefore, that what the Canadian Broadcasting Corporation has been applying in these past three years has not been a policy to which parliament has given its approval. It is a government policy. The government has never once submitted its policy of monopoly in television to the test in this house.
There are very good reasons for that. Had the government done so there would have been an opportunity to divide the house and to see how far the rank and file of Liberal members of this house are prepared to give their support to this monopolistic policy. The government has carefully avoided that course. It has carefully avoided giving the house the opportunity of expressing itself.


John Whitney Pickersgill: What about the opposition?


Donald Methuen Fleming: I am about to state our policy now, as set forth in one of the amendments which we sought to write into the report but which was defeated by a vote of 9 to 6. Again let me remind the minister who just interrupted me that among the 6 who supported our amendment were Conservative and Social Credit members and a Liberal member, the hon. member for Burnaby-Richmond. I regret

that it is so long, but here we are dealing with statements of party policy, and I think I should put the statement of the Conservative party's policy on record as it is set out here:
In establishing its own T.V. stations and dealing with applications for privately-owned T.V. stations the board of governors of the Canadian Broadcasting Corporation has been adhering to the policy announced by the government in the House of Commons on December 8, 1952, and March 30, 1953. There has been no change in the policy since. This policy of local monopoly has been clothed with the euphonious title "the single service coverage policy". C.B.C. has occupied six principal urban centres, Halifax, Montreal, Ottawa, Toronto, Winnipeg, and Vancouver, thus from the point of view of commercial revenue picking off all the biggest plums for itself. Eighteen privately-owned, television transmitting stations are operating. They are, however, restricted to areas where no C.B.C. station is operating, and they are now given by the government's policy a complete Canadian monopoly in their local areas. To carry out this policy channels have been juggled and shifted about. The government's policy creates and protects monopoly both for the C.B.C. and for private stations. That policy is already breaking down. Overlapping is now occurring in the areas served by some stations, at least where the viewer has an outdoor antenna.
The committee condemns this policy of monopoly. It believes that Canadian competition will have a healthy effect on both C.B.C. and private stations in their operations, in their service to the listening public, and in all forms of their programming. American competition is an existing fact. Millions of Canadians are within access of television from stations located in the United States. These stations send their signals into Vancouver, Montreal, Toronto, and the populous areas of southwestern Ontario. Their programs are popular. Indeed, unchallenged evidence before the committee showed that the Buffalo stations are listened to by almost twice as many Canadians as the C.B.C. T.V. stations in Toronto. Thus the government's policy of monopoly prevents Canadian competition, but not American. The United States stations have not been slow to exploit the protected position created for them by the exclusion of all Canadian privately-owned stations from the six major urban areas. By selling time to Canadian advertisers they are taking $2 million per annum in commercial revenues out of Canada.
Mr. Dunton testified that approximately 50 per cent of all programs in the C.B.C. television system are of United States origin. Private broadcasters indicated to the committee that they would expect to offer approximately the same percentage of Canadian content in their programs if licensed to operate. This is one of the things which proper regulation and control could effectively ensure, subject always to the right of the Canadian people to enjoy programs of their democratic choosing.
The policy of local monopoly is preventing the erection of French-language stations as well as English-language stations.
The dangerous policy of monopoly cannot be justified on the argument that C.B.C. must have all the commercial revenues from the six "plum" urban areas. At the present time the C.B.C. is enjoying revenues of approximately $30 million per annum. Of this sum only $6 million comes from commercial revenues. The balance comes from the public treasury and is provided by the taxpayers. The C.B.C. is not and never has been dependent upon its commercial revenues for the extension of its broadcasting or television facilities.
It is the opinion of the committee that competition is desirable in the public interest, and that

its desirability increases with the rapid increase in the number of television sets in use in Canada. The dangers of the present policy of monopoly are thus constantly increasing.
I do not think I need to enlarge on the points made in that statement of party position. I mention the fact that the government's policy excludes Canadian competition but not United States competition. Here in my hand I hold an advertisement of a United States station advertising that its services extend to certain states of the American union and the province of Quebec. How can a policy of this kind be justified? It means that $2 million per annum is going out of Canada in the form of advertising, and it means that the system is breaking down today because of its own inherent unsoundness. There is overlapping of coverage. It cannot any longer be prevented. This is the soft of thing that led the Vancouver Sun in its leading front page editorial on March 26 to comment as follows:
The spectacle of liberalism forsaken by false friends appears in frightening aspect in Ottawa. The federal government has deserted its principles in favour of a new anti-democratic idolatry of which the Canadian Broadcasting Corporation is the worst symbol. The Liberal party's own traditions are mocked by the delegation of absolute power to the C.B.C. in radio and television. Thoughtful members of parliament must be sadly aware that C.B.C.'s network and big-city monopolies in radio and television are a denial of public and private rights.
That editorial also points out the benefits that competition would bring, that the absence of competition brings decay and corruption and that this is true also in politics. So I say it is evident that there must be some change, because it cannot long be postponed.
On May 19 I also asked the Prime Minister this second question:
Is the government contemplating either the abandonment or modification of the so-called policy of single station coverage with respect to television, that is to say the policy of local monopoly of television in Canada?
To that question the Prime Minister made this reply, as reported at page 3909 of Hansard:
The question is not one to which a categorical yes or no can be given. The policy has never been that there would be, for all time, only one station in each locality. The whole matter is under constant consideration, and the question as to when it will be deemed proper to declare that applications for duplication of service will be entertained is part of that consideration. It may very well be that no decision would be arrived at before the appointment of the commission to which the hon. member referred in his previous question.
If a royal commission is going to be appointed by the government to inquire into this whole field and to recommend in relation to policy, why does not the government do
Supply-National Revenue the straightforward thing and come out and announce the appointment of that royal commission? The fact of the matter is, Mr. Chairman, that C.C.F. policies have dominated the thinking of the government in this field up until now, and it is going to take some effort to shake the Liberal party thinking-that is Liberal with a capital "L"-free of the socialistic tentacles that have been fastened upon radio and television policy under the present government. I am certain there are some members of the government opposite who cannot approve this kind of policy in principle. I hope they are going to be more vocal hereafter than they have been hitherto in influencing government policy.
Mr. Chairman, in reference to radio and television there is no issue arising now that is more important than the whole question of finances. That matter, together with the question of auditing and accounting, will be dealt with by my colleague the hon. member for Perth. I just wish to make this one comment in passing on a matter in which I took some interest in the committee. It is this publication "CBC Times", a rather attractive publication that is put out at a cost of $82,500 per annum against which the C.B.C. derives revenue of $27,000, so the publication costs $55,500 net per annum to the Canadian taxpayer.
The purpose of this publication is to announce programs. But what do we find in the issue of July 28? We find the whole report-the majority report-of the committee. As if that is not enough, we find that statements in paragraph 16 of that report, selected from the evidence of Mr. Dunton, have been italicized so as to draw particular attention to them. These remarks of Mr. Dunton are not italicized in the report but are italicized in this C.B.C. publication as follows:
. . . we are perfectly convinced and think it is very plain that it is impossible for anyone or anybody to operate a nation-wide service in this country-a national service in sound and television-on a purely commercial basis.
I do not think that is a proper use to make of public funds for this publication. We were told that this substantial cost to the Canadian taxpayer was justified because this publication acquainted the public with programs of the C.B.C. Now we find that it is being used to publicize the majority report and, in particular, a statement of Mr. Dunton which is challenged in certain quarters.
Mr. Chairman, there are many matters that would justify comment, but the hour is late and I do not wish to prolong these remarks. In the committee I drew attention to the way in which the so-called policy of balance in programs of opinion and comment is not working out satisfactorily; and that what we

Supply-National Revenue find put forward in the guise of adherence to the policy of balance represents a pronounced imbalance as, for instance, Mr. Matthew Hal-ton doing practically all the programs and comment from London and Mr. LaChance those from Paris.
Here in Canada, if there were time or if the house had the patience to hear it at length, I should be glad to review the evidence put before the committee indicating the extent to which there is a failure to follow the policy of balance in the selection of those who are participating in programs of comment and opinion right here in Ottawa. There is apparently something approaching a monopoly within a monopoly. The committee- and this was perhaps quite extraordinary -went so far, in the light of those disclosures, as to give support to a Conservative amendment. This is the amendment that was adopted, if you please, by the committee and appears in the majority report:
In a medium which exerts so strong an influence on public thought as radio and television it is desirable that the greatest care be taken to provide balance and freedom in the presentation of opinion. The committee suggests this be constantly kept in view in seeking a wider selection in those participating in the programs.
There are many matters that could be reviewed, but I do not propose to detain the committee longer except to comment on one upon which there has been some degree of public misunderstanding. It is in regard to what I said on March 8, concerning free time for the communist party at election time. This was pictured in some quarters as an assertion that there should be some attempt at suppression of freedom of speech. That is, of course, a nonsensical interpretation to place on the remarks that were put before the house on that occasion, or indeed on any other occasion.
What we are dealing with here is not political broadcasting generally, but the question of free time for recognized political parties at election time. Any communist in this country who wishes to obtain time on the air to diffuse his wicked propaganda is quite at liberty to go to any radio station in this country, whether operated by the C.B.C. or any private station, and purchase time for that purpose. That is not what we are dealing with; we are dealing with the particular provision, under existing policy, recognizing the right of political parties to free radio time at election time. The position we have taken on behalf of the Conservative party is that we do not approve of giving time to communists on that basis at election time as an organized political party. The Royal Canadian Mounted Police of this

country have had something to say about this labour progressive party that is a cloak for communism.
Our position in this respect was clearly stated in an amendment we sought to introduce in the committee, which reads as follows:
The committee, while affirming the principle of freedom of expression, cannot fail to take note of the fact that the present regulations respecting political broadcasts have been used by the communists to obtain free network time at public expense for the so-called labour progressive party by the device of nominating straw candidates in general elections. The committee also notes that in the recent general election in the United Kingdom no free time was given by B.B.C. to the communist party. The committee recommends that consideration be given by the board of governors to the revision of the regulations in such a manner as to prevent their being circumvented for this purpose.
We, I think, could be satisfied in this country to follow the example of the United Kingdom. The recognition of the labour progressive party as a recognized political party is the responsibility of the C.B.C. The political parties were brought in only after that decision, to decide on the apportionment of time amongst recognized political parties. It is no responsibility of any other political party that time should have been given to the communists, free time at the taxpayers' expense.
I simply conclude with this. This system, by reason of its developed weaknesses, its inherent unsoundness, its suppression of freedom, its suppression of competition in favour of monopoly and the colossal cost to the Canadian taxpayer, as my colleague the hon. member for Perth will show, has brought us to the point now in Canada that in this house we are requesting a fundamental revision in policy in relation to radio and television broadcasting.


Major James William Coldwell: I did not intend to speak this evening, but after listening to the hon. member for Eglinton I cannot resist the temptation of making a few comments on what he has said. He said the government was following C.C.F. policy in regard to radio. My opinion is that the government has followed very closely the policy laid down by Right Hon. R. B. Bennett when he was prime minister of this country some years ago. Mr. Bennett pointed out to the house, when the original radio commission was set up, that if governments could do it they would like to recall the privileges they gave to the railways and so on, when the railways were established in this country. It is just as necessary to have control over the railway system, so Mr. Bennett alleged and I think properly, as it is over the radio waves. He



28, 1SS5

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said the radio waves were a natural resource of the country, and they must remain under the control of the nation.
What my hon. friend is arguing against is not a policy proposed by the C.C.F. in this country or in this house, but a policy laid down years ago by Right Hon. R. B. Bennett when he was prime minister of Canada. Mr. Bennett made the point, and if I wished to prolong the debate and went up to my office I could produce numerous quotations from his speeches when the radio commission was set up, indicating that the possession of a radio wave was not an inherent right of any particular organization to which it was alienated for the time being, but must remain always under the control of the nation and it was, in fact, a monopoly of that air wave granted only temporarily. I want to tell my hon. friend that I do not believe in monopolies that may be used by private organizations to control either the industry or the thought of the country. The reason the radio commission was set up originally was that the government of the day believed, and I feel the people of Canada believe today, that we cannot safely alienate radio facilities into private hands and have freedom of thought and speech in this country.
It came to my attention a few days ago that the company developing the iron ore deposits in the Ungava district is asking the C.B.C. for the right to establish a radio station, a monopoly in that area. If they operate that radio station as they operate their railway only those who are acceptable to that company will be permitted to use that radio station. The airways are a natural monopoly which must be kept, as all monopolies must be kept, strictly under the control of this parliament, not under the control of the government but under the control of all the elected representatives of the people.
I cannot understand my hon. friend when he talks about freedom of speech and freedom of thought. What freedom of speech or thought is there over many of these radio stations? I know of organizations that have applied for time in order to answer speeches that have been made on time that has been bought by some powerful organization with the funds at its disposal. Unless you can put up an equivalent amount of money you cannot reply to the statements that were made on these radio stations. At least the C.B.C. does give to the people of Canada an opportunity of hearing all points of view without those people who hold those points of view having to buy expensive radio time in order to express their opinions. It seems to me that we have to keep very closely under the control of this parliament the radio services and facilities of this country.
Supply-National Revenue
My criticism of the government is that it has deserted the policies it too laid down in former years. If my memory serves me right, there was a time when it was decided that private radio stations would be limited to a certain power, I think it was 1,000 watts. Then it went to 5,000 watts; then it went to
10,000	watts, and some of the waves allotted to this country under the Havana agreement for powerful publicly-owned stations, as we thought at the time, of 50,000 watts, were alienated to two powerful private companies in this country. Bit by bit we have been deserting the fundamental principle that was laid down for the radio commission, and subsequently for the broadcasting corporation when it was set up in 1936 or 1937, I forget which. I was in the house, but I have just forgotten which year. I did not expect to speak on this matter, so I did not look up the facts.
I want to see the radio corporation under the control of this parliament. I want to see freedom of speech on the air, and I want to see freedom in television. I want to see television operated in the public interest, not as an advertising agency for powerful corporations and companies that can afford to buy television time which less privileged people cannot obtain.
I do not want to see either our Canadian Broadcasting Corporation stations or the private stations dominated by United States programs. I think already this country is dominated to too great an extent by the United States. It is not that I am against the United States, or against any of the people in that country, but I want to see this country built up as Canada, as a country with its own institutions and its own way of life. I do not want to see the infiltration of United States television and radio programs to any greater extent than they have infiltrated today.
So far as the communist party is concerned, and their free time, let me say that I hold no brief for that party. Over the years it has fought me and those associated with me even more vigorously than it has fought any other political party in this country. But I want to make this perfectly clear. I believe in freedom of speech, and I do not think we shall lose anything if we stand by that principle of freedom of speech. I am not afraid of communist propaganda in this country, provided we do not allow the seed of communism to develop here and provided we do not allow poverty, misery and want to come upon this land, as it did when my hon. friends were in power in 1930, or when their successors were in power from 1935 to 1940 and nothing was done to adequately meet the situation.
The government is not following C.C.F. policy. I am convinced of this, that if it is
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Supply-National Revenue C.C.F. policy then it is the policy of the Canadian people. I move around a good deal. I meet people throughout the country and in the United States who have a very high regard for the C.B.C. They realize that we would not have the development of Canadian talent on radio that we do have, were it not for the C.B.C. We would never hear plays like Julius Caesar, or other Shakespearean plays. We would not hear grand opera performed by national talent if it were not for the Canadian Broadcasting Corporation.
The broadcasting corporation has done much to develop Canadian talent. I do not know whether hon. members on the committee had the logs of private stations before them this year for examination so they could see what some of these private radio stations are doing in connection with the development of local talent, which they are obligated to develop. But I do know when I was on that radio committee I could not find evidence of most private stations doing what they were supposed to do when they were granted a licence to operate a station and use a certain monopoly, a radio channel lent to them and to them alone, in part for the development of Canadian talent.
I want to compliment the C.B.C. upon the manner in which over these last years they have developed Canadian drama and Canadian music, both operatic and symphonic. Over the last year or so I have not listened to the radio as frequently as I used to when I was more familiar with the programs, but friends of mine tell me that over the last two years there has been a further improvement in C.B.C. programs. I cannot understand my hon. friends, who laid the foundation of our broadcasting system in this country, rising in their places and trying to destroy it, in the interests of private monopolies that would grab our newspapers-
Donald Methuen Fleming: Utter nonsense.


Major James William Coldwell: Well, take the Thomson
chain. How many newspapers does the Thomson chain control? How many radio stations does he control?


Donald Methuen Fleming: What has that to do with what we said?


Major James William Coldwell: Much. I do not want to see these private interests given control, through private radio stations and the ownership of newspapers. One of the policies we thought was laid down some years ago in a radio committee report was that newspapers should divorce themselves from radio. Yet today we have a concentration of radio and newspapers in fewer and fewer hands, and they want to do the same thing with television.

It is not the policy of the C.C.F. alone to oppose this. I am convinced it is the policy of the Canadian people, people who want freedom, and who want any monopoly carefully controlled by the government so it does not become a private monopoly to control the thought of the people.


Mr. Blackmore:: Mr. Chairman, I have greatly enjoyed the remarks of the hon. member for Rosetown-Biggar. I do not know how one could express the ideal of managing radio any better than he has expressed it, and I congratulate him warmly. Sometimes he and I disagree, but on this occasion we are completely in accord. Our great problem is how to set up an agency whereby we can guarantee the fine principles he has laid down. That seems to be causing us more trouble than we would like to contemplate.
I have nothing but praise for the C.B.C. in respect of the matters mentioned by the hon. member for Rosetown-Biggar. I have been following the C.B.C. with considerable care during the last year, when I have had the time, and I have found that the educational, cultural and various other programs are of a high order and worthy of the highest praise, considering the handicaps and limitations under which the C.B.C. has to operate from the standpoint of geography, finance, immaturity, and all those other things which handicap the organization in its endeavours to attain its ideals.
The other matter mentioned by the hon. member, the desire on the part of the C.B.C. to give various political parties opportunities to express their views, is highly commendable. I agree with the hon. member for Rosetown-Biggar. I do not care how many communists speak to the people, so long as the people know they are communists. It is those who sneak in and teach communism without the people knowing that they are teaching communism, or without their knowing that they are communists, who are causing the danger in this country. I do not fear having any doctrine of political or religious philosophy taught to the people or advocated before the people, so long as the other side has a similar opportunity to be heard and so long as the people know exactly who is talking, and why.
The minister and the committee will remember that last year I raised a question which I considered to be of great importance, namely the indoctrination of communism through various speakers who are heard over the C.B.C. I referred to this the other day in another connection and indicated that I proposed to have something further to say, and in greater detail, when opportunity arose.

I have had two or three people listening rather closely to the programs which have been given over the C.B.C. to the Canadian people by various speakers since I spoke a year ago or a little more, and I am basing what I am saying tonight on what they have recorded and told me. I think the ordinary individual would be surprised to hear-I may not be giving this completely, but this is what is reported to me-that we have had 19 pro-communist speakers having astonishingly free access to the programs of the C.B.C. and coming in from the United States and Britain and Canada, while we have had only four people speaking against communism and their opportunities to speak have been few and far between. That is not a very good thing to contemplate. I propose to go into some detail just to show that what I am saying is not idle.
Before I start discussing some of these speakers whose performances I have here recorded, I wish to say that those who have been keeping a record of what has been going out over the C.B.C. tell me that our own press gallery has been worthy of the very highest praise, men such as Blakely and Campbell and John Bird and Dempson and Baldwin and other members of our gallery. When they have been speaking on matters they have given the facts. They have not attempted to slant those facts. That is worthy of high praise. When I hear a capital report I want a capital report, actual and objective. I do not want too much subjective material in it. I rejoice that such a good report could be given concerning the men of our press gallery. The one submitting the comment to me says this concerning our own men:
These fellows apparently know the communist conspiracy through and through and they do not monkey around trying to feed the Canadian people the wrong thing. They stick to facts and give the Canadian people a good resume of what has taken place in parliament that week.
That, I believe, is exactly the ideal which we should have in mind no matter who performs over the C.B.C. Whether a person speaks from Britain, the United States or Canada, whether he speaks from a university or from any other place, his business should be to give facts and not his own personal opinions, especially when they happen to be contrary perhaps to what the general will of the people would have.
I am now going to mention four speakers who have spoken against communism, according to my record, and give the comment which my reporter gives me. Dr. Watson Kirk-connell is one of the great anti-communists, as everyone knows who has heard him. As far as my reporter knows, from the spring
Supply-National Revenue of 1940 to the end of 1954 Watson Kirkconnell was not once invited by the C.B.C. to speak on current events. That may not be entirely right, but that is what my informant tells me.
Then we had a man named William Rowan, of the University of Alberta, who gave a most informative talk over the C.B.C. on June 20, 1954. Why has he not had one repeat engagement? This is a part of what Rowan said:
Radio has become the voice of humanity, a mass tool of news dissemination. An informed public can only be created on the basis of factual information, not propaganda.
Another one is Jack Brayley of the Canadian Press. He gave a good talk from Korea on Syngman Rhee's popularity. I guess that is what caused him not to appear again over the C.B.C. Why is he not invited to speak once in a while instead of Robert McKenzie of the London school of economics, or Matthew Halton or Douglas LaChance?
There is another one, Leonard Schapiro, an authority on Soviet affairs, who speaks over the B.B.C., who exposed the failures of Soviet agriculture and said:
The root of the problem Is the stubborn resistance of the peasant to doctrinaire Marxist theories.
I understand he has not had a repeat performance. That is sufficient to show the kind of thing which I believe the Canadian people have a right to hear.
It developed in our discussion of the estimates of the Minister of Justice, I believe, that only 63,000 people in Canada voted communist in the 1953 election, which indicates that only 63,000 of the voting people of Canada want anything to do with communism. Yet listen to the array of speakers who are turned on them by the C.B.C. as I shall give them in a few minutes. First we have a group of liberal speakers, so-called, liberal with a small "1". The liberal speaker, as the word "liberal" is used there, usually means a pro-communist or one far to the left. There are lots of "liberals" in the United States. They are not liberal at all. Any self-respecting liberal in Canada would not be seen dead alongside one of them.
Now Bertrand Russell comes on and says, "Let us start loving the communists." That was on November 21, 1954. Well, now, that is most interesting, is it not? Ralph Lapp, a scientist from Washington, gave a strong defence for Oppenheimer the same week the United States government denounced him, on April 15, 1954. Let us stop long enough and ask was it known by the C.B.C. officials that these two men were going to speak in that way before they were put on the air? If it was not known, why was it not? In the name

Supply-National Revenue of common sense, what business had anyone to speak over the C.B.C. and criticize what the United States had done against a man who was recognized as a communist in the United States, and try to persuade the Canadian people that the United States did not know what they were doing?
What would be the idea? Who in the C.B.C. set-up chose those two men? Here is another one. The works of H. G. Wells, I am informed, were given, two or three performances after the hockey season was over last year. The hockey season was over in May, 1954. I have no particular objection to H. G. Wells, but H. G. Wells borders pretty close on being agnostic. If I correctly understand the Canadian people as a whole, I would say that probably 85 per cent of them are distinctly Christian and they do not want their children drenched with agnosticism, and that is exactly what happens when people speak lovingly about the ideas of H. G. Wells. H. G. Wells' works in general are not based on the same principles that are in the Bible. They do not attempt to explain the world as the Bible explains it, or to explain history that way. That is important. Why should H. G. Wells and his doctrines be given so much attention by the C.B.C.?
It will be said, people ought to have both sides. Yes, but the trouble is people do not have the other side. That is what I objected to last year when I spoke. Dr. Davis, of the board of trustees of Oberlin College, Ohio, I am told, on July 31, 1954, on the C.B.C. gave an excitable talk-he could scarcely contain himself on a United Nations university. He said:
I think we should have a United Nations university of the world.
There is nothing particularly wrong with that, but why should the C.B.C. engage a speaker to come here and talk to us about that? Surely there are many things that would be of far more value to the people of Canada than speeches of that kind. Constance Gar-neau, C.B.C., December 21, 1953, from Montreal, lamented the expulsion of communists from British Guiana. She said:
A degrading situation existed for 100 years until a handful of communists walked in.
Imagine that, will you; imagine that being said over a British commonwealth radio. If that country had been taken over by the communists they would have control of a country from where they could threaten the Panama canal. That requires no comment. I do not know who this woman is that she should be permitted to speak so over the C.B.C.
Then Arthur Goldschmidt took a number of spot C.B.C. periods financed by the Ford
IMr. Blackmore.]
Foundation on "A Study in Groups". My informant does not give me the details of that, and I cannot say what value that would be to Canada or why the C.B.C. should be spending our money for someone to talk to us that way. Max Cohen of "Weekend Review", May 30, 1954, said:
My own guess is that if communist China could look forward to recognition by the United States and to a place in the U.N., communist China would go through with the motions of a deal.
There we have a very definite procommunist line. Everybody knows that Russia above all things wants communist China in the United Nations. What for? So communist China would be able to establish embassies in every country of the world and set up hotbeds of pro-communism just like the Russian embassies. Communist China would be able to vote with Russia in influencing United Nations decisions. Red China would have a claim to Formosa, and would have control of some 20,000,000 free Chinese in the world. We have the C.B.C. bringing in a man to preach that doctrine to us. Surely that is following the communist line. That is giving comfort to the enemy.
Here is something else that is interesting. It harks back to what we were talking about in respect of H. G. Wells. John Irving, professor of philosophy at Victoria College, University of Toronto, during June 1955, gave, I am informed, a series of talks called "Architects of Modern Thought". He selected Marx, Darwin, Freud, William James and Einstein. Irving said:
We have called them architects because we believe that the world views of the present and the future are being built and will continue to be built from the designs or patterns of thought they developed. I predict that every one of those we have chosen will be considered a traditionalist. The art of democratic society consists in . . . fearlessness of revision. The talk series "Architects of Modern Thought" combines reverence for tradition with fearlessness of revision. All the past is prelude.
He is not specific, but the general impression one gets is that this whole series is deliberately anti-Christian. How do the millions of devoted Roman Catholics in Canada feel about having their money spent by the Canadian Broadcasting Corporation to bring in men to preach that kind of doctrine? I am not saying that those five men were not great men, but certainly when you mention Marx you think of communism. I certainly think it is contrary to our ideas, our way of life. While Darwin never did teach evolution, everybody thinks he did, so that when you mention Darwin you connote the evolutionary theory which goes directly counter to the Bible. Apparently that whole series would be slanted in the direction of destroying

faith in the Bible and consequently faith in Christianity, which is one of the major objectives of Karl Marx and the communists.
That is enough to indicate what some of our "liberal" speakers are saying, evidently with the thorough approval of the C.B.C. and probably with their instructions. How am I to know?
Then we come to another set of speakers, a set from the Manchester Guardian. The ordinary person thinks the Manchester Guardian is a high quality paper. It has that reputation. Let me give some of the things which my commentator says about the Manchester Guardian, which I imagine are about right. The Manchester Guardian is a paper much to the left, and its speakers are profusely used by the C.B.C. Why should Manchester Guardian speakers be chosen by the C.B.C. above speakers from any other newspaper?


Stuart Sinclair Garson: Left of what?


John Horne Blackmore: The minister knows what that means. Left of Liberalism, anyway. It means slanted toward communism. This paper criticized-


John Whitney Pickersgill: What is the hon. member quoting?


John Horne Blackmore: If the minister will listen to what is said he can draw his own conclusions. This paper-


John Whitney Pickersgill: Who is the hon. gentleman quoting?


John Horne Blackmore: Will the minister sit down a minute, and then I will give him a chance to ask all the questions he wants.


John Whitney Pickersgill: I have just one question.


John Horne Blackmore: The minister asks a lot of questions and nearly always they are crank questions asked in an effort to throw me off the line of my reasoning. This is what was said-[DOT]


John Whitney Pickersgill: Mr. Chairman, on a point of order, is it not a rule of the house that if an hon. gentleman is asked what he is quoting from he must inform the house or the committee of the source? I inquired as politely as I could what the hon. gentleman was quoting from. I am interested; I would like to know; I would like to decide whether it is something that is credible, that is worth listening to.


Edward Turney Applewhaite: I did not appreciate that the hon. member for Lethbridge was quoting. If he was quoting he will of course give the source of his quotation.


John Horne Blackmore: I have said that three or four times. If the minister had not been
Supply-National Revenue so busy talking to the Minister of Justice ne would know that I have said time and again that what I am giving here was given to me by a commentator who had listened and noted these things.


John Whitney Pickersgill: What sort of commentator is the hon. member quoting? Surely we should not be asked to listen to an anonymous speech by a person we have never heard of.


An hon. Member:: We have often enough.


John Horne Blackmore: The minister can disregard this person just as much as he likes.


John Whitney Pickersgill: I am asking you to name him. I want to regard him, not disregard him.


John Horne Blackmore: The minister does not need to have the name.


Some hon. Members:: Order.


Edward Turney Applewhaite: I think the hon. member for Lethbridge has raised a difficulty there. As I understood it in the first place he was not quoting, he was putting this in his own words.


John Whitney Pickersgill: The hon. member said he was quoting.


John Horne Blackmore: I am reporting what the reporter jotted down.


Edward Turney Applewhaite: I think the hon. member for Lethbridge has been here long enough to know that he cannot quote in that way. When the hon. member will give me his attention I will suggest to him that he cannot use the views of others, particularly if he chooses to hide those under anonymity. He can assume responsibility for the accuracy of the statement he is making. If he chooses to do that and to submit these statements on his own responsibility as a member of this house, then the committee will have to take it on the responsibility of the hon. member for Lethbridge and not as coming from the source which he gives for it. But if the hon. member is giving it as a quotation from what someone else said, then we would want to know from whom it comes.


John Horne Blackmore: I hope you do not think, Mr. Chairman, that I was not paying attention because I was just looking up at the clock; I was following every sentence and every syllable you were saying. I am certain the Minister of Citizenship and Immigration thinks he sees an opportunity to switch me off the track and get me in a position where I will be called to order. You will be surprised to know how many times the Minister of Citizenship and Immigration has risen on points of order when I have been speaking on things of this nature. You can just trace him right through like someone with dirty
6852	HOUSE OF
Supply-National Revenue feet through the snow. In respect of the Manchester Guardian, I have endeavoured to say two or three times that this newspaper criticized Billy Graham's great English campaign of May, 1955. When Clement Attlee made his trip to red China in the fall of 1954, this newspaper wrote:
China has taken to communism dictatorship like a lost man to a signpost, a tramp to bread and cheese, a megalomaniac to Aladdin's lamp. As far as China is concerned it has found its panacea.
Now compare this with John Ridley's report in the Daily Telegraph, London, England:
I came out from communist China and it was with a feeling of immense relief. I knew China before what is now described as the liberation, and I found it was a sad, dismal place in comparison.
That is enough to give some idea of the Manchester Guardian. Now, here are some of the Manchester Guardian speeches we have had turned on us by the C.B.C. Patrick Keatley, C.B.C. "Midweek Review", July 28, 1954; a glorification of the great achievements by Chou En-lai at Geneva when Indochina was given over to the reds:
Mr, Chou had been invited by the B.B.C. to say a few words to British listeners, and he agreed. That in itself is remarkable enough.
Now, Mr. Keatley has a perfect right to say that if he wishes, but the point is that he is following the communist line. He is building up Chou En-lai and certainly giving comfort to our enemies. Francis Boyd conforms in a similar manner. Richard Scott was chosen by the C.B.C. to report the Geneva conference of the summer of 1954, direct from Geneva. Daily Mr. Scott told the Canadian people from noonday to Sunday on "Capital Report" that communism is so acceptable in Indo-China. Daily he hammered back to Canada that free elections would be won by the communists, when there have been no free elections won by the communists in any state so far as I know. His gleeful voice betrayed his red leanings and those of his paper, the choice of our C.B.C.
Now here is another Manchester Guardian speaker. Max Freedman speaks from Washington on "Capital Report" regularly, and has done so for some years. Note this man's communist line. On February 8, 1953, he said:
Millions of Americans are convinced that increased support for Chiang Kai-shek's regime on Formosa is against the enduring interests of their country.
I wish, from my personal knowledge, to add that no government in the world has a greater right than the Canadian government to protest against the implications of the new Formosa policy.
The presence of Chiang Kai-shek's troops in Korea, it was proposed, would prolong the war, would create fresh problems with communist China,
[Mr. Blackmore.l

and would leave a legacy of political troubles that would far outweigh any possible military advantages that would come from making a partner out of the discredited and discarded government on Formosa.
How could you preach a communist line in a more concentrated form, in a greater variety of respects, and for the same length of time than is done right here? And we are paying men to say these things! Right in those statements are at least three complete falsehoods. On July 19, 1953, the same man spoke. I am not going into detail concerning these, because we do not have time.
On October 4, 1953, and November 1, 1953, he spoke, and in 1954 he is still following the communist propaganda line. Freedman spoke on February 7, 1954, and in this case he would not release his script. He said that Bruce Hutchison, a very close friend of his, had "told me with regret of growing anti-American feeling in Canada". Freedman also said he hoped Chiang Kai-shek "will not resume his civil war." That is an absolute lie by implication. On February 21, 1954, he said:
It may be possible for the Republican administration to end the sullen quarantine of China that has already lasted much too long.
When has the United States government quarantined China? It has quarantined Formosa, but not China. Do you see the lie there? On June 27, 1954-and no script was released for this-Freedman intimated that: -some say in the United States that the United States state department gave China to the communists.
And-
-as if the United States state department had a title of deed to China.
-calling it a complete fraudulent charge. Another absolute lie, because the United States was the very organization that gave China to Russia. On May 1, 1955, Freedman criticized the Knowland - Bridges - Jenner-Hickenlooper policy which is against negotiations with communist China. Freedman said:
The Knowland group can be rescued from their misdemeanours by the possible errors of communist China.
No script, would be released for this one.
I ask why the Canadian people should be called upon to listen to all that kind of thing constantly.
Now I propose to give some details regarding a man against whom I spoke last year.
I have others, but I shall not have time to go all through this list. I have a large sheet of them here, including Robert McKenzie, Andre Laurendeau, Douglas LaChance, Louis C. Walmsley and Matthew Halton. Matthew Halton is listed as having spoken over our

radio system seven times, Louis C. Walmsley twice, Douglas LaChance twice, Andre Lau-rendeau six times, Robert McKenzie five times and J. B. McGeachy eight times. Here is what J. B. McGeachy said on November 14, 1954:
I've taken the view all along-since 1945-that the two halves of this divided world can live together in peace. I still think so.
There is the communist line of co-existence. We are trying to believe that it is possible to have co-existence and still keep up our guard. I hope, but we all know what Lenin said. His words have been placed on record in this house two or three times. In the light of those words no person has any right to assume that we can have peaceful co-existence. Mr. McGeachy goes on to say:
The Russians, and the Chinese as well, have a tremendous .iob to do at home in giving their people something like contentment and an economic equality with the other nations of the world . . .
There is. I think, more solid evidence that the Russians want peace.
Did the Russians act as though they wanted peace? When they came to the most recent conference they wanted to talk about Formosa and the eastern provinces. Why? To get Formosa if they could. To get red China into the UN if they could. That is what they want. They want to get us under their control completely.
On December 5, 1954, McGeachy made statements that were very strongly communist. On December 26, 1954, McGeachy set forth his policy:
At the two poles of our divided human society, Washington and Moscow, co-existence is the declared aim of foreign policy. . . . the irresistible social revolution that's going on in Asia-a revolution aimed at throwing off western domination and effecting economic changes.
That may be very correct but we wonder why in the world we should be told that over the C.B.C. What bearing has it on Canada? All it can possibly do is build up pro-communist public opinion in this democracy which can influence the United States, because we can take certain stands in the United Nations meetings and so forth. That is why there is so much concentration on Canada. On January 16, 1955, he said:
Nobody .... can defend the jailing of the airmen. This is the procedure of an outlaw, holding a captive to ransom. But let us face the fact that the United Nations (Washington in this matter has been chiefly responsible for U.N. policy) in whose service the airmen flew and fought, gives China the treatment reserved for outlaws.
I shall leave out the next portion because it does not bear particularly on what we are talking about, but here we have once more
Supply-National Revenue this slant that red China should be recognized. On February 6, 1955, we have this:
In other words, Mr. Acheson said by implication that if the communists captured Korea and Formosa, this would not disturb the United States.
We know perfectly well that Acheson said that, but we know Acheson was lying at the time he said it. McGeachy said:
It may be rash for a layman, a non-military person like myself, to venture an opinion here; but I am in good company in saying I don't believe a foothold in Formosa is necessary for the safety of the United States.
He can give that as his own private opinion, but why tell that nonsense to Canadians as a whole? There are other speeches given by this man; and I do not know of a speech I have heard by J. B. McGeachy that has not had the communist line in it somewhere. I should like to know just why these speeches go on our C.B.C. programs.
I do not wish to hold the committee up longer in order to go into these other matters, but I should like to ask this question. What is it about the C.B.C's organization, or who are pulling the strings behind the C.B.C., that causes them to be so emotionally exercised in favour of communism? That is what we want to know. By what means can that behaviour on their part be justified, when the whole Canadian people have so signally indicated their opposition to communism?
What can we do about this thing? I mentioned the matter last year but there has been no change. I cannot blame the minister. I do not blame the minister at all. He has not a chance in the world, apparently, of controlling the C.B.C. I greatly doubt that anyone in Canada or any combination of the patriotic people of Canada can control the C.B.C. as it is now being operated. I do not believe this parliament exercises a bit of control over it in matters like this. It seems to be an absolutely free agent unto itself in all matters pertaining to communism.
What must the members of this house do to bring that organization under control to the extent that it will be Canadian instead of pro-Russian? That is something 1 should like to find out. In respect of all these matters that I have indicated here it is just as pro-Russian today as though it were being directed immediately from Moscow. It could not do any better job from Moscow than is being done right now. In the light of all that kind of thing, remembering the terribly dangerous situation we are in and remembering the fact that right now it is just a question whether we can possibly survive against communism in this world, under circumstances like that I say that to have that sort

Supply-National Revenue of thing going on is simply not to be endured. As I have said, I do not blame the minister. He cannot control this outfit.


John Whitney Pickersgill: Mr. Chairman, has the
40-minute rule been suspended this evening?


William Alfred Robinson: When the hon. member's
time has expired we shall notify him.


John Horne Blackmore: Thank you, Mr. Chairman. I do not wish to say much more at the present time. I do not know whether it is going to be necessary to organize, to move that the appropriation for this C.B.C. be reduced to $1 and fight a major conflict on the floor of this house in order to bring this organization under control. I wonder whether that will have to be done next year, or whether the men who have been mismanaging and abusing the privilege they have had in connection with this organization will be warned and will desist Jrom the nefarious and subversive tactics relative to communism which they have been employing now for over two years. That is all I have to say.


William Alfred Robinson: Shall the resolution carry?


Mr. Gauthier (Porlneuf):: Mr. Chairman,
I am one of those who believe firmly that this session should have been a month shorter so we could go home and see our families and our electors. I therefore will not be very long, because I do not want to prolong the debate too much. However, there is one thing I do not understand after having listened to the speech just delivered by the hon. member for Lethbridge, and it is this. How is it that the C.B.C. should support lecturers advocating communist ideals on the one hand, and on the other hand be trying, on the shortwave, to go behind the iron curtain and impress upon the people behind the iron curtain that our way of living is better than communism? I do not understand how they could support those speaking on the air in Canada in favour of communism, and at the same time tell the people behind the iron curtain that our way of living or our political philosophy is better than theirs.


John Horne Blackmore: That is what I cannot understand.


Mr. Gauthier (Portneuf):: I do not understand that. I do not think the C.B.C. is putting up a double front. If I thought there were some body or some organization behind the C.B.C. in favour of developing communist ideas or philosophy in our population, I would not be the last to ask in this chamber for a clean-up of the whole organization.


John Horne Blackmore: I am sure that is right.


Pierre Gauthier: I now wish to say just a word about a few ideas expressed by the hon. member for Rosetown-Biggar, when he said that Mr. Dunton had advocated the present set-up of the C.B.C. organization in co-operation and sometimes in competition with the privately-owned stations. In 1928 the Aird commission arrived at this conclusion. The interests of the listening public and of the nation could be served adequately only-
-by some form of public ownership, operation and control behind which is the national power and prestige of the whole public of Canada.
That is the conclusion of the Aird report. In 1932, while Mr. Bennett was at the head of the government, a special parliamentary committee came to general conclusions similar to those of the Aird commission and made recommendations with regard to the setting up of a public radio body. It was the C.R.B.C. The committee in 1934-always at the same time Mr. Bennett was prime minister of Canada-maintained the same principles of public ownership and control.
I wanted to put that on the record in order to emphasize the ideas expressed by the hon. member for Rosetown-Biggar. I wish to add something I have always believed, namely that the C.B.C. and its organization, starting with the chairman and the other officials, have always lived up to their responsibilities. I think the words used by Mr. Dunton in the committee on June 4, 1946, were right and were coming from a sincere man. He said this:
We have a keen sense of our responsibility to the public through parliament and we feel it is of great value to the corporation and an important guarantee to the public that its affairs and policies be studied by a committee such as this one.
I have been on that committee since 1945. Every time the C.B.C. has been called before the committee to answer questions of the members, they have done so in the best spirit that could be wished for. I congratulate the officials of the C.B.C. for the way they have handled this organization from the very beginning. I am one of those who favour the-present set-up.
Even if I do not agree with the opinions of others in this house, I am going to say that I am against a special regulatory body. But before dealing with this matter I am. going to quote from the Massey report. In quoting from the Massey report and expressing the ideas contained in that report, I am going to express my own ideas because I have made those ideas mine. At page 276 of the Massey report, chapter 18, we find this:
First, radio may be regarded primarily as a. means of entertainment, a by-product of tha advertising business. Such a view does not imply

that it may not be used for education, for enlightenment and for the cultivation of taste; all these bring entertainment to many people. On the other hand, radio, as one of the most powerful means of education, may be regarded as a social influence too potent and too perilous to be ignored by the state which, in modern times, increasingly has assumed responsibility for the welfare of its citizens. This second view of radio operation assumes that this medium of communication is a public trust to be used for the benefit of society, in the education and the enlightenment as well as for the entertainment of its members.
Those are my ideas on broadcasting. I think most of the members-I could say all the members in this chamber-admit that we have a bilingual country and that we are bicultural. We want to keep those great advantages. According to what I have just read from the Massey report, I am afraid if we have a separate regulatory body this situation of bilingualism will suffer. I know I do not speak for everyone, but that is my belief.
If you look at the minority report of the Massey commission you will see what the privately-owned radio stations think. It is normal to have this in mind because it is their own money they have risked. They want to have a return on their money. Mr. Surveyer, at page 387. says this:
No private station could carry on a program policy such as that of the Canadian Broadcasting Corporation or such as requested by some of the associations without running into financial difficulties.
This means that the privately-owned stations cannot do the same job the C.B.C. is doing in Canada, or in any district where there is a minority of French-speaking Canadians who would like to have French programs. If these private stations go into the red, as Mr. Allard said in answer to a question put to him by the hon. member for Saskatoon, in trying to maintain French programs, they are not there to lose money and they will stop. It is normal. These French-speaking minorities in Canada would suffer if we did not have the C.B.C. operating in the way it has been operating in the past. I am afraid that a separate regulatory body would not be able to keep up its responsibilities toward the French-speaking minority outside of Quebec. It is for that reason that I am against a separate regulatory body and in favour of the C.B.C.
I want to thank the hon. member for Eglinton for the very kind words he expressed about me as chairman of this committee. I must tell him that the sentiments he expressed tonight should have been directed to every member of this committee. My duties were very easy to perform because of the perfect co-operation I received from every member of the special committee on broad-
Supply-National Revenue casting. I wish publicly, in this house, to thank all those members for their friendly co-operation.
It was said that free time should not have been given to the communist party during federal elections. If I understood correctly, it was also stated that the communist party had no free time on the B.B.C. in the last general election in England. Did I hear the hon. member for Eglinton correctly?


Donald Methuen Fleming: That was the evidence given to the committee.


Pierre Gauthier: I have gone to the trouble of getting some information on that point. If the communists want to have free time on the B.B.C. they have to have 50 candidates running. The membership in the British House of Commons is over 600. In Canada the communists are obliged to run 66 candidates, and our membership is only 265. If we want to compare the two situations I would say the Canadian attitude is much better than the British attitude. It is more rigid than the British attitude, 50 candidates when the membership in the house is 600, as compared to 66 candidates when the membership in the Canadian house is 265. Our policy is more rigid.


Donald Methuen Fleming: But the fact is they did not get any free time on the B.B.C.


Pierre Gauthier: Because they did not put up 50 candidates.


Major James William Coldwell: They had 30 candidates.


Pierre Gauthier: In England the communists have to put up 50 candidates when the membership in the house is 600, and the membership in the Canadian house is 265 but we oblige them to put up 66 candidates. Our policy is more rigid toward the communists having free time than it is in England.
I said I did not want to delay the committee any more because I am anxious to go back home to my family and electors. It is my pleasure to thank the members of the committee for their very great and friendly cooperation.


Jay Waldo Monteith: The subject with which I am going to deal for a few moments is a rather dry one. I shall try to make it as brief and concise as possible. I intend to deal with two clauses in the final report of the broadcasting committee dated June 17. The first clause appears at page 815 of the committee's proceedings, and reads:
Your committee examined at length the financial statements of the Canadian Broadcasting Corporation and considered its accounting methods. The committee is of the opinion that such accounting methods have been improved since the Auditor General's report of August 5. 1954. and recommends

Supply-National Revenue that the Canadian Broadcasting Corporation should continue its studies to modernize and further improve all its accounting practices.
I should like to refer to the bottom of page 809 of these proceedings, to simply point out that the item of the minutes in connection with paragraph 12 reads:


Jay Waldo Monteith: , seconded by Mr. Richardson,
That paragraph 12 be amended by deleting the last sentence thereof and substituting the following:
The committee is of the opinion that such accounting methods have been improved since the Auditor General's report of August 5, 1954, and recommends that the Canadian Broadcasting Corporation should continue its studies to modernize and further improve all its accounting practices.
After discussion, and the question having been put, the said motion was resolved in the affirmative.
The reason I have mentioned that, Mr. Chairman, is simply that I would like to point out that the motion was seconded by the hon. member for St. Lawrence-St. George, and that the amendment was agreed to by a Liberal majority of that committee. Let me refer to the actual meat of this amendment:
.	. . that such accounting methods have been
improved since the Auditor General's report of August 5, 1954, and recommends that the Canadian Broadcasting Corporation should continue its studies to modernize and further improve all its accounting practices.
To me that can only mean one thing. There has been some improvement since August 5, 1954. That is the report of the committee. Also it recommends that the Canadian Broadcasting Corporation should continue its studies to modernize and to further improve. In other words the committee agreed that the present system of accounting, and accounting methods, did need modernization and bringing up to date.
Mr. Chairman, I propose to set before the house what in my opinion is rather definite evidence bearing out the contention that the accounting methods of the C.B.C. certainly have needed improvement in the past, and continue to need that improvement. In this connection I should like to read a couple of paragraphs from the Auditor General's report for the year 1951-52. This appears at page 53, volume II of the public accounts for that year, and is as follows:
It is some years since the [DOT] information in the detailed records was confirmed by reference to the assets at each location. However a stocktaking is now in progress. Until this has been completed and necessary accounting adjustments made it remains impracticable to verify by audit whether the shown values correctly represent existing assets.
The next item is "Allowance for depreciation and obsolescence" and it states:
Sound broadcasting; fixed assets, $3,201,690.
It is recommended that when stocktaking is completed appropriate action be taken with respect to rates of depreciation and obsolescence. Those used by the corporation through the years have

never been scientifically determined nor consistently applied with the consequence that the appropriateness of the $3,201,690 allowance is open to question.
Mr. Chairman, the 1952-53 Auditor General's report appears at page 51 of the corporation's annual report for that year. I should like to read two or three paragraphs from this particular report. It refers first to fixed assets of $10,656,455. I might interject that this is of course, you will understand, one year later. It says:
In recent years audit verification of moveable assets was impracticable, as no stocktakings had been done. However it was noted in the 1951-52 report that one was then in progress. This was completed during the 1952-53 fiscal year, and it was found that there were items on the books to a value of $91,931, which were not reflected in the stocktaking. An investigation of the discrepancy commenced by the corporation had not been completed at the close of the audit.
The next item is, "Allowance for depreciation and obsolescence."
In the 1951-52 report it was suggested that when stocktaking was completed action be taken with respect to rates of depreciation and obsolescence since the appropriateness of the accumulated allowance was open to question for the reason that the rates used through the years had never been scientifically established or consistently applied. The comment still applies.
And then the heading, "Books of account".
The accounts are kept on a cash basis, except at the year end when accruals are entered in order that the annual financial statement may be prepared. The reason given by the corporation's officers for not maintaining the books on an accrual basis, as is generally the practice in corporate accounting, is that the cash basis better serves the corporation's internal administrative requirements.
Now I would like to read from the report of August 5, 1954, at page 51. This is one year later than the report I just read. The heading is, "Allowance for depreciation and obsolescence" and states:
Still applicable is the comment in previous reports to the effect that the appropriateness of the accumulated allowance for depreciation and obsolescence is open to question, for the reason that the rates used through the years have never been scientifically established or consistently applied.
And the next item:
Weaknesses having been noted in the accounts, this office wrote to the chairman of the board of governors on October 23, 1952 with supporting details and concluding with the words-
And these are the concluding words:
It is suggested that the system be carefully reviewed and appropriately revised and co-ordinated so that there may be no need to qualify the audit certificate in this regard.
That is the end of the quotation from the letter. Then, going on with the report: Subsequent action by the corporation not having been of a nature to remedy the situation, the

manner in which the accounts were kept during the fiscal year ended March 31, 1954 was not found to be conducive to satisfactory audit.
This last report refers to a letter dated October 23, 1952, and I am afraid I must read all of it. It is addressed to Mr. A. D. Dunton, chairman of the board of governors, Canadian Broadcasting Corporation, and says:
Part VIII of the Financial Administration Act having been proclaimed effective as from October 1, 1952, the auditors of crown corporations now are required, by section 87, to report more extensively than before. Among other things, they are to report whether proper books of account have been kept. I now write as you may wonder what is the position in so far as the C.B.C. is concerned.
At present the accounts do not conform with accepted corporate accounting practice. They are on a cash, rather than an accrual basis. In consequence, they do not show month by month the financial state of the assets and liabilities, neither do they correctly disclose what are the to-date revenues and expenditures for the year. Furthermore, information provided monthly for the guidance of management, which normally would and according to accepted accounting practice should be available from the books of account, is assembled in memorandum records not controlled by the books subjected to audit by this office.
An interim test audit for the five months ended August 31, 1952 revealed several unsatisfactory features as exemplified by the following:
(1)	It is the practice at the close of each fiscal year to credit accounts payable with the invoices then unpaid and to charge the relative expense and asset accounts. In effect, this places the accounts on an accrual basis at the year end. Therefore, to return them to a cash basis, it is necessary at the beginning of a new year to make a reversal of this entry. At the tune of the audit such a reversal had not been made. As a result, the balance shown as owing for accounts payable included accounts paid several months ago.
(2)	Claims made over several months for reimbursement of expenditures for the international shortwave service were not entered: consequently, the repayment received from the government appeared as a liability of $272,050.
(3)	Although more than $4,800,000 had been received, no revenue from licence fees was reflected in the accounts; instead the amount was incorrectly shown as a liability to the Department of Transport.
In view of the foregoing and because the accounts do not provide adequate internal control, it is suggested that the system be carefully reviewed, and appropriately revised and co-ordinated so that there may be no need to qualify the audit certificate in this regard.
This letter was dated October 23, 1952, and was signed by J. Hopkinson, assistant auditor general. It is to be found on page 396 of the proceedings of the committee. I think it is right to mention that in one of these criticisms, the July 10, 1953, report, mention was made of a discrepancy of $91,931 between the book account and the actual stocktaking. Evidence presented to the committee was to the effect that this had been considerably reduced, but undoubtedly there would still have to be some write-off.
Supply-National Revenue
I think you will have to agree, Mr. Chairman, that in this sequence of events, first the letter, the Auditor General's report concerning the 1951-52 accounts of the corporation, the Auditor General's reports in 1952-53 and in 1953-54, and the letter dated October 23, 1952, to Mr. Dunton, there must have been some laxity some place along the line. The first mention of this discrepancy in accounting goes back to 1951-52. The letter to Mr. Dunton mentions that only as of October 1, 1952, does the Auditor General of necessity report on the system of accounts. How are we to know? I think we have every reason to suspect that this system of accounting has gone back over the years. The Auditor General has found every fault with it. I think that speaks for itself.
Following the Auditor General's report of March 5, 1954, the firm of P. S. Ross and Sons, chartered accountants, was engaged to examine the accounting system. On February 7, 1955, they presented a report. This report is of a preliminary nature, and at the moment I certainly am not prepared to say that it is the cure-all or that any cure has been found. In fact, on page 399 of the proceedings Mr. Dunton had this to say:
It is not a question of an interim or final report. They were asked basic questions concerning cash, accrual and commitments and so on, and I think it is right to say that they gave their answers to the questions. However, a number of questions arise from carrying that out, and our management would want further opinions from them as to the practicality and the cost and the method of carrying out some of their recommendations. There was also a recommendation concerning the difference in the opinions expressed in brief form by the Auditor General and what chartered accounts say.
The words "chartered accounts" appear here. I presume that is a typographical error and it should be "what chartered accountants say". Further down the witness says:
I perhaps did not make it clear that this is not an interim report. This is simply a report in which they answer questions asked by us. We are going to ask for further information, advice and study from them, arising out of certain suggestions they have made in their first report.
I think it can be said that some consideration has been given and is still being given to this report of P. S. Ross and Sons. In my estimation there is a long, long way to go. The committee of this house has recommended in paragraph 12:
That the Canadian Broadcasting Corporation should continue its studies to modernize and further improve all its accounting practices.
This unsatisfactory condition, Mr. Chairman, has existed at least, as I mentioned before, since the 1951-52 accounting period, and undoubtedly beforehand. To my way of thinking some action should have been taken

Supply-National Revenue as far back as the date of the letter from the Auditor General to Mr. Dunton dated October 23, 1952. The first action that was taken followed the August 5, 1954, report, two full years afterward. All I can say is, what would a meeting of shareholders think of management if they had received a report from the auditors of their company two years before any action was taken to rectify the situation?
I simply state it is apparent that the committee is not satisfied with the progress in improving those methods and in modernizing the accounting.
Now, Mr. Chairman, I should like to refer to paragraph 17, to be found on page 816 of the committee's proceedings. It is paragraph 17 of the final report, which reads as follows: Your committee feels that the present system of financing the Canadian Broadcasting Corporation, in the light of increasing operating costs, should be reviewed to ensure a continual expansion of the national television service. In this connection the committee agrees that it is essential for the corporation to continue to supplement the income it receives from public sources with revenues from commercial operations.
I would point out, of course, that that paragraph is in the report, yes; but at the bottom of page 810 of the committee's proceedings there is the following:
On paragraph 17:


Jay Waldo Monteith: 
James MacKerras Macdonnell: Mr. Chairman, I move
That the committee rise, report progress and leave to sit again.
Motion negatived: Yeas, 29; nays, 35.


Mr. Bryson:: Mr. Chairman, on behalf members of this party I want to endorse sentiments expressed by the hon. mem for Eglinton with respect to the court shown the committee by the chairman of C.B.C. and his officials who were called give evidence. I rise at this time to sup] a principle which I believe is the only that can give the Canadian people the t; of broadcast program, both sound and t vision, they deserve. If pressure should brought by public opinion to change the p cies now followed by the C.B.C. we may in danger of losing that body. Therefoi feel obliged to bring before the Canac

people why I believe the C.B.C. is the only body in a position to give the type of service which is so necessary.
I feel that there have been no new arguments interjected into this debate to describe the operations of the C.B.C., and therefore anything I might say would only be repetition. Until new arguments are brought forward I feel that we in this group are justified in supporting the principle of the C.B.C.
It is all too easy for people not in the know as to the problems which must be faced under what is termed a single service, all the technical difficulties not only in respect to population but geographic, to offer unfair criticism. I think most of the criticism is based on lack of knowledge, and if the necessary information were available much of this criticism would not be forthcoming. It is my opinion that we want to still have the present control that is being exercised-I believe that is very important in the light of the tremendous expansion in this country-over this greatest medium of this day and age for good and evil. Television has the greatest possible influence over the Canadian people, especially young people. Because of the danger that is inherent in television broadcasting, it is absolutely essential to have some control that has the interest of the Canadian people at heart.
If there were any doubt in my mind as to the ability of the committee members to obtain information from the witnesses, that doubt was removed when I sat on the committee. The questions that were asked brought very frank answers that gave in great detail the operations of the C.B.C. They left no doubt in anybody's mind that it was a fair way of carrying on an investigation. I fail to see that any regulatory body such as is suggested by the Conservative party would justify its existence in any way, provided that it did not have, as they suggested, any ulterior motive. They suggest that such a body would not have any ulterior motives.
From my observations in the committee it would not justify its existence. After all, the people of Canada are going to continue to be asked to subsidize broadcasting in this country. Therefore the only people who have a right to carry on the investigation of such a body as the C.B.C. are the elected representatives of the people. I do not know where you would find a group of people fairer than those who represent the people in that committee.
As was pointed out by the hon. member for Rosetown-Biggar, it is a matter of record that the C.B.C. regulations, as they are presently being carried out, are and have been subscribed to by the Conservative party.
Supply-National Revenue They were brought into this house as a resolution by the Conservative party. I often wonder where these champions of so-called democracy who speak about free competition were prior to the establishment of the C.B.C. It is something we have become accustomed to. When an industry starts out in its infancy and there is a great risk involved, we find that in many cases private interests are very reluctant to risk their capital in such a venture. Once it has been proven to be successful, as in the case of the C.B.C., then we find a great agitation on the part of private interests to get into what has proven to be a fairly lucrative field.
They talk about competition. I cannot see very much competition when the Canadian people are asked to put up in the neighbourhood of $100,000 a year toward the maintenance of every private broadcasting station that is licensed in this country. It is no wonder that the private broadcasters in this country are in a lucrative field, for the simple reason that they are being provided with a large portion of their broadcasts at the expense of the Canadian people. They are certainly not showing by their actions that they are prepared to give a better type of program, a better type of television show than is being shown at the present time. If they had any intention in that regard they would make it known at this time.
I suggest that if television or sound programs are to be developed in this country, talent will have to be developed. I do not think the private broadcasting people in this country have gone out of their way to develop talent to the satisfaction of anyone. I should like to read from a news item in connection with this question. I have already put it on the record, but I should like to put it on the record again:
The Canadian Broadcasting Corporation gives generous assistance to Canadian composers through public performance of Canadian works over its stations, while less assistance is given by private radio stations, the Canadian league of composers said in a brief last week to the royal commission on copyright.
If the private radio stations are going to contribute, as they say they will, to a better type of program than the C.B.C., they should show more evidence of that than they are showing at the present time. I should like to comment for a moment on the brief published by the Canadian association of radio and television broadcasters and presented to the committee on broadcasting which met during this session. After reading this brief I think possibly they have made the weakest case of all. I should like to quote one or two

Supply-National Revenue items which I find in this to substantiate my contention that the case is very weak. First of all they say:
Competitive television will provide better and more effective service. It will tend to reduce, as experience in radio broadcasting has shown, the unduly large number of Canadians now regularly viewing United States television stations, in areas where only one Canadian signal is available. In the areas concerned few viewers have a second or alternative service in Canada they can turn to, so they must obtain that alternative service from American stations.
I have heard a good deal of criticism in that regard, but to anyone who has viewed the United States programs it is an entirely different picture to what you see in Canada. We must not fail to realize that at considerable cost the Canadian Broadcasting Corporation is procuring the best programs that are being made in the United States. I do not think anybody would be very much impressed with the type of show that is put over the air in the United States.
I cannot easily understand committee members bringing up the point that possibly some of the channels we are not using will be used by United States broadcasters. There could be nothing more fallacious than that argument. Yet we find a responsible body like the one from which I am quoting, namely the Canadian association of radio and television broadcasters, trying to make that one of their key arguments in connection with this problem of competition. I should like to read what they have to say in that regard:
If channels available in these areas for use are not employed by Canada, there is serious danger that these or adjacent channels will be employed by the United States.
They thus leave the impression that these channels are something like any product you might buy in the store; that you can pick up, put it under your arm and walk off with it. That is just absolute nonsense. The only way in which the Americans can possibly get any of these channels that we are alleged not to be using would be to annex some of the land that now belongs to Canada. You just cannot do that with any television channel. I therefore feel that that is one of the poorest arguments that could possibly be made.
In connection with the argument as to the quality of programs now being offered by the C.B.C., and the contention that under private ownership, because of competition, the Canadian people would be exposed to better programs, I should like to quote from the report of the Massey commission:
The private owners of broadcasting as "an industry", and their stations "hardly rate a pass on cultural programs". Too many stations "regulated in principle by the C.B.C., offer programs which must be described as regrettable". In a

sampling of five stations, there was "no attempt to fulfil the proper function of the local stations... to reflect the life and interests of the community, and to use and develop local talent available ... Spot announcements crowd their programs . . . Only very rarely can limited revenue be advanced as an extenuating circumstance for this inexpensive and unimaginative programming".
Therefore do not think we need be alarmed as to the type of program that would be forthcoming because of the transfer from the C.B.C. to private stations.
There is one question I should like to have answered by the department, and it is one that I feel was not answered at all in the committee. It is a question that was raised by the hon. member for Eglinton, and it has to do with the station in Newfoundland. In the face of the fact that the C.B.C. board of governors recommended that they establish a station at St. John's in Newfoundland, I should like to know why that application was turned down and a licence was granted to a private station, namely the Newfoundland Broadcasting Company. I should like to know why the government turned down the application of the C.B.C. in spite of the fact that the C.B.C. requested that they establish a station in Newfoundland.
In conclusion I should just like to say this. I think the whole problem we have to face as responsible members in this House of Commons is this. What kind of television and what kind of sound broadcasting are we going to have in this country? I do not think anything short of what we have now is going to do the job. I believe that those difficulties which I pointed out, both geographically and because of our sparse population, dictate- and I say this without any hesitation-that the government of Canada is going to have to subsidize broadcasting in this country. I think it is absolutely justified that we should do that.
I should like to add something to what the hon. member for Portneuf said in respect of minority groups in this country. I think we in this country have become great because of our people's tolerance and our attitude towards the many minority groups in this country. We could have had a great deal of strife in this country, but because of our tolerance toward these people we have been able to arrive at a great deal of unity. I think C.B.C. television in particular can take a great deal of credit for being able to make that unity a reality. I therefore believe that what we have to do in this country is subsidize broadcasting. I feel that it is justified. I am in support of the policies and principles at present being followed. I hope nothing will happen that will cause us to lose that kind of system.


William Alfred Robinson: Shall the resolution carry?


Mr. Holowach:: Mr. Chairman, as one whose privilege it was to serve with others on the committee appointed to study the annual report of the Canadian Broadcasting Corporation and to review the revenue, expenditures and over-all development of that corporation -and I would say that expressive corporation -I wish to present to the committee certain observations and personal conclusions.
I was one of the new members of that committee, and I look back with a great deal of pleasure at having had the opportunity to be associated with the very fine spirit which prevailed among all the members of that committee. There were 26 members, a majority of whom were from the Liberal ranks. There were only five Conservatives, two C.C.F. members and two Social Credit members.
I think it is proper for me to say that we were fortunate indeed in having had as our chairman the hon. member for Portneuf. He guided the meetings very ably and showed the kind of spirit which I consider to be a highly essential characteristic of a good chairman, especially when there are such a large number of members from the government side. I refer to a sympathetic understanding of the position of the minority members whose views in many respects were opposed to those of the government supporters.
I am sure that by this time all the members in the committee have read the final and official report of that committee. I have read it several times. As a matter of fact, tonight I have read it two or three times. It contains a truthful description of what was done; but as I read it, it seems to me that it has a general tone of approval of all things. In my humble estimation it does not reflect enough of the undercurrent of dissent which was prevalent through most of the hearings, even on the part of one of the Liberal members.
I realize that it is not the practice of this house to permit a minority report but perhaps there may be merit in considering, for the future, attaching to such final and official report of a committee a minority review. The reason for this suggestion is that time is of the greatest essence in this house. Such a report would eliminate the need of repeating dissenting arguments. It would provide the basis for members to gain the facts and figures which they need in order to take an active part at this point in our proceedings when we are considering the estimates of the department.
First of all let us take into consideration the job the committee had. Broadcasting by television and by radio is a gigantic business
Supply-National Revenue in Canada, and each has similar problems. Only by remembering this fact can we understand that while the committee sat for some 35 hearings, even that length of time, it appeared at least to me, was insufficient for every single member to examine all the intricate details of revenues, expenditures and over-all cost unless, of course, one encroached upon the time of his colleagues. Further, it would have required the full time of a member and also ample assistance in research.
Now, please do not misunderstand me. I am not saying the committee did not do a good job. It will continue to do a good job, as is always the case when the public's representatives have an opportunity of questioning and examining the administrators of the public's affairs. What I am saying, however, is that the magnitude of the job we had to perform was such that, in my opinion, we scratched only the surface of perhaps the most important question, namely the growing role which governments play in the life of this nation. We did not provide a satisfactory answer to just how far or to what extent we could allow the Canadian Broadcasting Corporation to retain its special powers. For these reasons, and because it is in the public interest whose money assists the activities of this corporation, I believe we should have the strictest parliamentary review made each year of this and any other crown corporation whose call upon the public treasury is becoming costlier to the taxpayer year by year.
It must be remembered that last year there was no such committee studying the operations of the C.B.C. The last time this committee sat was in 1953. Therefore, for reasons which are psychological, namely keeping people on their toes, I do suggest that a committee of parliament be appointed, not each alternate session but each session, to study at least some of the important branches of the activities of this corporation and thereby ensure that the people of Canada keep tab on the expenditures. I say this because it seems to me that the function of the committee, under growing government control and the numerous crown corporations, is to be alert to all the hazards and implications of this growth in government. There is a lot of truth in the saying that often democracy buries itself under the load it insists on carrying.
I am not here to shed compliments on the C.B.C. My responsibility is to criticize them, but in doing that I want to be fair. I will say this, that the C.B.C. and its officials have had to stand up to some pretty scorching public comment. How many other crown corporations have to appear on the witness

Supply-National Revenue stand and give an accounting? What are the essential facts we must have in order to know what policy we should adopt with respect to the future activities of this corporation? I think anyone who is fair will be impressed by the remarkable growth and accomplishments of the corporation. It is in this very growth and in these accomplishments that we have the problems which face us. Several years ago radio and television were novelties in the experimental stage. Today they are features of everyday living.
Our people today look to the activities of the corporation as a reliable source of information, entertainment and education. What does this imply? It implies that there is a need for a still fuller nation-wide service. I maintain that if we are to have that fuller service, then we should also have the private broadcasting stations and interests to share the burdens with the Canadian Broadcasting Corporation. I do not think anybody in this business of radio and television broadcasting in Canada should have special powers to regulate the activities of his competitor. This growth I have just mentioned also means that we should guard those things which are essential to our way of life. This can best be done by giving impartial treatment to all the news commentaries which the people have to hear.
I mention the impartial treatment of news because considerable debate took place on that very subject. It was charged that the C.B.C. had used a handful of commentators on its better conference and news programs, and that sometimes these commentators were not free of political bias or, in any event, their technique was slanted. Whether or not that was true I am not going to say. But I will say that I have had representations made to me by people in my own constituency who have been offended. This is nothing new. It has been going on for some time. I have a little article here appearing in the Financial Times of January 29, 1954, which makes reference to this charge. The headline reads: "C.B.C. Whiplash for Government". The article refers to something that was written by Chester Bloom, and it reads as follows:
The gist of what this dogged deadline devotee has to say is that if you don't like the Liberal government, the C.B.C. won't give you time on the radio. Of course it is true.
I do not so much blame the C.B.C. officials as I do the Liberal government.
He goes on to say that if someone hiccups in a way that could be construed as sounding Tory, then he is immediately banned. I continue to read:
To keep out of trouble, the C.B.C. minions simply keep the offending person off the air.
It is notorious that not a few scribes fawn on the government, and get steady assignments. Those who don't get-the air!
One would-be radio speaker has looked in vain for 14 years for an assignment because of this jittery ban. Yet another fellow can hardly get his clothes unpacked upon arrival in the city before he is breathlessly rushed to the radio.
A writer who is known not to favour the government, or whose free punching the craven C.B.C. fears, is told that he lisps, or he speaks too fast, or his voice does not reproduce too well. This is all apple sauce.
Or he may be told:	"Like to oblige you, old
man, but you know all our booking is done in Toronto. Why don't you write so and so?"
Now this is obviously a lie, because the endless flock of willing syllable stooges here in Ottawa are given radio assignments all the time.
The Liberal government will not, and cannot stand criticism. You say one bad word about the St. Laurent regime and you are through. The C B C crowd just do not want to risk their own liiy-white necks, lest Doc McCann or some other cabinet minister object.
Any criticism which does not suit the^ government is regarded as "unfair". Anything that nleases the government is called "impartial .
I think we should make it perfectly clear that the purpose of the Canadian Broadcasting Corporation is to give public service, not political service or patronage. I have confidence that the officers of the corporation will study this entire question and, if necessary, treat ruthlessly anyone who might use a nonpolitical program in a politically biased manner.
How about this question of television? Several years ago television appeared, but very few homes had it. It was looked upon as a luxury item. I believe regular television broadcasting did not start until the year 1952 in Montreal and Toronto. It is interesting to note that since that time, as of April 1, over 1,241,000 television sets exist in homes in Canada. I think it should now be our policy to try to bring within the range of the poor and the lowest wage earner in our country the means to acquire this instrument in order that they may enjoy some of the benefits. The C.B.C. talks of expanding their service, but one way to expand the service is to extend relief from the high costs of these instruments. We should be thinking in terms of gradual liquidation of the 15 per cent excise tax which is at the moment applied to radio and television receivers and associated products. I think this tax is a classic example of the public having to pay twice for the same service. In addition to substantial grants which the C.B.C. receives from the public treasury, it also receives revenue from the 15 per cent excise tax.
I have in my hand a letter from the radiotelevision manufacturers' association of Canada, dated May 18, 1955, which was sent to

tie Minister of Finance. I think it contains ome rather interesting information for the ommittee. It says:
Our members feel that it may not be generally ealized that the amount of excise tax collected n television receivers and tubes alone in the seal year ended March 31. 1955 was approximately 22 million, and that this amount was more than ouble the maximum that it was estimated would e collected for the C.B.C. by this method in any ne year when the plan was introduced two years go.
And later on:
Our members also feel that it may not be lenerally realized that since the 15 per cent excise ax is just as much an element of cost in a tele-rision receiver as the cabinet, the loudspeaker or my component, the distributor and dealer and inance company, if time payments are involved, nust deal with this added cost, and by the time he receivers are in Canadian homes the $22 mil-ion for the C.B.C. has actually meant close to 140 million out of the pockets of the consuming rnblic.
In statements before the committee Mr. Dunton estimated that in 1955-56 the corporation spending would be about $42,200,000. Government grants and revenues were expected to total $32,845,000. This would imply a deficit of $10,805,000 after receiving federal grants of some $25,800,000.
The reasons I mention those figures are twofold. First, while much of that cost may be necessary, that very fact indicates the need of frugality in the activities of the corporation. Second, despite the various revenues which the corporation has at this time, it appears to be facing a financial crisis. I think the C.B.C. is as anxious as anybody else to put their dealings on a sound business basis. Perhaps it is time, as was suggested this evening, to ensure to them a substantial definite grant voted by parliament each year to enable them to carry on the good work they are doing. There may be disadvantages to that proposal, but I think it has marked advantages as well. First, it would enable simpler bookkeeping and easier examination of their fiscal policy. It would ensure proper budgeting and planning and, what is very important as far as the taxpayers of this country are concerned, it will force them to make ends meet.
One of the most controversial points brought up during the committee hearings was on the question of C.B.C. policy in the matter of television, namely the so-called single-channel policy. As I understand it, under this policy only single stations are allowed to operate in any area of the country. These areas are now served by government-owned stations or by privately-owned stations. In those areas served by privately-owned stations the government has agreed not to enter into competition. In those areas
Supply-National Revenue served by government-owned stations, private initiative is denied the right to compete and give service.
The paradox of all this lies in the fact that this so-called single channel policy has created a government monopoly in those areas in which the C.B.C. operates; and on the other hand the policy sustains, although to a lesser degree, exclusive possession of service in the areas served by privately-owned stations for only those already there. I say to a lesser degree, so far as the latter is concerned, because at the present time the C.B.C. does have its stations in the larger urban centres of Canada.
Briefly, I think such a policy is diametrically opposed to the principle of a free society. One of the speakers this evening spoke of monopoly. So far as I am concerned monopoly is dangerous. It is contrary to the principle of equal opportunity, and smacks too much of "take it or leave it". It certainly denies the right to people in our country to an alternative choice.
Before going on I wish to make it amply clear that I am not arguing against the C.B.C., nor am I particularly interested in the private broadcasting stations. I do believe that some of the regulatory powers of the C.B.C. have created a great deal of bad feeling and have lent themselves to improper interpretation so far as the people of Canada are concerned.
Many years ago the great statesman in the country to the south of us, Abraham Lincoln, stated that the legitimate object of government is to do for the people what needs to be done but which they cannot, by individual effort, do at all or do so well for themselves.
I believe those people who were responsible for the founding of the C.B.C. in the early days must have had that idea in mind. It is granted that at that time special powers and controls were necessary for the corporation, if it was to provide a national service and unite the Canadian people. But today the facts indicate that over 80 per cent of our population is in a position to hear and see most of the broadcasting services. Yet that control seems to be vested permanently in the C.B.C.
I do not think any private broadcasting company, or any sensible and fair-minded member, will deny that the Canadian Broadcasting Corporation has made a marvellous contribution to this country. However, in the words of the submission made by the Canadian association of radio and television broadcasters, this appears:
Yet virtually all legislation pertaining to wireless communications is based upon broadcasting s development and position more than a quarter

Supply-National Revenue century ago-when this form of mass communication was in its infancy, when broadcasting's development and its present place in the community could not have been foreseen.
I do believe that public interest would be best served by giving opportunities to those so interested to make investments in this connection. I think such investments would spell out employment and higher standards. These would come by reason of competition, and it would give greater utilization to Canadian talent. But this cannot be, if the C.B.C. retains unaltered its single-channel policy. Surely the very able minister in charge of this department must have had this in mind when he stated on March 30, 1953, in the House of Commons, the following:
The principle of one station to an area is to apply only until an adequate national television system is developed. At the rate that applications for stations are now being received it may not be long before there is a sufficient degree of national coverage to justify the government and the C.B.C. giving consideration to permitting two and perhaps in some cases more than two stations in certain areas. It is anticipated that, in due course, private stations will be permitted in areas covered by C.B.C. stations, and the C.B.C. may establish stations in some areas originally covered by private stations.
It is quite apparent that what I am arguing for is the establishment of an independent regulatory board for Canadian broadcasting which, in the words of the submission made by the Canadian association of radio and television broadcasters, dated May 24, 1955, reads as follows:
1.	There be now permitted licensing of non-government television broadcasting stations in all areas of Canada, including Toronto, Montreal, Vancouver, Winnipeg, Ottawa, and Halifax. This would now be consistent with the recommendations of the Massey commission, with the general outline of previous government policy statements, and would give Canadians in these areas a choice of more than one television program at one time from Canadian sources.
2.	There be created an independent regulatory board for Canadian broadcasting, to correct the present situation in which one body competes and regulates at the same time; to bring broadcasting regulation into harmony with parallel regulatory situations in all parts of Canada; and with like situations in every part of the democratic world, and so to create for Canadian broadcasting a regulatory structure based upon fundamental democratic principles.
That brings me, sir, to perhaps the most compelling reason why there should be a separate, impartial board co-ordinating the activities of the C.B.C. and the private broadcasting stations in this country. I think everybody will agree that radio and television provide one of the most effective means of influencing and moulding public opinion. Repeated often enough and with visual aid, the spoken word can be both a builder and a destroyer. In "Mein Kampf" Adolf Hitler

makes repeated reference to the power of the spoken word. I believe, therefore, that a Canadian agency in charge of the affairs of both the C.B.C. and private broadcasting is desirable, since such an agency will be divorced from government domination and from private pressure groups.
I realize that we all have confidence in Mr. Dunton and his excellent officers. I am sure the government members will have confidence in their government. While it may be that we do not fear there would be a misuse of power, let us also remember that neither this government nor anyone else is wiser than some of the lessons of past history.
In conclusion I should like to say a few words on one of the important branches of the Canadian Broadcasting Corporation, namely the international service. This is an agency which does not take its policy directives from the Canadian Broadcasting Corporation but performs to the tune which is brought in from the Department of External Affairs. Mr. Dunton admitted that the Department of External Affairs guided the policy of the international service. From the very beginning, Mr. Chairman, I do believe the people of Canada have supported the international service; for they were led to believe that this service was an essential one, representing a very valuable psychological weapon to the free world. I believe our people insist that it continue to perform that initial function for which it was designed. I believe there have been restrictive policies on the part of external affairs, or whoever is responsible for that particular policy, as it is reflected in the international service, so that today the international service is only an anaemic semblance of what it originally was intended to be.
If you study the policy declarations that have been made throughout the years you can see that restraining influence in the very wording. Today we have something more effective, the financial restriction. On page 10 of the estimates for 1955-56 we have the following figures. In the year 1955-56 we are being asked for $1,807,825. The 1954-55 figure was $2,464,844, which represents a decrease of $657,019. The B.B.C. is spending some $18 million; the "Voice of America" is spending a far larger amount. We intend to spend only $1,807,825 in the next fiscal year.
There is one thing that I think every hon. member should understand, and also the experts in the Department of External Affairs; namely that the international service of the Canadian Broadcasting Corporation could be a more effective agency than either the B.B.C. or the "Voice of America". Those forces who

are opposed to us have been able to build up effective resistance to the B.B.C. and "Voice of America". In the target areas the people have been led to believe that the "Voice of America" and the B.B.C. are the voices of great powers hungry for more power and with colonial design. But surely no one by the widest stretch of the imagination can make that charge against Canada, which has an honourable and excellent record. Therefore the messages we send over the international service have a very deep psychological meaning for people in the target areas, much more so than the messages which come over the B.B.C. or the "Voice of America".
Therefore it is essential that the international service be maintained and encouraged in order that we may have contact with and assist the morale of these people behind the iron curtain. Listen to the broadcasts from Bucharest, Warsaw and Kiev or any of these other places, and compare them with ours. On the one hand we hear militant, strong, persuasive broadcasts from communist countries. Our broadcasts are meek, mellow and lack courage, in many cases neglecting completely the psychological background of the people. These people are interested in receiving certain messages from us. It is not a message on the merits of democracy and why our way of life is better than theirs. They are not interested in having a cold analysis of the news or hearing about wild and animal life in Canada. They are vitally interested in hearing what our verdict is as to their present status of enslavement.
Our minister of external affairs is an affable diplomat of whom we are all very proud, and he knows that one of the purposes of diplomacy is to win friends. It may not always be possible to win the friendship of those whose ideology is different from ours, but we should try to maintain the friendship of those whose aims and interests are identical to our own, which are compelling reasons for friendship.
We are glad to hear the announcement by the Prime Minister on May 19 that it is intended to set up a commission to study some of the problems of radio and television in Canada, and we hope that commission will make recommendations which will remove many of the iniquities which exist at the present time and will provide for a greater utilization of Canadian talent.


Mr. Dinsdale:: Mr. Chairman, during world war II I had the privilege of serving with the Canadian night fighter squadron. The slogan of that squadron was "Midnight is our noon". I can only hope that the spirit behind those words will enlighten the chamber here tonight notwithstanding the lateness of the hour. The 50433-434
Supply-National Revenue full report of the deliberations of the committee on broadcasting is available to hon. members; therefore we do not need to indulge in needless repetition. My reason for rising at this time is some of the things that have been said thus far. I want to make it clear that I do not subscribe to the viewpoint expressed by the hon. member for Humboldt-Melfort, which he described as the position of the official opposition.
During any discussion on Canadian broadcasting it is always said that members of the official opposition are critical of the Canadian Broadcasting Corporation, but I have never expressed that viewpoint and so far as I know neither has any other spokesman for this party. We are fully aware of the outstanding work of the C.B.C. in pioneering broadcasting in this country. One point we have made is the necessity for changing our approach to broadcasting matters with changing circumstances and changing situations. Since broadcasting activities were formally launched in Canada there have been tremendous social changes, not only here but throughout the world.
Today we must recognize that broadcasting is a mature medium of publication, and we must recognize the principle of the freedom of publication. I agree with the viewpoint expressed by the hon. member for Edmonton West, that the quicker we get away from state domination of broadcasting the better it will be for the principles of liberty and freedom, especially freedom of publication. Dr. Marcus Long is a frequent commentator on the C.B.C. and does an excellent job. He put the problem in the proverbial nutshell when speaking to the board of trade in Toronto, when he warned of the danger of change in the concept of the state from servant to master. I am quoting him directly. He said:
Let us resist as we would the devil every effort of government to demand more control than it actually needs. Government must rest on the consent of the governed, working for the general good of all.
That sounds like a very good Liberal principle, in the old sense of the term.
Like other members of the committee, I enjoyed very much the experience. It is always an interesting experience to examine close up the very complex activity that C.B.C. broadcasting has developed into at the present time. I must admit that I found the committee work very exhausting and very time consuming, and I do not doubt that the officials of the C.B.C. were under the same impression. We spent a long time in an exhaustive analysis and examination of broadcasting activities.

Supply-National Revenue
That is very interesting, of course, but I fail to see why it should be necessary for members of parliament to become experts in the delicate art of ballet dancing and the provision of dramatic presentations and spectacles for the entertainment of the Canadian public. Unfortunately, with the present regulation system that is the role members of this house have to assume. I feel-and I think there are many others of the same opinion- that C.B.C. will be happier and certainly we would have more time at our disposal to deal with matters more directly associated with legislative activities, if we could get away from this partisan collision that is bound to occur if C.B.C. insists on continuing its multiple role of broadcaster, competitor, adjudicator, and so forth.
I am convinced that one way to get around this difficulty, as we have gotten around the difficulty in other crown corporations, is to establish some independent regulatory board that can stand apart in the broadcasting field and give an impartial adjudication and regulation of both our public broadcasting activities and the activities of the very influential and effective group of private broadcasters at the present time.
So far as the genial chairman of the committee is concerned, the hon. member for Portneuf, I must say he was absolutely amazing in the fairness he manifested as we wound our tortuous way through the examination of the annual report of the C.B.C., and he provided every opportunity for a complete discussion. Any fear of the deprivation of the rights of minority groups, I am convinced, could be easily taken care of by an impartial regulatory body. It is the solution that has been applied with other crown corporations. The problem of an approach to crown corporations is one of increasing complexity, and I think we could well support the principle of an independent regulatory body.
I said that circumstances have changed in this country. They have changed in other parts of the world also. I was interested in an article that told of recent developments in television activities in the United Kingdom. The problem there is much simpler than ours, because they have a homogenous population. They have a very small country, but with the advent of television and the problems created by that medium they have seen the necessity for breaking the complete monopoly of the B.B.C. and establishing an independent television authority that will be responsible for the commercialized private television activity recently launched in the United Kingdom.

If that change has been necessary in broadcasting in that comparatively small country, obviously we are forced to face up to changes in the situation here in Canada. In the committee deliberations it was obvious that the cost of programming television was becoming prohibitive when the responsibility rested entirely with the public broadcasting activity of C.B.C. Public opinion is gradually coming to realize this problem. Those who are closer to the situation realize that we have the lion by the tail, and if we are not careful it is going to run away with us.
I am convinced, as I read comments on broadcasting matters in Canada from time to time, even from within the Liberal party itself, that public opinion is eventually going to bring about the obvious changes that are necessary at this time. I feel there is a need for a comprehensive review of broadcasting in Canada, and I sincerely hope that the commission to be appointed will have complete freedom to undertake such a review and bring down the recommendations necessary for bringing our broadcasting policy up to date.
I do not wish to get into a long discussion at this late hour, but I should mention that some of the usual red herrings have been raised in this debate tonight; the fear of crass commercialism, the fear of infiltration and saturation by United States cultural influences, the failure to get down to the grass roots of cultural development in this country, and so forth, which according to this approach to the problem would be the result if we were to allow the private broadcasters an equal competitive opportunity with public broadcasting in this country.
So far as infiltration and saturation by United States influences are concerned, today Canada has reached sufficient maturity in its development toward nationhood to be completely recovered from the feeling of insecurity and inferiority in this regard that existed before world war II. As a matter of fact, we have now reached sufficient national and cultural maturity that we are beginning to make some cultural impact on our powerful neighbour to the south. That fact came out in the committee on broadcasting when the chairman of the C.B.C. board indicated that there is an increasing demand for some of Canada's outstanding programs.
So far as the use of T.V. programs of United States origin is concerned, even under the present circumstances we are dependent upon that source of supply to the extent of 50 per cent of our T.V. programs. I do not think the establishment of an independent, regulatory body would have any undesirable influence in that direction.

A comment was made that private broadcasters have made little contribution toward the development of talent in this country. If we examined the matter closely I think we would find that a good percentage of the talent engaged in C.B.C. radio activities, as well as in television activities today, began and had its early training in the small local broadcasting stations, all of which, of course, are operated on a private basis. Because of the lack of programming scope in the private stations they have little access to the network. For example, there is not much stimulus or encouragement for elaborate programming of the spectacle-drama type. The talent, beginning in the local communities, is obliged to move to the big cities which, under our present scheme of broadcasting, have become the production centres.
So much for the problems of talent and American infiltration. I should like to deal with the problem of crass commercialism which was the bugbear of broadcasting in its early infancy, particularly when the Canadian broadcasting commission was first established in 1932. As a result of the United States situation, broadcasting had become the drudge of the hucksters and quite definitely the commercial influence was undesirable indeed. But now that approach to the broadcasting media has changed as well, and we find that even the C.B.C. is not averse to having its programs sponsored. Indeed, I directed to the chairman of the board a question with regard to the excellent "Wednesday Night" series which aims at a program of outstanding excellence, and the chairman of the board was quite frank in indicating that, if possible, they would have no objections to having C.B.C. "Wednesday Night" sponsored. Of course with the comparatively new medium of television, commercialism has become developed to a high art and as with advertising in that other important medium of publication, namely the newspapers, I feel that the approach to television advertising has reached a fairly high level.
At this point I should like to indicate that in the past two years something remarkable has been developing in the Canadian film industry. We have now had television for two years, and I have been quite amazed to read that in that short interval a new, healthy, thriving film industry has been developed in Canada. For example, in 1952 there were only 23 Canadian film companies operating in that field. Today there are 46 film companies operating, mainly engaged in supplying the voracious appetite of Canada's television broadcasting system. The statistics pointing to the output of films are extremely interesting. Under the heading of commercial film 50433-434J
Supply-National Revenue production of special advertisements and so on, we find that in 1952 the Canadian industry produced 111 films; in 1953, 191, and in 1954, 600. There was a tremendous increase in two years. Actually they are taking over the United States control of this field. Back in 1952, because of its head start-it will be recalled that television was late in developing in Canada-the United States film industry had almost a complete monopoly. Today Canada is moving ahead quickly in this field. As to slide films, in 1952, 31 were produced; in 1953, 48; and in 1954, 100. Then a most important commercial film activity is this one described as "Others"; that means the more ambitious film productions. In 1952 there were none; in 1953, 50, and in 1954, 200. The trend is ever onward and upward. I feel that development of this kind is encouraging indeed, so far as Canadian cultural contributions to the film and T.V. media are concerned. It shows that Canada has reached a level of maturity and a level of confidence where it can successfully compete with more powerful television film industry activities to the south of us.
To bring these remarks to a conclusion, may I say this. From listening to government spokesmen and to spokesmen from the C.C.F. party I would conclude that they see no need for change in our broadcasting policy at the present time. I can understand that attitude coming from the C.C.F. group, because any group subscribing to a doctrinaire viewpoint sets out for itself an ideological target which encompasses all the activities in a nation. Having set out the target of rigid state control for our broadcasting medium and having achieved that target, there is the tendency to feel that no change is desirable.
I trust, Mr. Chairman, that in these brief remarks I have indicated that the situation today is a far cry from the situation that existed in 1932. In 1932 broadcasting was in its infancy. We subscribed to the theory of what was called natural monopoly, or that broadcasting was a natural monopoly because of its very nature. We thought private broadcasting would wither away and that public broadcasting would come into complete possession of the field. Recent statistics, of course, refute that claim, because in 1953 there were 140 private radio stations; in 1954, 144; and in 1955, 155 private broadcasting stations.
I should like to emphasize also that Canada has grown up since 1932. If we went back to 1932 and recalled our attitude toward international affairs in that pre-war period, I am sure we would realize that the situation today has changed completely in all respects. Canada's role in world war II established her

Supply-National Revenue as a nation among the nations of the world. We no longer need to be afraid of being submerged by any other cultural influence to the south of us. Neither do I think we should be afraid of so-called powerful financial interests in the private broadcasting field. I have greater confidence in the public of Canada than to feel that they are out deliberately to demoralize or debase the national life of this country. Yet that is the implication that rests continually upon the situation when we find our public broadcasting activities under the C.B.C. retaining an absolute and complete regulatory control over its competitors. I believe that as Canadians can be trusted to do a good job in other activities in Canada under impartial regulation by an independent board, they can also do a worthwhile and public-spirited job in the field of broadcasting.
On the other hand, if public morality cannot be trusted, which is the implication in maintaining rigid state control, I would also suggest that no amount of regulation and control by the state will solve the problem. I have a quotation that I think will illustrate this point. It is entitled "The Spirit of Liberty" and reads:
Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it; no constitution, no law, no court can even do much to help it. And what is this liberty which must lie in the hearts of men and women? It is not the ruthless, the unbridled will; it is not freedom to do as one likes. That is the denial of liberty, and leads straight to its overthrow.
The spirit of liberty is the spirit which is not too sure that it is right; the spirit which seeks to understand the minds of other men and women; the spirit which weighs their interests alongside its own without bias;-
I think notwithstanding the charges and accusations made against the private operators in this field, they are activated by the same high principle as are the private operators of newspaper publications today. I trust, Mr. Chairman, that even at this late hour the slogan I enunciated at the beginning of my remarks, "Midnight is our noon", will become a reality as we proceed to an examination of this important problem.


Alfred Claude Ellis: Listening to the remarks made earlier by the hon. member for Eglinton I felt that once again we were seeing an exhibition of the chief indoor sport of Tory politicians in Canada, sniping at the C.B.C. I was very pleased that the leader of our group, the hon. member for Rosetown-Biggar, placed on the record some of the facts regarding the background of our national radio system in Canada. It is rather amusing to tie in the arguments now advanced by the members of that group with

the remarks made by their former leader at the time the national radio system was set up in Canada.
On May 18, 1932, Right Hon. R. B. Bennett moved the second reading of Bill No. 4 in respect to radio broadcasting. At that time Mr. Bennett said, as reported at page 3035 of Hansard for May 18, 1932:
-X desire to intimate to the house that in a general way it follows the committee's report which was unanimously adopted a few days ago and it is based upon principles which the government believes should be adopted, because they fulfil two essential requirements without which radio broadcasting in Canada must fail in service to the Canadian people.
Then the prime minister went on to point out some of those essentials for a national radio system. He said:
First of all, this country must be assured of complete Canadian control of broadcasting from Canadian sources, free from foreign interference or influence. Without such control radio broadcasting can never become a great agency for the communication of matters of national concern and for the diffusion of national thought and ideals, and without such control it can never be the agency by which national consciousness may be fostered and sustained and national unity still further strengthened.
Then the prime minister went on to point out the second essential of a national radio system. He said:
Secondly, no other scheme than that of public ownership can ensure to the people of this country, without regard to class or place, equal enjoyment of the benefits and pleasures of radio broadcasting. Private ownership must necessarily discriminate between densely and sparsely populated areas. This is not a correctable fault in private ownership; it is an inescapable and inherent demerit of that system.
Then Mr. Bennett added the third essential. He said:
Then there is a third reason to which I might refer, and one which I believe must commend itself to every hon. member in this chamber. The use of the air, or the air itself, whatever you may please to call it, that lies over the soil or land of Canada is a natural resource over which we have complete jurisdiction under the recent decision of the privy council. I believe that there is no government in Canada that does not regret today that it has parted with some of these natural resources for considerations wholly inadequate and on terms that do not reflect the principle under which the crown holds the natural resources in trust for all the people. In view of these circumstances and of the further fact that broadcasting is a science that is only yet in its infancy and about which we know little . . .
He goes on to point out some further considerations. I think I have read enough into the record to indicate that when national radio was first introduced in this country by a Conservative government, the Conservative prime minister laid down certain essential conditions under which radio must be developed in this country. It is rather strange today to find Conservative

members attacking the very principle upon which the Canadian radio system was first established. We find that at that time there was widespread support for this principle of public ownership of radio.
Immediately after Mr. Bennett, Hon. Ernest Lapointe spoke very briefly. He said:
I just wish to endorse the views expressed by my right hon. friend the prime minister and to say that I am in full accord with the principle embodied in this bill. I have been supporting this principle from the first, more particularly after the work of the Aird commission, but I knew the difficulties in the way and the strength of the propaganda carried on to prevent the work of that commission from having the results which we witness today.
Then Mr. Lapointe was followed by Mr. J. S. Woodsworth, the late leader of this group. He said:
I should just like to associate myself with the last speaker (Mr. Lapointe) in congratulating the prime minister on his promptness in bringing down this bill to implement the report which has been unanimously adopted.
In view of the conditions laid down by the Conservative prime minister of that day it is difficult to understand the change in attitude on the part of members of that party. It appears that the burden of their argument against the Canadian Broadcasting Corporation centres around the question of a separate regulatory body. There were many representations made about radio broadcasting to the Massey commission, and its report dealt with the question of a separate regulatory body. You will find that on page 285 of that report the commission points out:
The chief demand of private broadcasters is that in place of the present system of control exercised by the board of governors of the C.B.C., a new and separate body should be set up to regulate all broadcasting in Canada. There is a difference of opinion on the powers which it should exercise. Some suggest that it should have powers equivalent to those of the present board of governors; others have in mind something like the federal communications commission of the United States. Others again think that such control might be too irksome, an opinion shared by some American broadcasters.
And then later:
We have considered these proposals and find that they would either divide and destroy, or merely duplicate the present system of national control. Legislation to set up a separate regulatory body would alter the present national system and would result in two independent groups of radio broadcasting stations, one public and one private. The C.B.C. would no longer have the control over all clear channels considered necessary to ensure national coverage.
I think, without going further into the recommendations of the commission, that in view of the widespread representations made to that commission by interested parties, and after having given the matter very careful
Supply-National Revenue consideration, the committee has made a report which sets forth my own personal views regarding this matter of a separate regulatory body.
I realize that the C.B.C. is under constant attack. I am also aware of the fact that it is not in a position to answer many of the attacks made upon it. In this country there has been a great deal of lobbying and a great deal of pressure exercised on parliamentarians. There has been much effort to propagandize the people of Canada on behalf of private broadcasters. Certainly we continually find in our newspapers editorials and news items attacking the C.B.C. In view of the fact that there is a close tie-up between the ownership of many newspapers in this country and the ownership of many privately-owned radio stations, one can perhaps understand the point of view of some of the daily newspapers. Going through our weekly newspapers in Canada I have found that, in the main, many have not seen fit to editorialize on matters of national concern. That is, they write their editorials about local conditions. Nevertheless they seem to have the habit of coming out every month or so with an editorial against the C.B.C.
It seems difficult to believe that this is spontaneous. Newspapers which would not bother to publish editorials dealing with the plight of agriculture in the district, and which would not see fit to editorialize in respect of matters brought before parliament, seem to have the habit of coming out with editorials directed against the C.B.C., and that organization is not in a position to answer those criticisms. They are obliged to take them without any effective means of answering. And indeed they could answer, I am sure they could, and quite adequately.
The fact that the C.B.C. is criticized is a reflection on the nature of that body. The national radio set-up in Canada seeks to cater to the needs of Canadians generally. We have varied tastes in what we want to hear on the radio and see on television. It would be utterly impossible for any radio body, either public or private, to satisfy all the people in Canada at any one time. I have heard the criticism that their programs are too cultural, that they are trying to force culture down our throats. Last year we heard the Leader of the Opposition make disparaging references to the wrestling matches on Saturday night. Well, I believe the C.B.C. carries wrestling matches on Saturday night because the great majority of the people want to watch wrestling on television and I happen to belong to that majority. I must say, however, that when they were bringing wrestling from Hollywood I thought many of the wrestlers
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Supply-National Revenue would have been more qualified for Oscars to reward their acting than for any prowess they displayed as athletes. But it is a good show, and many people like to watch wrestling on television.
The C.B.C. is in an impossible position when it tries to meet the requirements and the wishes of all our people. But I wish to say this, that if we had no C.B.C., if everything were left to the control of the private broadcasters, this difficulty would not disappear. As a matter of fact I believe there would be a tendency to cater to the needs of one section of the population as opposed to another.
Many people like chamber music. On the other hand there may be a greater number who do not. It would be impossible for any radio body to satisfy the tastes of all the people in Canada, but I think the C.B.C. has done an excellent job. The hon. member for Brandon-Souris referred a moment ago to C.B.C. "Wednesday Night". That program is designed to provide the type of entertainment desired by a great many people, perhaps far more than are revealed in surveys. But I think that by and large the C.B.C. has done an excellent job in providing a varied bill of fare, if we may describe it in that way, for Canadian radio listeners and television viewers.
I do wish to make one reference to the work of the C.B.C., because as a teacher I am keenly aware of the importance of audiovisual aids to education, and I would be remiss if I did not commend the C.B.C. upon the excellence of its performances. One who has tried to teach English literature-Hamlet, Macbeth, Julius Caesar and other programs of that kind-appreciates the excellence of those programs. Indeed, it would be difficult to assemble more talented casts anywhere.
Many who are prone to criticize the C.B.C. would reveal a better spirit if they were to utter some praise for that organization. The thing that impresses me is that many of those who are so prone to criticize the C.B.C. are those who find no good in it; and I always suspect the person who can find only fault whether it be in relation to the C.B.C. or anything else. The fact that the C.B.C. is trying to serve the needs of the people of Canada leaves it in a position where it is open to criticism. It would be strange indeed if it were not criticized. They are condemned if they do and condemned if they don't. In all seriousness we have to ask ourselves this. If there were no C.B.C. and if radio were commercially controlled and operated, would we not have these difficulties?
I hear a good deal of talk about the standards of radio entertainment in the United States. Well, from the little television I have


seen in that country I have not been overly impressed. One need only consult the logs of television stations to the south of us to find that some of them have an early movie at seven o'clock and a late movie at 10.30, and they also have great amounts of advertising. And when one comes to size up the programming he realizes just how little there is in it unless, of course, he wishes to watch some old Hollywood movies that were put out many years ago, or class C productions made especially for television.
Some reference has been made in this debate to the talks heard over the C.B.C. In a democratic society we should be doing all within our power to encourage varied points of view. I would dread the thought of a society in which there was not a clash of opinion. The Leader-Post in my own constituency at one time carried at the top of its editorial page the slogan, "Where we all think alike no one thinks very much". It is quite amazing to hear some members of the committee suggest that the C.B.C. should not be allowed to carry certain talks because they do not find favour with a particular group. I for one am happy to hear points of view with which I disagree. Certainly in listening to the C.B.C. talks I find myself in diasgree-ment with many speakers. At the same time it is a challenge; it is stimulating to hear a point of view which does not coincide with your own. Perhaps we learn a great deal more from hearing the opinions of others, and it would be rather difficult to tie in our belief in democracy with a desire to exercise some sort of thought control.
The suggestion was made, why does the C.B.C. not check on what those people are going to say; why do they not keep them off the air? As much as I might disagree with a point of view, that person has the right to express his point of view. That is the strength of our democratic society. We maintain that our way of life is superior because we have free speech. In our society men may differ, and therein lies the strength of that society. If we are to succumb to the very virus which has destroyed democratic institutions in other parts of the world, then we are losing in the ideological war. In the struggle between rival ideologies our job is to convert them to our way of thinking, and not to adopt their methods. When we try to exercise some measure of thought control, then we are adopting the very methods which we abhor in others. I for one am only too happy that various points of view are expressed on our national radio.
With respect to our radio policy, it is important to remember that the conditions laid

down by the late R. B. Bennett still exist today. The very reasons he gave for the public ownership of our radio facilities in this country are as valid today as they were in 1932. These conditions have not changed. Apparently the opinions of the Conservatives have changed, but not the conditions under which the radio system was established.
When we hear a member of this house suggest that the government is following C.C.F. policy in carrying on the administration of the C.B.C., we need only go to the records of this house. I would suggest that some of my friends in the Conservative party go back and read through the debates at the time our national radio system was set up, and they will see only too clearly the valid reasons given by the late R. B. Bennett for the establishment of the Canadian radio commission on the basis of public ownership. I could read further remarks made by the late R. B. Bennett which indicate his views. For example, on page 3036 of Hansard he said:
Then there follows, of course, the provision for the commission expropriating stations when it is in a position financially so to do.
At that time there was no doubt whatever in the minds of the Conservatives and the government itself.


Stuart Sinclair Garson: The Conservatives and the C.C.F. agreed with each other at that time.


Alfred Claude Ellis: At that time there was universal agreement, as I pointed out a moment ago. After the late R. B. Bennett had put the government's position on the record, the late Ernest Lapointe rose in his place and congratulated the prime minister of the day. He was in complete agreement with everything the government was doing in the field of radio. We had agreement expressed by the leader of the C.C.F. party, the late J. S. Woodsworth. Members of the House of Commons were in complete accord as far as our national radio policy was concerned.


John Whitney Pickersgill: We heard the hon. gentleman the first time; he does not need to repeat it.


Alfred Claude Ellis: I point out to the Minister of Citizenship and Immigration the fact that we are here at twenty minutes past two is no fault of the people on this side of the house.


John Whitney Pickersgill: We are not doing the
talking.


Alfred Claude Ellis: Some lengthy speeches have been made on this estimate, none of which was made by members of this group. It is our duty to put forth our point of view on the estimates when they come up. Because the overwhelming majority on the government
Supply-National Revenue side is forcing members to sit here until twenty minutes past two is the fault of the government. I for one am not going to be intimidated into silence by hon. members opposite. When I have something to say on the C.B.C. estimates it will be said at the only time at which it can be said. I would have preferred it had the committee risen earlier and reported progress and met tomorrow. Then the remarks I have to make would be given at a reasonable time of the day, not at twenty minutes past two in the morning.
On that point, Mr. Chairman, I see no reason for this unseemly haste. We have been around here a good many months.


John Horace Dickey: Where have you been?


Alfred Claude Ellis: And there is absolutely no reason why the government should be forcing opposition members to sit here at this hour of the night.


Mr. Crestohl:: What has that to do with the debate that is now proceeding? We are not debating the time at which we should sit; we are debating the estimates of the minister.


Alfred Claude Ellis: I can appreciate the touchiness of the hon. member on that score. I remind hon. members, particularly the Minister of Citizenship and Immigration, who made some remarks in regard to the remarks I was making, that if I have any remarks to make on this item of the minister's estimates they will be made regardless of the hour of the day. I want to conclude the remarks I am making-I never thought the time would come when I would receive applause from the government benches.


An hon. Member:: Ten o'clock.


Alfred Claude Ellis: If hon. members on the other side want to show their impatience I can take my time. Hon. members will agree that I have been speaking quite rapidly in order to say what I have to say in the shortest space of time. No one can suggest that I have been unduly prolonging the debate by speaking slowly and deliberately.


John Horace Dickey: You have not been here for a week.


Alfred Claude Ellis: I am not going to answer the hon. member, because if he checks the record of the members of his own party he will find out what the score is on that point.


John Horace Dickey: We have been here.


Alfred Claude Ellis: I pointed out earlier that the Canadian Broadcasting Corporation was under almost continuous attack by the private broadcasters, and quite naturally. After all,

Supply-National Revenue that is their business. They are out to expand and get into the lucrative field of radio advertising. I do not think there is any dearth of applications for private radio stations, and it is not a question of risk capital at all. It is understandable why the private broadcasters are out to sabotage the C.B.C., because they are looking after their own interests.
The C.B.C. is doing adequate work, but it is not in a position where it can defend itself. It should be remembered that this radio system was set up with the widespread support of all parties in the House of Commons. I think it is the duty of members of parliament to point out the good work being done by the C.B.C. Those who attack the C.B.C. should do so in a more constructive manner. The director of the private broadcasters said public opinion was such that something should be done, but it has been a deliberate policy on their part to sell the idea that there is something obnoxious about the C.B.C., that it is to be abhorred, that it is a monopoly.
We know there is a monopoly in the United States, though they have a number of networks all privately-owned. People say that the C.B.C. costs the taxpayer money, while the private companies could put out programs for nothing. All of us are taxpayers and consumers, and everybody who buys a bar of soap is helping to pay for the soap operas; and this would include those who do not own radio or television sets. It is a most absurd notion people have that a program is not being paid for in one way or another. It is, and it could not be otherwise.
With a publicly-owned system the people would have some measure of control, and such a system would be amenable to the wishes of the people. In my judgment this government has not played fair with the C.B.C. The hon. member for Rosetown-Biggar pointed out that at one time certain regulations were in effect, but they exist no longer. There is no doubt that the private stations want to set up their own networks. In that connection the Massey report has this to say at page 287:
We have also received from individual broadcasters, and from the British Columbia association of broadcasters, a request for the removal of restrictions on private networks, a request not formally made by the national body, the Canadian Association of Broadcasters. At present, private stations may receive special permission to form local networks only, and a very few are permitted to have affiliations with American networks: but the general principle is maintained that the private station be operated only for local services and as an outlet for national programs.

Then they go on to say:
The general effect of private network broadcasting would, we believe, be the same as that of a separate regulatory body. It would destroy the national system.
When people advocate a separate regulatory system they are advocating the destruction of the national system.


Donald Methuen Fleming: Mr. Chairman, I have a few brief remarks in reply to some of the things that have been said during the course of the debate. I am sure all members of the government and all government supporters will be grateful to the socialist member who has just concluded his speech for the strong endorsement he has given of government policy in connection with the C.B.C., radio broadcasting and television.
I wish to deal with the remarks made this evening by the hon. member for Rosetown-Biggar, who committed a most horrible distortion of what I had said and what the party for which I was speaking contends for in regard to a separate regulatory tribunal. During my 10 years in the house I have never heard a more misleading speech than that made tonight by the hon. member for Rosetown-Biggar. He set up a series of straw men which bore no resemblance whatever to anything that had been said, and then proceeded to demolish them with great vigour.
Let me make it abundantly clear that in regard to the proposal for an independent regulatory body, we have stated in categorical terms that the two functions of the C.B.C. should be separated. Those two functions are, first, programming and operation of the national system of broadcasting; second, the regulation of all other forms of broadcasting in Canada.
Let me make it as clear as I can that we propose no change whatever in the first function. In other words the publicly-owned system would continue as a publicly-owned system. The C.B.C. would have the same operating system as at the present time. It would operate the present national system and its programs. The change would be in relation to the second function, which we propose should be transferred to another public body.
Therefore what the hon. member for Rosetown-Biggar had to say, in conjuring up all kinds of results affecting the operation of the national system and its programs, has no relation to fact and no basis in reality. It has no proper place in the debate.
He mentioned the development of Canadian talent. In the system we propose the C.B.C. would have the same opportunity as heretofore to develop Canadian talent. The C.B.C.

has done good work in the development of Canadian talent. The private stations have also done good work in the development of Canadian talent.
I would remind the hon. member for Rosetown-Biggar that the C.B.C. itself in television was not able to put the proportion of Canadian television programs at more than 50 to 55 per cent of the total. The spokesman of the Canadian association of broadcasters contended that the private stations, if they were given licenses, would be prepared to do the same.
Second, the hon. member for Rosetown-Biggar talked about the opportunity we have under the C.B.C., and would not have under the proposal that the Conservatives have put forward, to hear grand opera and symphony music. What a distortion! Many of the symphonies that are listened to in this country are of United States origin. Whatever the C.B.C. is doing in this respect as part of its programming functions it will continue to do under the system we propose.
Then we hear that we must keep the system Canadian. We of the Conservative party have nothing to learn from any other party in that respect, least of all from these socialists. These assertions by the hon. member for Rosetown-Biggar completely fall to the ground, because no change has been proposed in this respect.
As to the second function of the C.B.C., in relation to the licensing, regulation and control over all other forms of broadcasting, the hon. member for Rosetown-Biggar says, "Let us keep the licensing under public control". That is precisely what we propose. The tribunal we propose is a public body. That idea has not sunk into the minds of these socialists. If they would stop talking long enough to learn from other people, they might grasp the facts, but they will not listen to explanations of the facts.
Second, he asks that we preserve public control. That is precisely what we propose.
The third thing he said was that we must keep parliament in control. There is no more effective way of keeping parliament in control than through the establishment of the kind of public regulatory body we recommend. It is the most direct form of assertion of control through proper parliamentary means. The hon. member who puts forward this suggestion supports the kind of policies that have sought to take further and further away from parliamentary control the financing and operations of the C.B.C. The Progressive Conservative party has insisted in season and out of season on the maintenance of strict parliamentary control, and we have had no
Supply-National Revenue part in the kind of financial arrangements that are in existence today, under which C.B.C. receives five-year grants that do not permit parliamentary review every year, and which take away from parliament that form of parliamentary control through the purse strings which we should have. The C.B.C. is also taking the proceeds of excise taxes on receiving sets and tubes. Mr. Dunton himself pointed to the uncertainty of the revenues yielded by that method. Those are measures supported by the hon. member for Rosetown-Biggar and his socialist followers that were designed to take control away from parliament.
As one might expect, the hon. member for Rosetown-Biggar took advantage of the opportunity given to him tonight to distort the position of the Progressive Conservative party in this matter, and to make as well an attack on the private stations. If the private stations of this country, which have rendered an important service, as every one of us in his local community knows, looked to the C.C.F. for any measure of justice, they would go without any justice whatever. They have had nothing but antagonism and bitter attacks from the socialists at all times.
We in the Progressive Conservative party do not like private chains and we do not like the idea of stations falling into the same powerful hands. The kind of proposal we have put forward would help to arrest that kind of threat that has gone on under the present system, which is supported by the socialists. When they talk about these powerful financial interests; when the hon. member for Rosetown-Biggar lets the chills run up and down his own spine by this blood-curdling expression, he fails to see that that sort of thing is going on under the system he supports.
Of course, democracy has no place in the thoughts and the approach of the socialists. There has been little enough of it in the approach of the government. You would think the fact that people have certain preferences in regard to the programs they wish to hear has no place in the thoughts of these socialists. They are so bent on regimentation of the thinking and even the listening of the Canadian public that they have very little patience to expend on people who prefer to hear other kinds of programs.
I would say to these socialists that they can take any kind of recognized listener interest survey they choose, and they will find that in the areas where there are private stations that are permitted to have power comparable with that of the C.B.C. stations, the private stations outrank the C.B.C. stations in listener popularity. Not only does that

Supply-National Revenue apply to television but to radio broadcasting as well. It would pay them to read some of the evidence given to the committee. They would find that in the city of Toronto, for instance, United States television stations take about two-thirds of the listener interest. That is the kind of system they wish to perpetuate.
In conclusion I should like to say this. I have listened to the hon. member for Rosetown-Biggar make many speeches on radio in the committee in earlier years and more recently in the house itself. I have never heard him make a speech on radio when he did not refer to the part Mr. Bennett played in the establishment of the national system of broadcasting, for it was he who set it up in 1932. In the eyes of the C.C.F. in this one particular Mr. R. B. Bennett is a saint, but in every other reference of the socialists to Mr. Bennett you would think there is nothing of sainthood about him, for they have nothing but words of denunciation for the same man.
I wish they would get the facts straight. What Mr. Bennett did was to set up a national system of broadcasting in Canada because, under the circumstances obtaining in 1932, it was the only means for providing not just the metropolitan areas but all of Canada with a national Canadian system. That is the system he sought to set up, and it is the kind of system that I think is supported by all the members of this house today. I do not know of anybody in this house who proposes that the national broadcasting system should be displaced. Certainly we do not propose that. We are proposing changes in the function of the C.B.C. in relation to other forms of broadcasting. I hope I have made that point clear to all concerned.
Mr. Chairman, we hear complaints and bleatings from the socialists about attacks on the C.B.C. May I say that there have not been attacks on the C.B.C. in this house tonight, and that there have been few attacks on the C.B.C. at any time in previous debates. What this house has heard have been attacks on the weaknesses of the system, and attacks on government policy supported by the C.C.F. That is what has been heard.
I shall conclude by saying this. When the socialists say that the C.B.C. has no opportunity to answer attacks they are just doing plain violence to the facts, because the C.B.C. has always had full opportunity before this committee to make their statements with regard to this matter of policy.


Alfred Claude Ellis: What about before the general public?


Donald Methuen Fleming: Are you trying to regiment what the general public shall hear?


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: It is all part of this socialist thinking. Regimentation is part and parcel of their thinking, and we have these further evidences of it tonight. Indeed, they are superfluous.
The C.B.C. is afforded full opportunity in the committee to say what it wishes to say. There might be some in this house who might say that the kind of system of regulation is a matter of policy, and that it is not a proper matter for comment on the part of C.B.C. officials. We take that position with regard to government officials who appear before any committee. They are never permitted to be questioned with regard to policy or to state their opinions in that regard. But, Mr. Chairman, so far as I am aware-and I have been a member of the radio committee since 1945-no one has ever taken that position with regard to the C.B.C. Indeed, in every one of these committees Mr. Dunton has been asked for his comments on the proposal for setting up an independent regulatory tribunal, and has made his comments with full opportunity to say what he wished about it. Nobody has ever said him nay.
Therefore when the socialists try to give the impression that there is some kind of vendetta being carried on against the C.B.C., that there is some kind of injustice being perpetrated upon the C.B.C., or that there is some kind of scheme here for enthroning private interests and displacing the publicly-owned national system, they do violence to the facts.


James Joseph McCann: I do not wish to speak at length at this time except to say that this debate, which has been extremely vigorous and forceful, has also been rather illuminating. I cannot help thinking that my friend the hon. member for Eglinton has not made much ground either in the house or in the press of the country. I just want to quote from an article that appeared in the Ottawa Journal of Saturday, April 2, 1955, entitled " 'Rights' to the Air". It reads as follows:
The Prime Minister has told parliament (taking a position against that of the Liberal Federation) he considers it neither desirable nor necessary that an independent board be set up to take over the general control of broadcasting now exercised by the Canadian Broadcasting Corporation and to regulate not only private radio and television stations but the C.B.C. itself. That is the position to which The Journal invariably has given its support. Year after year this well-organized campaign of private interests against the supervisory authority of C.B.C. has been pursued with vigour and determination. Mr. St. Laurent, like his predecessors in office, is stoutly opposed to any clipping of the wings of C.B.C., but the strength behind the move for an independent board is illustrated by its ability to secure a majority in the Liberal federation itself against the wishes of the Prime Minister.

The basic issue is simple. Private interests do not possess and cannot possess any "rights" to the air. A private broadcasting interest cannot acquire anything more binding than a permit to use the airways-a permit subject to cancellation at any time by the constituted authority of the state itself. In other words a private broadcaster has a privilege but no vested interest.
That is a statement which should sink deeply into the minds of the members of this house.
This long campaign is aimed at putting C.B.C. and private interests on an equal footing and subject to the same regulation by an independent tribunal. In other words the private broadcasters thus would become endowed with vested rights to the air, which is what they have been striving for these many years. They then would occupy a position from which they could not readily be ousted-a place not subject to such effective disciplinary action as is afforded by present regulation under licence from C.B.C.
The private broadcasting interests have a good deal of influence, as this week's events have made clear. But Mr. St. Laurent's strong stand seems to leave the question settled for the moment. It would be an unfortunate day for the public if the campaign ever should succeed and obtain "rights" to the air.
I just quote that editorial to show that the press of this country are not behind what the hon. gentleman contends. Another editorial, one of April 1, 1955, shows that private broadcasters are under a false assumption entirely. This editorial reads as follows:
In the House of Commons, Prime Minister St. Laurent has given his personal opinion that a new tribunal to regulate broadcasting is neither desirable nor necessary. Many other Liberals will share his view, even though the advisory council of the national Liberal federation has recommended that the idea of some such tribunal be studied by a special commission. This idea of a "referee" is being propagated by private broadcasters who maintain, improperly, that they are in competition with the Canadian Broadcasting Corporation. If any real need were apparent, a commission might clarify matters. But so far parliament has felt competent to set the course of broadcasting policy.
After all, it is only a few years since the Massey commission was instructed as one of its tasks to consider "the principles upon which the policies of radio and television broadcasting should be based". On the basis of many briefs, public hearings, and its own investigations, it concluded that " the system recommended by the Aird commission (1929) has developed into the greatest single agency for national unity, understanding and enlightenment"
Private stations, the Massey report noted, were originally slated for elimination. But they have made a useful place for themselves within the national service. They have grown in numbers and wealth. At the same time, "the statement that the board of governors of the Canadian Broadcasting Corporation is at once their judge and their business rival implies a view of the national system which has no foundation in law, and which has never been accepted by parliamentary committees or by the general public".
The Massey commission labelled as "false" the assumption that broadcasting in Canada is an
Supply-National Revenue industry. It declared that broadcasting is a national service and would be duplicated or destroyed if some new agency were set up. As the report concluded, the dangers of too much commercialism and too much American influence are even greater in television than in radio broadcasting. For still fewer channels are available, investment is heavier, and costs are higher, while many U.S. programs are cheap.
In the circumstances, the question is whether private or public interests are to be dominant in this field. Considerations of national policy indicate that private broadcasting should be subordinate to a national service, as is now the case.
I must say that personally I subscribe 100 per cent to those views. Radio broadcasting under the C.B.C. has been successful ever since its inauguration. It is a growing concern attempting to give the people of this country a national service from the Canadian point of view. I do not believe that position can be taken by private interests. I do not see that there is any necessity or likelihood of a private regulatory body being set up.


Donald Methuen Fleming: May I ask the minister who suggested a private regulatory body?


James Joseph McCann: I meant to say an independent regulatory body. One of the recommendations of the Massey commission was that the whole subject of television and radio broadcasting in Canada be reconsidered by an independent investigating body not later than three years after the commencement of regular Canadian television broadcasting. The hon. member for Eglinton asked about this, and I am prepared to announce, on behalf of the government, that there will be either a commission or a board of inquiry set up some time within the near future to study the whole situation.
Now, Mr. Chairman, this has been a long debate. I am sure everyone is tired, and I think if you would call the estimates we might get along.


Donald Methuen Fleming: If the government is not prepared to make the required improvement or revision of its own policy, then at least, it is something that the government is prepared to appoint a royal commission to study the question and make recommendations. I should like to point out, and I do this with full respect for whatever may be the personnel of the royal commission-


James Joseph McCann: I did not say a royal commission; I said a commission or board of inquiry.


Donald Methuen Fleming: My remarks will apply just the same. The value of an inquiry by a commission or a board of inquiry will depend very largely on the personnel. I hope the government will not overlook the opportunity of getting people with practical experience to sit on that commission or board of inquiry.
6876	HOUSE OF
Supply-National Revenue


James Joseph McCann: Have you any criticism of the commission that was set up three years ago?


Donald Methuen Fleming: I have indicated many times my preference for the opinion of Dr. Surveyer who wrote the minority report. I have pointed out that of all the commissioners he was the man best qualified by technical experience to deal with the subject.


Hugh Alexander Bryson: Would the minister say why the C.B.C. application for a television station in St. John's was turned down in favour of a private organization?


James Joseph McCann: I believe the C.B.C. did give consideration to establishing a station in Newfoundland. An application was made by a private station, and after due consideration it was felt the private station in that place would serve the interests quite well. It may be that with technological improvements the C.B.C. station at Halifax may be able to serve Newfoundland at some time.


Erhart Regier: Is it still a regulation of the Canadian Broadcasting Corporation that copies of political talks must be available to the C.B.C.?


James Joseph McCann: After they are made they are kept on file, but they do not have to be submitted in advance for censorship.


Erhart Regier: What means are available, just for example, to me as a member of parliament to find out what the hon. member for Regina has stated about me over the air on a particular program?


James Joseph McCann: Just turn the dial and listen to it.


Erhart Regier: What means are available to me after the broadcast is made to find out exactly what he did or did not say?


James Joseph McCann: There is no regulation that makes it obligatory to give you a copy of someone else's speech. If you make arrangements with him, it probably would be given to you by the station or by the man himself.


Erhart Regier: In that case, what is the purpose of requiring that a copy be filed with the station?


James Joseph McCann: Just for reference; there may be a question of a violation of the regulations.


Erhart Regier: The minister has said, "for reference". For whose reference, if not the person who might be affected by something that was said?


James Joseph McCann: It would be for reference by the C.B.C. in case there might be complaints of a violation of a regulation.


Erhart Regier: Regardless of what the member for Eglinton said about the situation in Toronto, I am confident the people of the lower mainland of British Columbia are pleased with the establishment of a C.B.C. television station. The United States stations have had a poor audience in Canada ever since.


Donald Methuen Fleming: That is not the evidence that was given to the committee.


Erhart Regier: I do not place too much confidence in evidence that is gathered by organizations that have a vested interest.


Donald Methuen Fleming: Not even if their services are subscribed for by the C.B.C. with the taxpayers' money?


Erhart Regier: I may not be so opposed to the hon. member for Eglinton if he will only hold his horses. Since there are around three-quarters of a million people in this area and television has become the accepted thing in the average home, can the minister say when another privately-owned television station might be authorized for the area?


Donald Methuen Fleming: You will have to change the policy and get away from a policy of monopoly.


James Joseph McCann: We had better wait, before trying to answer that question, until a board of inquiry looks into the whole matter.


George Randolph Pearkes: Can the minister indicate whether it is the intention to set up a C.B.C. television station on Vancouver island?


James Joseph McCann: There is not any intention at the moment of having a C.B.C. station on Vancouver island. But I have no doubt if there were an application for a private station it would be entertained.


George Randolph Pearkes: But there are private stations on Vancouver island, are there not?


James Joseph McCann: I thought the hon. member was referring to a television station.


George Randolph Pearkes: I am.


James Joseph McCann: There is no television station on Vancouver island.


George Randolph Pearkes: Then we have to depend on United States stations.


Mr. Thomas:: I understand an application was made to the C.B.C. recently by private interests in Red Deer, Alberta, for a television station. Why was that application turned down? Red Deer is located directly between Edmonton and Calgary, and reception from either station is impossible. These people are being denied the right to view television and to have the enjoyment of television programs.


James Joseph McCann: Perhaps I should not tell this, hut the fact is that the application was turned down because the financial arrangements did not appear to be adequate to carry it through. However, another application could be made and it will be given consideration.


Ray Thomas: Would the minister consider having the C.B.C. set up some type of booster station in the area so these people may view their television programs from Edmonton or Calgary?


James Joseph McCann: That would have to come before the board. I am not in a position to answer at the moment.


Ray Thomas: I would like the board to give the matter very serious consideration, because it would serve a large area.


[Stage Direction]
Item agreed to.
DEPARTMENT OF JUSTICE Penitentiaries-
170.	Administration of the office of the commissioner of penitentiaries, including $40,000 for grants to recognized prisoners' aid societies, as may be approved by the treasury board, $398,326.
Erhart Regier: Has the minister the answer he said he would look up when we were discussing item 160?


Stuart Sinclair Garson: That answer was put on Hansard. Perhaps the hon. member was not here at the time.


James MacKerras Macdonnell: Mr. Chairman-


An hon. Member:: Forty minutes?


James MacKerras Macdonnell: Not a chance. It would not be my choice to keep the committee for even a moment at this hour of the morning, if it were not for the fact that I want to put on record a few things which I think are a challenge to the conscience and the common sense of every serious Canadian citizen.
When I spoke before on the question of crime and probation I used figures which appeared in the September edition of Canadian Welfare and which showed committals to prisons in Canada at 98,000 for 1950 as against 34,000 in England and Wales, and showed probation figures of 3,600 in Canada as against 33,000 in England and Wales. The minister questioned some of these figures, and I have spent a good deal of time trying to verify them.
These figures have been used freely for years. For example, they appeared in an article in the Vancouver Province in 1953. They also appeared in an article last December by the well known authority Mr. Edmi-son, in Toronto Saturday Night.
Supply-Justice


Stuart Sinclair Garson: It does not make them right; they are still wrong.


James MacKerras Macdonnell: Let me continue. Nevertheless the figure of committals is hard to verify, because there are so many different ways of approaching them. While I am not undertaking to admit that these are wrong,
I am not for a moment trying to suggest that they are right. The thing that interests me, at any rate, is the probation figures, and there has been no suggestion that the probation figures are not right.
The matter with which I am concerned, as I say, is this question of probation. We have only about one-tenth the number of people being probated in Canada that they have in England and Wales, as against the fact that our population is about one-third of theirs. So I suggest we ought to have about one-third, if this thing had been going as I have suggested it should have been going. In England they have had astonishing success. Between 1907, when the probation of offenders act was passed, and 1937, when the late Lord Samuel in a speech took stock of the situation, the number of annual commitments to prison in England over this period of 30 years had been reduced from more than 180,000 to less than 60,000; and between 1937 and 1950 the figure had dropped to approximately 35,000. This is attributed largely to the effect of probation.
The next point I wish the committee to consider is the relative success of probation as against committal to prison. In England the figure given is that from 75 to 80 per cent of first offenders placed on probation are rehabilitated and do not offend again. On the other hand, the figure for repeaters in Canada as shown in the article by Professor Jaffary, in the penal reform magazine of Canada of the Canadian Bar Review, for November, 1949, is really staggering.
In Ontario male offenders are sent chiefly to two large institutions, namely the Ontario reformatory at Guelph for first offenders and those under 21 years, and the industrial farm at Burwash for repeaters. For the year 1947 the Guelph figures show that of 1,480 inmates some 750, or 51 per cent, were repeaters. At Burwash 1,005 of the 1,039 inmates were repeaters, or 97 per cent. But that, of course, is explained by the fact that it is a place for repeaters.


Stuart Sinclair Garson: That is where they are supposed to go when they are repeaters.


James MacKerras Macdonnell: That figure does not mean much, I admit.


Mr. Lapointe:: What year is that?


James MacKerras Macdonnell: That is 1947.

Supply-Justice


Hugues Lapointe: Have you the figure for 1954?


James MacKerras Macdonnell: The picture is worse in the penitentiaries. For all Canadian penitentiaries the proportion of repeaters has been close to 80 per cent. I understand that is down slightly. It is about 76 per cent now. But that is a very high figure.
I wish now to say a word about costs.


Stuart Sinclair Garson: I wonder whether my hon. friend would permit a correction? He uses the word "repeaters". That is a word that can have a different significance in a different context. When he uses it as applied to the inmates of penitentiaries, what he means to say is that 80-odd per cent of those in the penitentiaries are people who have had some kind of previous conviction registered against them. Most of the people, when they get to the penitentiary, have a criminal record, so there is little significance to a figure of that sort. If he were to give a figure for the-


James MacKerras Macdonnell: Unless the minister wishes to ask a question related to these figures, will he please reserve his comments until I have finished? I think that is a reasonable suggestion. These are figures which were written in a responsible journal by a responsible man.


Stuart Sinclair Garson: I am-


James MacKerras Macdonnell: Mr. Chairman, will you please say who has the floor?
The Depuiy Chairman: If the hon. member for Greenwood does not permit an interruption at this time, and if the minister is not rising on a question of personal explanation, then the hon. member for Greenwood has the floor.


James MacKerras Macdonnell: I do not wish to be discourteous.


Stuart Sinclair Garson: I do not want to have the members of the committee misled.


James MacKerras Macdonnell: I resent that very much. I have read the figure. The minister is now wanting to put an interpretation of his own on it. He can do that afterwards if he likes. I am reading these figures. Unless he suggests I am distorting what I am reading, I think he had better let the matter go until he makes his comments, which he can do later.
A word is said about cost. The commission found there were some 8,000 recidivists or repeaters in Canada in 1936. Then the Ar-chambault commission carefully studied the costs of handling 188 of them, each of whom had had 10 or more convictions. The findings are startling. The convictions averaged 19 per individual. The cost of conviction was $18,000 per individual. I suppose that is

because they each had so many convictions. Maintenance costs in institutions, an average term of 11 years, added $7,450 per individual; the total cost was $25,450 per individual. Then he goes on and Professor Jaffary asks:
After spending this $25,000 per man on conviction and incarceration, what did we have to show for it? A confirmed criminal, hardened and antisocial, vowing further warfare on the community. Clearly, for all our profligate expenditure we are securing not protection but the reverse, further aggression. What kind of social policy is this?
I have dealt with the money side of these convictions, and I want to say just a word about the far-reaching moral side, the effect on the family of a convicted man, if he has a family; the stigma on the children, the support of the family while he is in jail, and the loss of his own pride.
I want to go back again to the question of probation. As I said, I think this question is a challenge to the conscience and common sense of all of us. That is the reason I am talking at this time of the night. I give as a comparison the population of England and Wales. We have little more than one-tenth of the number on probation. That is, we have 3,631 as against 33,929. I submit it would be reasonable to say that if we had dealt with the matter seriously in the sense of the Archambault report made 17 years ago, we would have approximately one-third of the number on probation. That is to say, since we have one-third of the population of England and Wales we would have one-third of the number of repeaters, or say 11,000. Therefore on this line of reasoning we have been sending to prison instead of probating some 7,000 people a year.
I am trying to make clear the basis on which I am putting this. I do not want to exaggerate it. The minister may say, "We would not have got up to that number so quickly." If he says that I would not be inclined to dispute it with him. This means on the reasoning I have been giving that some tens of thousands of people have gone to prison instead of being probated, since the Archambault report was made. As I shall point out, when the Archambault commission was appointed by the Department of Justice one of the things they were asked to do was report on probation, which they did do.
Then, having in mind the high ratio of success, 75 to 80 per cent in the case of probationers, and the poor record of those committed to prison, it is obvious that lamentable results follow. No wonder that Professor Jaffary in the Canadian Bar Review said:
Our Canadian system of handling offenders is fundamentally irresponsible, both in terms of money and in terms of human value.

I now wish to examine the record of the Department of Justice. In 1936-and I want to make very clear that this was a legacy left on the doorstep of the present minister;
I am not suggesting he is responsible for all this-the Archambault commission was appointed to report on, among other things: The conditional release of prisoners including parole or release on probation, conditional release under the Ticket of Leave Act and remission generally.
In 1938 the commission reported, and among other things recommended:
70. A probation system modelled on the system now in force in England should be adopted throughout Canada, both for adults and young offenders.
74. The pay and duties of probation officers should be the subject of an agreement between the provincial and federal authorities.
Writing in the Canadian Bar Review in November, 1949, Professor Jaffary, associate professor of the school of social work, University of Toronto, had this to say:
In Canada we have made little use of adult probation as a method of treatment.
At page 1040 Professor Jaffary says:
Why have we not used probation more?
Then he goes on to say:
Our Canadian system of handling offenders is fundamentally irresponsible. It is irresponsible because it is broken into so many separate bits and pieces that real responsibility cannot be placed. No one authority can be charged with the inefficiency of the system, with its high rates of recidivism, its wasteful costs. Hence, we have drifted-and are still drifting.
I now wish to go on and speak about the record of the federal government particularly. The Department of Justice, as was said on a famous occasion many years ago, has done too little and too late. The Archambault report was made in 1938, recommending strongly as I have indicated. So far as I can discover the federal government has done almost nothing over the past 17 years on this matter of probation.
I come to the committee to which the minister referred the other night. I am not overlooking that. So far as I can discover, the federal government has done almost nothing. When the minister was describing it the other night he took great unction to his soul because he appointed this commitee. He said the department were getting to the point where they could communicate with the provinces. The Archambault commission recommended in the strongest terms a widespread system of probation, and recommended officers jointly paid by the federal and provincial governments; yet so far as I can discover nothing has been done.
I cannot find that the provinces have been offered any encouragement, any guidance,
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any financial assistance. According to the minister, what has been done is to set up an advisory committee. I want to point out that, as I understand it, the advisory committee is to deal with remission, ticket of leave, but the commission was not asked to deal with probation as such. Whether that was an oversight I do not know. When the minister referred to it the other night as he did I was surprised to learn, as I did afterwards, that the committee apparently had not been asked to deal with probation at all. The other night the minister had a good deal to say about the importance of this committee. At page 5917 of Hansard he said:
With a view to providing the foundation upon which we could reasonably call the provinces together in a dominion-provincial conference we appointed an advisory committee.
"With a view to providing the foundation". If that statement had been made a year after the Archambault commission had reported it would have been a very natural statement, and we could accept it in good part; but when you consider that the Archambault commission reported 17 years ago, we find the minister saying 17 years later that with a view to providing a foundation upon which they could reasonably call the provinces together in a dominion-provincial conference, an advisory committee was appointed. Then the minister said that if they could get a report, which they expected to receive about October of this year, they would then have a mass of data that could be placed before the provinces in a matter which was their business, and carry on an intelligent discussion in the dominion-provincial conference in the hope that they could get all the provinces at the same time to instal a system of probation.
Then the minister said that when they got the report this fall they would bring it before the house at the next session. It was hoped that on the basis of that report they could call together the attorneys general of the provinces and discuss the whole problem.
I was glad to hear those words of the minister, and if they had been uttered in 1939 or 1940 I would have had nothing but praise for them. But what has happened? There was year after year of delay. We must remember that the war years intervened, and I would not care to be critical of the fact that nothing was done then. But there have been 10 years since then. It goes far beyond the minister's period of office, but it does not go back beyond the government's period of office, about which we are so often reminded.
These extracts indicate that the minister seems to think that after 17 years, if they take preliminary steps to get the provinces together that is sufficient. I submit that the

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report of the Archambault commission was a good one, and it was commissioned by the Minister of Justice. The advice given there is crystal clear, but after all these years so far as I can discover nothing has been done to bring the provinces together and give them a lead. The Minister of Justice might fairly be regarded as the custodian of justice, yet so far as I can discover nothing has been done. When he spoke two or three weeks ago the minister was reduced to saying that they were taking steps with a view to getting the provinces together, and were trying to do now what the Archambault commission recommended 17 years ago. In the interval tens of thousands of people who might have been probated have gone to prison with all the terrible results that follow.


Stuart Sinclair Garson: Mr. Chairman, I am glad to see that the hon. member for Greenwood has receded somewhat from the position he took on the last occasion on which he brought up this matter, at which time he was sufficiently gullible in relation to the figures he had examined that he came to the conclusion that we still have nearly 10 times as many convictions, proportionately, as they have in England. The figures he quoted, and which he excused himself for misinterpreting just a few moments ago by saying that others had done the same, are figures which as I think he himself noted merely represent admission of individuals into penal institutions.


James MacKerras Macdonnell: Would the minister agree that the probation figures are correct?


Stuart Sinclair Garson: If my hon. friend will just permit me to deal with his figures, the figures which led him to this ridiculous conclusion, I should like to clear that up because I do not want to have it go out from this committee all over Canada that any such statement as his is even remotely correct. If my hon. friend had taken pains he could have obtained the figures from the dominion bureau of statistics, which would have indicated that the very opposite was true.


James MacKerras Macdonnell: I took the figures in good faith, and they have been used by responsible people.


Stuart Sinclair Garson: They were all wrong. Then the hon. member made another speech this evening based on another set of facts and some more figures which may be just as inaccurate and just as misinterpreted as the ones he used on the previous occasion. The fact is that in Canada in 1952, as compared with England, there were for indictable offences-serious offences-29,761 convictions as against 131,047 in England and Wales.

Canada with about a third the number of persons provided less than a quarter of the convictions in England and Wales. The last time my hon. friend spoke he said we had 10 times as many convictions here in proportion to population.


James MacKerras Macdonnell: If the minister would deal with other than indictable offences he would find a somewhat different story.


Stuart Sinclair Garson: I shall be very glad to do that on some more suitable occasion. My hon. friend, however, is quite right in saying that the real issue in this matter is the question of how soon we can have the provinces of Canada instal systems of probation. My hon. friend has left the impression that the Department of Justice-not, as he has so charitably said, while I was minister-did nothing about the Archambault report. Well, let us look at the facts of the matter. The hon. member conceded that obviously very little could be done during the war in the implementation of the Archambault report; but he charges that since the end of the war the Department of Justice has done nothing.
I am speaking from memory, but I think the figures are correct. In April, 1946, Major General Gibson was appointed commissioner of penitentiaries and instructed to bring in a report as to the basis on which the recommendations of the Archambault commission could be implemented. He made his report in February, 1947, and the necessary legislation was introduced, passed and assented to in June, 1947, to become effective September 1, 1947.
Out of the 88 recommendations in the Archambault report, 68 involved action by the federal government. The other 20 involved either joint action with the provinces or were the sole responsibility of the provinces or of local communities. Of the 68 recommendations which called for action by the federal government, at least 54 have already been implemented or are now in the process of being carried out. It is the implementation of those recommendations which came under federal jurisdiction which has greatly improved the penal system of this country, as I am glad to see that my hon. friend from Greenwood concedes.
Apparently, however, my hon. friend's research did not disclose the fact that there was a dominion-provincial conference in 1947, one year after Major General Gibson had filed his report. There was a discussion at this conference as to the means by which the Archambault report could be implemented, both as regards those matters which came under the responsibility of the federal government and those matters which were

the responsibilities of the provincial governments. Very little progress was made at this conference. The purpose of the appointment of the Fauteux commission was to get a mass of data relating to probation.


James MacKerras Macdonnell: That was six years later.


Stuart Sinclair Garson: That is quite true; but in the meanwhile the hon. member for Greenwood has left the impression that the provinces have no capacity for starting any probation system of their own, and that they are quite incapable of carrying out any recommendations of the Archambault commission for which they are constitutionally responsible. But the facts of the matter are that four or five of the provinces at the present time have made a respectable beginning on a probation system. One of the provinces my hon. friend from Greenwood has overlooked is his own province of Ontario.


James MacKerras Macdonnell: I was talking about the
dominion.


Stuart Sinclair Garson: The hon. gentleman from
Greenwood implies that we could not have a system of probation in the Canadian provinces except by the federal government prodding the provincial governments into discharging what is their responsibility and nobody else's. British Columbia, Ontario, Alberta, Saskatchewan and Nova Scotia have already begun without any inspiration on the part of the federal government provincial systems of probation. The Fauteux advisory committee was appointed to secure in an objective manner data which we hope will appeal to all the provinces of Canada and induce them to introduce provincial probation systems. As the hon. member for Greenwood has said, the results which have been obtained from probation in Great Britain and in other European countries have been spectacularly good.
It is perfectly clear that money invested in a probation system is much more efficiently invested than it would be in an increase in penitentiary or gaol accommodation. I said the other day that this is not a new subject. We have been conscious of its importance for some time; and it was with a view to persuading all the provinces to follow the example set by some of them that we are getting these data together. We hope to be able to persuade all the provinces to act.
There is no difference of opinion whatsoever between the hon. member for Greenwood and myself, as to the value of probation. My only purpose in rising is so that the record will not be left in the condition in which my hon. friend for Greenwood left it. He
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has cast an aspersion on those preceding me in the Department of Justice on the ground alleged by him that inadequate steps had been taken to interest the provinces in probation. The facts are that as soon as the war was over, Major General Gibson was appointed as the very efficient commissioner of penitentiaries, and the necessary legislation was expeditiously introduced into parliament to implement the recommendations of the Archambault report for which the federal government was responsible.
One of the very first steps taken was a conference with the provinces in the fall of 1947 for the purpose of discussing the implementation of the Archambault report. That has been followed by the carrying out of probation in certain of the provinces, and the purpose of our present activities is to see that what was begun in four or five provinces should be extended to all of them. I cannot see that the Department of Justice at any stage has been remiss in the discharge of its duties.


[Stage Direction]
Item agreed to.
171.	Operation and maintenance of penitentiaries, including supplies and services relating thereto: administration, operation, repair and upkeep of buildings, works and equipment: maintenance, discharge and transfer of inmates; compensation to discharged inmates permanently disabled while in penitentiaries, $8,927,174.
Gage Workman Montgomery: This item states "discharge and transfer of inmates; compensation to discharged inmates". Would the minister say whether the penitentiaries are overcrowded, from what penitentiaries transfers have to be made to others, and what the government contemplates in the way of new buildings and arrangements for looking after prisoners and feeding them in a more modern manner, as recommended by the Archambault commission?


Stuart Sinclair Garson: With regard to transfers, my hon. friend will appreciate the fact that it is the total accommodation in all the penitentiaries of Canada which determines our ability to handle all the prisoners who come into any penitentiary for admission. Most of the transfers to which reference is made are transfers from either Quebec or Ontario, at the present time, to the western provinces in certain cases and to the maritime provinces in others. The larger centres of population in Quebec, Ontario and British Columbia are the ones which produce what might be described as surplus penitentiary population which has to be accommodated in other places where the local production of convicts is lower and where as a result they cannot fill their penitentiaries with local convicts. I am proud of the fact

Supply-Justice
that the part of Canada from which I come seems to be incapable of keeping our western penitentiaries full.
So far as new accommodation is concerned, our thought was to construct a penitentiary for women at Collins Bay with a view to the transfer of the women prisoners from the present building in which they are incarcerated at Kingston. This is a separate building, but one of the Kingston group. Then our plan is to use the vacated building at Kingston as a centre where we can take the prisoners when they come into the penitentiary in the first place, so they can be held there until we can determine in what part of the penitentiary itself they should go. This will help to avoid having younger offenders come into contact with older criminals.
In addition to that one new structure, we plan on having a larger penitentiary in eastern Canada, that is in either Quebec or Ontario, to take care of the growth in penitentiary population in that part of Canada, and another one in either Alberta or British Columbia, to take care of the growth in prison population there.


Gage Workman Montgomery: Might I ask the minister one more question. It says "compensation to discharged inmates". Is there any set rule as to how much a prisoner gets on discharge? How much money is used for that purpose?


Stuart Sinclair Garson: There is a set formula. In addition to that, the prisoner is paid for his work while he is in the penitentiary. He has any accumulated savings which are available from that source as well when he is discharged.


Gage Workman Montgomery: Are different types of work carried on in each penitentiary? For instance, I am thinking at the moment of Dorchester. What particular work is carried on there? Are any goods manufactured, or is farming carried on, or what is done?


Stuart Sinclair Garson: Mr. Chairman, lacking at this late hour the assistance of my staff I am afraid I am not able personally to give any details with regard to the work at Dorchester or the other prisons; but such work varies from prison to prison. In some places, for example, there is a great deal of printed forms and other printed material prepared for use in the penitentiaries and ir other government departments. In other prisons, or perhaps in the same prison, we produce large quantities of prison clothing and shoes. In other prisons-and I think this is true of Dorchester to which the hon. gentleman has just referred-farming operations are carried out on a considerable scale. The total production for all the penitentiaries across

Canada runs into substantial sums of money under all these heads, and is quite an important source of revenue on the other side of the ledger to the moneys which we are obliged to expend to maintain the prisons.


Gage Workman Montgomery: I have just one more question. I take it that this production from the labour of the penitentiaries is sold more or less to the government and that it is not sold to the public. Is that right?


Stuart Sinclair Garson: Yes, that is right. It is sold to other government departments. A great deal of it is used within the prison itself. For example, the consumption of food in our penitentiary system is very substantial. A very large percentage of it indeed is grown and prepared upon the penitentiary properties. The same thing is true with respect to clothing. A large percentage of it is manufactured in the penitentiaries.


Gage Workman Montgomery: Are the inmates credited with the amount of labour they do?


Stuart Sinclair Garson: They are credited with wages for that labour.


George Hugh Castleden: Mr. Chairman, the reply the minister gave to the hon. member for Vic-toria-Carleton seems to be denied by a recent report from the province of Saskatchewan to the effect that the penitentiary at Prince Albert is somewhat overcrowded, and that fact has been part of the cause of the recent trouble there.


Stuart Sinclair Garson: No. I cannot remember the figures exactly, but I think they were 660 and 630, if I am not mistaken. In other words, the capacity of the penitentiary at Prince Albert was 660 and its population was 630. It therefore could not have been overcrowded because that number would not even fill it to capacity, much less overcrowd it.


George Hugh Castleden: The trouble then was not due to overcrowding?


Stuart Sinclair Garson: No.


George Hugh Castleden: What was given as the cause of the uprising? I understand that some conditions were not in line with ordinary procedure, and that they might have been short of staff.


Stuart Sinclair Garson: No, they were not overcrowded. They were not short of staff. They had had beforehand very few complaints of the character of those which are sometimes given by rioting convicts as the reason for their action. More than that, only a small percentage of the prisoners took part in the riot. I am sorry I cannot give now any more facts than these. We are having an investigation conducted at the present time by the

eputy commissioner. I will not be in a posi-Lon to make a more detailed statement until fter we have received his report. But those auses which are sometimes regarded as a iossible reason tor these occurrences were 11 conspicuous by their absence in the resent case.


George Hugh Castleden: I see that in the vote for his department-I guess perhaps it is vote 72-the sum of $148,000 is expected to be pent this year on construction, improvements ind new equipment in Saskatchewan.


Stuart Sinclair Garson: Yes.


George Hugh Castleden: And I note that last year the imount of vote was $136,000. That is as far is the Saskatchewan penitentiary was con-:erned. Was the $136,000 used last year?


Stuart Sinclair Garson: I think so.


George Hugh Castleden: Full details are not given lere.


[Stage Direction]
Item agreed to.
Resolutions adopted in committee of supply ;his day reported, read the second time and incurred in.
Mr. Deputy Speaker:: When shall the com-nittee have leave to sit again?


An hon. Member:: Later this day.


Mr. Deputy Speaker:: Next sitting of this douse.



BUSINESS OF THE HOUSE

Walter Edward Harris: the adjournment of the house.
He said: Mr. Speaker, I understand that we have left the estimates of the privy council and those allied to it; the estimates of finance and those that report to the minister, and a supplementary in fisheries. We shall continue with those today in that order.
Motion agreed to and the house adjourned at 3.50 a.m.
[The following items were passed in committee of supply]:



DEPARTMENT OF MINES AND TECHNICAL SURVEYS

[Stage Direction]
A-Department-
Administration services-
208.	Departmental administration, $487,981.
Explosives Act-*
209.	Explosives Act-administration, operation and maintenance, $98,340.
Mines branch-
210.	Mines branch administration, $97,018.
Supply
Mineral resources investigations-
211.	Administration, operation and maintenance, including a grant of $12,500 to the Canadian institute of mining and metallurgy to assist in defraying the cost of the sixth empire mining and metallurgical congress to be held in Canada in 1957, $2,433,296.
212.	Construction or acquisition of new equipment, $158,500.
Investigations of radioactive ores-
213.	Administration, operation and maintenance, $342,247.
214.	Construction or acquisition of new equipment, $97,790.
215.	To provide for payments to McGill University in connection with the development of a coal-fired gas turbine, $110,000.
Geological survey of Canada-
Geological surveys-
216.	Administration, operation and maintenance, including the expenses of the national advisory committee on research in the geological sciences, an amount of $1,875 for Canada's share of the cost of the committee on mineral resources and geology, London, England, and an amount of $25,000 for grants in aid of geological research in Canadian universities, $2,394,637.
217.	Construction or acquisition of new equipment, $104,000.
Surveys and mapping branch-
218.	Surveys and mapping branch administration, $56,536.
Topographical surveys, including expenses of the Canadian board on geographical names-
219.	Administration, operation and maintenance, $1,592,065.
220.	Construction or acquisition of new equipment, $106,000.
Canadian hydrographic service-
221.	Administration, operation and maintenance, including Canada's annual contribution of $4,200 to the international hydrographic bureau, $2,830,784.
222.	Construction or acquisition of buildings, works, land and new equipment, $1,643,852.
223.	Geodetic survey of Canada-administration, operation and maintenance, $554,938.
224.	International boundary commission, $61,081.
225.	Legal surveys and aeronautical charts, including a grant of $350 to the Canadian institute of surveying and photogrammetry, $669,502.
226.	Provincial and territorial boundary surveys, $54,450.
Map compilation and reproduction-
227.	Administration, operation and maintenance, $917,636.
228.	Construction or acquisition of new equipment, $44,300.
Geographical branch-
229.	Geographical branch-administration, operation and maintenance, including a grant of $250 to the Canadian association of geographers, $300,345.
Dominion observatories-
Dominion observatory, Ottawa and field stations-
230.	Administration, operation and maintenance, including membership fee of $500 to the international astronomical union and a grant of $3,500 to the royal astronomical society of Canada, $515,420.
231.	Construction or acquisition of buildings, works, land and new equipment, $97,050.
[Stage Direction]
Supply
232.	Dominion astrophysical observatory, Victoria, B.C., $116,663.
General-
233.	Payments to the Royal Canadian Air Force and commercial companies for air photography, and to provide for the expenses of the interdepartmental committee on air surveys, including purchases of equipment, $1,250,000.
A-Department-
Mines branch-
678.	Mines branch administration-further amount required, $2,500.
Mineral resources investigations-
679.	Construction or acquisition of new equipment -further amount required, $40,000.
Surveys and mapping branch-
Topographical surveys, including expenses of the Canadian board on geographical names-
680.	Construction or acquisition of new equipment -further amount required, $20,000.
Canadian hydrographic service-
681.	Administration, operation and maintenance- further amount required, $27,500.
682.	Legal surveys and aeronautical charts- further amount required, $12,260.
Dominion observatories-
Dominion observatory, Ottawa and field stations-
683.	Construction or acquisition of buildings, works, land and new equipment-further amount required, $9,390.

[Stage Direction]
420.	Departmental administration, $254,215.
421.	Companies division, $89,631.
422.	Trade marks division, including a contribution of $2,400 to the international office for the protection of industrial property, $164,341.
423.	Bureau for translations, $1,122,139.
Patent and copyright office-
424.	Administration division, $131,315.
425.	Patent division, $1,153,353.
426.	Copyright and industrial designs division, including a contribution of $2,100 to the union office for the protection of literary and artistic works, $26,050.
Special-
427.	To provide for special expenditure in connection with a commission under the Inquiries Act to inquire into the working of the Patent Act, the Copyright Act, the Industrial Designs Act and other related legislation, $35,000.
735.	Departmental administration-further amount required, $2,350.
736.	Trade marks division-further amount rerequired, $3,000.
Patent and copyright office-
737.	Administration division-further amount required, $3,000.
738.	Patent division-further amount required, $73,000.
Public printing and stationery-
346.	Departmental administration, $489,936.
347.	Purchasing, stationery and stores, $494,090.
348.	Distribution of official documents, $292,091.
349.	Printing and binding of official publications for sale and distribution to departments and the public, $380,000.
350.	Printing of Canada Gazette, $110,000.
351.	Printing and binding the annual statutes,. $35,000.
352.	Plant equipment and replacements, $413,775. 703. Plant equipment and replacements-further
amount required, $133,985.
Office of the chief electoral officer-
58. Salaries and expenses of office, $61,025.
Civil service commission-
84. Salaries and contingencies of the commission, $2,604,585.

[Stage Direction]
Customs and excise divisions-
286.	General administration, $3,294,791.
287.	Inspection, investigation and audit services, $3,491,435.
Ports, outports and preventive stations-
288.	Operation and maintenance, $23,806,542.
289.	Construction or acquisition of buildings, works, land and new equipment, $845,150.
Taxation division-
290.	General administration, $2,524,429.
291.	District offices, $25,014,588.
Income tax appeal board-
292.	Administration expenses, $80,790.
Customs and excise divisions-
691.	General administration-further amount required, $48,100.
Ports, outports and preventive stations-
692.	Construction or acquisition of buildings, works, land and new equipment-further amount required, $25,000.
Canadian Broadcasting Corporation-
International shortwave broadcasting service-
56.	Maintenance and operation including authority to credit to the appropriation revenue from the rental of facilities in Radio-Canada building and at Sackville, New Brunswick, to an amount of $215,000 and to re-expend these moneys for the purposes of the international service, $1,614,625.
57.	Construction or acquisition of buildings, works, land and new equipment, including supervision, $193,200.
International shortwave broadcasting service-
641. Construction or acquisition of buildings, works, land and new equipment, including supervision-further amount required, $56,645.
Loans, investments and advances-
785. Loans to the Canadian Broadcasting Corporation repayable with interest at a rate to be fixed by the governor in council on such terms and conditions as the governor in council may determine and to be applied in payment of expenditures to cover capital costs of television installations and to support the development of the service. Such loans, with interest, shall be a charge on the revenues of the Canadian Broadcasting Corporation next after the charge imposed under the provisions of section 17 of the Canadian Broadcasting Act, 1936, $8,500,000.

[Stage Direction]
A-Department-
Combines Investigation Act-
666.	Restrictive trade practices commission-further amount required, $7,200.
667.	Office of investigation and research-further amount required, $24,500.

B-Penitentiaries-
170.	Administration of the office of the commissioner of penitentiaries, including $40,000 for grants to recognized prisoners' aid societies, as may be approved by the treasury board, $398,326.
171.	Operation and maintenance of penitentiaries, including supplies and services relating thereto; administration, operation, repair and upkeep of buildings, works and equipment; maintenance, discharge and transfer of inmates; compensation to
Supply
discharged inmates permanently disabled while in penitentiaries, $8,927,174.
172.	Construction, improvements and new equipment, $1,322,390.
B-Penitentiaries-
668.	Operation and maintenance of penitentiaries -further amount required, $327,600.
669.	Construction, improvements and new equipment-further amount required, $418,700.
[Stage Direction]
Wednesday, July 27, 1955