1956-02-24

GREAT SEAL


Hon. Roch Pinard (Secretary of State):: Mr. Speaker, I desire to inform the house that Her Majesty the Queen has approved the adoption and use by the government of Canada of a new Great Seal of Canada.
Since confederation the design of every Great Seal of Canada has comprised the effigy of the reigning sovereign seated on the throne, crowned and robed, and holding in each hand the orb and sceptre, or sword; also the Canadian armorial bearings, and around the rim an inscription of the title and name of the sovereign. The design of the new Great Seal which Her Majesty has now approved is of this design, with the bilingual inscription "Elizabeth II Queen of Canada-Reine du Canada".
The design shows Her Majesty wearing the St. Edward's crown with which the Queen was crowned at Westminster, and this crown also surmounts the whole armorial bearings of Canada, in addition to being part of the crest.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. What is the justification for, and what was the purpose of, his intervention by telegram to the United States secretary of the treasury asking for delay in a civil suit against Cyrus Eaton in connection with certain copper interests, or the formation of a certain copper company? What is the basis of his intervention?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, in the first place there was no intervention on behalf of Cyrus Eaton at all. The intervention was to ask for the postponement of a tax appeal against Premium Iron Ores, which is a Canadian company. Representations were made to me
by Canadians who are interested in that company. They contended that there was double taxation. A tax agreement we have with the United States provides that there shall not be double taxation. The intervention was in order to give Canadians who are interested in Premium Iron Ores more time to process their objections.


Mr. Fleming:: May I ask a supplementary question? Who were the Canadians at whose request the minister intervened?


James Joseph McCann: Well, one very important
Canadian was the president and manager of the Steep Rock iron mines.


Donald Methuen Fleming: Others?


James Joseph McCann: Others, yes.


Mr. Knowles:: May I ask a supplementary question? In view of the minister's statement that the attempt is to avoid double taxation, can he say whether any Canadian income tax has been imposed with respect to these transactions?


James Joseph McCann: Mr. Speaker, I am sorry, I did not get the whole of that question. It will either have to be repeated or I shall take it as a notice.


Stanley Howard Knowles: I said, in view of the minister's statement that the attempt is to avoid double taxation, will he say whether any Canadian income tax has been imposed with respect to these transactions?


James Joseph McCann: Yes, the Canadian government has collected from Premium Iron Ores all the taxes that are required of them and all that they owed.


Donald Methuen Fleming: I should like to follow up the minister's answer given to a previous question. Is it not a fact that the Steep Rock iron mines are controlled by Mr. Cyrus Eaton? And second, as the minister referred to Canadians at whose request he intervened, could he tell us who the others were?


James Joseph McCann: Mr. Speaker, I do not know where the control of Steep Rock iron ore mines lies. All others who made representations were legal people connected either with Steep Rock iron mines or with Premium Iron Ores.
1514	HOUSE OF COMMONS
Reference to Unparliamentary Remark PIPE LINES



TRANS-CANADA PIPE LINES    EXCLUSION FROM CAPITAL EXPENDITURE FORECAST

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. Does the exclusion of Trans-Canada Pipe Lines Limited from the minister's forecast of capital expenditure in the coming year indicate that the minister does not expect construction of the line this year?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, in preparing the forecast of capital expenditure the department is instructed not to include a project that is not definitely financed. The pipe line eastward from Alberta was not included.
My hon. friend is asking if I expect it to be built this year. I do; however, it is not advanced to a point where we thought we should include it in the forecast of capital expenditures.



SHIPPING

[Stage Direction]
SINKING OF DEPARTMENTAL VESSEL "ill LUNG A"
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadral:
Mr. Speaker, I should like to direct a question to the Minister of Public Works. Some days ago I asked the Minister of Transport (Mr. Marler) whether or not the public works vessel Hilunga which foundered on the west coast last week was designed only for service in minor waters, class 1, whereas she foundered in minor waters, class 2. My understanding was that the Minister of Public Works would answer that question. Perhaps he would take this as notice and give an answer at the first of the week.
Hon. Robert H. Winters (Minister of Public Works):: I shall be glad to do so, Mr. Speaker.



PRIVILEGE


Mr. R. E. Reinke (Hamilton South):: Mr. Speaker, on a question of privilege, I was in the house yesterday afternoon when the hon. member for Springfield (Mr. Weselak) was speaking and he made reference to Mr. W. J. Parker, president of the Manitoba pool elevators, and a remark was interjected from the opposition side reported on page 1471 of Hansard and attributed to an hon. member-"He is a rat."
Further along in the debate the hon. member for Rosthern (Mr. Tucker) brought

this to the attention of the Speaker and Mr. Tucker had this to say at page 1472:
Mr. Speaker, on a point of order, when Mr. W. J. Parker, president of the Manitoba wheat pool, was referred to by the hon. member who has just spoken, I distinctly heard a statement from the C.C.F., "He is a rat." I think it is shameful that a man of the high standing of Mr. W. J. Parker should be characterized in this house by any hon. member as a rat. I think that should be struck from the record.
Further along the hon. member for Portage-Neepawa (Mr. Weir) said:
Mr. Speaker, on a question of privilege, I want to join my hon. friend from Rosthern (Mr. Tucker) in protesting vigorously against that type of language.
The Deputy Speaker ruled on this question of privilege and I would suggest he ruled correctly. I would like, Mr. Speaker, to be dissociated, as a member who was sitting in the house at the time, from this remark and I suggest that where it says on page 1471 "


An hon. Member:: He is a rat", it should say, "An hon. C.C.F. Member: He is a rat".


Stanley Howard Knowles: Mr. Speaker, should the record not be made complete? Should not reference also be made to the fact that at the conclusion of last night's sitting my colleague the hon. member for Burnaby-Coquit-lam (Mr. Regier) indicated that however it came about it was he who used the words, whereupon he withdrew them without reservation?


Some hon. Members:: No, he did not.


Mr. Harris:: I agree with my hon. friend up to a point, but if you recall the apology which was tendered-I have not seen the record to see if it carries it-my recollection is that the hon. member said that apparently it was not within his competence to refer even to an hon. member of parliament as a rat.


Mr. Speaker:: I will have to look at the whole record. I see what happened as reported on page 1471 of Hansard, and as referred to by the hon. member for Hamilton South (Mr. Reinke), but the withdrawal which the hon. member for Winnipeg North Centre (Mr. Knowles) refers to might have taken place while the house was in committee. I cannot find it at the moment.


Stanley Howard Knowles: It will be found on page 1510 of Hansard for yesterday at the conclusion of the sitting when Mr. Speaker was in the chair.


Mr. Speaker:: I have not had an opportunity to peruse what is recorded on page 1510, but I think it would be much better if expressions of this type did not reach our record. There is no question about that. I do not think

that hon. members will insist that an expression like that remain in the record. I do not think we should have expressions like that as applied to anyone remain in our record. As I say, I was not in the chair at the time. The matter is being brought up now and as far as I am concerned I think hon. members will agree that if it is possible the expression therein contained should be eliminated from the record. I think all hon. members would be of that view. It is just as simple as that If hon. members want to make a case of it, I shall study the point and give a ruling later. However, I take it that that would be the general view. Is it the general view that this expression be eliminated from the record?


Some hon. Members:: Agreed.


Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I am not quite clear as to the extent to which elimination can take place. There is a question of privilege I wish to raise. The hon. member for Burnaby-Coquitlam (Mr. Regier), in admitting that he had used this term, then in a manner which was not in keeping with the ordinary decencies of this house tried to place the blame upon the Conservative party. He used these words:
I was one of those who echoed the Tory interjection "He is a rat."
I wish to put it clearly on the record that there was no such interjection. I was in the house during the discussion and it was most unfair, most improper and not in keeping with the decencies of this house. In accepting responsibility for the statement, to whomever it was directed, the hon. member should accept full responsibility and not try to divest himself of any measure of responsibility for this improper statement.


Mr. Speaker:: While the Leader of the Opposition was speaking I had a chance to read the remarks of the hon. member for Burnaby-Coquitlam as recorded on page 1510. I think that so much has been said there that our elimination from the record of the expression on page 1471 would necessitate the elimination of whatever is recorded on page 1510. That would be too much of an alteration in Hansard. I think there is only one way to deal with it now, that is for the hon. member for Burnaby-Coquitlam to stand up and withdraw unreservedly the expression which has been used.


Mr. Erhart Regier (Burnaby-Coquitlam):: Mr. Speaker, on a question of privilege, as I said yesterday, I withdraw that remark and I do so in its entirety. However, I cannot tell a lie; my ears heard the interjection.


Some hon. Members:: Oh, oh.
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Erhart Regier: I withdraw even that.


Mr. Speaker:: The hon. member is to be lauded for saying that he cannot tell a lie, but I would suggest to him that he would do well if he would withdraw without adding anything else.


Erhart Regier: I should like to do so, with your permission.


George Alexander Drew: Mr. Speaker, I should like to point out that the hon. member has successfully placed on the record a statement which is untrue. I was in the house and so were other hon. members of this party and no member of the Conservative party made any such remark. That remark came from the hon. member for Burnaby-Coquitlam and he should accept full responsibility for that contemptible remark.


Mr. Speaker:: I understand that at my request the hon. member for Burnaby-Coquitlam has withdrawn without any reservations whatever. I think we might well be satisfied with that withdrawal.



PROVISION FOR GUARANTEE OF BANK LOANS TO PRODUCERS IN PRAIRIE PROVINCES, ETC.

[Stage Direction]
The house resumed, from Thursday, February 23, consideration in committee of Bill No. 82, to provide for short-term credit to grain producers in the prairie provinces to meet temporary financial difficulties arising from inability to deliver all their grain- Mr. Howe (Port Arthur)-Mr. Applewhaite in the chair.
On clause 3-Minister's liability to a bank.
The Deputy Chairman:: Order. May I take the liberty of pointing out to hon. members that it is unfair to expect any member of the house to open this discussion with the noise that has been going on. I know that there is always this little disturbance while we get settled down, but let us please keep it as quiet as possible, because one of these times it may be ourselves who wish to speak, and I think we should extend the same courtesy to others as we would expect them to extend to us.


Mr. Nicholson:: Mr. Chairman, I wonder if the minister could make a comment or two in regard to subclause (1) (e) (ii) at the bottom of page 2. This reads:
fifteen hundred dollars, minus the aggregate, at the time of the application for the loan, of the moneys that have been paid or are payable for the sale of grain delivered by or on behalf of the borrower under his current permit book before the making of the loan and on or after the 1st day of August, 1955, other than for grain delivered and entered in the permit book as the balance of the 1954-55 eight bushel quota.

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I wonder if the minister would indicate how the owner of the land might be eligible if he has been renting it. Common practice has been for a farmer, when he retires, to rent his land to his son or to a neighbour so that the owner pays the taxes and the renter pays one-third of the crop to the landlord if and when it is sold. Let us take a typical case where the crop is 6,000 bushels. The landlord is entitled to 2,000 bushels, and the renter has 4,000 bushels, out of which he must pay all operating costs, but the landlord must pay his taxes. At the present time the landlord will have difficulty in getting any cash until the renter has been able to market at least eight or ten bushels per acre. I wonder if the minister could indicate what provision, if any, has been made for the owner of the land to receive assistance under the subclause I have just mentioned.


Clarence Decatur Howe: I thought I had made it clear that only the actual producer of the grain is entitled to borrow under this bill. The relations between the owner and his tenant are whatever they are under the law; but, so far as this bill is concerned, only the producer can borrow.


Alexander Malcolm Nicholson: As I pointed out, the landlord is committed to pay the taxes. That is an essential part of the operation of any farm. Normally the tenant would deliver to the landlord his third of the crop by Christmas time, but under the present set-up the tenant must have at least 5 bushels per acre to meet actual cash disbursements. It seems to me that quite a large number of the owners of the 200,000 farm units in the prairie provinces are retired. They are too old to work the land and do not have a permit book. It seems to me there should be some provision for them. If a retired farmer has 2,000 bushels of grain which cannot be delivered it should be possible for him to get some assistance so that he can aieet his taxes and pay his grocery bill.


Clarence Decatur Howe: It seems to me that my hon. friend is putting up a straw man. If the tenant could deliver his grain freely he would give the farmer one-third of the money. If he borrows from the bank I suppose he can still give the farmer one-third of the money. The position is unchanged. The regulation is exactly the same as in the 1951 bill, and I am told that no single instance of the kind mentioned by my hon. friend was ever raised.


Mr. Johnston (Bow River):: I should like to say a word on this clause. If I interpret paragraph (e) (ii) of subclause 1 correctly, $1,500 is the maximum amount that a producer can get. I also understand that if a
IMr. Nicholson.]
producer has sold grain to the value of $1,000 he would only be entitled to an additional $500. If that is so I think it should be changed so that once the legislation comes into effect the producer may be entitled to get the full $1,500 regardless of whether or not he has in the past sold a few bushels of grain. As far as I can see, it should not make any difference whether he has already sold some grain before the coming into effect of the legislation. He should still be entitled to the full $1,500.
The bank is not bestowing a favour on the producer. The bank is carrying on a legitimate business for which they are being paid a fairly handsome rate of interest with an absolute guarantee. Therefore it seems to me that this is an imposition on the producer and he should be allowed to get the full $1,500 when the legislation is passed regardless of whether or not he has previously sold any grain.
Mr. Hansel!: I should like to call attention to paragraph (d) of subclause 1 in which the rate of interest of 5 per cent is mentioned. Yesterday the hon. member for Acadia rose and put in rather concise form the fact that the government was in an excellent position to persuade the banks to grant these loans at cost. I agree with that and I do so on this basis. After all, I take it that the purpose of this piece of legislation is to meet an emergency. If an emergency had not arisen there would be no need for the bill. I am not going into a detailed discussion on that point. We all know the background and the reasons for the bill. The farmers have claimed that they need money by reason that they cannot sell their grain. Part of the responsibility for disposal of the farmers' grain falls on the government.
Now then, the government recognizes that this emergency exists and they have introduced this bill. But the fact remains that the farmers are going to be burdened with 5 per cent interest on a tragedy for which they are not responsible. Because of these circumstances we believe that it would not be unreasonable that in emergency legislation of this kind the banks be asked to lend money at cost. The other feature is that the banks are going to be guaranteed against loss. There will be very few losses sustained when the government, through this legislation, is going to guarantee the banks against loss.
Now, let me read what the hon. member for Acadia said yesterday at page 1507 of Hansard, the second column:
That is why some of us wonder whether or not the government endeavoured to get the chartered banks to make loans at a lower rate than 5 per cent where the loans are guaranteed by the government.

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Now, I will skip a piece here lor the sake of brevity and read from the middle of the page. The hon. member for Acadia said:
Remember that some years ago we had Mr. Towers before the banking committee, and he told us that he estimated it cost the banks approximately 3 per cent to create money. If it costs the banks 3 per cent to create money, then surely on loans guaranteed by the government they should be prepared to make loans at cost. As has already been pointed out, they are making loans at cost, if 3 per cent is the cost, to the wheat board, and they are making loans to the wheat pools at approximately 32 per cent, just three-quarters of one per cent above their cost as estimated by the former governor of the Bank of Canada.
Now, the following sentence is the pertinent one:
In view of that fact, I think it would be interesting to know whether or not the government did attempt to get the banks to make loans at a lower rate than 5 per cent.
Then the hon. member for York West spoke. The government did not answer that question, and I think it would be interesting to know, in their talks with the representatives of the chartered banks, as to whether or not the banks were willing to grant loans at cost or grant loans at 3 per cent or 4 per cent, and what persuasive arguments the government used by reason of the emergency to ask the banks to grant loans at cost. I think that question should be answered and therefore, Mr. Chairman, I am going to move an amendment. It is a simple one. I move:
That section 3 subsection (1), clause (d) be amended by deleting the words "five per cent", and substituting therefor the words "three per cent".


Clarence Decatur Howe: It is quite impossible to do that because that would be imposing a unilateral change in an agreement. In other words, there is an agreement between the banks and the government and it has been outstanding for some time. The banks have lent large sums of money on the strength of the exchange of letters with the Minister of Finance. Personally, neither myself nor this party will agree to repudiate the signature of the Minister of Finance which is the signature of the government of Canada. If my hon. friend thinks that is good Social Credit practice we of the Liberal party do not believe it is sound government practice.


Mr. Coldwell:: I do not think that is the question at issue, if I may say so with all due respect to the minister. That is not the question.


Edward Turney Applewhaite: Order. I see the hon. member for Macleod.


Mr. Hansell:: Mr. Chairman, I know the minister is aggravated. The debate has been going on for a long time, and we are now on
a very important section of the bill. But I think that the minister's interjection "if that is good Social Credit practice" is entirely uncalled for. I will tell the minister what good Social Credit practice would be, and that is to bring down a bill and get the authority of parliament before striking an agreement with anyone else. That is what good Social Credit practice would be, and the people of this country should know now that Social Credit members would not override the authority of parliament.
Here is the point, Mr. Chairman. Many hon. members on this side of the house have risen and called attention to the government's flouting of the powers of parliament. Is there an agreement existing between the government and the banks? If there is an agreement existing between the government and the banks, then parliament becomes a rubber stamp.
I can understand how there could be an exchange of letters. That might be all right. I hope there is an exchange of letters between some other interested parties and the government as well as with the banks. The situation is this. The bill is now before us. We are discussing the bill. The committee has a right to amend any bill. It is my proposal that we amend this bill now. I cannot help how impractical it may appear to change the bill. If the government has made any mistake, that is its responsibility, not parliament's. We are saying what kind of bill we want now. This is not even the kind of bill we have been continually advocating. By reason of the defeats of previous amendments we are now forced into the position where we must fight for the best bill possible. We want to pass legislation which we believe in the circumstances is the best piece of legislation obtainable, and we claim now that the interest rate should be 3 per cent instead of 5 per cent. Therefore, we have moved this amendment, and the committee will have to deal with it regardless of whether or not the government stuck its neck out and reached some agreement with the banks. But I must confess I do not like this idea of governments making agreements and then bringing the bills here to be passed and then saying: "You have got to pass it because we have made the agreement".


Clarence Decatur Howe: Mr. Chairman, I should have added that this bill, of course, is out of order. It calls for a change in the interest rate-


Some hon. Members:: Hear, hear.


Clarence Decatur Howe: I should have said "this amendment is out of order". It changes the arrangement that has been made. There is no indication whatsoever that the banks

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would lend at 3 per cent. It imposes a charge on the treasury, and that of course is not the privilege of a committee of this house.


Ernest George Hansell: On a point of order-


Major James William Coldwell: I was going to rise to say very much what the hon. member for Macleod has said. I do not think that the minister's objection is correct. My understanding is that in dealing with a charge on the people of Canada we may not increase the charge but we may reduce the charge on the people of Canada.


Clarence Decatur Howe: On the treasury.


Major James William Coldwell: Well, perhaps that is dealing with something somewhat different. I think the minister is not correct when he says we cannot deal with this matter in committee. When I rose before I was going to make the point that I do not know what the Social Credit principle is, the C.C.F. principle, the Liberal principle, or the Conservative principle, but it is a parliamentary principle that no commitment regarding the expenditure of money shall be approved by this House of Commons before that commitment is made.


Clarence Decatur Howe: That is what we are asking.


Major James William Coldwell: The government should have called parliament together before making this arrangement. And when we vote, as I presume we shall, my colleagues and I will vote for the reduction in the interest rate, but when we do that we shall not be repudiating any agreement that is made. What we shall be doing is failing to confirm the agreement that was undertaken, that was improperly given by the Minister of Finance on this occasion.
The Depuiy Chairman:	Before the hon.
member for Prince Albert speaks may I say I believe the point has been made that the amendment as submitted is out of order in that it increases the charge on the public treasury. I may say now that I am unable to agree with that. Clause 3 (d) says that the act would come into operation if:
The rate of interest charged by the bank on the loan did not exceed 5 per cent per annum simple interest.
The amendment is that the clause would come into operation if:
(d) the rate of interest charged by the bank on the loan did not exceed 3 per cent per annum simple interest.
I am not ruling the amendment out of order. The hon. member for Prince Albert.


John George Diefenbaker: Mr. Chairman,-


Mr. Byrne:: On a point of order, the member for Macleod has just pointed out that the

money can be created by the banks in large sums or otherwise at the rate of-


Ernest George Hansell: What is the point of order?


James Allen (Jim) Byrne: Permit me to make this point of order.


Edward Turney Applewhaite: Order.


James Allen (Jim) Byrne: It will cost 3 per cent to create money, but that does not say that money can be created and administered in small loans as presumed by this legislation, therefore-


Some hon. Members:: Order.
The Depuiy Chairman: Order.


James Allen (Jim) Byrne: -therefore it will require more than 3 per cent to lend money to the farmers under this legislation. The banks have said they cannot lend at less than 5 per cent. There would be a 2 per cent administration charge that would be charged to the treasury, and therefore it would be a charge on the treasury. For that reason, the amendment is out of order as there can be no legislation proposed or amended other than by the government. For that reason I feel that the amendment is definitely out of order.


Stanley Howard Knowles: Mr. Chairman-
The Depuiy Chairman: Order. If the hon. member for Winnipeg North Centre is going to speak to the effect that this amendment is in order, he does not need to. I am bound here by the terms of the bill, and I am also bound by reasonable results which may flow from any action based on it, but I do not consider that I would be justified in saying that there are going to be a larger number of failures to repay loans because the interest rate is dropped. It is in case of failure to repay loans that the liability of the country comes into effect.
The point raised by the hon. member for Kootenay East is that if the banks charge 3 per cent, then some entirely new arrangement would have to be made whereby the government would have to raise another 2 per cent. With all respect to contrary opinion, I have to say that I cannot see that in this bill, and I cannot see any legal liability on the government of Canada under this bill unless a new section were brought in. In my opinion the amendment is in order in that it does not of itself place an additional burden upon the public treasury.
The hon. member for Prince Albert.


John George Diefenbaker: Mr. Chairman, I must say the Minister of Trade and Commerce has just enunciated a new principle of government; in other words, that parliament

must ratify anything that the ministers of the government do. In fact, he said that was a good principle of Liberalism.


Clarence Decatur Howe: Mr. Chairman, my hon. friend is entirely misrepresenting my statement-I say the government must endorse the undertaking of a minister of the government.


John George Diefenbaker: Surely the government does not act by itself; it only acts through parliament.


An hon. Member:: Not this government!


John George Diefenbaker: And this is just another example-


Mr. Gardiner:: That is what we are doing.


John George Diefenbaker: My hon. friend has joined the chorus. As a matter of fact, this is another example of riding roughshod over the rights of parliament, making agreements. I know my hon. friends on the other side of the house laugh; but, Mr. Chairman, I have heard Mackenzie King, on occasions when he used to speak the tenets of liberalism, say that above everything else parliament should never be placed in a position wherein the government having entered into some arrangement parliament has to pass it. That is the attitude of this minister. It is just another step from 1948 when taxation was imposed by a radio speech.


Donald Methuen Fleming: 1947.


John George Diefenbaker: Yes, 1947, when taxation was imposed by a radio speech.


Clarence Decatur Howe: May I ask my
hon. friend a question. Would he apply the principle he is just enunciating to treaties between governments?


Donald Methuen Fleming: It is a different thing
altogether.


John George Diefenbaker: This really is the epitome of nonsense. Since when did an agreement with a banker amount to a treaty between sovereign nations? As a matter of fact, sometimes having regard to the interest the government shows in great interests, I think it actually does believe that some of the great interests have the power to make treaties. Yes, that is a different proposition. I am surprised that the hon. gentleman secured such assistance from the Secretary of State. That is one of the exceptions-that is the only exception, the power that vests in the executive of the day to enter into treaties subject subsequently to be brought before parliament; but this is as yet an agreement with the banks, or a letter to the banks. A letter to the banks in his country does not, I hope, amount to a treaty or anything analogous to a treaty. As a matter of fact, this
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is just another example of this roughshod riding over parliament. I was amazed at the answer he gave to the hon. member for Macleod: "Huh, we did this; the Minister of Finance wrote a letter; it is going through and we are not going to have any amendments to it."
This is very much in keeping with the statement the Prime Minister made at the bar association meeting here in September-


An hon. Member:: You are out of order.


John George Diefenbaker: Order? Mr. Chairman, have we arrived at a point where we cannot answer the constitutional misobservations of the government?
The Prime Minister said at the Canadian Bar Association in effect, when explaining the centralization of power in Ottawa: "The people require these things; they are requiring more and more from the central authority, and when they do we have to get the necessary power and the necessary revenue in order to satiate the demands of the people".
Unfortunately that seems to be the trend today, instead of leadership following demand. This example of the hon. gentleman saying, "Well, we wrote a letter and therefore we are not going to countenance any amendments", indicates exactly the degree to which this parliament, in the minister's view, has become simply an instrument to carry out the wishes of the cabinet made by agreement before parliament meets.
We had another example today, the latest one in connection with the Cyrus Eaton matter, which is just another example of what this government does.


Some hon. Members:: Order.


John George Diefenbaker: It is another example, Mr. Chairman-


Some hon. Members:: Sit down.


John George Diefenbaker: -of ministers of the crown interfering. In this latter case it is an interference in another country. It was a telegram in the Cyrus Eaton case, a telegram to the United States secretary of the treasury to hold up an action-


Edward Turney Applewhaite: Order. I have no desire to interrupt any hon. gentleman who is entering this debate. Up to the present the hon. gentleman has been answering the point advanced by the Minister of Trade and Commerce as to why this amendment should not be adopted, but I ask the hon. member for Prince Albert to agree with me that if he is allowed to go into the merits of an entirely different case, which perhaps he quite properly referred to as parallel, but if he is going into the merits of something which I understand has to do with income tax on

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minerals, then the statements he makes will be answered from other quarters of the house and we will be debating something which is not the question whether the interest rate should be reduced from 5 to 3 per cent.


John George Diefenbaker: I was just giving another example of the trend. I need not give any example because the answer of the minister indicates the supreme contempt he has for hon. members of this house. He says, "We wrote a letter"-


Some hon. Members:: Order.


John George Diefenbaker: -and hon. members of the house must carry it out whether or not we believe it is an agreement which is necessary. It must be carried out whether the individual terms are agreeable or acceptable. I can see no reason, Mr. Chairman, why the suggested amendment should not at least be considered. As a matter of fact, as far as the one in question is concerned, I doubt whether it could be actually affixed to the bill as it is. But to give an answer which says in effect, we wrote a letter, take it or leave it, this dish of crow is yours, is not what we have the right to expect as members of the House of Commons.


Mr. Quelch:: When the hon. member for Kootenay East spoke he suggested that we had implied that the cost of the creation of money by the banks was 3 per cent. He then went on to say that that would not cover the cost of servicing the money that had been created. When Mr. Towers in the banking and commerce committee referred to the cost of the creation of money as being 3 per cent he included in that the total cost, the cost of servicing the accounts, the cost of bank premises, the cost of wages to employees, the cost of investigation. That was the over-all cost. Surely hon. members are not so naive as to think the mere physical action of writing up an account creating credit would cost the banks 3 per cent. That part would be practically costless. The expensive part is servicing the account arising from the creation of that money. There is one other point I want to refer to. When the hon. member for York West followed me he had this to say, as recorded at page 1507 of Hansard: ... I dissociate myself entirely from any suggestion that the banks should be forced to deal in any manner whatsoever.
I never suggested in my statement that the banks should be forced. All I suggested was that they should be given the alternative, that either they would make the loans at 3 per cent or the government would. There is no suggestion that the government should force them to make loans at any given rate
[The Deputy Chairman.]
of interest. The point is that if they did not do it the government should.


Donald Methuen Fleming: The Minister of Trade and Commerce in his latest outburst has introduced the ugly word "repudiation". It is a fantastic use of the word as applied to what is under discussion. This is not a case where any valid obligation binding on the government of Canada is being repudiated or is proposed to be repudiated. If it were I am sure those of us who are members of the official opposition would have nothing to do with it. We do not believe in repudiation; we always have opposed any proposal of repudiation. But the minister is completely mistaken in suggesting that there is now binding upon the people of Canada through the government of Canada any legal obligation. The only obligation that has been created in any sense whatever is the obligation which the government took upon itself by means of a letter written by the Minister of Finance to the banks of this country saying that legislation would be introduced. That is the only obligation there was. There was a moral obligation placed upon the government by that letter, but no legal obligation was created by it. The only kind of legal obligation that could be created would be one created by parliament. The government is asking us to create it, but the minister in this remarkable and silly statement he has made this morning about repudiation, assumes that a legal obligation is in existence now. We have reached the point where the minister is resorting to these utterly fantastic suggestions and charges in order to buttress a position which is so hopelessly weak. He does not attract any strength to the position by resorting to far-fetched suggestions of this kind.
There is no legal obligation in existence today as far as the people or the government of Canada are concerned. Only parliament can create any legal obligation, and that has not yet been done. So let there be none of this silly talk about repudiation as applied to what parliament is engaged in doing now, namely, deciding whether it shall permit the government to create a legal obligation and what shall be the terms of such legal obligation. We have a perfectly free hand in this parliament to decide on what terms we will permit the government to undertake such obligation.
Having been the person who raised the question last evening as to what discussions had been carried on by the government with the banks of Canada in relation to the interest rate, I wish to follow that up with one or two brief observations. I drew attention last

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night to the fact that there are a good many people who would be happy to lend money with a guarantee of the government of Canada for an interest rate substantially less than 5 per cent.
There are two kinds of obligation that we have to consider here in a reasonable approach to a question of this kind. There are shortterm obligations and there are term obligations. The government of Canada borrows money today on 10-year maturities through savings bonds at a rate of 3J per cent. Presumably an obligation with similar maturity terms guaranteed by the government would yield a similar return.
Here we are dealing with short-term obligations. The government guarantee is applied to an obligation which will mature in the ordinary sense in six months, as the minister indicated in his explanation last night. In that field the government today is borrowing at substantially less than the 3| per cent which is being paid by the government on 10-year maturities or on maturities of more than 10 years.
On the other hand, in a situation of this kind we have to make some allowance for handling charges. This is not simply a case of the government selling bonds. Some account has to be taken of the fact that these applications for loans must be processed, the bank must make certain investigations, certain prescribed forms must be completed and paper work will have to be done by the bank and in its contact with the government in order to put the guarantee into full effect. Anybody who believes in the scheme of this bill must take account of the fact that something must be allowed to the banks for handling charges.
But this does not yet provide an answer to the question that was asked last night. I think the Minister of Finance was here at the time or at least he had been here just before. He took his departure then and he has not appeared since in this committee of the whole during the discussion of this bill, as I think he should. He is the man who carried on the negotiations with the banks- and after I asked the question the Minister of Trade and Commerce said that he did not have anything to do with the banks, and it was the Minister of Finance who had carried on these negotiations. The Minister of Trade and Commerce said that he did not know what discussions the Minister of Finance had had with the banks about a proper interest rate. So the question remains unanswered because the Minister of Finance has not chosen to be in the committee or to acquaint the committee with the facts. I suggest that this committee ought to have 67509-97
an answer to the question before it deals with the clause and before it deals with this amendment. This committee is entitled to know what was the course of discussion between the government and the banks in regard to the interest rate.
I am sure that the Minister of Finance does not just write a letter out of the blue offering to introduce a bill to provide government guarantees for a scheme of bank loans. Surely the matter of interest rates must have entered into these discussions and before this house takes one step further it ought to be told in the plainest terms by the Minister of Finance what were the discussions and what was the position taken by the banks in regard to the maximum interest rate at which they were prepared to lend. We ought to know what was the government's position. Did the government make any serious effort to obtain for the farmers who will be borrowing under this measure an interest rate lower than the 5 per cent now contemplated?
I suggest to (the government that the Minister of Finance should be sent for. He should come into the committee now and answer that question. This house has no right to go ahead passing a measure of this kind in relation to something that is going to be most important for the borrowers without having that information.


Clarence Decatur Howe: My hon. friend is complaining that the Minister of Finance was not in the chamber when the question was asked, but I think I should say that my hon. friend was not in the chamber when the question was answered. If my hon. friend will look at page 1508 of Hansard of February 23 he will find that the Minister of Finance gave this answer:
There were negotiations and conversations over several days with respect to all the terms of the loans that might be made. Opinions were expressed about the rate of interest and whether it should be lower or higher, and as a result of those discussions the conclusion reached is in this bill.


Donald Methuen Fleming: That does not answer the question at all. We wish to know what was the position of the government. What position did the banks take? The minister simply said that there were discussions on various points and that this is the result. That is not an answer to the question. What did the government do? Did the government try to obtain some reduction in this proposed rate? We have not been given that information yet. If hon. members opposite are prepared to proceed without information of this kind, then I must say that I think they are being asked to act irresponsibly.


Mr. McCullough (Moose Mountain):: Mr. Chairman, I do not see anything in this clause

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that is good. We in this group at every stage of this legislation have endeavoured to have the bill given a hoist or taken from parliament and replaced with something more acceptable to the farmers. I do not agree with the hon. member who has just spoken. I think perhaps there was adequate discussion with the banks, but I think the point that should be made is that the discussion was not with the right people, the people who are going to have to pay the interest, namely the farmers. The farmers have not been given an adequate show in connection with this bill. No decision was made on their behalf. I think it can be truthfully said that the decision was made in accordance with the request of the banks.
I think I speak for this group when I say that we have been against this bill at every step. We would like to see the farmers given a square deal by being given cash advances. We are prepared to support any reduction, small as it may be, which would make it easier for the western farmer. I do not think there should be any interest. As has been said on former occasions, the farmer has done his part, he has produced his year's income in the form of grain now stored on his farm and which he cannot deliver through no fault of his own. The fault lies right on the doorstep of this government. Even a rate of 3 per cent would be easier for the western farmer and it would be better than the rate of 5 per cent presently provided.


Mr. Johnson (Kindersley):: Mr. Chairman,
there is one point I should like to have clarified by the minister before we go any further. As indicated on page 1498 of Hansard, the minister stated:
These are small loans. The average is about $800, and the period of time would not be over six months.
The length of time the interest is in effect depends entirely, of course, upon the farmer's ability to deliver his grain and to retire the debt. The minister has stated on previous occasions that this legislation is aimed at assisting the small farmer in western Canada. The point I should like to have reconciled is this. How is a quarter-section farmer who is able to get a loan of $1,500 able to repay the loan within six months unless the minister by that statement has guaranteed that there will be at least a 16-bushel quota available at the end of the crop year? The maximum amount that a quarter-section farmer could deliver on even an eight-bushel quota is 1,280 bushels.	It is apparent that it would
require a 16-bushel quota for this quarter-section farmer to pay off the loan of $1,500

on the basis outlined in this legislation. Is the minister's statement that the interest will not carry on for more than six months a guarantee that there will be a quota of at least 16 bushels at the end of the crop year?


Clarence Decatur Howe: A guarantee of
a quota of 16 bushels per specified acre would mean deliveries of about twice that much, that is, 32 bushels per seeded acre. Does my hon. friend know many farmers who can deliver 32 bushels per seeded acre?


Willis Merwyn (Merv) Johnson: He knows the
quota is on the specified acreage. You cannot say a quota is 32 bushels when it is only 16 bushels. With an eight-bushel quota, the farmer with 160 acres would deliver eight times 160 bushels, that is, 1,280 bushels.


James Garfield Gardiner: There are no such farmers.


Clarence Decatur Howe: There are no
quarter-section farmers who plant every acre they have to wheat.


Willis Merwyn (Merv) Johnson: That is worse.
He will not have the opportunity to deliver an eight-bushel quota. His opportunity to deliver would be limited even further.


Clarence Decatur Howe: Now, Mr. Chairman-


Willis Merwyn (Merv) Johnson: The minister
is revoking the statement he made that the interest would not apply for over six months. He has indicated that it may carry on for a year or perhaps even longer.


Clarence Decatur Howe: I was speaking
of the average rate. Just as the average amount of the loan is $800, I said the average period of the loan would not exceed six months.


George Alexander Drew: Mr. Chairman, this is an issue which is a little different from a mere question whether three per cent or any other particular percentage is an appropriate amount. What has practically been placed before us as the issue upon which we must vote is whether or not we have the right to vary any provision of this act.
The minister has propounded a doctrine that, because the government committed itself to certain arrangements without consulting parliament we are therefore bound to the detail of those arrangements. I submit that we have not before us the evidence that would make it clear whether or not three per cent is the figure that could appropriately be charged, but I am satisfied that the minister has made the issue here whether we have or have not the right to vary any provision of this bill.

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I must say that I do not know-and I do not think any other hon. member knows, including the member who moves this amendment-whether in fact three per cent is the appropriate figure. From day to day the amounts that must be charged by government vary. However, the minister has put this on the ground that we have no right to challenge the rate of five per cent because this government has committed itself to the banks and therefore we must abide by that decision. If that principle were to be accepted, all that would be necessary for the government to do in any case would be to abandon the ordinary procedure, enter into improper arrangements in advance of the meeting of parliament, make commitments to various corporations or other bodies in this country and then come before parliament and say, "Because we have done this, you cannot discuss any variation. We are pledged, and it must ride or fall in detail as we have put it before you." That would deny to this parliament the right of discussion, which is the very foundation of parliamentary democracy. That, I think, is an issue which the Minister of Trade and Commerce does not understand, but he has made that the issue in the amendment that is now before us.
I am reluctant to support an amendment setting forth an exact figure which does not have supporting evidence to tell us whether or not it would be the right amount. But I am prepared to support this amendment as a challenge to the statement of the minister that they have made the commitment for five per cent and that stands no matter what the effects are. On that ground I shall certainly support this amendment as an acceptance of the challenge that parliament has no right to vary any figure in this bill.
I think also that the minister has made a statement here that should not go without notice. He said just a few minutes ago that the government must endorse the decision of a member of the government. We have had brought before us here, by a steady process of prodding and prying and questioning, decisions by various ministers that were unknown to the other ministers. If they were going to follow the course of being committed in every case to what is done by those ministers without the knowledge of the other ministers, then we would indeed have reached a point where parliament would be impotent to guide the affairs of this country. That would apply with more force to the members opposite than to the opposition. It would be the responsibility of the members opposite in particular to challenge a proposition of that kind. That proposition would mean that every hon. member opposite who supports this 67509-97i
government is reduced to the role of a rubber stamp and that by his unquestioning vote he denies to this parliament the real freedom of discussion and the formation of opinion which should decide the course of legislation in this parliament of Canada. I hope hon. members opposite will recognize what the issue is here. I for one support this amendment for the reasons I have put forward.


Clarence Decatur Howe: Mr. Chairman, I think I should say that the government has never questioned the power of parliament to change the opinion of the government, whatever might happen to the government. Of course, parliament has that power. My hon. friend says we deny him the right of discussion. It seems to me he has been discussing it at great length, and so have other members. We do not question his right to change the decision of the government. We question whether he has the votes to do it.


Stanley Howard Knowles: There is one piece of evidence that I think should be on the record in connection with this matter. The evidence to which I refer is on the table of the house, in the form of a sessional paper, but I do not think it has yet been placed on the record of Hansard so that those who follow Hansard might read it.
Reference has been made to the undertaking which the government gave to the banks. The minister said earlier that the government and the Liberal party would stand behind that undertaking. He has confirmed that view now by saying to the Leader of the Opposition that he cannot command enough votes to change the views of the government. In other words, the minister is quite satisfied that those on his side of the house will stand by the government so far as this matter is concerned.
I think it should be pointed out that the Minister of Finance, the Minister of Trade and Commerce and other members of the government have lived up to the undertaking they gave to the banks. Three letters were written to Mr. F. W. Nicks, president of the Canadian Bankers' Association, the Bank of Nova Scotia, Toronto, Ontario.
This evidence is found in three letters which are contained in sessional paper No. 189 which was laid on the table of the house on Monday, February 13. The letters were written on October 28, 1955, November 25, 1955, and January 20, 1956. I want to read only short extracts from one or two of them. In the first letter which was signed by the Minister of Finance there appears this paragraph:
I am authorized to inform you that legislation in some respects similar to the Prairie Grain Producers Interim Financing Act 1951, will be introduced in parliament at the earliest opportunity to provide for a guarantee by the Minister of

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Finance to the chartered banks of loans made under section 88 of the Bank Act and subject to the following additional conditions . . .
I will not read the conditions. There are about two pages of them. The concluding paragraph in the first letter reads as follows:
Loans made by the banks in advance of the legislation under the terms and conditions above described will become guaranteed loans when the legislation comes into force, and I should appreciate your confirmation that, in the meantime, the banks will participate in making such loans.
Those are the only two references in that first letter to anything that might be called an undertaking. The government undertook to introduce legislation. That is all they undertook to do. I think the letter was poorly worded in the last paragraph when the Minister of Finance used the phrase "when the legislation comes into force." I think he should have had enough respect for the rights of parliament at least to say, "if and when the legislation comes into force."


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: Oh, my hon. friends opposite laugh at our concern for the niceties of parliament but the niceties of parliamentary procedure are important. The other two letters, those dated November 25, 1955, and January 20, 1956, indicate changes that were made in the proposed legislation, and all they say that bears on the point now being discussed is that the Minister of Finance is authorized to inform the banks that the legislation to be introduced will be along certain lines. Surely it is clear, Mr. Chairman, that the only undertaking the minister gave to the banks was that legislation would be introduced. That has been done, but surely parliament has the say as to what should happen to that legislation.


Mr. Tucker:: I should like to say a word with regard to the rate of interest. In promising to introduce this legislation the government was doing as the farm leaders asked them to do at that time, and naturally they wanted a workable system introduced. There is no use introducing a system whereby the banks would not get a guarantee unless they lent money at a rate of interest at which they would lose money. In other words, if you set the rate of interest too low it would mean that you would be putting a plan into effect that would not work at all. Therefore the only question so far as I am concerned is whether the rate of interest has been set as low as it possibly can be and expect the plan to work.
On that basis I remember what happened when we were putting through the Farm Improvement Loans Act. At that time some

of us felt the rate ot interest should be lower that 5 per cent. We heard a great deal of evidence and it all went to show that if the rate were set at 4 per cent the banks could not lend at that rate without losing money. They pointed out that if we put the rate of interest at 4 per cent we might just as well not pass the bill because nobody would be able to borrow money under it at that rate.
The majority of the members on that committee came to the conclusion that, although they would have liked to see a lower rate because there was a partial government guarantee, it was more important to the farmer to be able to get money to improve his farm and buy machinery and so on at 5 per cent than for them to make heroes of themselves by setting the rate at 4 per cent with the result that the farmer would not get any money at all. That is why the rate was set at 5 per cent, and obviously when it was set at 5 per cent at that time it was based upon the cost of doing business of the banks and of the money.
A little over one year ago this whole question of cost of making small loans was dealt with in the banking and commerce committee where we had evidence of the experience of the Canadian Bank of Commerce in making small loans. I should like to refer quickly to the evidence given there. During the year ended October 31, 1953, the average amount of loans was $515. During the whole period the plan had been in operation the average amount was smaller than that but that was the average during that year. The bank was charging an effective rate of interest of 10 [DOT] 46 per cent, almost 10J per cent. Against the plan it charged 2-05 per cent as the cost of providing the money, so it was not charging a high rate for the cost of the money.
In spite of only charging roughly 2 per cent, the cost of doing business in making small loans was such that their operating profit before income tax was 1-46 per cent. In other words, while they charged only 2 per cent against their banking operations for the money they put into the small loan plan, after taking into account the cost of making these small loans their operating profit before income tax was 1-46 per cent. The cost of operation in making these loans in small amounts was such that even though they charged 10-46 per cent to the borrower and were only getting interest at 2 per cent representing the cost of providing the money they only had a profit of 1-46 per cent.
If you take what the bank got out of it by way of interest and profit, 2 per cent and 1-46 per cent, they got 3-46 per cent and

charged 10-46 per cent. So according to the actual figures it was costing the bank 7 per cent to conduct this business. That is 7 per cent over interest. I grant that if loans average more than $500, as they probably will be in this case, it will cut down the cost of doing business, but I ask hon. members this question. If, over and above the cost of the money, it costs the bank up to 7 per cent to administer a small loan plan of this type, even with a low rate of interest of roughly 2 per cent, then are the banks not going to say that they will lose money if we only give them 1 per cent over the 2 per cent representing the cost of the money to do business and will there be any money lent at all when, according to the evidence, it cost them 7 per cent to engage in the small loan business over and above the cost of the money?


Major James William Coldwell: Will the hon. member permit a question?


Walter Adam Tucker: Surely.


Major James William Coldwell: There was no guarantee of those loans by the government and, second, there was no advertising of the loans and therefore no advertising expense.


Donald Methuen Fleming: And third, they are not secured.


Walter Adam Tucker: The amount spent on advertising by Canadian Bank of Commerce was only [DOT]15 per cent, just a little over one-tenth of one per cent. So that does not affect the argument. With regard to the partial guarantee, obviously if you say to the banks that you will guarantee them against losses but will only let them collect a rate of interest on which they are going to lose money on every bit of business they do, then you might just as well kill the bill. Everybody must know that. In trying to get a deal with the banks whereby the farmers would get some money the government had to make a deal whereby the banks were likely to lend some money, and had the government done differently the farmers of western Canada would have had a right to complain.
I think I understand the situation of the farmers of western Canada. They need money to meet their living expenses and so on. A rate of 2 per cent on $1,500 for six months would be $15.
I do not think that any farmer would appreciate it or thank us for saying that we are so worried about wanting to save you some interest we are going to prevent you from paying that $15 of extra interest, even if it means you will not get any money at all. If my hon. friends opposite really believe that the farmers need money to carry them
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over, surely they would not vote for an amendment that would mean this bill was, in effect, killed and the farmers would not be able to get any money at all under the plan. I will have no hesitation in voting against this amendment because the effect of the amendment would be to say to the farmer, we are being so concerned about you that we are going to say you cannot borrow at all. Of course, we will cover it up by advancing the idea we are in favour of low interest rates.
I believe in facing the facts. We have the experience under the Farm Improvement Loans Act and the evidence given to the banking and commerce committee in regard to the Small Loans Act. In the light of the evidence that has been put before the banking and commerce committee over and over again, nobody could suggest that the banks could hope to engage in this business at 3 per cent without losing a lot of money. Then, do my hon. friends opposite say that if the banks are invited to go into the lending business at a point where they are going to lose a lot of money they are going to put out money to the extent required by the farmers? They know themselves that the effect of carrying this amendment would mean that the farmers would get no more money under this plan. Is that what they want? Well, it is not what I want. I should like to see the farmers receive the benefits the government intended them to receive under this legislation, and at a reasonable rate of interest for small loans, namely 5 per cent. I have no hesitation in saying that I intend to vote against this amendment.


George Alexander Drew: Mr. Chairman, to use a term that was coined by the Minister of Trade and Commerce, this is rapidly degenerating into a debate. There are one or two things that have been said by the hon. member for Rosthern that require some comment. First of all, there is one correction, and that is that the act that was being considered by the banking and commerce committee was not the Small Loans Act, but the Bank Act. There is also the fact that the kind of loans that were being considered were very different from these. There was no guarantee. There was no security such as there is in this case. In addition to that there was the very large cost of advertising and solicitation to get the loans. The position is not at all comparable.
I have said, without any reservation, that we have not the facts before us that would make it possible to determine exactly what the percentage should be. I view this amendment more in the light of an assertion that we have a right to demand an examination

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of the interest rate, rather than a declaration that we know whether it should be 3 per cent or any other amount. I quite recognize that what the Minister of Trade and Commerce has said is correct. We have the right of discussion, but it is more than the right of discussion that is involved. There at least must be the inference that the government is prepared to listen to arguments. After all, the right of discussion has no meaning in the light of the proposition put forward by the Minister of Trade and Commerce when he said, we do not question that you have the right of discussion but we question whether you have the votes. In other words, it does not make any difference what you say; you go ahead and talk, but if we have the votes we will just simply go ahead. Of course, implicit in everything that has been said is that we will crack the whip and our followers will toe the line.
In this proposition there is more than the substance of the amendment. It is a question of whether discussion in this house is still an attempt to try to reach some reasonable conclusion. We have put forward a proposition that has been dealt with, and I cannot suggest to you whether or not it was wise, that is that this should have been referred to a committee.


An hon. Member:: You are out of order.


George Alexander Drew: I am not out of order at all. We would have provided an opportunity in that way. I still suggest to this government that in the light of the discussion that has taken place this morning they consider the advisability of providing an opportunity not only to the farmer representatives but to the representatives of the banks as well, so that we could have the facts before us in regard to this case. In so far as the argument used by the hon. member for Rosthern is concerned, I can only express some measure of satisfaction that he did not make that argument over television in western Canada or some more television sets might have been endangered as a result.


Victor Quelch: I find it very difficult to believe that the hon. member for Rosthern was really serious when he was trying to get us to believe that making loans under the small loans branch of banking is comparable to making loans under this legislation. The loans under the Small Loans Act are very small. They go down to $50. The average loan under this legislation to date is $800; that is a fairly large sized loan. Is he going to suggest that making loans of an average size of $800 is similar to making loans under the small loans branch, which is a very special' ized form of making loans? The fact is that

the small loan companies have been charging 2 per cent per month in the past and that shows a rate very much higher than general banking practice. The fact that the Bank of Commerce was charging around 10 per cent for small loans while they were charging an average of 5 per cent or 6 per cent on their general banking practice shows the big difference between the two.
As the Leader of the Opposition has pointed out, under the small loans branch the banks have the cost of investigation, the cost of a chattel mortgage and various things. Under this legislation they have wheat in the bins. In addition, the farmer goes to the banker and signs certain statements before the loans are made. Then the bank does not even have the cost of collection. The loans are collected by the elevator companies. The two are totally unrelated, therefore. Of course, on top of that the loans are guaranteed by the government. The hon. member should think twice, therefore, before he asks members in this house to believe in what I call the ridiculous suggestion he just made.


Mr. Argue:: The hon. member for Rosthern has made a real plea in favour of what I consider to be a very high rate of interest. I do not believe his argument is well founded when he compares this legislation to the small loans legislation. His argument was not well founded according to his own words because he pointed out the cost of a small loan was somewhere around 7 per cent and therefore if loans under this legislation cost less the banks would be losing money. I do not believe even the hon. member for Rosthern thinks the banks are going to lose money under this legislation.
We are going to*support the amendment because it goes at least part of the way towards the end we have been attempting to accomplish. No one has said money could be made available without any cost. Loans or cash advances cannot be made available free, without some charge to somebody. But we have continuously said that there should be no charge to the producer. I take it the hon. member for Macleod is now saying that if we have lost the fight to have advances made without any cost at all, the next best thing is to attempt to get the 5 per cent reduced. On the other hand, the hon. member for Rosthern is arguing in favour of a high interest rate, namely 5 per cent. Some years ago he was well known for ideas about monetary reform. A large part of those ideas was to get interest rates down. He argued this morning to maintain high rates of interest. The hon. member for Rosthern is arguing that the full cost of any advance or any loan that

is made to the farmer, plus the profit involved, must be borne by him. If the amendment should carry there will be nothing to prevent the government from moving a further amendment to this legislation to make up any loss that might be incurred, if there should be any loss, and I am not convinced there would be at the rate of 3 per cent.
What the hon. member for Rosthern is arguing is that the farmer shall pay the whole shot. The hon. member for Macleod is saying that we at least should be making some contribution as the parliament of this nation toward seeing that the farmer gets a loan at a reasonable rate.


Charles Edward Johnston: I wish to say a few words on this. When the hon. member for Rosthern was speaking I attempted to ask him a question but he did not want to be interrupted at that point.


An hon. Member:: That is his privilege.


Charles Edward Johnston: That is his privilege and I am taking advantage of my privilege now in asking the question. At this point I am not much concerned whether he answers it or not. The hon. member was indicating that it costs the banks about 2 per cent on their money to carry these small loans. Then he said the cost of administration was about 7 per cent, making a total of 9 per cent. Of course, he did state quite emphatically that the type of loan he was describing then, and the type of loan which the Bank of Commerce was making, which was in effect a small loan, was the same as the loan contemplated in this legislation. He made no differentiation at all; in fact, he said they are the same. Now, that would mean-


Walter Adam Tucker: I did not say they were the same. I said the average amount during the past year has been $525. I said these loans would be bigger, and therefore the cost would be lower. But I said it would cost 7 per cent to administer an average loan of some $500 odd. They certainly could not administer loans of twice that for one per cent.


Charles Edward Johnston: I do not think the hon. member should be making a speech now. I asked for the privilege of asking a question a while ago and the hon. member refused me that privilege. He definitely said- and I am sure the record will bear this out-that they were very similar loans. Let there be no misunderstanding about that. He went on to point out that an interest rate of 5 per cent was, in his opinion, a reasonable one. And yet he pointed out that every time
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the banks make a loan under the small claims act they have to charge around 10 per cent. That would lead us to believe-and he will have to correct me if I am wrong in this interpretation of his remarks, I do not think I am-that every time the bank would make a loan to a farmer under this legislation they would in effect be losing 5 per cent. That is just nonsense, Mr. Chairman.


Walter Adam Tucker: Mr. Chairman'-


Charles Edward Johnston: Wait a minute until I get through; you sit down. You would not give me permission to ask you a question, so just keep your seat.


Mr. Stick:: Dictator.


Charles Edward Johnston: It is quite evident, Mr. Chairman, that the hon. member for Rosthern is now trying to salve his own conscience in his support of the government introducing this legislation. Maybe I should be excused for using that word, but I have used it and I shall have to let it stand. I am sure the farmers of western Canada, and particularly of Saskatchewan, will not be too pleased when they find that the hon. member for Rosthern is upholding in every way he possibly can this high rate of interest when in fact he knows it should be lower than that.
The amendment moved by the hon. member for Macleod would not prevent farmers from getting money under this legislation. If it were carried-and I hope it is carried- it would say that the farmers would now be obliged to pay 3 per cent instead of 5 per cent. In fact, I am sure the farmers of western Canada deserve the benefits which would be derived by them from parliament carrying this amendment.


Edward George McCullough: Mr. Chairman, it took a certain amount of courage on the part of the hon. member for Rosthern to rise and defend the 5 per cent interest.


Walter Adam Tucker: It took no courage; it was just a matter of honesty on my part.


Edward George McCullough: Perhaps I should have said it would take more courage in other parts of the country to say it.
When the hon. member tries to make an argument in justification of the high rate of interest that is to be charged farmers under this legislation he points up the fight that we have been trying to make that we should have this thing done at a smaller cost to the western farmer. If it is true that, in the words of the hon. member for Rosthern, the banks are going to have difficulty in even making a profit on loans to farmers at the

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high rate of 5 per cent interest, then I think there is every justification for the case that we have been trying to make that loans should be made through the Canadian wheat board, and that this government should give the responsibility and the power-


Edward Turney Applewhaite: Order. I am afraid I must point out to the hon. member that the amendment we are now discussing is not whether the loans should be made through the wheat board or through the banks, but whether they should be made at 5 per cent or 3 per cent.


Edward George McCullough: Well, Mr. Chairman, I am going to try to confine myself within the orbit of the discussion. There is a discrepancy between the interest cost and how the loans should be made to the farmers. We are now discussing whether the interest rate should be 5 per cent or whether we should support the amendment of the hon. member for Macleod to reduce the rate to 3 per cent.
It is significant that under this legislation the elevator agents are to be the people responsible for collecting the money. They are to be responsible for making the returns to the bank. When we come to clause 9 of the bill we shall find that those elevator agents who are designated by this government are to be responsible for collecting those loans. I do not know what they are to be paid for it; I do not know how far their responsibility will go. If we had designated the wheat board as the lending agency, had advanced money to them and then had them collect it through an entry in a permit book we would have had a simple process, and I do not think the arguments made by the hon. member for Rosthern could have been maintained in any way.
If this complex process is going to cost the farmer 5 per cent interest, and if the banks are not going to make substantial profits, it seems a clumsy way in which to try to get a little money into the pockets of the farmers.


Mr. Hees:: Mr. Chairman, I should like to ask the minister just one question. Did the government, in its negotiations with the banks, ask them to handle those loans at less than 5 per cent? If so, what was the banks' reaction?


Clarence Decatur Howe: Now, Mr. Chairman, I have already said that I was not present at the negotiations. The negotiations with the banks were conducted by the Minister of Finance. I have the statement of the Minister of Finance on Hansard that negotiations extended over several days. If there had not been an attempt by the Department

of Finance to get a lower rate of interest I do not know why the negotiations should have taken so long.


George Harris Hees: Mr. Chairman, I wonder whether the minister would ask his colleague, the Minister of Finance, to come into the committee and answer that question. It is one of the key points around which this whole clause revolves. If the minister has not the answer, will he ask his colleague to come into the house-he must be close by-and answer the question.


Clarence Decatur Howe: Has my hon.
friend suggested he might change his vote if he had more information?


George Harris Hees: Mr. Chairman, that is typical of this government's attitude towards discussion in this house. I have asked a straightforward question, and I would like a straightforward answer on a very important point, a point which is extremely important to the farmers who are asked to pay this interest rate on their loans. If the minister does not have the answer on this important point, would he ask his colleague to come into the house and give the answer.


Clarence Decatur Howe: Mr. Chairman, my colleague is attending an extremely important meeting at the moment. I think the answer I have given on his behalf is sufficient. He has already said that he negotiated long and arduously. I do not know if he could give you any more information if he were here.


George Harris Hees: That is not an answer to any question. The answer the minister has given to my question is that we have discussed all aspects of this question and at the end have come to a decision which is reached in the bill before you. That is absolutely no answer, and we can therefore assume from this, Mr. Chairman, that the government did not ask the banks to handle these loans at less than 5 per cent, but it simply offered the banks 5 per cent and that is the sum total of this matter.


Mr. Carter:: Mr. Speaker, I rise to point out to my hon. friends opposite that the effect of this amendment will be to give a much lower rate of interest to farmers than that which they voted to give to the fishermen last year. For that reason I am unable to support it and I ask them how can they honestly support it if they believe in the principle of equal treatment for all?


Hazen Robert Argue: We will extend it to the fishermen.


Willis Merwyn (Merv) Johnson: Mr. Chairman,
I think there is one fundamental thing we

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have to keep in mind in discussing the interest rate proposed by this legislation. It is that you cannot make a silk purse out of a sow's ear. By amending legislation that is unsavory you can perhaps make it smell a little better. We in this group are in favour of the recommendation advocated by the farmers of western Canada. It is proposed by this amendment the legislation might be slightly more palatable, but I think the principle we are concerned with is the desirability of introducing legislation that meets with the favour of western Canada. By amending the legislation certain groups are accepting the principle of the interest payment, which would indicate that they are perhaps showing some favour towards the bill. I would point out that in honesty to the people of the Kindersley constituency who are unalterably opposed to this type of legislation you cannot improve it in this manner to meet the desires of the farmers in my constituency.


Mr. Hahn:: It would appear from the discussion that is taking place at this time that the minister would have been well advised to have brought this to the committee on banking and commerce or the committee on agriculture and colonization either of which could properly have dealt with it; however, we must ask our questions here.
I was rather intrigued by the hon. member for Rosthern when I discovered he was persuading himself that the interest rate was perfectly justified especially when I read the act. I understand that the act was negotiated between the Minister of Finance and the banks.
Clause 3, sub-clause 1, paragraph (d) of the act specifically says the interest rate charged by the banks on the loan did not exceed 5 per cent per annum. That would indicate to me that it is not mandatory to charge 5 per cent and that the banks themselves recognize that they could have given interest at a rate lower than 5 per cent. Therefore I would suggest to the hon. member for whom we all have a great deal of respect that certainly he should have taken that little phrase, "did not exceed 5 per cent" into consideration before having made those particular remarks.
The hon. member for Kindersley earlier in the debate asked certain questions of the minister in respect to a quarter-section farmer and the minister in reply indicated that it would take longer than six months in some cases to repay this loan. However, the bill itself does not indicate that and there is no provision for that. I find here that the amount of the loan is payable on the first day of
October. If a quarter-section farmer makes a loan in May or June that does not provide a six months period and then the bank can come to the government and expect a repayment of the guaranteed loan. I was wondering if possibly the minister might elaborate somewhat on that point and indicate how we are protected against an instance such as that. Probably the farmer wishes to pay his bill but he does not have the money because he has not been able to deliver his wheat. The farmer is going to be put in the awkward position of having a loan come due and the banks, of course, can come to the government for the guarantee. Would the minister care to comment on that?


Edward Turney Applewhaite: I would suggest that that question could be properly asked under the operative part of this bill, but it would widen unjustifiably the discussion on the amendment which we now have before us. I would suggest to the hon. member that when the amendment has been disposed of he should then ask his question.


Frederick George Hahn: With all due deference to your remarks, Mr. Chairman, I would point out that the hon. member for Kindersley did raise this question in the course of the discussion on this amendment and that was the reason for my bringing it up at this time.


George Harris Hees: As the Minister of Finance is now in the house, will he answer my question? Were the banks requested to handle these loans at less than 5 per cent, and if so, what was the reaction of the banks to that request?


Walter Edward Harris: I understand that in my absence at a meeting of the treasury board the Minister of Trade and Commerce has already quoted what I said last night. I answered that question last night and I do not propose to add anything to the answer I gave at that time.


George Harris Hees: There has been no answer given to that question. The minister simply said that all matters pertaining to the loans were discussed and the bill is now before us as we see it. There has been no answer given to my question. I am asking you to give me a straight answer to a straight question. Were the banks requested by the government to handle these loans at less than 5 per cent, either yes or no. And if so, what was the reaction of the banks to that request? That is a simple straightforward question and I should like a direct straightforward answer.


Some hon. Members:: Question.


Edward Turney Applewhaite: Shall the amendment carry?

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George Harris Hees: Mr. Chairman-


Some hon. Members:: Sit down.


Ernest George Hansell: All I am going to say on this particular point is that it is quite obvious to me that the government in its negotiations with the banks did not fight for low rates of interest. If there had been any controversy about it the Minister of Trade and Commerce would have known of it.
A further proof is this. In the return that was brought down, return No. 189, the first letter that was written on October 28 by the Minister of Finance to the president of the Canadian bankers' association states in the first paragraph:
May I refer to the negotiations that have been carried on between representatives of the chartered banks and representatives of the departments of finance and trade and commerce with a view to facilitating loans to grain producers in western Canada.
It then goes on to set out certain conditions, the third one being:
(iii) that interest on the loan does not exceed 5 per cent simple interest.
That was the first letter. I do not think there is much controversy there. In the second letter that was written certain changes were made, but there was no change in the interest rate. Some further changes were made in the third letter that was written but it contains no suggestion of any reduction in the rate of interest. I take it from that that the rate of interest was not a controversial matter, that the government did not fight for a lower rate of interest but simply suggested that 5 per cent was all right and they would let it go.


Mr. Habel:: May I ask the hon. member what rate of interest is charged by the Alberta treasury branches for farm loans and is it not a fact that even at that the treasury makes good the losses?


Ernest George Hansell: I cannot answer that definitely, but I can tell you what they charge me when I go to the Alberta treasury branch for a loan. They charge me 5 per cent.


Stanley Howard Knowles: Does that mean that you had not received your yearly pay?


Ernest George Hansell: I have had to borrow. I
think the banks would charge me the same rate. I have no objection to paying it, but that is not the principle involved here. In this case the farmers are facing an emergency and this bill has been brought down as a result of that emergency.
I may say that the Alberta treasury branches would have liked to come under this bill. They wrote to this government and asked if they could receive the same
[The Deputy Chairman.]
guarantee as the banks, but they were refused the same protection. I do not know whether they would have loaned money under this bill at a lower rate of interest, but it is conceivable they might have. You cannot compare what the treasury branches are doing now with what they might do under protective legislation of this kind. That is my answer to my hon. friend and I think it is quite a reasonable answer. They are lending money to municipalities at a very low rate of interest.


George Harris Hees: In view of the refusal of the Minister of Finance to answer a straightforward question, we can only take it- I would like to hear him deny it if it is not so-that the government was perfectly satisfied to have the farmers charged 5 per cent and made no effort to have the interest rate reduced. I would assume also from the government's attitude in this matter that the government suggested the 5 per cent rate of interest.


John George Diefenbaker: Mr. Chairman, all the conclusions which the hon. gentleman has just mentioned seem to be conclusively established by the minister's failure to answer, but I think we can get this cleared up. The Prime Minister is here and he is the leader of the government. I ask him a simple question: Were the banks approached to accept less than 5 per cent?


Mr. St. Laurent (Quebec East):: The banks were approached to make loans to farmers under the best possible conditions under which they would agree to make such loans.


Mr. Yuill:: Mr. Chairman, for the peace of mind of hon. members opposite who have been inquiring about the interest rate charged to municipalities in Alberta I would like to tell them that I have been the mayor of Barrhead, Alberta, for 12 years. During that time we got loans from the provincial treasury, and I can also tell you something about grants. On more than one occasion we were able to borrow money for as low as 2 per cent when we were putting in our water and sewer facilities. We borrowed other money at 3 per cent, some at 3J per cent but never more than 3J per cent.
With regard to municipal assistance, may I say that this town of less than 2,000 population received a direct gift of $13,642. We got enough from the Alberta government to pay them back 100 per cent.


Edward Turney Applewhaite: I thought the hon. member had risen to discuss comparable interest rates, but I must point out that we are not discussing municipal grants.


Mr. Blackmore:: Mr. Chairman, I think the noisy people across the way are beginning to see how completely ridiculous their position is. When a government really wants to help people it goes to work and does something tor the people, not try to gouge them the way this bill does.
I should like to draw the attention of the hon. member for Rosthern to one or two facts which he knows very well. If the Bank of Canada has a $100 bond of the dominion government submitted to it, it can create $100 without its costing anybody anything. It could just as well be a $100,000 bond. If every dollar of the money to be loaned to farmers was obtained from the source from which the dominion government can get money, the Bank of Canada, that could be done by simply writing a Dominion of Canada bond and putting it in the hands of the Bank of Canada. I know the hon. member for Rosthern knows that. It is most important that every hon. member knows that and that the country knows that.
I should like to know whether the hon. member for Rosthern will take the untenable position that the dominion government should not have ample money created by the Bank of Canada in order to lend at 2 per cent.


Edward Turney Applewhaite: I think I should point out that the hon. member for Rosthern should not be permitted to answer that question as we are not dealing with the question of government manufactured currency. We are dealing with the question of bank loans.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Edward Turney Applewhaite: The committee has under consideration Bill 82, clause 3, and the amendment thereto by Mr. Hansell. Is the committee ready for the question on the amendment?


John Horne Blackmore: Mr. Chairman, when the committee rose, I had just asked the hon. member for Rosthern if he could deny the fact that the Dominion of Canada could get money completely free from the Bank of Canada and, if the Dominion of Canada could get that money, whether or not there was any reason why they should not subsidize the interest rate of 5 per cent so as to reduce it to 2 per cent. Money that would be created by the Bank of Canada would be completely free. It would not come from the taxpayers. It would not constitute a debt. Consequently, the very first thing the hon. member for Rosthern has to do before he can establish
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the necessity of having 5 per cent interest on these loans is to show that in this case the Bank of Canada should not be used to bring down the interest rate to two per cent.
I believe that the considerations I have brought before the committee are such that the committee simply cannot afford to support the proposal for 5 per cent interest.


Clarence Decatur Howe: Mr. Chairman-


Hazen Robert Argue: Question.


Clarence Decatur Howe: I think there are several questions that need to be discussed at this stage.


George Alexander Drew: What is this, a filibuster?


Mr. Ellis:: A one-man filibuster.


Clarence Decatur Howe: In the first place I was interested in the speech by the hon. member for Eglinton. He said there was no agreement between the government and the banks. There were two letters written-


Donald Methuen Fleming: On a point of order, the minister has said that I said in debate there was no agreement between the government and the banks. I did not say that. What I said was that there was no legal obligation created. I said there was simply a moral obligation, created by the letters from the government, to introduce the legislation.


Clarence Decatur Howe: That is just the point I was going to make. There is no legal obligation created by the exchange of the letters, but certainly a moral obligation, which just shows that you have to be very careful with whom you do business, particularly financial business. I shall remember that remark by the hon. member for Eglinton.


Donald Methuen Fleming: I hope you remember my remark and not your paraphrase of it. Is the government filibuster over?


Mr. Weir:: No, Mr. Chairman, I am rising on a matter-


George Harris Hees: Government filibuster.


William Gilbert Weir: I do not know why government members should not participate once in a while in a debate.


George Alexander Drew: Neither do we.


William Gilbert Weir: It should not be monopolized by the opposition. As a matter of fact, I am rather surprised they should continue this debate so long if this measure is so bad. Why not let it go through and let the public decide whether or not they want to pass their judgment in favour of it or otherwise?


Alfred Claude Ellis: Why not have a vote now?


William Gilbert Weir: I was interested more particularly in this item of interest, having to do with

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the amendment that has been proposed by one of the members of the Social Credit group.


George Harris Hees: There are enough in now.


William Gilbert Weir: For one thing, what it amounts to-


Alfred Claude Ellis: Are there not enough Liberals in the house now?


George Harris Hees: Here they come.


Donald Methuen Fleming: You can sit down now.


An hon. Member:: Here they come.


Donald Methuen Fleming: Here they are to toe the party line.


William Gilbert Weir: All I was going to observe during those interjections was that my wife thinks I am a pretty good looking fellow, and I am quite prepared to let you look at me.


An hon. Member:: Order. Keep to the bill.


An hon. Member:: What has that to do with wheat?


William Gilbert Weir: What I was leading up to was this. I was associated for some years with a farm organization that gave a great deal of credit-


An hon. Member:: Not Social Credit.


William Gilbert Weir: -to matters affecting the costs of production for agricultural producers. Among the items to which they gave a great deal of consideration was the matter of credit, and one of the things that we learned in our experience in those times-


Donald Methuen Fleming: Was to stall.


William Gilbert Weir: -was that the more prior the claims that were placed against fresh mortgage securities, then the higher the interest rate was bound to be, and I think that is sound. Now I come to the other point, and that is whether or not an interest item should be charged in making loans to individual farmers. In spite of what some of my hon. friends on the other side are arguing, I think it is logical and fair that an interest item should be charged. I am not going to argue as to what rate of interest that should be.


Donald Methuen Fleming: Are you going to vote for that?


William Gilbert Weir: I am going to vote for the bill as it is,-


Donald Methuen Fleming: Toe the party line.


William Gilbert Weir: -subject to any changes which may be made that will improve it.


Some hon. Members:: Oh.


William Gilbert Weir: What are my hon. friends arguing about? The government has provided in this measure for guaranteed loans to farmers through the banks at a rate of interest of five per cent. I presume that, had a lower rate of interest been secured from the banks, the guarantee required would have had to be higher. I think that is logical and reasonable, and that is the approach that has been made here. Interest on a loan of $1,000 at five per cent for a period of six months, if I have calculated correctly, amounts to $25. If the same loan is secured at four per cent, it amounts to $20. What is this argument about between a four per cent and a five per cent loan? For a six months period on $1,000, it means $5. My hon. friends also argue on the basis that this money should have been provided through the wheat board. If that is their argument and if they maintain that the expense thereof should be borne by the wheat board, I say that is unfair as an item to be charged under operating expenses.


Alfred Claude Ellis: What clause are you speaking on?


William Gilbert Weir: I am talking on the interest item on which you have been talking all morning. Some people will be borrowing by means of these bank loans, and others will not. It is wholly unfair to say that the man who does not need to borrow should pay the interest costs of the man who does need to borrow. I shall go one step further in the same regard on this item. I look to the man who may have some securities but has a right to borrow, under the argument of my hon. friends opposite, an interest-free loan, but I go further and I take the case of a man-there are many such-who may have a mortgage on his farm, on which he is paying interest. He is able to sell a certain amount of grain in his deliveries this fall and from that should have paid off his mortgage. But, instead of paying off his mortgage, he did not do so, but retained that money that he had secured from the sale of his grain for pocket money to pay expenses and so forth. Is anybody going to say that somebody else is to get an interest-free loan while that man is continuing to pay 5 or 6 per cent on the mortgage money he has borrowed? That to me seems wholly logical, and there is no argument on it.
I doubt very much if my hon. friends opposite could stir up very much interest in the country over the item of interest itself. When farmers get accommodation of this kind, I think they would be expected to pay interest on it. I simply come back to what I pointed out earlier, that the argument here

seems to be over a matter of $5, between a $1,000 loan for six months at 5 per cent as compared with the same loan for the same period of time at 4 per cent. That is all I wish to say on that.


Alfred Claude Ellis: What about 3 per cent?
Amendment (Mr. Hansell) negatived: Yeas, 52; nays, 88.


Edward Turney Applewhaite: I declare the amendment lost. Shall clause 3 carry?


Hazen Robert Argue: No, Mr. Chairman. Will you put the question on the clause?
Clause agreed to: Yeas, 92; nays, 54.
On clause 4-When minister not liable.


Donald Methuen Fleming: Mr. Chairman, there is a question that arises on clause 4 of the bill. In effect this clause of the bill puts every one of the chartered banks in Canada on an individual basis in applying to the loans made by that particular bank certain limitations of the total extent of the government guarantee. May I ask the minister in the first place if all the banks have indicated that they intend to participate in the scheme of these loans? I have a second question that will then arise.


Walter Edward Harris: Yes, all the banks are participating.


Donald Methuen Fleming: Then clause 4 means that with respect to each one of the chartered banks and looking at any one of them individually there are certain over-all limitations on the extent of recovery against the government under the guarantee. Would the Minister of Finance indicate to the house just how this is going to work out? I should think it will necessitate very close supervision from day to day unless the banks were prepared to proceed on the assumption that the loss on such loans would be a mere trifle and that they had no need to worry about the limitation that clause 4 puts on the government's responsibility under this guarantee. For illustration, what is the extent of the lending of individual banks now in relation to the limitations imposed by clause 4?


Walter Edward Harris: I regret that I cannot give that information. As a matter of fact, as a result of the inquiries in the committee last night I tried to ascertain this morning what the figures were for January but they are not compiled yet. Therefore the only information I can give is the total number of loans and the total amount involved up to the end of December, and I think that was given in a return.


Donald Methuen Fleming: We have already had that, but I was wondering how with respect to any
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individual bank clause 4 involving this matter of the over-all limitation is going to apply at the present time. I should think that the banks are going to want to have some day-to-day over-all control on the loans that their individual branches are making in view of the over-all limitation applied.


Walter Edward Harris: I do not see that that would be necessary. The guarantee is unlimited to the extent of $50 million. The only distinction is that the percentage of guarantee diminishes after $100,000. But in view of the fact that up to the end of December the amount involved was about $8 million I would think there is really no reason why any bank would feel that it was making so many loans that it would exceed the $50 million.


Donald Methuen Fleming: I realize it must apply to each individual bank, but can the minister give us any over-all idea at all how this particular clause will apply to any individual bank to the extent to which that bank has already participated in the scheme of loans?


Walter Edward Harris: I think the clause is quite clear. Any one bank is guaranteed in the manner indicated by subclause (a) (i) and subclause (a) (ii). We will of course be expected to report to parliament in any event, and if my hon. friend will let the matter rest I will be glad to give the January figures as soon as they are received and also, if I can, break them down by banks. He will then see the extent of participation by any one bank.


Hazen Robert Argue: Could I ask that when those figures are given they also be broken down by provinces?


Walter Edward Harris: Oh yes, we can do that.


[Stage Direction]
Clause agreed to.
On clause 5-Regulations.
John George Diefenbaker: I should like to ask the
minister whether or not as of this date forms of application and directions, etc., have been drafted and if the minister has those forms available. Would the minister mind tabling the forms that have been prepared so far? As has already been stated, the original forms contained such a complete catechism that they naturally aroused a great deal of antagonism. The newer form does not have the same effect on the applicant as did the earlier one. Would the minister say what regulations, if any, have been passed as of this date? If regulations have not been passed, what forms are being used and to what degree are the banks directed to make loans on the basis of qualified applicants measured by the formula that the minister referred to, namely, that the borrower shall be able to establish that he has in fact a certain number of bushels of wheat on his premises? I should

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also like to know whether any form or return is made by the banks under this or any other section setting out the names of applicants who have applied for loans and have been turned down.
I believe it was the minister who stated the other day he did not think there were very many. I have no idea of the numbers but I do know that in the course of the last three weeks I have received letters from 17 or 18 farmers who were turned down, who had on their premises the necessary wheat, but having advised the local bank manager as to the purposes for which they desired the money, namely the payment of some current liabilities other than for actual groceries and the like, the explanation given in these various cases was that these loans were not intended to cover instances such as were contemplated by the intended borrower. I should like the minister to give some kind of assurance because farmers are asking, what is this legislation? Why is it that unless an applicant is practically in a position where he could actually borrow on his own security, in certain branches of certain banks the application is being denied?


Clarence Decatur Howe: We have been told several times in this debate, Mr. Chairman, that we cannot have regulations when the bill has not been approved.


John George Diefenbaker: But you have tentative ones.


Clarence Decatur Howe: We have tentative ones. I am told that the forms that are used for applications for loans and certain other forms were tabled in the house this morning in the usual way. My hon. friend says that people who have the required amount of wheat have been turned down. I should like to know what the other circumstances were, how many liens were filed on the wheat. So far as the government is concerned, the two requirements are- that borrowers give evidence that they have the wheat that is required by the amount of loan for which they apply, and that it is not pledged under section 88 to some other bank.
What was the other problem?


John George Diefenbaker: I asked generally about the use of the money and the refusal of the bank on the basis of a proper application.


Clarence Decatur Howe: Yes. The bank has no right to ask what the money is going to be used for. Such information is not required by the government, and although my hon. friend says it is required by the bank, I cannot challenge that statement, but I doubt it. I have received many letters myself from people who expressed surprise

at the ease with which they obtained loans. One said he had never met a bank manager before but was delighted with his reception and with the ease at which the loan was forthcoming. I cannot believe that, if there had been any great resistance in carrying out the spirit of this legislation, I would not have heard about it before directly from the persons concerned.
Then, the hon. member asked if the application for a loan was filed with Ottawa. The applications for loans that are granted are filed with Ottawa, and must be, because Ottawa guarantees each individual loan. I think that answers the question.


John George Diefenbaker: Would the minister also indicate the machinery? I am a farmer who goes into a bank and signs an application. Is it still a fact that that application has to be sent to Ottawa for consideraion here? If not, what is the explanation for the delay between the time of the application and the granting of the credit where credit is granted?


Clarence Decatur Howe: Of course, the application is not sent to Ottawa as now suggested. The bank manager must determine whether that same grain has been pledged to another bank. He does that, as I understand it, by telephoning the clearing house at Regina. It should not require much time, and I doubt if it is a matter involving any great time. The bank manager has to make that one search of the title to the grain.


John George Diefenbaker: Is there any submission to the Bank of Canada or the officials here?


Clarence Decatur Howe: No, not before the loan is granted. When the loan is reported, it is filed here at Ottawa.


Hazen Robert Argue: I want to mention the point about the ease with which an applicant may be able to get a loan. I want to say the information I have received in many instances is contrary to the information or the letters to which the minister referred. I have information that it is very difficult for many applicants to get loans, and for many of them the amount of the loan they are able to obtain is a good deal less than that for which they have applied.
I want to ask the minister about some cases based on information given to me on the way particular applicants were treated. A farmer went into a bank and asked for a loan. He was provided with a loan of $700 on December 20. The minister has said it is not proper for the bank to take any part of the farmer's loan to discharge any other responsibility that the farmer may owe the

bank at that time. As I understood the information the minister gave to the house before, it is not proper for a bank manager to deduct from the amount of money the farmer may obtain under this legislation the amount of money that may be owing the bank at that time under the Farm Improvement Loans Act.
In this case at the time the application was made the bank did not attempt to deduct the amount owing under the Farm Improvement Loans Act. Here is the way the bank operated according to the information given to me. The farmer was given a loan of $700 on December 20. It was deposited to his account. The farmer came back 11 days later to take the $700 out of his account, but the bank had moved in in the meantime and taken $300 out of it to pay moneys owing under the Farm Improvement Loans Act. I am wondering if that practice is proper, and whether the bank had any right to use a back-door method to accomplish something I understand is improper, and perhaps even illegal. When a farmer is making an application, is it within the right of the bank to move in a few days later after the loan has been made and take from the amount the farmer received an amount owing to the bank?


Clarence Decatur Howe: The action of the bank some days after the loan has been granted is a matter for a lawyer. It has nothing to do with this act. Your correspondent had better discuss it with his lawyer to see whether the bank had a right to go into his account and take $300.


Hazen Robert Argue: What is the point of having this kind of legislation and having the minister say it is improper for a bank to deduct from the amount of money a farmer can obtain any amount he may owe under another act if the bank, a few days later, can come in and take that money from the farmer's account?


Clarence Decatur Howe: Surely you would not expect the Minister of Finance or the Minister of Trade and Commerce to guard that money for 11 days after it was paid to the farmer. If he had put the money in his pants pocket and walked away, you might as well expect us to protect him from being robbed on his way home.


Donald Methuen Fleming: There is a point I should like to raise with reference to one subclause of clause 5. The clause in general permits the governor in council to make regulations, and then paragraph (e) reads:
(e) respecting subrogation of Her Majesty to the rights of a bank with respect to a guaranteed loan.
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As hon. members are aware, the purpose of subrogation is to permit the guarantor or surety, in the event of default, to step into the rights of the person who has put up the loan in the first place. In this case, presumably the intent of the section is to permit regulations to be passed under which Her Majesty will be able to step into the position of the bank in relation to the rights of the bank as against the original borrower.
Now, while the regulations are not technically in existence, nevertheless the whole borrowing scheme is and I would like the minister to indicate what the provisions in regard to subrogation contain in this regard. Would he outline with particularity the procedure that is provided for and contemplated in the event of default? If it is clear that default has been made and the farmer is not in a position to remedy his default, what are the steps then to be taken?


Clarence Decatur Howe: I can read to my hon. friend the regulation under the 1951 legislation. I assume that the same regulation would apply in this legislation. The regulation reads:
Where payment is made by the Minister of Finance to a bank under the act in respect of any loss sustained by the bank as a result of a guaranteed loan, the bank shall execute a receipt in accordance with form "E" in the schedule to these regulations or a form to the like effect in favour of the Minister of Trade and Commerce, and the Minister of Trade and Commerce on behalf of His Majesty shall thereupon be subrogated in and to all the rights of the bank in respect of such loan and without limiting the generality of the foregoing, all rights and powers of the bank in respect of the loan, and in respect of any judgment in respect thereof obtained by the bank, and in respect of any security taken by the bank for the repayment thereof shall thereupon be vested in the Minister of Trade and Commerce, on behalf of His Majesty, and that minister shall be entitled on behalf of His Majesty to exercise all the rights, powers and privileges which the bank had or might exercise in respect of such loan, judgment or security, and to commence or continue any action or proceeding in respect thereof, and to execute any documents necessary by way of release, transfer, sale or assignment thereof, or in any way to realize thereon.


Donald Methuen Fleming: Mr. Chairman, that dealt with the first part of my inquiry. The minister has indicated that similar regulations are in contemplation here. There can be no doubt that the regulation he read from the 1951 act provides for complete rights of subrogation so that if similar regulations are passed under the authority of clause 5 we may assume then that Her Majesty will step into all the rights that the banks enjoy under their original contractual relations with the borrower.
This raises the question as to the policy as well as the question as to procedure. I would ask the minister whether he would deal with the second part of my inquiry? Assume that

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the fault has arisen; that the bank has satisfied itself that there cannot be any immediate recovery, and that the borrower is not in a position to remedy his default, put himself in good standing, and the government has been called upon to make good the guarantee. Is it the intention of the government in any such case to insist that the bank should first take judgment, or what process is the government going to insist that the bank take before it will be satisfied to pay under the terms of the guarantee? Assume that the circumstances have arisen under which the government has paid on the guarantee, what is the procedure contemplated and the policy in view on the part of the government with respect to enforcing the rights to which it is subrogated?


Clarence Decatur Howe: Mr. Chairman, the action would depend upon the circumstances of each individual case. I might tell my hon. friend though that in connection with the 1951 legislation there was no case in which judgment was obtained against the borrower.


Victor Quelch: Mr. Chairman,-


Donald Methuen Fleming: May I just follow that up? May I take it, then, that it is not the intention of the government to insist that the bank shall obtain a judgment and presumably a return of "no goods" on the execution issued under the judgment before it will pay on its guarantee to the bank?


Clarence Decatur Howe: Well, I am not going to say what the intention would be. I do not know what the circumstances will be. All I can say is, it is a matter of record that loans were defaulted under the 1951 legislation and no judgment against the debtor was obtained.


Donald Methuen Fleming: And the government made good its guarantee without insisting on a judgment being taken? Is that the minister's answer?


Clarence Decatur Howe: That is right.


Victor Quelch: Mr. Chairman, I was somewhat puzzled by the reply the Minister of Trade and Commerce gave to the hon. member for Assiniboia. I was wondering whether the Minister of Finance would agree with the minister's statement. I gather from what the minister said that if a farmer owed the bank money and then borrowed from the bank under this legislation, the only safe thing for him to do would be to draw that money out of the bank in currency, put it in his pocket and walk away with it; otherwise, there would be nothing to stop the bank from raiding that farmer's account and taking out the money he has in it.


Clarence Decatur Howe: I said nothing of the sort. The hon. member for Assiniboia was mentioning what had happened to cash deposited in the bank eleven days after the deposit had been made. My point was that the government's responsibility is no different then from what it would have been had the farmer, instead of depositing it in the bank, put it in his pocket and walked away with it. Eleven days earlier the government had passed out of the picture. The money passed out of the jurisdiction of the government when the loan was made and the money paid over.


Victor Quelch: The only safe way is for the farmer to take out in currency the money that he borrows and take it away with him because-


Clarence Decatur Howe: I suggest that is your statement, not mine. I made no statement that can be twisted or turned into that statement.


Victor Quelch: You said that eleven days later the bank might consider raiding the account. The logical thing for the farmer borrowing from a bank to do would be to deposit it in the bank. Then he could issue cheques against that. It might take eleven days for those cheques to come back to the bank, and by the time the cheques came back his account might be marked N.S.F. because the bank had in the meantime raided the account. That is a very unsatisfactory situation. There should be some understanding with the farmer. If this legislation is being passed for a specific purpose, then the bank has no right to seize the money when it is deposited.


Clarence Decatur Howe: I have only the word of the hon. member for Assiniboia on that point.


Hazen Robert Argue: I have the evidence in my hand.


Clarence Decatur Howe: Why not give it to a competent lawyer in your district and have him take action?


Victor Quelch: That is not the point. It should not be necessary for a farmer to have to go to the expense of hiring a lawyer to safeguard himself under this legislation. I should like to have an interpretation of the situation from the Minister of Finance. Does he think it is ethical for a bank to raid the account of a farmer when money is deposited under this legislation?


Walter Edward Harris: Mr. Chairman, I do not think we ought to be too much concerned about an isolated case. One does not know precisely what the situation may have been. As everyone knows, when a customer in indebted to a bank he may very well sign an authority

to the bank under which the bank may at any time take some sums of money for the purpose of adjusting accounts. In this particular case I have no doubt whatever that the hon. member for Assiniboia is correctly reporting what he has been advised. But let us suppose that at the time the borrower said to the bank manager: Now, I am going to have to spend about $500 to pay this and this, and when I get through with that I may have no other debts. But I want $900 now to be sure I have more than enough. We cannot be sure that there was not a tacit understanding that at some time if there was a surplus in the account the bank manager might take it by agreement or understanding.


Charles Edward Johnston: Mr. Chairman, may we have some understanding of this from the Minister of Justice? The hon. member for Acadia asked a very important question. It is a legal question. The minister pointed out a particular case. I can understand that in a particular case, such as the instance given, the borrower may have given the bank the right to take certain moneys from his account and apply them on a bill owing to the bank. But generally speaking, we should have a statement from the Minister of Justice telling us whether the banks have the right to take money from an account, money which has been obtained under this legislation, and then make deductions from the farmer's account in order to offset it against that which he owes to the bank without authority from that individual farmer in that particular case.


Walter Edward Harris: Mr. Chairman, excuse me if I answer before the Minister of Justice. The whole purpose of the legislation is to assure to the farmer the maximum amount of the loan. It has been understood that the banks will not take from the loan the amount of their indebtedness in other respects. Now, if it happens that a bank manager has done this, and if there has not been an understanding between them, I shall be glad to communicate with the bank concerned, because the purpose of the legislation is to give additional ready money to the farmer. I do not think we need a legal opinion; all we need is the persuasion of public opinion and the desire of parliament.


Hazen Robert Argue: Mr. Chairman, I want to thank the minister for the remarks he has just made. I do not see anything wrong with the bank suggesting to the farmer that part of that money might be used to make a payment under the Farm Improvement Loans Act but it seems to me it should be done by agreement at the time the loan is made.
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Mr. Harkness:: I should like to ask the
minister a question with regard to paragraph (f). What is the form and purpose in which it is envisaged the reports of the banks to the Canadian wheat board will be made?


Clarence Decatur Howe: Before a new permit book can be issued it is necessary for the wheat board to know what loans are outstanding against the book which is being replaced. The reference has to do with the endorsement of the permit book.


Douglas Scott Harkness: As I understand it, then, the sole purpose of this paragraph concerns the issuing of new permit books. Is that correct?


Clarence Decatur Howe: Yes.


Douglas Scott Harkness: And that is the only reason for a report to the wheat board at all?


Clarence Decatur Howe: Yes.


[Stage Direction]
Clause agreed to.
On clause 7-Effect of endorsement.
Clarence Decatur Howe: Clause 7 (a) provides that no manager or operator of an elevator shall, after the coming into force of this act, receive for storage grain delivered by or on behalf of the borrower who made the endorsement.
It is found that while that provision was contained in the 1951 legislation it is not required in this legislation and I would ask my colleague the Minister of Finance to move:
That clause 7 of Bill No. 82 be amended by deleting paragraph (a) therefrom and relettering paragraphs (b) and (c) respectively as (a) and (b).


John George Diefenbaker: That of course removes an obvious anomaly in this section. However, I should like to draw the remainder of the clause to the attention of the committee. The part I refer to is this. If the manager of an elevator, or in other words the local buyer or any other person, receives delivery of grain, then that person becomes personally liable by action or proceedings for the recovery of the amount owing to the bank to the extent of the value of the crop that was delivered to the elevator buyer or manager.
There was a similar section in the old act. I should like to ask the minister what was the experience in the 1951 act in relation to the whole of clause 7. Were there any actions taken to the knowledge of the minister or his officials under this clause? I would think this imposes a very heavy onus on the buyer, the elevator operator or manager of the local elevator. It may be that it is just one of those clauses that has been borrowed holus-bolus out of the old act and stuck into this one, if I may use that expression.

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But if it were actually enforced it imposes a heavy liability on the local buyer and one which few buyers would be willing to undertake.
Would the minister let the committee know the experience under the old act, because I personally know of no action taken under the old act and I wonder whether or not there were any such actions taken.


Clarence Decatur Howe: Mr. Chairman, my responsible officer tells me that under the old act there were no cases where the money was not collected and turned over to the bank as provided in the legislation.


Alexander Malcolm Nicholson: It would appear to me there should be an additional amendment in paragraph (c). Reference is made there to paragraph (b). I imagine the minister would want to move another amendment. Where the letter (b) appears in line 26 of paragraph (c) it should be changed to (a).


Clarence Decatur Howe: That is correct. Thank you for the correction. I am just having the amendment written out. We discovered it at about the same time my hon. friend discovered it.


Hazen Robert Argue: Two good lawyers.


Clarence Decatur Howe: Yes.


Edward Turney Applewhaite: In the meantime, would it be the wish of the committee to pass the first amendment? Is the amendment already moved by Mr. Garson agreed to?


Some hon. Members:: Agreed.


[Stage Direction]
Amendment agreed to.
Clarence Decatur Howe: A further
amendment, which is really part of the same amendment, is moved as follows:
That in new paragraph (b) the words "paragraph (b)" in line 26 be amended to be "paragraph (a)".


Edward Turney Applewhaite: I think the committee has heard the motion made by Mr. Garson. Is this amendment agreed to?


Some hon. Members:: Agreed.


Mr. Zaplitny:: Mr. Chairman, just before we leave clause 7 I wish to refer again to what is now paragraph (b) with the amendment which refers to the responsibility of the manager of the elevator with respect to the bank taking proceedings to collect. I should like to know whether that means the person responsible as manager of the elevator, the person who at that time happens to be the manager, or what we call an elevator agent, or whether it could also refer to any person succeeding him in that job who assumes that responsibility.

For example, at the time a loan was granted there may be one particular person who is the agent of a particular elevator. He gets moved, let us say, 30 days later before the loan is paid back. Does the new agent who replaces him assume the same responsibility that is placed upon the current agent by this act?


Clarence Decatur Howe: The man responsible would be the man who accepted the wheat and endorsed the permit book knowing that there was a claim registered in the permit book against that particular grain. It would be the operator at the time the grain was accepted for delivery.


Frederick Samuel Zaplitny: Regardless of whether that particular agent happens to be still an agent of the company by which he is employed, and regardless of the fact that he may have moved away entirely and taken on other employment, he still carries on that responsibility as an individual. Is that the case?


Clarence Decatur Howe: He had no responsibility. He made no loan. The loan was made by the bank. The only responsibility on the agent is that when grain is presented for delivery on a permit book against which is endorsed an undischarged loan, it is the duty of the elevator agent to make out two tickets, one for the farmer and the other for the bank.


Frederick Samuel Zaplitny: Mr. Chairman, I can hardly agree with the minister when he puts it that way. I will read the words in the paragraph that are pertinent to the question: the bank in whose favour the endorsement was made may recover any of the moneys to which it is entitled under paragraph (b) -
-which now reads paragraph (a); and these are the words'-
by action or proceedings against the manager of the elevator or other person receiving delivery of the grain or receiving such moneys-
The responsibility of the agent or the manager of the elevator does not cease when he has issued the duplicate ticket. The bank may take action or proceedings against him. It must be remembered that clause 7 begins with these words:
Notwithstanding any other act or law-
That means that this legislation supersedes any other act or law and is a law unto itself. I can hardly agree with the minister that when a responsible agent issues a duplicate ticket on the delivery of grain he should be faced with the possibility of having action or proceedings taken against him. How long will he have to face the possibility of a bank taking proceedings against him even though

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he may be no longer employed by the elevator company on whose behalf he purchased the grain? Does that go on indefinitely or is there any limitation?


Clarence Decatur Howe: The only case where there could be continuing liability would be where he diverted money taken from the farmer and intended to be paid to the bank. If he proceeded normally when the grain was delivered, if the storage ticket was properly made out, he would have discharged his liability. But if he puts the bank's share in his own pocket and leaves the job I suppose he would be liable for whatever penalty is provided under the Criminal Code.


[Stage Direction]
Clause agreed to.
Clause 8 agreed to.
On clause 9-Offence and penalty.
John George Diefenbaker: This is the clause to which I raised strong objection the other day, but not with regard to subsection 1, which reads:
Every person who. after the coming into force of this act, in respect of a guaranteed loan
(a)	knowingly makes any misrepresentation in any application or other document or wilfully furnishes any false or misleading information; or
(b)	if he is a borrower and his loan has not been repaid in full, delivers, or causes any other person to deliver on his behalf, under a permit book that has not been endorsed by the borrower as required by this act, any grain of which he is the actual producer,
is guilty of an offence and is liable on summary conviction to a fine not exceeding five hundred dollars.
To that section there can be no objection because it is similar to previous sections dealing with misrepresentation. However, subsection 2 does go somewhat further. In most summary conviction matters there is an ordinary limitation of six months, but this subsection provides for a limitation of two years. There may be good reasons for the extension of the limitation because of the circumstances connected with transactions under this legislation, but the subsection to which we in the official opposition take strong exception is the following:
(3) When a person is convicted of an offence under this section, there shall be imposed on him, in addition to any fine, a penalty equal to the amount of the guaranteed loan that has not been repaid by him together with interest on the loan to the date of payment of the penalty-


Clarence Decatur Howe: Perhaps I could shorten this discussion if I tell my hon. friend that I am going to ask my colleague to move the following amendment:
That clause 9 of Bill No. 82 be amended by deleting subsection (3) therefrom.


Mr. Garson:: I move accordingly.


John George Diefenbaker: That is the subsection to which I raised the strongest objection because it provides for imprisonment for debt under the summary convictions section of the Criminal Code. The failure to pay a fine imposed under the summary conviction clauses has the alternative of a sentence of six months in jail. I contended that it was iniquitous legislation to imprison for debt. I thank the minister for moving this amendment because that is the way that I think parliament should operate.


[Stage Direction]
Amendment agreed to.
Alexander Malcolm Nicholson: Paragraph (a) of clause 9 reads:
knowingly makes any misrepresentation in any application or other document or wilfully furnishes any false or misleading information;
It is a practice in western Canada to do a large part of harvesting with combines and I am sure that there is no farmer who could estimate accurately the amount of grain he has in his granary. Therefore I am sure that 99 farmers out of 100 will be providing false information as to the quantity they have on hand. Subclause 2 reads:
A prosecution under subsection (1) may be instituted at any time within two years from the time when the subject matter of the complaint arose.
Then paragraph (b) reads:
If he is a borrower and his loan has not been repaid in full, delivers, or causes any other person to deliver on his behalf, under a permit book that has not been endorsed by the borrower as required by this act, any grain of which he is the actual producer,
is guilty of an offence and is liable on summary conviction to a fine not exceeding five hundred dollars.
Section 694 of the Criminal Code reads:
(1)	Except where otherwise expressly provided by law, every one who is convicted of an offence punishable on summary conviction is liable to a fine of not more than five hundred dollars or to imprisonment for six months or to both.
(2)	Where the imposition of a fine or the making of an order for the payment of money is authorized by law, but the law does not provide that imprisonment may be imposed in default of payment of the fine or compliance with the order, the court may order that in default of payment of the fine or compliance with the order, as the case may be, the defendant shall be imprisoned for a period of not more than six months.
(3)	A summary conviction court may direct that any fine, pecuniary penalty or sum of money adjudged to be paid shall be paid forthwith or, if the accused is unable to pay forthwith, at such time and on such terms as the summary conviction court may fix.
The people who are going to be affected by this legislation are short of cash although they may have plenty of grain. Certainly it would not be difficult to establish that a farmer has given information not in accordance with the facts, and a penalty of $500 would seem to be

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heavy under circumstances where the maximum amount he can borrow is $1,500. If a farmer cannot put his hands on the cash and must go to jail for six months it would seem a most objectionable provision. I feel sure that, when farmers are confronted with this possibility, even a smaller percentage will apply for loans than applied in 1951. I wish the minister would consider reviewing this section so that the penalty would not involve a farmer going to jail if he found himself in the position where he could not market any grain for cash and had nothing with which to pay his fine except grain.


Stuart Sinclair Garson: Mr. Chairman, the fact that the section in question has received the approval of an hon. member who, I think we will all agree, is one of the most eminent criminal lawyers in Canada, the hon. member for Prince Albert, should indicate that there is not very much wrong with it from the standpoint of the accused. Otherwise the hon. member for Prince Albert would not have approved it.
I might say for the benefit of my hon. friend from Mackenzie that in drafting a bill of the sort that we now have under consideration the draftsman has to take into account the existing body of the law. Although it may seem to my hon. friend that this clause creates an offence which he may have thought did not exist before, actually the effect of this clause is to change this stated set of facts which would otherwise constitute the offence under the Criminal Code, of obtaining credit by false pretences, which would be triable upon indictment and carry a maximum penalty of ten years. Having regard to the fact that the offence contemplated here is of a less serious character -than the usual offence of obtaining credit by false pretences, it has been set up in the form of what in effect is an amendment to the code. This bill provides that any misrepresentations under clause 9 (1) (a) shall be an offence triable upon summary conviction, for which the penalty shall be a fine not exceeding $500. I think my hon. friend from Mackenzie will agree that this is a very much lesser maximum penalty than ten years' imprisonment. That being the case, the effect of this present provision, as I have said, is to reduce very greatly the character of the offence and the nature of the punishment from what they would be under existing law.
After the accused has been found guilty- not, as my hon. friend has suggested, of merely conveying wrong information, but of knowingly making any misrepresentations in any application or other document or of wilfully furnishing any false or misleading information-he would be punished much more lightly and, we think, much more fairly,

in relation to the kind of case that my hon. friend from Mackenzie has just suggested, than he would be if we were to have left the law as it would have been but for the passage of this clause.


Alexander Malcolm Nicholson: Mr. Chairman, will the Minister of Justice agree with me that any farmer who has a granary full of grain will admit very frankly that when he says he has 1,200 bushels in the granary, that is misleading, and it might be 1,100 or 1,300 bushels?


An hon. Member:: Knowingly.


Alexander Malcolm Nicholson: I think at some point later he will be forced to admit that it is misleading information as to the exact amount of grain he has. I think the Minister of Justice could come out with some sort of wording that would be less offensive and some way of imposing penalties that would be less severe than we have in this legislation.


Stuart Sinclair Garson: With all deference to my hon. friend, I would suggest to him that the language that has been proven by experience, not over years but over decades, in the Criminal Code is the language that is indicated here: knowingly and wilfully making false representations.
Let us consider the case of which my hon. friend speaks, where a farmer, not being too sure about the quantity of grain in his bin, was inaccurate, but unintentionally so, in making his application for a loan. If any prosecution were later to be based upon that set of facts, the Crown would have to prove beyond all reasonable doubt-and the accused would be entitled to the benefit of the doubt- that not only was the information incorrect but that the accused gave that incorrect information wilfully and knowingly with the intention of securing credit to which he was not lawfully entitled.


Victor Quelch: There is one point I should like to have clarified. Unfortunately, I am not a lawyer. Clause 9 (1) reads as follows:
Every person who, after the coming into force of this act. in respect of a guaranteed loan
(a) knowingly makes any misrepresentation in any application or other document or wilfully furnishes any false or misleading information;
... is guilty of an offence and is liable on summary conviction to a fine not exceeding five hundred dollars.
Clause 14 says:
This act shall come into force on a day to be fixed by proclamation of the Governor in Council.
Does that mean that any farmer who commits an offence under this clause prior to the coming into force of the bill is not guilty and has not committed an offence under this clause?

Wheat


Clarence Decatur Howe: Not under this bill. He may come under the Criminal Code, but certainly this bill is not retroactive.


[Stage Direction]
Clause agreed to.
Clauses 10 to 12 inclusive agreed to.
On clause 13-Extension by the governor in council.
Stanley Howard Knowles: Mr. Chairman, as 1 indicated last night, it seems to me that the provision contained in this clause is an objectionable one. As everyone knows, we on this side of the house do not like this bill's inadequate way of dealing with this year's cash crisis in the west. It seems to us that by means of clause 13 the government is making it possible for it to come forward with the same inadequate solution next year if a similar crisis develops, without even having to raise the matter in parliament. If parliament is to give order in council rights, it should do so very sparingly, and it seems to me this is one occasion where that right should not be given.
If it was the intention of the government to make this legislation effective for two years, it should have been so provided in the main part of the bill. I do not like this uncertain way in which the future is left. In fact, I do not like the idea of the government having the power by order in council to extend legislation without coming back to parliament in any way whatsoever.


Clarence Decatur Howe: I think I might clear that up. The government believes it is very doubtful if legislation of this kind will be required next autumn. We look for a very heavy movement of wheat during the summer and autumn, and it may be that there will be no call for the legislation. Therefore there will be no purpose in having it outstanding, unless there is a need for it-* and we believe there was need last fall, in spite of what has been said here-if there is a need for it, my hon. friend, after these four or five weeks of filibuster, will hardly expect the government to take the same responsibility again that it has taken this season. Through this bill, it will not be necessary to do so. We think it is very much better to have the authority enacted now, rather than be with no authority.


Stanley Howard Knowles: In spite of what the minister has said, I still think this house has the right to expect the government to bring matters such as this back to parliament.


Charles Edward Johnston: May I ask the
minister for a little clarification? Do I understand him to have said a moment ago that any man who has borrowed money under
this bill prior to the time the bill comes into force is not liable to the penalty under this clause?


Clarence Decatur Howe: The penalties set out in this bill apply only against a person who commits an offence after this bill has received the royal assent.
Clauses 13 and 14 agreed to.
Bill reported.


The Acting Speaker (Mr. Applewhaite):: When shall this bill be read the third time? Now?


Stanley Howard Knowles: Next sitting.


The Acting Speaker (Mr. Applewhaite):: Next sitting of the house.



PROVISION FOR PAYMENT OF CARRYING COSTS OF TEMPORARY EXCESS RESERVES

Clarence Decatur Howe: the second reading of Bill No. 83, respecting the payment of carrying costs of temporary wheat reserves owned by the Canadian wheat board.


John George Diefenbaker: Mr. Speaker, I merely want to reiterate the stand taken on the resolution, that we in the official opposition support the bill. Any discussion on it will be in committee with reference to the several sections; and in view of certain sections to which reference cannot be made on second reading we believe that everything should be done to expedite the legislation, requested as it has been by all the major farm organizations and representing the conclusion of a concerted effort on the part of the farmer's unions throughout western Canada and other organizations of a similar nature for the achievement of this end. Further than that I will not say at this time.


Frederick Samuel Zaplitny: Mr. Speaker, I expressed my views on the principle of the subject matter of the bill at the resolution stage; therefore I am not going to repeat the views I expressed at that time. We are prepared to expedite passage of the bill almost immediately, particularly so because of the method provided for payment of the first instalment on account of this contribution from the treasury to the cost of storage. It is provided that the first instalment of half the amount that is payable shall be paid on the first day of the month following the month in which the act comes into force. We are very close to the end of this month and therefore we hope there will be no delay in passing the bill now in order that the first half of the moneys payable may be made

Wheat
available on the 1st of March. For that reason we are quite prepared to forgo any detailed discussion at this time and to let the bill pass.


Victor Quelch: Mr. Speaker, at the resolution stage we expressed our approval of the proposal, and now that the bill is before us we still believe it is a good piece of legislation. Therefore we are going to support second reading.


Mr. G. H. Caslleden (Yorklon):: Mr. Speaker, as well as supporting the motion on the basis of the principle of the bill, I should like to say that since this grain is in storage the government should undertake to pay the costs of the abnormal carryover. In this way the government will recognize its responsibility toward the producers who would normally have to carry this cost if the government had not undertaken to pay it.
The reason for the large stocks of wheat in store is the failure of the government to maintain a selling. program of such a type as to get rid of sufficient wheat. Most of the increased production is being carried by the farmers on their farms, and it is only right and just that the government should undertake to pay storage costs. If they had recognized that responsibility with regard to Bill No. 82 there would have been much less trouble. I may say we are very pleased that this bill has come before the house and we intend to support it. We think it only right and just.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On clause 1-Short title.
John George Diefenbaker: Mr. Chairman, the general discussion on this clause will enable certain questions to be asked. One arises out of a statement I made the other day which was somewhat challenged, and I wish to refer to it now. At page 392 of Hansard for January 23 there is the following:


Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Will the minister consider closing out the 1954-55 wheat pool account so that prairie producers may receive a larger payment at an early date rather than a smaller interim payment?


Clarence Decatur Howe: Mr. Speaker, I stated on a previous occasion in reply to a question by the same hon. member that no consideration could be given to the subject until Bill No. 2 on the order paper is approved by parliament or otherwise. That is still the situation. It will be the situation and I hope the question will not be asked again until that bill is disposed of.


Hazen Robert Argue: Is the minister not aware of the
fact that Bill No. 2 is a bill standing in my name, and the bill he refers to is actually a resolution?


Clarence Decatur Howe: Quite right.
What I want to find out from the minister is something of the mechanics under which this legislation will immediately become operative. Would the minister be prepared to advise the committee and the country as to the total amount being paid today for the storage of wheat in the country and terminal elevators? There is also the fact that the legislation when passed will, as the minister said on an earlier occasion, enable a distribution to be made by an early cut-off of the 1954-55 crop in storage in the elevators of this country and as yet unsold.
As I see it, that is one of the major matters at issue at the moment in this legislation, and it is in that regard that the western farmer is particularly interested in knowing approximately what extra amount will be payable to him on account of the wheat in the 1954-55 pool and the saving that will be achieved by the farmer in respect of storage now being paid and ultimately charged to the fund from which distribution is made. How much will the farmer receive in general, and when may he expect that the cut-off for the 1954-55 crop will take place?


Clarence Decatur Howe: Mr. Chairman, on July 31, 1955, there were in store, over the 178 million bushels which is considered normal, another 217 million bushels of wheat, and that 217 million bushels of wheat is the wheat referred as coming under this guarantee. All that wheat belonged to the 1954-55 pool. However, the amount belonging to the pool diminishes day by day as sales and deliveries for export are made. The wheat board receives the government's payments each month, applying on the grain in store.
To the extent that the grain in store is grain from the 1954-55 pool, it will apply to that pool. To the extent that the 1954-55 grain has been disposed of and replaced by grain in the 1955-56 pool the payment will apply to that grain. It is just a matter of bookkeeping for the wheat board to determine to which pool the payments are to be apportioned. This will be done month by month. It is customary to transfer the remainder of one pool into the next pool when a considerable proportion of the pool has been sold and priced. We have never, I think, transferred as much as 100 million bushels from one pool to the other.
Just when the transfer can take place, I do not know. We receive a recommendation from the wheat board when the proper time comes, and at that time the cabinet decides whether it can accept the recommendation

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of the wheat board. In this case the situation is somewhat complicated by the fact that when we discovered there was a filibuster under way here we decided we could not ask the producer to wait. Therefore we authorized an interim payment instead of the final payment.
Obviously the amount of the final payment could not be determined until this bill had either been passed or rejected. Now that it has been passed we will continue with the interim payment, and in due course the government will decide to accept the recommendation of the wheat board and the final payment on the 1954-55 pool will be made. After that decision has been arrived at we will be able to announce it in the house.


John George Diefenbaker: That is all very interesting but also very general. Is the minister in a position to say that the amount that will actually be credited to the wheat producer under this legislation, in so far as the 1954-55 crop is concerned, would amount to any more than 6 cents a bushel? I have tried to work out a general computation in that regard, and I am asking the minister whether or not any estimate has been made and whether or not that estimate exceeds 6 or 6-4 cents a bushel?


Clarence Decatur Howe: It seems to me that my hon. friend and I both had better cease guessing how much it will be and wait until a computation can be made by the wheat board, who are responsible for pricing the grain. I would not attempt to guess. I would think it would be more than 6 cents, but that would be only my guess.


George Alexander Drew: Since reference has been made several times by the Minister of Trade and Commerce to a filibuster, with some appearance of objection to what has taken place, I would point out that there is a very good reason for not guessing. If there were no other ground for some of the discussion that has taken place than the time that was needed for the minister to learn what was the effect of subsection 3 of section 9, it would have been extremely useful in itself. The fact is that the answers that have been given by the minister are well illustrated by his ridicule of the hon. member for Prince Albert when he tried to point out that this subsection 3 of section 9 actually provided the penalty of jail for debt.
Now that the minister has seen what are the facts, we welcome the fact he is not prepared to guess on this occasion. But we would suggest there should not be so much reference to the time taken to convince him of some of the things that were wrong with this act.


Hazen Robert Argue: The statement by the Minister of Trade and Commerce that the passage of this bill was held up by the debate on Bill No. 82 is not accurate at all. The fact that this bill has been delayed until this day is because the government has held back in calling this bill when announcing the business of the house. We in the C.C.F. group and all members of the opposition have been ready from the moment parliament assembled to pass this legislation with a minimum of delay. Nothing the Minister of Trade and Commerce can say can show that we have not been prepared at all times to pass this legislation since it was announced to the house.
As a matter of fact we did our best by way of a vote to get the government to alter its order of business. The fact that this measure has been delayed so long is not only because the leader of the house from time to time announced Bill No. 82 ahead of Bill No. 83, but because the Minister of Trade and Commerce himself on February 3 moved a motion to reverse the decision the house had taken earlier, namely to proceed with the resolution preceding the bill now under discussion. The minister's excuse cannot stand up at all. The government does what it wants so far as announcing the business of the house is concerned.
It' is the governor in council who decides when an interim payment will be made or *when a final payment will be made. I suggest to the minister that a combined interim and final payment on the 1954-55 wheat pool should be made immediately. The minister has said there is a good deal of wheat still in that account. This should not make any difference. The wheat board and the minister know the price at which grain is being sold today. We have the assurance of the minister, repeated time after time, that grain is being sold now in very large quantities. He says there is no doubt about it; it is all going to be sold in a very short time. I do not see any reason why western producers should have to wait for several weeks, perhaps many months, before they receive a final payment. We have had far too much jockeying in the past by the government with the dates of interim and final payments. I suggest the government should be prepared at a given date following each crop year to make a final payment, and at a given date during the crop year to announce an interim payment.
There is another disadvantage to making an interim payment at this time and a final payment at a later time rather than making a combined payment right now. It.is the additional cost. It costs a substantial sum of money to make thousands of cheques payable to producers, and the producers themselves

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have to pay the cost of making that extra payment. The final payment, if it were announced now, would be about one year late so far as our experience in the past is concerned. I suggest that the government has erred in not announcing, instead of a small interim payment, a larger final payment so that the account could be closed.


Alexander Malcolm Nicholson: Before the clause carries I wish to say that I am sorry the hon. member for Vancouver-Burrard is unable to be with us. I think I should say that I am very glad no one but the hon. member for Vancouver-Burrard, so far as I am aware, has expressed any criticism of this particular legislation. I believe it is important that we should recognize that the carrying of food is a national matter. I think it is very fortunate the Minister of Trade and Commerce is able to say today we are likely to have good sales in the next few months. It is unfortunate, however, that a calamity in Europe is going to be responsible for a great many of those countries being short of grain. This points up the value of having in the world stocks of food for emergencies.
I think it is only right and proper that all the people of Canada should carry some part of the cost of maintaining those stocks. I am very glad that no one in the house, with the exception of the hon. member for Vancouver Burrard, has offered any objections to this legislation.


Mr. Campbell:: Before this clause carries I would like to get some information. Some time ago I asked the government a question regarding elevator space. When I received the answer I was amazed at the amount of empty space in terminal elevators. I want to know why that situation exists. Is it because of a shortage of box cars or not? Before the minister answers I have another problem to put to him. There was an editorial in the Saskatoon Star-Phoenix around February 17 which said this:
Transport controller Roy W. Milner, whose powers parliament will be asked to renew for two years, said Thursday there is no shortage of box cars holding up prairie grain shipments.
In the same article we find the following:
Meanwhile, Jake Schulz of Winnipeg head of the interprovincial farm union council, said he is confused by Mr. Milner's remarks. The council is made up of farm groups in the prairie provinces, Ontario and British Columbia.
In a brief before the cabinet, the council had attacked the transport controller because of a reported box car shortage, saying it shows Mr. Milner "is failing in his duties and thus betraying the trust of the farmers".
Mr. Schulz said later he brought up the matter during the council's meeting with the cabinet and was informed by trade minister Howe that because

of a box car shortage, prairie grain elevators will not be emptied before the spring navigation season opens.
"What are we to believe?" he asked.
Mr. Howe, under opposition fire because of federal grain policies, recently said in the commons that the big problem in selling wheat was not markets but transportation.
There is a confusion of opinion there. Later on in the same article we find the following:
Mr. Marler, speaking at Saint John, New Brunswick, Wednesday said figures he has received this month "give me good reason to be confident that the railways are doing an excellent job."
Some critics have suggested that the government's decision to pay storage charges on abnormal wheat carryovers in the hands of the wheat board is complicating the issue.
The government has conceded there is room in elevators for more grain. But the more wheat that is packed into the elevators, the higher the charges the treasury will have to bear, unless the wheat is sold.
What I want to know is, why has this space been accumulating in terminal elevators? Is it going to be the policy of the government to back up the grain on the farms and keep the terminal elevators with a lot of empty space?


Clarence Decatur Howe: I may say that I am confused after listening to my hon. friend. The purpose of the government is to move grain from the farms just as rapidly as possible. There is a very great demand for wheat at the ocean shipping ports, particularly at Vancouver, Halifax and Saint John. The weather conditions in western Canada have been very bad indeed. A combination of circumstances has not made it possible to deliver the required grain at export points and at the same time fill elevator space within Canada. An effort is being made to do both, and I think the situation is improving from day to day. If my hon. friend wants to talk to the transport controller or to any officer of the department in the committee on agriculture and colonization, all the reports are tabled now and he can go there and talk to them directly. He will not have to let me interpret them.


Alexander Maxwell (Max) Campbell: Mr. Chairman, I am not satisfied yet. The minister himself spoke in Edmonton in November. At that time he is reported as having said-I am not going to try to give the figure-that there was a considerable amount of space both at the lake-head and in the western Pacific terminals. Why was that situation allowed to develop when the farmers needed money so badly? Is it the fault of the transport controller? Is it because we have not enough box cars? What is the answer to that problem?


Clarence Decatur Howe: After my hon. friend listens to the evidence given in the

committee he can make his own assessment. I am not very much interested in assessing blame for what has or has not happened. I am interested in getting the job done. It is becoming a little better each day.


Donald Methuen Fleming: The title of this bill is the temporary wheat reserves act. Presumably we are to enact it as a temporary measure. It is fair then to ask the minister what is his best estimate of the length of time over which this measure is likely to be in force?


Clarence Decatur Howe: I could not give an estimate unless my hon. friend is prepared to tell me what is his estimate of the size of next year's crop, and what will be conditions generally. This is self-liquidating legislation. It stays in force until the carryover at the end of any crop year is less than 178 million bushels.


Alexander Maxwell (Max) Campbell: I am going to ask the minister a straight question. Is there a shortage of box cars in Canada?


Clarence Decatur Howe: That is a matter of opinion. I am not prepared to express my opinion. I expressed an opinion at Edmonton in the speech to which the hon. member referred. I said at that time that there was a shortage of box cars in western Canada. There is a much greater number of box cars in western Canada today than there was then. He can take one opinion; I will take another. As I say, he can get the opinions all collected in one room. He will have to make up his mind then.


Mr. Charlton:: May I ask the minister whether this section means what I think it means? Is there not some strange use of words there that might give it some other meaning? The section reads:
If at the commencement of a crop year the stocks of wheat of the board are not in excess of 178 million bushels, no payment shall be made by the Minister of Finance to the board under this act in respect of that or any subsequent crop year.


Clarence Decatur Howe: Yes.


John Alpheus Charlton: Just exactly what does that section mean?


Clarence Decatur Howe: That is the liquidating clause. It means that if at the 1st day of August in any year the carryover does not amount to 178 million bushels, this act becomes a dead letter.


John Alpheus Charlton: Mr. Chairman, I take it that might quite easily mean one bushel stored away some place. The act could be carried on for another year if one extra bushel had to be carried over. If that is the correct meaning of it, that is the situation.


Clarence Decatur Howe: What of it?
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John Alpheus Charlton: What of it? It is pretty important, I would think.


Clarence Decatur Howe: If there is one bushel over, the act will remain in force. We will pay storage for the year on one bushel of grain.


John Alpheus Charlton: One bushel on the 1st day of
August.


Clarence Decatur Howe: I know; that is all.


John Alpheus Charlton: There might be 10 million
on the 30th day of August.


Clarence Decatur Howe: It does not matter what it is on the 30th day. We pay storage on the amount in store on the 1st day of August.


John Alpheus Charlton: Yes, for the year previous. But what about the next year? Do you pay it for 12 months or do you pay by the month? I take it that it would be each month's storage of wheat that it would be paid on?


Clarence Decatur Howe: I think my hon. friend can take my word for it that we pay only on the amount in excess of 178 million bushels that is in store on the 1st day of August of any year. If there is one bushel extra in storage the act remains in force and we pay on that one bushel all through the year, which would amount to 15 cents, I suppose. But if there is one bushel less we do not pay on anything and the act comes to an end.


John Alpheus Charlton: By the same token, it would seem rather strange if on the 30th day of September, for instance, after the harvest, there was a carryover in excess of 178 million bushels, probably 200 million bushels, then you do not pay the storage on that for the whole of that crop year?


Clarence Decatur Howe: That is not carryover. If my hon. friend would pay a little more attention in the committees that he attends every year he would know that carryover is the amount of grain in store at the end of the crop year, which occurs on the 31st day of July in every year.


John Alpheus Charlton: I do not think the minister had any justification for making that crack, because I have attended the committee meetings very religiously when they have been held, which has been very seldom. I do not think it has been anything but wheat for the last number of years. I take it, then, that the storage is only to be paid on the excess at the 1st of August for the year, no matter what the excess is during the year,

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and that there will not be any storage paid on that until the 1st of August of the next year.


Frederick Samuel Zaplitny: The bill refers entirely to wheat reserves, and of course anything additional coming to the producers of wheat will have to be reflected in the dividend payments as they come due, whether they are interim or final payments.
I wonder if the minister would care to inform the committee whether or not consideration was given to making this a grain reserve act instead. There are many large and important areas in the prairie provinces where wheat is not the main crop but where, for example, barley or oats may be the more important crop. Since barley or oats are included in the operations of the wheat board, I wonder whether any consideration was given to including barley and oats under this act to make it a grain reserve act rather than an act confined entirely to wheat. If consideration were given and it was decided against doing this, perhaps the minister could inform the committee of the reason for this.


Clarence Decatur Howe: The carryover of oats and barley has never been a problem. Over the years it has never been difficult to sell oats and barley as soon as those grains are put in a marketable position. The possibility of there being any considerable visible carryover of oats and barley is too remote to warrant consideration in this bill.


Hazen Robert Argue: I wonder if the minister could give us some idea of the policy that will likely be followed, let us say during the latter half of a crop year before we arrive at August 1. This legislation provides for payment for the inventory of wheat in excess of 178 million bushels. It seems to me that the great advantages of this legislation could at least to some extent be reduced, for example in the last few months of the crop year, by buying more than usually large quantities of oats, barley and flax so the space in the terminal and country elevators on August 1 would have in them a greater proportion of oats and barley than might usually be the case. It is quite possible to have a policy of buying large quantities of coarse oats at the end of the crop year. That may not be a great danger or the most important way in which the benefit of this legislation might be reduced.
According to the answer the minister gave, on January 20 there was effective space for 58 million bushels in the country. In other words that would reduce the amount of obligation of the national treasury under this legislation, because the carryover would not be there. The carryover would still be back

on the farms. The amount for which payment would be made would be reduced by 58 million bushels. I am wondering if the minister could say what general policy will be followed toward the end of the crop year so this legislation may be as effective as I believe it is intended to be.


Clarence Decatur Howe: Mr. Chairman, as to what grain the wheat board buys, I might say it buys any grain the farmer wishes to deliver on his permit book. If he has delivered all his wheat and wants to deliver oats and he still has space in the permit book for oats, I suppose we would accept oats. But I hope my hon. friend is not suggesting that anyone connected with the government or the wheat board is wilfully going out to buy some oats or barley in order to cheat the farmer out of this payment.


Hazen Robert Argue: Not at all.


Clarence Decatur Howe: As far as shipments are concerned it is always the purpose of everyone connected with wheat to get the wheat as far forward as possible as transportation may make possible. We might have a shipping strike on the great lakes which would intervene, but generally speaking an attempt is made to fill the elevators at the seaports and fill the elevators supporting the ports so there will be reserves against all shipping delays. To do that we make space in the country, and of course farmers wish to deliver wheat to fill that space. I do not think the difficulty foreseen by my hon. friend is likely to arise as a problem if there is a surplus of wheat in the country.


Hazen Robert Argue: I am extremely pleased to obtain that assurance from the minister. I do not want anything I have said to be taken as a reflection on either the minister, the wheat board or the policies they follow. I may just express the hope that box cars will be available so that the large amount of space now available will be filled by July 31.


Clarence Decatur Howe: I share that hope.
Clause 1 agreed to.
Clause 2 agreed to.
Clause 3 agreed to.
On clause 4-Payment in monthly instalments.


Clarence Decatur Howe: Mr. Chairman, I am going to ask my colleague to move to amend clause 4 as follows:
That paragraph (a) of clause 4 be amended by deleting the words, "on the first day of the month next following the month in which this act comes into force," in lines 15, 16 and 17 and by substituting therefor the words, "forthwith upon the coming into force of this act".


Douglas Scott Harkness: I should like to ask the minister what is the purpose of the monthly instalments instead of paying this as a lump sum at the end of the year, when the amount of the carryover is determined?


Clarence Decatur Howe: We have been asked to consider a winding up of the 1954-55 pool. Unless the money is in hand it will be difficult to wind up the pool. The purpose of paying monthly is that storage charges are usually paid monthly, and the government should properly pay monthly storage charges on grain the government itself is carrying.


Douglas Scott Harkness: As I understand it, the carryover at the end of the crop year is determined and on anything in excess of 178 million bushels the government is going to pay storage charges. That amount is determined right there and then, as far as I can make out; is that not the intent and purpose of the act? I am therefore just wondering why these payments will be made monthly instead of being made there and then. Is not the matter determined at that point?


Clarence Decatur Howe: Is it my hon. friend's suggestion that it be prepaid? The amount of the payment for the succeeding year is determined on August 31, but the charges do not accrue until the storage has been used. The payments are made each month as the storage charges accrue. The terminals make their settlement with the wheat board each month, following the usual pattern of trade.


Douglas Scott Harkness: The amount that is going to be paid, however, is determined at the beginning of the crop year, and the amount on which storage is going to be paid for next year might be considerably in excess of or less than that?


Clarence Decatur Howe: No.


Douglas Scott Harkness: Why does the minister say no? Is the amount on which storage is going to be paid to vary from month to month throughout the year?


Clarence Decatur Howe: No, the amount paid is on the carryover at the end of the crop year, so many bushels. This year the amount is 217 million bushels. Under this bill that 217 million bushels is to be carried throughout the crop year, no more, no less. That will be the case every year. We carry a definite amount as prescribed in this bill.


Douglas Scott Harkness: Surely the minister is not saying that the board is going to carry 217 million bushels plus 178 million bushels throughout the year. If they can find customers for it they are going to sell it. That is the point I am raising, that the amount of the 67509-98J
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payment is going to be determined at the end of the crop year and paid in monthly instalments throughout the year, instead of in a lump sum when the determination is made.


John Alpheus Charlton: This is just further to what I was asking the minister before. The minister has used the words "succeeding payments" and has referred to prepayment. The minister told me before that the amount to be paid was on wheat in excess of 178 million bushels on August 1. Does that mean it will be irrespective of how much was in storage on December 1 of the previous year? In replying to the hon. member for Calgary North the minister suggested prepayment, but as I understand it all we will be paying on is the excess over 178 million bushels on August 1 in any year.


Clarence Decatur Howe: That is right.


John Alpheus Charlton: Is the minister saying it will be on that excess for the entire year, for the twelve months?


Clarence Decatur Howe: That is right.


John Alpheus Charlton: Regardless of how much was in storage on January 1 of that year?


Clarence Decatur Howe: Yes.


John Alpheus Charlton: Supposing there were 200
million bushels in excess in storage as of August 1, would you pay the storage costs on those 200 million bushels for the entire year?


Clarence Decatur Howe: Yes.


John Alpheus Charlton: No matter how much was in storage on September 1 of the year previous? If that is what the minister is saying, you are twelve months in arrears; each month you are a year behind in your payments, I take it.


Clarence Decatur Howe: No, Mr. Chairman. Perhaps I could explain it this way. We have always been asked to set up a government reserve of wheat, and that is really what this bill does. How do we fix the amount of the reserve? We fix it by the carryover at the end of the crop year on July 31. If that carryover is 178 million bushels, which is normal, plus 217 million bushels, which was the case last July, that 217 million bushels is taken as the reserve which the government will carry for that year. My hon. friend will say that we will be shipping out of that reserve and replacing it, which would mean that it would not be the identical wheat, but we would be taking on 217 million bushels this year as a reserve which the government will carry in the national interest. My hon. friend can argue up and down but that is the situation.	.

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John Alpheus Charlton: Supposing the situation is that on August 1, 1956, you have 500 million bushels over and above 178 million bushels; you will pay storage for one year on the 500 million bushels.


Clarence Decatur Howe: Unfortunately the elevator space will allow us only to have about 250 million bushels over the 178 million bushels.


John Alpheus Charlton: I will change the figure.


Clarence Decatur Howe: You can take 500 million bushels as a theoretical figure but it does not mean anything, because physical limitations intervene.


John Alpheus Charlton: I will take it as 200 million bushels. I was just using the 500 million bushels as an example. With 200 million bushels, when in fact you may not have any more than 178 million bushels in storage as of January 1, I do not see how the minister can argue himself out of that.
' Mr. Howe (Pori Arihur): I think the hon. member is the only one in the house who is disturbed.


John Alpheus Charlton: I think the farmers of
eastern Canada will become much more disturbed knowing that that is the fact. Who is going to get that six months' storage? The government is going to pay out money when in fact the wheat was not in storage at the time it was paid for.


Clarence Decatur Howe: July 31 is the period between the two crops. That is when the old crop would normally be shipped out and before the new crop starts to move. Any grain in storage on July 31 of any year is going to be supplemented by the new crop which begins to move into the elevators in September and October. During the following year that will be reduced again until the low point is reached at the end of July. That is the time when we fix the amount of the reserve we are going to carry for the next year.


John Alpheus Charlton: Is the minister saying now that all the wheat that is grown in the west is going to be taken into storage by September 1? In effect is the minister saying that all the excess will be in storage for at least a month when in fact the actual harvesting would not take place until September 1?	.


Clarence Decatur Howe: I give up.


Hazen Robert Argue: I imagine what the hon. mem-oer is worrying about is that this is going to cost more money this way than if it were drawn up in some other way. I suggest that the least amount of grain that the wheat
IMr. Howe (Port Arthur).]
board is going to have on hand at any time in the year will be about August 1, before the new crop is harvested. If you want it to cost the treasury more, let us start this storage arrangement as soon as the crop is marketed. We will then get storage for a year. But the way it is drawn now the prairie farmer will get something from the treasury only when there is a very large carryover, something excessive in relation to the experience we have had in the past. I am all for any suggestion that will increase the storage payment, but I think my hon. friend's worries are misplaced.


Douglas Scott Harkness: As far as I can see the minister has not yet answered my question as to why this should not be paid in a lump sum. He said, "Do you want us to prepay it?" It is not a matter of prepaying it at all. As I see it, the situation is that if the excess held in storage on August 1 in any year is, we will say, 200 million bushels, that wheat will have come in during the previous year and the wheat board will have already paid the storage charges on that wheat or on a good part of it. Some of it may have been in the elevator for a year and a half, and certainly the wheat would be in for varying lengths of time. In any event the wheat board will have already paid the storage charges on the wheat and under this bill the money is going to be paid by the government at the rates laid down. Therefore it is going to go back into the farmers' hands and the farmers will be that much better off as a result.
The thing I cannot see is why that payment is not made at the end of the crop year when the amount that is going to be paid is determined, instead of being made as provided by this subsection in twelve monthly instalments. The advantage of paying it in a lump sum is that it would be an initial payment which could be determined immediately and the cash would go into the farmers' hands, rather than having it spread out over twelve months and delaying it getting back to the farmer.


Hazen Robert Argue: A final payment.


Douglas Scott Harkness: That is the point I am getting at.


Clarence Decatur Howe: My hon. friend is taking too seriously the fact that this legislation is intended to cover the crop year 1955-56.


Douglas Scott Harkness: 1954-55.


Clarence Decatur Howe: No, 1955-56. It applies to the grain that is in store during the year 1955-56. It is true that all the grain that is in store at the beginning of this

period must have been in the other pool, because the grain delivered in 1954-55 belongs to the 1954-55 pool. That grain, on the 1st day of August, 1955, was in the elevators; it was the government's reserve of wheat. We are going to pay charges on it for the rest of the year. Those charges accumulate daily, but they are settled on a monthly basis. So on the 1st of September we owed certain money; on the 1st of October we owed certain money; and on the 1st of November we owed certain money. We have not been able to pay that money because we did not have the legislation, but we are going to settle our debt in a lump sum to the end of February. After that we are going to pay monthly as charges accrue. We are simply paying currently as the charges on our reserve accumulate.


Douglas Scott Harkness: Then may I ask the minister this question. This is the situation, as I understand it. This money that is going to be paid, in this case about $32 million, I think the minister said, is going to be available to settle up the 1954-55 bills, is it not?


Clarence Decatur Howe: No. Part of it is.


Douglas Scott Harkness: Now the minister says "No", and he says, "Part of it is". How much is going to be applicable to and available for settling up the 1954-55 pool?


Clarence Decatur Howe: We shall always assume that we shall be paying interest on 217 million bushels of wheat every month. In the month of August it will all belong to the old pool. But if during that month we shipped out 25 million bushels there would be 25 million bushels less in the old pool and 25 million bushels applied to the new pool. That would be occasioned by deliveries during the month of August. Each month we ship out certain grain which is credited against the old pool, and we replace it as grain applying to the new pool. The storage charges that we pay are allocated according to whether the grain to which they are applicable belongs to the old pool or to the new pool. This is a calculation which only the wheat board can make, but which the wheat board must make if they carry out this legislation.


Douglas Scott Harkness: Has the minister not received from the wheat pool any calculation, or does he not know at this time, how much of this $32 million is going to be applicable to the 1954-55 pool?


Clarence Decatur Howe: I really do not know. It depends how rapidly we can sell out the old pool. When all the old pool wheat is gone, naturally there will be no more payments on that pool. But I think my hon. friend should be able to see that the amount
Wheat
in the old pool is a diminishing amount until the old pool is wholly disposed of, and he will see that the amount payable on the 1955-56 pool is an accelerating amount until all the wheat for which we are responsible is wheat belonging to the 1955-56 pool.


Douglas Scott Harkness: Perhaps one of the difficulties here is that this legislation is going to be retroactive to some extent. Therefore the only thing one can take is the calculation made on the 1st of August, whatever it is. Say it is 200 million bushels of wheat that was the surplus at that time, and it was accumulated over the previous year. The wheat board has already paid storage on it. This payment is being made to them for storage. Part of the money is to repay them for storage already made.


Some hon. Members:: No.


Douglas Scott Harkness: That is certainly what is being done as far as the present situation is concerned. At the same time the minister says it has been paid month by month because it is to cover the interest payments they will have to make during the next year. Surely it is either retroactive or it is not retroactive. The minister has already said that it is retroactive, in part at least, to the 1954-55 pool. Therefore I do not think he can have it both ways in connection with this matter.


Clarence Decatur Howe: Perhaps I can explain it. As of the 31st of July, 1955, everyone is paid. The storage that has accumulated on wheat up to that time has been paid.


Douglas Scott Harkness: Yes.


Clarence Decatur Howe: Then, beginning there, the wheat in storage on the 1st day of August is divided into two lots; 178 million bushels, which is the normal carryover and will continue to be paid for by the pool, and 217 million bushels, which is going to be paid for by the government. That wheat is going to be held in storage for the full year. So each month we pay the storage charges on 217 million bushels of grain. Is that clear?


Douglas Scott Harkness: I have already said that
myself.


Clarence Decatur Howe: No. I just want to go step by step. If we take two steps at once, we shall get my hon. friend confused again.


Douglas Scott Harkness: I said that myself a few minutes ago.


Clarence Decatur Howe: You were going back to the 1954-55 pool.


Douglas Scott Harkness: Yes.


Clarence Decatur Howe: That is why you
got everybody confused. We are going to pay

Wheat
on 217 million bushels from the 1st of August, 1955, until the 31st of July, 1956. Now this is where my hon. friend, I hope, will not interrupt me, because I have explained it twice, and this will be the last time. If he does not understand it this time, he can talk the rest of the day but I will not say anything more.
The question becomes what proportion of the 217 million bushels belongs to the old pool and what proportion belongs to the new pool. That proportion will vary each month. Finally, say about April, the old pool will have disappeared and the full payment applies on the new pool, for in the meantime the old pool is being shipped out. A smaller proportion each month applies to the old pool and a larger proportion applies to the new pool. Does that mean anything at all?


Douglas Scott Harkness: I do not think the minister and I are in any misunderstanding in connection with the actual operation that is taking place, and so forth, but the point is this. I have not the wheat pool report for 1954-55 with me-it came out not very long ago-but I think it shows a deficit in the wheat account, leaving out oats and barley, of some $14 million. That is at the end of the old crop year. There have been some differences in that, as wheat has been sold so far. The point I am getting at is that at least part of this $32 million is going to be used to make up that deficit; and the remainder, as far as I can see, is going to be used to make this interim payment which is going to be made to farmers on account of wheat they delivered into the 1954-55 pool. Will the minister say whether that is not the situation?


Clarence Decatur Howe: No.


Douglas Scott Harkness: I should like an answer
from the minister to that question.


Clarence Decatur Howe: The answer is no.


Douglas Scott Harkness: When the minister says the answer is no, does he mean that this $14 million deficit is not going to be made up out of this $32 million?


Clarence Decatur Howe: The deficit in the pool accounts is purely a bookkeeping deficit. The grain in store is credited with the initial payment. It will be sold later at the market price and the deficit will gradually be turned into a surplus. It has nothing to do with this bill or anything we are discussing now. Every time we bring down a statement from the wheat board there is a deficit shown, and that deficit is a bookkeeping deficit. 1 do not ever remember seeing a statement come down showing a surplus. At that time of the year it is not normal to have a surplus.
TMr. Howe (Port Arthur).!


Douglas Scott Harkness: I think perhaps the place to prosecute this matter further is in the committee on agriculture and colonization when the wheat board accounts are dealt with there. However, I think there is no question but that in effect that is what is going to happen to this money. Perhaps there is not much use in our continuing to argue further about the matter here.


[Stage Direction]
Amendment agreed to.
Clause 4 as amended agreed to.
On clause 5-Use of moneys by the board.
John George Diefenbaker: Mr. Chairman, I should like to find out from the minister the reason for the inclusion of certain words in this clause. First I will read the clause, and then I will refer to the words to which I wish to direct attention. The clause reads:
The board shall, as the governor in council on the recommendation of the board directs, use moneys payable to it under this act in payment of expenses incurred in connection with the operations of the board attributable to wheat, and the board shall adjust its accounts accordingly.
What is the purpose of the addition of the words, "as the governor in council on the recommendation of the board directs"? My understanding of the wheat board is that it is an autonomous body not subject to the direction of the governor in council, which receives certain moneys for certain purposes as explained by the minister in that rather incongruous collection of explanations the committee has had in the last few moments. Why does the governor in council step in here? Why is the governor in council empowered to act as a kind of director for the wheat board? The wheat board receives certain moneys under clauses 3 and 4, which moneys are payable to the board by the Minister of Finance. Why should the governor in council direct what the board shall do on its own recommendation?


Mr. Lesage:: Because this is the taxpayers' money.


John George Diefenbaker: Well, I am very much interested in that statement. I am not so sure that is the explanation, but if that is the reason it is at least a step in the right direction. The board receives moneys for certain purposes and must use those moneys payable in payment of expenses incurred in connection with the operations of the board and pursuant to the statute itself. Why then does the governor in council retain, over and above the statutory provisions, a further power as set out in this clause? I am asking that because this is an unusual clause.
I am not one of those who believe that these boards should be placed above parliament but I do ask why, when the board

Wheat
is circumscribed under a statute in respect of the moneys it receives, it has to go to the governor in council and obtain an order in council to do that which the statute itself empowers the board to do. That cannot be brushed off by the mere suggestion on the part of the minister who interrupted a minute ago that it is because it is the taxpayers' money. It was the taxpayers' money. It is turned over to the board in pursuance of the statute to do certain things. Why is the board not permitted to do those things, empowered as it is by the statute, without having to go to the governor in council again to have an order in council passed to empower the board to do that which parliament authorizes the board to do, and to do it on the recommendation of the board?


Clarence Decatur Howe: What part of the legislation is my hon. friend referring to with respect to directing the board how to apply these funds? Which clause directs the board how to use these funds?


John George Diefenbaker: I am referring to the words beginning with the fourth word in the first line of the clause and ending with the word "directs" in the second line. Why are those words included?


Clarence Decatur Howe: This calls for a decision on the part of the board as to the amount applicable to the earlier pool and the amount applicable to the later pool. There is no way we can set that out exactly in an act. It is an arbitrary division. The board recommend it, and as a matter of fact the board ask that their recommendation be considered and confirmed by the government. No board likes to make such an arbitrary division and have it questioned later on by the Auditor General or by anyone else.


John George Diefenbaker: Mr. Chairman, if the government is learning from the criticisms of the opposition I must say this is a laudable step. I was merely asking for information to ascertain the situation, because only in the last few days we have had an example of how far parliamentary control is actually removed on occasion. On the 16th of this month we had an example, as found at page 1231 of Hansard, when the hon. member for Burnaby-Richmond endeavoured to place a petition before parliament embodying the request of himself and those associated with him for the establishment of a television station in British Columbia. The Clerk of the house took it on himself to say this:
It is my opinion that since parliament has vested in the governor in council and in the Minister of Transport the exclusive authority to approve and issue licences for the operation of television stations, the house has no jurisdiction in such
matters. . . . Therefore, I maintain that according to the practice of this house the petition should not be received.
The petition was regular; yet parliament was placed in the position that it dare not consider the matter covered by the petition because a board had been set up independent of parliament and not subject to the control of parliament, in so far as the exercise of the powers are concerned, to determine where television stations shall be established.
That is the reason I am asking for information now. If this clause is designed to bring back to parliamentary control, to a greater extent than under any other statute up to the present time, boards set up with absolute powers as under this legislation, then I most certainly commend the stand. I think it is a proper thing, and that is the reason I am asking for information. On the 16th of February I heard Mr. Speaker approve the Clerk's decision that this parliament cannot even have a petition brought before it because a board has been set up, and I must say that if that is the case then indeed a trend is taking place that is very serious and derogatory to the powers of parliament.
I am glad to have the minister's answer; and if this clause means that from now on whenever these matters come up, because the governor in council will have the power to pass an order in council the information will then be furnished to parliament by the responsible minister, then I certainly commend what has been done in this connection because that is what we have been contending for. We have contended that these boards should be subject to interrogation through the minister in the House of Commons, to the end that their actions must be ratified by parliament and be subject to the scrutiny of parliament.


[Stage Direction]
Clause agreed to.
On clause 8-Limitation.
Donald Methuen Fleming: There is one question on clause 6. We have been dealing with a figure of 178 million bushels, and certain answers have been given as to how it was arrived at. However, I would ask the minister if, with greater particularity than he has exercised thus far, he would indicate just how the figure of 178 million bushels was chosen as the breaking point for this purpose.


Clarence Decatur Howe: The first year of big crops was 1951. We went back from then 15 years and took the average carryover of the 15 years.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
[Stage Direction]
Committee on Atomic Energy ATOMIC ENERGY

Clarence Decatur Howe: That a special committee be appointed to examine into the role of government in the field of nonmilitary research in Canada, including:
(a)	operations in the field of atomic energy,
(b)	operations of the national research council. That the committee be empowered to sit during
the sittings of the house and to print such papers and evidence from day to day as may be ordered by the committee and to report from time to time; and that notwithstanding standing order No. 67 the committee shall consist of twenty members.


Mr. Green:: Is the minister going to make a statement?


Walter Edward Harris: I take it that although this will not be a lengthy debate there will be some speeches that hon. members would like to make on it. Perhaps we could break the rules to the extent of adjourning this and calling it five o'clock so that we could proceed with the other business.
The Acfing Speaker (Mr. Applewhaile): I
always hesitate to accept the responsibility of calling it five o'clock before it is five o'clock, because the sponsor of some private measure may not be present, and I do not think it should be held against him if that is the case.


Walter Edward Harris: Quite so.
On motion of Mr. Harris the debate was adjourned.



PRIVATE BILLS


[Stage Direction]
On the order:
Second reading of Bill No. 109 (Letter W-3 of the Senate), intituled: An act for the relief of Morris Gilbert.-Mr. Hunter.
The Acfing Speaker (Mr. Applewhaile): As
often occurs, there are a number of divorce bills. Is it agreed that these second readings be taken at the same time?
Stanley Howard Knowles: No. I would prefer you to call this order; then I move, seconded by the hon. member for Mackenzie (Mr. Nicholson):
That the house do now proceed to order No. 46. The Acting Speaker (Mr. Applewhaile): Is it the pleasure of the house to adopt the motion?


Walter Edward Harris: lust on a point of order, Mr. Speaker, I have 10 objection to my friend taking this proceeding without notifying me, but is there any particular reason for this so we can judge the situation?


Stanley Howard Knowles: With regard to the initial statement of the Minister of Finance the hon. member for Parkdale (Mr. Hunter), whom I advised of my plan, was going to inform the minister. I do not hold it against him if he neglected to do so. In answer to the minister's question, we feel that there are other items of legislation of more importance than divorce bills.


Walter Edward Harris: I do not oppose the motion at the moment, Mr. Speaker, but for the record I should like to enter an objection that those persons who have followed the procedure and filed their petitions and have bills before the house are entitled to have those bills considered in whatever sequence we normally reach them, though there may be special reasons for putting off this or that bill. I have no objection to the motion, sir.


[Stage Direction]
Motion agreed to.

Chesley William Carter: the second reading of Bill No. 122, an act respecting the general synod of the Church of England in Canada, the missionary society of the Church of England in Canada, the women's auxiliary of the Church of England in Canada and the Church of England consolidated trust fund.
He said: In order to understand the purpose of this bill, Mr. Speaker, it is necessary to know something about the organization and administration of the Anglican Church of Canada. For purposes of church government the fundamental unit of the Anglican Church of Canada is the diocese, which is under the authority and guidance of a bishop in matters both spiritual and temporal. The diocese of Newfoundland to which I belong was founded in 1839 with the Right Rev. Aubrey George Spencer as its first bishop. Previous to this Newfoundland had been administered as part of the diocese of Nova Scotia, which had been founded in 1787. In 1844 Bishop Spencer was succeeded by Bishop Field.
The letters patent which nominated the Rev. Edward Field as bishop also declared that on appointment Bishop Field would become a body corporate with the ordinary powers and functions of any corporate body. As soon as a diocese is sufficiently well organized a governing body known as the diocesan synod is set up to administer the temporal affairs of the diocese.
The diocesan synod of Newfoundland was organized in 1870 and incorporated in 1875. Every diocesan synod is composed of two houses, the house of the clergy which includes all the clergy active in the diocese,

and the house of the laity which is composed of the lay delegates appointed by each parish at its annual meeting. Matters which affect the whole church of Canada are in the hands of a corporate body now known as the general synod of the Anglican Church of Canada. This general synod is composed of two houses, the upper house or the house of bishops and the lower house made up of a body of lay and clerical delegates who are elected in equal numbers by each synod. It will be seen, therefore, that the system of government employed by the Anglican Church of Canada closely parallels our own federal system. The diocesan synod would be the counterpart of the provincial government and the general synod would be the counterpart of our own parliament of Canada.
The last meeting of the general synod took place at Edmonton, Alberta, from August 30 to September 8 of last year. The upper house consisted of 40 bishops, of whom 28 were diocesan bishops and the remainder were retired bishops. The lower house was composed of 284 elected delegates, half of whom were lay delegates and half clerical. One of the first matters considered by the general synod at this last meeting at Edmonton to which I have just referred was the following resolution:
Resolved that the church hitherto known as the Church of England in Canada shall in future be styled the Anglican Church of Canada.
After due consideration and debate this resolution was passed by both houses with a substantial majority. The vote in the upper house or the house of bishops was 23 to 4 and in the lower house 174 to 40. I should like to make it quite clear that the decision of the general synod to change the name of the church requires no parliamentary sanction whatever. However, at various times in the past this parliament of Canada has passed a number of acts dealing with various bodies and organizations affiliated with the church and with the property owned by those bodies. As the name of the church has been written into some of these acts, the purpose of this bill is to effect a corresponding change in the name of the church wherever it appears in any of these measures.
Hon. members may wish to know why it was decided that a change of name was necessary. I can assure hon. members that it was not a snap decision. It has been under consideration on and off for over 40 years. It first came before the general synod in 1911. It was considered by the general synods of 1915, 1918 and 1921. It came up again in 1931 and was dropped until 1949. While support 67509-99
Private Bills
for the change tended to increase during the years, on none of those occasions was there sufficient support to have the change approved by any of the general synods. In 1954 the Primate set up a commission to study the whole matter, and it was the recommendation of this commission, embodied in the form of a resolution, that was passed at the last general synod.
The primary reason for the change was that the name "Church of England in Canada" no longer properly describes the present autonomous and independent status of the church in Canada as it did in the early days of its history.
Hon. members may recall I pointed out at the beginning of my remarks that the diocese of Newfoundland was founded in 1839. Prior to that date the work of the church in Newfoundland, and in all the colonies, was financed from the mother church in England and carried out under the direction and authority of the Bishop of London. The first chaplain arrived in Newfoundland from England in 1583, and it is possible that this date may mark the beginning of the history of the Anglican Church of Canada.
The cathedral parish of St. John's, Newfoundland, of which I am a member, claims the distinction of being the oldest parish of the Anglican church in Canada. It was organized by Rev. John Jackson in 1699, and financed largely by funds supplied by church organizations in the old country. One of these organizations was the society for the promotion of Christian knowledge, commonly known as S.P.C.K.; another was the S.P.G., or the society for the propagation of the gospel.
Today the situation is quite different. The Anglican Church of Canada is financially independent and conducts its own missionary activities in various parts of the world. Indeed, one of the highlights of the general synod at Edmonton was the presentation of a gift of $50,000 to the newly-appointed Bishop of Korea for his work in that diocese. No longer do our clergy come to us from England. Our clergy today are recruited from our own congregations and trained in our own Canadian theological colleges. Our bishops are no longer nominated by letters patent. They are now elected by the diocese which they are called upon to govern. It is quite probable that the late Bishop of Newfoundland, the Right Rev. Philip Abraham, who passed away on December 22, 1955, is the last member of the house of bishops to be consecrated following letters patent.
Another reason was that the missionaries and clergy working among newly arrived immigrants found that the name "Church of

Private Bills
England in Canada" conveyed to these people the erroneous idea that membership in the church was confined and restricted to people of English birth and ancestry. Be that as it may, after many years of consideration this decision to change the name of the church has been approved by a substantial majority in both houses of the general synod. This bill results from that action, and since it is a matter of importance to some 2 million Anglicans in all parts of Canada, I strongly recommend it to the house for approval.


Leonard T. Stick: Mr. Speaker, I should like to support what my colleague from Burin-Burgeo has said. My words will be few. I think it has been found by the Anglican church in Canada that as Canada has grown and become sovereign in her own right-and particularly is that so since the union with Newfoundland-the church has found herself somewhat in the same position. It is now by this legislation and by law becoming sovereign in its own right in Canada. It is felt that since this nation has grown up and become independent, so the Anglican church in Canada is now Eully grown, and this is another step to show (hat it is now sovereign in its own right. I have much pleasure in supporting the petition of my colleague from Burin-Burgeo.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on miscellaneous private bills.
Mr. Speaker:: It was agreed earlier to by-pass divorce bills and let them stand until later this day, and take second reading of Bill No. 146. Is that agreed?


Some hon. Members:: Agreed.



CANADIAN EQUITY INSURANCE COMPANY

Mr. John Hunter (Parkdale) moved: the second reading of Bill No. 146, to incorporate the Canadian Equity Insurance Company.


Mr. Macdonnell:: Will the sponsor of this bill say something about it?


John William Gordon Hunter: Mr. Speaker, the object of this bill, of course, is to incorporate a company which shall carry on the business of fire insurance and classes of insurance other than life insurance. Its capitalization will be $1 million divided into 10,000 shares of $100 each.
In the event of incorporation of the company, arrangements have been made for the subscription for and the issue of 5,000 shares of the company at par and the payment of a premium of $500,000 to the company for shares by certain proposed shareholders. In the result, before the company commences business it will have capital and surplus (Mr. Carter.]
accounts totalling $1 million, which is $250,000 higher than the present minimum amount desired by the Department of Insurance. No incorporation fees or expenses are to be charged to the company.
It is expected that after incorporation, shares will be issued so that the capital of the company will be held as follows: 50 per cent by a Dutch insurance company whose name I would not even attempt to pronounce; 20 per cent by the Hibernian Fire and General Insurance Company Limited of Ireland; 19 per cent by another Dutch company which I would not attempt to pronounce; 5 per cent by another one that I cannot pronounce; and 6 per cent by the directors.
The head office of the company will be in Toronto. The initial classes of business for which a certificate of registry will be sought are: fire insurance; accident insurance; automobile insurance; boiler insurance, excluding machinery; inland transportation insurance; personal property insurance; plate glass insurance; real property insurance; theft insurance; and in addition thereto civil commotion insurance, earthquake insurance, limited or inherent explosion insurance, falling aircraft insurance, impact by vehicles insurance, limited hail insurance, sprinkler leakage insurance, water damage insurance, weather insurance and windstorm insurance, limited to property insured under a policy of fire insurance of the company.
The amount of the company's paidup capital and premium is sufficient to qualify the company to apply for a certificate to transact all classes of insurance other than life insurance.
I think that is about all that is relevant.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.

John William Gordon Hunter: the second reading of Bill No. 147, to incorporate Interprovincial Trust Company.


James MacKerras Macdonnell: Would the hon. member make a statement; this is very interesting.


John William Gordon Hunter: My hon. friend is immensely curious. This bill has been fully discussed with Mr. MacGregor of the department and it is believed that he is satisfied in all respects as to the people behind the company and the proposed method of operation. The applicants, of course, are just provisional directors at the present time, although they may become permanent directors.
It is intended that the initial capital of the company required by Mr. MacGregor before

a licence will be issued will be raised by private financing, and that after it has been incorporated and licensed to do business, additional capital will be raised by selling shares to an underwriter who will in turn sell them to the public.
The present intentions of the people behind the company are that they will as soon as possible open offices in Toronto, Edmonton, and Vancouver, and that as the company develops offices will be opened in other major cities of the country. The company intends ultimately to carry on a general business of the same nature as that carried on by most of the existing leading trust companies.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.

[Stage Direction]
On the order:
Second reading of Bill No. 148, an act respecting Quebec North Shore and Labrador Railway Company-Mr. Brisson.
Mr. Speaker:: In the absence of the sponsor of this bill it will be allowed to stand. Shall we now revert to divorce bills?


Stanley Howard Knowles: That was not what was in my mind when I moved that we proceed to order No. 46. It was my intention after that for us to move to order No. 70. I thought when it was done by agreement it was understood we would now go on and move to public bills.


Mr. Speaker:: The only point that has to be made clear for the purpose of the scroll is that when the hon. member for Winnipeg North Centre moved his superseding motions the motion for second reading had not been proposed from the chair and therefore he was not superseding anything but it was understood that it was the wish of hon. members that the first group of divorce bills be not proceeded with by agreement, and not by virtue of his superseding motion.


Stanley Howard Knowles: It is quite satisfactory to me, Mr. Speaker, that the divorce bills were passed over by agreement rather than by passing the motion, but it was my thought that in passing over them we were passing over them for today.


Mr. Speaker:: That would be agreeable. Is it agreed?


Some hon. Members:: Agreed.


Walter Edward Harris: Yes. I think it is probably well known that the hon. member wants to make a speech in the remaining 45 minutes and I suppose we really ought to humour him.
67509-99i
Industrial Relations


Mr. Speaker:: What does that mean?


Leonard T. Stick: Our genial minister.


Mr. Speaker:: Is it agreed that all the divorce bills on the order paper will stand?


Some hon. Members:: Agreed.



INDUSTRIAL RELATIONS


Stanley Howard Knowles: the second reading of Bill No. 5, to amend the Industrial Relations and Disputes Investigation Act (voluntary revocable check-off).
He said: I confess that it is a temptation to respond to the challenge that was thrown to me a few moments ago by the Minister of Finance, but I also confess that it is not my intention to speak for 45 minutes if for no other reason than that the rules would limit me to 40 minutes. However, I shall limit myself to an even shorter period of time.
The bill now before the house is one which should be well known to all hon. members. It calls for the addition of a subsection to the appropriate section of the labour code, otherwise known as the Industrial Relations and Disputes Investigation Act, which would write into the labour code the voluntary revocable check-off.
The voluntary revocable check-off, Mr. Speaker, is a device whereby the collection of union dues is facilitated particularly in cases where a union has been properly certified and is the recognized bargaining agent in relationships between a group of employees and their employer.
This bill has been before the house a great many times. The history of the way in which the house has dealt with it is, I believe, pretty well known to hon. members. Despite the fact that it has been defeated a number of times some of us still hope that one of these days the government will realize that the rights of labour, one of which is set out in this legislation, deserve the passing of this bill.
As hon. members know, as long ago as 1948 a provision in exactly the words that are spelled out in Bill No. 5 was written into the Industrial Relations and Disputes Investigation Act when that legislation was before the committee on industrial relations. The sponsor of the motion on the basis of which the check-off was written into the labour code at that time was the then Liberal member for Spadina who is now an hon. member of the other place.
Despite the fact that the committee on industrial relations approved of the check-off

Industrial Relations
being written into the labour code at the time we dealt with it in 1948, when that bill came back to the committee oi the whole house it was opposed by the then minister of labour and on the motion of another private Liberal member it was deleted from the labour code. Ever since then we on this side of the house have been trying to persuade the Liberals to accept this Liberal idea which, as I say, originated so far as legislating efforts in parliament are concerned with the hon. member who is now known as Senator David Croll.
I remind hon. members also that later in that same year the last national convention of the Liberal party was held. National conventions of the Liberal party are historic events; they do not occur very often. There was one in 1919, another was held in 1948 and there is a certain amount of interest as to when the next one will come. At any rate, at the national Liberal convention in 1948 a resolution was passed in support of union security.
Union security is a broad term. It is something which can be implemented in a number of different ways and to varying degrees. It is recognized that the voluntary revocable check-off is one form of union security. Therefore I suggest that the fact that in the spring of 1948 a Liberal member tried to write the voluntary revocable checkoff into the labour code, taken with the fact that the national Liberal federation a few months later passed a resolution supporting union security, is a pretty clear recognition that the rank and file of the Liberal party were in support of the proposal made by the then Liberal member for Spadina.
Despite the fact that the Liberal party .s committed to supporting the principle of anion security, despite the fact that quite a number of Liberal members have voted for this bill across the years-in one session I think the number of Liberals who supported it got as high as 17, which is quite remarkable-the government as a whole has not seen fit to agree to this legislation. I hope the day will come when the government .will see the wisdom of this legislation and will realize that it does involve a recognition of the rights of labour which labour in Canada deserves.
In addition to the support of this principle which has been shown by the Liberal party in the way I have indicated, my bill has had the support of the three groups on this side of the house every time it has come to a vote.
I might point out also that in at least six provinces of Canada the provincial labour legislation includes1 some version of the voluntary revocable check-off. Those provinces are
fMr. Knowles.]
the three in the far west, British Columbia, Alberta and Saskatchewan, together with three of the maritime provinces, namely Newfoundland, Prince Edward Island and Nova Scotia.


Leonard T. Stick: May I interject to say that Newfoundland is not included in the maritime provinces. If the hon. member would use the words "Atlantic provinces" he would be more correct.


Stanley Howard Knowles: I was afraid I was going to have an argument over my statement about the check-off, but I am happy to make the correction that Newfoundland regards itself as one of the Atlantic provinces, not as one of the maritime provinces. At any rate, Newfoundland, Prince Edward Island and Nova Scotia of the Atlantic provinces do have the check-off in their labour legislation.
This business of six provinces supporting something has become a bit of a watchword in relation to another piece of legislation. I hope the fact that we have six provinces supporting the principle of the voluntary revocable check-off will make this bill more acceptable to the Minister of Labour (Mr. Gregg) and to the government in general.
In addition to the six provinces I have mentioned as having the voluntary revocable check-off, I believe that in the minister's own province of New Brunswick there is a provision for the voluntary revocable checkoff with respect to workers in the mines. I do not think the provision in New Brunswick is as broad as it is in the other provinces, but at least there is a partial provision there. In other words we have got beyond this magical number of six, we have got to the point where about six and a half out of the ten provinces have the voluntary revocable check-off.


Mr. Brooks:: New Brunswick is more than half a province.


Stanley Howard Knowles: I seem to be having trouble with my friends from the Atlantic and maritime provinces. I hope they will understand that any error is quite unintentional. I did not mean that New Brunswick was half a province, not at all. Perhaps I can put myself in the clear by pointing out that my father was born in Nova Scotia and my mother was born in New Brunswick, so I would not indulge in anything derogatory to the maritime or Atlantic provinces. What I meant was that New Brunswick is half way along with this particular type of legislation.
In addition to the support of this principle which I suggest is indicated by the facts I have stated to date, I am sure the Minister of Labour knows that when the question of the

check-off has come before conciliation boards, more often than not such boards have recommended in favour of some form of union security, and more often than not in favour of the voluntary revocable check-off except in those cases where something better has been recommended such as the Rand formula. It is a few years now since there was a treatise on this matter in one of the issues of the Labour Gazette. However, in that treatise, figures were given showing that out of 125 cases that had pome before conciliation boards where the question of union security was involved, 90 of the boards had recommended in favour of some form of union security.
While across the years the trade union movement has had to fight pretty hard to be recognized-it is a long story and I shall not attempt to go into it at this time-the point has been reached in Canada where it is becoming fairly generally recognized that labour unions are here to stay. They have a tremendously important part to play, not only on their own behalf and on behalf of their members but in the economy of the country, and all possible steps should be taken to accord them full recognition.
Because this point of progress has been reached, to me, to many of us on this side of the house, and I think to quite a few on the Liberal side of the house as well, it is disappointing that the federal government is still dragging its feet so far as this matter is concerned. It may be pointed out, and quite successfully, that a good many of the employees who come under federal labour jurisdiction already have the check-off in one form or another. For example, the railway employees have even more than the voluntary revocable check-off; they have the Rand formula.
Surely with this principle being established by law in so many other jurisdictions the time has come when the federal government-it can no longer give the lead because that has been taken by others-should follow along and put this principle into our federal labour legislation.
As to the meaning of the phrase, voluntary revocable check-off, I believe this is pretty well covered by the language of the bill. I do not think the wording is ambiguous as the drafting of bills sometimes is. May I spell it out by saying that what is involved in the voluntary revocable check-off is that when a union has been certified by the Canada labour relations board as the bargaining agent for a group of employees, then and only then that union has the right to request, which request must be granted, a check-off
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of the dues of its members. Even after that, under the terms of the voluntary revocable formula, the dues of individual members are checked off, that is deducted from the pay of the workers and paid over to the union, only for those individual members who sign cards or statements asking that their membership dues be deducted from their wages. Even after the deduction has been provided for in that way, it is still revocable in that any member of a union who has requested that his dues be deducted may revoke that request and, if he does so, the company discontinues deducting that particular employee's union dues. So it is clear that it is the very minimum of what is known as union security. It is the least provision one can ask to further the cause of helping to retain union membership and making it possible for unions to get along with other important business rather than spending time on the details of collecting dues.
The idea of a check-off is not confined to unions. Most employers, whether government or private, make deductions of one kind or another from their employees. The best known form of check-off, and the one most widely practised, is that which comes under the Minister of Labour's colleague, the Minister of National Revenue, in the income tax deductions that take place at the source. Almost everyone in Canada whose income is in a bracket that makes him taxable at the end of the year finds that there is a deduction made from his cheque every week, every two weeks or every month. In addition to that, people request deductions for various charities to which they wish to make contributions, or for purchases of Canada savings bonds and so forth. Pension fund payments are also deducted at the source. In fact, I have seen statistics of firms where there are scores of items that are deducted, not from the same individual, but deducted by an employer in the course of his business.
Why there should be this resistance by management to this particular type of deduction is hard to understand, unless it is that somehow or other management likes to hold back on the full recognition of the rights of labour and the place of the trade union movement in our economy.
Many fine things are said in this house and on public platforms of all kinds throughout the country about the place of Canadian labour in our economy, about the right of our working people to their hard-won privileges, about their right to a decent standard of living and their right to security. That is all wrapped up, so far as workers are concerned, in their organized effort through their trade union movement, and they feel very

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strongly that they should have the recognition implied in the voluntary revocable check-off.
I have no doubt that when a very important event takes place in the city of Toronto, beginning April 23, the Minister of Labour will be there and will extend his greetings, and the greetings of the government and people of Canada, to the Trades and Labour Congress of Canada and the Canadian Labour Congress on the occasion of their merging into the Canadian Labour Congress. It will be a very important and significant event, and all of us who are related in any way to the labour movement are very proud of the step that is being taken. We feel that it will be for the good of workers generally and for the good of Canada that unity has been achieved between these two major labour bodies, and it augurs well for the future, not only because of the union that is taking place but because of the spirit in which it is being effected.
It seems to me that the Minister of Labour would feel much happier going to that convention-if he gets an invitation, as I am sure he will-if he could indicate to the new congress a few steps that have been taken this very year to show that the recognition of the labour movement consists not just of words, not just of the fine speech he will make from the rostrum if he goes there, but in legislation such as this that would mark a further step in national recognition of the place of the trade union movement in this country.
As I say, I have been pleased that in the past we have had the support, not only of all those on this side of the house but of a dozen to 15 or more Liberals, when this measure has come to a vote. I hope that this year the Minister of Labour will support it and that this piece of legislation, which recognizes the right of labour in a particular way, will be included in our national labour code.
(Translation):


Mr. Arthur Masse (Kamouraska):: Mr. Speaker, in the six years I have been sitting in this house this question of the compulsory check-off has come up quite often, practically every year. After a thorough study of the matter I have come to the conclusion that it is my duty to oppose this legislation.
I want to say first of all that I am in favour of trade unionism. Secondly, each worker should support his own union. Thirdly, that achievement should come about through an agreement between employee

and employer, and not through an act of parliament.
Here is what this legislation seeks to accomplish, and I quote section 1, paragraph 3:
Upon request of a trade union entitled to bargain collectively under this act on behalf of a unit of employees and upon receipt of a request in writing signed by any employee in such unit, the employer of such employee shall, until the employee in writing withdraws such request, periodically deduct, and pay out of the wages due to such employee to the person designated by the trade union to receive the same, the union dues of such employee.
I will come back later on to that last part, for I believe it is up to the worker to designate that person.
And the employer shall furnish to such trade union the names of the employees who have given and withdrawn such authority.
I do not agree at all with the sponsor of this bill when it comes to the means of effecting such social security. Since I have been sitting in this house I have often noticed that all groups represented here approve the principle of a bill but disagree on the way it should be carried out. If this legislation could bring about a greater measure of social security I would gladly vote for it, but I fear its adoption would have rather dire results.
The economic history of Canada shows that trade unionism plays a very important part, even an essential part in our industrial expansion. In my opinion, labour legislation derives its strength from the fact that it enables the members of a group or nation to obtain information on the matters under dispute. I agree with those who believe that unions have come to stay and if we want to protect them, we must give them the opportunity of extending their activity, and not hamper their work.
It is not by fostering disagreement between employers and workers that we will promote unity in trade unions. In that connection, I would like to quote an excerpt from "The Labour Problem in the Light of the Social Doctrine of the Church in Quebec":
Professional organizations.
In order to make their full contribution in the national economy, promote their professional interests and further their legitimate claims in the economic and social fields, workers must unite in strong professional organizations.
Every man is bound to ensure the protection and security of all his professional interests. He should strive to secure for himself and his family what he needs to lead a truly human life, sheltered from the uncertainties of the future. He must contribute to the welfare of his fellow citizens, particularly those who share with him common interests. It is his duty to co-operate toward the

restoration of a better balanced social order, while furthering the respect for justice in all labour, industrial and business activities. Alone, he cannot succeed. By uniting with his fellow workers, he will be able to discharge that imperious social duty. Under present circumstances, he has therefore a moral obligation to take an active part In professional organization.
And I now quote paragraph 106:
By striving to ensure unity and harmony between capital and labour, one is not hampering the work of trade unions; on the contrary, such an effort is essential to ensure a careful and courageous evolution towards the adequate development of the labouring class; such an evolution will bring permanent and stable results.
In brief, the proposed legislation does not favour in the least the labouring class but does favour the union leader who wishes to ensure the perenniality of his salary.
Mr. Speaker, I have learned and I have taught that a good engineer, when undertaking to change the topography of a piece of land, must accept the ensuing consequences.
The same goes for any attempt to change the basis of the legislation and regulations pertaining to employers and employees.
I am also convinced that the standard of living of our working class can easily be compared to that of the labouring class of other countries.
This is due to the fact that our legislation has done more than any other to further the development of the labour movement in this country. Why should we complicate by legislation the friendly relations between employers and workers?
If improvements have been so consistent, we owe it to the understanding and the intelligence of our labouring class, supplemented by a wise legislation contributing to the application of principles capable of promoting the development of the labouring class.
If I have not taken part in this debate up to now, it is because, being the representative of a predominantly agricultural district, I had decided to abstain from speaking; however, having received from a mining organization of my province a request to oppose this bill, I felt it my duty to express my opinion after a careful study of the matter.
I do not believe it is fair to ask employers to do the work which the unions themselves should do. This procedure could very well bring about indifference on the part of the worker as regards his union since he would no longer be in contact with his association. Moreover this would seem to infer that the worker would not pay his dues willingly.
I am too well acquainted with the workers of the province of Quebec to allow such doubts
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to be cast upon the way in which they discharge their obligations. I would like to quote further, in this connection, from "The Labour Problem in Quebec", page 12.
A number of facts observed by us among the working people of Quebec are such as to give rise to real admiration because they reveal the riches of the worker. Our city families, our workers have fine qualities. Could we remain silent in the face of the sacrifices which the working class father constantly undergoes on behalf of his wife and children? How could we do justice to the devotion of those many wonderful mothers through whose strength and resourcefulness families find comfort in adversity and a livelihood from a limited budget? Through an appropriate education and in co-operation with their husbands they find the means of bringing up their children in a Christian way and of preparing them for urban living.
We have noted that our province has become largely urban in character. The adaptation of the countryman to city living is difficult. The worker and his family are beset with dangers, but resistance is taking shape. Class consciousness is developing among our workers; they demand that their rights be respected. Faced with this rising force some are worried, others remain confident and these are the more numerous.
Let us assume that there are in this country one million workers paying two dollars monthly. That means two million dollars per month that the employers alone would be called upon to pay over to the union treasury.
It seems to me that that is contrary to the right of the individual to do what he pleases with what is rightfully his.
In carrying out my professional duties I have always tried to let responsibilities remain where they belong. In this instance these responsibilities are those of the employer, the worker and the province concerned.
And when I say that this is the business of the employer and the worker, I quote again from the publication entitled "The Labour Problem in Quebec", page 50:
Relations with employees
The true employer, whatever the number of his employees, realizes his obligations as head of a working community. He appreciates his employees, not only for their physical strength or their productive ability, but also for their co-operation in a common endeavour and, particularly, for their dignity as men and Christians. A Christian employer is known by his determination to create a happy atmosphere in the enterprise, by his genuine solicitude for his associates in the labouring effort, by the genuine charity he shows towards them.
As regards the worker, I quote from page 34 of the same book:
Action required of the ones primarily interested.
The rehabilitation of the worker's status can be achieved properly only if workers have a noble and truly Christian appreciation of themselves and only if they are fundamentally prepared to co-operate and to help. Before counting on the

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help of others, they must rely on their own efforts, on their own defence, on their mutual assistance, in the application of which the basic element is the feeling of close solidarity between those who give and those who take. They shall therefore be the primary makers of their improved situation, failing which the best reform projects cannot achieve the desired results.
Moreover, the province should make sure that it can exercise its rights. To this effect, I wish to quote, from page 61 of the same publication, an excerpt dealing with the role of the state as between employers and workers.
The workers, who are primarily interested, the employers, the members of the liberal professions and the educators who, in varying degrees, have a considerable influence over the life of the workers, should aim to contribute, each in his own way, to the rehabilitation of the labour conditions, and to "improve gradually and by peaceful means the physical and spiritual status of the working man". In their service, the state wields authority in order to place all, and therefore the workers, within easy reach of living conditions corresponding to their dignity. While it is not part of the state's duty to substitute its own action to that of the individuals and the lower level groups, it is within its province to take particular care of the weaker members.
I believe that very few Quebec companies fall under the federal labour code and that it would be more advisable to let the provincial governments legislate in this matter. I also believe that the only ones who could solve the problem to the advantage of those involved are the workers and employers themselves.
In my opinion, union security, whatever it may be, should continue to be discussed
by the company and the union, with a view to eliminating all coercion.
Moreover, it would become increasingly difficult for the provincial governments who, until now, have resisted all union pressure to write the check-off into their labour code,- it would become increasingly difficult, I repeat, to maintain their opposition to this request, which scarcely tends to improve industrial relations.
For all those reasons, I shall oppose the adoption of this act as long as the workers of my province have not convinced me that it is needed.
(Text) :



BUSINESS OF THE HOUSE

Walter Edward Harris: Monday will be private members' day, Mr. Speaker. Tuesday we shall take the motions on the order paper setting up the several committees, beginning with that of estimates and then atomic energy. After that we shall take second reading of the Canadian Farm Loan Act.


Stanley Howard Knowles: May I ask if it is the intention to have the third readings previous to those items or later on?


Walter Edward Harris: Monday, normally.


Stanley Howard Knowles: We are speaking about Tuesday and the third readings of the bills that were moved up today.


Walter Edward Harris: Certainly.


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