1956-02-02

Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, as hon. members are aware, the Prime Minister of the United Kingdom, Sir Anthony Eden, will be arriving in Ottawa tomorrow afternoon. Arrangements have been made to have our distinguished guest address the members of both houses of parliament in this chamber at 2.30 o'clock on Monday afternoon. Because of these arrangements it will be necessary to delay the opening of the ordinary proceedings of the house until 4.30 o'clock on Monday. If I may have the unanimous consent of the house I should like to move:
That when this house adjourns tomorrow it stand adjourned until Monday next at 4.30 o'clock in the afternoon.
I understand that the ordinary tickets for the gallery have been cancelled for that occasion and special tickets have been distributed to the whips to be made available to the members of this house who wish to have guests attend the ceremony. It would be appreciated, of course, if all hon. members could be in their seats a few minutes before 2.30 in the afternoon.
We have all received from you, sir, a very kind invitation to attend in your chambers immediately after the ceremony to have the privilege of meeting with the Prime Minister and the Secretary of State for Foreign Affairs, Mr. Selwyn Lloyd.


Mr. Knowles:: Before the motion is put may I direct a question either to the Prime Minister or the leader of the house? In view of the fact that Monday would normally be private members' day, is there not some arrangement that could be made so that the time lost might not be lost entirely by private members?


Mr. Harris:: We can solve the problem immediately by saying it had been our intention, and still is, that we should move to go into supply on Monday.


[Stage Direction]
Motion agreed to.


Mr. Speaker:: On the subject matter of the exchange of visits by parliamentarians, I have received another communication from the Secretary of State which I have asked the Clerk to have mimeographed, and copies will be distributed to hon. members.


REQUEST FOR TABLING OF MINISTERIAL ORDER OF JULY 7
[Stage Direction]
On the orders of the day:
Hon. George A. Drew (Leader of ihe Opposition):: In view of the discussion that has already taken place concerning the possibility of further discussion on the matter,
I would ask the Prime Minister if he would arrange to have the ministerial order of July 7 referring to the Harvard aircraft tabled so that it may be before the members of the house.


Louis Stephen St-Laurent: Mr. Speaker, I think this matter has been fully canvassed and discussed-


Some hon. Members:: No, no.


Louis Stephen St-Laurent: -and full information has been given as to how that ministerial order was made. The only official document which is provided for by the statute is the export licence.


George Alexander Drew: May I then ask the Prime Minister, Mr. Speaker, if he will have the export licence tabled which covered this particular order?


Louis Stephen St-Laurent: Mr. Speaker, that is a document which for other reasons it is not practicable to make public. All these documents dealing with individual transactions of commercial corporations are treated as confidential and are described as. such in their form for purposes that are legitimately required by our industrialists who engage in competitive business.


George Alexander Drew: Mr. Speaker, may I then ask the Prime Minister what document there is that can be placed before the house which will show what actually took place on July 7?


Louis Stephen St-Laurent: There is no document which can be placed before the house to show what actually took place on July 7. The hon. gentleman has been informed of how the matter was dealt with. It
788	HOUSE OF
Inquiries of the Ministry was dealt with by communications between ministers and those have invariably been regarded as confidential documents and have to be treated as confidential documents so that the ministers who are all jointly responsible for that which has been done, even under statute, by any one of them may see to it that they are properly informed of when and how they are going to have this joint responsibility.


George Alexander Drew: In that case, Mr. Speaker, just to clarify it, may I ask the Prime Minister if the published list which is issued by the Department of Trade and Commerce covering aircraft is not in fact the full list of permits that are issued?


Louis Stephen St-Laurent: Well, I would have to look at that list. I must confess that I have not recently read any of those lists of permits that have been issued by the Department of Trade and Commerce.
I will have to look at that and then compare it with the other information that is available to me in order to be able to answer the hon. gentleman's question.


George Alexander Drew: Mr. Speaker, simply by way of explanation-


Some hon. Members:: No, no.


George Alexander Drew: Simply by way of explanation I would point out that there is a record of permits issued and that there is one actually published-


Some hon. Members:: Order.


George Alexander Drew: -which shows two licences: one for an aircraft to Egypt and one for an aircraft to Arabia which are not included-


Mr. Speaker:: Order. I feel I must interrupt the Leader of the Opposition with regret, but if I am to allow the debating of any one answer I will have to allow all hon. members to do so.


INQUIRY AS TO SECRECY OF EXPORT PERMITS
[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, arising out of some earlier questions in connection with the export permit mystery, would the Prime Minister state whether there are certain kinds of export permits covering aircraft and aircraft parts which are secret and others which are not secret, and what is the reason for the division between secret and non-secret?


Louis Stephen St-Laurent: All export permits are treated as confidential documents for commercial reasons. They contain information with respect to commodities, prices of commodities, the


source of supply, the firm dealing in those commodities, and for that reason these documents have always been treated as being confidential for the proper protection of those who are engaged in competitive business.


Mr. Fleming:: May I ask the Prime Minister if that is the view taken by the government even where the purchase is made from Crown Assets Disposal Corporation?


Louis Stephen St-Laurent: From Crown Assets-


Donald Methuen Fleming: Crown Assets Disposal
Corporation.


Louis Stephen St-Laurent: Well, I would have to inquire whether those permits are in the same form. They are probably in fact treated as confidential but I do not know that they should be.

On the orders of the day:


John George Diefenbaker: Would the Prime Minister say, in view of his explanation a moment ago, that the export of arms and aircraft is now a competitive business in this country?


Louis Stephen St-Laurent: The export of aircraft parts is a competitive business in this country, but I do not think that the export of aircraft themselves could be regarded as a competitive business, not, at least, as between Canadian producers.


George Alexander Drew: I wish to direct a question to the Prime Minister in view of his last answer. If the sale of aircraft is not a competitive business, then why can the permit covering the export of Harvard planes not be produced?


Mr. Stuart (Charlotte):: You had a bad day
yesterday.


Mr. Speaker:: I do not want to interrupt whatever answer the Prime Minister wishes to make to the question asked by the Leader of the Opposition, but is it the view of hon. members that cross-examination should take place at this point? I do not make the rules but I want to make sure that I interpret them in the way that the majority of hon. members in all parties interpret them. In my view the purpose of our question period is to ask questions for the purpose of obtaining information, not for the purpose of debating a certain matter under the guise of several questions. That is what has been taking place for some time.


INQUIRY AS TO REQUEST FOR
[Stage Direction]
25-pounder ammunition
On the orders of the day:
Mr. Gordon Churchill (Winnipeg South Centre):: May I ask the Secretary of State for External Affairs if the cabinet has reached a decision with regard to a request for 25-pounder ammunition which he said was placed before them some time ago?


Hon. L. B. Pearson (Secretary of State for External Affairs):: No, Mr. Speaker, the
matter is still before the cabinet.


Mr. Rowe:: Confidential too, I guess. reference to expulsion of u.s.s.r.


OFFICIALS FROM SOUTH AFRICA
[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I should like to direct a question to the minister of peace-I mean the Secretary of State for External Affairs. Has the minister any comment to make on the outstanding action of the government of South Africa in expelling representatives of Russia because of their conduct?


Lester Bowles Pearson: No, Mr. Speaker, I have no comment to make on that matter. However, I do admit I am glad, in view of the discussions of the last few days, to be called minister of peace.


Mr. Harkness:: He meant piecemeal.


ANNOUNCEMENT OF INTERIM
Right Hon. C. D. Howe (Minister of Trade and Commerce):: I wish to announce a wheat payment, Mr. Speaker. The Canadian wheat board has recommended and the government today decided to authorize the board to make an interim payment in varying amounts on the higher grades of wheat delivered during the crop year 1954-55. The cheques will be mailed to producers as soon as they can be calculated and issued, probably about February 15.
The interim payment will be 10 cents per bushel on Nos. 1, 2, 3 and 4 northern and No. 4 special, including toughs and damps of those grades; 5 cents per bushel on Garnets; 25 cents per bushel on No. 1 to No. 4 Durums; 10 cents per bushel on the lower grades of Durum; 10 cents per bushel on soft white springs and 5 cents per bushel on certain minor grades. A full schedule of payments will be issued by the wheat board in the customary way. The full amount to be distributed to producers in this interim payment will be $22,300,000. Returns from the
Wheat-Interim Payment sale of feeding grades of wheat do not justify an interim payment on Nos. 5, 6 and feed wheat. I believe, however, that it will be possible to make a final payment on these grades when the pool is closed.
A final payment on the 1954-55 wheat pool account must await approval of the legislation now before the house with respect to the assumption of carrying charges on excessive wheat board stocks, as well as reduction in the size of this account to a level which would enable the balance to be transferred to the 1955-56 account.


Mr. H. R. Argue (Assiniboia):: May I ask the
Minister of Trade and Commerce a question arising out of his very welcome announcement? Can the minister say whether it is his hope or intention that the final payment can be made in time to be in the farmers' hands before seeding?


Clarence Decatur Howe: I announced some time ago that I would discuss final payment when the legislation now on the order paper had been passed. I had thought that would be a much shorter period than now appears probable. I now understand that the bill is to be filibustered.


Hazen Robert Argue: Mr. Speaker, may I ask a further supplementary question? Will the minister consider discussing with the leader of the house the possibility of calling first tomorrow the item having to do with storage in the hope that it can be passed tomorrow?


Clarence Decatur Howe: No, Mr. Speaker. We have undertaken to pass a very simple resolution, and until that is passed we are not prepared to take any other resolution.


Hazen Robert Argue: In other words, the minister is holding up the storage legislation.


George Alexander Drew: Mr. Speaker, on a question of privilege, I would point out that a subject that has been debated one day, even in the sensitive mind of the Minister of Trade and Commerce, should not yet be described as a filibuster.


John George Diefenbaker: Mr. Speaker, arising out of the minister's welcome but very belated statement-perhaps I should have amended the statement I made earlier-would he say what is being done with regard to assuring farmers a greater opportunity to market their wheat through the freight cars that have been made available to a greater extent recently? On the basis of the additional number of cars that have been made available at the present time, would the minister say what the prospects are of an increase in the quota to the various areas of the western provinces?
790	HOUSE OF
Inquiries of the Ministry


Clarence Decatur Howe: I gave the actual loadings of last week and as I recall the figure averaged 867 cars per day.


John George Diefenbaker: Since when?


Clarence Decatur Howe: That was the daily average for last week. I get daily reports from the Canadian National Railways showing the exact number of its cars loaded, the additional cars going into the area, and the unloads at all the ports. Those reports indicate that additional cars are going into the grain movement every day.
I have not the same complete reports from the Canadian Pacific Railway, but the car loadings on the Canadian Pacific Railway are increasing. That railway is also putting more box cars in the grain movement, and, therefore, we can look for steady improvement in the rate of country loadings.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. John M. James (Durham):: Mr. Speaker, this may appear a bit unusual, but the hon. member for Ontario (Mr. Starr) and I would like to combine in asking the Minister of Labour a question. Would the minister care to comment on the position under the Unemployment Insurance Act of those General Motors employees now on strike who will not be recalled to work immediately following the hoped-for strike settlement?


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, in reply to the joint question of my two hon. friends, the procedure in this case would be exactly the same as in all others. That is as follows: When General Motors resumes operations and the plant starts again, then those former workers who are not taken on or have not found other employment when the plant reaches normal production may apply for unemployment insurance.
As to the definition of "normal production", the former production output and the normal number of employees, of course, are considered as factors. Where there is a difference of opinion between the claimant and the insurance officer the matter may be taken to the board of referees, and, of course, to the umpire if necessary.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I should like to direct a question to
fMr. Diefenbaker.]

the Minister of National Defence. Can the minister inform the house whether any decision has been made in regard to supplying the CF-100 to auxiliary squadrons?


Hon. R. O. Campney (Minister of National Defence):: No, Mr. Speaker. The future of
auxiliary squadrons is still under consideration, but I hope to be able to make a statement shortly. We have had the senior officers of all auxiliary squadrons in; we have had a number of conferences, and we are now working on proposals for the future.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. H. O. While (Middlesex East):: Mr. Speaker, I rise on a question of privilege. At page 786 of yesterday's Hansard there is an answer to a question of mine which appeared on the order paper asking for the number of rural routes extended in the county of Middlesex. The answer gives only those extended in Middlesex East, and not the whole county. I would therefore ask that the question be reinstated on the order paper.


Mr. Speaker:: We will take note of the request of the hon. member; but whenever this type of request is to be made I might inform the hon. member that' he may see the clerk of orders and notices if these questions are to be reinstated with respect to the part not covered.



REFUNDS IN PURCHASES BELOW FLOOR PRICE

[Stage Direction]
On the orders of the day:
Mr. G. H. Castleden (Yorkton):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture, notice of which I gave him yesterday. Will he make a statement to the house concerning the administrative machinery set up by his department which will guarantee a floor price to hog producers in western Canada?


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, the arrangement made under the order setting up the floor price for hogs is on the basis of 23 cents for grade A hogs at Toronto and Montreal. The provision under which that floor price can be obtained is that the hogs pass through a stockyard. The floor price is made available at the stockyard. Any person delivering hogs in Saskatchewan can get the floor price at the stockyard and there is no excuse for

anyone not getting it provided he takes the hogs there. I have sent for the full information on the slip that was given to me, and I have sent the slip along as well. There is no name on it to indicate who delivered the hogs and there is no explanation as to why he took 25 cents less. I can think of many reasons why some people may have taken 25 cents less.



AUTHORITY FOR FLOOR PRICES AT WINNIPEG

[Stage Direction]
On the orders of the day:
Mr. E. G. McCullough (Moose Mountain):: I should like to direct a question to the Minister of Agriculture. Could the minister inform the house if there are floor prices for hogs established at Winnipeg and, if so, under what authority?


James Garfield Gardiner: Yes, Mr. Speaker, there are floor prices established at Winnipeg. As a matter of fact, floor prices are established at all stockyards across the country. This is done under the authority that established floor prices, the Agricultural Prices Support Act.



DISABLED PERSONS


[Stage Direction]
On the orders of the day:
Mr. F. S. Zaplitny (Dauphin):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. Have discussions been held between officials of his department and officials of the provincial departments with a view to liberalizing the regulations under the Disabled Persons Act and, if so, can the minister report anything by way of progress?


Hon. Paul Marlin (Minister of National Health and Welfare):: Mr. Speaker, my hon. friend will remember that the other day I indicated to the house that officials of the provincial and federal governments charged with the responsibility of disabled allowances administration were meeting to discuss, as they had decided to do some time ago, certain aspects of their administration. Beyond that there is nothing further that I can say at this time.



POTATOES


[Stage Direction]
On the orders of the day:
Mr. J. A. MacLean (Queens):: Mr. Speaker, I should like to address a question to the
Inquiries of the Ministry Minister of Transport. Has the minister any statement to make regarding the reported shortage in Prince Edward Island of suitable railway cars for the shipment of potatoes?


Hon. George C. Marler (Minister of Transport):: Mr. Speaker, the hon. member who has just put this question and the hon. member for Prince (Mr. MacNaught) have both drawn this matter to my attention. Unfortunately in the time which has elapsed since they did so I have been unable to obtain any information with which to reply to the question. I shall endeavour to do so tomorrow.



INQUIRY AS TO PROGRESS OF NEGOTIATIONS WITH RUSSIAN DELEGATION

[Stage Direction]
On the orders of the day:
Mr. H. A. Bryson (Humboldl-Melfori):: should like to direct a question to the Minister of Trade and Commerce, but first may I assure the Minister of Agriculture that I will send him the name if he so requests.


James Garfield Gardiner: I can get it whether you wish it or not.


Hugh Alexander Bryson: And I should like to get the slip back.


Mr. Speaker:: Order. Would the hon.
member be good enough to put his question?


James Garfield Gardiner: I think I should be permitted to say, in view of the statement that you, Mr. Speaker, have allowed to be made, that the slip will be returned when I have all the information necessary in order to answer the insinuations that were made.


Hugh Alexander Bryson: Would the Minister of Trade and Commerce report on the progress so far in the trade negotiations with the Russian trade delegation in Ottawa?


Clarence Decatur Howe: Mr. Speaker, I must advise that I have not as yet received a report on the progress of the negotiations.



REQUEST FOR REVIEW OF CONTROLS ON TRADE WITH CHINA

[Stage Direction]
On the orders of the day:
Mr. Claude Ellis (Regina City):: Mr. Speaker, I should like to address a question to the Minister of Trade and Commerce. In view of yesterday's announcement, following the Eisenhower-Eden meeting in Washington, that Britain and the United States have agreed to review the scope of controls' on trade with China, will Canada make a similar review with a view to extending our trade in non-military goods to that area?

Interest Act


Clarence Decatur Howe: Mr. Speaker, I presume that Prime Minister Eden will inform us of his discussions in Washington. If, in the light of that information, a further review of our trade relations with China is warranted, I am sure the review will be made.



INTEREST ACT


Hazen Robert Argue: the second reading of Bill No. 2, to amend the Interest Act.
He said: Mr. Speaker, the Interest Act, as it now stands, does not provide any limit on the interest that may be charged in this country. In certain fields there are limits on the interest rates that may be charged but those limits are placed there by special acts of parliament. Apart from money lent under the Small Loans Act, the Farm Improvement Loans Act, the Bank Act and so on, there is no legal limit to the amount of interest that may be charged. In the fields where there is no limit to the amount of interest that may be charged, large sums of money at very high rates are being made available.
We have already been told that an amendment or amendments to the Small Loans Act will be presented at this session. My understanding is that the bill covering the amendment or amendments will be referred to the banking and commerce committee for study, a move that I welcome. But at this time I want to express the hope that, when the subject matter of that bill is referred to the banking and commerce committee, the members of the committee will be given perfect freedom to inquire into interest rates as they are levied by all companies and business firms in this country. I am hopeful that the discussion that takes place in the banking and commerce committee may be free and that we shall be able to acquire there all the information that may be necessary to write into the Interest Act a definite limit, and one that may be as low as practicable.
When a week ago I moved second reading of Bill No. 3 having to do with limiting the interest that may be charged under the Small Loans Act, a government member moved the adjournment of the debate. The discussion was stopped. At this time I want to express the hope that the government will not have one of its members move the adjournment of this debate but that rather it will allow the debate to go on today just as long as there are any hon. members wishing to take part in it. I do not think the government at any time should use its overwhelming majority in order to cut off discussion.

After listening to the debate that took place on the Small Loans Act one might draw the inference that as long as we have the Small Loans Act in operation loan sharks, in the sense of persons or corporations, are not able to charge excessive rates of interest. The fact is that loan sharks-if you wish to call them that-are free to operate in Canada provided they are not small loan companies making small loans as defined by the Small Loans Act. In other words, as I understand the law, it is perfectly legal for an individual to make a private loan to any other individual at any rate of interest that may be agreed upon. It is perfectly legal for a finance company-an acceptance corporation, as they are often called-to make any charges that may be agreed upon between the purchaser of an article and the company that is financing that purchase.


Mr. Benzdickson:: If he sets out the effective rate of interest in the document.


Hazen Robert Argue: I understand further that there is no limit to the interest or rate, or whatever name you may wish to call it, that may be charged by a business firm in providing credit for instalment purchases. I am moving this bill in the hope that there may be established in Canada, on all loans that are made on all instalment buying, an interest or rate limitation. I have suggested in this bill

as I suggested in another bill to amend the Small Loans Act-that that rate should not be more than 12 per cent per annum. When I think of the lower rates at which banks are able to lend money and when I think of the experience that credit unions have had from one end of this country to the other in lending money at a maximum rate of 12 per cent and in many instances at the bank rate of interest, I can see no good reason why a limitation should not be fixed on the interest rates that may be charged on all credit that is made available.
The acceptance corporations-that is the finance companies-from what I have been able to ascertain from making inquiries, all charge a rate in excess of 12 per cent. Hence the passage of this bill would place a definite limit on the rates that may be charged by acceptance corporations. As the result of further inquiries I have made with respect to the rates that are charged, it seems to me that a rate of 18 per cent, 20 per cent or 22 per cent is a common one. The effect of this bill would therefore be to reduce substantially the charges that may be made by those companies. Hence, in my opinion, the result would be a substantial saving to the people of this country.
The amount of money that is made available by acceptance corporations is tremendous.

The amount of money that is made available for instalment purchases of all kinds is large and growing. As a matter of fact, it now appears that the total amount of retail instalment sales in 1955 in Canada is likely to exceed the sum of $1 billion. Retail instalment sales include the purchase of such things as passenger cars, radio and television sets, electric and gas household appliances, furniture and other consumers' goods including clothing and jewelery.
The large item in this list is the item for the purchase of automobiles. Instalment credit for the purchase of new passenger cars in 1953 amounted to $252 million. Instalment credit for the purchase of used passenger cars in that year amounted to $321 million. Most of those purchases are made under what is known as a conditional sales contract. As I understand it, the purchaser has no equity in the automobile that he is purchasing, for example, until the last payment is made; and if he should fail to make a payment at any time, the automobile can be repossessed without much trouble. Since it is a conditional sales contract the purchaser is not entitled to any equity in the automobile even though he may have paid a large part of the purchase price.
On speaking to automobile dealers and implement dealers in various parts of this country, I have been informed by them that not only is there a conditional sales contract as far as the purchaser is concerned but that the same type of thing is worked by the acceptance corporation on the degler himself, and that if there is any loss whatsoever because of the conditional sales contract, the dealer himself will be held responsible for the unpaid balances. Dealers have said to me that, two or three years ago, when things were booming on the prairies-and I am thinking of the prairies particularly-they considered that their net worth was $100,000, $200,000 or $300,000; but because of the conditional sales contract as it has been applied to dealers, and because of the rapid drop in purchasing, they felt that their total net worth -in certain instances approaching a quarter of a million dollars-was in fact at stake. These dealers, because of this type of contract and because of the high rates that are charged, felt that they might lose the total equity they had in their business. In addition to that, the customer would be losing the equity he might have had in the machine he purchased.
This business is very large and very profitable. I have the profit statistics in my hands for four acceptance corporations. The first one is the Union Acceptance Company. In
Interest Act
1948 that company made a profit of $22,500. Six years later, in 1954, it made a profit of over $302,000, an increase in profit of 1,239 per cent. The Laurentide corporation, another acceptance corporation, made a profit of over $30,000 in 1946, and this has been increased to $320,000 in 1954, an increase of 954 per cent within that period. The Industrial Acceptance made a profit of $53,000 in 1946, and 8 years later made a profit of $6,837,000, an increase of 2,596 per cent within that period. The Traders Finance Corporation in 1946 made a profit of $483,000, and in 1954 made a profit of $4,401,000, an increase in the 8-year period of 810 per cent. Clearly, the business of providing money by the acceptance corporations for the purpose of automobiles and other consumer goods is a very lucrative one. It is one which I believe should be inquired into by the banking and commerce committee. Possibly if we had a thorough inquiry into the business practices of the acceptance corporations, into the rates they are charging and into the profits they are making, there could in fact be a decided reduction in the charges they make with a very beneficial result to Canadian consumers.
That is one large field but there is another large field of consumer credit and that is the field of instalment purchases through retail companies. In this field I find that the interest rates or charges, whatever you may wish to term them, go up even higher than the rates charged by the acceptance company. The hon. member for Regina City (Mr. Ellis) a few days ago put on the record in detail the charges made by Eaton's and Simpsons-Sears on the smallest purchase that could be made under the instalment plan. He pointed out that the effective rate on a small purchase was 54 per cent. It is true that as the amount of the purchase increases the rate goes down, but in all instances the rates are considerably higher than the bank rates. In most instances they are from 15 per cent to 35 per cent.
I have quite a number of examples of charges made on the instalment plan, and I shall refer to one at this time. There was an interest charge of 6-25 made on an unpaid balance of $60, repayable in $6 monthly payments. On that unpaid balance of $60, Eaton's or Simpsons-Sears charged an effective rate of 23 per cent. I should like the banking and commerce committee to have before it witnesses from big corporations such- as Simpsons-Sears and Eaton's which do such a tremendous business from one end of this nation to the other. I should like to ascertain from them, if we could, the amount of profit that they acquire because of their credit business and see to what extent the total profits of these huge companies are derived, not from

Interest Act
the amount of profit they make from the actual sale but from the profit they make through the extension of credit.
I have visited a great many homes, as most members of parliament do. I know it is a common practice, it is almost a general practice, for the housewife to have credit accounts with the big mail order houses. I have made purchases at such firms as Simpsons-Sears, and instead of telling me the article was $5.00, for example, the clerk would say to me, "What is your account number?" I said, "I have not got an account number." I felt rather guilty that I did not have an account number because the attitude they seemed to take was that if you did not have an account number you were a bit of an oddity, a bit of a piker. I said, "No, I do not come to Regina very often so I think I will pay cash." It is very simple to get credit. The charges that are made are very high. I imagine a great many purchasers not only do not understand the rate of charge, but in fact have a difficult time meeting their monthly payments because of the very high rate charged.
I am hopeful that witnesses from these two large companies, from some of these acceptance corporations and small loan companies may be brought before a committee of this house and questioned. If members of parliament had such witnesses before them, they could go into the profits that are made by these corporations and then if desirable introduce legislation to reduce the rate that might be charged. As a consequence, I am certain we would save the consumers, the ordinary rank and file of the Canadian people, ten of millions of dollars within a one-year period. We would not have to reduce the rate too much to save many millions of dollars when one bears in mind that, according to the Bank of Canada statistical summary, $2 billion is being lent in credit of one kind or another. Of course, that is not only credit that is being made available and on which very high interest rates may be charged.


Walter Edward Harris: May I ask how much of that $2 billion is bank loans?


Hazen Robert Argue: I have not got the statistics at this time. There would be a considerable portion of it in bank loans. I do, however, have the amount of retail instalment purchasers to which I referred a moment ago. [ made the statement that on the basis of the information available today it might be that retail instalment credit in 1955 would exceed a billion dollars. If you want to confine yourself to the billion dollar figure only and to say nothing about the high interest rate that may be charged by individuals, the high interest rates that may be charged on

second mortgages, I think it is fair to say that many millions of dollars would be saved by the Canadian people if a move were made to reduce interest rates.
One hon. member of the house spoke to me yesterday about a practice that was being followed by people in the business of constructing homes.
It was pointed out to me that the amount of money made available under the Central Mortgage and Housing Corporation is not sufficient to pay the total cost of construction, and that very often the purchaser of the house does not have the total cash payment required. Therefore, the contractor takes a second mortgage on the house, and that second mortgage is then taken to a finance company which purchases it at a substantial discount. It is true that if a limitation were put on the amount that may be charged for second mortgages, the amount of money available for such second mortgages in all probability would be reduced, and unless something else were done the single act of reducing the interest rate that may be charged on second mortgages would perhaps make it more difficult for individuals to purchase houses.
At this point I should like to read a statement taken from an article in the Chatelaine magazine of January, 1956. It reads as follows:
Avoid second mortgages like the plague. Rates go as high as 10 per cent, with discounts of 15 to 25 per cent. This means that if you take out a $5,000 second mortgage, the lender may only give you $4,000 cash (keeping a discount of $1,000) but you will have to pay the high interest rate on the full amount of $5,000. Thus the discount is a way for the lender to get a much higher true rate of interest on his loan than the stated rate.
The fact that houses are being made available, with second mortgages carrying an effective high interest rate, I believe to some extent at any rate undermines the purpose of the National Housing Act. The purpose of that act was to make houses available to purchasers at a reasonable rate of interest. Therefore, in the whole field of credit the government should take certain very definite additional steps. Besides placing a limit on the interest rate, the government should consider, as, passing a new act of parliament that might be called a family welfare loans act, an act which would provide a small percentage guarantee to the chartered banks to encourage them to make loans to families for ordinary consumer credit purchases, the type of purchases for which they are now paying very high rates.
As a result of the experience of the government with the Farm Improvement Loans Act, the National Housing Act and other acts

of parliament, an act such as I have suggested would be effective in making money available to Canadians at a low rate of interest and would substitute for any money sources that might be dried up as a result of limiting interest rates to 12 per cent.
I should like to see similar guarantees given under such an act, and under all other acts of this nature, to credit unions. Credit unions in Canada are an important source of credit. They are growing in importance. Over the years they have proved their soundness. I believe the government would be wise to encourage the use of credit union facilities by extending to credit unions in every instance the same type of guarantee that is now extended to the chartered banks, so that in the field of making money available to ordinary consumers the credit unions of this nation would be placed on an equal footing with the chartered banks. If that were done the credit unions would be able to function with a loss ratio not any larger, and very likely even smaller, than the very small and commendable loss ratio now experienced by the chartered banks in this lending field.
As has already been said in this house by the hon. member for Saskatoon (Mr. Knight), another thing the government should do is to require all firms, all corporations, all small-loan companies and persons in the field of lending money, to state the effective rate of interest per annum. When a customer comes in and asks for something on the instalment plan he should be immediately informed before the transaction takes place that if he obtains credit of this nature the interest rate will be 10 per cent, 20 per cent, 30 per cent, or whatever the figure may be. If that were done, it would make it much more difficult for those loan companies and corporations to charge an exorbitant rate of interest.
The first action the government should take is to place a definite ceiling on the interest charges that may be made, not only by small-loan companies, but also by acceptance corporations, by large retail firms and by individuals whenever credit is made available.


Mr. Victor Quelch (Acadia):: Mr. Speaker, I agree with the hon. member for Assiniboia that this bill should be referred to the banking and commerce committee in order that there may be a thorough investigation into the subject of credit buying. Most of us are familiar with a number of the practices to which he has referred, practices that may be described as very undesirable ones and I think justifiably referred to in many instances as a racket. However, I must admit that
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when I first read this bill I was not too well impressed by it. It seems to me that a rate of interest of 12 per cent in an act of this kind is too high. It is true it is only a ceiling; it is true there is no ceiling at the present time; but it does seem to me that when you put a ceiling of 12 per cent into an act you are actually implying that a rate of interest of 12 per cent may be justified under certain circumstances. With one or two minor exceptions I do not think that is the case, and those exceptions can be taken care of by federal legislation.
It seems to me in the past there have been a number of cases where 12 per cent has been charged; for instance, to farmers. As a farmer I have paid 12 per cent. In the early days it was a very common practice to charge a rate of 8 per cent on loans for hail insurance. But the minute that loan became overdue the rate rose to 12 per cent. I have paid that. The due date was October 1,' a date, of course, that no farmer could meet. On farm machinery the rate was 7 per cent until due, and then it became 10 per cent to 12 per cent. We all know that in the vast majority of cases it was not possible for a farmer to pay the note when it became due, therefore in a very short time he was paying 10 per cent and 12 per cent. I am glad to say that practice has ceased to a very large extent, but there are still instances where those rates prevail.
It seems to me the only instance where 12 per cent might be justified would be in regard to small loans, but small loans are covered by a federal statute and therefore would not come under this act. Small-loan companies operating outside a federal charter no doubt would feel they could not carry on their business at a rate of 8 per cent. If we put a ceiling of 8 per cent in the act, then I presume they would immediately apply for a federal charter in order to get the protection of the act. I do not like the idea of putting a ceiling of 12 per cent into an act of this kind because, as I say, it does imply, or appears to imply, that a rate of 12 per cent could be justified under certain circumstances.
I would far rather see the rate of interest set at 7 per cent or 8 per cent, and then let us pass federal legislation to take care of cases where a larger rate may not have been fair. But, in the meantime, in view of the fact that this legislation would prevent a higher rate being charged, I would support the bill.


Mr. Erharl Regier (Burnaby-Coquitlam):: Mr. Speaker, I am told that in the early days of Christianity it was considered to be against the teachings of the church to charge any

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rate of interest at all, and those members of the Christian community who were found guilty of having lent money at a rate of interest were excommunicated. I think we have come a long, long way from that early concept which was held by people toward the use of money. I fail to see how we can set maximum rates of interest that some money lenders in Canada are permitted to charge and then claim to be logical when we say that all others not covered are outside the law in so far as they may charge whatever rate of interest they are able to get.
The hon. member for Rosthern (Mr. Tucker) placed on the record the other day some statistics concerning the operations of the personal loan department of the Canadian Bank of Commerce. Those statistics revealed that although the Bank of Commerce through its personal loan department charges less than 11 per cent interest they still show a net profit of -77 per cent. I think most of us are aware that over a period of many years the Bank of Montreal has made personal loans available to its customers at the rate of 6 per cent per annum on the minimum monthly balance. I am quite willing to concede that possibly the Bank of Montreal is doing this in the interests of good public relations and that it has to rely on its earnings on larger loans in order to break even.
I am very pleased to note the rapid growth throughout Canada of thousands of credit unions none of which charges more than 12 per cent per annum. A larger number of them find at the end of each year that they are able to supply their customers or members with a rebate of some of the interest that has been paid. We can readily see that the business of lending money is growing rapidly in Canada and the number of individuals, organizations and institutions that are engaging in this practice is steadily increasing. When we look at some of the statistics available to us it is small wonder that the number is growing. It is apparently a very easy way to make a living.
I must say to my shame that I recently visited a cousin of mine who had sold his legitimate businesses. I asked him what he was planning to do now and he replied that he intended to lend out his money because for every $10,000 he had he could arrange to lend out $50,000 and could easily get 2 per cent per month on the unpaid balance and frequently even more. I said that I was ashamed to call him my cousin because I have my opinion in relation to this practice and my regard for people who make their livelihood in this manner is very low indeed.
I have already said it is small wonder that the number of Canadians who are

engaging in this kind of enterprise is rapidly increasing. With this in mind I should like to refer hon. members to page 27 of the annual report of the small-loan companies and money lenders. I am using the statistics which appear there simply because I think they are indicative in no small measure of what is happening in the money lending field. We find here the report of the Household Finance Corporation of Canada for the year ending December 31, 1954, in the small-loan field, and I notice that they had a total income of $12,812,433.21. Of that total, Mr. Speaker, they record a profit before income tax of $5,952,743.75. Under their list of expenditure I notice an advertising item of $498,373.17. If you add the advertising expenditures to the profit you get a profit of half of the complete income of this organization. Not only is their profit half of their total income, I notice it is twice the amount of wages they pay. I do not know what their scale of wages is but either it is far too low or the rate of profit is excessive and the interest they are charging is needlessly high.
I also notice there is an investment of share capital paid in cash of $3,070,000. This company in which is invested $3,070,000 was able to pay in dividends to shareholders $3,048,510. In other words, they recovered the whole of their original investment in a 12-month period.
I have available to me a mortgage which was obtained by a mill worker whom I know on a house that would sell for at least $14,000. He needed a bit of money and went to the mortgage company. Apparently he was not able to get a mortgage with reasonable ease so he then went to some of the loan sharks which unfortunately we also have in British Columbia. He signed a first mortgage on his home for $2,300 at 8 per cent and had paid out to him the sum of only $2,000. I have not bothered to work out the interest on that amount.
I have another statistic which I should like to place on the record. The organization to which I am referring is engaged in the business of financing automobile sales. I have a letter from them dated November 10, 1955, which says:
"If the balance is paid by November 30 you will have to send $179.60."
Then on December 12 they wrote:
"The balance is, since no payment was received, $198.47."
A further letter sent at the end of the month again states that the balance is $198.47. In other words, Mr. Speaker, for the loan of $179.60 for one month this company was charging an interest rate of 125 per cent

per annum. If this customer had been foolish enough to have sent the money on December 12 he would have paid an interest rate in excess of 250 per cent. Added to this was compulsory automobile insurance as well as compulsory life insurance. In cases such as this the customer is completely at the mercy of these companies when he applies for a refund.
There may be a reasonable argument raised on behalf of those who have money and decide to lend their money to someone else. After all, if I have a certain sum of money which is legally and rightfully mine I do not have to make that money available for the use of my neighbour, and if I were to do so the argument could be advanced that I should be entitled to stipulate my own terms and conditions and the reward that I would expect for the use of my money.
I think it is fair to say that 90 per cent of the money being used today in Canada for lending purposes does not belong to the lenders. That money is obtained from regular and recognized lending institutions. It is a very common practice when you are engaged in the retail field or in the business of selling automobiles, or even if you wish to set yourself up as a racketeer and open a finance company, that you supply $1 and the life insurance company or the chartered bank will lend you $4 more so that you will have $5 to lend out. Then you pay 4| to 51-per cent interest on that money and as the hon. member for Nanaimo (Mr. Cameron) pointed out the other day in the debate on the second reading of Bill No. 10-


Mr. Deputy Speaker:: Of course the hon. member will not refer to a debate on another bill.


Erhart Regier: It has been pointed out that this amounts to 400 per cent on the investment. I feel that money in the insurance companies and on deposit with the banks belongs to the masses of the Canadian people and I see something very wrong in people being able to go to those institutions and obtain that money at a low rate of interest and then turn around and lend it back to the people who rightfully own the money at an exorbitant profit.
The argument is sometimes made that the government should not interfere. Let the buyer beware is an old slogan. It is argued that people should acquaint themselves with the rates of interest they have to pay and that these enterprises should be allowed to operate outside the law. These organizations and individuals have the full protection of the law, and when it comes to the customer meeting his part of the contract I submit that if this parliament claims the right to
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pass laws which authorize individuals and corporations to collect their pound of flesh then this parliament is morally obligated to pass legislation which will see to it that the customers, the general masses of the people of Canada, get an even break in the deal. We cannot have a law which does not place upon those who use the law for their own protection the duty of being reasonable. Some of the things being done in Canada today are not just or reasonable and legislation is necessary. If we do not want legislation to set maximum interest rates then we should abolish the legislation that enables people to enforce the sanctity of contracts. The one is as fair as the other.
I am also rather concerned with the damage being done to ethical and long-established businesses in our nation. Why should the chartered banks who are engaged in the business of borrowing and lending money not be enabled to extend their activities to meeting the needs of the people? Why should not greater encouragement be given to credit unions? I cannot recall anything important that this government has done to extend the credit union movement, although I realize that on the whole that comes under provincial legislation.
There are many respectable companies engaged in business in Canada, even in the business of lending money. Their reputation and ability to serve the people are being seriously hampered by the activities of these money shysters. Take the retail merchants of Canada, as an instance. I can think of two large furniture establishments operating in Vancouver, both selling on the instalment plan. One store allows for a reasonable profit and if an article is bought on the instalment plan the purchaser pays 9 per cent per annum on the minimum monthly balance. While that may be considered excessive by the hon. member for Acadia (Mr. Quelch) I would tell him that we consider the passage of this bill to be necessary because right in that same city is another large department store which has no markup whatever on its furniture and which openly brags that it sells at cost and makes its money out of the finance fees that are collected. They are putting out of business many of the smaller retailers in the city and they are doing injury to the other large retailer who is attempting to earn a living in an honest way.
I am concerned also with the too liberal credit which is being offered today to the Canadian consumer. I do not think that the easy money available these days is of much help to Canada in the long run. As the hon. member for Assiniboia (Mr. Argue) has pointed out, these high rates are robbing

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the Canadian' people of millions of dollars a year. Whatever you charge for the use of money or as an interest rate that exceeds the cost of handling money is the amount of purchasing power that you take from the Canadian people.
I have been told that some members of parliament had very little reaction to the first introduction of this bill a year ago, but that is easily understood. People who are in the clutches of loan companies or instalment buying plans do not go around openly bragging about the fact that they have allowed their finances to get into such a mess. Not many of them would want to inform even their federal member of their situation. We have almost reached the position in Canada where people consider it a disgrace to borrow money. Our forefathers had to borrow money to meet their urgent needs and that was considered a perfectly honourable thing to do and should be so regarded in our society. However, as things are now people hate to admit that they are borrowers of money.
I feel that the government must act this year. I interject again: What about the borrower? I think that this bill will be talked about in Canada for a long time if the government does not act. I am hoping that organizations throughout the country will take up the cause and make enough noise about it that it will reach the ears of the government. I hope that our religious organizations who are concerned with ethics will interest' themselves in the wholesale robbery of the Canadian people which is taking place. I see no reason why those engaged in the practice of lending money or selling goods on time should not be held responsible for the toll that is extracted.
We need money for loans for necessary and worthy purposes. There are many engaged in that occupation in Canada who have a very high reputation. They are concerned with the security of the loan and all they are asking is that the rate allowed be commensurate with the cost of the services they are rendering to society. Finally, I should like to appeal to the government to rid Canadian society of some of these parasites.


Mr. Philpoit:: I wonder whether the hon. member would permit a question before he finishes. He said he could not remember anything that the house or the government had done to assist the credit unions. I am sure the hon. member will recall that last spring when the bill respecting loans to fishermen came before the house the credit unions were made eligible to make loans in record time, and the bill went through the
[Mr. Regier.l
house much faster than this particular measure is going through the house this afternoon.


Erhart Regier: Mr. Speaker, in answer to the hon. member's question, I believe I did not say that the government had not done anything. Relatively speaking, I felt that way and I believe I started by saying something to that effect but I amended my statement and said that they had done very little. I had in mind the very amendment that the hon. member has mentioned. However, in relation to what the government does to aid private business it has done nothing to aid the credit union movement.


Mr. Richardson:: May I ask the hon. member a question? Is he not familiar with the fact that credit unions are granted exemption from taxation under the Income Tax Act?


Hazen Robert Argue: That is not true. They pay every tax that every other corporation pays.


Mr. Deputy Speaker:: Order.


Erhart Regier: Mr. Speaker, I would love to answer the hon. member-


Mr. Deputy Speaker:: Order. The hon. member for Fort William.


Daniel (Dan) McIvor: Mr. Speaker, there are two sides to this question. I have had some experience with people who borrow and my advice to them has been: Do not buy anything unless you can pay cash. I think that is one thing we should emphasize.


Alfred Claude Ellis: That is easy enough for a $10,000 a year man to say.


Daniel (Dan) McIvor: 
Stanley Howard Knowles: Could not the hon. member quote Scripture a little more accurately?


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I am going to accept the valuable advice of the hon. member for Fort William (Mr. Mclvor) and avoid any quotations from the good book, as he has just suggested. I am very happy to have the opportunity to speak for a few minutes in support of the bill to amend the interest rate which has been introduced by the hon. member for Assiniboia (Mr. Argue). I feel he has rendered a service to the house and to the people of Canada by bringing this matter forward. As far as I am able to determine, the time is long overdue for a thorough review of the situation to be undertaken by the House of Commons.
As I understand it, the Interest Act is an act that covers in general terms the whole field of the charging of interest upon money that is lent in Canada. The hon. member proposes to amend section 2 of the act by providing for a maximum rate of interest of 12 per cent. That section now reads:
Except as otherwise provided by this or by the other act of the Parliament of Canada, any person may stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount that is agreed upon.
I believe that provision has been on the statute books for a considerable period of time without any change. I do not know exactly when the Interest Act was first placed on the statute books of Canada, but I understand that no amendment to the act
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has been made since the year 1907. On various occasions the parliament of Canada has recognized that it is necessary to place curbs upon the unlimited nature of the provisions of section 2 of the Interest Act and has passed certain special acts which limit particular situations as far as the charging of interest is concerned. We have the Small Loans Act, the Money-Lenders Act and the Pawnbrokers Act.
I think that hon. members should be cognizant of the fact that our predecessors have recognized from time to time the necessity of placing restrictions upon the freedom of individuals to lend money at any rate of interest they may be able to obtain. I also think it should be clear from the review of the current situation made by the hon. member for Assiniboia that since the time when such acts as the Money-Lenders Act and the Pawnbrokers Act were placed upon our statute books there have been some very great and drastic changes in the methods of lending money to Canadian citizens. Because of the fact that over a period of time there have come into existence various new institutions or various new methods for lending, such as the credit systems operated by some of our retail chains today, I think the time has now come when it would be advisable to include within this general act an over-all limitation upon any form of money lending which may be undertaken in Canada either as between individuals or through various incorporated money lending agencies so that, as the years go by, those who are concerned in this business will have no loophole through which to devise various other methods within the law of lending money at excessive rates of interest. That is why I feel that the amendment to this act which is being proposed by the hon. member for Assiniboia (Mr. Argue) is so greatly to the point.
Some of the hon. members who have spoken have pointed out that over a large field of successful lending operations in this country today interest rates either at 12 per cent or less are enabling money lending businesses to operate with great success, to say the least. While at the time when this act was put on the statute books it might have been a valid argument that if restrictive clauses were attached to this section the field of credit would be unduly limited to those who might have real need of it, nevertheless I think it is fair to say that such is not the situation that exists today. As the hon. member for Burnaby-Coquitlam (Mr. Regier) pointed out, we are today completely surrounded by various agencies that are only too

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anxious to make deals that involve the lending of money at interest. As a further instance of that fact, I think it would be worth while at this stage to point out that since the present provisions of this act were established there have arisen in Canada many other fields of lending activity including the whole activity of the credit union movement across this country. That is a movement which has operated successfully within the restriction of the maximum interest rate of 12 per cent. That is a movement which is now sufficiently national in scope to enable all Canadian citizens in need of credit-even if some of these other lending agencies were not in operation-the opportunity to secure credit when they need it.
Apparently the national statistics on credit unions compiled centrally are not particularly up to date; but even in the year 1953 the credit union movement in Canada is reported to have had total assets of $492,384,000 and to have made loans in that year totalling $204,863,000. That fact in itself-to me at least-is an indication of the scope of the present day credit union movement and of the facilities which it has available for making loans to the citizens of Canada. Since their inception and up until the end of 1953, the credit unions across Canada had made loans in a total amount of $1,179,733,000, and they have been growing since 1953. Last year in the evidence given before the banking and commerce committee on the bill to which the hon. member for Vancouver South (Mr. Philpott) was referring a few minutes ago, it was indicated that between the years 1954 and 1952 the credit union assets in British Columbia had increased by more than 50 per cent. As I say, while apparently the latest statistics available on a national basis are for 1953, I think it is safe to say that in other parts of Canada the credit union movement has been growing at a comparable rate and that the figures I have just been quoting, if given for the year ending December 31, 1955, would show a material increase over those of 1953.
I have gone to some pains and have spoken at some little length to point out the picture of the credit unions with respect to the offering of credit facilities in Canada. I have done so merely to indicate that, as far as I can see, it certainly would not be valid to argue that any Canadian citizen would be denied an adequate measure of needed credit if the amendment to section 2 of the Interest Act that is proposed by the hon. member for Assinibbia is passed by this house.
As to the situation of the credit unions, I feel that I should mention the fact that in many parts of Canada today the credit unions

are in effect operating as institutions which employ staff on a full time basis and that they have what one might consider to be the normal operating expenses of other lending institutions. Those of us who have had some experience in seeing credit unions start as small organizations know that a good deal of volunteer work has been carried on by the members themselves, and is still being carried on within those organizations, particularly in the smaller places. But in Canada today there are a great many credit unions which have reached the stage where their operations are of such a size that it has become necessary for them to employ a trained staff to carry on their business just as do many of the private commercial organizations. Some of these were mentioned in connection with our fishermen's credit union in the evidence before the banking and commerce committee last year. The largest of those fishermen's credit unions in British Columbia-I refer to the Prince Rupert fisermen's credit union-at that time had assets of $1,750,000 and was making loans on a scale which certainly could not be handled on a volunteer basis. I mention that matter in case somebody might try to suggest that it is not fair to put forward the fact that credit unions can operate quite successfully within a maximum rate of 12 per cent because of the fact that they are carried on by voluntary work on the part of the members.
Without attempting to repeat the arguments that have been advanced by some of the other hon. members who have spoken, and having simply attempted to emphasize one or two of the points which have not been expanded by them, I feel that I can in all conscience urge upon the house the acceptance of the amendment that has been proposed to the Interest Act by the present bill.


Alfred Claude Ellis: There are just one or two comments I should like to make on this bill. I feel that as a parliament we have a duty and a responsibility to our people. The very high cost of living in this country is the concern of all thoughtful Canadians. I suggest that by the passage of this bill we would be making at least a slight contribution towards a reduction in the cost of living. We would be, in effect, increasing to at least a slight degree the purchasing power of the low income groups in Canada.
There are many factors contributing to the high cost of living today. There are such things as the excessive corporation profits, taxation at all levels of government, the effect of the tariff structure on the cost of goods purchased, and of course the excessive debt

charges carried by the people of Canada have a very important part in the high cost of living. Now, anything we can do to lighten the load, we should do. A few moments ago the hon. member for Fort William (Mr. Mclvor) suggested that the parliamentary assistant ought to be thinking about doing something towards reducing the interest rate. But just thinking about it or turning to the government and asking them to take something under consideration is not good enough. Here, we have a specific piece of legislation which will have the effect of benefitting the low income groups in Canada. If the government is at all concerned about helping the low income group, they will support the bill now before the house.


William Moore Benidickson: You have not read the speech from the throne.


Alfred Claude Ellis: We were hoping the parliamentary assistant would take part in this debate and give us some indication of what the government had in mind. However, from past experience with government legislation we know that there is always a great fanfare about legislation that is coming. Then, when the legislation is introduced, we find that in very few instances does it measure up to what it was cracked up to be. For example, at the time the National Housing Act was introduced, we heard a lot of glowing things about the legislation the government was proposing. Since that time we have had ample evidence that the act has not fulfilled the purpose for which it was introduced. We are now told the government is going to introduce some legislation dealing with interest rates. Therefore, we should keep this issue in mind and face up to the fact this bill has the effect of getting to the root of the problem.
This bill is quite clear-cut. It is quite specific. There is no shilly-shallying around, no ifs or buts. It is quite definite, and that is what we regard as the hallmark of a good piece of legislation.
Now, whatever the legislation the government proposes might be, I think that we in this group are going to make it abundantly clear we want some legislation with teeth in it. We want some legislation which is going to do the job we feel must be done at the present time. I repeat that I consider this bill to be at least one step we could take now to ease the burden of our hard-pressed low income groups in Canada. The hon. member for Fort William stated that in his opinion people should not buy goods unless they could pay cash. I wonder how long business would operate in Canada if all businesses adopted the same point of view. Borrowing is an essential part of our whole business structure. It is very easy for
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a person with a sizeable income to talk about paying cash, but let us face the fact that if we expect the average Canadian to enjoy some of the amenities of life, if we feel the average housewife ought to have an electric washing machine and some of these other necessary household appliances, then the only way a great many families can buy those things is through borrowing. No amount of lecturing on the part of government supporters is going to change that fact.
Naturally, everyone would prefer to buy for cash. It is the cheapest way to buy. We have all had the experience of going into a store to buy an article priced at say $189. When we announce that we are prepared to pay cash, we usually get a better price. It is, therefore, to everyone's advantage to pay cash. It is all very well for a person with a good income to lecture the poor on the virtues of paying cash, but it is a different matter for a family that is paying exorbitant rents and trying to get the necessities of life to go into the market and pay cash. Unless the government takes it for granted that these people should not have washing machines and these appliances which we have come to regard as household necessities, then I think we ought to be prepared to do something to lighten the load of those who are forced to borrow money to buy these goods.
I believe that from the standpoint of pure economics it is quite obvious that if a person must buy on time or borrow money in order to purchase goods, his purchasing power is reduced considerably. When you multiply the instalment purchases on the part of a great many Canadians from one end of Canada to the other, then you begin to realize the extent to which the purchasing power of the people of Canada is reduced by excessive interest rates. Of course, the effect on business and industry is quite obvious. The less money the individual has to spend on the purchase of consumer goods, the less goods will be purchased. I am suggesting that the passage of this bill bringing about a reduction of interest rates generally will place in the hands of the people more purchasing power, and obviously this additional purchasing power will be used. After all, a family on a low income must spend every penny of that income in order to make ends meet. This money will be spent on consumer goods, and the additional purchases of consumer goods would materially assist the employment picture in this Canada of ours.
When we view this legislation, we must look at it from a broad point of view. Here is a specific example of how we might do something concrete to help the average man,

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There are many other ways in which we could help. I mentioned some of the factors contributing to the high cost of living, the tariff structure, the question of corporation profits, taxes and so forth. We must advance in all fields. Looking at this bill now before the house, I suggest it affords every member in this house a definite opportunity of doing something for the people who need help most.
In discussing a bill similar to this the other day which dealt with a reduction in interest rates from 24 per cent to 12 per cent, I referred to the extent to which the people of this country are presently in debt. I placed on the record some figures indicating that there was very little risk involved by the loan companies in lending money. Certainly there is no excuse whatever today for this government permitting loan companies to charge the excessive rates presently being charged because the risk does not warrant them. Certainly, no one is going to suggest that Household Finance, for example, is doing people a favour by lending them money, when they spend nearly $500,000 a year in trying to persuade people to come in and borrow money. One cannot turn on the radio today without hearing some voice saying: "You are welcome at Niagara", or "Come in and borrow money from the friendly finance company". They are spending huge sums of money in order to persuade people to borrow money. They are not doing that as a public service; they are doing that because they know that the lending of money in Canada is one of the most profitable businesses in the country. Apparently the government is prepared to allow them to go on gouging the people of Canada through excessive interest charges.
I am quite willing to admit that many people are not cognizant of the tremendous interest rates they are paying. I believe the hon. member for Rosthern (Mr. Tucker), in a previous debate, referred to the fact that the Canadian Bank of Commerce small loans department found it difficult to compete in some instances with some of the finance companies simply because a great many people were not aware of the disparity in the interest rates because the Canadian Bank of Commerce did not go out into the advertising field and spend a small fortune and charge it, of course, to the fellow who borrows the money. The advertising of the interest rates that he pays is deducted from the income tax of the lending company. Remember, every finance company that is advertising and trying to get people to go into debt is being subsidized by this government in the form of income tax deductions.
	.
No one can rightly say that a great service is being done and that any reduction in the interest rates will drive those people out of the field, or will make credit more difficult to obtain. Remember this, the majority of families in Canada are not in a position to go out and buy a great many of the consumer goods needed in the modern home. The only way in which they can buy those goods is by borrowing money or buying on the instalment plan. You cannot tell me that any level-headed businessman can consider the disappearance of those loan sharks in terms of loss of business. In other words, if he cannot sell his goods he has to go out of business. The lowering of the interest rate certainly is not going to have any effect on the sale of goods through instalment buying, because goods have to be sold and the only way in which they can be sold is by selling them on time.
As I look at this problem from the broad economic point of view, I say we must consider this bill in the light of the effect it will have on the lot of the average family in Canada today. I would venture to suggest that the average low-income family today is in debt, either to a finance company, a department store or a mail order house, and the interest rates which they are paying have the effect of cutting down their purchasing power and thus reducing their standard of living. Therefore, if we are anxious at ail to help the low wage-earning groups in this country, then I suggest a positive way in showing our concern is to pass the bill in its present form.
I suggest that the parliamentary assistant should inform the house now as to the nature of the legislation to be brought down. Is he suggesting that it is the same as this bill? What would be the point of staying out of the debate and suggesting this debate is unnecessary unless the government proposes to bring in almost identical legislation? The Minister of Finance (Mr. Harris) laughs at that. Suppose a private member brings in a bill on a certain subject and a government spokesman rises in his place and says, "We want to debate it, but since the government is bringing in certain legislation along those lines we feel this debate is superfluous": the only validity in that argument is that the government legislation is nearly parallel to the legislation contained in the bill brought in by the private member.


Walter Edward Harris: Such logic.


Alfred Claude Ellis: My hon. friend may disagree but I suggest he has an opportunity to refute that position and to put forth his point of view.

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The government has remained strangely silent in respect of putting forth some concrete reasons why this bill should not be passed in its present form. Here is a definite test of the government's concern or sincerity over the question of excessive interest rates in this country. If they believe in doing something to relieve the heavy burden imposed by those rates on the wage earners of this country they will pass the bill in its present form.


Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, the arguments which have been set forth by the previous speakers, particularly those from the C.C.F. group, have struck a responsive cord in my being. I agree with them completely that there is a most serious need for some facility whereby the ordinary individual who meets with misfortune can secure himself against a debt which could utterly ruin him throughout the remainder of his life.
Suppose a person, just an ordinary man, working, we will say, for $2,000 a year, has a mishap, for instance the occurrence of a serious case of cancer in his home. He does everything that he possibly can to give his wife, we will say, a chance to recover from the disease. He takes her wherever it seems advisable to take her; he probably takes her to the Mayo clinic and in so doing destroys his financial stability for the remainder of his life, if his wage-earning capacity does not in some way increase. Now, surely any ordinary person realizes it should not be necessary for a man who is placed in circumstances such as these to become the victim of loan sharks .
Take the case of death. No one can possibly escape the consequences of a death in the family. By the time one recovers from the expenses of a funeral, usually they run into the neighbourhood of $500. Let a person borrow $500 at an interest rate amounting to 24 per cent a year; let him be supporting a family which requires all the money he is able to earn, and then let us contemplate the dismal prospects which he faces in life. Then think about that case in terms of the development of communism in the world.
A great many of us are altogether too much inclined to forget that we have been more or less fortunate in life, and it is fortunate. The very best off of us are well-off because of good fortune. The very best that any man can do can fail to win competence in the economic and financial world, without what we call the breaks. What facility have we anywhere in our whole financial and economic structure for providing a person, stricken with a mischance, the like of that which I have indicated, with the means whereby he can go through this experience 67509-514
and emerge with some possible hope of recouping himself, getting on his feet?
I am not prepared to say, Mr. Speaker, that the way of providing for most of the mishaps which I have indicated is through the small-loan company. I sympathize with the points set forth by my hon. friends, but I am not sure that the small-loan companies would be the agencies through which we should endeavour, as an enlightened people in Canada, to provide against the hardships I have indicated and many others which hon. members can think of immediately. I am wondering whether or not we should pass some legislation similar to the Farm Improvement Loans Act or some other of the various acts which we now have such as the Industrial Development Bank Act? I wonder if we could devise some means whereby an agency more or less analogous to those which I have mentioned could be set up from which people who fall upon evil days financially could obtain loans which would enable them to recover economically and financially.
It has been suggested to me by some people that in setting out to solve this problem we could have arrangements with the chartered banks under which the federal government would finance, support or guarantee them in making loans up to a certain amount and under certain conditions, in order that people who are stricken by misfortune would be able to obtain sufficient money to tide them over the period of emergency. It was suggested that an interest rate not exceeding 5 per cent be charged on such loans. I simply throw out that suggestion for your consideration. I have not had sufficient time adequately to think this suggestion through. However, I believe that every hon. member will agree with me that there has long been a need in this country for a facility of this kind. The need is urgent; it is right upon us at the present time.
I well remember when my father died leaving a widow and a family of 13 children on a farm with a 20 year old boy as the oldest breadwinner. The cost of my father's funeral almost sank the family financially. I do not know what would have happened had my father not left a certain amount of assets which could be liquidated. By the time the funeral expenses were taken care of and the succession duties were paid we were very nearly reduced to scratching on gravel. No family should have to face financial difficulties of that kind. No member of any family should have to make the kind of sacrifice which was made by one of the members of my father's family in order that the family could economically survive. I just leave this matter with the house and with the government. I urge that those who have charge

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of the financial affairs of our country do not disregard this need. Please do not shrug it off. I urge you to take cognizance of it and to put your best efforts into finding a solution which will actually provide relief for hundreds of thousands of Canadians.


Mr. R. R. Knight (Saskatoon):: I had not
expected to say anything in this debate but I am brought to my feet at this time to express surprise at the fact that my hon. friends on the government side do not have more sympathy for the victims of these money lenders whom we have heard referred to today by almost all the names that are parliamentary. Is there no member on the government side bold enough to oppose this bill? We are accustomed to seeing the hon. members on the government side not being bold enough to support bills brought in by the opposition side.


An hon. Member:: We have a good government.


Robert Ross (Roy) Knight: That is the reason I rise to register my surprise at the silent treatment being given this bill by hon. members opposite. What about my legal friends on the government side of the house? What about the hon. members of the legal profession? Is it forsooth because in some cases they are members of this nefarious system of money lending?


Some hon. Members:: Order.


Robert Ross (Roy) Knight: Is it true that some of them are merely collection agents for these people? Is that why we have not heard one word in opposition to the bill.
My friend the hon. member for Fort William (Mr. Mclvor) said that he was not going to say anything about the bill and he rose from his seat and admirably carried out that intention. He said the condition on which he would say anything about the bill would be if he first knew what the government side of the house was going to say or think about it. I particularly expected that the parliamentary assistant to the Minister of Finance (Mr. Harris) would have something to say on this matter. I should like to know what he thinks about it.


William Moore Benidickson: This is private members' day; we are giving you a full chance to express your views.


Robert Ross (Roy) Knight: And that is why I am taking my full chance.


William Moore Benidickson: You complained contrariwise the other day.


Robert Ross (Roy) Knight: I should like to agree with my hon. friend from Fort William. He said we should pay cash as we go along. I think

that is a delightful idea! However, as my hon. friend from Lethbridge has said, life does not always flow in an even stream and a man who is earning $100 or $150 a month and is spending his entire monthly earnings as he receives them for the necessities of life for his family cannot escape the fact that there are vicissitudes in life. The hon. member for Lethbridge (Mr. Blackmore) mentioned just one, death, which is pretty certain, I think, in most cases. There are other events, too, including happy events like weddings when our daughters or sons get married. These occasions involve expenses outside of the ordinary expenditures which we are usually prepared to meet. On the other hand, I do not think the wife of a man who is earning only the bare necessities of life should have to do without many of the things which are enjoyed by the wives of my hon. friends opposite. I am all for the theory advanced by the hon. member for Fort William; it is a wonderful one. I could only wish that it were practical. I do not think the wives of what are called "humble" people-and I do not like that term-should have to do without some of those things which we have come to consider as necessary.
Why do the government members not say something about this bill?


An hon. Member:: You said that.


Robert Ross (Roy) Knight: It is a strange sort of debate when only a few people in the opposition do the speaking. What is the government's intention concerning this bill? Has the parliamentary assistant to the Minister of Finance nothing to say? What is the reason for this silent treatment? I challenge hon. members opposite. I think they are afraid to speak in this debate. I do not think there is a man on the opposite side-


An hon. Member:: Period.


Robert Ross (Roy) Knight: -who would dare to rise and oppose this. Naturally we cannot expect them to support anything which comes from this side of the house; they never do. There was a little discussion about that at the meeting of the Liberal association when our two senior cabinet ministers were honoured- and quite rightly so-the other evening: "You must follow the party line". The Minister of Agriculture (Mr. Gardiner) said, if he was correctly reported, that there had been occasions upon which he had differed with the government but that he had suppressed his natural desire to oppose what the government proposed. Of course I presume that to him, as to many of my Liberal friends, the ultimate catastrophe would be the defeat of this government and so, with a majority of

something like 120 members-it is so large I cannot keep track of them-it would never do for three members of the government side, for example, to get up and vote for something which would be good for the wheat farmers of Canada. The government might be defeated. And so the advice goes out: "Follow the party line; follow the whip; do what you are told." I think there is some merit in the accusation-


William Moore Benidickson: You kicked out the member for Moose Jaw-Lake Centre (Mr. Thatcher) when he did not follow your whip.


Robert Ross (Roy) Knight: -that this government is becoming more and more a dictatorship. Today it says that bills or resolutions brought forward by anyone except someone who follows the line and who obeys the whip of the government side are not worthy of debate. Let some of my honourable and learned friends on the other side get up and oppose this bill.


Mr. A. M. Nicholson (Mackenzie):: Mr. Speaker, apparently the parliamentary assistant to the Minister of Finance has not his notes organized as yet so I will give him a few minutes longer to prepare.


William Moore Benidickson: This is your bill.


Alexander Malcolm Nicholson: My reason for rising to support the hon. member for Assiniboia (Mr. Argue) is to stress the fact that he has presented to parliament proposals which should receive the sympathetic consideration of hon. members in all sections of the house. I have before me the latest statistical summary issued by the Bank of Canada which points up some facts in connection with charge accounts, retail dealers instalment credit, finance companies instalment credit and cash personal loans from chartered banks.
I suggest that an analysis of what has happened in Canada during the so-called boom would result in some pretty careful consideration. For example, I find that from December 1951, which is apparently as far back as our records go, charge accounts increased from $420 million to $533 million for September 1955, the last period for which statistics have been compiled. In the case of retail dealers instalment credit the increase was from $126 million in December 1951 to $309 million for last September. The finance companies instalment credit increased from $180 million in December 1951 to $575 million, while the cash personal loans increased from $338 million to $790 million. If you add those together you find there has been an increase from $1,120 million to $2,212 million, an increase of over $1,000 million.
Interest Act
I am sure the parliamentary assistant to the Minister of Finance will agree that this indicates a disturbing trend in a country allegedly as prosperous as is Canada. When these statistics reached me I phoned the Bank of Canada to find if it would be possible to get information as to how those figures compared with consumer credit figures for the period prior to the crash of 1928-29, but I was informed that we were not compiling those statistics in Canada at that time. Therefore we have to rely upon statistics supplied by the United States for that period.
It would appear as though this alarming increase in Canada resembles in many respects the increase in credit buying that prevailed in the United States prior to the crash back in 1928-29. It is not hard to figure why there should be this large increase. I am told that nearly anyone who has a clean shirt can go into almost any used car lot in Canada and drive away a car which will run for some considerable time. I am told also that those who are selling radios, television sets and electric refrigerators do not seem to worry very much about the fact that many of their customers are committed to paying more each month than their salaries will permit. That does not seem to disturb many people who are finding that they have to pay interest rates as high as 50 per cent, as was mentioned a few days ago by the hon. member for Regina City (Mr. Ellis).
It is obvious that the person who cannot pay cash, as was suggested by the hon. member for Fort William (Mr. Mclvor), is not going to get out of trouble by paying 50 per cent per annum as interest on the purchase of things which the storekeeper is prepared to sell him. It is bound to get him into trouble eventually.
The latest publication by the Minister of Trade and Commerce (Mr. Howe) dealing with the distribution of non-farm income in Canada should be examined along with the statistical summary of the Bank of Canada. This publication indicates the staggering information that 34 per cent of Canadian families of two or more persons have an income of less than $2,500 a year; over one-third of Canadian families receive less than $2,500, an average of $1,530.
I think it is pretty obvious that if one-third of our families are getting an average income of only $1,530 annually and cars, radios, electric refrigerators and other electrical appliances are so plentiful on the market and are being pushed, if interest rates of as high as 50 per cent are being charged, there is going to be trouble for someone some time.
If you divide the Canadian families in another way and take those getting less than

Interest Act
$2,000 a year you find that there are 23 per cent or almost one-quarter of the families in Canada of two or more persons who are getting less than that figure per year. If you average the incomes of those 23 per cent you find that it comes to $1,190 per year or less than $100 per month.
You are not going to solve the problem of people in this group if you encourage them to buy television sets, radios, electric refrigerators and what have you by extending credit at interest rates of as high as 50 per cent. Therefore I say that the proposal brought forward by the hon. member for Assiniboia should receive the favourable consideration of hon. members in all sections of the house. We should have legislation which will place a ceiling on these interest rates and assist our friends in the lower income brackets who have such a small average income but who, according to the Bank of Canada, have extended their credit commitments by over $1,000 million since we first started compiling these statistics back in 1951.


William Moore Benidickson: Mr. Speaker, I have looked around and it does not appear that any other hon. member wants the floor to speak in this debate.


Hazen Robert Argue: We have more speakers.


William Moore Benidickson: I will yield the floor.


Hazen Robert Argue: No, go ahead.


William Moore Benidickson: Hon. members will realize that a bill in similar terms was introduced rather late in the last session, and at the same time another bill was introduced by the same hon. member to amend the Small Loans Act. There was a debate in connection with the amendment to the Small Loans Act last year. It was indicated by me then that the small loans legislation was receiving the consideration of the government and it was altogether likely that legislation would be introduced at the next session of parliament, which is the present session. It was indicated that the history of parliamentary activity in this field showed that a discussion of interest rates and lending practices generally was usually advanced and aided considerably by having public representations through the operation of a parliamentary committee.
I cannot make much reference to the debate last week on the small loans bill because of the rules of the house, but I indicated at that time that government legislation regarding the small loans field would be introduced within a short period, and that that legislation would be rererred to a suitable parliamentary committee. I am able to say more than that today. The legislation will be introduced in a day or

two and we will have the benefit of a parliamentary discussion in a parliamentary committee. I am sure that as a result of that discussion there is bound to be a consideration of the Small Loans Act and of the general situation respecting lending and interest rates. It seems to me there is a much wider opportunity to discuss problems of this kind when the discussion is brought about by reason of the introduction of government legislation.
I pointed out in connection with the other bill that there were a number of other items standing in the names of private members which, under our rules, receive attention in the early days of the session but might not receive the same opportunity for debate later in the session and that, as hon. members know, there are not similar restrictions to the discussion if we are considering a debate that comes under the heading of government orders. Legislation with respect to the Small Loans Act will be introduced under the heading of government orders.


Mr. Green:: May I ask the hon. member a question? Is that bill to be introduced in the house or in the Senate?


William Moore Benidickson: I am not able to say as to that, Mr. Speaker. I believe it has just received consideration by the cabinet today in final draft form. That would be a matter on which the cabinet would make the decision, and I would think that decision would be made almost immediately.
I do not propose to deal with the merits of the particular bill before us because, as I say, there will be another and a better opportunity to do so later in the session. However, hon. members have asked why one would not readily accept a bill of this kind. I think I can give a very good illustration from a debate concerning the Small Loans Act, to which I can refer because it is the debate that took place last year. The sponsor of this particular bill introduced an amendment to the Small Loans Act last year, and at the same time I gave him the assurance that we would likely be considering legislation in this field this year I pointed out to him that I did not think his bill of last year was in a form that would satisfy even him.
I pointed out at that time that he was simply amending one section of the Small Loans Act, and that the effect of his measure neglected the licensing and regulation of small loans in a very wide area. The effect would be that the regulating and licensing provisions elsewhere provided for in the act would simply apply then to only such loans as were made at interest rates between [DOT] 95

of one per cent and one per cent, which as hon. members can recognize is a very narrow range.
So far as the bill we are discussing today is concerned, I do not want to delay the house because I know there are other items under public bills and orders of quite a worthy nature in which private members are interested, and doubtless they want to proceed with them. As I say, there will be another opportunity to discuss this matter. I think some hon. members-including, I believe, the sponsor of the bill-referred to the desire that there should be no charges-I believe that was the word he used-in connection with loans that would involve costs exceeding 12 per cent. I point out to him that in its present form the amendment he has introduced would not ensure that a lender would not be able to make an agreement with a borrower under which the borrower would be obliged to pay, shall we say the insurance premium cost, the cost of drawing up a chattel mortgage, legal fees and various things of that kind which, if taken into account, would be a rather expensive item so far as the borrowing of that money was concerned.
In the Small Loans Act there is a section stipulating that the charges to the borrower must be all-inclusive of not only interest but any other incidental charge related to the borrowing of the money. The hon. member would not accomplish purposes of the kind described in debate by the bill he has introduced today. Therefore when hon. members see the government legislation that is to be introduced almost immediately I think they will realize that the opportunity for a wide discussion of the Small Loans Act will be most beneficial to members of the house before they make up their minds on the question of lending and interest rates generally, particularly when they can see how easy it is to pass legislation such as this that does not take care of costs of all kinds relating to a loan.
Having said that, Mr. Speaker, and without discussing in detail the points raised by a number of hon. members, because an opportunity to do that will come at another time this session, I should like to move that the house do now proceed to the next order of business so as to provide other private members an opportunity to debate other measures under public bills and orders, because this is the last debating day provided for the discussion of public orders.
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INCOME TAX ACT


Stanley Howard Knowles: the second reading of Bill 'Jo. 9 to amend the Income Tax Act (com-nunication of information).
He said:	In presenting this bill, Mr. Speaker, I am conscious of the fact that it s contrary to government policy as it obtains it the present time. I hope no member on he government side will be afraid to stand >y government policy, in view of the news n the press this afternoon as to what some-imes happens to a member as the result of aking such a position. At any rate, we are ill enjoying the publicity which the hon. nember for Rosthern (Mr. Tucker) is ichieving, and we are glad to know the shot vas not fired at him personally but only at lis appearance on television.
Someone is reminding me that there are wo Tuckers anyway, so we are very glad me of them is still with us.


Mr. Tucker:: If I did not have nine lives he C.C.F. would have got me long ago.


Hazen Robert Argue: We have got you eight times o far.


Stanley Howard Knowles: The purpose of Bill No. 9 is to amend section 133 of the Income Tax Act. The proposed amendment is not new to this house. Indeed, I have presented a bill in similar terms on several occasions in recent years. Section 133 of the Income Tax Act provides for ironclad secrecy with respect to information obtained through income tax returns. It is our contention that although such secrecy is proper with respect to the income tax returns of individuals, the iron curtain should be lifted so far as corporation income tax returns are concerned.
It is not my purpose, Mr. Speaker, to speak at any length to this bill, for the reason that all the arguments have been advanced a number of times across the years. We feel that corporations are matters of public concern. The business they do affects the economy of the nation. The income taxes they pay either increase the income of the federal treasury, thereby reducing the amount that others have to pay, or their income taxes are reduced, leaving a deficit to be made up by others, notably by individual income taxpayers. Therefore we feel that corporation income tax matters are of public concern, and that it should not be possible for everything in relation to corporation income tax to be carried on behind a wall of secrecy.
I do not suggest in this bill that every corporation income tax return should be printed and made public. Apart from other reasons for not advocating such a proposal, it would involve a tremendous amount of printing that certainly would not be useful or necessary. But we do feel that, particularly where members of parliament believe that information contained in certain corporation income tax returns should be made available, it should be possible for a minister of the crown to give that information. Hence, all this bill does is add to the secrecy provision which is now set out in section 133 this proviso:
Provided that nothing in this section shall operate to prevent a minister of the crown from communicating to the Senate or to the House of Commons any information with respect to corporations obtained under the provisions of this act.
I emphasize again the fact that the proviso which my bill would add to section 133 does not alter the secrecy that now obtains with respect to individual income tax returns.
There are those who have offered as an argument against my bill the suggestion that most corporation income matters are already made public through the annual reports and financial statements which are published by all corporations. I recognize that fact, Mr. Speaker. That is one of the reasons why I do not think we should go to the extent of requiring all of this material to be published
TMr. Benidickson.]

again. But what is not made public, either in the annual financial statements of the corporations or in any other way, is what goes on in arrangements that take place between corporations and the income tax branch.
All of us know, Mr. Speaker, that an individual income tax return, particularly in the case of a great number of Canadian individuals, is a relatively simple matter. The average taxpayer may not call it a simple matter the night he is making out his income tax form, but it is relatively simple. He discovers, for example, that there are not very many deductions he can make. The average taxpayer is limited, so far as deductions are concerned, to contributions he may make to an approved pension plan and to his trade union dues, together with charitable donations and medical expenses. Both those latter items are limited, as set out in the act. I shall not go into the details now.
Beyond those deductions, of course, there are the statutory deductions of $1,000 for a single person and $2,000 for a married person, and a deduction for each child. There are no other deductions that the ordinary taxpayer, filling out the simple form, is permitted to make. As a result there is not much leeway; there is not much question as to what the average individual's amount of income tax will be. It is a very simple matter to work out. But when you come to corporations, the list of items that can be regarded as deductible is very long. In addition, there are the questions of depreciation and all the other kinds of allowances that are provided so far as corporations are concerned.
Obviously, in the very nature of things, when you have so many different factors in the picture as you have with respect to the computing of corporation income tax, there can be a good deal of leeway, a good deal of dispute as to what amounts should be allowed. We all know that these things make a great deal of work for accountants and lawyers, both on the side of the corporations and on the side of the income tax branch.
We have no way of knowing, Mr. Speaker, to what extent certain kinds of expenses are allowed. There is this whole question of advertising. To what extent does one firm get the advertising it claims allowed as deductible before it pays income tax, as compared with the extent accorded to another firm? When is advertising really advertising? When is it political propaganda, or propaganda on the part of an employer against a trade union with which it has a dispute? These are the kinds of things that are involved in arriving at the amount of income tax to be paid by a corporation.
We feel that one corporation as against another should have the right to know what 67509-52
Income Tax Act
yardstick is being applied, what rules are being used, so there might be fairness as amongst various corporations and so they might know that there is fairness. In addition, we feel the public has a right to know to what extent all of us are really paying for some of the things for which corporations take the credit.
For example, to what extent are we, out of the public treasury, paying for all the advertising with which we are being flooded at the present time? I will not break the rule and refer to the debate that took place earlier today, but I can remind hon. members again that finance companies and loan companies, as well as many other companies, are flooding us, through the press and by radio and television, with a tremendous amount of advertising. We are conscious of the fact that the consumers pay for that advertising in the price of the product, but it is also true that a portion of that advertising is paid for out of the public treasury to the extent that such advertising is allowed as a deductible expense to those corporations. I think that is a matter of public interest and of public concern. I think we should be able to get information as to how much this company or the other was allowed as a deduction for its advertising expenses. That is a type of question that we could get answered if it was not for the ironclad secrecy which is provided in section 133 as it now stands.
I have referred in passing to disputes that take place from time to time between employers and employees. Frequently in such disputes the management will indulge in full page newspaper advertisements stating its side of the case as against that of the union; but when I have asked in the House of Commons as to whether the cost of that advertising was allowed as a deductible expense-in other words, was it being paid for out of the public treasury-I was told that this information could not be given because of the secrecy provision.
So one might go down the list. There are these full page advertisements which the chartered banks publish in the newspapers at the end of the year. I think it would have to be admitted that frequently they are largely political documents. They express views on matters of political concern. Sometimes we in this movement are favoured by being the object of that advertising; sometimes it is pro-government as against the official opposition. To the extent that this sort of thing is political in nature, is it not a fair question to ask if it is being paid for at least in part out of the public treasury by means of an allowance against taxable income before taxes are paid?
iio

Income Tax Act
The whole question of political advertising :ould be raised more directly. Are there nstances where firms are in effect making :ontributions to political causes, but doing ;o indirectly by paying for advertising or by charging up some other kind of expense and [DOT]eceiving a deduction for it? There certainly lave been suggestions in the past that this rind of thing goes on. The government of ;ourse denies-and I would expect the government to deny it-that there is any recog-lition by the income tax branch of eontributions to political parties as such. But lo we not have the right to know whether ncome tax deductibility is being allowed for some other kinds of expenses which might ippear to some of us as being in effect con-;ributions in support of a particular political muse.
The question of brewery and distillery advertising, and indeed the whole question if the brewery and distillery business could ae raised. To what extent are their expenses allowed or disallowed for income tax purposes? I repeat, Mr. Speaker, that all of ;his raises questions as to the treatment of ane firm as against another, and it also raises the question as to whether or not the public interest is being fully protected.
I have no doubt as to the zeal of the income tax branch in its determination to collect Erom every possible source all the revenue the law says must be collected. I would point out, however, that parliament has a place in activities of this kind, and I do not think we should be asked simply to take it on the word of the department that this is being done.
A great many matters have been raised in discussion in the last week or two and there has been some difficulty obtaining information concerning these matters which we feel parliament has the right to know about. I feel the same thing applies in this important field.
I said a moment ago that when an individual files his income tax return he discovers it does not take too long to fill out his form because there are only two or three things he can claim by way of deduction, but if you are in business or if the case is that of a corporation it is a somewhat different story. I am always interested in these voluminous books which are published as a guide to completing income tax returns. I have one such book in my hand at this moment consisting of 118 pages and entitled "Your Income Tax". This is a booklet that tells individuals and corporations how to make out their returns to their best advantage, and of course it is full of suggestions as to what one can do to achieve that end. In addition to that I have in my hand another tiny document called

"Canadian Pocketax" which purports to be an authoritative guide on income tax, gift tax, succession duties, etc.
If one turns to pages 20 to 24 of this little booklet one will find a long list under the heading "Deductible Items". In fact I have counted the number of main headings in this list and I find there are 46 of them, not including all the little subheadings. I am just going to read some of them: accounting expenses, advertising expenses, automobile expenses for business use, appraisal cost for insurance, bad debts, bank charges, carrying charges, efficiency experts' fees, hire of capital equipment, industrial engineers' fees, insurance premiums, fire, theft and so on. Then there is interest on borrowed money, interest on succession duties, legal expenses. There are a couple of subheadings there, to collect business debts and to defend action under the Combines Investigation Act. I move on to management costs, production control costs, raw material costs, sales promotion expenses, secretarial expenses, taxes on real assets, technical assistance, telephone and so on.
I again make the point, Mr. Speaker, that in view of that list-and I did not exhaust it by any means-it is obvious that there is a great deal of room for dispute, a great deal of leeway, and much room for bargaining, arranging and discussing as to what is the correct amount of tax that a corporation should pay. I feel it would be in the public interest that where it is desired we should be able to get at that information, so we may know what we are in effect paying for out of the public treasury and can therefore know whether or not we are receiving from private corporations all that the public treasury should receive under the income tax law as it stands.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, I shall be quite brief in contributing to this debate. We are all fairly familiar with the arguments which the hon. member for Winnipeg North Centre has put forward, because this is not the first time he has spoken on this matter.
Parliament has thought it wise to make these returns confidential. The hon. member who has just spoken approves of that in so far as individuals are concerned, but not in so far as corporations are concerned. That seems to me to be unsound. In fact I think you could almost make an argument that in the case of individuals it is only their personal feelings that are concerned but in the case of corporations, if you force them to disclose all the details of their business you may actually injure them in competition. In speaking of competition I think one should bear in

mind that corporations compete not only with each other but with non-incorporated businesses.
Today a friend of mine gave me a rather astonishing illustration of this. He spoke of a case where a certain corporation for which he had worked showed a profit of $2,500, while a certain unincorporated body for which he worked had a profit of over $1 million. I feel the idea which many people hold that corporations are big and individuals are small leads us too far afield. Consequently I want to back to the basis on which this is proposed to be done.
I was rather struck with the fact that the hon. member said the minister should apparently exercise this discretion, and a difficult discretion it would be, at the instance of a Member of Parliament. Now, I am a Member of Parliament, and I should like to be able to think well of myself and of all of my colleagues. However, he seemed to suggest that if a Member of Parliament wanted to go and obtain information from the minister then that was, as I gathered from him, almost a sanction in itself.
As a matter of fact it seems to me that there is a double, almost a triple, objection to the minister having this discretion. First of all I take it that parliament if it wished could by resolution or otherwise-the hon. member knows more about procedure than I do-get the facts if it wanted to. It could get whatever information it considered desirable. I do not think this discretion should be taken away and given to the minister.
As a matter of fact I think it might be argued that there are two objections almost opposite to each other. If you had this discretion in the minister a very conscientious minister might feel that he had to disclose all cases, whereas another minister might not be so conscientious and be even suspected of allowing bias of various kinds to sway him. I do not believe that the minister should be given any such discretion. I have tried to imagine how such discretion would be exercised, and I find it extremely difficult. My colleague suggests that it would be dangerous as well.
I want to come back to the basis of this. It is not a flimsy basis; it is not technical; it is full of common sense. Under the provisions of our law people are asked to make a full disclosure of their position. As I said a moment ago, I think it would hurt less if individual income tax information were disclosed. At any rate, business comes along and makes a full disclosure of facts which are withheld from competitors. Facts of great importance to the conduct of their business are disclosed 67509-52i
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to officials of the Department of National Revenue. I feel that the practice which ha: been followed is sound, that it is based or common sense. I think the reasons for suggesting that it is not well carried out are flimsy, and I feel that this bill should nol pass.


Elmore Philpott: Mr. Speaker, I want to say a few words ir support of the position taken by the hon member for Greenwood and against the position taken by the hon. member for Winnipeg North Centre. Before I do so I think I should make some reference to the opening remarks of the hon. member for Winnipeg North Centre, which were made in all good nature, I am sure we were all glad he made them, because it was an amusing episode aboul which we all have read with such delight on the front pages of today's newspapers. I think it indicates the affection and respect with which the hon. member for Rosthern is regarded by members in all parties in this house. I think it is worthy to note that he himself laughed most heartily at the joke which we all shared. I sometimes believe i1 is a great compliment to any speaker, when people cannot find the answer they are seeking, that they must resort to what one might call Manitoba C.C.F. confetti.
Speaking seriously about the bill proposed by the hon. member for Winnipeg North Centre, may I say that personally I am completely opposed to the suggestion he made. None of us in this country likes to pay taxes of any kind, and none of us likes to pay income taxes. I for one do not believe that an individual or corporation should be subjected tc any kind of political inquisition as a byproduct of having to make a return to the Department of National Revenue.
I think perhaps that is the thing which divides me from my hon. friends immediately opposite, more than any other point. I agree with almost everything for which they stand in the way of social welfare, although 1 sometimes feel a bit sorry for them because the Liberal party has so completely supplied all the welfare measures which my hon, friends have stood for that it is almost like a man who has lost the upper part of his bathing suit being threatened with the loss of the lower part as well.
I believe there is danger in the suggestion made by the hon. member for Winnipeg North Centre. Corporations are compelled by the law of the land to file returns in great detail with the Department of National Revenue. There are many of us who over the years have found out how extremely efficient that department is in checking even

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he amount spent on travelling, say from Vancouver to New Westminster. I think we vill all agree that the Department of National Revenue is not allowing anything to lip in the way of collecting taxes due to his country.
As to the suggestion that these income tax eturns should be made a sort of mine or >onus for members of parliament from which hey could obtain information against cor-lorations which in the ordinary course of vents they could not get, may I say that I or one am completely opposed to it. I am ipposed to it because I think it is wrong, and
am opposed to it even more on the ground hat I am a member of parliament trying to lo my duty to my constituents and I have mough to do in connection with immigration md other kinds of cases without wanting to >e burdened with the insidious task of having i corporation write to me to try to get secret nformation on its competitors by using my irivileges as a member of parliament.
For that reason, and there are a great many ithers I could give, I am completely opposed o the bill proposed by the hon. member for Vinnipeg North Centre.


Frederick Samuel Zaplitny: Mr. Speaker,
rise to speak briefly in support of the bill vhich stands in the name of the hon. member or Winnipeg North Centre. As has been nentioned already, this is not a new subject n this house, and the usual objections have >een raised to the adoption of this amend-nent.
First of all, what is the situation today? If ! understood the argument presented by the ion. member for Greenwood it was that this imendment would provide discretion for the Minister of National Revenue which he does lot possess today, and would put him in ;he position of possibly or potentially abusing bat discretion.
What is the situation today? We find that .vhen a question is asked or an order for *eturn passed with respect to a corporation ;he minister is able to brush it off by saying bat he cannot give the information because if the provisions of the Income Tax Act vhich prohibit him from doing so. That Maces hon. members of this house in the position, not of being up against the discre-;ion of the minister, but of having the ninister tell the house that he cannot give be information because he is prohibited from loing so.
On the other hand, if this amendment were ;o carry it would not give the Minister of National Revenue any more discretion, but .t would give discretion to the house as a vhole in seeking information and in passing notions for certain returns. It would be the

responsibility of all hon. members to decide whether that information should or should not be brought down.
Therefore, unless I misunderstood the hon. member for Greenwood, I fail to see how the passing of the amendment would give the Minister of National Revenue any greater discretion than now exists. It would still be the responsibility of members of the house or a majority of them to decide at any time a motion was made for the bringing down of certain information, whereas at the present time discretion is not in the hands of the members of the house but the matter is controlled by a provision in the act which prohibits the giving out of information.
There are many reasons why this information should be made available. I think the hon. member for Winnipeg North Centre was quite correct when he stated that this change would not lead to anything like what has been envisaged by the hon. member for Vancouver South (Mr. Philpott) when he referred to an inquisition involving every return of every corporation. Perhaps that is a very extreme example, but there come times when certain information should be made available in the public interest.
I can recall that during last year's session of the house I personally sought certain information with respect to certain corporations which had received a remission of taxes, and just at the point when we were beginning to get some information we were told, "That is as far as you can go; the act prohibits the giving out of any further information." Therefore we had to accept the explanation of the government as to what they had done.
Unsatisfactory though it was, that was as far as we could pursue the matter, and it was only our imagination against their word. Therefore occasions do arise when I think it becomes necessary for the house to concern itself with the protection of the public interest. I believe that members of the house as representatives of the public can be trusted to use their good judgment to seek the kind of information necessary for the protection of the public interest, and not to seek information for the purpose of giving any corporation an advantage over another or to seek information purely out of curiosity.
For example, there is the question of deductions. The hon. member who introduced the bill has already given a few examples of what may happen where the deductions in respect of one corporation may be far more lenient than in the case of another. Who is going to judge whether a fair and square deal is being given to all

corporations? We, the public's representatives, who alter all represent all the people of Canada including the corporations-


Mr. Trainor:: Are you very concerned about them?


Frederick Samuel Zaplitny: Yes, I am just as concerned about one corporation as I am about another.


Owen C. Trainor: That is a very sudden change.


Frederick Samuel Zaplitny: I want to see a fair deal given to all. At the present time, however, we are not in a position to find out on what basis these deductions are being given. There may be a particular need for such information in a case where the government itself becomes involved with a private corporation. That is something that may happen at any time now. For example, the arrangement being made among the federal government, the government of the province of Ontario and Trans-Canada Pipe Lines is something which to a degree combines the operations of a private company with those of a crown company. There is a case where it may become very necessary for the public's representatives, in order to ensure that the public interest is being protected, to know just what is going on with respect to Trans-Canada Pipe Lines Limited to the extent that it is involved in a joint enterprise with a crown corporation. I am sure, however, that unless this provision of the act is changed there will come a time in the house when we will be seeking that information, and we will be told that the act does not permit it to be given.
Then we have the question, touched upon in passing, of deductions by corporations with respect to contributions they make either indirectly or directly for political purposes. It is a very interesting field. I recall that two years ago the former member for Quebec South, who is now a member of the other place, wrote an article which appeared, if I remember correctly, in MacLean's Magazine. It was a most interesting article written by a gentleman with wide experience in that particular field, a man who had been responsible for a great deal of the fund raising for the Liberal party, and who was intimately acquainted with the methods and procedures used in keeping the treasury full.
We must remember that the article was written by one who sat as a Liberal member in the house, and therefore he would take a lenient view in writing it with repect to his own party; but even what was disclosed in the article was enough to indicate that there must be a good deal going on behind the scenes about which the public is not allowed to know anything. We know, and the members of the government know, that there are
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corporations which, by their own admission, make very substantial contributions to the funds required by the Liberal party for election purposes. I am sure they are not going to deny that; if they are I hope they will speak up now. They do not, so that is established.


Walter Edward Harris: Don't be silly.


Frederick Samuel Zaplitny: I am admonished by the Minister of Finance not to be silly. I am glad he spoke up, because if he wishes to deny it right now I will give him the opportunity, and then we will proceed from there.


Walter Edward Harris: If I told you what I am thinking you would not like it.


Frederick Samuel Zaplitny: The minister may say what he pleases, but the point I have made is this.


Mr. Bennett:: Oh, go on with your speech.


Frederick Samuel Zaplitny: That is exactly what I am doing. The point I have made is that the huge corporations of this country have, by their own admission, made very substantial financial contributions to the Liberal party. I have stated that if any member of the government or the party opposite wishes to deny that statement I will be glad to hear it. Instead of that-


Mr. McCann:: What is wrong with it?


Frederick Samuel Zaplitny: That puts a different face on it entirely. Now one of them speaks up and says, "What is wrong with it?". It depends on which way you look at it.


James Joseph McCann: Yes, exactly.


Frederick Samuel Zaplitny: From the point of view of good Liberals there would not be anything wrong with it. As a matter of fact, if it were not for that I imagine the great majority of them would not be here at all.


Mr. Hosking:: Who pays your expenses?


Frederick Samuel Zaplitny: It helps them to overcome their opponents. Another gentleman from the Liberal ranks speaks up and asks who pays my expenses. I am glad that question was asked, because it so happens that in any election in which I have participated, and there have been six of them, I have never gone outside my supporters in my own constituency to ask for five cents, nor have I ever accepted anything. That is more than the hon. gentleman who asked the question can say, I am sure.


Mr. Deputy Speaker:: Order. May I remind the hon. member that we are discussing second reading of Bill No. 9, an act to amend the Income Tax Act.
At six o'clock the house took recess.

Income Tax Act AFTER RECESS
The house resumed at eight o'clock.


Frederick Samuel Zaplitny: Mr. Speaker, when the house rose at six o'clock I had just drawn attention to the fact that many of these large corporations whose income tax details are protected under the present statute do in fact make substantial contributions to the treasury of the Liberal party. At that point the Minister of National Revenue (Mr. McCann) interrupted to ask, "What is wrong with that?" That brings up for consideration an interesting principle, because if the government takes the attitude that there is nothing wrong-


Mr. Carrick:: Mr. Speaker, I rise on a point of order. I do not think the Minister of National Revenue asked what was wrong with it. What he said was that it was nonsense.


An hon. Member:: You are wrong.


Frederick Samuel Zaplitny: If the Minister of National Revenue said "nonsense" it would not be the first time he has said it. But as I heard it, the minister wanted to know what was wrong with corporations making contributions to the Liberal party. If the minister did not say that, of course I shall be glad to withdraw it; but that is my understanding of what he interrupted me to say. That in itself is not entirely the question. The question with which we are faced is this.


James Joseph McCann: Speak a little more loudly, please.


Frederick Samuel Zaplitny: The question with which we are faced is this. To what extent are the government's actions influenced by such contributions from big business? A great many people in Canada today believe that the federal government is being unduly influenced by big business.


Some hon. Members:: Oh, oh.


Frederick Samuel Zaplitny: I hear some hon. members across the floor laughing. I imagine they do not agree with me. I have before me some figures which were taken in a recent public opinion poll in which people were asked who, in their opinion, influences the federal government most. Of the 84 per cent of those who had an opinion to express, 37 per cent said "big business". I think that must include a large number of the Canadian people.
But be that as it may, the question with which we are faced is this. Under the present provisions of the statute the Minister of National Revenue, when a request is made for information with respect to the income tax of a particular corporation, may reply as he has replied in the past-and quite

properly under the present statute-that he is prohibited by the statute itself from giving that information.
What this amendment would do is this. It would not automatically disclose the details of the returns of all the corporations of Canada, but would simply leave to the members of the house the discretion as to whether that information in any particular case should or should not be disclosed. In other words, it would take way that umbrella provision under which the minister at the present time, without justifying his refusal on the grounds of public interest or for any other reason, may simply state that under the statute he is prohibited from giving the information, and that is the end of that. This amendment is an attempt to place the responsibility as to what information shall be given by the government in the hands of the members of this house, where I think it properly belongs.
As representatives of the public we have a right to know what is going on. We must be in a position to answer to these people upon whom taxes are levied and whose money is being spent out of the public treasury. We must be able to answer questions that are put to us. It is a poor position for a public representative to be in when he is obliged to say to his constituents, the Canadian people, "I am sorry, but I cannot give you this information because it is prohibited by statute". Prohibited by whom? Prohibited by the members of this house, because they are the ones who passed the statute in the first place, and they are the ones who must amend the statute if they are going to change the situation. That is what this amendment seeks to do.
Questions arise from time to time. A while ago I mentioned the disclosures that were made by a former member of this house, in which he stated quite frankly that the party of which he was a member-that is the Liberal party-received substantial contributions from various corporations. Various corporation officials themselves have admitted that they make substantial contributions to the party cause. People have a right to know whether such donations or contributions are deductible as an expense when these corporations file their income tax returns. They want to know whether political advertising, which is an indirect contribution to the party's cause, is deductible as a legitimate expense with respect to their income tax returns. They want to know whether in fact the Department of National Revenue collects all the revenue which is lawfully payable to the treasury by the various corporations.

As representatives of the public the members of this house, in their opinion, have a right to be able to assure the public that this matter is being properly handled, that the laws of this country are being properly carried out, and also that the public treasury is not put in the position of being obliged to subsidize any political party in this country, because that is exactly what happens when a corporation may pay for political advertising, make cash contributions or in any way, directly or indirectly, pay into the coffers of the political party in power and, as a return for so doing, be able to deduct that amount as a legitimate expense in making their income tax returns. As representatives of the public we want to be in the position of being able to check on that kind of activity.
That is the main purpose of this amendment. I want to emphasize again, Mr. Speaker, that far from this amendment giving more discretion to the Minister of National Revenue or to any other minister, it is putting the discretion in the hands of the members of this house, where it belongs.
Within the last few days we have been faced with the situation that the government has been in a position to refuse enough information, or to refuse information often enough, without any statute calling for secrecy but simply on the basis that it is not, in their opinion, in the public interest to disclose such information. For example, even this afternoon the Leader of the Opposition was told that the government could not table a certain export permit having to do with the export of arms, not because it was prohibited by statute but because, in the opinion of the government, it would not be in the public interest. We are not even in a position to find out what is being done by private concerns with respect to arms shipments which affect both domestic and international policy.
Without even having a statutory prohibition, there are enough grounds on which the government finds it possible to refuse information. I see no reason why there should be any extra umbrella of secrecy under which they can continue to refuse information which should be in the hands of this parliament.


Mr. Boisvert:: Mr. Speaker-


Mr. Hansell:: Mr. Speaker-


Mr. Deputy Speaker:: I recognize the hon. member for Nicolet-Yamaska.


Stanley Howard Knowles: You little people are having a lot of trouble.


Ernest George Hansell: Mr. Speaker, there happen to be two little men up on their feet. I shall yield to my hon. friend, but I will say that
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I was up on my feet at six o'clock, thinking that the hon. member for Dauphin was through.


Maurice Boisvert: Mr. Speaker, I am glad to take part in this debate for many reasons. The first is that the measure under discussion was introduced by my good friend the hon. member for Winnipeg North Centre. In the second place, I would think that as a matter of parliamentary procedure, he is out of bounds in bringing in legislation such as that which he is trying to present today. Even if the intentions of the hon. member for Winnipeg North Centre are always the best, the words he uses to express his intentions do not always represent God's will. I should say that in the present case what he is aiming at is to destroy the most important piece of legislation in any of the democratic countries in the world. He is doing this by introducing one of those shadowy measures which will cut at the roots of our economic system.
When the hon. member asks us to vote for a measure which will have the effect of disclosing in this house the income tax returns made by corporations, he is asking something that will reduce the Income Tax Act to nothing. I shall try to make my point on that. It is against the procedure in our courts of justice to have these documents produced and examined by judges. This measure is an indirect way of cutting at the root of the Income Tax Act. He is asking us to do one thing for one purpose, and next year he will come and say, "Let us do it again for another purpose." The income tax returns would be open to the public and I think that would be the worst thing that could happen in our country. By their very nature these income tax returns are confidential.
I am sure the hon. member for Winnipeg North Centre would not be pleased to have his tax return published in the newspapers of this country. I am sure he is doing right when he makes his return, and I am sure all the people of Canada make honest returns. But they are confidential documents, and are considered as confidential documents in every country in the world.
Let us examine what May says about it. I am taking the citation from Campion, "Introduction to the Procedure of the House of Commons," at page 195:
The rule as laid down by .May page 433 is "a minister is not at liberty to read or quote from a dispatch or other state paper not before the house, unless he is prepared to lay it upon the table."
If, therefore, a question arose in the house about a return made by a corporation, the minister would be forced to deposit the return

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on the table, because he could not talk about it or refer to it without doing so. In this way all returns made by corporations could be produced, deposited on the table of this parliament and foe open to public discussion. I should think that would be against public security, in the sense that any corporation is entitled to make a return in the knowledge that it will not be made public.
Let us go further; let us go before the courts of justice. It has been acknowledged by the courts of this country that an income tax return is to be considered a confidential document which should not be disclosed in any trial. This rule has been followed, with one exception, by every court in Canada. What will happen to that rule if we vote for this measure introduced by the hon. member for Winnipeg North Centre? All the returns made by corporations would be tabled in the house and would become public. It would be impossible, therefore, in any trial to keep those returns as privileged documents. They could be introduced in any trial concerning income tax.
In my opinion this legislation is not aimed at the good of Canada, the good of the corporations or the good of the people. In the end it would mean sabotaging the Income Tax Act. If there is one law which has to be protected by this parliament it is the Income Tax Act. I know some people would like to know what there is behind the corporations in this country. It is easy to find out what is behind the big corporations. Their business is well known to everybody. The large corporations advertise the results of their yearly business by publishing reports in our newspapers. Anyone who wants to know these things can find out by looking at the newspapers, and does not need to ask this parliament to make a disclosure of income tax returns.
I do not wish to take much of the time of this house, because it is so precious. However, when I see legislation that is tending toward a system that will bring no good to anyone, I am glad to fight against it. I am of the opinion that this measure is only aimed at the destruction of a system which has built this country, and which is now making this country one of the greatest in the world.


Ernest George Hansell: Mr. Speaker, the legislation presented by the hon. member constitutes an amendment to the present Income Tax Act. One should analyse this amendment very carefully. I cannot help thinking that my hon. friend has not given enough thought to its wording. I am rather inclined to think that if the amendment passed it would turn out that he would

eventually get something he did not want. The bill does not make it mandatory for the minister to give information when it is asked for. If it were mandatory perhaps this group would have looked upon it with a little more favour than it does. It would still give the minister a perfect right to withhold information if he so desired. The only thing that would happen is that the minister could not be fined $200 if he did give the information, but if he did not want to he would not have to.
I would suggest, Mr. Speaker, that if we examine this amendment more carefully we shall discover that it could be one of the most dangerous pieces of political legislation to have on our statute books. Let me visualize what could happen. I am not saying it would happen. Suppose, for instance, there is a corporation in the province of Saskatchewan in which members of the government have an interest, or some member of the government has an interest. Suppose we take it into the political realm. Let us suppose that a Liberal from Saskatchewan should get wind of something that was unsavoury in connection with that company and should move on the floor of the house for the production of the income tax papers respecting that company. The minister intimates that he is quite willing to give that information and he does so. I would go so far as to say that if there is something unsavoury about it perhaps it should be revealed. Nevertheless this is the picture. He reveals the information and somebody is destroyed. The government of Saskatchewan could conceivably be destroyed.
Let us take another province which we will suppose is a Liberal province. Some member of the opposition gets wind of something that is unsavoury in connection with a corporation, and he moves for the production of the income tax files of this particular corporation. The minister rises in his place and says that he does not think it is in the best interests to reveal the details of that particular case. Of course the house will not get the information then. Therefore I am saying it could be used-I am not saying it would be, because I will not accuse this government of being capable of doing a thing like that-as one of the most dangerous pieces of political legislation we have. I wish the hon. member would give consideration to that. Of course the legislation does not present itself favourably to me or to many of my colleagues. I have not talked it over with all of them.
We are still living under a competitive system. We are still living under a system where we believe that competition is the life of trade. This piece of legislation might be

ail right if there were a socialist government sitting to your right, Mr. Speaker, under which every man's business and every corporation's business could be revealed, if there was a corporation left that was not government-owned. But we in this group still believe in the private enterprise system; we still believe in the competitive system, much as may be desired in respect to it. We do not believe we can take the abuses out of it in this way. In fact it might give rise to even more serious and worse abuses. There should be other ways of doing the same thing.
It could reasonably work in this way. If a corporation has given some funds to the party in office-we know there are some who contribute to the party in power, and some contribute to my friends and some to us, but we do not seem to get very much; corporations and people do support all political parties- it could work out in this way. A corporation may say, "We will give you a donation, but when we give it to you it is going to become public knowledge. If it becomes public knowledge we might lose business, and therefore you see that you take care of us." It could work in that way.
I do not see how the proposed amendment to the Income Tax Act will do what the hon. member wants done. Once again I say, let us have it one way or the other. Let us not leave it to the discretion of the minister. Either leave the thing the way it is or else make it mandatory. Personally I do not think I would be in favour of making it mandatory. We have to give governments a certain amount of authority. They have to collect taxes, and we have to give them the authority to collect without letting the whole nation know everybody's business. That is my view of it. I feel quite certain that if our friends were sitting on the other side of the house they would take the very same view.
Therefore, Mr. Speaker, as far as I am concerned I am afraid I shall have to vote against the amendment.


Mr. Roland Michener (Si. Paul's):: Mr. Speaker, this is a bill to make available to the House of Commons, through the minister, information supplied by corporate taxpayers. In so far as it has been advanced on the basis that it is right and proper, that the House of Commons should be able to call for all information that is necessary or desirable to enable it to discharge its duties, a principle of that kind would commend itself to all members of the house. Parliament can only function if it is able to inform itself. Parliamentary privilege assures that the House of Commons is able to inform itself. If that were the purpose of the bill we might look at it favourably.
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The other principle of the bill, as I understand it, is that the house suspects the ministry in the way it administers the income tax laws, and wants to obtain information to demonstrate that its suspicions are well founded. We on this side of the house of course know that the ministry deserves suspicion, and that principle certainly commends itself to everyone on this side, but the proper remedy is to turn out the ministry and get one which is above suspicion, and not to go tinkering with somewhat basic legislation.
Looking at the bill itself and the arguments which have been advanced in its support, we see different reasons for this peculiar little bill which appears to be so virtuous and yet has in it the seeds of so much discrimination and snooping. What is the information in question? The information is that which is supplied by taxpayers, all people who are called upon to pay income tax whether they are individuals or corporations. That is information to which the government would not otherwise have access, which would not be gathered in one place if we did not have income tax laws and taxpayers were not required to divulge their income so the government could ascertain with reasonable accuracy whether or not the taxpayer was paying his full tax.
Let us not forget that this information is forced out of the taxpayer for one purpose, and one purpose alone. It is not there to inform all and sundry, to disclose the business of the corporation or of the individual unrelated to the payment of taxes. It is really private information, and the principle of the act has been to keep it private for the purpose of seeing that the income tax due is paid.
As I listened to the arguments presented by the sponsor of this bill I came to the conclusion that apparently his fear was that improper deductions were being made. In other words his fear was that the income tax officials were allowing corporations to make deductions which they were not entitled to make. He suggested certain advertising expenses as an example. He did not suggest any yardstick by which the propriety of deductions could be measured, but I am sure the officials have a yardstick and when they find a corporation has spent too much in advertising an inquiry is made to see just where the money went and to ascertain whether it is properly deductible from income.
We then came down to what seemed to be the real nub of the matter, and that is whether corporations might be allowed to make political contributions and have them

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deducted from taxable income. I do not consider that there is any difference in principle among the hon. members of this house with respect to the deduction of political contributions. They are not properly deductible as income tax exemptions. If corporations make political contributions they make them out of their own funds, at their own expense. That information is open to any member of the house. Any hon. member could rise in the question period and ask the minister whether or not the political contributions made by corporations are allowed as tax deductions by those corporations, but I am satisfied that is not the principle followed in the administration of the act.
Disregarding the principle, we are urged to inquire into specific cases to see whether or not the ministry is properly enforcing the law. As I suggested previously, the remedy for lack of confidence in the ministry is one that is well known under the parliamentary system; in fact, it is the basis of parliamentary government. Those who supported the bill did not ask the ministry this question. They did not ask the principles on which deductions are allowed. They want instead to snoop into the affairs of certain corporations.
This brings me to the other objection I have to this bill, and which I think every fair-minded member will have. I refer to the fact that it singles out one type of entity in a most discriminating manner. That is to say, it singles out the taxpaying corporation from amongst the taxpayers who are required to supply information, and it does this on no sound basis of distinction and with no principle behind it. The discrimination is between those taxpayers who are corporations and those who are individuals. It is not for the purpose of collecting taxes; it is for the purpose of finding out what political contributions have been made. It does not reach all those who might be interested in making political contributions. There are entities other than taxpaying individuals and corporations, who would not be touched at all by this legislation.
I need not enumerate too many of them to show that there is a discrimination in that respect if the purpose of the bill is what the sponsors have indicated it to be. In the first place, on no sound basis of distinction-I will just elaborate on this for a moment-it leaves cut a person who is in business, who spends money on advertising and who has just as much right as a corporation to deduct this expense from his taxable income. So there is no real difference in principle, as was suggested by the sponsor of the bill.

In fact, all that long list of 46 expenses, with the possible exception of one or two- and I am not sure there are any real exceptions-apply equally to an individual who is carrying on a commercial business as they do to a corporation, because the same expenses are met by an individual in earning a profit and carrying on a business as are met by a corporation, and the individual is properly entitled to deduct all expenses necessarily paid to earn a taxable income. There is a considerable argument in the fact that the individual as well as the corporation is not only subject to inquiry as to the basis of his expenses but there is the first problem which the tax authorities have to determine and that is, what is his income?
There is a good deal of information which may be required to determine that question. What is income may depend on the difficult distinction between what is commonly called a capital gain and what is properly called income or revenue. This distinction which the proposed bill seeks to establish as between an individual and a corporation is entirely without any foundation in reason; therefore I say it is discriminatory. It leaves out the individuals as taxpayers, but it also leaves out individuals who are not taxpayers, nonprofit corporations which are not taxpayers, other corporations which are not taxable, certain co-operatives and trade unions which have been alleged to make political contributions, crown corporations, municipal corporations and other bodies who have funds in their possession which they are free to spend and which are not subject to scrutiny under the provisions of this bill.
For the purpose for which it was designed this bill is a discriminatory measure which no one should consider as sound legislation in amendment of the Income Tax Act, which has been devised after very careful study not only by the authorities and the best brains of the administration but by those who are taxpayers, their various organizations and the community at large.
No; the shaft is aimed at the secrets of the taxpaying corporation alone, with a view to prying into how they spend their own money. The C.C.F. party, which professes to be free of discrimination and to treat all equally, hereby discloses its most common political phobia, abuse of those who endeavour to make a profit.


An hon. Member:: Hydrophobia.


Daniel Roland Michener: Not individuals, because individuals have votes and so information as to their profits is not to be included. It is only corporations, which have no votes.

I suggest that the need in the case of corporations is less than in the case of those who are left out of this bill, because the laws of all the provinces and of the federal government require every corporation of any size engaged in a public operation to deliver to its shareholders 10 days in advance-14 days in the case of the dominion-of its annual meeting full particulars of its earnings and expenses, with a balance sheet properly audited and certified by reputable auditors. That is not required of most of the other entities and persons who would not be touched bj this bill.
The bill itself seems to be unnecessary. I suggest that the present section of the Income Tax Act does not prevent parliament from calling for any of this information by a proper order duly passed with the approval of a majority of this house.


Stanley Howard Knowles: Members of the hon. member's party have tried that quite often.


Daniel Roland Michener: The section reads:
133. Every person who, while employed in the service of Her Majesty, has communicated or allowed to be communicated to a person not legally entitled thereto-any information obtained under this act or has allowed any such person to inspect or have access to any written statement furnished under this act is guilty of an offence and liable on summary conviction to a fine not exceeding $200.
Those are the key words, "person not legally entitled thereto". The question is whether the present section could be read as meaning that parliament is a person not legally entitled to the information. If parliament is legally entitled to the information, then there would be no offence under this section and there would be nothing to prevent parliament asking for a particular bit of information on those occasions when a majority of the house thought it proper to call for it in the usual way by an order for return or whatever procedure might be adopted.
The definition of person is well known. The Interpretation Act defines a person as follows:
(22) "person", or any word or expression descriptive of a person, includes any body corporate and politic, and the heirs, executors, administrators or other legal representatives of such person, according to the law of that part of Canada to which the context extends.
I do not think anyone will argue that the House of Commons is a body corporate or politic under the law of any part of Canada to which the Income Tax Act extends. Furthermore, this section does not prevent the crown from having the information. It is a well known maxim of construction that statutes do not apply to Her Majesty unless so specified. The crown is not "a person not legally entitled" to the information. I am not
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sure whether a minister is a person; some of them may be, but whether they are legal persons under this act may be doubtful. When you take into account the Interpretation Act as it stands there does not seem to be any real reason in law why it would be an offence for a member of the administration staff of the Department of National Revenue to produce papers called for by an order of this house.
On that account the bill would seem not to be needed, and it does not appear to advance the privileges of the house with respect to obtaining information that it thinks it should have. Therefore I suggest that this measure can only be described as a discriminatory, snooping bill for low partisan purposes.


James Joseph McCann: Mr. Speaker, this bill No. 6 might well be designated as the hardy perennial of the Canadian parliament.


Stanley Howard Knowles: Would the minister like to correct that? It is Bill No. 9.


James Joseph McCann: It is six upside down. There have been so many arguments turned upside down that I referred to it as No. 6 instead of No. 9. For the sixth time this bill has been introduced by the hon. member in almost as many years. While I do not intend nor would I like to impute motives to the hon. gentleman, my opinion is that this bill is born more of curiosity and suspicion than with a view of doing any great public good.
I wonder why it is that the C.C.F. hate to see anyone make an honest dollar unless they can share it almost immediately. That is really what this does. The hon. gentleman started off by saying how he would like to see what discussions go on between corporations and the income tax branch. He does not make any accusations, but by innuendo and suspicion he attempts to cast reflections upon the administration of the national revenue department. I submit to him that the public interest is not being protected by arousing suspicions that things are not right in th6 Department of National Revenue.
The Income Tax Act came into being a few years ago following the old Income War Tax Act. It was introduced one session and ther held over designedly to the next session foi enactment in order that hon. members mighl have an opportunity to study it.
I think my hon. friend has introduced this bill following what he did last year, when he tried by every possible method of questioning to have me give information which I was no: permitted to give. I have not the slightesi

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doubt in the world that had I broken the provisions of the act and given the information which he requested in his series of questions he would have been the first to ask for my removal from office or see that I was fined $200. So I think the hon. gentleman is stooping to pretty low motives in wanting to put his nose in every other people's business.


Stanley Howard Knowles: Order.


Mr. Speaker:: Order.


James Joseph McCann: All he has to do-


Mr. Speaker:: Order. I do not think it is quite parliamentary for any hon. member to say of another that he has stooped to pretty low motives. I think the minister would do well to withdraw the expression.


James Joseph McCann: If the language is unparliamentary I withdraw it.


An hon. Member:: With reservations.


James Joseph McCann: With reservations.


Mr. Speaker:: Order.


James Joseph McCann: I simply repeated what the ion. gentleman said.


Mr. Speaker:: I think the Minister of National Revenue is quite capable of making lis own remarks, and he would do well to vithdraw the words "with reservations".


James Joseph McCann: All right; I will do that. I vant to say to the hon. member and members >f his party that if they are so interested in lorporate business, why do they not buy one hare of a corporation, go to the annual meet-ng and ask all the questions they want to tsk. They would then be able to find out all ibout the business of that particular corpora-ion. But no, they want to parade before this louse and before the public of this country .11 the details of business firms throughout he country, and then the next step will be he details of the business of individuals.
I submit, Mr. Speaker, that this bill is not n the public interest. I submit further that t would be very definitely class legislation, ill corporations are persons under the law, nd they are entitled to the same protection f their rights. Every reason for maintaining he secrecy provisions for the protection of individuals applies with equal force to cor-nrations. In fact the vast majority of cor-orations are owned by individuals through hareholdings, by one person or by a very mall group who have assisted one person nancially in the establishment or the exten-ion of the business. Most of these corpora-ons are in substance proprietorships under legal corporate form. I do not intend that rhat I have to say shall be limited to small IMr. McCann.]
corporations, because I feel that my remarks apply to all corporations, whether large or small, just as they do to individuals.
As everyone knows from common knowledge, from time immemorial the Englishman's home has been his castle, and all matters pertaining to him and his family are protected by law from trespass or exposure. You cannot enter his house without his permission. You cannot ascertain his private affairs without voluntary disclosure. This right of privacy that every Englishman possesses is as strong in this country and in all the countries of the commonwealth as it is and has been from time immemorial in England, from whence we draw so many of our laws and so much of our tradition. This right of privacy that every Englishman possesses is, as I said, as strong in this country as in any other.
These comments are not comments in law. They are comments on things vital to the nation and the welfare of the people, and are instinctively understood, appreciated and jealously guarded by common consent of every citizen in every nation. The provisions of the Income Tax Act respecting the right of the taxpayer to have his appeal heard in camera, and the provisions respecting secrecy which the bill proposes to amend, have been in the Income Tax Act since it was first enacted away back in 1917.
I think it can be taken that these provisions are a recognition of the inherent right of the citizen to have his business affairs kept as private as possible. This right of privacy is necessarily invaded for the purpose of collecting taxes, but when that purpose has been attained these two present provisions of the act preserve to him that right of privacy in all his affairs. The tax laws of all countries of the commonwealth provide that disclosures of their affairs by taxpayers made to tax authorities are to be held confidential and secret.
The taxpayer is by statute compelled to produce and file with the government and its officials for the purposes of revenue, and for the purposes of revenue only, certain portions of his private affairs, namely his income, the contracts out of which his income is earned, his investments, his relations with other businesses, all of which from time to time play a part in determining what the taxpayer's income may be and have to be produced to the revenue officials. On many occasions in litigation between subject and subject litigants in order to advance their case have subpoenaed officers of the crown for the purpose of compelling them in the witness box to disclose information which came into their possession as officers of the

crown under the compulsion of revenue laws, and to compel them to make disclosures. Where the matter was a civil question between subject and subject the courts have sustained the basic British right of privilege or privacy and secrecy pertaining to a man's affairs, and the inroad into those private affairs is not to be made through the medium of subpoenas.
I am informed that the courts have said that while the right of production as an abstract right is not to be denied the courts, it is equally clear that that abstract right is not to be invoked by order of the court to serve the end of litigants in our courts, which are places of public entry. Having secured the abstract right to the courts, they nevertheless realize the paramount need of the nation as a whole and do not issue orders demanding the production of documents which are received under compulsion of law in the course of carrying out a revenue measure.
In cases of litigation in civil courts between subject and subject our Canadian courts have followed the practice of the British courts of maintaining the right of the court to compel the production of any evidence; but where the Minister of National Revenue or his officers state that it would be injurious to the public interest to produce the documents or to give information, they have consistently held that production should not be made or evidence given. I should like to quote from the judgment in a British case in 1953 as follows:
They (meaning those who are in the public service and the minister in charge of the department) must know the exigencies of the public service far better than the court and therefore the courts, although not departing-


Stanley Howard Knowles: What date did the minister give for that judgment?


James Joseph McCann: In 1893.


Stanley Howard Knowles: I thought you said 1953, but last year when you quoted it you said 1893.


James Joseph McCann: 1893.


Stanley Howard Knowles: The same speech.


James Joseph McCann: I continue:
-from the power to have the question thoroughly investigated, nevertheless recognize, in all except extreme cases, that the word of the officer who is head of the department ought to prevail on the question whether the production of the document would be injurious to the public service.
The courts have dealt with this subject on the broad basis of public policy. I think I would go further and say not only would it be injurious to public policy-


Stanley Howard Knowles: I rise on a point of order. I am interested in knowing what the rule is
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with regard to the reading of speeches. I am interested not only in the fact that the minister seems to be reading from a typewritten document, but also that I am able to follow most of it paragraph by paragraph in Hansard of March 22, 1955. He is now reading a paragraph which is to be found in column two on page 2269.


Mr. Speaker:: As the hon. member knows, the other day I placed a statement in Votes and Proceedings regarding the rule on the reading of speeches, and I did include a few suggestions in that statement. Until the house has signified some approval and support for the suggestions contained in that statement the rule is the one that is quoted in May, Bourinot and Beauchesne, namely that a member while speaking must not read but may refer to his notes. Further to that, there are two statements made by Mr. Speaker Macdonald in 1951 which are to the effect that in speaking, cabinet ministers, the Leader of the Opposition and the leaders of the other parties or someone speaking on their behalf may read their speeches. That is my position at this moment.


James Joseph McCann: Mr. Speaker, I have no
apology whatever for using substantially the same material as I used last year, because exactly the same type of case has been presented. This is the sixth year this case has been presented, and the hon. gentleman who introduced the bill did not have one single argument to put forward today that he has not made repeatedly for the past six years. I challenge anybody in the house to read the speech the hon. member made today and the speeches he has made in the past six years. They are the same.


Stanley Howard Knowles: I challenge anybody to read any two of my speeches and find identical paragraphs as one can in your speech.


Mr. Speaker:: Would the hon. members be kind enough to address themselves to the chair.


James Joseph McCann: What I was reading was a quotation from a British case in 1943.


Stanley Howard Knowles: 1893.


James Joseph McCann: Do you expect that I am going to memorize judgments?


Stanley Howard Knowles: 1893.


James Joseph McCann: 1893; that is what I said.


Stanley Howard Knowles: You said 1943.


James Joseph McCann: I think you had better get a hearing aid.


Stanley Howard Knowles: The minister had better get another pair of glasses.

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James Joseph McCann: I do not attempt to memorize judgments given by courts. Since the hon. gentleman has succeeded in interrupting me, I am going to repeat this judgment of 1893, because it is extremely important. The quotation is as follows:
They (meaning those who are in the public service and the minister in charge of the department) must know the exigencies of the public service far better than the court and therefore the courts, although not departing from the power to have the question thoroughly investigated, nevertheless recognize, in all except extreme cases, that the word of the officer who is the head of the department ought to prevail on the question whether the production of the document would be injurious to the public service.
The courts have dealt with this subject on the broad basis of public policy. Information which is received by the crown for the purpose of revenue only will not be used directly or indirectly in any other direction or for any other purpose. I might interject here, Mr. Speaker, that there have been deviations from that course. For instance, the supreme court decided in 1954 that notwithstanding the section, employees of the Department of National Revenue could be required to classify and produce returns in criminal cases.
My further remarks will have to be with reference to the hearing of these corporate appeals in camera and the necessity that they be kept private and confidential. Court procedures may well expose the trade secrets and every financial operation of a corporation to the full view of its competitors, a process which would completely eliminate the fruits of good business principles and administration and do irreparable harm to the business.
The Income Tax Act gives the minister the widest power to demand information from any person of his own or another taxpayer's affairs for the sole purpose of assessing taxes. That is the reason it is required. Obviously the minister would not of his own volition bring to the house information obtained under the authority of the act. These amendments necessarily mean that somebody in the house or the Senate must seek that information, and the purpose for which he seeks it may be good or evil. Parliament could be made the instrument of securing private information compelled initially to be given by statute, solely for the purpose of revenue; and the house could not possibly know with complete satisfaction why the information in a particular case or group of cases was desired.
It would be my view that parliament is supreme in all these matters. If parliament indicated that this information must be given, we would comply. However, the question that is being put to the test is this. Should this amendment be the means through which persons in this house can cause the minister

to secure information and bring it to the house in response to any inquiry or motion?
I suggest it is more desirable to deal with these matters directly. If any corporation is to be interrogated, or its private affairs examined, then parliament can do so if it so desires, by the appropriate procedure of which every member of this house is aware. That is, it can do directly what this bill seeks to do indirectly.
There are not many more comments that I wish to make, Mr. Speaker, except to say that in addition to the powers of parliament to which I have just referred, the Auditor General of Canada has free access to and has members of his division practically in our head office and in a good many of the more important offices throughout the country. Chapter 116 of the revised statutes of 1952 gives him certain powers. Section 66 of the Financial Administration Act reads as follows:
66. (1) Notwithstanding any act, the Auditor General is entitled to free access at all convenient times to all files, documents and other records relating to the accounts of every department, and he is also entitled to require and receive from members of the public service such information, reports and explanations as he may deem necessary for the proper performance of his duties.
The Auditor General has full authority to examine into the tax returns of any individual or corporation, and he may seek-and he always gets full co-operation and assistance from the members of the Department of National Revenue.
I submit, Mr. Speaker, that it is a matter of pride that the Department of National Revenue has administered this law loyally and meticulously and has complied with all the secrecy provisions, though of necessity the collection of taxes requires the production in detail of the private business affairs of all taxpayers. Should these amendments pass, any resulting disclosure of private information to this house would be disclosure to the public at large, including competitors. That is something which I submit would be resented; and notwithstanding the legality with which these amendments would clothe that disclosure, such resentment would reflect on the administration which had secured the information for the sole purpose of levying taxes.
I am of the opinion that the adoption of these amendments would be a backward step and accordingly I, on behalf of the government, oppose the bill.


Stanley Howard Knowles: Mr. Speaker,-


Mr. Speaker:: If the hon. member for Winnipeg North Centre speaks now, he will close the debate.


Stanley Howard Knowles: Mr. Speaker, first of all I must point out that I have been saved the necessity of making any notes with regard to the speech just given by the Minister of National Revenue (Mr. McCann). I have it all before me in his speech of last year at pages 2268 to 2271 of Hansard of March 22, 1955.


James Joseph McCann: Why did you not read it? You were defeated on exactly the same arguments for the last six years.


Stanley Howard Knowles: Mr. Speaker, the minister seems to take some pleasure in the fact that the majority of the house happens to agree with him that the proposal set out in this bill should not be enacted. I am aware of the fact that on this measure there seems to be great unanimity amongst the Liberals, the Progressive Conservatives and the Social Crediters in this house. One often hears it said, particularly by Progressive Conservatives and Social Crediters, that parliament should be given full information, that all the matters with which the government is concerned should be brought to the light of day. This is particularly true if the Canadian National Railways is under discussion, or the Canadian Broadcasting Corporation, or any other crown corporation, or the affairs of the government itself. All these things must be brought out to the light of day. The veil of secrecy must be lifted.


Donald Methuen Fleming: We put public money into them. You vote public money for them right here.


Stanley Howard Knowles: My friend the hon. member for Eglinton says that we vote public money. My point is that the amount of money in the public treasury is, to a large extent, determined by the taxes levied on corporations, and the amount obtained from corporations is in turn affected by the treatment accorded to their income tax returns. I contend that this matter is as much a matter of public interest and public concern as are the affairs of the Canadian Broadcasting Corporation, the Canadian National Railways, the Polymer Corporation or the government itself.


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: My hon. friends shout in holy horror against that view, but it is just a matter of whose ox is being gored. My hon. friends seem quite willing to make their attacks on crown corporations and public bodies, but they want nothing to strike at this sacred privilege of private corporations to enjoy the protection of secrecy. It is interesting to notice the way in which the members of all parties surrounding us get together on this issue.	!
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Donald Methuen Fleming: Everybody is out of step but Stanley.


Stanley Howard Knowles: I was quite interested in the forthright statement of the position of those opposed to this bill which was given by my good friend the hon. member for Nicolet-Yamaska (Mr. Boisvert). He went to town; he pulled out all the stops. He said this is something that is sacred; this is one of the most basic things in our society, this right of private corporations to have their income tax matters secret. This is a matter of public security. This is attacking the good of Canada, to attack the secrecy of income tax matters of private corporations.
We contend, Mr. Speaker, that there is no such thing as a corporation-that no corporation in this country would get anywhere- without the people who do the work and who provide the markets out of which these corporations make their income. We contend that these matters are matters of public concern, and that the corporations have no right to the protection of this ironclad secrecy which is given to them by section 133 of the Income Tax Act. It is guaranteed to them, apparently, so long as there are enough Liberals, Tories and Social Crediters in combination to provide a majority in this house.
The Minister of National Revenue makes a good deal of the fact that these corporations are legally persons. I recognize that that is a legal interpretation of a corporation, but surely there is a difference between the Canadian Pacific Railway and James J. McCann or Roland Michener. Surely their being persons is something different than the personality which is ascribed to these corporations. We contend that these corporations should be made the servants of the people, of the living human beings in this country; that they should not have the right to make huge profits out of the economy of this country and have the matter kept in complete secrecy.


Owen C. Trainor: Who says the profits are huge?


Stanley Howard Knowles: The Minister of National Revenue, in that part of his speech which was not in the printed speech of last year, said something he was required to withdraw. But in saying that he suggested that some of us were throwing innuendos, were arguing that the income tax department is to be suspected, that it is not to be thoroughly trusted. If the income tax department is completely above suspicion in all its dealing with individual corporations; if it treats every corporation, whether it is the little corner store or a huge distillery, on the same basis with respect to all its different kinds of expenses; I would think it would be the first to say, "We want

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this material out in the open so there will be no question about it."
This could be described as a bill in defence of the purity of the income tax branch so far as these matters are concerned. I should say very strongly that if there is any matter the people of Canada have a right to know anything about, it is the income tax arrangements with these huge corporations that are making money that they could not possibly make if it were not for the fact that there are 15 million Canadians in this country to do the work and provide the markets out of which this great wealth is made.


Maurice Boisvert: Would the hon. member permit a question?


Stanley Howard Knowles: Very gladly.


Maurice Boisvert: How many of these people are living on what the corporations are doing in this country?


Stanley Howard Knowles: Most of the people in this country are living by the sweat of their brow. Most of the people in this country are living by their toil on the farms or their toil in industry, out of the wages they receive. They are not living out of corporation profits. Only a few are doing that. My hon. friend's approach-


James Joseph McCann: Would the hon. member permit a question?


Stanley Howard Knowles: Yes.


James Joseph McCann: Does he realize that the government of Canada, for the people of Canada, has a 45 per cent interest through the corporate tax in all the profits of every corporation in Canada? It is that tax that helps to provide-


Stanley Howard Knowles: That is exactly the point.


James Joseph McCann: It is that tax which helps to provide all the social security and other requirements of the country.


Stanley Howard Knowles: I thank the minister for helping me out with my speech. This is something else that was not in the part of last year's speech which he read. He is making the point that the people of Canada, through the government, have a stake in corporate profits to the extent of 45 per cent of those profits. I believe that is one more reason why we should know whether or not that 45 per cent is levied properly and accurately in all cases, whether it is completely fair across the board. It is all the more reason why we should have the kind of information this measure aims at obtaining.
You see, the hon. member for Winnipeg South (Mr. Trainor), the hon. member for

Nicolet-Yamaska (Mr. Boisvert), the Minister of National Revenue and others who might be named seem to think that corporations, because they have payrolls, because they do a certain amount of developmental work, are beneficent feudal lords. They are quite satisfied this is the way our economy should be run. We should bow down and worship these corporations because they provide jobs.
It is our contention, as I have said several times tonight, that no corporation would be able to exist at all in this country, no corporation would make any profit or get anywhere, if it were not for the part that the people play through their toil or through their role as consumers. What we are trying to emphasize is the social fact of what corporations are, and it is because of that social fact we contend we are entitled to such information as is available in the income tax department.


Mr. Studer:: Tell us about the socialist corporations.


Stanley Howard Knowles: A number of my friends raised an interesting question. They wanted to know whether I was not being discriminatory in distinguishing between individuals and corporations. I point out, of course, that the Income Tax Act distinguishes between individuals and corporations. There are the two groups. There is the individual income tax and the corporate income tax.
I point out also that when I first introduced this bill, and as the Minister of National Revenue says that was a long time ago, its provisions were not limited to corporations. When I first introduced the bill it called for the possible revelation of this information from any income tax return. There are still 50 or more hon. members around who were here when I first introduced this bill, and if they will search their memories they will realize that the main criticism levelled at my bill when it included individual income tax returns was that this was peeping Tom legislation; this was getting into the private affairs of individuals. All the attacks on that first bill of mine were levelled against the extent to which it seemed to get at individuals. I said all right; if that seems to be the main criticism of this bill I will accept it and take out the part regarding individuals, just leaving the corporations. The fact is that far more holy horror is expressed now when an attempt is made to get information concerning corporations alone than was expressed when it related to individuals. We know now who the sacred cow is so far as the other three parties of this house are concerned.


Donald Methuen Fleming: Go on with your hymn of hate.


Stanley Howard Knowles: My hon. friends can make these interjections if they wish. They are simply making it clear that their concept of public service is to provide special privilege for monopolistic corporations, even in a day when society has moved on to the realization that most of the things we do are by common, community, co-operative effort; what we gain we gain by our common effort, and what we have won in that way really belongs to us all-at least, the knowledge about it, such as that which is in the possession of the Department of National Revenue.
Some of those who have criticized the bill, notably the hon. member for Macleod (Mr. Hansell), have asked questions about the mechanics of it in the form in which it is drafted. The hon. member for Macleod implied that if the publishing of this information by the government were made mandatory by my bill instead of voluntary, his attitude toward it might have been different.


Owen C. Trainor: He said he did not think so.


Stanley Howard Knowles: Well, I have a pretty good idea what would have been said by him and by others in this house if I had brought in a bill making it mandatory to publish all the information in all the corporation income tax returns filed with the Department of National Revenue. I would have been told it would involve a huge amount of printing; it would involve an endless and wasteful expenditure, and therefore we simply could not go ahead with it.
Now, Mr. Speaker, despite the charges that have been made that I did not think this thing through too well before I drafted this bill, I make the assertion that I did do a great deal of thinking about it and did discuss it with legal counsel as well, as to what was the best'way to go about it; and it was quite a deliberate decision on my part that one should not require that all the information should be published automatically but rather, as the hon. member for Dauphin (Mr. Zaplitny) put it, that the umbrella under which the Minister of National Revenue can now hide should be removed, and moreover that the legislation should be such that a minister of the crown could give this information in the Senate or in the House of Commons.
The bill as worded does not require such information to be requested by a member of parliament. Indeed, the minister could make such information public on his own initiative; but I suggest that the hon. member for Macleod is really handing out innuendoes when he suggests that if this bill were passed any minister would take the position in reply to one request that that kind of information could be given, but in reply to another, which
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might be embarrassing to his side of the house, that information would be withheld.


Ernest George Hansell: I did not say that. I said it was conceivable that that could happen.


Stanley Howard Knowles: The hon. member said it was conceivable. I am sure that if he will read the bill more carefully and think it through he will realize that if it were passed, not to be mandatory that everything be published but with a provision for the minister to make any of this information available to parliament, I suggest it would be an affront to parliament if any minister after that refused to give any information of that kind that was requested.
Some have said that parliament can get action today. The hon. member for St. Paul's (Mr. Michener) said that parliament can pass the appropriate order for return and get the information, but the Minister of National Revenue does not agree with the hon. member for St. Paul's on that point. On February 21, 1955, as recorded at page 1331 of Hansard, my colleague the hon. member for Dauphin moved a motion calling for certain documents in this field. This was the reply of the Minister of National Revenue:


James Joseph McCann: Mr. Speaker, I will have to oppose this motion, and suggest to the hon. member that it be withdrawn. I oppose it on the ground that this is private correspondence between a taxpayer and the taxation division of the Department of National Revenue and that, according to the secrecy provisions, it cannot be disclosed.
I remind the hon. member for St. Paul's that last year when we were dealing with a certain question his colleague, the hon. member for Prince Albert (Mr. Diefenbaker), sought to get certain information. He was told, as I was told at the same time, that we could not get that kind of information because of the secrecy provisions of the act.


Daniel Roland Michener: Because the order was not passed.


Stanley Howard Knowles: My hon. friend says: "Because the order was not passed". Does he not know that at the present time there is in this house an overpowering majority that defeats motions of that kind every time? And does he not realize that he himself admitted that if by any chance his party were on the other side they would take the same stand? He said that tonight.


Donald Methuen Fleming: No, he did not.


Stanley Howard Knowles: Oh, yes.


Donald Methuen Fleming: He did no such thing.


Stanley Howard Knowles: He said that the way to correct what he thought might be some doubt-

Income Tax Act
ful practices in the Department of National Revenue was not to lift the veil of secrecy; no, keep it on, just change the party in power.


Daniel Roland Michener: On a question of privilege, what I suggested was that if the house by a majority called for those papers there was nothing in the act as it stands to prevent them being given.


Stanley Howard Knowles: That is a debatable point. I do not think the Minister of National Revenue will agree with the hon. member that they could be brought down even if the house passed the motion, since it is against the statute. If I may offer my opinion, even though I am not a lawyer, the only way the house could override a statute would be by passing another statute, not simply by an order for return, as my hon. friend suggests.
But the point is-and the hon. member for St. Paul's has made his party's position clear in this matter-that so long as the majority is against this kind of thing we will not get it. We know the Liberals are against it. We know now the Conservatives are against it. We know the Social Crediters are against it. It looks as though the secrecy surrounding private enterprise is protected, and therefore for some little while longer private enterprise can go its merry way knowing that its affairs, though they are of public concern, though they are possible only because of the contribution the public makes to them, will not be made known to the people of this country.
This is a longer speech, Mr. Speaker, than I made when I introduced the bill. At any rate, nobody would say I am reading it, or that I ever read a speech in this house.


An hon. Member:: Maybe you cannot read.


Stanley Howard Knowles: I hear someone say, "Maybe you cannot read". That might be correct. I am also aware of the fact that when I introduced the bill I thought, well, it is just a harmless little bill. The rest of the boys, and the girls, do not like it, but it will not stir them up too much. But lo and behold, it has. It has stirred them up as it did before because of the interest so many members in this house seem to have in protecting private enterprise and the profits that huge corporations make out of the Canadian people.
Some day there will be a change. Some day the people of this country will realize that the economy of this country is a matter of public concern, and that all its benefits should accrue to the people of Canada themselves.



EDUCATION


[Stage Direction]
The house resumed, from Thursday, January 26, consideration of the motion of Mr. Holling worth:
That, in the opinion of this house, the government should consider the advisability of introducing legislation to provide national scholarships and bursaries for students at the university level who are in financial need, in so far as the subject matter of this resolution is within the competence of parliament.
Alexander Malcolm Nicholson: Mr. Speaker, I must congratulate the hon. member for York Centre (Mr. Hollingworth) upon presenting this resolution to the house. It is significant that the members of all parties have paid tribute to my colleague the hon. member for Saskatoon (Mr. Knight) for having presented a similar resolution to parliament year after year. Now that hon. members of all parties have indicated their support of the ideas expressed in this resolution I hope that action will be taken very soon and funds made available for this purpose.
When we consider the amount spent by the Canadian people on educating our young people during the war years it is clear that we are going to have to tackle the problem of providing funds for university education just as we provided funds during the war years.
I remember that during the war a question was asked of Senator Power, who was then minister of national defence for air, as to the cost of training a pilot. He said the cost was around $30,000. A year ago the present Minister of National Defence was asked the same question, and he said the cost is now $65,000. If the people of Canada are able to spend $65,000 on the training of a pilot, we can spend adequate amounts to provide university education.
This morning I ran across a new book, "The Age of Mackenzie King". I am sure that all members of parliament will want to read this very interesting book written by H. S. Ferns and B. Ostry. I find that the book is dedicated to the memory of Flying Officer William Paterson and Pilot Officer Leon A. Titof. Those members who were here in 1940 will recall that Flying Officer Paterson was on the prime minister's staff at that time. He was a very brilliant young Canadian who had started out in external affairs and was then in the prime minister's office.
I remember being in the home of our station agent on Christmas eve, 1943, I think it was. The year before the station agent had received word that his only son, who was in the R.C.A.F., had been reported missing. Later the news of his unfortunate death was received. Flying Officer Paterson was overseas with the R.C.A.F. and on Christmas morning his wife received word that he was missing. Later it was confirmed by the R.C.A.F. that he would never come back to Canada. Pilot Officer Titof also came from my constituency. His father was a merchant, and this young chap was able to join the air force when he finished school. He was such a promising young lad, and of course he never came back.
Recently I saw some statistics prepared by the Canadian Bank of Commerce indicating the division of federal, provincial and municipal taxes. The breakdown to the nearest percentage showed that of the Canadian tax dollar, 74 per cent comes to the Minister of National Revenue and 14 per cent to the provincial treasury, with 12 per cent going to the municipality. I think it must be obvious to everybody that the municipalities and the provinces with but 26 cents of every tax dollar provided by the Canadian people cannot furnish that quality of education which is necessary in this day and age.
When one considers that thousands of our young people had similar experiences to those of Flying Officer Paterson and Pilot Officer Titof one might expect that now, in memory of these young men and their pals, we would find ways and means to see that the young people of Canada who have the mental qualifications are given a chance to go to university and make their contribution to the life of Canada and of the world.
Therefore I hope there will be unanimous support for the resolution moved by the hon. member for York Centre. I hope we will all accept the resolution.

Education


Elmore Philpott: Mr. Speaker, I want to say a few words in support of the resolution of the hon. member for York Centre, which I think is supported in most quarters of the house. Before I do so, however, I should like to make one point that has not been made yet.
While it does seem to me that we need more of the right kind of students in all our educational institutions, the primary schools, the high schools and the universities, I think we now have a great many of the wrong kind of students at all levels of our educational system. It seems to me that not only in the higher grades of our primary schools but in our high schools and in our universities there are people who do not want to be there, who are kept there more or less against their wills, either through family pressure or other pressure, who are only marking time. The net effect of their presence is to clog the progress of all. I think these beliefs would be borne out by almost anyone who acts in a professional capacity at any level of our educational system in Canada. In other words we have too many drones, too many dead cells, in our educational institutions.
On the other hand, Mr. Speaker, I think t must be obvious to anyone who studies the facts that there are a great many potential leaders in all walks of life who never get the shance to become leaders in our society aecause they lack the opportunity to get such education as would enable them to do so. I ;hink the very first point made yesterday n the joint declaration by the two great eaders of the western democracies, President Eisenhower and Sir Anthony Eden, centred >n the value of the individual.
It seems to me if there is one thing that differentiates our ideals from the ideals of certain other parts of the world it is that we place as the supreme value the worth of the individual citizen in our democracy; and it is a fact that is easily ascertained by studying what happens in any walk of life in our society that a great many people who are potentially great in any field do not get a chance to make the most of their talents simply because they lack the education.
I move the adjournment of the debate.


Some hon. Members:: No.


Mr. Speaker:: Mr. Philpott, seconded by Mr. Garland, moves the adjournment of the debate.


Mr. Maclnnis:: Talk it out.


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


Some hon. Members:: No.


Mr. Speaker:: Those who are in favour will please say "yea".


Some hon. Members:: Yea.


Mr. Speaker:: Those who are opposed will please say "nay".


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.


Mr. Coldwell:: On division.


Mr. Speaker:: I declare the motion carried on division.


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

Questions
ANSWERS TO QUESTIONS	grain-loss through spoilage
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:

Mr. Diefenbaker: 1.	Was a brief submitted to the Minister of Finance, the Acting Postmaster General and the Secretary of State, on May 27, 1955, by the postal workers' brotherhood of Canada, asking for an increase in their salaries?
2.	If so, has consideration been given by the government to this request and what decision was made?
3.	Has the government given consideration to the setting up of a board of arbitration or commission to hear representations and to make recommendations relative to the request by the said brotherhood?
Answer by: Mr. St. Laurent (Quebec East):
1.	Yes.
2.	Yes; no general increase in civil service salaries has been made since the request. The brotherhood was told that ministers had not been convinced there is a justification for special action in regard to the salaries of postal workers, but they would be glad to see any further evidence that the brotherhood wishes to present in support of its case.
3.	No; the Prime Minister informed the brotherhood that the Civil Service Act did not provide for arbitration and the law relating to conciliation boards in industrial disputes is clear in stating parliament's intention that it should not apply to the civil service. It was pointed out that the civil service commission is an independent body, established by parliament and not subject to any direction by the government, which has the duty of investigating questions of the kind referred to by the brotherhood, hearing the views of associations and making recommendations upon them. The Prime Minister expressed his view that this full-time tribunal, established by parliament and assisted by a large and expert staff, is far better able to give proper consideration to matters of this kind than would some ad hoc conciliation board as proposed by the brotherhood.



WHEAT BOARD


Mr. Argue: 1.	Has the Canadian wheat board supplied the Department of National Revenue with statements of payments made to producers?
2.	If so, under what authority?
Answer by: Mr. Howe (Port Arthur):
1.	Yes.
2.	By order of Department of National Revenue dated September 13, 1948.

Question No. 57-Mr. Thatcher:
How much grain, owned by the Canadian wheat board, has been lost in storage through spoilage, in each of the crop years, 1952, 1953, 1954 and 1955?
Answer by: Mr. Howe (Port Arthur):
The Canadian wheat board has no knowledge of loss of grain through spoilage because licensed elevators are responsible, as warehousemen, for maintaining condition of grain. Spoilage is a negligible factor in warehousing Canadian grain.



BARTER SALES

Mr. Thatcher: 1.	During 1954 or 1955, have any nations expressed a specific desire to the Canadian wheat board or to the Canadian government to barter merchandise or raw material for Canadian wheat?
2.	If so, what nations, and for what products?
Answer by: Mr. Howe (Port Arthur):
1.	No.
2.	See answer to No. 1 above.



COAL STATISTICS, 1955

Mr. Regier: 1.	What is the extent of the consumption of coal in Canada for the year 1955?
2.	How many tons of coal were imported into Canada in 1955, and how many tons were exported?
3.	What is the estimate of duty paid on Canadian coal sold to the United States in 1955, and what is the estimate of duty received on American coal entering Canada in 1955?
Answer by: Mr. Howe (Port Arthur):
1.	Consumption of coal in Canada, calendar year 1955, 34,810,000 tons (preliminary estimate).
2.	Canadian imports of coal, 10 months ended October 1955, 16,319,058 tons.
Canadian exports of coal 11 months ended November 1955, 554,999 tons.
3.	Estimate of duty paid on Canadian coal sold to United States in 1955, not available.
Estimate of duty received on American coal entering Canada January 1-October 31, 1955, $4,767,706.



FARM STATISTICS, PRAIRIE PROVINCES

Mr. Boisvert: How many farms were in operation in Manitoba, Saskatchewan and Alberta for the years 1950, 1951, 1952, 1953, 1954 and 1955?
Answer by: Mr. Howe (Port Arthur):
Number of occupied farms in 1951 (1951 census):	Manitoba, 52,383; Saskatchewan,
112,018; Alberta, 84,315.
For the years 1950, 1952, 1953, 1954 and 1955, the information is not available.
As a result of the census to be taken in June of this year, an up-to-date figure will be obtained.
830	HOUSE OF
Questions



UNEMPLOYMENT INSURANCE BUILDING ERECTION, OSHAWA

Mr. Slarr: 1.	Have plans been made for the erection of a building in the city of Oshawa to house the local branch of the unemployment insurance commission?
2.	If so, in what location?

Answer by: Mr. Pinard (for Mr. Winters):
1.	No.
2.	Answered by No. 1.

Friday, February 3, 1956