1956-06-12

THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the house that I have received the following communication:
Sir:
Ottawa, June 12, 1956
I have the honour to inform you that the Honourable Patrick Kerwin, Chief Justice of Canada, acting as Deputy of His Excellency the Governor General, will proceed to the Senate chamber today, the 12th June, at 5.45 p.m., for the purpose of giving the royal assent to certain bills.
I have the honour to be, sir,
Your obedient servant,
J. F. Delaute,
Secretary to the Governor General (Administrative).



BANKING AND COMMERCE

[Stage Direction]
Seventh report of standing committee on banking and commerce.-Mr. Hunter.


Hon. W. E. Harris (Minisier of Finance):: Mr. Speaker, the house will recall that when the resolutions on the income tax bill were passed by the house the bill itself had not been printed. It has now been printed and I would ask leave for you to call the first reading of bills so I may present the bill today.



INCOME TAX ACT

Walter Edward Harris: for leave to introduce Bill No. 418, to amend the Income Tax Act.


Mr. Speaker:: Has' the hon. gentleman leave to introduce this bill?


Mr. Knowles:: By leave.
Motion agreed to and bill read the first time.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, may I ask the Minister of Finance -I was going to ask the Minister of Public Works the same question also, but perhaps
the Minister of Finance can answer for both -what steps the government proposes to take in the light of the situation resulting from the conflict in government policy between the tightening of money on the one hand, under the measures taken by the Bank of Canada with government approval, and on the other hand the lending operations under the National Housing Act, which have resulted in a very serious scarcity of mortgage funds in metropolitan areas?


Walter Edward Harris: Mr. Speaker, the hon. member for Winnipeg North (Mr. Stewart) sent me notice a few moments ago that he intended to ask the same question, based on a telegram that had been received from the Toronto area. I would not want to give an answer-


Donald Methuen Fleming: The Toronto metropolitan home builders' association.


Walter Edward Harris: I think the same telegram went to both hon. gentlemen. I would not want to give an answer at the moment, sir, in the absence of the Minister of Public Works. I understand he will be returning perhaps tomorrow-I am not sure-and I will speak to him about it.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. J. Wilfrid Dufresne (Quebec Wesl):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs but in his absence I will direct the same question to the Prime Minister. Does the Prime Minister care to comment on a press report that appears in the French paper Le Droit of today from the France-Presse agency to the effect that Canada would now be ready to recognize Tunisia and French Morocco?


Right Hon. L. S. St. Laurent (Prime Minister):: The matter, Mr. Speaker, is under consideration. Tunisia and Morocco have been recognized by several powers and the question as to whether or not it would be appropriate for us to extend recognition at this time is under consideration.

Inquiries of the Ministry REQUEST FOR STATEMENT ON DISCUSSIONS WITH EARL OF HOME
On the orders of the day:


Mr. E. D. Fulton (Kamloops):: Could I ask
the right hon. gentleman whether he is now in a position to make a report as to the discussions that took place between members of the Canadian government and the Secretary of State for Commonwealth Relations of the United Kingdom government, about which I inquired yesterday, and as to the conclusions, if any, arrived at as a result of those discussions, which I assume might form a basis, as it were, for the forthcoming conference?


Louis Stephen St-Laurent: There were no conclusions arrived at. They were very frank discussions about many of the problems which are of concern to all of us who are interested in commonwealth affairs. They were of a confidential nature, of course. There was no memorandum or summary prepared afterwards of these discussions, and quite frankly I do not think it would be helpful to go beyond what I have said about the details of those conversations.
There were no conclusions reached. We were endeavouring to explore with a view to being able to reach a position where we would, after discussion at the conference, come away with a disposition and the material that would enable all of us to make such decisions as were required and that would be in accord with each other.


LABOUR CONDITIONS
[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, may I ask the Minister of Labour whether he is in a position today to give a reply to my question of last Friday concerning the importation of United States welders into British Columbia to work on the Westcoast Transmission line?


Hon. Milton F. Gregg (Minister of Labour):: Yes, Mr. Speaker. The hon. member for Vancouver-Quadra, the hon. member for Vancouver East and others have raised this point.
On the subject of the complaint from the British Columbia welders' association regarding the entry of 14 welders from the United States, our regional office of the unemployment insurance commission in Vancouver is keeping in close touch with this situation and has worked closely with the immigration branch, to which employers must first apply

for the admission of various workers into Canada. The immigration branch in turn gets in touch with the national employment service to ascertain whether or not Canadian workers are available who are able to do the work concerned, and only if they are unable to recruit the skilled workers needed are American workers admitted to Canada.
The united association of plumbers and pipe fitters, who hold a collective agreement with the pipe-line contractors, the British Columbia office of the unemployment insurance commission and the immigration branch considered that the employers' requests for stringer-bead men for front end crews were genuine, as it is not always possible at the moment to find in Canada a sufficient number of stringer-bead men.
I think I should say, Mr. Speaker, that this type of employee, namely the stringer-bead man, is the ultimate as a welder. He starts the weld at the joint and it is most important that this start be made faultlessly. The joint must be firm and exact, and it requires highly experienced men to effect it. Less experienced welders complete the joint started by the stringer-bead man who continues on to start the next joint. Thus, for every two stringer-bead men employed, 12 to 18 other welders are required. Our office was unable to find sufficient bead men who were able to meet the rigid test required for this operation and, as a consequence, the 14 welders in question were allowed in from the United States.
Our regional office made a study of the various companies presently employing welders and found that, of a total of 79, 66 are Canadians and 13 Americans.
All the pipe-line contractors are still field testing welders and building up their crews for maximum activity. It is anticipated that in the weeks to come all qualified Canadian welders will be employed either on the main line, the feeder lines or on municipal distribution systems.


Howard Charles Green: May I ask the minister a supplementary question. Is there any limit on the length of time these United States welders can remain in Canada, because so often this is used as an excuse to get them in and then they stay? Can anything be done to prevent that occurring in this case?


Milton Fowler Gregg: That point will be watched, Mr. Speaker. I might say that as the men I have referred to here as follow-up welders are trained to be bead men they can take the places of those now doing that part of the operation.


Howard Charles Green: Is any limit placed on the time these men may remain in Canada?


Milton Fowler Gregg: I have no information as to that at the moment.


Mr. Harold E. Winch (Vancouver East):: May I ask a supplementary question of the Minister of Labour. In view of his statement that the immigration department inquired of the employment service in British Columbia if there were any qualified welders available, was inquiry also made of the union of welders as to whether they had any qualified men?


Milton Fowler Gregg: The three bodies are working in close co-operation, that is the union, the immigration branch and the national employment offices.


Harold Edward Winch: Why is it that we have received a wire from the union stating that they have qualified men and at the same time men are being brought in from the United States? How could that happen if they have been working in co-operation with the union?


Milton Fowler Gregg: I cannot answer the question as to why, but from the information I have been able to get the figure of 80 which was mentioned is in excess of the number of qualified Canadian welders who had taken training in welding and were not yet employed under this arrangement


REPORTED STRIKE ON STEAMSHIP &quot;PRINCESS HELENE&quot;
[Stage Direction]
On the orders of the day:
Mr. G. C. Nowlan (Digby-Annapolis-Kings):: In view of the seriousness of the question I raised yesterday-I realize it was only yesterday-I wonder whether the Minister of Labour is in a position to reply to that question, with respect to the strike on the Princess Helene.


Milton Fowler Gregg: The matter is being considered by the parties concerned today. I am not prepared to make any statements with regard to the matter as yet.


George Clyde Nowlan: As a supplementary question, can we understand that the minister will make a statement after the consideration of today?


Milton Fowler Gregg: Just as soon as I receive a report.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. Michael Starr (Ontario):: Mr. Speaker, I should like to direct a question to the right
Inquiries of the Ministry hon. Prime Minister. Can the Prime Minister advise when he will be able to answer the question I asked on May 9 regarding the shortage of scientists?


Louis Stephen St-Laurent: I did secure the information, and I was informed that there was constant contact between the employment services and those who require skilled labour. I was informed that this was almost a daily occurrence at some one or other of the employment services. I was told also that at the present time there is an intensive survey being made for two purposes: one, for the publication this year of the biennial report on the skilled labour situation in Canada, and the other to supply the commission on Canada's economic prospects with information about the skilled labour situation. This will be a more intensive and direct survey than has been made at any time previously with regard to skilled labour.



REVISION OF SALARIES OF TEMPORARY EMPLOYEES

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Finance. Can the minister say whether the pay cheques to be received by the sessional employees of the House of Commons on June 15 will include the salary increases announced by Your Honour on April 9 and confirmed by Your Honour and the minister on May 7? If not, can the minister say when these increases will come through?


Walter Edward Harris: If my hon. friend is referring to the sessional employees the answer is that the internal economy commission has authorized an increase in pay which was spoken of at that time and presumably it will be in time to have it included in the June 15 cheques. However, the decision was made only yesterday and it may take more than a day or two to do that. But the decision has been made, and I am sure the employees will receive additional pay.


Stanley Howard Knowles: Is it understood that these increases will be retroactive to April 1?


Walter Edward Harris: Yes.



COMMONWEALTH CONFERENCE


[Stage Direction]
On the orders of the day:
Edmund Davie Fulton: Mr. Speaker, may I ask the right hon. Prime Minister

Inquiries of the Ministry whether it is anticipated that at the forthcoming commonwealth prime ministers' conference such matters as the status of Cyprus and Ceylon, and indeed the whole position in the Middle East and any such similar matters will be brought up for discussion and, if so, what will be the position with respect thereto taken by the government of Canada?


Louis Stephen St-Laurent: With respect to Cyprus, the hon. gentleman knows that is a matter which concerns the government of the United Kingdom, and I would not anticipate that there would be advice or criticism volunteered. I have no doubt that the matter will be raised for discussion at the conference. With respect to Ceylon, I do not think it would be proper for me to say anything publicly. The hope is that Ceylon will wish to remain in the commonwealth, and it would be the opinion of the Canadian representatives that that would be a desirable solution.
I hope that with a frank discussion of these problems, which are real and serious, it will be possible, if not to make decisions, to get ourselves into a frame of mind where the decisions of all those participating will be similar and will be conducive to the settlement, or at least the easing, of those problems.



REQUEST FOR ANSWER TO QUESTION ON ORDER PAPER

[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilton (Notre Dame de Grace):: Can the Minister of Transport inform the house when an answer will be forthcoming to my question No. 518 on the order paper?


Hon. George C. Marler (Minister of Transport):: I think it is the intention, in view of the question of my hon. friend, to make it an order for return tomorrow and give him the information as soon as it is available.


William McLean Hamilton: As
a supplementary question, is the minister aware that this information is constantly tabulated in his own department?


George Carlyle Marler: I have not got to the point where I require information from my hon. friend as to what goes on in my own department. When all the information asked for is available it will be brought down.



NATURAL RESOURCES


[Stage Direction]
On the orders of the day:
Mr. F. S. Zapliiny (Dauphin):: May I direct a question to the Minister of Northern affairs


and National Resources? Has the minister received a petition from Mr. August Fontana, of Virden, Manitoba, seeking redress for the loss of certain mineral rights as a result of action taken by this government? If so, what action has the minister taken as a result of this petition?


Hon. Jean Lesage (Minister of Norihern Affairs and National Resources):: Mr. Speaker, if my memory serves me right there was a petition addressed to the government last year, and after considering the petition the government decided not to grant it.


Frederick Samuel Zaplitny: The petition I refer to is of more recent date. Perhaps I should send a copy to the minister, and I shall do so in order to refresh his memory.



IMMIGRATION


[Stage Direction]
On the orders of the day:
George Clyde Nowlan: May I direct a question to the Minister of Citizenship and Immigration. Can he advise the house if Mr. Hal Banks, president of the S.I.U., has acquired the status of a naturalized Canadian citizen?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: I should think, sir, that as he was only landed as an immigrant the day before or a day or two after I became minister, I cannot remember which, he would not have been here the required five years.


George Clyde Nowlan: May I direct a supplementary question to the Minister of Citizenship and Immigration. In view of the fact that, according to my recollection, the house was informed by the minister's predecessor some time ago that Mr. Banks arrived in Canada in 1951 as a landed immigrant, would the minister recheck his files so as to be in a position to answer the question?


John Whitney Pickersgill: It is quite unnecessary to do so, sir. Mr. Banks was in Canada as a visitor for quite some time before he was landed as an immigrant. Although I cannot say whether the precise date was June 30 or July 1, 2 or 3 of 1954, it was some time within that week that he was landed as an immigrant, and his time for citizenship would count only from that date.



DOMINION-PROVINCIAL RELATIONS FISCAL ARRANGEMENTS    INQUIRY AS TO AGREEMENTS WITH PROVINCES

[Stage Direction]
On the orders of the day:
Harold Edward Winch: should like to direct a question to the Prime

Minister. In view of the statement of the Prime Minister yesterday that a bill on dominion-provincial financial relations will be introduced at this session, can the Prime Minister inform the house at this time whether agreements have been reached with all or a majority of the provinces as a result of the proposals of the federal government respecting the rental of their corporation and income tax fields? If not, is it the intention of the government to hold any further conferences in order to reach agreements, or will the bill be a fait accompli as far as all the provinces are concerned?


Louis Stephen St-Laurent: I did not
catch the last few words.


Harold Edward Winch: I am sorry.


J.-Wilfrid Dufresne: It is in French.


Harold Edward Winch: Will the bill respecting dominion-provincial financial arrangements, which the Prime Minister told us yesterday was going to be introduced at this session, be a fait accompli that all the provinces must accept or have you reached agreements with all or the majority of the provinces and, if not, are you going to try to arrive at agreements before the bill is brought in?


Louis Stephen St-Laurent: It is not expected to have another conference before the bill is brought in. The bill will be one that would authorize the making of agreements, but no agreements have yet been reached.



PIPE LINES


[Stage Direction]
On the orders of the day:
Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, yesterday the hon. member for Vancouver-Quadra asked me about the tabling of documents associated with the contract with Trans-Canada Pipe Lines. I can advise him that the last document, P.C. 1956-860, authorizing execution of mortgage and indenture of mortgage dated June 7, 1956, Trans-Canada Pipe Lines Limited to Northern Ontario Pipe Line Crown Corporation, was tabled this morning. I have a list of the various documents that have been tabled and their numbers. Perhaps I can send it across to the hon. member for his convenience if he wishes to check any others.


Stanley Howard Knowles: Perhaps the list of documents could be put on Hansard.


Clarence Decatur Howe: I would be glad to put it on Hansard if that is the wish.
67509-313i
Canadian Forces Aci


Mr. Speaker:: Is it agreed that the document be inserted in Hansard?


Some hon. Members:: Agreed.
(For list of documents see appendix, page 4982.)



TRANSPORT


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: I should like to address a question to the Minister of Transport. In view of the fact that the second section of the pool train from Toronto to Ottawa has been withdrawn, can the minister say whether or not the information that the house would have suspended its sittings by June 10 came from the government?


George Carlyle Marler: Mr. Speaker, I must admit that my contact with the actual operations of the Canadian National Railways is not close enough for me to have acquired that information. However, I shall make inquiry of the railway in order to find out how this report circulated. I was most interested to hear the hon. member mention July 10.


An hon. Member:: June 10.


Ellen Louks Fairclough: May I ask a supplementary question. When the minister acquires his information, will he also inform members who come from southern Ontario how they are to return to Ottawa on Sunday nights?


George Carlyle Marler: I am surprised that they should even have left by that time.



CANADIAN FORCES ACT


Hon. R. O. Campney (Minister of National Defence) moved: the second reading of Bill No. 416, respecting the Canadian forces.


Mr. G. R. Pearkes (Esquimalt-Saanich):: Is the minister going to make a statement?


Ralph Osborne Campney: Mr. Speaker, yesterday in speaking to the resolution I pointed out that three of the sections are amendments to the Defence Services Pension Act and nine are amendments to the National Defence Act. As the sections are not related to each other nor do they all deal with one subject I assume that we shall not be able to discuss the principle of the bill as is usual on second reading. I would suggest therefore, if hon. members will agree, that we follow the usual custom in respect of this act, namely give it second reading and then go into committee

Canadian Forces Act
where we can discuss each section in the light of its own circumstances.


George Randolph Pearkes: Mr. Speaker, before we move into committee and come to the detailed discussion in relation to the various sections of this bill, I should like to comment on the manner in which the bill is now being introduced to the house. It is typical of the blundering and panicky way in which the government has been conducting its business all throughout this session. The resolution preceding this bill was placed on the order paper on January 12, five calendar months ago today. There it remained until yesterday afternoon, when the resolution was briefly discussed. The minister made a short statement and I asked a question or two. I was told that there were several amendments and that the sections were not related, as the minister has said today.
There are 13 different sections in this bill. They deal with amendments to two different acts, namely the Defence Services Pension Act and the National Defence Act. The National Defence Act has been amended several times, and in order to understand at least one of the sections of the bill it will be necessary to refer to the amendments which have been made to the National Defence Act. In addition to that consideration, in the bill and the notes attached to the various clauses reference is made to the United Kingdom act, the new Criminal Code of Canada and the Penitentiary Act. In order to study various clauses properly, those acts all must be referred to.
This bill was given first reading yesterday afternoon. At the close of yesterday's sitting the Minister of Finance said that if the bill was not already printed, it would be available early this morning. I arrived here and cleared my mail box at nine o'clock. There was no bill in it. Since I thought it would be discussed today I went down again just before the committee on external affairs met at eleven o'clock. There was no bill there then. I remained in the committee on external affairs until lunch time. I had my lunch, and then I found this bill.
That certainly is trying to railroad things through this house. I do not know whether other members have studied the bill. I have looked through it, and I shall do the best I can to offer some comments from time to time on the various sections. In view of the very limited time that hon. members have had, I do think we have the right to expect a full and detailed statement by the Minister of National Defence on the various clauses. We have not had the time to give them the proper consideration that we normally do. I feel that I am not coming to
[Mr. Campney.l
the discussion of this bill prepared in the way I usually am with any comments I have to make on the actions of this government. If, therefore, my questions may not be strictly relevant it will be for that reason, and I shall ask for some latitude in that respect.
Again I draw attention to the fact that for five months this resolution remained on the order paper and then in less than 24 hours- less than five hours, in fact-after we have received the bill we are asked to discuss it.


Ralph Osborne Campney: Mr. Speaker, perhaps I should-


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


Mr. Gordon Churchill (Winnipeg South Centre):: It will be too bad if the minister closes the debate, because we have not started. I must join with the hon. member for Esquimalt-Saanich in offering a protest against the method of introducing this bill in this house with such great haste. It has just come to my attention now in the bills which have been filed on our desks by the page boys and I have not had time to read it over. Under such circumstances the minister can hardly expect the best of co-operation in getting the bill through this house.
We have protested in other years against this method of bringing in an omnibus bill which amends more than one statute. This time I notice the minister says that this amending bill deals with just two statutes instead of the half dozen statutes that were amended last year. But it is wrong to do it this way, and I think we shall continue to protest as vigorously as we can against this method. We make a further protest against bringing the thing in as rapidly as this when there was plenty of time to have the bill printed and in our hands long ago.
This is the type of bill that requires careful study because the matters dealt with, particularly in the amendments which deal with the code of service discipline, require close attention. If we hastily pass this through we may be putting into the code of service discipline something which should not be there. How the minister expects us to understand this bill with the very limited explanation that he has given I do not know. I think he should have taken his time and at the resolution stage yesterday given a much more detailed statement as to the amendments which were to be introduced, and today he might very well have spoken at some length on the matter.
To approach a bill of this nature in this frame of mind is not conducive to its passage in short order, and I would hope that the minister would take note of our feelings in

the matter and when on any other occasion he has to introduce an amending bill in this house he will do so differently.
We faced this problem last year and the year before. How can you discuss the principle of a bill when it amends two statutes? What is the principle? Do you divide it into two parts and say there are two principles in this bill, or how do you approach the subject? At this stage if we go into the question of the clauses I am sure we will be informed that that is not an orderly procedure, and that should be taken up at the committee stage. But that is the problem we are faced with this afternoon. A hastily introduced measure which is of an omnibus character does not lend itself to a discussion of the principle involved.
Then the minister in his introductory remarks has not been helpful. According to the information I have before me, in his statement yesterday at the resolution stage he just touched on the various amendments that were being brought before us without more than a sentence or two of explanation. For example, where the amendments deal with persons accompanying a unit to whom the commander may issue orders, he does not tell us what types of persons he has in mind, and I would certainly want to know that before I could comment upon it. There are persons who are subject to the code of service discipline, yet apparently they are not actually in uniform. According to this amendment the commander of the unit will be able to issue orders to them to take certain action under certain circumstances. Well, what type of person is involved in that?
Then the restriction that is to be imposed on drivers of vehicles who are considered to be impaired might have merited greater explanation than the minister offered. What is the standard of evidence that is going to be required with regard to this matter of impairment, either due to the use of alcohol or a drug? What drug, for example, is being considered? Then what has required the necessity for a further amendment, or an amendment, with regard to the enforcement of discipline in service prisons and detention barracks? I presume these things arise because of something that has to be corrected. Well, why did the minister not tell us what has to be corrected? What is wrong now with the code of service discipline that necessitates an amendment respecting the enforcement of discipline in service prisons and in detention barracks?
Then there is his amendment with respect to service vehicles paying tolls on bridges, highways and canals. What is being done
Canadian Forces Act
at the present time? He did not give us any explanation of that; and so it goes. The minister does not deserve to have this bill given second reading this afternoon. As the hon. member for Esquimalt-Saanich pointed out, we have not had time to look at the thing very carefully; we have not had time to get the statutes and the amendments of recent years and compare these new amendments with what is already on the statute books and put them in their proper places, with the result that we cannot discuss the question with the care and attention that a matter of this kind deserves.


Stanley Howard Knowles: Mr. Speaker, I rise just to support the protest that has been made by the hon. member for Esquimalt-Saanich and the hon. member for Winnipeg South Centre with respect to the form of this bill. This is a protest that these hon. gentlemen and some of us have been making for four or five years now. I do not know how many years we are going to have to keep on making the protest before the practice is changed; but it does seem to me it would be far more logical, when the government wishes to ask parliament to amend the Defence Services Pension Act, to bring before parliament a bill amending that act; also, when it wishes to amend the National Defence Act, to bring before parliament a bill amending the National Defence Act.
This practice that has been followed now for several years of bringing in a bill entitled the Canadian Forces Act in which are included amendments to a number of different acts-only two this year, but in other years there have been a number

seems to me to be an illogical and shall I say sloppy way of dealing with the matter. I think it would be far better if on this occasion the government would consider the proposal that has been made from this side of the house, namely that these acts be treated on their own and amended by separate bills amending each act by itself.
I have made that plea on a number of occasions. As I say, it seems to have fallen on deaf ears. I feel it is with justification that the hon. member for Esquimalt-Saanich and the hon. member for Winnipeg South Centre have made this protest once again today.


Ralph Osborne Campney: Mr. Speaker-


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


Ralph Osborne Campney: Mr. Speaker, I should like to say that I regret that hon. members opposite did not receive the bill until lunch time, as was made apparent by the remarks

Canadian Forces Act
of the hon. member for Esquimalt-Saanich. The bill has been printed for a good while, but it had to be dated and numbered either during the night or this morning. I made inquiry early this morning and I understood the bill was on the way to the distribution office. I was not aware that there had been any delay, and I know that some hon. gentlemen did receive the bill early. In any event I can assure all hon. members there was no intention on my part to try to crowd this bill.
This is not a bill the sections of which are of great similarity in detail, and for that very reason it is not a bill that could be thoroughly discussed on second reading without creating more confusion than could be cleared up on account of the fact that each section has its own subject matter.
As to the remarks that have been made with respect to omnibus bills, we have found over the years in the department that by following this method we have obtained better service throughout Canada, Europe and England, wherever servicemen may be, much better success than under the old dispensation. Hon. members will recall that on one occasion there were 21 bills amended while this year there are only two, both of which are of direct and immediate interest to the services.
There is always the cumulative index in each annual volume of statutes where most people who look for bills can generally find them. I think the advantage to the services of having one bill each year covering matters that deal particularly and specifically with them has been of great benefit, in that it provides a means of quick reference and a means of getting the new changes known quickly, both of which are of advantage generally in the administration of the services.
As I have said, the sections of the bill are completely independent of each other. I think that is why in all previous cases- and I would like to suggest in this case also- it has been found that the practical and realistic way of dealing with them is to pass second reading of the bill and then take each section by itself in committee and discuss it at length, at least to the extent that hon. members wish to discuss it. In that way we will be talking about one subject at one time and shall deal with all of them successively, rather than trying to deal with them all simultaneously.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
[Mr. Campney.l
On clause 1-Title.
The Chairman:: Shall clause 1 carry?


George Randolph Pearkes: Would the minister please explain this to us?


Ralph Osborne Campney: Clause 1 is just the title.


William Alfred Robinson: Shall clause 1 carry?


Some hon. Members:: Carried.


[Stage Direction]
Clause agreed to.
On clause 2-Expiration of fixed term.
William Alfred Robinson: Shall this clause carry?


George Randolph Pearkes: Would the minister explain this one?


Mr. Gillis:: Are you going to make a statement?


Ralph Osborne Campney: Go ahead.


Clarence Gillis: This is of course the Defence Services Pension Act. The minister is aware of the fact that on a good many occasions both in this house and in committee I have raised a point with respect to this act. I notice that despite the amendments before us the matter I raised has not been taken care of.
What I had in mind is this. A member of the forces who contributes to the superannuation fund may die while in the service. Perhaps he has paid into that pension fund for 14 or 15 years. After he passes away in the service his contributions are then returned to his wife or his dependents. When that contribution is returned the income tax department will make an assessment against the total contribution-it may be $3,000 or $4,000-and they will tax it. I know of one case where a young officer contributed for 10 years and there was a sum of $600 deducted by the income tax department from the contribution when it was returned to his wife. I think it is a pretty rank piece of injustice, and for four or five years now I have been bringing it to the attention of the minister, and I did so in committee when the defence act was amended a few years ago.
I believe the department is being lax. That is a matter which is much more important, I think, than any amendment that is contained in the present act. It merely involves making arrangements with the income tax department. The superannuation contribution that is returned to the widow of a man who died in the service is not income because he has already paid income tax on his salary while he was in the service. Of course he would be allowed to offset that contribution, but the contribution is perhaps the only thing the widow has to depend on in the future, and I do not think it could be considered as income.

Canadian Forces Act
I wonder if the minister has taken the matter up with the Minister of National Revenue. I myself have done so. I also wonder if the defence department and the Department of National Revenue have had any discussions on the matter, because I think it is a pretty raw piece of business. I am running into quite a bit of it; I have had several cases. Would the minister care to comment on that?


Ralph Osborne Campney: Well, Mr. Chairman, as my hon. friend well knows the question is primarily one for the income tax branch. I would point out, however, that at the time the contribution was paid in no income tax was paid on it. When the sum is paid out I presume the Department of National Revenue feels that it should be subject to income tax. It is not a matter over which we have any real jurisdiction, but I know my hon. friend feels quite strongly about it because he has brought it up several times. He has now pointed out that he took it up with the branch which has control of taxing or not taxing the payments. I shall be glad to note the hon. member's further comments, but it is not a matter with which this department can deal by itself.


George Randolph Pearkes: I hoped perhaps the minister would have given an explanation of the advantages and purpose of this particular amendment. As far as I can understand, if an officer is offered and does not accept a further fixed term of employment, then he is compulsorily retired. On the other hand, if he is offered and refuses an indefinite term of employment, then he is retired at his own request. What is the purpose of those two different sets of circumstances?


Ralph Osborne Campney: This section is to take care of an officer who has risen from the ranks and has taken a fixed term commission. At the expiry of the fixed term he may be granted a permanent commission or he may be released entirely or he may have his fixed term commission extended, as is often the case. Under the act as it stands if at the completion of his fixed term he is offered but does not accept an extension of his fixed term commission he is deemed to have voluntarily retired. Therefore he gets only the gratuities payable under the pay regulations for his service during his period as an officer, but he loses any gratuities he might have as the result of his service as a man in the ranks.
In addition to clarifying the law as it exists, this section takes care of that situation and enables a man who has risen from the ranks and who has proceeded in the manner I have outlined to get a gratuity based on his service as an officer and as a man in the ranks. In other words it works to his advantage.


George Randolph Pearkes: Does this apply only to a man who has risen from the ranks, or does it apply to a man who has what is usually referred to as a short-term commission?


Ralph Osborne Campney: It applies only to the man who has both qualifications, who has a short term commission and has risen from the ranks.


George Randolph Pearkes: The minister referred to a permanent commission. Is that just another expression for the indefinite period, which is the term used?


Ralph Osborne Campney: Yes.


George Randolph Pearkes: I think the wording in paragraph (b) of clause 2 is rather unfortunate. This reads:
-and such retirement of an officer mentioned in subparagraph (i) of paragraph (a) shall be deemed to promote economy or efficiency in the forces.
I know that is the term frequently used, but it is possible that it would cast doubt as to the efficiency of the person's services while he was in the armed forces. When he enters civilian life and applies for employment the prospective employer would see that he was released from the services in order to promote economy or efficiency in the forces. The would-be employer might be apt to hesitate and say, "Here is a man who has been released from the armed forces in order to improve the efficiency of those forces." That would not be a very good recommendation for a man whose only crime apparently has been that he was not prepared to accept re-engagement under the terms of the act. Would it not be possible to adjust that in some way?


Ralph Osborne Campney: As the hon. member knows, that is a phrase which runs through the Defence Services Pension Act and has for many years. Among those who are familiar with it, it does not carry any connotation of inefficiency or anything wrong. We are now engaged in a revision of the act and this very point is being considered. We hope we can arrive at some better nomenclature than this, but I repeat that this phrase has for a good while been used throughout the act.


George Randolph Pearkes: I know it has been there for a long time, but that does not mean that people who are not connected with the services understand its full significance. I realize I have criticized the minister for bringing in amendments to the* Defence Services Pension Act, but if he will bring in one next year to adjust this particular matter I shall be a little more lenient in my criticism.


Gordon Minto Churchill: How is the pension affected as between these two methods if a man voluntarily retires?

Canadian Forces Act


Ralph Osborne Campney: Generally speaking, an officer who has retired voluntarily merely has his contributions returned. If he is compulsorily retired he gets a gratuity or pension depending on the length of his service.


Mr. Nesbitt:: Mr. Chairman, the remarks I intend to make with reference to clause 2 will apply equally to the 13 clauses of the bill. I concur in the remarks made by the hon. member for Esquimalt-Saanich. I am very interested in the amendments to these acts, but the bill was distributed at about eleven o'clock this morning and as I happened to be in the external affairs committee I did not receive it until much later. Clause 2 and the other clauses of this bill are quite technical and complicated, and I do not think it is fair to hon. members of this committee, particularly members of the opposition, to expect that they will be able to comment upon or criticize the bill when they have had it in their hands for such a short time.
I think in fairness the minister should consider adjourning this matter until another day. While it is quite true that as we reach the different clauses we will be able to make superficial criticism by reading them over hastily, the fact is that we cannot give the clauses the careful consideration we would normally expect to give them.


Mr. Goode:: It is hard for me to understand why hon. gentlemen who have served so long in the forces would consider this bill to be complicated. I certainly did not have the service of the hon. member for Esquimalt-Saanich, but to my limited intelligence this bill is quite simple. I do not think the minister will have any difficulty in answering questions.
One thing I want to bring to the attention of the minister is what was said by the hon. member for Esquimalt-Saanich, who expressed my opinion completely. Many of us have known men who have served in the armed forces and whose discharge papers did not state the reasons for their discharge. I submit that those reasons should have been included. I submit that the Minister of National Defence should do something about this. If a man is retired at his own request why should that not be stated in his papers, instead of adding other words to it?


Walter Edward Harris: Hon. members will recall that last evening I said that if this bill was not distributed in time, suitable arrangements could be made if desired. I made inquiries this morning and I made inquiries at noon, and I was not informed that it was the desire of hon. members to postpone the consideration of this bill.


Gordon Minto Churchill: From whom did you make inquiries?
fMr. Churchill.]


Walter Edward Harris: Shall I say the usual channels. This is not by way of reproach of anyone, but those inquiries were made. However, if hon. members feel that they do not desire to go on I would be glad to suggest to my colleague that we leave the matter as it stands. On the other hand I may tell hon. members that had I been informed that they felt this way about it, we would have called some other item rather than taken the time that has now been taken, I leave it entirely to hon. members as to what they wish to do.


George Randolph Pearkes: As I indicated, the time has been extremely limited, but provided a reasonable latitude is given to us to ask questions and provided the minister is prepared to explain these various clauses-and it will take longer than it would have done had we had time to consider this beforehand-we are prepared to go on, as far as this party is concerned.


Walter Edward Harris: Thank you.


George Randolph Pearkes: At the end of clause 2, in the part dealing with other ranks, there is a different wording in connection with re-engagement and the offer for re-enlistment. Is there only one type of enlistment in the forces, namely for a fixed period? Is there no indefinite period?


Ralph Osborne Campney: Not in the ranks.


George Randolph Pearkes: Just for a fixed period of so many years? Is that uniform in all the services?


Ralph Osborne Campney: It is not uniform as to years, but it is the uniform practice.


George Randolph Pearkes: Would that apply to apprentices as well as to men who are in the regular units?


Ralph Osborne Campney: Yes.


[Stage Direction]
Clause agreed to.
On clause 3-Employment of officer pensioner in the public service of Canada or the forces.
George Randolph Pearkes: Regarding clause 3, the addition seems to be the words "chief petty officer first class or second class." There have been chief petty officers in the navy from time immemorial. How is it that it is necessary now, at this stage, to add these special words, and what has happened to the chief petty officer in the past?


Ralph Osborne Campney: Chief petty officers now are classed under the law as warrant officers, classes 1 and 2. At the time the law was passed with regard to people entering the public service they were not warrant officers. The only point in this amendment is to make

them warrant officers for the purpose of adjustment of their salaries and pensions, the same as warrant officers have always been in the other two services.


George Randolph Pearkes: If they are now warrant officers, why do we have to put in chief petty officers first class and second class? If it had been in before, I could have understood it.


Ralph Osborne Campney: I do not know why we have not called them warrant officers. Probably we would have to consult the chief of the naval staff on that. It is a time-honoured term, and as long as they have the legal status of warrant officers they do not have to change the name.


George Randolph Pearkes: The whole point is that we should get this cleared up. We have chief petty officer first class and second class in the navy, and warrant officers first and second class in the army and air force. Why is it necessary to put in "chief petty officer first class or second class"?


Ralph Osborne Campney: The chief petty officer first class is the same as a warrant officer first class, and the chief petty officer second class is the same as a warrant officer second class.


George Randolph Pearkes: So I understand, but I am asking why you do not have to put in "a contributor who has been retired as an officer, warrant officer first class or second class, or chief petty officer first class or second class."


Ralph Osborne Campney: I understand that originally the navy had warrant officers, and they were not commissioned, and so there is some complication in terms. A chief petty officer has come to have a certain status, and it has been retained in the wording of this section, but he now has exactly the same status as the warrant officer in the other services.


Wallace Bickford (Wally) Nesbitt: This clause says:
A contributor who has been retired as an officer, warrant officer or chief petty officer 1st class or 2nd class . . .
Does this include warrant officers in the
navy?


Ralph Osborne Campney: I am informed that there are not now warrant officers in the navy. There were at one time, but not now.


Wallace Bickford (Wally) Nesbitt: I realize that, but it says:
A contributor who has been retired . . .
What about those who held the rank of warrant officer? Does it include them?


Ralph Osborne Campney: As they were not commissioned officers, as warrant officers were not in the navy in the past, the same rule would apply as is under this clause. I understand
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also that there have never been any warrant
officers in the navy who come under part V of the act.


Wallace Bickford (Wally) Nesbitt: Perhaps the minister might explain this. It is a rather technical point. In the navy there were formerly commissioned warrant officers and warrant officers. Perhaps he would explain the difference between those two.


Ralph Osborne Campney: I understand that many of the warrant officers in the navy were subsequently commissioned and that now there are none moving up to commission. The rank has been abolished in the navy. A chief petty officer first class or second class is the equivalent of a warrant officer, but I am informed that there are no warrant officers in the navy.


Mr. Hamilton (York West):: The term "warrant officer" is not restricted to any part of the forces anyway, as I understand it. That would cover the categories mentioned if there were any to qualify, would it not?


Ralph Osborne Campney: Yes, I think that is true.


George Randolph Pearkes: May I ask whether there have been any chief petty officers who have been retired in the last six years who might be adversely affected by the fact that this had not been previously included?


Ralph Osborne Campney: The number is approximately 77 altogether.


George Randolph Pearkes: What has happened to them? Have they received their pensions, or how have they been dealt with, seeing they were not included under the old act?


Ralph Osborne Campney: Up to the present time they have received a full pension.


George Randolph Pearkes: In spite of the fact that they have not been shown? They have been included as having been in effect covered?


Ralph Osborne Campney: No.


George Randolph Pearkes: What I am trying to get at is that we are suddenly adding these words "chief petty officer first class or second class". It is not a new rank; that rank has been in existence ever since the pension act has been in existence. What has happened to the chief petty officers first and second class who have retired during the time part 5 of the pension act has been in effect and until this amendment is passed?


Ralph Osborne Campney: They have been treated exactly the same as staff sergeants in the army. Prior to the effective date of the bill they will not be affected. This is so even though payments may have exceeded the restriction, which is a general restriction that obtains with respect to people from the

Canadian Forces Act
services within the limits of this act who later pay account. Any debit balance in his take up civilian occupations with the account, however it arose, would be collect-government.	able under this section.


George Randolph Pearkes: These 70-odd men who have been retired have been adversely affected owing to the fact that these words have not been included in the act?


Mr, Campney:: They have gained, because they have their full pension not subject to the adjustment that is provided for in this section. I think the general rule is that you get that part of your pension which when added to your salary does not exceed the pay and allowances of the position you had on retirement, so they have really gained.


George Randolph Pearkes: The navy will not be very pleased about this amendment.


Ralph Osborne Campney: It is only fair.


[Stage Direction]
Clause agreed to.
On clause 4-Idem.
George Randolph Pearkes: Clause 4 refers to the collection of debts. In the old act reference was made to a man who was a debtor on account of pay. I believe that was there, though I have not had a chance to turn it up. Does it only refer to pay?


Ralph Osborne Campney: Perhaps I could shorten the discussion on this clause by saying that the only point in it is to provide a method of giving notice to the debtor. The law as it stood before this amendment provided that there should be a set-off from the man's pay account upon notice, but there was nothing in the section to indicate how the notice must be given. Therefore you had to find the man. Having regard to the usual procedure in matters of this kind, the amendment provides how notice may be given, either actual or constructive. Otherwise you have to find the man or you cannot give him notice.


George Randolph Pearkes: This refers to overpayment, where there is a debt on the part of the man.


Ralph Osborne Campney: Yes.


George Randolph Pearkes: He may have received more pay than he was entitled to owing to various circumstances.


Ralph Osborne Campney: That is correct.


George Randolph Pearkes: Does it refer only to pay? Does it cover allowances? Does it cover any loans which may be made under the new act, whereby loans may be made to men in the various units or ships?


Ralph Osborne Campney: From the wording I think it would certainly apply to any debit balance resulting from, for example, any equipment he might have purchased and charged to his


George Randolph Pearkes: Then that debit may be taken from his pension. Is that correct?


Ralph Osborne Campney: That is correct.


George Randolph Pearkes: That raises the whole question of debts incurred by servicemen. If the services themselves are going to assume the right to collect a debt which is owing to the service by a man in the forces, should consideration not be given to the collection of debts which are owed to civilians by men who are in the services? I regret to say that from time to time there are men in the services who do not meet their civilian obligations. They escape paying their debts either by transfer or by the mere fact that they remain in the unit or retire on pension, and the civilian land owner or person who has rented accommodation to them or the man who has sold them a television set on time and so on cannot collect. Recently, as the minister knows, the bar association of British Columbia passed a resolution which I presume has been brought to his attention. It reads in part as follows:
Whereas many merchants and others through dealing with persons in the employ and pay of the government of Canada, by giving to them credit, have suffered hardship and in many cases grievous loss because advantage is taken by such persons of the fact that their wages or salaries cannot be garnisheed-
Then it goes on to recommend that service personnel and other personnel in the employ of the government should come under the various provincial acts which govern these circumstances. There are not a great many cases so far as the armed forces are concerned, but there are a limited number. These men who do not live up to their obligations bring discredit to their ships or their units. If the government is now bringing in an amendment so as to be able to collect debts owing to the government, should the government not also consider providing some relief for those unfortunate persons who have been victimized by persons in the services who have not lived up to the traditions of the service, are not a credit to the service, and who may have gone on pension? It seems to me that if this is suitable procedure for the government for the collection of debts, then there should be an obligation on the government to see that debts owing to civilians are paid.


Ralph Osborne Campney: The pay account of a man in the services has always been regarded by the services, and I presume by the man himself, as a private matter between the two parties, the paying party and the receiving

party. To open up that position to the extent of allowing the paymaster to deduct alleged debts owing to other people would certainly be initiating a new principle, particularly if this practice were extended to the civil service. There may be some reasons why at first blush it would seem to be a desirable thing, but I am sure that on second thought my hon. friend will realize that it would hardly be practicable, and certainly would not make for good relations between the man and his employer, the government service.


George Randolph Pearkes: Has this resolution of the bar association been brought to the minister's attention?


Ralph Osborne Campney: Yes. As a matter of fact we have received representations from time to time, as I presume those concerned with the administration of the civil service have, from interested bodies, I think that has been going on for quite a while. However, it is a very large subject and a very novel approach which, so far as X know, has not been accepted in any government circles, either civil or military.


John Borden Hamilton: I should like to add my voice to that of the hon. member for Esquimalt-Saanich. I do not know whether it should be suggested that we are asking the government to act in any way as a collection agency, but certainly the brief that has been referred to has suggested that members of the armed forces should be placed in the same category as any civilians in connection with their civil obligations. At this time I do not think we should simply put the matter off by saying that in the past there has been a well-recognized principle.
It may be that in times of national emergency it would cause considerable dislocation in the armed forces to have the personnel subject to garnishee or attachment in some way for civilian debts, but in times such as these there would appear to be no reason why the same obligations should not be shouldered by these people as are shouldered by everyone else in the country. I strongly suggest that we do not rest this case simply on the basis of an old principle. As the hon. member for Esquimalt-Saanich has said, it brings no credit on the armed forces if there are people in the forces who avoid their obligations.
I think the vast majority of the people in the forces, no matter what branch they might be in, would be quite satisfied to see some change in this type of regulation. As I have said before, I do not think we should suggest that the paymaster become a collection agency; but if the government is prepared 67509-314i
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to take steps to protect its own position, as it is here, it should be willing to recognize the same principle on a broader basis.
As to the section itself, may I say this. It seems to me that here is an example of the lazy-man approach. If there is any credit left in the account of the person receiving the pay or the pension, obviously it is going to be necessary for the department to track that person down in order to make the payment; but it would appear that it would be much easier, if it is simply the case of a deduction, to send him notice of it. We are removing from the person who might be considered a defendant considerable of his rights in the first part of the section when we say that the governor in council by regulation may prescribe the manner in which this money can be collected. What excuse is there to take the next step and say "We can just send you notice of it by registered post"?
I do not know whether this is the ordinary type of contra-account transaction we have where we say, "We have $10 of yours, you owe us $5 and we are sending you on $5". But in any case it would appear that the combination expressed in the first part of the section and the second removes the opportunity for the man to put in his defence and say, "I do not owe you this money and I am not going to pay you until you prove it". Under this regulation the department simply has to say, "You owe this money, we have deducted it and that is what you have left".


[Stage Direction]
Clause agreed to.
On clause 5-Subordinate officers and men.
George Randolph Pearkes: We now come to the consideration of the amendments to the National Defence Act. In the notes with respect to clause 5 I see the following:
This clause would permit the enrolment of a subordinate officer in the Canadian forces for either an indefinite or a fixed term of service . . .
Are they permitted to change from one to the other? Can a person who starts off on a fixed term change at his request to an indefinite term?


Ralph Osborne Campney: Generally speaking, if an officer starts off on a fixed term commission, he is working up to a permanent commission later on. This amendment deals with a particular type of officer known as a subordinate officer. I understand that a subordinate officer in the navy is an acting sublieutenant or a midshipman or a naval cadet; in the army he is an officer cadet; and in the air force he is a flight cadet. He is enrolled but not commissioned, although he is looked upon when he is enrolled as being a proper candidate, subject to check as his activities

Canadian Forces Act
go on, for a commission. Under the act as it now stands a subordinate officer can enrol only for a fixed term. The amendment provided by this clause would permit him to enrol either for an indefinite term or for a fixed term as at present. In other words it gives him wider latitude than he has under the law as it now stands.


George Randolph Pearkes: That did not quite answer my question. I asked whether he would be able to change from enrolment for a fixed term into enrolment for an indefinite term. For instance, I have in mind a cadet at the H.M.C.S. Venture college at Esquimalt, who would be there for a fixed term of so many years. Could he during the period of that service change to an indefinite period?


Ralph Osborne Campney: Only with the consent of the service concerned.


George Randolph Pearkes: Oh, yes.


Ralph Osborne Campney: It would be given, if it were given, after some period of observation as to his likelihood of becoming a successful officer.


George Randolph Pearkes: Would the minister say why subclause 3 has been eliminated? In the present act paragraph 3 reads:
(3) A person under the age of 18 years shall not be enrolled without the consent of one of his parents or of his guardian.
That paragraph has been eliminated from the new amendment?


Ralph Osborne Campney: No. Subclause 3 is not being eliminated. The amendment that is made is just being made to subclause 2. Subclause 1 of section 21 and subclause 3 remain as they were.


George Randolph Pearkes: They remain?


Ralph Osborne Campney: Yes.


[Stage Direction]
Clause agreed to.
On clause 6-Persons deemed to be under .command of superior officer.
John Borden Hamilton: Before I make any remarks about this clause, may I say that I assume it covers people whether they are affiliated with the armed forces in Canada, within the jurisdiction here or in a foreign jurisdiction. Would that be right? Is that a proper assumption?


Ralph Osborne Campney: This section practically
speaking, applies only outside of Canada.


John Borden Hamilton: Perhaps that answer limits my remarks to a certain extent, but I am wondering whether the department has taken into account the fact that the use of nuclear weapons may necessitate the

officer commanding having authority not only over those affiliated with the armed forces, as set out here, but that his authority perhaps-although some question of sovereignty may arise in connection with my remarks-[DOT] may necessitate his having control over all the persons within an area and, in so far as our act is concerned, that he should be protected in connection with orders to remove all civilians within a certain area. Perhaps we cannot get around any liability which he might have in a foreign jurisdiction but certainly we should be able to provide that he is protected, in so far as our own armed forces are concerned, if he orders all civilians out of a certain area. This section would not appear to take that situation into account.


Ralph Osborne Campney: This section has nothing to do with civilians generally as a class. It has to do only with those within the definition of persons accompanying a unit outside of Canada. They have already been made subject to the code of service discipline but, under the law as it now stands, they have not been made subject to the orders of the commander of the unit to which they may be attached or which they may be accompanying. The purpose of this amendment is to give him some authority in certain cases.
These things take place, of course, in potential war areas. The idea is to give the commanding officer authority to take them under his command for purposes of defence and evacuation except as regards bearing arms. In other words, he could move them out of there or move them about for these purposes other than for active service in the sense of engaging in the bearing of arms. It is just a small gap that was found in the general law which provided that something could be done but did not provide who could do it.


Gordon Minto Churchill: I wonder whether the minister could help us out here. Who are these people who are subject to the code of service discipline by virtue of the paragraphs that are mentioned here? Would the minister refresh our memories on that point?


Ralph Osborne Campney: Well, principally, of course, they will be dependents together with other civilians who for certain reasons would be accompanying the unit. The definition covers persons who participate with a unit or other element of the service in carrying out any of its movements, manoeuvres, duties, warlike operations, and so on. It would go no farther than those categories, plus the dependents of the members of the unit. These two general classes cover practically all cases.


George Randolph Pearkes: May I ask whether I heard the minister correctly when he said this applied only to persons accompanying Canadian forces out of Canada? Where is that contained? I do not see it in subsection 8 of section 56 of the National Defence Act, as amended.


Ralph Osborne Campney: It was covered in the 1954 amendment. Subsection 7 (a) of section 56 defines persons accompanying the Canadian forces, and if I recollect correctly I think it deals only with dependents accompanying them out of Canada. Subsection 7 (a) of section 56, subclause (c), which defines classes of persons accompanying Canadian forces as, "a dependent out of Canada or of any officer or man serving beyond Canada in the unit", and so on.


George Randolph Pearkes: That would not apply to any personnel who might be in the northern parts of Canada?


Ralph Osborne Campney: No, Mr. Chairman.


[Stage Direction]
Clause agreed to.
On clause 7-Parties to an offence.
George Randolph Pearkes: I have not had an opportunity of looking at the Criminal Code. Can the minister give assurance that this conforms exactly to the wording of the Criminal Code?


Ralph Osborne Campney: Yes, it does, Mr. Chairman. The new Criminal Code changes a little the results which flow from common intention in respect of offences under the code, and we have made the same changes in respect of service offences. I think the amendment is identical, word for word, with the Criminal Code.


John Borden Hamilton: Would the minister answer this question. With respect to personnel serving outside of the country, what law is taken into account in defining "unlawful purpose"?


Ralph Osborne Campney: I think an unlawful purpose would be defined as under the Canadian Criminal Code in respect of Canadians, or under the National Defence Act, where we have our own code of service discipline which we administer whether at home or abroad.


John Borden Hamilton: Would this not include any civilian law of the locality where the armed forces are serving?


Ralph Osborne Campney: Only to the extent that the National Defence Act makes an offence against the local law an offence under the National Defence Act. If the National Defence Act, as it does in some cases, makes the law of the place applicable, then the jurisdiction rests under the National Defence Act, but it would have to be within the limit of the provisions of that act.
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John Borden Hamilton: I have only one observation then, sir, in connection with this. As I understand it, this section did not appear in the previous act at all, and therefore it is an additional responsibility or liability of members of the armed forces. My concern is this. Certainly numerous situations arise in the armed forces which ordinarily may not arise in civilian life.
This section talks about an intention in common to carry out an unlawful purpose. In some sections of Europe to ask for a drink between eight and ten o'clock may be a breach of some code. Under these circumstances it would be most unfortunate if a group of Canadian soldiers were involved in some type of a dispute, many of whom had no thought of being involved in anything serious at all, and wound up being charged with a very serious offence because of the meaning of this section. I should like to feel that there was no question but that unlawful purpose was designated entirely within the realm of our own law and not by any definition of an outside jurisdiction.


Ralph Osborne Campney: Under the NATO arrangement, of course, we have usually the first opportunity to deal with those cases: otherwise the civil courts can deal with them under the amendments to the act which have already been brought into the house. As I understand it, so long as we apply the Canadian law that would cover unlawful purpose or any other subsidiary matter. Because we have generally the first right to try people in foreign countries for transgressing their law, it becomes a question, I should think, of relying on the judgment of the commanding officer or whoever is in charge of the unit or the area. If he failed to apply Canadian law then, in the second instance, such people can be tried under the law of the place where they are, but I cannot imagine any practical situation in relation to our own people, in any serious case, where a Canadian officer charged with the jurisdiction would pass it over to someone else.


John Borden Hamilton: I am thinking of the places where the minister has indicated that by statute there has been an application of the law of the foreign jurisdiction. Notwithstanding the fact that the commanding officer, or whoever is going to be in charge of a court martial, may have the first opportunity to try an accused, would I not be right in saying that under whatever conflict of law exists he might have to apply the law of the civilian jurisdiction which has been made applicable by a previous statute or regulation to our own armed forces? If that be the case, even

Canadian Forces Act
though he might have jurisdiction to try, he might be working under a definition in those areas which would create considerable disability on the part of defence counsel.


Ralph Osborne Campney: It would appear in the case the hon. member has mentioned that the Canadian officer or tribunal having jurisdiction would apply, under all the existing regulations and the act, the Canadian law in determining any of these matters. But if there were no Canadian law-if it happened to be an act not made an offence by Canadian law-I would think he would have to apply the law of the place where he was at the time because if he did not the foreign court could then step in and apply itr.


[Stage Direction]
Clause agreed to.
On clause 8-Parties to an offence.
George Randolph Pearkes: Clause 8 obviously provides penalties for what might be called an extension of looting or the searching of and stealing from bodies of the fallen. I was wondering whether the words "in the course of warlike operations" were not a rather strict limiting factor. Suppose circumstances occurred during extensive training periods where you might perhaps find an R.C.A.F. plane had crashed and the bodies might possibly be then tampered with. Would they be covered by that clause, or does this clause only refer to the strict interpretation of the words "in the course of warlike operations"?


Ralph Osborne Campney: Mr. Chairman, in most cases, of course, the ordinary law of theft would apply. It was felt however that the same amendment as was made to the army act of the United Kingdom last year after a good deal of investigation should be adopted. These particular offences which have to do with activities in the field are of a more serious nature and should be more stringently dealt with than ordinary cases of theft. I think that would also be why in subclause (g)- and this incidentally is taken directly from the British army act-the words "in the course of warlike operations" were added.
The net result of the clause which we have adopted from the British army act is that it has increased the maximum penalty. That is about the only real change; the reason being, as I have said, that it is felt that this type of offence is more heinous, more serious in the midst of activities in the field than ordinary theft.


George Randolph Pearkes: I can see it being classed as ordinary theft here in Canada, but let us suppose our troops in Europe were engaged in extensive activities, as they have been in recent years, and there was an unfortunate accident there and a case occurred where, to

take subclause (g) as an illustration, an attempt was made to steal from some of the men who had become unfortunate casualties. Would they be covered by this subclause or not?


Ralph Osborne Campney: The point the hon. member has raised would not come under subclause (g). It would be a case of theft, for which the penalties are also stringent but not as stringent as they would be in this case.


George Randolph Pearkes: That is why I said I thought perhaps this was a rather strict limitation, and I wondered if you had considered expanding it?


Gordon Minto Churchill: I was wondering if the minister would give us a little more explanation as to why this amendment is introduced now. It is all very well to say it is similar to section 30 of the army act, 1955, of the United Kingdom, but what has brought about the need for this to be introduced here in so far as the Canadian forces are concerned? We are not now engaged in warlike operations. Have we had anything like this in the past? Something must have brought this to a head.


Ralph Osborne Campney: Mr. Chairman, these subclauses of course do not apply in Canada at the moment. I think the reason they were introduced is because the investigation that took place in Great Britain and the changes made in their act-we try to keep in touch with the changes to the relevant acts in the United Kingdom and United States as well- commended themselves to us as being useful sections in the event of war and as being of assistance under such circumstances. There is no application at the present time, of course.


Gordon Minto Churchill: It is aimed at looting, is it? Were the investigations carried on in Britain as a result of looting in the second world war, or were they the result of something which happened in Korea or Malaya?


Ralph Osborne Campney: There are probably a number of reasons but I think one of the reasons is that frequently plans, documents and identification and so on which might have proved useful were removed and thrown away or scattered about. The fact that such actions have been made serious offences might tend to correct some of that sort of thing. Also in time of war I should say one has to be pretty stringent in regard to the punishment of anything savouring of theft.
The only difference in the application of these subclauses would be that the maximum penalty for stealing would be increased under the code of service discipline from 7 years, or 14 years, under certain circumstances. Incidentally, these penalties are somewhat less than those imposed under the Criminal Code.

It is a question really of making the punishment fit what they regard as the crime, I suppose. It is not a change in the definition of what constitutes theft or what constitutes an offence, but it is making optional the gradation of the seriousness of punishment.
It has also just been pointed out to me that while it is generally true that these three subclauses deal with theft, some of the offences listed here would not be strictly theft at all, but are peculiar to the warlike conditions under which we would be operating.


Gordon Minto Churchill: Yes, Mr. Chairman, but does not section 68 deal with property of the government and matters pertaining to that? Yet this amendment, certainly in subclause (i), extends to property abandoned by the enemy. The present section 68 does not go quite that far at all; it has nothing to do with enemy property.


Ralph Osborne Campney: Well, property abandoned by the enemy of course automatically becomes the property of the government of the successful country engaged. It does not lapse; it becomes the property of that country immediately.


Mr. Herridge:: I would like to ask the
minister a question with respect to subclause (g), which reads:
Steals from, or with intent to steal searches, the person of any person killed or wounded, in the course of warlike operations:
I remember at Ypres we were advancing on one occasion. We had been in the trenches for a week or two and my feet swelled up so I could hardly bear my boots. When we were advancing I ran across a poor unfortunate Australian, and I stopped for a few minutes and took off his boots and put them on. Would a soldier be guilty of an offence under this clause under those circumstances?


Ralph Osborne Campney: I would not think he would under the circumstances outlined by the hon. member.


Herbert Wilfred Herridge: I suppose it would be a question, as the deputy minister of justice says, of being morally innocent.


Mr. Quelch:: I remember in the first war we were quite short of equipment, and it was a common practice to take a pair of binoculars or a revolver from a German officer and use it for our own personal use. We did not call it stealing, we called it commandeering. Would a man doing those things be liable under this clause?


John Borden Hamilton: In the last war you just gave them a receipt signed "Joe Blow".
Canadian Forces Act


Gordon Minto Churchill: I think this matter deserves a little more consideration. As has just been mentioned, enemy property taken during the first war was considered to be commandeered, whereas in the second world war it was considered to be liberated. I think a little haste has been shown in inserting this particular amendment without giving full consideration to all the possibilities. A good example was given by the hon. member for Kootenay West. Anyone who served overseas can recall multiple instances of these things; and while the minister may say that under those circumstances an officer or man would not be charged, I am not too sure. If we had a particularly efficient adjutant general's department and a very efficient provost corps, troops who were doing commandeering or liberating at the front might be borne down upon quite heavily. I would not want to give the adjutant general or the provost corps any more power than they have at the present time.
I fail to understand why this amendment should be suddenly brought forward during peacetime. In case of war it might be necessary to be more careful with regard to looting, although section 68 of the National Defence Act seems to provide sufficient protection against this offence. I think it goes far enough. If we write into the National Defence Act something which cannot be enforced, then we will be bringing the law into disrepute. I do not see how you could enforce this clause in the field under actual service conditions. There would be enemy property that was abandoned, and it would be taken otherwise than for the public service. I can assure you of that. If a person were on the stand he might be able to declare that what he had done with the abandoned enemy property was for the public service, but he would be in an awkward position.
If this section concerned only our own people or our allies from whom things were taken, that would be a different matter entirely; but when it comes to the enemy I am not at all sure that you can effectively guard against what appear to people in the field to be legitimate operations. I suggest to the minister that he withhold this particular amendment for further consideration.


Ralph Osborne Campney: This clause has been brought forward because the people in the department agree with the British that we should profit from some of the experiences of the past and get our statute in shape to deal with emergencies that might occur, although we hope they will not occur. It seems to me

Canadian Forces Act
that any provisions which might tend to discourage the wrongs that might occur in warlike operations, particularly anything savouring of looting or of dealing carelessly with valuable documents and so on, would be of extreme value. Such provisions would prove to be most beneficial if war should break out.
The subsections do not apply in peacetime, but if unfortunately we should be involved in a war I think we should be able to deal with these matters very stringently. Probably in a new war we would have to deal with them more stringently than was the case in any past war.


Gordon Minto Churchill: I still am not convinced that we have to introduce this section. British experience may point to the need of it, but Canadian experience has been rather extensive. I gather from the minister's remarks that the request for this has emerged from the intelligence branch. I imagine they have felt that some valuable material was lost in the last war, or perhaps in Korea, which would have been most useful to their service. Of course a good point can be made on the basis of the requirements of intelligence, but I still am far from being convinced that we need to write this into the act at the present time. I do not know that the minister has advanced sufficient reasons for it being incorporated in the act when section 68 has served so well up to the present.
I do not object to the department looking at what is being done in the United Kingdom or the United States with regard to matters of this sort, but we have a very extensive Canadian experience in service problems, and if this has not been brought up by Canadian service personnel as the result of Canadian experience in active theatres of war I think it might well be held over.


Mr. Mclvor:: I think the word "steal" should be defined. A man who takes for his own use and does it out in the open with everybody knowing about it is not stealing, but a man who takes in order to sell so that he may put money in his own pocket is really stealing.


Mr. Pallell:: What about the man who holds up a bank?


Mr. Jones:: I think the last suggestion is worthy of consideration. The word "stealing" should be defined. I remember losing my compass in France and I was lost without it. I found another, and made use of it. Was that stealing? It was not mine, but it helped me out of a difficulty.


[Stage Direction]
Clause agreed to.

On clause 9-Improper driving of vehicles.
Mr. Trainor:: Dealing with paragraph (c), the minister will be aware that certain drugs are used in the treatment of illness which are capable of impairing the ability to drive a motor vehicle. It seems to me it would be unfortunate if the penalty provided by this clause were to be applied in such cases. I think some exception should be made in paragraph (c) to cover drugs which are used under a prescription by a medical officer.


Ralph Osborne Campney: Surely if a man is impaired by the use of a drug he should not be driving a vehicle, even though the drug has been administered for medical purposes. The person certainly would be aware that he had been treated with such a drug, and whether his driving capacity had been impaired to the danger of the public and other motorists on the highway. Surely the test must be whether, by reason of alcohol or by the use of a drug, under any circumstances he has become a danger or a menace on the highway.


Gordon Minto Churchill: Subparagraph (c) states: having charge of a vehicle of the Canadian forces knowingly permits it to be driven by a person whose ability to drive such a vehicle is impaired by alcohol or a drug; is guilty of an offence . . .
Private soldiers are placed in charge of vehicles. If the private soldier has that vehicle taken by an intoxicated superior officer, whether he is a corporal, a sergeant, a sergeant major or a commissioned officer, who bears the blame? It is the private soldier against whom the vehicle is charged. Would he bear the penalty, or what would the army do under those circumstances?


Ralph Osborne Campney: Generally speaking, the
senior officer in the vehicle is in charge of the vehicle, and this amendment is intended to make that very clear. Under certain circumstances, if the senior officer is in charge of the vehicle and is not capable of exerting the charge, he is still liable, I would say, and he is also responsible, whether he is impaired or whether he is not, in law for the acts of the junior driving the vehicle. He should not be in that condition, and the intention of this subclause is to make the officer in the vehicle responsible for the driving, whoever under him is actually driving it. I think it is only fair and proper that he should be.


John Borden Hamilton: I think the minister has missed the point of the question by the hon. member. The situation that he referred to was that the man junior in rank had actually been placed in charge of the vehicle and that the man senior in rank, who might be intoxicated, had come along and taken the vehicle away from him, or asserted his authority. Would the junior

still be chargeable under this clause? I think that was the question.


Ralph Osborne Campney: I should not think he would be. Under those circumstances, I think the junior would be exonerated. He cannot be held responsible for something he cannot prevent, and he certainly could not be said to have permitted it to take place.


John Cameron Pallett: As a hypothetical question, supposing there is a sergeant in charge of the vehicle and an officer comes down insisting on a vehicle, what happens then?


Ralph Osborne Campney: I think the general procedure would obtain that, if the sergeant received an order from an officer, prima facie he has to carry it out. I do not think this would be any different from any other circumstances.


John Borden Hamilton: Then is the
minister saying that, if the person senior in rank to the person who had been placed in charge of the vehicle takes the vehicle on his authority, he then is the person who becomes in charge of that vehicle and the only one who can be charged under that section?


Ralph Osborne Campney: That would certainly be
my understanding.


John Borden Hamilton: In regard to this clause I notice too that the wording of subclause (b) does not conform exactly with the wording of the Criminal Code, section 223. The Criminal Code says:
. . . drives a motor vehicle or has the care or control of a motor vehicle . . .
Whereas the clause here says:
. . . drives or attempts to drive such a vehicle . .
We have had numerous cases under the Criminal Code where convictions have taken place, where the accused had been under the influence and had been simply sitting in the vehicle. Is this change in the wording going to make it better for the accused and perhaps give some leeway in his defence or perhaps make it more stringent for him?


Ralph Osborne Campney: I presume the hon. member has looked also at subclause 2 of the amending clause, which must also be read in this connection. The change to which he refers is from the words "care or control" to "drives or attempts to drive." In many cases the care or control of the vehicle would be vested in the senior officer in the vehicle. It was changed to make it tie in with military conditions.


John Borden Hamilton: Then in this' particular case, if I might pursue it, reading subclause 2, it has even removed one of the possible defences available to the accused
Canadian Forces Act
under the Criminal Code. In this particular case it is established that if he is sitting in this particular seat he in fact is considered to have attempted to drive such a vehicle and must assume the burden of proving otherwise. Is that not a greater burden than is presented under the section of the Criminal Code and the ordinary rules of evidence?


Ralph Osborne Campney: I should not think that is correct, because in the Criminal Code the words used are "care or control." That is a rebuttable presumption in the Criminal Code; and it is also in this subclause 2 a rebuttable presumption that he entered the vehicle in order to drive it. I do not see that there is very much difference in the implications except that in the Criminal Code the words used throughout those sections are "care or control" and in this clause the words used are "drives or attempts to drive."


John Borden Hamilton: Perhaps I may be splitting hairs on this, but suppose a person who does not own a car at all and might be considered by some people under the influence gets in the car and sits there. Under the Criminal Code it would be the obligation of the crown to prove that that person either drove the car or had the care or control of the car. The obligation would be on the crown to prove that. Under this clause if the same circumstances took place, the burden of proof -and I think ordinarily we are very jealous of these particular rules of evidence-under our Criminal Code would shift over, and it would be on the accused to prove that he did not have the care or did not attempt to drive, as the case may be.


Ralph Osborne Campney: I think the hon. member is in error, because the same presumption arises in each case. Section 224 of the Criminal Code, subsection 2, reads as follows:
For the purpose of sections 222 and 223, where a person occupies the seat ordinarily occupied by the driver of a motor vehicle he shall be deemed to have the care or control of the vehicle unless he establishes that he did not enter or mount the vehicle for the purpose of setting it in motion.


John Borden Hamilton: That would
appear to answer it.


Ralph Osborne Campney: The same presumption exists here. The crown does not have to prove anything under this section of the Criminal Code; neither does the prosecutor under the proposed amendment.


Daniel (Dan) McIvor: I should like to ask the minister a question. I had a case some years ago of a lady who was hit by an army truck and the driver was guilty of breaking the law. She could only get a box of chocolates from the army surgeon. There was no way

Canadian Forces Act
that she could collect, and I must say that I did my best. Is there anything in this provision that will afford protection in a case like that? She had a good position as a dressmaker and had to go to the hospital. She got a box of chocolates but she sent it back.


Ralph Osborne Campney: I am afraid that on the meagre facts adduced I could not very well express an opinion.


[Stage Direction]
Clause agreed to.
On clause 10-Appointment of commissioner.
Mr. Carrick:: Mr. Chairman, I am wondering what reason the minister may have for thinking that he will be able to get evidence taken on commission from a witness in a foreign country where that witness is reluctant to appear voluntarily before a court martial.


Ralph Osborne Campney: I can think of one or two cases which might arise. For example, a man some distance from the place where the trial is taking place might be unwilling to leave his business to attend the trial whereas he might be quite willing to give evidence if someone duly authorized would come and take it. There are a number of other instances, I am sure, if I could think of them at the moment, where that would obtain. It is just an attempt to try to increase the likelihood that all the evidence in any of these cases will be brought in in one way or another, acceptable in law, of course. We hope that it may prove useful in cases such as I have mentioned and others that may occur to hon. members. It is probably not going to be effective in a great many cases but it could be helpful.


Owen Lewis Jones: Paragraph (a) refers to the
securing of evidence for both the prosecution and the accused. It ends by saying:
... or that the attendance of a witness for the accused person is not readily obtainable-
And so on. But paragraph (b) only takes care of the prosecution. There is no provision made for the taking of the evidence of a witness for the accused when the witness is outside of Canada. I think the accused should be treated in the same way as the prosecution. I do not know whether it is an omission. You cover it in paragraph (a) but you do not in paragraph (b), and I think the accused should be protected.


Ralph Osborne Campney: Well, it seems to me that the defendant is protected in any case.


Owen Lewis Jones: In paragraph (a), yes, but if you read paragraph (b) there is no mention

made of the taking of the evidence of a witness for the accused who is outside of Canada.


Ralph Osborne Campney: I am not just sure that I understand the hon. member's question clearly, but all this clause does is to extend the mechanics or the method or the possibility of obtaining evidence for the prosecution. The defendant has the widest possible latitude and evidence can be taken where it is not readily obtainable at the trial for any reason.


Owen Lewis Jones: Where the serviceman is outside of Canada and more or less at the mercy of the service he should be protected in the same way as the prosecution, and apparently he does not have the same power to call witnesses according to this provision.


Ralph Osborne Campney: Frankly, it seems to me that he is more fully protected.


Donald D. Carrick: May I ask the minister if he considers paragraph (a) of subclause 1 applicable to courts martial outside of Canada so that the provision where the attendance of a witness for the accused person is not readily obtainable for any reason would apply?


Ralph Osborne Campney: Yes, paragraph (a) is applicable outside of Canada.


John Borden Hamilton: There must be some reason for the additional words, "under the law of that place there is no provision for compulsory attendance" in paragraph (b) when they are not in (a). I would feel that the observation that the wording should be extended to include the accused person is probably right. It is an additional reason over and above that stated in paragraph (a).


Ralph Osborne Campney: The general principle underlying these amendments is that we give the widest possible latitude to the defence under any possible circumstances to call evidence. The rights of the prosecution are more limited, and this is an attempt to extend it slightly.


George Randolph Pearkes: But why is it necessary then to add the words in paragraph (a), "or that the attendance of a witness for the accused person is not readily obtainable for any reason"? If it is necessary to include them in paragraph (a), surely it is desirable to add them to paragraph (b).


Owen Lewis Jones: I think paragraph (b) could read, "that the attendance of a witness for the prosecution or the accused". I think it is only just.


Ralph Osborne Campney: I might put it another way. The intention of the amendments in this clause is to give the accused the widest possible latitude to call his witnesses and to

keep the prosecution within reasonable limits. In other words, the section is in favour of the accused.


Owen Lewis Jones: No, the section is in favour of the prosecution. It is going to enable them to secure further evidence and that is not necessarily so as far as the accused is concerned. I think that is quite clear.


Mr. Dickey:: No, that is not clear at all. Paragraph (a) says that the judge advocate general or such other person as he may appoint for that purpose may appoint an officer or other qualified person as a commissioner to take the evidence of a witness under oath if the attendance of that witness for the accused person is not readily obtainable for any reason. That is complete. But paragraph (b) limits the authority of the judge advocate general with respect to appointing a commissioner to take the evidence of a witness for the prosecution to instances outside of Canada where the attendance of that witness cannot be forced by the provisions of the law of that country for compulsory attendance. In other words, it is only operative where there is no law in that country under which the prosecutor can go and enforce the attendance of the witness. That is not being required of the accused. That is all.


John Borden Hamilton: I think there is a fair amount of reason to the observation of the senior member for Halifax, but in connection with paragraph (b) is it the practice of the department always to extend to the accused's officer counsel the opportunity to attend upon an examination by a commission for the purpose of cross-examination? I think that would be a very important item to consider in connection with paragraph (b).


Ralph Osborne Campney: Yes, it is always the practice to have the representative of the accused present. In fact, it is required by the act itself, section 155, subsection 4.


[Stage Direction]
Clause agreed to.
Clause 11 agreed to.
On clause 12.
John Borden Hamilton: Perhaps I should reword this question. This addition does not in itself indicate that tolls or charges will be paid. It simply says that the treasury board may authorize payment of duties and tolls in respect of such use. Is it the intention that tolls and charges of the kind mentioned here in the explanation will be paid from now on?


Ralph Osborne Campney: The hon. member is talking about clause 13.


John Borden Hamilton: I am sorry.
Canadian Forces Act


Mr. Cameron (Nanaimo):: Can the minister tell us why subsection (2) of section 178 is now being repealed? Is there some difference now?


Ralph Osborne Campney: No. It is just being reenacted in order that it may fit into the proper place in the act.


Colin Cameron: I understand.


[Stage Direction]
Clause agreed to.
On clause 13-Duties or tolls on roads, bridges, etc.
John Borden Hamilton: May I have an answer now to the question I just asked?


Ralph Osborne Campney: The section as it stands in the act is a complete bar to the payment of tolls, in the circumstances set out in the section, by the Department of National Defence, on bridges and highways, over canals and so on. But certain circumstances have arisen in a number of places which make it desirable that under these circumstances we should be required or might reasonably be required in the department to pay tolls. It is not an automatic abrogation of the section. It is merely putting a rider into the section to permit-where treasury board thinks the facts warrant it-the payment of tolls by the department.


John Borden Hamilton: How will that work out? We can envisage an army convoy coming to a toll bridge. What is the procedure going to be as far as the payment of tolls for the whole convoy is concerned? Have there been any problems in the past in connection with manoeuvres, where convoys have been stopped and payment has been charged or attempted to be charged?


Ralph Osborne Campney: The bridges and other facilities which we shall have to deal with will necessitate making agreements in relation to convoys and so on, as the hon. member implies. But the section is worded in that way purposely so that where the circumstances arise-there are not very many toll bridges in the country-or where the question does arise treasury board in fact may be the judges as to what sort of arrangement should be made what payment will be permitted and so on. In other words, it is a purely permissive addition to the clause.


John Borden Hamilton: Instead of causing great confusion in army convoys, may I suggest to the minister that he might use his influence with the Minister of Finance and see whether he could not get a little bit more help for the municipalities. Then he would not have to pay any tolls over their bridges.

Canadian Forces Act


George Randolph Pearkes: A much bigger problem arises in connection with Her Majesty's ships tying up at wharves. In the past I believe Her Majesty's ships have paid no wharfage when they have tied up at any pier in a harbour. Is it now the intention to reimburse municipalities where there are wharves other than government wharves? Suppose a naval vessel ties up at, shall we say, a C.P.R. wharf. Is it now the intention to pay the C.P.R. wharfage?


Ralph Osborne Campney: It would depend upon the circumstances. I may say that so far as I know that particular phase of the question has not arisen. At any rate, it has not been brought to my attention.


Herbert Wilfred Herridge: I should like to ask the
minister whether this section would make it possible for provinces or councils or municipalities to be compensated for damage to highways or roads or bridges caused by heavy army vehicles and that kind of equipment?


Ralph Osborne Campney: No.


Colin Cameron: Can the minister tell us what sort of circumstances they would be that would make it proper to pay in one instance and not in another? I must confess that I find that matter difficult to understand.


Ralph Osborne Campney: In some cases the federal government has contributed substantially to the cost of a bridge and has made agreements exempting all departments from tolls. We have one case where a municipality purchased at the going rate and paid a substantial sum to the department for some of the land for part of the abutment to a bridge, and paid cash. There are two different sets of circumstances. In one there is a contractual freedom from tolls because it was part of the deal. In the other case the government contributed nothing; in fact, it profited by the transaction. I think of at least those two instances at the moment. I do not think they can be treated in the same way.


Colin Cameron: Would not the fact of the existence of contractual agreement exempt the government from paying without this amendment at all?


Ralph Osborne Campney: Oh, yes.


Colin Cameron: You do not need this amendment to cover that feature. What are the other circumstances?


Ralph Osborne Campney: We need this amendment only where circumstances make it seem that we should pay.


Colin Cameron: You have not yet told us what circumstances they might be.


Ralph Osborne Campney: I am instancing a case in point where a bridge has been constructed and

where in the construction of the bridge we- the government-did not contribute anything; and where we sold a piece of land at a reasonable price and received the money for it. In that case the municipality says, "You should pay tolls; we have bought your land and paid you for it and we have no agreement with you". In each case it is a matter of making out a case that we should pay. It is only in cases of that nature where this amendment would have effect.


Mr. Stewart (Winnipeg North):: How many such cases are there and where are those cases situated?


Ralph Osborne Campney: The question arose in the first instance in connection with the Halifax-Dartmouth bridge. The only other bridges that I know of, other than international bridges, are the Lions Gate bridge in Vancouver; the Victoria bridge in Montreal; the Jacques Cartier bridge in Montreal and the Canso causeway. I think those are about the only ones that I am aware of.


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


George Randolph Pearkes: Next sitting of the house.


Mr. Speaker:: Next sitting of the house.



INCOME TAX ACT


[Stage Direction]
The house resumed, from Tuesday, April 24, consideration of the motion of Mr. Fulton for the second reading of Bill No. 52, to amend the Income Tax Act.
Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, the debate was adjourned on April 24 by the hon. member for Middlesex East (Mr. White). Does he intend to continue?
I wish to make a few remarks with reference to the argument put up by the hon. member for Kamloops (Mr. Fulton) and the hon. member for Middlesex East. In the debate the hon. member for Kamloops dealt at some length with the principles which he considered were involved. However, the argument of the hon. member for Middlesex East was mostly along the line of particular cases. I think the particular cases could, with all reasonableness, be dealt with when the estimates of the department come before the house. I may say that the estimates of the Department of National Revenue, taxation

division, have already been before the select committee, and most of the principles and a lot of the details were dealt with in that committee. If those who are interested would follow the report of the proceedings that took place there probably they could get answers to most of the questions of the type that had been raised both when this bill was before the house and by hon. members on different occasions.
What I want to say is there can be no doubt at all that it is highly desirable-and the department agrees with this-that every taxpayer in the country should be able to settle and determine with finality the amount of his liability for income tax as quickly as it is practically possible. The government has accepted in principle the idea that there should be a point beyond which the crown cannot go back and change an assessment unless the taxpayer was guilty of fraud or misrepresentation. With this in mind, the six-year limitation was introduced in the income tax in 1944. Since that time progress has been made in getting the work of the taxation division more up to date and the Minister of Finance, who perhaps may have something to say in the course of this debate, has considered the possibility of shortening the six-year term; that is under consideration. Whether the three-year limit proposed in this bill is suitable or not, it is not a limitation that we can accept at this time until further studies have been made.
Mention has been made here of the fact that very considerable progress has been made in getting the work of the taxation division up to date. Ten years ago, or 12 years ago, from 1945 on, there was a great backlog of work which had to be done. That backlog was the accumulation of unassessed returns, because of the fact that during the war years a great number of our staff had been diverted into private enterprise and it became increasingly hard to recruit people to do the work. At that time I remember we had somewhere between 11,000 and 12,000 employees in the central office here, in what we call the head office, and in the 28 divisions which we have throughout the country. I am very happy to say that that backlog of work has been cleaned up and we are now on a current basis. The same amount of work, or considerably more work, is now being done with 6,000 to 7,000 employees that was formerly done by 11,000 or more.
From the consideration of the precise period of time, three years, which has been suggested, I should like to turn briefly to the technical aspects of the bill. The bill recognizes the possibility of conflict with section
Income Tax Act
42 of the act. Section 42 has to do with assessments averaging for farmers and fishermen. Therefore, if the investigation were only a three-year period there would be a conflict in that averaging which is given to farmers and fishermen.
It should be noted that section 43 operates in much the same way as section 42. It is immediately apparent that the operation of sections 53, 64 and 80 might be seriously affected. Further study will no doubt reveal other provisions that would require some changes. This is not the kind of thing we should rush into without first deciding what to do about those other provisions, some of which have been inserted for alleviation of the tax burden.
Let me deal with the technical aspects of the bill. I suggest it does not say what the hon. member for Kamloops has in mind. In line 18 we find the words:
Such assessment shall be deemed to be final.
In lines 21 and 22 we find the words:
Such assessment shall not thereafter be subject to be re-opened or varied.
The words "such assessments" refer back only to the original assessment mentioned earlier in the section. No account is taken of the possibility that there may already have been a subsequent assessment that varied the original assessment. Furthermore, this language is much stronger than that found in section 46, and it appears to be in conflict with subsection 7 of that section, which provides for the assessment being varied as the result of an objection or an appeal.
I feel sure the sponsor of this bill did not intend that court decisions must be reached within three years. I only point this out as one of the technical oversights that makes the bill somewhat objectionable. More serious objection to be found with the substance of the bill is the manner in which it would hamper investigation. As I read it, it specifically provides that the taxation division cannot investigate returns more than three years old unless fraud is alleged in respect of that particular year. To allege fraud or wilful misrepresentation is a very serious matter. It is not something that can be done before investigation starts. Though the officials investigating might have very good reason for thinking some income has been omitted from a taxpayer's return, or that income has been incorrectly calculated, or even though they may suspect fraud, I assure the house it is not their practice to allege fraud before seeking substantial corroborative evidence. Even where fraud has been proven in a current year I would hesitate to ask anyone to allege fraud in a previous year

Income Tax Act
before it had been possible to investigate those previous years. Yet this is what the bill appears to require.
Early in 1955 a case was completed in a certain city in Canada involving a group of individuals and corporations engaged in a certain type of business. The corporations and the individuals were convicted of evading more than $600,000 of taxes, with charges laid for each of the years 1942 to 1952. This investigation was started in 1952. Careful and thorough planning was necessary to ensure that evidence would be available. This was particularly true because immediately prior to starting the investigation reassessments involving additional taxes of only a few hundred dollars were made, based on the books and records made available by the corporations and the individuals concerned. Does the house wish to circumscribe and hinder investigations which have produced and will continue to produce such results?
I do not think this matter of investigation should be left without pointing out to the house that in fraud cases much of the information is obtained from sources other than the taxpayer's own books and records. The right to inquire from or require information from persons applies to "any person" and not just the person being investigated. The proposed bill would make it impossible to get information, in many cases, from suppliers, customers and banks without advising those parties that the department has alleged fraud. It is bad enough, indeed, to tell the taxpayer at an early stage of the investigation that the department is alleging fraud, but surely it is highly undesirable, to say the least, to insert provisions that would spread the knowledge that the department has alleged fraud or wilful misrepresentation to many of the taxpayer's business associates. His name would be blackened before the matter was brought before the courts.
I am not suggesting, Mr. Speaker, that the author of this bill had any intention of giving any protection or assistance to anyone who is deliberately evading taxes. I am quite sure that he had not. However, I feel sure that after close scrutiny of the provisions before us the house will agree that something more than the words before us is necessary and that we should take a cautious approach to this subject.
Mr. Speaker, I repeat I am not averse to a further limitation of the powers to reassess, having regard to all the considerations this house had when the present six-year limitation was introduced, and I may say the matter was considered before the present income tax bill was brought down. To my knowledge, however, the change has not been

made but I am going to let the Minister of Finance (Mr. Harris) give the reasons for that. The ramifications of the effects of this bill, in some cases adverse to taxpayers, have not been fully studied in its drafting. I accordingly must oppose the bill at this time in its present form.


Herbert Wilfred Herridge: Mr. Speaker, I am going to be very brief indeed; I have not the capacity this afternoon to talk for more than about three minutes.
We commend the hon. member for Kamloops (Mr. Fulton) for his diligence and attention to this problem. I am quite sure he has brought it forward because he realizes it is a matter of serious concern to a large number of Canadians. Hon. members in this group have received similar complaints and have had similar suggestions made for some amendment to the present form of assessment going back for a number of years.
While we feel the bill would possibly not achieve all the hon. member aims to achieve at this time-and I listened with great interest to the minister's remarks-and although possibly it has some minor defects, nevertheless we in this group intend to support the bill, Mr. Speaker. We give our support to the purpose of the hon. member for Kamloops in bringing this matter before the house and introducing this bill. That purpose is one we heartily agree with. It is to provide justice for all Canadian taxpayers and a system of income tax administration that will receive the unqualified support of the majority of fair-minded citizens.


Walter Edward Harris: Mr. Speaker, I too shall be very brief because my colleague the Minister of National Revenue has placed before the house the reasons why we feel obliged to oppose this bill. Nevertheless I think I should add something he probably could not say, and that is that one ought to consider the remarks made just this moment by the hon. member for Kootenay East.


Herbert Wilfred Herridge: Kootenay West.


Walter Edward Harris: Kootenay West; I beg your pardon.


Herbert Wilfred Herridge: There is some distinction.


Walter Edward Harris: We must consider what in fact is justice to the taxpayers of Canada. I am not going to argue anything at all except this. The payment of taxes is the greatest form of justice that can be exercised to the taxpayers of Canada. A government must be in a position to collect taxes equally and fairly from those who should pay them. It may very well happen that with a staff which, while not limited in numbers, nevertheless is not

increased particularly at any given time, that a government collecting agency would fall behind in normal work in collecting taxes. It also means that the person who inadvertently, as well as the person who deliberately, avoids the payment of taxes may not possibly be reached in the ordinary way without the passage of some time.
I think we all agree on this, that if we are going to exempt people from taxation because they have not been assessed by a particular period of time, it must be on the assumption that first of all we can afford not to have those taxes and secondly that we should place in the hands of the government every facility to have assessed that person and collected the taxes by that particular time.
Now, that is the issue at this particular moment. My hon. friend says he wants to limit the amount of time within which the government can collect taxes, except on certain conditions, from the Canadian taxpayers as a whole. The Minister of National Revenue (Mr. McCann) has indicated that in the normal course of events it is likely that people will not be assessed until a certain time has elapsed. I am in the position as the Minister of Finance of having to say to my colleague that if that is the case it will be necessary then for me to give that department at the expense of the Canadian taxpayer additional people, additional inspectors, additional assessors, in order that we can be sure the three or four million people who pay taxes in this country can in fact be assessed within a given time.
Now then, in addition to that, we are going to say to the Minister of National Revenue that if in the course of his investigations he finds that Mr. A has not paid his taxes when he should have and if he finds this perchance by some other means-not by just going to his house-he is not entitled to use that information if a certain time has run by unless, as I understand the bill, he can prove that the individual deliberately and fraudulently avoided the payment of taxes.
I realize, Mr. Speaker, there is bound to be a period of time after which you will not do this. We have always thought the six years was a reasonable length of time. As far as I am concerned, I quite understand the vexation that may be attendant upon a person who thinks he has and who has in fact settled his accounts and then finds at a later time that he has not. On the other hand, I am conscious of the fact that six years is not in my view too long generally for this kind of work to be done under present circumstances and that if you abridge
Income Tax Act
the time-at least if you abridge it as substantially as the present bill suggests-you are undoubtedly going to place the government of Canada in a position-I am not going to say of doubling the number of people employed for this purpose-of substantially increasing it or of asking me to admit in the house that it will be impossible to collect all the taxes that ought to be paid by citizens who want to pay their taxes and those who try to avoid so doing.
Under those circumstances, sir, we gave consideration last year-I might say before the budget was presented-to this problem and we gave consideration to it again this year and we could not come to the conclusion that we should abridge the time at the present moment without the possibility that we would be deprived of a considerable sum of money which we think we are entitled to in fairness to all the Canadian taxpayers who are paying their taxes. It may be possible that the time could be abridged less than what the hon. member for Kamloops has in mind. 1 quite agree that we would remove some of the vexatious difficulties if we did that, but I am not satisfied yet, and I accept the responsibility for the decision, not my colleague the Minister of National Revenue, that at this moment we cannot accept the bill. All I can say is that we have made progress in the two discussions we have had last year and this year in examining the whole problem to see if we could not cut down the six years. Therefore in the meantime I propose to oppose the bill for that reason, and that reason alone.


Colin Cameron: Mr. Speaker, when the minister was speaking I was wondering whether what he told us implies that the department has been gradually falling behind in this work.


Walter Edward Harris: No.


Colin Cameron: If not, it would appear to me that the question he raised of having to appoint more staff is not as serious as one might perhaps think. It merely means that there is not a large enough staff to review these cases within the set time. I would suggest that we should have more information as to how many extra staff will be required before we are asked to accept that explanation. Surely once that backlog is caught up with, and there must be a backlog, it should be possible, if you are not falling behind with your present staff, to do this work in three years instead of six years. If it is taking six years you must be falling behind at some point.


Victor Quelch: Mr. Speaker, I think this bill is a good one. Many cases

Income Tax Act
have been brought to my attention in the past few years of farmers who thought they had paid their taxes in full and then one day receiving a notice that an inspector would be in the district and they were to appear before him with their records for the past six years. In many cases they had not those records as many of them had been destroyed and consequently a net worth statement had to be filled out in which arbitrary figures were used. 1 am satisfied that in many cases the farmer had to pay additional taxes which should not have been paid simply because some records had been lost and arbitrary figures were used in filling out the net worth statement. I admit that there are certain difficulties, but I think that is the responsibility of the department. I do not think farmers should be penalized as a result of the government not having sufficient inspectors to do this work more efficiently.


Edmund Davie Fulton: Mr. Speaker, when the Minister of National Revenue (Mr. McCann) said at the beginning of his remarks that the department was considering the possibility of reducing the time available for reopening assessments-the minister would not agree with the three-year limit suggested in my bill as he said he had not made up his mind as to what shorter period would be appropriate-I was inclined to say to myself that it might be appropriate to defer asking for a decision on the bill. However, when the Minister of Finance (Mr. Harris) rose he used words which seemed to suggest to me that in his view he was not prepared to admit that six years was too long. In fact I think those were the words he used, that he was not prepared to admit that the six-year period was too long. Therefore, Mr. Speaker, I am in the position of having had my hopes raised by the Minister of National Revenue and then having them dashed by the Minister of Finance.


Walter Edward Harris: Would the hon. member permit an interjection? I do not think that I said that at the moment I was prepared to admit that, but we have been considering whether or not the time could be abridged.


Edmund Davie Fulton: The minister has modified somewhat my impression of what he said earlier, but I think it will be found on Hansard that he did say something very much to the effect that he was not prepared as yet to admit that six years was too long, that in fact it could be reduced below six years. It seems to me that the only thing to do is to call for a decision on the bill and the principle involved in the bill.
The principle involved in the bill is that there should be a limitation of three years after the date of a final assessment within

which the department must reopen an assessment unless it alleges fraud or wilful misrepresentation, and that after a three-year period from the date of the final assessment the assessment will become not subject to reopening or review unless, as I say, there is then an allegation of fraud or wilful misrepresentation.
The Minister of National Revenue said that there was some possible conflict with sections 43, 53, 64 and 80 of the act. I do not pretend to be an expert draftsman but in the short time available to me I have looked at the act and I cannot see that there is any irreconcilable conflict. I believe that by and large those sections have to do with averaging and they would prevail if there were no conflict. The bill expressly preserves the right of averaging given in section 42 and therefore I cannot see that there would be any conflict which would work to the detriment of the taxpayer as between the new clauses set out in this bill and the sections of the act mentioned by the minister.
I was interested in his criticism of the proposed amendment. The minister referred to the words in paragraph (b) (i) as follows:
Such assessment shall not thereafter be subject to be re-opened or varied.
The bill does not take account of the possibility of a reassessment having been made after the first assessment but within a three-year period. I would refer the minister to the provisions of subclause (b) of the proposed new clause 4, which reads:
After the expiry of 3 years from the day of the original assessment, and subject only to the provisions of subparagraph (i) of paragraph (a) of this subsection,-
Subparagraph (i) of paragraph (a) gives the minister the right to insist on an investigation in the event of wilful misrepresentation or fraud at any time after three years, notwithstanding whether reassessments have been made or not. That situation is protected by the use of the words "subject only to the provisions of subparagraph (i) of paragraph (a)".
Then the minister said that the language with respect to the final nature of the assessment was stronger than the language of the present section 46 in that it would now be necessary for the department to allege fraud or wilful misrepresentation if it wanted to reopen after three years. That result does follow from the language of my bill and it is a result which I deliberately sought to accomplish in wording the bill. Let me point out in answer to the many objections raised by the two ministers that if the three-year limit from the original assessment was adapted it would still give the department virtually four years to carry out its investigations.

The original assessment, whilst it is provided in section 46 that it must be made with all due dispatch, is nevertheless not made usually for some months and in some cases going on for a year after the filing of the return. By the proposed bill there is a further three-year period from that time, within which they may carry on investigations, so that in effect they are given from 3| to 4 years to carry on investigations and make reassessments if there is found to be any irregularity. That should be, in my submission, ample time, so that one is justified in providing that, after that time has expired, then the assessment can be reopened or varied only if the department is prepared to allege fraud or deliberate misrepresentation.
In my view, as I said in introducing the bill, and I repeat now, I am not seeking to protect the dishonest or fraudulent taxpayer. The necessity of the allegation of fraud or misrepresentation after there has been plenty of time to make an investigation, that is, 3i to 4 years, would have a rather wholesome effect in that it would discourage the making of investigations which in many instances at the present time smack almost of persecution. I know it would be a serious allegation and I think it would give the department second thought before it instituted an investigation if it had to allege fraud or misrepresentation. I am not at all uncertain-in fact I am satisfied-that that would not be an unhealthy situation, because on the basis of the evidence now available it is our view that there are too many investigations too carelessly undertaken after the lapse of six or seven years, when the taxpayer has no possibility of producing the evidence that is required and, simply because he cannot prove his innocence, all the cards are in the hands of the department, and the innocent taxpayer is presumed to be guilty.
Sir, it is to correct that situation that I introduce the bill. Nothing said by the two ministers this afternoon has led me to believe that the principle should not be accepted, and I therefore recommend it for the verdict of the house.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major C. R. Lamoureux, Gentleman Usher of the Black Rod, as follows:
Aitken, Miss
Balcer
Barnett
Bennett, Miss
Blair
Bryce
Cameron (Nanaimo) Casselman
[Stage Direction]
The Royal Assent
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the Senate chamber.
And being returned:
Mr. Speaker informed the house that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
An act for the relief of Marcel Alban St. Amour.
An act for the relief of Grace Elizabeth Browning MacDonald.
An act for the relief of Mary Carol Devone Henry Scott.
An act for the relief of Stanley Mira Levene, otherwise known as Stanley Mira Francis.
An act for the relief of Alice Isabel Christian Thompson.
An act for the relief of Czarna Landzman Desmarais.
An act for the relief of Real Perras.
An act for the relief of Andrea Marietta Hiekisch Farago.
An act for the relief of Barbara Mary Elliott Priestley.
An act for the relief of Nancy Elizabeth Theresa Butler Waugh.
An act for the relief of Robert James Clarke.
An act for the relief of Veronica Rose Latter Haworth Robinson.
An act for the relief of Billie Mae Margaret Taylor Dennis.
An act for the relief of Naida Donnithome St. James.
An act for the relief of Alma Elizabeth Mackie Wahlberg.
An act for the relief of William Maguire.
An act for the relief of Anne Perley-Robertson McNicoll.
An act for the relief of Colette Palardy Loranger.
An act for the relief of Esther Kathleen Hamilton Williamson Maynard.
An act for the relief of Helga Maria Berger Pilgrim.
An act for the relief of Ruth Carol Friedman Allen.
An act for the relief of Joseph Thomas Evans.
An act for the relief of Marie Jacqueline Carmen Van Troyen Morin.
An act for the relief of Hazel Wilhelmina Langtry Kimpton.
An act for the relief of Sergei Vermala.
An act for the relief of Stanley Tom Wood.
An act for the relief of Amelia Alice Stefani Schofield.
An act for the relief of Bridget Rowley McHale Bowman.
An act for the relief of Shirley Susan Morris Duggan.
An act for the relief of Maureen Evelyn Allison Cooper.
An act for the relief of William Windsor Frewen.
An act for the relief of Ethel Hansen Echlin.
An act for the relief of Muriel Doreen Southall Fisher.
An act for the relief of Paulette Lavallee Plotkin.
An act for the relief of Peter Butler.
An act for the relief of Ivy Umilta Gooding Joseph.
An act for the relief of Margaret Lash Johnston.
An act for the relief of Ethel Simon Baroff.
An act for the relief of Golda Cohen Winter.
An act for the relief of Henriette Lessard Hughes.

An act for the relief of Ewart Ernest Clouston.
An act for the relief of Mary Ethel Irving Buchanan Simcox.
An act for the relief of Constance Catherine Mary Pilon Milmine.
An act for the relief of Joseph Henri Maurice Messier.
An act for the relief of Mildred Helena Seale Darker.
An act for the relief of Robert Alfred Price.
An act for the relief of Alfred Sevigny.
An act to incorporate La Paix General Insurance Company of Canada.
An act to incorporate the Canadian Provincial Insurance Company.
An act to incorporate Grand Falls Central Railway Company Limited.
An act respecting the Maritime Stock Breeders' Association.
An act to amend the Live Stock and Live Stock Products Act.
An act to amend the Tariff Board Act.
An act for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1957.
At six o'clock the house took recess.

AFTER RECESS

The house resumed at eight o'clock.


Walter Edward Harris: the second reading of Bill No. 415, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways System during the calendar year 1956, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.


Gordon Minto Churchill: Mr. Speaker, is the Minister of Finance going to conduct the bill at this stage, or is his assistant?


Walter Edward Harris: Well, Mr. Speaker, it was not my intention to say anything at this stage. I thought we covered the main points yesterday and my parliamentary assistant felt the same.


John Borden Hamilton: Mr. Speaker, I do not intend to take long tonight in connection with the second reading of this bill since I spoke only yesterday at the resolution stage. I think however I might refer again to the fact that this bill, which provides for the money to be available for the Canadian National Railways for capital expenditures during the current year, and also covers a sufficient amount to take care of the same type of expenditure for Trans-Canada Airlines, is the usual type of bill. But at the

same time it seems to me we might seriously devote a little more attention to the problem of the railway's financing, because if we do not look at these expenditures as we go along it may be possible the formula which was put into effect in 1952 covering the capital outstanding at that time might again be placed in jeopardy.
The president of the railway was very fair in giving the sessional committee on railways and shipping the benefit of his experience in connection with these financing problems. I think it is well to remember that Mr. Gordon is a man with a vast banking and financial background. I think he has brought to the railway that wide experience, and we should pay considerable attention to what he says in connection with the financial position of the railway.
I would like to read to you, if I may, some of Mr. Gordon's words as reported at page 261 of the minutes of the committee dealing with the very crucial problem concerning the ability of the railway to continue to carry the carrying charges on the outstanding capital and at the same time to meet its operating expenses. This is what Mr. Gordon said:
But two questions have to be met. One is that this apparently satisfactory result has been due in large measure to the high returns which we obtained from our capital expenditure on the dieselization program. In the early stages of dieselization those savings were at their maximum because we deliberately selected those services which would give us the biggest return. We have now entered upon the stage where though the whole program is still based on economic considerations the amount of return will be subject to the law of diminishing returns. I can say therefore that we are just at the point of having to worry about our ability to keep ourselves in that position, and one of the most difficult problems confronting the Canadian National management is to ensure that the economic benefits which are scheduled to accrue in connection with this capital expenditure-
I might say that is the capital expenditure we are talking about voting here tonight.
-are not diverted into meeting steadily increasing current costs, the most important of which are wages and materials. If we find that the savings which we get from these capital expenditures have to be used to meet rising current costs they will not be available to prove the point I am making. If we cannot increase current revenues and get them adjusted to offset the effect of current cost increases the net result would be a growing inability to provide any return whatever on our equity investment and make it increasingly difficult to service the outstanding debt out of our earnings.
And then on the next page, Mr. Speaker, Mr. Gordon referred to the fact that the amount of money which was being spent was on expenditures which he deemed prudent.
Canadian National Railways


Mr. Benidickson:: What page, please?


John Borden Hamilton: Page 262. This is what Mr. Gordon said:
Up to this moment I can defend all this expenditure as being prudent expenditure earning its keep, and if we can maintain our current costs in proper relation to current revenues this property will stand on its own feet and it will be able to show a profit though perhaps never to the point where we shall fully service our equity capital to the extent it should be-but at least providing a reasonable return on equity capital.
This is getting back to the position I discussed very briefly yesterday. Capital expenditures themselves require a certain fixed sum to be made annually by the railway to meet the carrying charges on the same. The president of the railway has said that these are prudent expenditures. The expenditure of these moneys will show a return sufficient to carry the outlay made, but if the railway finds itself in the position, in connection with its current operations, where it has to cut down to the point where it cannot make sufficient money to take care of that fixed amount, then of course we are going to find ourselves back in the same position we were in several years ago when the government had to put up the money to meet the carrying charges on the guaranteed bonds.
I suggest, sir, that perhaps we have to take a different outlook in this connection. Perhaps we will have to arrive at a new formula. If these expenditures are prudent, as the management of the railway believes they are, then there is a fixed amount which must be set aside as the amount which must be earned annually out of those prudent expenditures to take care of the carrying charges on them.
If it is apparent in the other half of the formula that the current revenues are not in a position to do that job and meet the current operating expenses, then I think we have reached a stage where the railway must be given more freedom in order to carry out its operations. It must not be left in the position where it is always between the squeeze on the one hand of keeping certain of its expenditures down, the squeeze of keeping its charges down, and at the other extreme facing the annual demand for increasing wages.
As I said previously, I do not think labour is very happy with this situation because they feel there has been placed on top of the whole operation a blanket type of control, and when they move into negotiations they are not moving into unfettered negotiations and there is a ceiling put on their aspirations. They are not going to be happy, I believe, until they see management in a position to meet their legitimate demands and at the same time plot the course for the railway

Canadian National Railways without a continual reference year after year to a board of some kind to see exactly where they stand.
I am not suggesting tonight the board has to be removed. I simply say that we should be plotting a course to put in management's hands more of the ability to meet every-day competition and to plot its own future without being hamstrung at every turn.
In connection with this situation I think it is advisable for us to move along that line in any case. It seems to me, once we have determined that there should be an operation of a company by the public and once we have provided for the public corporation to do the job, it is our duty to see that the company has the tools with which to carry out the job.
I think one of the things we should be making a point of is that we do not snipe continually year after year at some type of operation such as this. We should give them the tools to do the job and as long as they are not coming back and calling on us to meet recurring types of operating deficits- they have some excuse if they do not have the freedom they need-but as long as they are not doing that, I do not think we should be bothering them at every turn in connection with their policies.
In connection with this legislation I notice that Trans-Canada Air Lines is mentioned. It seems to me that we are moving to the point where even with government corporations there can be a conflict of interests and I submit that these two corporations should be separated. As far as I can see there seems to be no particular reason why the capital expenditures of Trans-Canada Air Lines should be intermingled with legislation dealing with Canadian National Railways.
As a matter of fact, I am a little confused as to who is responsible for this type of legislation. I notice that questions having to do with Canadian National Railways are answered by the Minister of Transport (Mr. Marler), but when legislation deals with the financing of Canadian National Railways it is handled by the Minister of Finance (Mr. Harris), and then when Trans-Canada Air Lines enters the picture the Minister of Trade and Commerce (Mr. Howe) squeezes in. There is certainly confusion in connection with this type of legislation and I think it is time that the two corporations should be separated before a real conflict of interests arises.
I might suggest also that it is about time the Minister of Trade and Commerce, who has a big pipe-line job on his hands, should divest himself of T.C.A. and let it come back where it should be, to the Minister of Transport. The minister has several jobs and it
fMr. Hamilton (York West).]

might be a good thing if he were to divest himself of eight or nine of them. Then perhaps the Prime Minister (Mr. St. Laurent) might resign six months earlier and let the minister finish his career as Prime Minister, a job which he seems to be carrying out anyway.


Daniel (Dan) McIvor: May I ask the hon. member a question. Has the Minister of Trade and Commerce not made a success of anything he has taken hold of? Why quit it?


Donald Methuen Fleming: Like wrecking parliament. He made a great success of operating the steamroller.


John Borden Hamilton: I am suggesting that we might let him be Prime Minister for six months, which should be an adequate reward for any service he has rendered.
I notice that we are carrying on the same process of guaranteeing the bonds of this corporation. I should like to see a hands-off attitude adopted toward the corporation so it might be in position to carry out its job properly without interference. I wonder if it has ever been suggested that future issues of the securities of this corporation be made without a government guarantee. Perhaps the government guarantee goes with the securities of any government corporation-I am not sure of that-but I am thinking specifically of the requests which are made at various times for the construction of branch lines in different parts of the country. There seems to be a need for these branch lines which is brought out in the committee and it is indicated that they are likely to be a good business proposition. Instead of lumping all the securities together, as we do today, would it not be possible at some stage to say, "Here is a good business proposition; this community needs this line and the evidence is that it can make money; we are prepared to go ahead with this and issue debentures, mortgage bonds or whatever is necessary to put out and let it stand on its own; let us see if we cannot make new financing as we go along possible without this over-all guarantee".
I mentioned this in the examination of Mr. Fairweather, the vice-president, and he indicated that it had never been contemplated. The thing that worried me was that it had never been contemplated as far as the bookkeeping system was concerned. As I understand it, it is impossible to bring figures to indicate that any particular segment of the line is a paying proposition while another segment is losing money because everything is lumped together. He could not say, "This particular area pays and it would be a good investment, while another area does or does not pay. It seems to me that these are

things we should think about annually in connection with this legislation, because I understand it comes before this house each year.
We heard complaints today, in connection with the previous bill, that it had been placed in our hands just before we came into the house. The Minister of Finance was quite right in saying that he indicated yesterday that if the notice proved to be too short he was quite prepared to allow the legislation to stand over. I remember distinctly his having said that. He mentioned also something about the bill having to have a date on it, and I understood it was difficult to have it printed with the date on it and distributed in time for consideration. If that is the case, I would make the suggestion that bills such as this one and the one we had earlier should be circulated in draft form without a date and then there would be no question of our having to come to the house with only one or two days' notice.


William Moore Benidickson: A date plus a consecutive number.


John Borden Hamilton: That does not change my suggestion that if the bills were distributed in draft form we could have them much earlier. In this particular instance, with the pipe line debate intervening, we could have had a draft bill several months ago and really studied it before we were asked to discuss the various clauses.


Stanley Howard Knowles: Mr. Speaker, there is just a brief word I should like to say about the form of this bill. There are many matters in relation to the Canadian National Railways in which I am interested, but they are not covered particularly by this bill and I shall not try to drag them in by their heels.
There is something about the form of this bill which reminds me of the other bill we had this afternoon; that is, it combines subject matters which for many years were dealt with in two separate bills. I must not break the rule by referring to the clauses but there is no law against Your Honour looking at the bill which you have in your hand and noticing that the last clause deals with a subject matter which for many years was covered by a completely separate bill.
As I say, this afternoon we had a bill which amended two different acts of the parliament of Canada. I wonder sometimes just how far this practice can be carried. I recognize that it is much more convenient for the government to reduce the number of bills it has to bring before parliament. If it could go on combining bills into one it might do something about the length of the session and something about the problems which this government has in facing parliament.
Canadian National Railways
Frankly I see no reason why the Minister of National Defence (Mr. Campney) should be allowed to put all of his bills for the session into one bill; I see no reason why the Minister of Finance (Mr. Harris) should be permitted to put in one bill what used to be in one bill introduced by the Minister of Finance and in another bill introduced by the Minister of Transport (Mr. Marler), unless the same privilege is to be extended to the other ministers. I certainly hope it will not be done, for I checked and discovered that so far this session the Minister of Transport has presented five different bills, the Minister of Finance has presented six or seven different bills, the Minister of Public Works has given us three, and the Minister of Trade and Commerce has given us at least three bills. So I might go on with the rest of the ministers.
The excuse given this afternoon by the Minister of National Defence was that it was a matter of convenience to have all the national defence legislation for a year in one bill. I am sure, too, it is a matter of convenience to the Minister of Finance to be able to do this, but I suggest that if that can be done there is nothing to stop each minister in the cabinet from putting all his legislation for the year into one bill and saying, "This is my department's legislation for the year." Maybe it is carrying it to the point of absurdity, but we have seen this government do absurd things, to say that after a few years of that kind of practice the Prime Minister might bring before us one bill containing all the legislation for the session.


Daniel (Dan) McIvor: Hear, hear.


Stanley Howard Knowles: My hon. friend from Fort William says "hear, hear." I have no doubt that would be a pleasant way for him, as far as the business of parliament is concerned, but I am sure it is hardly the way to do things. I recognize that it may be argued by the Minister of Finance that this provision for the appointment of auditors which is contained in this bill is relevant to the affairs of the Canadian National Railways. I reply that it is not covered in the title of the bill. Previously, when we had a separate bill for the appointment of auditors for the national railways, that separate bill was so identified. But I suggest in all seriousness that the argument of convenience which was given to us this afternoon by the Minister of National Defence for putting all his bills into one, and now the practice that is developing in this case of combining two bills into one, is a course that should not be carried too far.

Canadian National Railways
Bills that are distinctly separate matters, that should stand on their own feet before parliament, I suggest, should continue to be dealt with as separate bills. In this case I feel that the appointment of the auditors of the Canadian National Railways should have been kept in a separate bill. I would say at the same time that it is still our view that that work should be done by the Auditor General rather than by a private firm, but my main point in rising is to protest this practice of telescoping numbers of bills into single bills, two examples of which we have had today.
(Translation):


J.-Wilfrid Dufresne: Mr. Speaker, I would like to avail myself of the opportunity offered by the bill now before the house to make a few remarks.
Once more I ask the government for something which I have been requesting time and again in the nearly three years I have been sitting in this house. When we are called upon to vote more than $200 million to provide certain improvements for the Canadian National Railways, I would ask the government again to provide the city of Quebec with an additional railway station.
It is a well known fact, especially to the hon. members who are from Quebec city or from the surrounding area, that at the existing station there is a traffic congestion which delays passengers each time a train comes in. I have already asked that consideration be given to the possibility of building at the entrance to the city of Quebec, more exactly at the foot of the hill called Saint-Sacrement boulevard, another station which would serve approximately 100,000 people. This would only mean a five minutes delay in the arrival time of the train and it would accommodate thousands of travellers arriving at Quebec. It would also help to relieve the traffic congestion around the present Palais station.
This request, Mr. Speaker, seems very legitimate. It is necessary to the progress and advancement of the old capital. I do hope-and I feel that in speaking in this way I am accurately expressing the feelings of most of the people of Quebec city-that the government will see fit to grant this request and to construct, at the foot of Saint-Sacrement boulevard, the station I have already asked for and for which I am once more asking today.
I should also like to avail myself of this opportunity to ask the government to bring
pressure to bear on the authorities of the Canadian National Railways so that they hasten to settle the matter of the lots surrounding the station. These lots are to be used for the construction, in the near future I hope, of the new postal terminal for Quebec city. I know that, for nearly two months, the civic authorities of Quebec have been negotiating with the management of the Canadian National Railways. I hope that those negotiations will be successful and that there will be no delay in the exchange of these lots required for the construction of that terminal eagerly awaited by the city of Quebec and which will provide jobs for a fairly large number of people who are still unemployed.
In the same line of thought, I should also like to draw the attention of the government to some news items which appeared in Montreal and Quebec newspapers to the effect that, especially in Montreal, the authorities of the Canadian National Railways did not observe the Lord's Day Act.
It is not necessarily a matter of preventing trains from running on Sunday, nor am I suggesting that those who operate them stop working. However, I insist, as was stressed in the articles published in the press, on the fact that it is in no way urgent that Canadian National employees load and unload freight cars on Sundays.
There is a Lord's Day Observance Act in the province of Quebec, and I hope that the management of the Canadian National-


Mr. Richard (St. Maurice-Lalleche):: They allow transport of alcoholic beverages on Sunday; they allow liquors to be served on Sunday.


J.-Wilfrid Dufresne: That has little to do with the Canadian National.


Joseph-Adolphe Richard: Talk about working on Sunday.


J.-Wilfrid Dufresne: It seems to me that the hon. gentleman could have dispensed with so irrelevant a remark.
I therefore urge the management of the Canadian National, Mr. Speaker, to respect the Lord's Day Act. That is one of the main reasons for my intervention tonight, and I hope that the government will set an example by taking the appropriate steps to ensure compliance with this Quebec law, which demands of everyone to observe the Lord's day.
As to my hon. friend who has just mentioned the Sunday sale of liquor, it is unfortunate, but I imagine that, if ever the Liberal party came to power in the province

of Quebec, I mean in 25 or 30 years from now perhaps, this situation would go on just the same as it does now.


Mr. Maurice Boisvert (Nicolel-Yamaska):: Mr. Speaker, I wish to say a few words in reply to the remarks just made by the hon. member for Quebec West (Mr. Dufresne).
In the first place, the first two points he raised have nothing whatever to do with this bill. It is a bill which concerns the financial aspect of the Canadian National Railways operations, and those first two points are therefore quite irrelevant.
The third point raised refers to the enforcing of the Lord's Day Act. I have no doubt that my learned friend is perfectly aware that the enforcement of that act is a provincial government responsibility. No step can be taken towards enforcing the Lord's Day Act without previous consent of the attorney general of the province in which such work is carried out.
I only wanted to call the attention of this house to these matters, and I believe I can leave it at that.


J.-Wilfrid Dufresne: Mr. Speaker, if I may be allowed a further remark, I would say to the hon. member for Nicolet-Yamaska (Mr. Boisvert) that, from my seat tonight, I am asking the attorney general of the province of Quebec, who may not be aware of this violation of the Lord's Day Act by Canadian National Railways authorities, to be kind enough to investigate and have the law applied as it should be.
(.Text):


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
Clauses 1 and 2 agreed to.
On clause 3-Capital expenditures authorized.
Mr. Stewari (Winnipeg Norih):: What capital expenditure is envisaged on hotels, and is it the intention of the Canadian National to sell any of its present holdings of hotels?


William Moore Benidickson: The hon. member knows that certain hotels of the Canadian National system were sold a year or so ago. I have no knowledge of any other sales in contemplation. My hon. friend is referring to the capital expenditure of $9,035,000. The greater part of that, 1 think $8 million plus out of the $9 million, is the cost of the capital expenditures
Canadian National Railways contemplated during the year 1956 for the new Queen Elizabeth hotel in Montreal.


[Stage Direction]
Clause agreed to.
Clause 4 agreed to.
On clause 5-Guarantee.
John Borden Hamilton: I am wondering whether any thought has ever been given to the issuing of securities against specific parts of newly constructed line.


William Moore Benidickson: I listened quite intently to the remarks of my hon. friend when speaking on second reading of the bill. I think that is very difficult for a crown corporation. I have in mind in the province to which he and I belong, Ontario, the expansion being carried out by Ontario hydro and I can contemplate that there would be considerable difficulty in providing financing for some of the important things that Ontario hydro is doing in my own area as distinct from the operation of the entire system.


John Borden Hamilton: Has there ever been any thought given to the issuance of non-guaranteed securities as we replace outstanding securities? That takes place almost every year. There are securities which are redeemable and new securities are issued to provide funds to replace those securities. Has any thought been given at any time on a general basis to the issuance of non-guaranteed bonds or other type of securities?


William Moore Benidickson: I am not going to answer my friend directly with respect to whether any thought has been given to the matter, but I would remind him that it is obvious that the possible cost of financing would be greater without the guarantee. My hon. friend would recognize that certain specific projects might not go ahead if the cost were greater than under the original plan.


John Borden Hamilton: Would that not, however, simply bring the issuance of those securities into line with the issuance of similar securities by a private corporation carrying on the same type of business, and would the cost not be the same?


William Moore Benidickson: I simply refer the hon. member again to the analogy that I suggested, Ontario hydro.


John Borden Hamilton: I do not think that answers my question. In answering the previous question the parliamentary assistant referred to the financing of a particular segment as being more difficult than if it were financed as part of the general plan, but what I am referring to now is the over-all financing and the issuance of securities. He has said that it would cost more if they were not

Canadian National Railways guaranteed. My question is, would it cost any more than it would cost a private corporation in similar circumstances?


William Moore Benidickson: Well, Mr. Chairman, having been assistant to the Minister of Transport and in the last couple of years assistant to the Minister of Finance, I may say that I have had the responsibility of piloting this bill through the house on several occasions and this point has not been raised previously. I can assure my hon. friend that it will be looked into.


[Stage Direction]
Clause agreed to.
Clauses 6 to 9 inclusive agreed to.
On clause 10-Trans-Canada Air Lines.
John Borden Hamilton: Is there any logical reason for the continuation of the policy of carrying out the operation and the financing of the operation of Trans-Canada Air Lines by means of this act? Has any thought been given by the department to separate legislation for that purpose, and has there been any thought given to placing this back under the department where I suggest it should be, the Department of Transport?


William Moore Benidickson: Again, I listened very carefully to what my hon. friend said. I thought perhaps he had given too little attention to the preamble of the bill in which there is special emphasis on the fact that this bill is a financing bill. Parliament itself has enacted that Trans-Canada Air Lines shall be a completely owned subsidiary of Canadian National Railways.


John Borden Hamilton: Here again I might make a suggestion. From what I can see we are asking the people of Canada to guarantee, by the issuance of certain securities through Canadian National, sufficient money to carry on the operations of Trans-Canada Air Lines. I think what we would like to see [DOT]is Trans-Canada Air Lines carried on as a separate financial entity. Here again I should like to emphasize that with the record T.C.A. can achieve, if it has not already achieved it, that company could go out into the market and obtain its financing without, I am quite sure, the necessity of a guarantee by the government or the people of Canada. If it costs a little more to do it, again the company will simply be putting itself in the same position as any private corporation carrying on a similar type of work. I would say that here is an opportunity for us to detach ourselves from the annual job of setting up and approving this capital expenditure for Trans-Canada Air Lines through Canadian National Railways. It would be an opportunity, as a matter of fact, to ensure that less and less

government interference took place in connection with the operation of that crown corporation. I would strongly suggest to the parliamentary assistant-because I feel I am on very firm ground-that as far as the operation of the air line is concerned, any financing could be obtained in the open market without having to be done in this manner.


[Stage Direction]
Clause agreed to.
Clause 11 agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Hon. George Prudham (Minister of Mines and Technical Surveys) moved: the second reading of Bill No. 417, to amend the Emergency Gold Mining Assistance Act.
He said: Mr. Speaker, I have little to add at this time to what I said at the resolution stage. The gold mining industry continues to face difficult economic problems. The fluctuation of the exchange rates has resulted in a slightly higher return from the sale of gold. I believe the net returns per ounce during the past year or during 1955 was somewhere about 40 cents higher than in the previous year. There has been an improvement in the position of the mines or in many of the mines, I would say, because of increased capital investment in machinery and general improvement in efficiency. A few mines have improved their position because of higher grades of ore. However, the fact remains that many mines and their dependent communities still must rely on cost aid in order to survive. Approval of the proposed two-year extension of the provisions of the Emergency Gold Mining Assistance Act at this time will enable the mines to plan their operations for the next 2J years with confidence and efficiency that would not be possible otherwise. It naturally follows that the more efficient is the operation of the mines, the less assistance will be required from the public treasury. That is why we are proposing the extension at this time.


Donald Methuen Fleming: Mr. Speaker, this is a very brief bill. It purports to add the word and figures "1957 and 1958" to the provisions of one of the clauses of the Emergency Gold Mining Assistance Act. This measure has been in effect now for eight years. The subsidy has been offered since 1948. In that period of time there have been various debates on measures to

extend the effect of the subsidy. In each case the measure has been supported by the house, and no new principle is involved in the present bill.
I think a word should be said on the matter of subsidies. I think that any subsidy requires some justification in normal times. There are dangers in subsidies. There are particular dangers in hidden subsidies. The subsidy we are dealing with here is not a hidden subsidy. This subsidy has been, from the outset, nothing more than a stop-gap, hand-to-mouth form of emergency assistance to the gold mining industry. It has never been a solution of the problems of that industry. When I say "hand-to-mouth", I am stressing particularly the fact that the measure has never been in effect at any one time for more than a couple of years. Hence the industry has not known very far in advance how long it could expect to receive this form of assistance.
There are justifications for this particular subsidy, far as it falls short of being anything like a solution of the problems of the industry. There are several grounds upon which, for lack of a proper solution, the subsidy can be justified. First of all, this is one commodity on which government sets the price. I do not say that the Canadian government has the absolute control of the setting of the price. Nevertheless, it is a commodity the price of which is definitely determined by government. In that respect it differs from almost any other commodity that is produced in Canada.
In the second place, there can be no question as to the need of the industry for some form of assistance in the absence of a proper solution of the whole problem. The plight of the gold mining industry in Canada is serious, as it has been for some years. It has been ground between the upper and nether millstones, the upper one being the set price, a ceiling on the price realized from the product, and the nether stone being the rising cost of production. Indeed, as the Canadian dollar has strengthened in terms of international exchange the position of the Canadian gold producers has deteriorated correspondingly.
It is not simply a matter, though, of the need of the industry as a producer of wealth. We are obliged to look more widely at the plight of those communities which are dependent on the gold mining industry, and there are many of them in Canada. The growth and prosperity of such communities on the one hand or their atrophy and depression on the other depend in effect on whether the ore bodies in the adjacent mines are to be operated and worked at a profit or not.
12, 1956	4971
Emergency Gold Mining Assistance Act When the margins are so narrow as they have been in the gold mining industry, a very slight difference in price can mean the difference between value for an ore body and literally no value at all in terms of workability.
The plight of the industry is not the fault of the industry. I do not think anyone in this house is going to question the fact that the industry has done its best, in the face of the difficulties that have confronted it, to keep itself on an efficient basis. The recent report of the Knox committee in Ontario as well as things that have been said in this house bear testimony to the fact that the industry has not been lacking in energy, enterprise and the desire to maintain all possible efficiency in production.
I have mentioned two factors, Mr. Speaker, that lend justification to the provision of a subsidy with respect to gold:	The fact that
the price is established by governments, and second, that the industry needs some form of assistance, otherwise it is going to close down further.
The third of these factors is the national interest. To an extent that some Canadians unhappily have forgotten, the gold mining industry in Canada has been one of the most effective contributing factors to the health of the Canadian economy. The search for gold has been an impelling factor in the development of great areas of Canada, not confined alone now to the extraction of gold but of other metals as well, both precious and base. In the depression years the gold mining industry stood out like a beacon light in the Canadian economy. Indeed, the prosperity of that industry in the days of the depression went far to sustain a weakened economy in Canada. In the war years the industry played a leading part, particularly in the early years of the war, again in the strengthening of the Canadian economy; and who can say that the day may not come when we shall again need the strengthening quality of the gold mining industry to help to lend support to the rest of the Canadian economy?
At any rate, this industry has an assured market for its product. It has an assured market for its product in the country where we most wish at the present time to sell some of our products. I refer to the United States. With that country in our commodity trade we are incurring a huge trading deficit. In 1955 that commodity trading deficit with the United States amounted to close to $1 billion, and in the first four months of this year it is evident that that commodity trading deficit with the United States is increasing. We have these figures from the dominion bureau of statistics. For the first four months of this
4972	HOUSE OF
Emergency Gold Mining Assistance Act year, 1956, our imports from the United States amounted to $1,363 million. Our exports to the United States amounted to $860 million. Therefore, in these first four months of the present fiscal year, Mr. Speaker, we have incurred a deficit of $500 million on our commodity trading account with the United States.
In the face of that situation and particularly having regard to the historical strength of the gold mining industry and what it has meant to the health of the Canadian economy, I submit to this house that it would be extremely dangerous to the Canadian economy if we contemplated a serious decline in the gold mining industry. Apart from a few mines which are blessed with very high-grade ore, the fact is undeniable that without some form of assistance, lacking an adequate solution to the problem, mines will be closed and the industry will suffer a body blow under present conditions. There are also many communities in this country directly dependent upon the gold mining industry which would atrophy and decay.
We may remind ourselves that already the process of decay in the gold mining industry has gone far, even with the very limited form of assistance that has been available to the industry under the Emergency Gold Mining Assistance Act. There are today in operation only half of the producers that were in operation in the year 1941, which is just 15 years ago. Had growth been normal there would have been many additional mines added to the group of Canadian producers. Development work has been curtailed. No one is seeking to open up new gold mines today and half of those mines that were producing in 1941 have closed down in these intervening 15 years.
It is fair also, Mr. Speaker, that we should ask what this form of assistance has cost the treasury of this country. In the eight years that it has been in effect it has cost the treasury $90 million. The extent of this aid was greatly reduced in 1955 as compared with the previous year, 1954. That year, 1954, was the record in terms of assistance advanced to the gold mining industry, when $16-3 million was paid out of the treasury of this country to the industry under the terms of this legislation. In 1955 the total of assistance under the revised formula that was introduced at the time the legislation was before this house last was just $9-3 million, and it is estimated that if this measure is continued in effect for the remainder of 1956 and the years 1957 and 1958, as proposed in the present measure, the assistance in this year, 1956, will cost the public treasury $8-9 million, and in the year 1957, $8-6 million. The


scale of assistance under the revised formula is moving steadily downward.
The purpose of this bill, sir, is to extend the effect of the legislation for two years. It is right and proper that this measure to extend the provisions of the act should be introduced now rather than that the industry should be left in doubt until the legislation would otherwise expire at the end of 1956. It is right and proper that it should be introduced now. Indeed, if it had been left until later, serious injury would be done to the industry because the mines must know in time to make their plans. Had it been the intention of the government to let this form of assistance expire at the end of 1956, or had the industry been left in doubt as to the plans of this government or as to the intention of the government with respect to it, then the plight of the industry would have been very serious, indeed.
I have emphasized, sir, that this measure is no solution of the deep-seated problem of the gold mining industry. The difficulty and the flaw in measures of this kind is that they often lull the government and lull parliament into thinking that the problem has been solved, or at least the problem has been met for the time being. No hon. member should delude himself into thinking that this measure is any solution, even on the short-run basis, of the needs and the problems of the goldmining industry. These problems are going to require much more farsighted solutions than are offered by the hand-to-mouth, stopgap type of assistance that we have in the present measure.
The importance of gold in the world has not receded in these recent years. There is not a country in all the world that does not want more gold. The heroic measures of austerity which the British government has found it necessary to impose upon the economy of that country have been designed to retain and recapture an increased quantity out of the world's store of gold. The possession of gold is a leading factor in the fiscal and trading policy of every country in the whole world.
Last year parliament approved some easing in the restrictions that theretofore had been applied in this country with respect to the holding of gold in private hands and the coinage of gold. But, Mr. Speaker, no one I am sure is going to pretend that these were anything more than very, very slight palliatives. These were no solution. What is required is something much more far-reaching. That leads me to say just a brief word about the relationship of this country and of this government with the International Monetary Fund.

It is evident that our engagements with the International Monetary Fund are such that the government has not a free hand to pursue the goal of an increased price for newly-mined gold apart from some permission on the part of the International Monetary Fund. I have been urging for years now that the government has the responsibility to Canada and to the gold mining industry to pursue with very much greater vigour and determination the need of a higher price for newly-mined Canadian gold. That, in the last analysis, is the only solution of the problem of the gold mining industry. An upward adjustment in price is overdue.
The government has been very chary in even acquainting the house with what it may have proposed at meetings of the board of governors of the International Monetary Fund. It has been like drawing teeth to try to extract any information from them as to what they have urged. We do know that South Africa with similar interests has been pressing its case very strongly before the International Monetary Fund for an increase in the price of newly-mined gold. This country, this house and the gold mining industry of this country are entitled to know what the Canadian government is doing in the same regard, and are entitled to expect vigour and determination on the part of the government and the exercise of the utmost ingenuity at meetings of the governing body of the International Monetary Fund in seeking some solution to this problem, which is not going to be solved apart from an upward adjustment in the price of newly-mined gold.
Finally, Mr. Speaker, we are entitled in this regard to ask the Canadian government for a statement of its own policy with reference to the holding of gold. What is the degree of confidence that the Canadian government is prepared to demonstrate in the future of gold-gold as a factor in our fiscal, trading and, indeed, all our economic relations? If the Canadian government wished to give some striking evidence of their belief in the future of gold to a country that is a substantial gold producer, and would be a much greater gold producer if a profitable market awaited it, it could give a striking demonstration of that confidence in the future of gold by making a bold declaration in regard to its own policy in reference to gold holdings.
In the budget papers tabled by the Minister of Finance (Mr. Harris) which are appended to the speech he delivered on the occasion of the introduction of his budget on March 20, we find in table 11 on page 24 the holdings of gold and of United States dollars of the exchange fund account and the Bank of Canada.
12, 1956	4973
Emergency Gold Mining Assistance Act
In 1952 gold holdings were $885 million; United States dollars $961-8 million. In 1953 gold holdings had increased to $986-1 million; United States dollars had decreased to $802 million. In 1954 gold holdings had increased to $1,072-7 million; holdings of United States dollars had increased to $833-4 million. In 1955 gold holdings had increased to $1,133-9 million; holdings of United States dollars had decreased to $692 million.
It is evident from even a quick perusal of those figures that our holdings of gold in Canada have increased slightly in each of the last four years. Our holdings of United States dollars have fluctuated year by year but at the end of that four-year period they were less than they were at the beginning of it. Figures are not available in detail for 1956, but what I have seen of government figures indicates there has been a decline in the holdings of gold in the exchange fund account and the Bank of Canada in the portion of this year that has expired.
It is for that reason, Mr. Speaker, tlmt in the presence of the Minister of Finance as well as the Minister of Mines and Technical Surveys (Mr. Prudham) I urge this is a time when the Canadian government ought to be bold in declaring a policy with regard to the holding of gold in the exchange fund account and the Bank of Canada. Here again the government has been very chary about making any statement of policy.
I do remember that two and a half years ago when Mr. Abbott was minister of finance he did allow himself to say that as far as the holding of gold was concerned it was found to be somewhat unproductive. Well, there are wider considerations to be taken into account than those which impelled Mr. Abbott, when minister of finance, to take that position.
Having regard to the seriousness of the" plight of the gold mining industry, having; regard to the imperative necessity for finding, a solution, having regard to the fact that any subsidy measure like the present one is at: best only to be supported on the basis of ar? existing emergency, then I submit, Mr. Speaker, we must have a serious engagement on the part of the Canadian government to address itself to the problem and to bring forth a solution. The solution lies in part with such pressures as the Canadian government may be in a position to exercise upon the International Monetary Fund and also upon the United States government which is the principal buyer of newly-mined Canadian gold; and given those factors, we still ought to have from the Canadian government some statement of its own policy and position with
4974	HOUSE OF
Emergency Gold Mining Assistance Act reference to the acquisition for government account of newly-mined Canadian gold.
Mr. Speaker, I have indicated there is no new principle in this bill. We have supported the measure, inadequate as it is, in the past. Having regard to the seriousness of the situation we must, of course, continue to support the provisions of this subsidy; but, sir, this is no excuse for postponing our search for the solution for which this industry and the national interest are crying today.


Herbert Wilfred Herridge: Mr. Speaker, the hon. member for Eglinton (Mr. Fleming) has more or less dealt with the rarefied and to me somewhat mysterious atmosphere of international finance and gold supply and so on. My remarks will be directly related to the somewhat more earthy subject of the lives of the miners and the communities in which they live.
This group has supported the Emergency Gold Mining Assistance Act since it was first introduced in the house as a temporary legislative palliative that maintains employment and in so doing protects the livelihood of the miners and others concerned, their investments in their homes and their investments in their communities. However, Mr. Speaker, we are not certain that the legislation is being used to the best advantage of the miners and the others concerned and of the country as a whole. We think it is about time there was some consideration given to a possible amendment to the act to make it more flexible to meet a situation which is not only temporary but which appears to be somewhat like some positions in the government service-it is a permanent-temporary situation.
Until comparatively recently all mining operations, whether base metal or gold, generally speaking followed a similar wage policy throughout Canada. While rates varied somewhat from area to area, within a given area the wages were practically identical in all types of mining. I am informed that this was particularly true in Canada's two main gold mining camps, Kirkland Lake and Porcupine. In fact I am informed that their wage policies were identical and extended into the base metal mines in northwestern Quebec. I am informed also that this solid policy or front which extended to even having the same negotiators handle their dealings with the unions was broken down about a year ago when Noranda, a base metal producer at Noranda, Quebec, granted the 44-hour week and certain wage concessions. I presume the reason for that change was the rise in the price of copper from 36 cents to 46 cents in a little more than a year and the development of the uranium mines in the Blind River area.


I understand that at that time the Ontario and Quebec mining operators were faced with a labour shortage. I am informed also that hundreds of miners left the Kirkland Lake area and the Timmins area last fall and winter for the base metal and uranium mines because of the higher wage scales and better employment advantages. As a matter of fact, regardless of the beneficial effects of the act, it has not been completely effective in preventing a lessening of the population in those two important areas.
The gold mining operators under that situation were faced with two alternatives. First, the prosperous gold mines could raise their rates to compete with the base metal and uranium mines for labour which would have provided a somewhat realistic view of the prosperity of the gold mining industry. Second, they could join together with the marginal mines and present the gold mining operators' version of a solid wage scale front on behalf of the operators concerned.
As I understand it, the gold mining operators chose a combination of these two alternatives. They introduced the 44-hour week without making any wage concessions. They thus left themselves considerably behind the base metal and uranium mines in regard to rates. Apparently they had hoped that the fact that most of their miners had an investment in their homes would force them to forgo the higher rates of pay available elsewhere in the mining industry. That was their first proposal.
The second part of their plan provided for the tapping of a labour supply willing to accept rates of pay averaging up to 50 cents an hour less than those paid in the base metal and uranium mines. Obviously no such labour supply was available in Canada, or indeed anywhere else where people knew the score so far as employment in the mining industry was concerned. I am informed that about three months ago the gold mining companies sent representatives to Europe to import necessary miners to work under those conditions. I have also been reliably informed that one of the men who went to Europe was Mr. William Ramsay, the manager of the unemployment insurance commission at Kirkland Lake.
On this account the gold mines are now being operated with older miners. 1 am told that the average age of miners in the gold mining industry in Kirkland Lake is now in excess of 40 years. These miners are held captive by their investment in homes and by the fact that mining operators will not hire men over 40 years of age. I understand it is the intention of these mines to operate with these men, in some cases plus labour imported

from Europe which is willing to work for the lower wage scales provided in the unorganized mines. I understand it is difficult to organize some of these submarginal gold mines because the union cannot offer the men very much in the way of hope for better wage scales and working conditions.
I suggest that the time has come to consider the present distinction between base metal mines and gold mines as being artificial. In our opinion it should be somewhat along the line of profitable and non-profitable mines. I must admit that I am not aware of the details of conditions in northern Ontario, although I am completely at home in the southeastern portion of British Columbia and understand mining conditions there, but I have received my information from what I consider to be most responsible and reliable sources. I understand that there is a large iron prospect at Boston Creek in the Kirkland Lake area which is undeveloped. I wonder whether the government has given consideration to amending this act to provide more flexibility in its administration and purposes and to permit assistance to such developments, either by way of loan or by way of the form of assistance now provided by the act.
In our opinion this act can be effectively administered only as a result of co-operation and a study of the situation in total in the mining industry by the Department of Finance, the Department of Labour and the Department of Citizenship and Immigration. We in this group are firmly of the opinion that the time has come for a co-ordinated approach to this problem by the three departments I have mentioned. We think that is very necessary. We should give consideration to making the act more flexible and more realistic in order to meet a situation which apparently is at least temporary-permanent or permanent-temporary, whichever way you like to put it, and thus be able to deal more effectively with the conditions faced by the miners and the communities concerned.
Before concluding I wish to ask the minister a number of questions which I would appreciate his answering when we reach the committee stage. My first question is this: Is Mr. William Ramsay, who has gone to Europe to recruit labour for the mining industry, still an employee of the federal Department of Labour? My second question is this: Is it the government's policy to continue emergency gold mining assistance to certain mines especially in view of the fact that a labour force made up of young, single immigrants will have almost the same effect on those communities and their property values as would the closing of the mines? These immigrants may be willing to work for these substandard
12, 1956	4975
Emergency Gold Mining Assistance Act wages, but the purpose of the act is to maintain the communities and the standards of the employees concerned. The effect of the employment of these single immigrants on these communities will be almost identical with that which would follow the closing down of the mines.
These men will live in bunk houses and will only be temporary residents. As soon as they know the score and become aware of Canadian conditions in general they will do the same as did a good many others who came here to work on the farms; they will disappear to more lucrative areas. They live in bunk houses or rent rooms and as temporary residents they will not be purchasing property, nor be investing in the community and, as I said before, will not do anything to stabilize the communities or assure their permanency.
My next question is: what is the attitude of the Department of Citizenship and Immigration to the mass importation of European labour to work in marginal gold mines under the circumstances that I have outlined, and what co-operation has the department extended to the gold mining operators who are seeking this immigration from Europe to carry out the work in the gold mines? That question is of considerable interest to a good number of persons who work in the mining industry in northern Ontario.
My last question is: has the government given any thought to forcing mining operators receiving emergency gold mining assistance to hire over-age miners in their own communities when the mines they are working in close down?
Here is the situation that exists. Canadian miners that have been employed in the mining industry all their lives have an average age of over 40 years. If it happens that the mine in which they are working closes down, because the other mining operators would not employ miners over 40 years of age- and I think that is related to pension plans and things of that sort-then these good Canadian citizens find themselves out of employment, with their investment in homes and so on in the mining community concerned, while at the same time immigrants are brought in from Europe to take the employment that they otherwise could obtain. We think it would be a wise policy on the part of the government to insist that the mining operators who are accepting gold mining assistance give employment to these miners even though they are over 40 years of age, by some special arrangement.
We think it is most unfortunate that these good Canadian miners should be out of employment and the vacancies taken by miners being brought into this country under these
4976	HOUSE OF
Emergency Gold Mining Assistance Act [DOT]conditions. We are not opposed to planned immigration and the location of immigrants according to proper circumstances and conditions, but I for one am very much opposed to bringing in immigrants from Europe to take the positions that are vacant while under certain circumstances Canadian citizens are unemployed.


George Prudham: Will the hon. member permit a question at this time?


Herbert Wilfred Herridge: Certainly.


George Prudham: Do you actually know of instances where that has taken place?


Herbert Wilfred Herridge: As I said before, I do not know from personal experience but I have had the information given to me on good authority and I shall be only too pleased to look up my file and give the information to the minister.
That is a serious situation. I am very pleased to see that the Minister of Citizenship and Immigration is now listening to what I have to say because I am sure he is interested in this question. That is why we say that the time has come for much closer coordination between the Department of Finance, the Department of Labour and the Department of Citizenship and Immigration in relation to the satisfactory administration of the Emergency Gold Mining Assistance Act. I make those few brief suggestions and ask those questions of the minister. I shall look forward to his answers to the questions when we reach the committee stage.


Mr. Roland Michener (St. Paul's):: This short bill No. 417 simply extends for two years more the bill that was introduced last year. As has been pointed out, there is no change in principle nor in application of the emergency gold mining assistance to the problem of the gold mining communities.
Last year, as reported at pages 2177 to 2184 of Hansard, I dealt at very considerable length with the economics of the gold mining industry and all the social consequences of the problems of that industry and the gold mining communities and the miners and citizens who live and have lived there, many of them for a generation or more, and are firmly established there, in considering the proposal that was then before the house in regard to reducing the assistance to be paid. I consider that no good purpose would be served in repeating what was said there, as it is readily available in Hansard for anyone who wishes to reconsider the problem with which we were faced a year ago.
I urged at that time that the government reconsider its proposal to reduce the amount of emergency gold mining assistance, but the government proceeded with its program. The minister expected that there would be a


reduction in the over-all payment of assistance from $16 million in 1954-in fact it turned out to be about $16,300,000 in 1954 -to $11 million in 1955. Now, in introducing this extension of the policy, the minister is able to tell us that in fact the total payment in 1955 will be in the neighbourhood of $9,300,000, about $1,700,000 less than he estimated when he introduced this policy to the house a year ago, so that in effect the reduction in payment to the gold mining industry is from $16,300,000 to $9,300,000 in one year, with anticipated further reductions over the next three years of the life of this program. That is a reduction of 43 per cent, and it is a very considerable and substantial reduction.
How the government justified the reduction which was made last year was more than I could see from anything that was said, except on the ground of saving an immediate outlay of funds. I endeavoured to show the importance of the industry at that time, with its 18,500 workers, its great communities, well established permanent communities, many of them based entirely on the gold industry, with no possible alternative means of support. In that connection I suggest to the hon. member for Kootenay West (Mr. Herridge) that it would be desirable for him to visit some of these communities because his idea of what they are is somewhat removed from the facts as found in the gold mining report made by the committee in Ontario, at least the facts as they apply in the province of Ontario, of which I believe he was speaking.
I commend this report to the members of the house. It has been mentioned already by the hon. member for Timiskaming (Mrs. Shipley). It was the report of a committee of inquiry into the economics of the gold mining industry in 1955, under the chairmanship of Professor F. A. Knox of Queen's University, and with a very competent committee supporting him. An interim report was made last year, and the final report this year. It is interesting to note the composition of the mining group in the Ontario camps. I think the Porcupine camp is the largest and probably the most representative. In that camp, according to the table on page 83 of the report, there were 6,135 men who were reported for the purposes of this committee, and the number of Canadian-born were 3,556. That is a little more than half. Of these, 942 were French speaking and 2,614 were English speaking. Then I come to those who came from abroad, and here is where the hon. member for Kootenay West (Mr. Herridge) would be interested from the point of view of verifying the statements which he was making on

"very good" authority. Those from the British Isles numbered 598 while those from east and south Europe numbered 1,728 which shows that the miners who are there are about half newcomers and about half Canadian born.
Even more interesting are the figures on recent arrivals. Immigrants into that camp since 1945 numbered only 452, of those who reported, less than 10 per cent, and since 1950 there have been only 305. That does not show any great change in the composition of the miners in the camps. The ages were also the subject of a study made by the same committee, and I think members might be interested in the ages of the miners in the Porcupine camp because after all this assistance is a guarantee that these men will be able to continue to work in the jobs they have known and where their homes are, where their children go to school and where they expect to live their entire lives.
Under 19 years of age there were only 185. From 20 to 24 years there were 1,053, from 25 to 34 years there were 3,064 and from 35 to 44 years 2,801. That is about the breaking point that the hon. member for Kootenay West suggested. Up to that point we cover substantially more than half of the miners. From 45 to 54 there are only 2,451, and in the group from 55 to 59 there are only 798. That is by way of a description of these communities and the consideration of the social consequences of this legislation.
Apart from the industry itself, gold is of great importance in our economy. It has a permanent value, and I do not need to repeat what I have said before and what has been said by others on that score. The Ontario report at page 67 may be some authority for the relative importance of gold, the continuing importance of gold, and I will read one paragraph which illustrates the point to which the hon. member for Eglinton (Mr. Fleming) drew attention earlier.
During the depression of the li)30's gold exports were of considerable importance in our balance of payments. In the two years 1935-37, for instance, gold exports averaged 14-5 per cent of our total merchandise exports, the average gold export being $132 million and merchandise exports $909 million. In the first two years of the second world war, before other methods were devised to finance essential war imports from the United States, the Canadian government urged all-out gold production from the mines.
It is not likely that proportion will return but that illustrates the great role that gold played, as anyone who lived through that period, particularly in Ontario, knows, in maintaining the stability of the economy.
Then, the place of gold as a monetary reserve is, I submit, a basic consideration in support of an advanced policy of assistance.
12, 1956	4977
Emergency Gold Mining Assistance Act The gold reserves must be placed opposite the inflow of capital because the capital which comes into Canada, which we all welcome, and which is playing such a part in the building up of our resources, is all exportable again. As I pointed out last year, in the period of emergency gold mining assistance $3 billion in new capital had come into Canada in the same period all of which, if it were demanded, would have to be paid back. In consequence the establishment of a substantial reserve in an acceptable form of money, namely, gold, is the necessary counterpart of our policy of permitting the free investment of foreign capital in Canada.
In addition, gold mining is not simply an industry to itself. As the minister has recognized, gold mining has led to some of the forms of mining which are now more profitable such as the base metal mining which is being carried on today to an ever-increasing degree. It was gold that gave the boost which started hard rock mining in this country and exploration for base metals. Gold mines have played a very substantial part in financing base metal mines and have supplied the engineers, the technique, the capital, everything necessary for the great expansion in the base metal industry. They have played and are playing an important part not only in the production of gold but in the mineral development of Canada.
What has been the effect of the policy which the minister introduced a year ago? His own statement indicates that the industry is a failing industry, and I think that is the most important consideration before the house in determining whether this policy should be renewed just as it is or whether the assistance ought to be increased, as was urged last year. It is a failing industry. It is true that total ounces produced last year were slightly greater than the year before and to that extent there is cause for satisfaction, but that production is at the expense of the future. The minister admits that five of the lode mines, as opposed to placer mines, have suspended operations in the course of the year. One was absorbed by the parent company and one new mine was opened. The net loss is five of the lode mines out of a total of about 54, I believe, which are receiving assistance.
The minister, to use his own words, says that other gold mines are in a life and death struggle for existence. That does not indicate a very healthy industry to anyone who has heard him support continuation of this policy in its present form and the results it has achieved over the past year. In addition, the minister says that some of the mines may close. After the present act expires it is
4978	HOUSE OF
Emergency Gold Mining Assistance Act anticipated that 18 to 20 mines may close permanently.
A more serious consequence of the present condition of the industry is that there is very little prospecting and there are very few new mines being discovered, opened up and operated. In the period from 1941 to 1955 the number of mines in operation has been reduced by more than half, and one has only to project these trends into the future to see that the gold mining industry, if it depends on this temporary assistance and is not restored by a more permanent solution, is doomed to disappear in Canada.
The cost of what the government has done has been pretty well reviewed by the hon. member for Eglinton. I should like to point out to the house that the total cost of this assistance from its inception in 1948 is only $90 million. That $90 million has accounted for the production of $950 million worth of gold so that putting it at the highest the cost of putting into being gold which would not otherwise have existed as an asset in the Canadian treasury has been only 10 per cent of the amount of newly-mined gold in this country over that period. That is a very small premium for the insurance which this gold gives as part of our reserves.
In the period of the subsidy our reserves have increased by about the amount of the newly-mined gold, although not quite as much. In December of 1954 our reserves stood at $1,072 million, as has been said, and at the end of the last calendar year they stood at $1,134 million, an increase of $62 million in the course of the calendar year. The costs I have put at 10 per cent, being the relation of the assistance to the total production. But those costs are offset by a great many forms of taxation which bring back into the treasury a good part of the emergency gold mining assistance. Those are direct taxes on the profits of the mines and also taxes on the mining communities where the emergency gold mining assistance is largely put into circulation. Hence the net cost of providing Canada with this kind of insurance against its external obligations in the form of a vast reserve of gold, now well over $1 billion, is negligible as compared with its permanent value. In addition, this industry lends itself particularly to assistance because it is not a competitive industry. There is only one purchaser of its product, basically, and that is the government. Therefore in subsidizing in an indirect way by public funds we are not interfering with other enterprise. Furthermore, there is no danger of overproduction which is another hazard of a subsidy as the Minister of Agriculture (Mr. Gardiner) has found out to his great embarrassment.


The net cost then is small in proportion to the values which one can see from the application of this policy. I have only two criticisms to make. The first is the criticism that I made last year, namely that the minister was wrong in reducing the assistance. If he had not reduced it the production would undoubtedly have been greater. Not only would some of the mines which have gone out of production have stayed in production but there would have been more incentive for exploration and the development of new mines. I know of gold mines where there are substantial tonnages of ore waiting to be mined when it is profitable to do so. Hence I think it is fair to say that the production of gold, the amount of gold put into being and flowing into the reserves of this country, would have been greater had the assistance not been reduced. There is a marginal point where gold ore will be left in the ground if the assistance is withdrawn. The minister knows that very well.
Then the other criticism-and it has already been voiced-is that the government does not appear to have attempted to find a permanent solution. At least, if they have done so, it has been kept quiet. I should like to ask the Minister of Finance (Mr. Harris) what approach he has made to the international monetary fund or bank, whichever institution has authority in these matters, or what efforts have been made in international consultation to find a means of increasing the price of gold. The minister last year accused me of being in favour of gambling with public funds, I believe, when I said there was a real possibility that these reserves which he is providing for the Minister of Finance (Mr. Harris) in the form of $1 billion in gold valued at $35, might very readily by the stroke of an international agreement become worth another $1 billion if the price of gold were doubled, as has been done in the past and as, I am sure, will be done again one day, because these things have a habit of recurring under similar conditions. Hence it is reasonable to expect that there can be no loss on this gold which the government is helping to produce. It is also reasonable to expect that there may very readily be a substantial profit to the Canadian economy and the Canadian people as a whole; and in the meantime there is a substantial benefit to those who are directly engaged in this industry as miners and their families and those who serve the mining communities.
On those two points I suggest that the government has failed in its duty. Of course I cannot complain of the fact that the act is being extended for a further two years because it is obviously of great benefit to the country and to the gold mining industry

particularly; it is of great benefit to know two years in advance just what the course of events will be. I therefore do not propose to vote against this bill but I would have liked this year-as I would have liked it last year -to see the assistance kept at the level at which it had been established. I should like to know what the government has been doing, or what effort it has made to have a review of the price of gold among the nations of the world who are concerned with it. It is 10 years since the Bretton Woods agreements were made and in all conscience that is enough time to know what the consequence of that $35 fixed price of gold has been to the great gold-producing countries like Canada, South Africa and others.


Mr. Charles E. Rea (Spadina):: Mr. Speaker, I should like to say a few brief words about this matter. I wonder whether all hon. members in their mind's eye can go back to the beginnings of this industry in Ontario. Many of them are not old enough perhaps to go back to the time when the Ontario government first started to build the Temiskaming and Northern Ontario Railway in northern Ontario and to know what happened. First it opened the great town of Cobalt which became a great silver centre which remained for many years. Then as those with pioneering spirits started to get ahead of the railway, the first thing we knew gold was discovered up in Timmins. It must have struck a tremendous chord with everyone in Canada when it became known that gold had been discovered in northern Ontario. First there was just a little camp, with a few tents and someone who had a general store. Then as time went on these things grew, and finally a great big town appeared. Then we had gold discovered in Kirkland Lake. I can remember, back in 1922, getting off the train at Swastika. You had to get the old bus and go six miles from there into Kirkland Lake. It was a town of shacks at that time. People were buying Teck-Hughes stock at 15 cents a share; and if they bought it, they did not know where they were going to sell it. Now when you walk into Kirkland Lake, what do you find? It is a terrific town, one that you can be proud of. Then you went over to Larder Lake, Elk Lake and so on and so forth. This gold mining industry of ours just seemed to cause towns to spring up all over the place. As has been mentioned already, back in the early thirties, there was one place in Canada to which every traveller wanted to go to sell his merchandise, namely to northern Ontario because that is where business was good. Why? Just because of the gold mines.
Then along came the first increase in price, and away things went again. Prospectors 67509-316
12, 1956	4979
Emergency Gold Mining Assistance Act went out looking for more gold, this precious metal which meant so much to everyone. Then all at once what happened? World war II came along. The cost of everything started to go up. Here was an industry with a level selling price and the cost of everything going up. Miners had to be paid more money; and it was right and just that they should. Merchandise cost more; machinery cost more; everything cost more. But the poor mining companies had a ceiling on what they could get for their merchandise. Things became so bad that eventually you brought in this Emergency Gold Mining Assistance Act in order to help many of these companies out.
It is said that this is a failing industry. That is a terrible word for us in Canada to use in talking about any industry. I do not think it is a failing industry. There is just one thing that keeps any industry from failing and that is salesmanship. All right. What have we to sell? We have a couple of things to sell. One of them is up to the government. They have to sell to the United States of America the idea that the price of gold must be either "upped" or freed. There is no question about that. We do not know how hard the government is going after it, or just how sincere their intentions are. I realize and understand that the United States is worried perhaps a little bit, or perhaps a lot, because we do not know what this might do to Russia. We hear they could be the second largest gold-producing country in the world. These are things that we do not know at the moment.
As I said on the resolution stage of this bill, those who are allowed to get the subsidy are not allowed to sell gold on the free market. That is something that I just cannot understand. I mentioned it before. If we allow everyone to sell on the free market and they are getting $3.48 subsidy now, and if they got an extra $2.48, the government would have to pay them only $1 an ounce when they produced the ore, if their sales averaged that.
I have another thought in mind for doing that. It would mean that all the gold mining companies could get together and have a sales force to start to re-educate the people of Canada about gold, what gold is and what they could do with gold. Hon. members can recall, as I can, when we used to get $10 gold pieces and $5 gold pieces for gifts and we used to get them as presents, and so on and so forth. But there are many people living in Canada today who have never seen a $5 or a $10 gold piece. Why can these gold mining companies not get together and build up a sales force and re-educate the Canadian people in the use of gold and perhaps in other ways? Let us go back and
4980	HOUSE OF
Emergency Gold Mining Assistance Act see what happened to the nickel companies. You know what they did. They built up a research department and they are finding more and more uses for nickel. Why are the gold mining companies not encouraged to do that sort of thing instead of being left to themselves? Why should we say to them, "We will give you so many dollars. Do not go above that. We are going to give you your subsidy, but also let you go out on the free market." In case it does not work out and they lose their subsidy the minister says to me that they can come back on January 1 or July 1. I know all that, sir; but in the meantime, how much money have they lost?


George Prudham: Will the hon. member permit a question? Is the hon. member aware that on the so-called free market the price of gold is less than $35 an ounce?


Charles Edward Rea: I realize that, but perhaps on the free market they could get more than that. That is what I am trying to tell the minister. I know you can buy gold at the mint, too, but all you can get there is a gold brick. You cannot go and get a $10 gold piece, or anything like that. You might be able to get $38, $39 or $40 an ounce for units of small articles that could be sold. There is no reason why that could not be done. If the government will only try to get the United States to increase the price of gold or let it go free, it would be a great help. Once again, we are hamstrung by our neighbours to the south. This is an actual fact. We must admit that. We know that Canada could not raise the price up to $50 or $60 an ounce or every country in the world would be sending their gold here; that is certain. The United States is different because they are the biggest purchaser of gold in the world.
Gold is something that we have to keep because of the fact that all these towns and all the people that are in these towns and all the industries that are tied up and allied with it are dependent on gold. You know, there is not a prospector today out looking for gold. I can imagine there is all kinds of gold in Ontario, but it does not pay. Suppose a prospector finds a great strike of gold, who wants it? I can remember back in 1936, I think it was when they made the strike in the O'Brien mine in Cadillac township. It was free gold; it was not too big. I was down in the mine; I saw it. It was the most gorgeous looking thing you ever saw. It was solid gold about the size of the top of this desk. There is lots more of it around this country. I have staked hundreds and hundreds of claims in my time. I never got a big one. Like every prospector, you always look for some bonanza somewhere along the line. But now no one is encouraged to go out and look for gold at all. I always say


this: no matter where you are in the world, if you have gold you can do business and trade. That is what brought this country to where it is today. I just hope we can continue on to do that.
Certainly, we must have this subsidy. There is not any question about that. I still think that the minister should allow every mine, whether they are getting the subsidy or not, to try to see what they can do to develop a free market for gold. They have no sales force. That is one thing the gold mining companies never had, is sales force. They just shipped it down to the mint. That is all they had to worry about. So long as they had insurance on the bullion coming from the mine to Ottawa they were through. That is all the selling they had to do. I think they should get together and start a research and sales department, and I think everyone would be surprised at what could be done.
Of course, I am going to vote for this bill. There is nothing else one can do. It is a help; it is not enough. But I do hope-and I want to repeat this once again-that the minister will seriously consider allowing all the mines to go into the free market regardless of whether or not they are getting the subsidies. If they make more than the present price it will come off the subsidy. It will not entail any bookkeeping work. They must keep track of their sales anyway; therefore the extra bookkeeping work, if there is any, would be small.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Application of act to 1955, 1956, 1957 and 1958.
The Deputy Chairman:: Shall the clause carry?


Donald Methuen Fleming: Mr. Chairman, it is ten o'clock. I hope that, while it is a very short bill, we are going to have from the ministers some statement of policy along the lines that were suggested tonight by several of those who spoke on second reading.


Edward Turney Applewhaite: Shall I report progress and ask leave to sit again?
Clause stands.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, I presume we can finish this bill tomorrow in committee of the whole. Then we shall go on with the estimates of the Department of National Revenue. I may say, sir, we shall call any third readings before that.


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

[Stage Direction]
The following answer, deposited with the Clerk of the house, is printed in the official report of debates pursuant to standing order 39:

Mr. Hamilton (York West): 1.	Has application been made to the Canadian Broadcasting Corporation for television time on any of its stations for the United States television program "You'll Never Get Rich"?
2.	If so, has objection been raised by any department of government or anyone else to the telecast
Question
of the program in Canada by the Canadian Broadcasting Corporation, and, if so, by whom?
3.	Has any check been made by any government department with the United States government to determine if the said program has aided recruiting?
Answer by: Hon. J. J. McCann (Minister of National Revenue):
The Canadian Broadcasting Corporation advises as follows:
1.	Inquiries were made to the C.B.C. regarding time availabilities for the program.
2.	Not to the knowledge of the corporation.
3.	The corporation has no information.
4982

Trans-Canada Pipe Lines Limited



APPENDIX


[Stage Direction]
File No.	Subject:	Tabled:174	Agreement Nov. 21/55 with Govt, of Canada, & Corr	
Jan.	11174A	Agreement re public financing; ownership of shares	
Feb.	20
174B Corr. with Provinces, since Jan. 1/54, re building of (Agree. &
Rept. Ontario Treasurer included)	 Feb.	21
174C Corr. with Govt, since Jan. 1/55 (Financial Rept. Sept. 22/55
included)	
Feb.	21174D	SUPP. RETURN TO Corr. from Jan. 1, 1955 to date	
Mar.	14174E	Copy of Order No. 88462, Mar. 28/56	
Mar.	28174F	Order No. 84220	
Apr.	9174G	Western Pipe Lines Ltd.-Corr. with Govt. Jan. 1/49 to date.. Apr.	17174H	Trans-Canada Pipe Lines Ltd.-Corr. with Govt, since Jan. 1/51 . . Apr.	171741	Midwest Transmission Corr. since Jan. 1/51	
Apr.	17174J	Tennessee Gas Transmission Corr. re sale of gas	
Apr.	17174K	Northern Natural Gas Corr. re sale of gas	
Apr.	17174L	Trans-Canada Pipe Lines Ltd. P.C. 1956-656 re Agree	
Apr.	30
174M McMahon Corr. Apr. 4-May 3/56 with Tr. & Commerce re pipe line
from Alberta to Eastern Canada	
May	3174P	P.C. 1956-703, May 8:-loan & shareholders agreements	
May	9174N	Telegram May 6/56: Gairdner & Co. to Hon. C. D. Howe, re financing May	71740	Northern Natural Gas Co. Corr. since June 1/55 re negotiations .. May	8
174Q SUPPLEMENTARY TO 1740-One letter re Northern Natural Gas Co. Corr. various Governments (prov.) & Canada, re construction
from Alberta to Eastern Canada	
May	17174S	Purchase of pipe-Corr. with Tennessee, Can. Gulf & Hudson's	Bay May	21
174T Oral judgment by Brd. of Transport Comm. & Order No. 88874 of
May 25/56, re Western Provinces	 May 28
174U Corr. Finance Minister & L. R. Champion, re construction of pipe
line, Alberta to Eastern Canada	 May 31
212 Natural Gas Pipe Line-AH Canadian. Copy of Communications dated March 26 and April 9, from Gairdner & Co. Ltd. to Minister
of Trade & Commerce, re proposed plan for financing	 Apr. 13
174V P.C. 1956-860 authorizing execution of Mortgage and Indenture of Mortgage dated June 7, 1956, Trans-Canada Pipe Lines Limited to Northern Ontario Pipe Line Crown Corporation	 June 12
[Stage Direction]
Wednesday, June 13, 1956