1956-08-06

Hon. W. E. Harris (Minister of Finance):: have just been informed that those in the opposition group who are particularly concerned with the first item of today's business, namely the unemployment insurance amendment, are prepared to have the resolution passed after one speech has been made by each of the opposition parties, so I would ask that the government members take the same view and allow the resolution to carry.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 98-Mr. Nowlan:
For a copy of all letters, memoranda, petitions, telegrams and other documents, exchanged during the past two years by the Postmaster General, or any agent or person acting on behalf of his department, or on behalf of any other minister of the crown, and any other person or corporation, concerning the closing of post offices at Whiteside, Walkerville, Evanston, Grantville and Lower River Inhabitants, Cape Breton island, Nova Scotia.
Motion agreed to.

[Stage Direction]
Motion No. 99-Mr. Diefenbaker:
For a copy of all letters, including in particular alleged complaints, if any, which have passed between the department of the Postmaster General or any officials of his department, and any person or persons, since the 1st day of January, 1956, regarding the postmastership at Debden, Saskatchewan, and the temporary filling of the position.
['Mr. Speaker, I am unable to answer that question because I do not know when the house is going to rise, but', '\nas I stated in the house the other day we are in consultation with other governments with whom we have been discussing this question in order to establish a relationship, if any, as was pointed out the other day, between the supply of arms to Israel at this time and the dangerous situation in the Middle East arising out of the Suez incident.']
Mr. Kirk (Shelburne-Yarmouth-Clare):: I
wonder if the hon. gentleman would be willing to let this stand until Wednesday when the Postmaster General will be here.


Mr. Diefenbaker:: Agreed.
Motion stands.



[Stage Direction]
On the orders of the day:
John George Diefenbaker: should like to direct a question to the Secretary of State for External Affairs and ask him
whether or not he is prepared to give a report on the Suez canal area and also would he inform the house and the country whether Canada's official stand follows that of the United Kingdom and France or that of the United States?


Hon. L. B. Pearson (Secretary of State for External Affairs):: Mr. Speaker, there is very little that I can add to what has appeared in the press about the actual situation in the Middle East.
In so far as the latter part of my hon. friend's question is concerned, as to the stand that Canada is taking in this matter, I think that statements previously made have indicated that stand. We know now that a conference is to be called in 10 days and the government hopes, as I know all members of the house hope, that at that conference a solution to this very difficult and indeed dangerous problem will be found which will safeguard the free use of the canal without discrimination and that as a result force of any kind will not be required to bring about that essential result.
I must also deprecate, in a friendly way, the implication of my hon. friend's question that there is necessarily any difference of policy in this matter between the United States on the one hand and the United Kingdom and France on the other. I hope that at the conference in question the three governments will be able to work closely together and that at this conference, as in all other matters-and this is a question of the most vital importance to Canada-the closest co-operation inside the commonwealth and the closest co-operation between the United Kingdom and the United States will be reflected once again.


John George Diefenbaker: Mr. Speaker, if I may ask a supplementary question, is there not a very substantial difference between the attitude taken by the United Kingdom with France on the one hand and the United States on the other, and to what degree is Canada giving support at this time to the stand taken by Britain in order to preserve peace in the Middle East? Will the minister say whether or not, having regard to the fact that Canada is a trading nation, she made any application or suggested that she would be willing to attend this conference so that the weight of her views might be expressed there and
7048	HOUSE OF
Inquiries of the Ministry a degree of support given to the United Kingdom in this hour of great stress and difficulty?


Lester Bowles Pearson: Mr. Speaker, the three governments of the United Kingdom, United States and France have all agreed on a communique, and we have already indicated to this house, through a statement of the Prime Minister, our strong support for the objectives of that communique on which the three governments are agreed. It might be that there is a difference of approach as to how the objectives of that communique can be realized between the United States on the one hand and the United Kingdom and France on the other; but I hope that any possible difference of approach will not result in a difference of policy. I think it is essential from everybody's point of view who is interested in getting this problem solved peacefully that there should be unity between those three countries as to how it should be done.
So far as the supplementary part of the question is concerned, Mr. Speaker, we did indicate to the meeting in London that we would be willing, of course, to attend the proposed conference if we were invited. The criteria which were laid down by the three governments for an invitation to that conference were ones to which we did not take any exception, namely the signature of the Constantinople treaty, the importance to a country of its shipping going through the Suez and the importance of the canal to the trade of a country. As it happened, Canada did not fall within those criteria, and therefore we did not receive an invitation, nor, indeed, did any other western hemisphere country except the United States, nor did South Africa. We have no complaints about that at all; but we would, of course, have been quite willing to attend the conference if we had been invited, and we indicated that to the governments that were meeting in London at that time.


[Stage Direction]
On the orders of the day:
Mr. H. O. White (Middlesex East):: Mr. Speaker, I would like to direct a question to the Secretary of State for External Affairs. Will a decision regarding the delivery of jet fighter planes to Israel be made before this session of parliament ends?


An hon. Member:: Move the adjournment of the house.


Lester Bowles Pearson: Mr. Speaker, I am unable to answer that question because I do not know when the house is going to rise, but


as I stated in the house the other day we are in consultation with other governments with whom we have been discussing this question in order to establish a relationship, if any, as was pointed out the other day, between the supply of arms to Israel at this time and the dangerous situation in the Middle East arising out of the Suez incident.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, before the orders of the day are called I desire to direct a question to the Minister of National Revenue, notice of which I have not previously sent him.
Has the minister received a letter dated August 3, 1956, from F. G. Holberton of Lethbridge, formerly until 1950 an employee of the Lethbridge income tax office, now a partner in the firm of Holberton and Kaun Limited, accounting, auditing, income tax, Lethbridge, in which Mr. Holberton calls in question certain of the minister's statements in answering questions asked in this house by the hon. member for Lethbridge, since the minister's announcement of intention to close the Lethbridge income tax office on September 1, 1956?
No doubt the minister will desire to take this as notice, but perhaps he could tell me whether or not he has received that letter.


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, the question is rather long. I will have to accept it as notice and I will give an answer tomorrow.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, may I ask the Minister of Finance if he has received any recent representations seeking the abolition of the sales tax on cut flowers and, if so, what reply he has made to such representations?


Walter Edward Harris: Mr. Speaker, no representation has been made, I think, since about budget time, as I recall it, although possibly representations have been received in the department.


Donald Methuen Fleming: May I ask the minister what reply he made to the representations he did receive at the time he did receive them?


Walter Edward Harris: My recollection is that I was not able to agree to the representations, but I will have to check to see the reason I gave for that.



UNEMPLOYMENT INSURANCE ACT


Hon. Milton F. Gregg (Minister of Labour) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Unemployment Insurance Act to authorize the unemployment insurance commission with the approval of the governor general in council to make regulations providing for the extension of the act to persons engaged in fishing notwithstanding that they are not employees of other persons, and for including as an employer of a fisherman any person with whom the fisherman enters into contractual or other commercial relationship in respect of his occupation as a fisherman, and also to modify the provisions relating to the requalification requirements for certain subsequent benefit periods and to adjust the duration of regular and seasonal benefits accordingly.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


Milton Fowler Gregg: Mr. Chairman, the resolution standing in my name now before the house is almost self-explanatory; consequently it will be possible for me to join with my three fellow members this morning in making my statement short.
First of all I would like to express my gratification at the understanding that had been reached entirely without my knowledge, which was announced by the leader of the house.
On May 16 last I stated in this house that we had been continuing our investigations to find out to what extent if any the Unemployment Insurance Act might apply to a reasonable number of individuals who were engaged in the fishing industry, many of whom are self-employed. I stated that even though it should be found that a plan could be formulated to provide coverage for fishermen generally it would take a good deal of time to work out anything like a practical detailed plan.
The government has now given consideration to the outline of a plan which the unemployment insurance commission believes can be worked out in detail in a practical manner. This plan would give a limited coverage under special regulations to persons whose main occupation is fishing. For most of those engaged in fishing only seasonal benefits could be made available. In order to bring such a scheme into operation it
Unemployment Insurance Act will be necessary to have an enabling amendment to the Unemployment Insurance Act to provide for collections of contributions from and on behalf of fishermen who are not employed for wages.
In view of the wide variety of ways in which the fishing industry is carried on in different parts of Canada, several months more will be required before it will be possible to announce a practical detailed plan. It is the expectation of the government that this plan can be worked out in time to permit contributions from fishermen to commence by the beginning of the next fiscal year, which is the most satisfactory date if the majority of fishermen are to be put in a position to make enough contributions to qualify for benefits before the end of that fiscal year. This resolution forecasts a short enabling amendment for the purpose I have mentioned.
As to the second part of the resolution, the other clauses in the bill which will follow this resolution propose to modify section 45 (2) and other related sections dealing with qualification for benefit. The present effect of the act is that persons who become unemployed and claim benefits every year have to acquire 30 weekly contributions every year in order to qualify. The proposal will allow these persons to requalify if they make 24 or more new contributions during the preceding year. This change would be accompanied by adjustments in the duration of benefits on such claims and also in the duration of seasonal benefits. It is expected that a substantial percentage of those who were unable last fall to requalify for ordinary benefits will be able to requalify under the modified conditions proposed in the bill which will follow this resolution.
I am informed by the Clerk of the House that if and when this resolution is passed copies of the bill in both languages will be available at the table.


Mrs. Fairclough:: Mr. Chairman, as the
minister said, it has been agreed that this resolution will be considered in committee with only one speaker from each party participating in the debate at this time. Of course we are anxious to see the bill and I presume it will be available today.


Milton Fowler Gregg: That is right.


Ellen Louks Fairclough: The various clauses and
the effect of the amendments I understand will be considered in the industrial relations committee.


Milton Fowler Gregg: If it is the will of the committee of the whole that that should be done, I would be glad to recommend it.
7050	HOUSE OF
Unemployment Insurance Act


Ellen Louks Fairclough: There are just a few
things I should like to say at this time. The Unemployment Insurance Act was completely overhauled last year and the committee went into the revisions exhaustively, but I am sure that most of us did not realize that the new act would impose such restrictions upon employed workers. I am sure we were all caught by surprise. This year many workers have been disqualified because of the requirements of the new act and I still think that those disqualifications were due to the manner in which the regulations were interpreted. It is true that early this year the minister authorized his officials to revise their interpretation of the regulations to admit some of those who had previously been disqualified. Even then, if my memory serves me well, the revision only admitted some 6,000 out of some 90,000 that had been disqualified by reason of the new regulations.
Of course, we were promised that some new revision would be made by about May 15, but that was not found possible, and even with the re-interpretation of section 119 (b) we found that a great many persons in the past winter were unable to qualify for unemployment insurance. So we welcome a revision of section 45 (2), which it is hoped will achieve the result desired.
However, I trust that the minister, in watching the effects of this amendment, will not permit it to go so long this coming winter as to disqualify again a large number of persons who are applying for benefits. Last year it was a case of waiting to see how bad it was going to be before we did anything, and the net result was that those persons who were unable to qualify suffered for the whole winter. They never got on the list, with the exception of those few who were able to qualify after the interpretation of the regulations had been altered. So I hope that, even though the proposed amendment to 45 (2) now appears to cover most of those who might find themselves in difficulties, if and when a new season of seasonal unemployment hits us this coming winter, too much time will not elapse before the minister will take whatever steps are necessary if he finds that even this new amendment to 45 (2) does not produce the desired results.
Now I should like to say a few words with reference to the coverage for fishermen. Those of us who were in the committee last year followed the discussions there with great interest, and all of us, I am sure, were pleased at the interest that was taken by the Minister of Fisheries himself. I am sure that the present regulations that are being brought in are in part due to the keen interest that was taken by the Minister of Fisheries and also
[Mr Gregg.1

by the Minister of Citizenship and Immigration. I am sure that their combined interest in the plight of the fishermen had much to do with persuading the government to institute coverage for these men.
Whilst I am not a fisherman myself, I have felt right along that these men required special treatment because of the very nature of the work in which they are employed. True it is that one of the great difficulties that faced the department was the difference in employment between those who operated on the west coast and those who operated on the east coast. I hope that the amendment to the act and the subsequent regulations, when they are brought down, will take care of this coverage, but I am a little disappointed that it is going to be so long before they go into effect. Coverage has been considered since last year definitely and prior to that, with representations from the groups concerned, and now it will be another year before contributions will be taken, and still another eight months or so before they will be able to benefit.
I have one major disappointment with regard to the bill that will be brought down, and that is that on this occasion when the minister had a golden opportunity to amend another portion of the act he did not take it. I refer to section 67 (1) (c) (iv) with respect to married women. I still believe as I did last year, and I tried to implement that belief with action, that this clause should be eradicated from the legislation. If we could have it stricken from the legislation then section 161 of the regulations would become unnecessary.
I should like to point out to the minister that women now constitute 23 per cent of the labour force and that 15 per cent of all married women are now in paid employment. These are the figures given by the director of the women's bureau of the Department of Labour during the course of the consideration of the estimates of the department. Those of us who have repeatedly asked that this clause be stricken from the act are hopeful, since the minister has not seen fit so far to listen to our pleas, that the studies of the women's bureau of his own department will eventually convince him, and I trust that time will not be in the too far distant future.
You have here a large body of employed persons who suffer discrimination under the act which is not suffered by any other group of workers. In my opinion it is all wrong. We have to remember that the unemployment insurance fund is supported by these workers. The funds, now approaching the $900 million mark, have been contributed by those workers who are covered by insurance and these

funds, which they contribute through weekly deductions from their pay, are not subject to tax exemption. Whether they are insured or whether they are not insured they contribute to the fund, in the first instance through their weekly contributions and the lack of tax exemption therefor, and in the second instance by the government portion which is paid in turn out of taxes collected from employed persons. On the other hand, the employers' contribution is eligible for tax exemption in the hands of the taxpayer. The government contribution, as I said a moment ago, is paid for out of taxes, moneys collected alike from workers and employers.
Because of this it seems to me that all workers have a very real interest in the fund which is being built up, and now, when we have 60 per cent of the labour force covered by unemployment insurance, when we have such a large number of women employees both married and single, I think it is high time that the minister took another view of this offending clause and listened to our pleas to have it removed from the act. We will wait until we see the bill, Mr. Chairman, to make any further comments, and we will follow the discussion with interest.


Mr. Gillis:: Mr. Chairman, I am not going to anticipate any of the details of the bill that follow the resolution. The impression may have been created throughout the country that we are rushing this matter through the house at the last minute, but may I say that is not the case. This matter has been under discussion and consideration by the members of the estimates committee who looked at the minister's estimates as long ago as last April. At that time the minister was not quite clear as to what he could do with respect to amendments, particularly with regard to section 45 (2). The actuaries have been looking at the problem since that time up until a few days ago. The minister now has the necessary data to bring in a bill which is a compromise having in mind what I should like to see. But I think that after discussing this matter briefly with the minister a few days ago, as a member of the estimates committee, the amendment to section 45 (2) will at least considerably modify the situation that existed last winter. I am not going to comment on it now because this bill, I understand, is going before the industrial relations committee where the members of that committee will take a square look at the details of the bill and also point out to the minister any other adjustments we may think necessary in the Unemployment Insurance Act.
There is one thing that I believe the members of this house will have to hammer
Unemployment Insurance Act home to the people of this country and that is that the unemployment insurance fund is a trust fund which belongs to the workers of this country. It is not only the responsibility of the Department of Labour and the Civil Service Commission to protect that fund but it is the responsibility of organized labour, particularly outside of this house, to use that fund as a trust fund that belongs to them. Anyone who injures that fund in any way should be taken to task.
Now, with respect to the fishermen, I may say that so far as the members of the committee are concerned it is the unanimous opinion that the fishermen should be brought under the act. However, it is going to be rather a difficult administrative job. It is not going to be easy, not nearly as easy as it is for the organized labour forces. I do not think we want to create the illusion that the mere passage of this bill will bring benefits to the fishermen within five or six months. It is not going to be that easy because the task of getting them registered, centred in their proper offices, that kind of thing, is going to be difficult. I do not think we should have any illusion as to how rapidly that will be accomplished.
I am not going to say any more at this time, Mr. Chairman, but I did want to dispel the illusion that we were rushing things. We have been considering this matter continually since last April and I believe the members of the committee are unanimous in believing that what we have arrived at is not all that we would like to see but it is the best we can do under the circumstances. The Minister of Labour has been very cooperative in the matter and I join with the hon. member for Hamilton West in saying that with respect to settling the question of bringing in the fishermen, a large part of the credit should go to the Minister of Fisheries. I do not want the press outside to get the impression that the Minister of Fisheries and I are now tilting across the floor to bring about the kind of thing he suggested a few days ago.


Mr. Sinclair:: It will come.


Clarence Gillis: I do say that in all sincerity because I know the minister and his departmental officials worked very hard on it. I know that the Minister of Citizenship and Immigration worked hard as well, but of course he has a motive in that a large part of his riding is a fishing area. He is working for his riding, and rightly so. He was interested in seeing this thing brought about. I expect I shall have something to say when the bill comes back after we have looked at the details. I might say that the

Unemployment Insurance Act married women's regulations are something that I used to call the bear trap, but I think in dealing with the subject a few days ago before the committee, the hon. member for Hamilton West will agree with me, there has been a modification in the administration and they certainly are not working the way they used to do.


Ellen Louks Fairclough: They should not be there at all, anyway.


Clarence Gillis: The last time we amended the act, we took that out but the actuaries placed it back in. I do think there has been a modification with respect to administration, but I agree they should be out and that has been my main demand over the years. However, I am glad we arrived at this decision to get this matter finalized before the session closes. I will say that in my judgment the arrangements now made with respect to amending section 45 (2), by reducing the number of weeks to qualify from 30 to 24, will take care of the big load now. Officials of the unemployment insurance commission showed us, with the use of charts, how it would have worked week by week last year. I think that, if the data are correct, this is going to bring a lot of relief and will pretty well cure the situation that we faced last year with respect to seasonal unemployment. At the same time, it is not going to cover everybody and there will be difficulties with regard to qualifications. However, the amendment is going to break the back of the big load we encountered last winter.


Mr. Hahn:: In speaking on behalf of this group, Mr. Chairman, I might say that we welcome the resolution standing in the name of the Minister of Labour. As was pointed out by the hon. member for Cape Breton South, section 45 (2) has been continually before the committee throughout the whole of the session, as well as other labour problems. The minister has been kind enough to frequently call the steering committee together to discuss certain phases of the question so we must say we have been kept thoroughly informed as to what we might expect will take place.
I am satisfied that if the regulations connected with section 45 (2) are as good as they were when we first revised the act two years ago, then in all likelihood they will meet the desires of the employees. In so far as the part having to do with the fishermen is concerned I, too, would like to be counted with those who have complimented the Minister of Fisheries and the Minister of Citizenship and Immigration upon doing their best to bring this about. I know something of the interest the Minister of
[Mr. Gillis.J

Fisheries has taken in getting unemployment insurance for the fishermen, because we both have fishermen in our ridings on the Pacific coast. The hon. member for Fraser Valley has spoken of the need of fishermen for this provision, and he too has received representations from them. I am sure that they will welcome this part of the resolution, but I foresee a great deal of difficulty in the administration of the act. However, the fact the department realizes its responsibility is of considerable merit, and I would say we could probably leave it to the administration to work out the details.
I have not, therefore, very much more to say at this time since we have agreed that we should have only one spokesman from each group. I think we can do a great deal more of our study of this matter in the industrial relations committee. After we get the bill and study it in more detail, we will have more to say on it on second reading.


Milton Fowler Gregg: I want to thank the three speakers for their co-operation this morning, Mr. Chairman, and I join with them in expressing gratitude to my colleagues the Minister of Fisheries and the Minister of Citizenship and Immigration for the part they have played in making this resolution with special reference to fishermen possible. These remarks apply also to the officials of the Department of Fisheries and the departments other than my own because this has been a joint departmental effort to reach this stage.
The hon. member for Hamilton West expressed some regret that there will be delay even yet with the insurance plan for fishermen. I think it very important, in taking this vital step, that we should do everything we can possibly do to make sure that when the plan does come into effect it will work as well as possible. We believe it may be necessary for some of our officials who have been working interdepartmentally on this to go to parts of our fishing areas to hold hearings or to investigate the conditions that exist there so that the plan might be tailored to take them into the best advantage. I do not mean taking in in the sense that is sometimes used, but to cover the fishermen to the best advantage.
Since the question has been asked, I might make the statement that the plan is intended to cover not only the fishermen on both coasts but also those engaged in commercial fishing in fresh water, not the kind with the rod and the fly.
The hon. member for Hamilton West hoped that too much time would not be lost in bringing it into effect. I can assure her that

we will not delay. She also asked us to watch the working of the amendment to section 45 (2) when we come into the fall of this year. We will do that, unquestionably. It should be recalled by the committee that every fall, as a matter of fact, every month of the year, a great many insured workers, whose applications cannot be accepted for a great variety of reasons, apply for insurance. Consequently, out of the 90,000 that were turned down last fall, there were a great many who would have been turned down had the act never been amended, last session.
With regard to the married women question, we shall continue to have that matter kept under study and very careful consideration. The hon. member for Cape Breton South said-and I was very glad to hear him say it-that we are not rushing this through parliament. The fishermen question has been before the officials of this government, the Minister of Fisheries and the Minister of Labour for five or six years. It has been intensively before us now for two years. Ever since last Christmas section 45(2) has been a source of concern, study and worry as far as my people are concerned; that is, on the official level. As far as the House of Commons is concerned, both items have been to the fore and have been carefully considered ever since the estimates committee met in the early days of March.
Furthermore, we do not want to create the illusion that by bringing in this enabling clause to the act, which will come in the amendment, the fishermen will be getting unemployment insurance next week, next month or even at the end of this year. It will take time for the plan to be completed. When we come to the committee of the whole I shall not be able to answer questions in detail on the plan because of the fact that I do not want to tie the hands of those who are now charged with the responsibility of completing the plan. I shall be able to give, as I have already given or as the resolution has given, certain broad principles governing it.
I think that covers the points that have been made, and I again say, sir, that the Clerk has on hand a supply of the bill for study so that the second reading can be moved forward.
Resolution reported and concurred in.
Mr. Gregg thereupon moved for leave to introduce Bill No. 449 to amend the Unemployment Insurance Act.
Motion agreed to and bill read the first time.
International Wheat Agreement


Mr. Deputy Speaker:: Shall this bill be read the second time later this day, or next sitting of the house, as the case may be?


Mr. Green:: Next sitting.



INTERNATIONAL WHEAT AGREEMENT


Right Hon. C. D. Howe (Minister of Trade and Commerce) moved:: That it is expedient that the houses of parliament do approve the international wheat agreement opened for signature at Washington on May 14, 1956, and that this house do approve the same.
He said: Mr. Speaker, the international wheat agreement, which came into operation in 1949 and was renegotiated in 1953, expired at the end of July this year. In order to continue the agreement, the United Nations convened a conference which succeeded in renegotiating the agreement again, subject to signature and acceptance by the governments of the countries concerned, to run for an additional three years up to July 31, 1959. Thus it is anticipated that the agreement, which has completed seven years, will have at least 10 years of operation.
The results of the renegotiation were announced in the house on April 23, and to bring hon. members up to date on the developments since then, I should mention that the agreement was open for signature from May 14 to May 18, during which time the agreement was signed by the seven participating exporting countries and 34 of the importing countries which indicated their intention during the negotiations to participate in the new agreement.
Signatory countries were required by July 16 to deposit instrument of acceptance or give formal notice of their intention to do so not later than December 1, 1956. The following countries have met this requirement: Argentina, Australia, Canada, France, Sweden, the United States. Importers: Austria, Belgium, Bolivia, Brazil, Costa Rica, Denmark, Dominican Republic, Ecuador, Egypt, El Salvador, Germany, Greece, Guatemala, India, Israel, Italy, Japan, Korea, Lebanon, Liberia, Mexico, Netherlands, Nicaragua, Norway, Panama, Peru, Philippines, Portugal, Switzerland, Union of South Africa, Vatican City, Yugoslavia.
Exporting countries accounting for more than two-thirds of the total guaranteed quantity as well as importing countries accounting for more than this amount have complied with the acceptance provisions of the agreement with the result that the agreement came into effect on August 1, 1956.

International Wheat Agreement
Twelve of the importing countries represented at the United Nations wheat conference did not sign or accept the agreement, namely, Ceylon, Colombia, Cuba, Haiti, Honduras, Indonesia, Jordan, Saudi Arabia, Spain, Venezuela, Ireland and New Zealand. It is possible that some of these countries may wish to be admitted to the agreement by accession at a later date. Only one of the 12 countries, Ceylon, has declared since the conference that it does not intend to take part in the agreement.
As for the agreement itself, I think that all members of the house will be disappointed in the government of the United Kingdom's declaration early in the negotiations that they would not rejoin the agreement. Because the United Kingdom imports a much greater quantity of wheat than any other country, the agreement is denied the leadership of the United Kingdom on the import side at a time when their effective participation would be welcomed by other importing countries and by exporting countries alike. On the other hand, the United Kingdom officials have advised us that their market for wheat is open to us without let or hindrance of any sort and that they anticipate the British millers will continue to prefer our qualities of wheat as they have done in the past. In other words, they will continue to do business with us, whether they are inside or outside the agreement.
Although the United Kingdom continues to stand aloof from the agreement, Argentina and Sweden have joined, for the first time, the ranks of the exporting countries. Argentina's participation will create a liaison through the agreement with the other exporting countries as well as the importing countries. This marks a new departure in the grain marketing policy of the Argentine government which is welcomed by both exporting and importing countries.
It has been disappointing to see the reduction in the amount of the guaranteed quantities for some of the importing countries which have remained within the agreement. Because of the reductions in the quantities of these importing countries the major exporting countries including Canada have had to reduce their guaranteed quantities by roughly one third from the levels of the 1953 agreement. Canada's new guaranteed quantity will be in the neighbourhood of 100 million bushels, depending upon the actual acceptances of the agreement by the importing countries. Not only has the easier supply situation within the importing countries as well as within the exporting countries contributed to this decrease, but transactions entered into or in prospect by some of the importing
[Mr. Howe (Port Arthur).!
countries with the United States under the provisions of public law No. 480 have induced them to refrain from putting a high percentage of their total import requirements into their guaranteed quantities under the agreement. Such wheat transactions on noncommercial terms do not qualify for registration against the United States guaranteed quantities under the agreement and it is unfortunate that the existence of such transactions is operating to limit the present scope of the agreement.
When it became known to us that the guaranteed quantities would be reduced, our delegates to the conference were instructed to take a very firm position on prices because we were not prepared to make price concessions in return for such reduced quantities. In the end agreement was reached on a price range of $1.50 minimum-$2 maximum, which represents only a token reduction from the $1.55-$2.05 price range negotiated in the 1953 agreement.
As on other occasions, the government and our delegation had as advisers the presidents of the principal western farm organizations who all endorsed renewal of the agreement on the terms that have been agreed.
Although the agreement does not, as we might have wished, cover a major portion of the world trade in wheat, one must bear in mind that the background wheat position created a difficult atmosphere for the renegotiation of the agreement. Therefore, there is some reason for satisfaction that agreement could be reached on the present basis which will provide time not only for the supply situation to level out, but also to test the degree of continuing support for the agreement.
With a few notable exceptions, the great majority of importing countries have attached continuing value to their participation in the agreement. They have no reason to fear for lack of supplies of wheat in the immediate future, but they do value stability in agricultural prices to which the agreement has contributed. For our part, we attach value to the fact that forty nations or more have recorded their acceptance of a range of prices from $1.50 to $2 as a fair range for the course of wheat prices over the next three years.
The agreement also contributes to understanding and exchanges of views between the trade representatives of the importing countries and the exporting countries and to exchanges of views among the exporting countries in which Argentina and Sweden will now participate, as well as Canada, the United States, Australia and France.

These more intangible values might be regarded as the real substance of the agreement rather than the contractual guarantees which the agreement contains, namely, a market for 100 million bushels if offered at the floor price of $1.50. It is because so many countries are still prepared to subscribe to the principle of stability in the international level of wheat prices that I commend this new agreement to the house for approval.


John George Diefenbaker: Mr. Speaker, having regard to the lateness of the session the viewpoint that will be expressed by the opposition through me will be limited very considerably.
The minister has mentioned the disappointment of the government in the fact that the amount of wheat that will be purchasable from Canada has been considerably reduced under wheat agreement No. 3, the amount of the reduction being some 50 per cent. Indeed, when the parliamentary assistant to the minister referred to the agreement on April 23 he made this statement in part as reported at page 3161 of Hansard for that date:
. . . notwithstanding inadequate quantities Canada should continue to participate provided there was no substantial reduction in maximum and minimum prices from those included in the present agreement.
There has been no serious change in either regard, the reduction being, as the minister says, five cents on the maximum and the same amount on the minimum.
It is of interest to note that in effect what has been done in respect of the amounts purchasable under this agreement is the establishment of a floor price for wheat. That is an important matter and achieves in part, although to a limited extent as compared to previous agreements, something that the farmer in this country and I think generally throughout the world does desire, a stabilizing security and a floor price.
However, it is also interesting to note that while the floor price is a little different from what it was when the first agreement was made farmers generally find their purchasing power has been materially reduced during the period of approximately seven years that the agreement has been in effect.
The reason for this is simply the fact that Canada's dollar is becoming more and more anaemic through inflation. The tendency is a downward purchasing power for the Canadian dollar. The problem of inflation, more and more serious as the days go by, is one that must be faced by Canadians.
I point out the difference in purchasing power over a given period of time. My 67509-448
International Wheat Agreement information is secured from the submission of the interprovincial farm union council in June and the figures given not having been challenged may be accepted as representative of the facts.
In 1948-49 the purchasing power per bushel, based on a comparison with the period from 1935 to 1939 being 100, was then 93 cents. It has gone down gradually since, year by year, until in 1950-51 the purchasing power was 86 cents; in 1951-52, 81 cents; in 1952-53 the same. Then there was a material diminution in 1953-54 to 70 cents, and in 1954-55 to 61 cents. The latest figure estimated for 1955-56 is 58 cents. In other words, while prices under the international wheat agreement have changed little in the intervening seven years they have been greatly altered in their effect by the reduced purchasing power of a bushel of wheat, falling as it has from 93 cents to 58 cents, a decline in purchasing power of 62 per cent.
As far as the agreement is concerned, it does achieve some measure of futher stability, although without the United Kingdom as a member it cannot be as effective as otherwise might be the case. The minister said that he was disappointed that the United Kingdom had not joined in the agreement, but he pointed out that the United Kingdom would still require to purchase large quantities of wheat. A little later I intend to make reference in that direction and to suggest to the government that measures be taken as between Canada and Great Britain to bring about a larger measure of trade than is the case today.
Too often we in Canada think only of our economic relationship with Great Britain. Too seldom in recent years has our attitude been to consider and to support the world leadership of Great Britain. That is particularly so at this moment when Great Britain finds herself in one of the most challenging situations in her history. Canada's attitude toward Great Britain as revealed again today by the Secretary of State for External Affairs has not that directness which would be expected under the circumstances. It is almost one of pussyfooting disregard of the serious situation which prevails in the Middle East. We think of our economic relationship but we should be thinking of our political and international relationship within the British commonwealth and be ready to take a stand in keeping with our responsibilities within the commonwealth.
As far as the wheat agreement is concerned, its purpose is, first, to secure greater stability of income of both producers and consumers of wheat and, second, to provide a mechanism for the orderly adjustment to
7056	HOUSE OF
International Wheat Agreement changes in supply of and demand for wheat. The international agreement provides guaranteed sales, but only in the event that the price falls to the minimum. The guaranteed sales for the exporting countries are as follows:
Bushels
Argentina ...
Australia 

Canada	
France	
Sweden	
United States
14,697,484
30,257,380
102,896,902
16,534,669
6,430,149
132,088,561
This agreement in no way meets the serious situation in which we find ourselves. Once more this year Canada is faced with vast surpluses, and this situation is true not only in Canada but throughout the world. According to the latest figures the supplies of wheat remaining on hand on about June 1 of this year in the four major exporting countries for export and carryover total 1,887 million bushels, or 1 per cent more than a year ago. In the case of the United States, the supplies on hand at June 1 amounted to 1,057 million bushels, a small increase over a year ago. Canada had almost 600 million bushels on hand, as compared with 541 million bushels at the same period last year. There has been some change in that figure, but not a material quantitative change. Australia had 160-8 million bushels as compared with 133-8 million bushels; and Argentina had 69-7 million bushels as compared with 143-8 million bushels a year ago.
We have once more in prospect a very large crop of wheat on the prairies. What is to be done about this situation creates one of the great problems facing us. I say that this problem will not be met by the present agreement representing, as it does, a market for only 100 million bushels of Canadian wheat.
What must be our purpose in international trade? After all, Canada is a trading nation, in particular agriculturally so, and it is to this I am directing my attention at the moment. Action will have to be taken through multilateral trade agreements and by cooperation among the free nations particularly if we are to avoid finding ourselves in a worsening position with surpluses ever piling up and with restrictions against importations in various parts of the world. The best summary on international trade I have found is that made by the Canadian Federation of Agriculture in its brief to the royal commission on Canada's economic prospects on March 5, 1956, and I quote:
In arriving at the best possible international trade policies, it is necessary to recognize that from the farmers' point of view several basic aims and objectives must be taken into account, and given proper weight.


To give every encouragement to the freest possible inter-exchange of products between nations.
To maintain and increase Canada's position as a successful world trader-something upon which the whole Canadian economy depends.
To maintain and develop Canada's export markets for agricultural products-of which she is a surplus producer. This applies particularly to wheat and other grains, but also to meat, some dairy products and by-products, and some fruits and vegetables.
To protect the prices and incomes received by farmers from excessive decline.
To protect the land, and to develop technical and human resources that make up Canada's farm industry.
The brief proceeds in that way. As far as this agreement is concerned, it is merely one of the means that can be used, and further means will have to be adopted. Not only are our farmers finding themselves in the position of having ever-increasing surpluses of wheat on hand; with the exception of the last few weeks there has been a profound loss of wheat markets, in particular Great Britain, which was for many years our major market. The situation in Canadian agriculture is set out by the Canadian federation in its brief to the government on February 14. It says:
From the point of view of prices, farm products now show a price decline, taken as a whole, to about 20 per cent below a fair relationship level- whether this is calculated on the base period of 1925-29 used by the Canadian Federation of Agriculture or the more recent period of 1943-45.
Farmers from coast to coast feel keenly that on the average their returns have become badly out of balance with those of other major economic groups in the nation. It is important to emphasize purchasing power in this connection because the farmer's difficulties are to be found as much in high prices of the things he buys as in a decline in the number of dollars he receives.
I am not going to go into details of the summary of the international wheat agreement that was made by Mr. Graham Spry in the summer 1956 issue of the International Journal, but this article clearly sets forth the very serious situation for wheat farmers generally. It says:
The importers, far more than the exporters, were determined to get an agreement and on February 27 took the exceptional course of stating publicly, in reply to the United Kingdom, that previous agreements "had promoted and maintained a degree of stability" and that they wished to negotiate a renewal . . .
In a situation of world surplus and possible collapse, the minimum price is more significant than the maximum. The adherence of two new exporters, Argentina, a major exporter, and Sweden, as well as the United States, Canada, Australia and France, members since 1949, greatly strengthens the floor or minimum price in world trade. These six are responsible for 90 per cent of world wheat and flour exports.
On that basis, this agreement at least represents a floor price in general for approximately one-third or more of the amount of

wheat Canada will export, and therefore is beneficial to that extent. What farmers will do. however, under this agreement, if the continued effect of inflation wipes out even more than today the purchasing power of their dollar, no one can foretell. Since the farmer's bushel of wheat purchases today only 40 per cent of what it did when this agreement was first brought into effect, and since the trend is in the direction of higher and higher prices for the things the farmer has to buy, this agreement at the end of three years may well represent a minimum price serious to the preservation and maintenance of the agricultural machine within our country.
Canada and Australia today are the only two exporters in the world that subsidize neither wheat prices to their farmers nor export prices to their buyers. That is the reason that wheat farmers find themselves in the serious position in which they are today.
I should like the minister to tell the house and the country something of what the export situation from Canada of wheat may be expected to be during the months ahead. There has been some increase in recent weeks and months, but in considerable measure that increase represented the filling up of the world demand during the period when there was a material decrease in exports of wheat from this country. What is the actual amount of the carryover as of the beginning of this crop year? What is the expected and estimated amount of the wheat crop this year? The minister might also tell the house and the country what is going to be done to increase our share of the world market- for certainly the United States has in the past two years, by the adoption of policies which in part are a denial of the principles of GATT, had a considerable effect on our diminishing wheat markets and reducing Canada's share.
On August 2 the department of agriculture of the United States reported that during the past year its increase in exports of farm products had been very considerable, and that, other than cotton, which had declined very seriously because of conditions in Egypt and in Asia, the United States increased its exports of all farm products by approximately 26 per cent over the previous year. In fact, this was due to the disposal program authorizing the sale of surpluses abroad for foreign currencies, those currencies being used for economic development in the countries designated.
During the past year, the United States has increased its grain exports by 33 per cent. That indicates that the United States is taking over markets that were ours previously, that we have failed to keep abreast of.
7057
International Wheat Agreement
This agreement in itself does represent something that is beneficial and is asked for by farmers everywhere in this country; but the wheat farmers of this country must not be allowed to have built for them optimistic expectations of markets being available during the coming year which were not open and available during the last year.
Finally, sir, I think that a great responsibility rests upon the free nations today to ensure that the surpluses which have been, built up will not be wasted. The dangerous situation in the Middle East today makes it necessary that the free world have available surpluses, should the terrible consequences of a failure of negotiation plunge that part of the world, and possibly the whole world, into war. To that end, more than ever before, I think the United States should be made to realize that we in Canada view with deep annoyance the type of policies that the United States is expanding whereby, in a give-away policy, demand for wheat generally, paid for on economic terms, is being undermined. Up to the present time the United States has shown little interest in the objections raised by Canada to the policy that is being followed by that country. The United States eats its cake and has it too. It remains within the international wheat agreement and at the same time, outside of the wheat agreement, acts in a manner that constitutes a denial of the basic principles upon which that agreement is founded and can operate.
Second, outside the agreement but within the limitations imposed thereby, I believe that Canada must to a greater extent than has been the case in the last two or three years endeavour to expand its wheat trade generally in the world. Last year Japan purchased, as I remember, some 16 million bushels of wheat from Canada. The Japanese are good traders and they have proven in the past to be good payers. In order to build up our wheat trade in Japan and in other countries that have similar qualities, I believe-that Canada, in order to preserve her international trade in wheat, will have to be prepared to make loans to such countries as Japan in order to provide the necessary funds so that Canadian wheat can be purchased by those countries.
Third, I ask the minister: What are the free nations doing to establish a food bank? Wheat does not deteriorate in storage to any serious extent. The international organization, F.A.O., has advocated such an instrument. It seems to me that a food bank cannot be secured under the United Nations. That being so, what consideration has been given to a food bank being set up by the.

International Wheat Agreement "North Atlantic Treaty Organization, representative as it is of the free nations joined to preserve freedom?
Next, I ask what is being done to increase *and expand our share of British trade. Mr. *James S. Duncan, former president of Massey

HaY'ris-Ferguson Limited, and now chairman of the dollar sterling trade council, set out in a recent issue of the Farmer's Advocate principles that I believe are necessary. He said:
Unless Canadians awake to the necessity of preserving and strengthening their historical and traditional markets with the United Kingdom and the sterling area by increasing imports from them, the outlook for the long term sale of some of our primary products is not at all bright.
He goes on to say that if encouragement were given in Canada to an increase of even 10 per cent in the amount of imports from the United Kingdom that increase would in large measure remove the serious adverse balance of trade between Canada and the United States and would place the United Kingdom in a position where it would be able to purchase a larger amount of Canadian farm products. He went on to say:
. . . we would not only ease our deficit with the United States but close the gap with Britain and enable it to buy more from us.
Would the minister say what is being done in that connection, for outside of the wheat agreement a very serious challenge faces the Canadian wheat farmer? What is being done to provide markets? Has any serious consideration been given to the establishment of a food bank? What attitude does the minister take towards loan advances to countries that require wheat, countries in which a larger measure of wheat trading can be expected in the years ahead, if at the present time a good trading relationship is established with them?
These are but one or two of the matters which in my opinion deserve the attention of the government. The hew wheat agreement, providing as it does for only 100 million bushels of wheat, merely touches the outward fringe of a problem which has worsened in recent years. What will be done by the government to provide expanding markets for Canadian wheat? What are the expectations for the next year? Have the nations of the free world learned yet the need of maintaining surpluses against the possibilities of dark days ahead? After all, this is not a problem peculiar to the western provinces but one that affects the economy of the dominion, for if the western wheat farmer does not receive a fair and proper price for his wheat and a reasonable assurance of markets detrimental effects will come to all parts of Canada in a reduced demand for industrial and other products.
[Mr. DiefenbakerJ


Mr. H. R. Argue (Assiniboia):: Mr. Speaker, since the end of the war in 1945 Canada has been selling a substantial quantity of wheat under long term contracts and agreements with other nations. The policy of participating in the international wheat agreement has been supported, advocated and promoted over the years by the farm organizations representing the grain producers. I think the farm organizations in Canada are an outstanding example of a widespread organization that advocates a responsible policy, an organization that has assisted in a very important and material way in formulating national policies for the disposal of the products with which they are concerned. If there is one single reason more than any other why we are today considering an international wheat agreement it is perhaps because the farm organizations of Canada have consis^ntly supported an international wheat agreement. Whether or not the Minister of Trade and Commerce was right in February, when he suggested that unless some two-thirds of the world's wheat going into international trade were covered by a wheat agreement Canada should not be interested, only time will tell. The fact we have an agreement today covering a much smaller part of the world's trade in wheat being presented to this house for approval is mainly because the farm organizations have said they wanted an international wheat agreement, even though such international agreement might cover a relatively small part of the wheat going into international trade.
If one looks over the quantities of wheat that will be covered by this agreement and compares it to the other international wheat agreements in which we have participated in the past, one is almost forced to the conclusion that this agreement is not enough; that Canada will have to do some new thinking as to its wheat policy in the future; that governments throughout the world are going to have to bring forward some alternative to the policy now being followed. The reason is quite obvious. It is the fact that each successive wheat agreement that is signed covers a smaller and smaller part of international trade. The first international wheat agreement after the war covered 595 million bushels, and that was rather an effective agreement. The next agreement, the one just ended July 31 of this year, covered a much smaller quantity, 394 million bushels. The agreement today, if all listed countries had ratified, would cover an even smaller quantity, 302 million bushels. In his statement to the house the Minister of Trade and Commerce pointed out that there are 12 of these nations that have not yet signed the

agreement and the 302 million bushels is based on the assumption that they would. So we have an agreement that may cover less than 250 million bushels of wheat.
Of that quantity Canada's share is much less than 102 million bushels because our quantity is reduced in proportion. I am not certain, in view of our experience in the past, that we are likely to sell or export even that smaller quantity under this agreement. I have the figures here for the sales of Canadian wheat under the international wheat agreement through July 13, 1956, a couple of weeks before the end of the agreement. I do not suppose anything very material happened in the last two weeks. The figures show that for 1955-56, that is to that date, out of a total guaranteed export quantity for Canada of 153 million bushels, we had then exported something less than 75 million bushels.


Clarence Decatur Howe: The final figure was exactly 75.


Hazen Robert Argue: The minister says the final figure was exactly 75, so that means in the past year under the international wheat agreement, which said that Canada was guaranteed sales of 153 million bushels, we exported slightly less than 50 per cent of that quantity.


Clarence Decatur Howe: I would point out to my friend that his expression "guaranteed Canada sales", is his and not mine.


Hazen Robert Argue: I want to point out to the minister that that expression is the expression of the international wheat agreement wheat council in their regular publication, and I agree with the minister that when they say, "guaranteed quantities (export countries)", that name should certainly be changed based on experience.
The agreement we have today is perhaps important in that it indicates there is still a substantial number of importing countries that are prepared to sign an agreement. It is perhaps well to remember that the agreement was brought about after a long period of very difficult negotiations. I think as it now stands it should be a clear indication to this government, and a clear indication to our farm organizations and to the world, we are going to have to adopt new and different measures in the future if we are to have stability in the marketing of grain in the international markets of the world. As the hon. member for Prince Albert pointed out in his own statement and in the statement of others, this is a guaranteed floor price of $1.50 per bushel. I want to point out that even as a guaranteed floor price it is not nearly as
International Wheat Agreement significant as one might hope. It is a guaranteed floor price for a relatively small quantity of wheat related to the international markets of the world.
If the Canadian government passed on any such reductions to the wheat producers so that all the Canadian wheat producers would get for their grain was $1.50 per bushel, basis No. 1 northern Fort William, less all the cost of storage, administration and so on, it would spell a price to our producers in this country of about $1.20 net. This could do nothing but bring great financial hardship to the whole economy of the three prairie provinces. This agreement is of value, but it will not do the job of providing stability. One of the main stumbling blocks has been the attitude of the United Kingdom. As the greatest purchaser of wheat in the world her absence from the agreement has made the agreement much less effective. From what I have read, and I have done considerable reading as to the negotiations, I have come to the conclusion that Great Britain did not just stand out of the agreement and say, "You people go ahead and negotiate an agreement." She took an active role, and has indeed for a number of years, in opposition to this type of agreement. She has not merely, and this is very serious, stayed out of the agreement, but she has hoped that, by so doing, it would result in no agreement at all being signed.
I think when we are talking about commonwealth relations and commonwealth problems, people in high places in the United Kingdom should review their attitude towards the international wheat agreement because if there is going to be some give and take in international policy this is the place where the United Kingdom can give a real lead to the world. I do not think the role of the Canadian government is completely without blame. It is one thing to sign an international wheat agreement; it is one thing to sign contracts for the sale of wheat as we have done with a great many countries, but another thing is necessary and that is to see that the potential importing nations have the currency with which to buy our grain. Trade is a twoway street; we have heard that said many times. So far as the Canadian government is concerned in relation to the wheat trade, just as in relation to many other matters, they seem to think that trade is a matter of exporting Canadian goods without paying very much attention to the question of importing goods from potential customers.
One of the best things the government has done in recent months is to sign contracts with iron curtain countries for the sale of substantial quantities of Canadian wheat. That has been a good move. But, if such contract sales are to be repeated in the future,

International Wheat Agreement if they are to be extended, then the government will have to consider making contract agreements for the purchase of goods produced in the countries that buy our wheat. If we say to the U.S.S.R., to Poland, to Czechoslovakia, and to the other countries that have purchased our wheat, we will sell you wheat, we will give you a good price but we will do little or nothing to buy the goods that you produce and wish to sell us, then the agreements that have recently been signed may indeed be the last.
We in this group have always advocated that the principle involved in an international agreement should be extended. We have never felt content with even the best international wheat agreement that the world has yet produced. We have said that the best type of agreement should be one within the United Nations itself, should be one to establish an international food pool to take care of surplus foods that are produced in certain countries so that those surpluses may be moved to the deficit countries.
While the Canadian government's attitude in relation to signing an international wheat agreement has generally been commendable, its attitude toward an international food pool, toward an international clearing house, has been indeed a bad one. The Canadian government, a government perhaps that should be more interested than any government in the world in establishing international control of food surpluses, has opposed on every occasion every United Nations move to establish an international world food pool, or an international commodity clearing house.
If we are to have stability in the sale of our grain in the future, the Canadian government's attitude toward a food pool must be changed. Somebody may say, well, of course, the falling off in the quantities under the international wheat agreement just shows that state trading, state management of exports to the world, cannot operate. I do not agree with that at all. If governments of the world were not taking some measure of control over the export and sale of grain we would have had a collapse in the market for wheat long ago. And if the grain officials of the United Kingdom, together with the Canadian Pacific Railway Company of this country, had had their way, we would have had the grain exchange opened for the sale of wheat in this country which, I am sure, a certain collapse in the price of wheat to perhaps less than $1 a bushel, and that, together with the Canadian Pacific Railway attack on the Crowsnest pass rates, if it had been successful, would have brought economic ruin to 200,000 wheat producers on the


prairies. We are glad that the United Kingdom has not been successful yet-neither has anyone else-in getting the futures market, the speculative market, re-opened in Canada for dealing in wheat, and we are also pleased that nothing has as yet been done to change the rates covered by the Crowsnest pass agreement.
One of the most satisfying influences in the wheat picture in the world today has been our own Canadian wheat board. The Canadian wheat board has had to operate within government policy. They have not been able, because of government policy, to compete with the type of policies that have been adopted in the United States; and yet, circumscribed as the Canadian wheat board has been, they have done, in my opinion, an excellent job on behalf of the wheat producers in the assembling, the storing, the marketing' and the handling of grain. >
Some say that a government body cannot be efficient. I will tell you how efficient the Canadian wheat board is. The Canadian wheat board is so efficient in its administration that it has been able to function on behalf of the wheat producers of western Canada at a cost of five-eighths of one cent per bushel per year. Perhaps that has been the best investment the Canadian wheat producers have yet made in so far as the return they have obtained on their investment is concerned. The wheat board, within Canada, has been able to transfer from the international wheat agreement, and from other wheat agreements, certain stability to the Canadian wheat producer.
I was interested in a statement made the other day by the deputy minister of trade and commerce, Mitchell Sharp, when I asked him in the agricultural committee whether he felt the fact that we have a central selling agency in Canada for wheat made it possible for Canada to sign contract sales with the iron curtain countries. His answer, if my memory serves me correctly, was that certainly the fact that we had the Canadian wheat board made it much easier for the government to undertake such policies in the sale of grain.
We can talk about markets, and markets are necessary. One problem that has yet to be overcome, outside of the fields of markets in this country, is to deal with the question of a fair price-cost relationship for the wheat producer. Some may think that the Canadian sales of wheat in the last year have gone up to the point where everything is well for the wheat producers and the marketing of grain. There has been a substantial increase in exports of Canadian wheat, from some 251 million bushels a year

ago to about 310 million bushels in the crop year just ended; but this has been brought about, I feel, not so much from action by this government as by our participation in a generally expanding world market for the sale of wheat. Our sales have gone up. So have the sales in the United States. The United States sales will increase from some 274 million bushels a year ago to an estimated 330 million bushels in the crop year just ended. Our sales have gone up a substantial amount, but the sales of the United States have gone up by an almost identical amount.
If we are to be consistent in our policies for the marketing of Canadian wheat, I suggest that the whole question of stability should not, and must not, be confined to the sale of wheat on the international wheat markets.	We must take the concept of
stability right back to the local marketing point. I want to say that within the policy that has been followed within Canada in the last year the concept of stability, as far as quotas at local marketing points are concerned, has been thrown out the window, and in the last year we have had introduced the very rankest kind of inequality in the marketing of grain.	The crop year that
ended on July 31 saw approximately 50 per cent of the marketing points in this country at the relatively low quota figure of five or six bushels per acre. Within the marketing of grain in Canada there has been great discrimination, and without reason. No justifiable reason has yet been given for that discrimination. It is true that grain must be called out where the grades and types are available; but no one can tell me that the types and grades of grain available for market are confined by nature to marketing points along the C.N.R. and the off-grades of grain are confined by nature along the C P R. The fact is that the C.P.R. company has made a mess of supplying and allocating box cars. Because of its failure to comply with the requests of the transport controller it has cost grain producers living along side its lines tens of thousands of dollars. It is probably correct to say that the average producer living alongside a Canadian Pacific Railway point in western Canada had a quota of from five hundred to one thousand bushels less than a wheat producer living alongside a Canadian' National Railways point. Certainly that figure is correct concerning farmers with farms of average or above average size.
I make a plea to the minister. The type of stability we consider when we are talking about an international wheat agreement must be extended so that stability is provided to the wheat producer in the marketing of his grain.
International Wheat Agreement
The second great need for stability is to stabilize the purchasing power of a bushel of wheat. Our economy is prosperous and people say at the moment our economy is booming. While the economy is booming, the wheat producer is afraid that unless something is done about his plight he may go broke. The price of grain has steadily been declining. The purchasing power of a bushel of wheat today is reported by experts to be less than it has been at any time in Canadian history with the exception of a two-year period in the early thirties. Therefore we need parity prices and the wheat producer says that as a first step in the realization of this we should have parity prices at least on the grain that is marketed in Canada. That is not adequate and it is not a complete parity concept but it would be a first step in that direction.
The next thing that is needed if we are to stabilize the grain economy is something that has been referred to so frequently in this house during this session that even I am convinced any statement on it would be out of order; but I want to say to the minister the issue dealt with this session for-such a long period of weeks is just as important now as it was at that time a few months ago. The whole question of providing advance payments to producers for grain stored on the farm must be dealt with by the government and this problem must be solved if the wheat producer is to share in the general prosperity of this nation.
We suggest further an extension of contracts for the sale of wheat to countries other than iron curtain countries wherever that may be feasible. We also suggest we should be prepared to sign reciprocal trade agreements for goods purchased in countries which buy our grain. The government should be prepared to accept local currency wherever it is possible and grant by that means the credit that may be necessary to make sales of wheat possible.
In spite of the fact that this type of policy has been condemned and pooh-poohed in this house in recent weeks, I repeat that there is a substantial place in the international market for the provision of free wheat to needy nations to overcome hunger and to help overcome serious malnutrition.
Finally we suggest to the government that it should change its policy from one of opposition to an international food pool to one of support for this measure under the United Nations as the best method to deal with the problem of food surpluses in the world.


Mr. Low:: Mr. Speaker, the hour is almosl one o'clock. I do not want to ask for any

International Wheat Agreement special consideration; however, I do not like getting started and then stopping when one o'clock comes.


@Acting Speaker: Is it agreed that I call it one o'clock?


Some hon. Members:: Agreed.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Solon Earl Low: Mr. Speaker, there has been a general agreement among the parties in the house that each would put up only one speaker to deal with the agreement now before us. Because of that fact I am sure we all welcome the opportunity of getting the measure passed and approved by this parliament, not because we feel it is of less importance than other things by any means but there are good reasons I think why we should not get into a long protracted debate on agriculture at this time although I must say that that subject is of such importance as to warrant almost continuous consideration until the great problems now facing the farmers of Canada are much nearer to effective solution than they are at the present time.
I am sure that if it were not for the general agreement among the parties there would be quite a number of other hon. members who would like to speak. I can mention a few in my own group who would ordinarily take part in this debate. The hon. member for Lethbridge (Mr. Blackmore) has indicated that he would have liked to say something; the hon. member for Acadia (Mr. Quelch) would certainly be taking part; as would the hon. member for Battle River-Camrose (Mr. Smith), just to name a few, and others. I am sure the same would be true of the other parties. However, the agreement has been made and we are going to stay by it.
The international wheat agreement which we are now considering will provide only a minimum of stability of wheat prices in this country, and for that matter in the world. Year by year the international contract has become less a factor in helping to stabilize farm income. However, little as it may mean, little as the stability that it provides today may be, we do welcome it at least as one means of helping to prevent complete chaos in the world wheat markets which I am sure would have developed before now if it had not been for the international wheat arrangement.

As other speakers have indicated, we are disappointed that the United Kingdom has not seen fit to become a party to the agreement. Some are inclined to blame Great Britain for remaining outside the agreement and perhaps carrying on year by year in the hope that she will be able to buy her supplies at a lower price. When one is inclined to be critical of Great Britain I think he should realize that since the war Great Britain has been fighting an almost impossible battle for her economic life. Because of that fact we should not be too critical of her.
I am quite certain that if our attitude toward buying British-when I speak of "our attitude" I am speaking of the Canadian attitude-since the war had been somewhat different, Great Britain's attitude toward becoming a party to the international wheat agreement might have been different. In fact I am inclined to believe she would have joined in the agreement. If Canada had shown more inclination to transfer some of her purchases to the United Kingdom I think it would have encouraged Great Britain to feel somewhat obligated to become a party to the agreement, but we did not.
Our Canadian people have got into the habit of buying from the United States and as a consequence we have built up a large trade imbalance with that country and we have left unpurchased from the United Kingdom many of the things which Canadians would gladly have bought if they had known about them or if the pattern of thinking and economic action had been somewhat different. So let us not be too critical of Great Britain. But as I say, we are disappointed that she is not a party to the agreement.
At the same time we welcome the fact that Argentina has seen fit to become a party. As one of the great wheat suppliers of the world, the fact that she along with other great exporting nations are parties to this agreement will, it seems, go far toward stabilizing the market for wheat, at least within the realm of the international wheat agreement.
I am disappointed of course that there are twelve nations still remaining outside the wheat agreement. Those are twelve importing nations and their imports would have made a difference to Canada's possible quota. I do not intend to go into this aspect of the matter as enough has been said already by the two speakers who preceded me to indicate that Canada's so-called guaranteed quota under the agreement will not be realized unless those twelve nations do come in. That in itself is a somewhat serious and disappointing factor. However, there is nothing we can do at the moment to force them to come

in, and we would not force them to come in even if we could. But, every encouragement should be given those nations to become parties, and if there is anything Canada can do in that regard we ought to do it.
Since the agreement we are considering provides only a bare minimum of stability for wheat prices, this government and this country must take steps to provide a greater measure of stability if that is possible, and I think it is. I think the farmers of the country have a right to their share of the national income, which they are not getting today. There is a wide disparity between what could be considered their fair share and what they are actually getting in relation to the farm population of Canada and the proportion of the total population which that represents.
We feel that where the farmers are not masters of their own destinies, where they have to bear the major weight of government policy in respect to tariffs and that sort of thing, then there is a responsibility upon the government to see to it that conditions are laid down under which our farmers can receive their fair share of the national income. Until they do, industry cannot make the progress it ought to make in this country. It must be remembered that there is a definite relationship between the buying power of the farmers and the wellbeing of industrial workers. As a matter of fact I think studies in the past have shown that as long as there is a fair balance between farm cash income, on the one hand, and industrial wages and salaries, on the other, there will be buoyancy in our whole economy, a minimum of unemployment and a maximum of well-being on the part of the people. Just let those two things get out of balance, by reason of a decline in farm cash income, let us say, and almost at once there is a dislocation of our whole economy and the first to feel that are the industrial workers. Unemployment then becomes a problem in the country.
From the economic point of view, neglecting entirely humanitarian aspects, it seems to me that the government is bound to take whatever action it possibly can take to see to it that there is a stabilization of farm income. One of the most important factors in that is stabilized wheat prices.
There are those in eastern Canada who are apt to say, "The farmer can turn to the production of something else; if he is not satisfied with wheat prices let him convert to another form of farming." I would draw your attention to the fact that a great portion of western Canada is peculiarly adapted to the production of one crop, and that is grain.
International Wheat Agreement There are large areas in the country which would require a tremendous effort to turn to the production of anything else, and then there is no guarantee that that would be successful. Climatic conditions and soil both contribute to the success of the one crop.
If we can specialize in certain areas of our country in the production of grain to feed the people, not only of our country but of the world, that is the kind of thing we ought to do. Western Canada is best able to produce grain crops and it would be difficult to convert to other forms of agricultural production. Markets might be just as difficult to stabilize if a greater production of other commodities was encouraged. So I say that the government does have a responsibility to make a continuing and intensive study of this whole matter with the idea of introducing every possible means of stabilizing farm cash income. As I said, one of the major factors in doing so would be to stabilize the price of wheat.
That is one aspect of it. There is another aspect, which is this. During the war and for some years after the war, the farmers of western Canada did accept a lower price for their wheat and other grains than could have been expected if they had been free to market anywhere in the world and take what they could get. I do not think there is any question about that. It has been variously calculated that the farmers lost from $300 million to $500 million under the ceiling prices that were imposed upon them. They accepted those ceilings, but they accepted them on condition that the government would keep its promise, and the promise given by this government was that if the farmers would accept a lower price for their products during the war, the government would stand behind them after the war in stabilizing prices over a long period. I say that it was a definite promise; there is no question about that. One could cite the speech of the prime minister of Canada of the day, Mr. Mackenzie King, who made that promise in unequivocal terms. I say that the farmers have looked in vain for the fulfilment of that promise. They are justified in expecting that the government will see to it that everything is done to stabilize their prices.
What are some of the means by which they can stabilize grain prices? I think it has already been put before the house in different forms and at different times, but let me repeat briefly that I think there is a great virtue in the two-price system. Those of us who do not support it are missing one of the best bets so far as the stabilization of farm income is concerned.

International Wheat Agreement The two-price system can best de described by simply saying that it includes an internal price based upon parity and an external price based upon the best you can get by negotiation and what you can get under contracts such as the international wheat agreement or bilateral contracts such as have been made with Russia and other countries.
With regard to the question of internal parity, every bushel of wheat that is supplied by the farmers to the bakers and the other consumers of Canada ought in fairness to carry with it a parity price. There is no argument whatsoever that can change my mind about that point. A parity price means to me a price that bears a fair relationship to the price the farmers have to pay. There are those who say that that would necessitate perhaps government subsidies. What if it did? The government subsidizes industry in practically every form through the tariffs; it subsidizes labour through labour codes, unemployment insurance and other things. It seems to me that the forgotten man of this country is the farmer, who has to sell for what he can get and pay the cost of freight both ways, on what he sells and on what he buys.
I say that there is no real, valid argument against establishing a parity price for all of the farmers' wheat that is consumed in Canada. There are those, of course, who claim that if we should establish parity prices, and an internal parity price for wheat, we would be forcing the Canadian people to pay a higher price for bread. Let me examine that for just one moment. I doubt it very much. The price of wheat has a relatively small influence on the price of bread. Investigations made during recent months show that since 1945 and 1946 the price of bread has more than doubled in its average across Canada. The 24-ounce loaf now sells for an average of something like 21-2 cents in the major cities of Canada. That is something more than twice what it cost in 1946. At the same time, the farmer, since 1946, has received very little more for his wheat, and the bakers admit that what little increase there has been in the price of wheat is not reflected at all in the price of bread.
The major factors affecting the price of bread are the price of labour in the bakeries and in the mills, in the concerns that make up the paper and all the other things that go into the packaging and marketing of bread; the cost of marketing and the cost of transportation. Those are the things that affect the price of bread. If the farmers of Canada were to be guaranteed a parity price for their wheat internally, it would affect
IMr. Low.]

the price of bread very little, if any. Even if it did, I am satisfied that every Canadian citizen would be glad to take care of that small increase in the price of bread as a means of ensuring that the farm cash income is kept at an economic level, a level that will guarantee the farmer a fair return for his labour and a return on the investment he has in this country.
So I do not hesitate for one moment to agree with those who claim that the best way to start guaranteeing stabilization of price is to establish an internal parity price system for the farmer. It would be easy if the farmer had complete control of his own product and could keep it under his control and sell it under his own agencies. Then he could set his own price and perhaps could achieve his objective without government help. But the government of Canada has undertaken to market the farmers' wheat under the Canadian wheat board and, having done so, it seems to me it has a certain amount of responsibility to see to it that something is done to stabilize wheat prices for the farmer.
The second feature, as I said, of the two-price system is the best external price we can get by negotiation and contract. That is what we have been doing, of course. We have been accepting what we can best get in the external market. The international wheat agreement and contracts between nations do add somewhat to our ability to stabilize prices even externally, but there is one thing that we must do, and that is to give credit to the Canadian wheat board for whatever stability there has been in external marketing. I think it has done a good job and the farmers of western Canada appreciate the wheat board. They would not want to go back to the old open market system of marketing, with the dealing in futures and gambling that went on over the years. The farmer was the victim, and the farmers do not want to go back to it, generally speaking. There may be some who would like to see a change, but they are in the minority. So far as we in this corner of the house are concerned, we certainly go along with the farmers when they say, "Let us keep the wheat board and give it every support."
As I have said, the wheat board has contributed to whatever stability we have been able to achieve externally in the marketing of our wheat, so long as it has kept itself free from the imposition of government policy to the contrary. There have been times when that has happened, and the wheat board's work was made ineffective. As long as the government allows the wheat board to conduct its own affairs as it considers best, I am sure that it will continue to get along well as it

has in the past. We stand by that two-price system and we feel that it would not be any great task to adopt it as a policy, and particularly to see to it that the internal price structure, so far as farm products are concerned, is based on parity.
Another important thing that would contribute, I think, to the stabilization of wheat prices would be a realistic trade policy in which we would recognize this very important principle: Nations of the world which may want to buy our wheat can only do so if they can get Canadian dollars or Canadian credits with which to make the purchase. That is basic and fundamental. It is simple. Consequently, if we expect Britain, India or any other country to buy Canadian wheat we have got to be prepared to buy goods in those countries and supply them with the dollars with which they can make their purchases here. We have failed in that respect in the past, and somehow or other we have got into the frame of mind where we look upon American dollars as the only criterion.


Mr. Fulton:: The almighty American dollar.


Solon Earl Low: The hon. member for Kamloops has just interjected "the almighty American dollar" and I think you can perhaps very easily call it that. I think that is perfectly true. It seems to me, Mr. Speaker, that we have let the tide carry us. We have not started swimming against it as yet, and in government policy particularly we have been too inclined to be rushed off our feet by that American dollar and the hope that we will be able to keep in well with the powers that be in the United States.
I think we must revise our whole trade policy. It must be based on the two-way street idea. We must be prepared to purchase more in the United Kingdom than we are purchasing. Everything should be done, it seems to me, to encourage the Canadian people to get into that frame of mind where they are prepared to call for things British. Britons produce quantities of excellent goods that Canadians would buy if they knew about them and if their minds and desires were directed in that channel. It has been calculated, Mr. Speaker, that if we were to divert between 7 per cent and 10 per cent of the trade we now carry on with the United States into European channels, more particularly British channels, we could balance our trade all the way around. That should be the objective, and I think that is what we should aim for.
One of the things, of course, that Great Britain would want to know is whether, if they bought Canadian wheat, if they should purchase the 120 million or 130 million
67509-449J
International Wheat Agreement bushels which they annually buy from the west, we would in very deed buy British. There is one way they could be sure that we would buy part of it and that is for them to say that they will be prepared to pay pounds sterling for at least a portion of the wheat and agricultural products they buy from us if we are prepared to accept those pounds sterling and use them for purchases in their country when and if we want to buy them, and that under such a condition they will go ahead. I am satisfied that Great Eritain would find that to her advantage and sc would we.
A few years ago we put forward the idea-of accepting sterling at least in part for settlement of our trade balance with Britain and it was turned down in this house. However, I am very glad to see that the hon. member for Assiniboia (Mr. Argue) and others have changed their minds.


Hazen Robert Argue: We have not. We have
favoured that for years. You just had a lot of funny money in that resolution.


Solon Earl Low: I think you had better read the record. There was absolutely nothing about funny money in the resolution. My hon. friends have changed their minds but they do not like to admit it. They try to deny it.


Edmund Davie Fulton: They changed their minds at Winnipeg last week.


James Sinclair: They are just Liberals now..


Solon Earl Low: Not only that, but oftentimes they change their principles.


Hazen Robert Argue: You would not need to worry about that. You cannot change what you have not got.


Solon Earl Low: I think one of the important things in life-


Hazen Robert Argue: Get back to the agreement.


Solon Earl Low: The hon. member for Assiniboia would like me to get back to the agreement.


Hazen Robert Argue: And away from the thing that you have not got.


Solon Earl Low: It is distasteful to him to be reminded of the fact that he was one who voted against the acceptance of sterling.


Hazen Robert Argue: Just the funny money.


Solon Earl Low: It is not funny money. It was sound money. My hon. friend then goes out into his constituency and all over Canada and preaches the doctrine of acceptance of local currencies, as he said today, and he does it whithout a blush. If anybody asks him out on the hustings what stand he has taken over

International Wheat Agreement the years he says: Prove that I have taken any other stand. Well, we can prove that he has.


An hon. Member:: We still do not like your tunny money.


Solon Earl Low: All right, you have your right to that but certainly stick to the truth about this matter. As I said, I am very glad to see the hon. member for Assiniboia and his party now advocating that we introduce into our marketing system a measure of acceptance of local currencies as one of the guarantees that we will buy from those countries. I think that is an indication of an increasing measure of unanimity of thinking amongst the farmers of western Canada. I like to see that. As a matter of fact, it is surprising how much unanimity there is and it is interesting to note that as the farmers of western Canada take their position the political parties in this house also take their position in conformity with what the farmers are asking. I support all that because I think it is an indication that we are beginning to get somewhere, and if we would be big enough to put away from us a lot of foolish, political considerations-


An hon. Member:: Page the hon. member.


Solon Earl Low: 
Mr. Deputy Speaker:: If the minister speaks now, he will close the debate.


Clarence Decatur Howe: It is not my intention to take up too much of the time of the house, but I think perhaps a few words are indicated by the remarks that have been made on this resolution. In recommending the resolution the government believes it is making an important contribution to the well being of our western country. On the other hand, statements have been made here that I think rather overemphasize just what the agreement can do. It has been suggested that the agreement guarantees a minimum price for wheat. Well, that is hardly true. This year the sales registered under the international wheat agreement were less than 25 per cent of the total sales. We must remember that no one is obliged to purchase wheat under the international wheat agreement unless we offer wheat at the minimum, which last year would have meant offering No. 1 northern wheat at $1.55 per bushel and this year would mean offering No. 1 northern wheat at $1.50 per bushel. Well, I would not like to be pressed into the necessity of offering wheat at those prices with any belief that the member countries of the wheat agreement would take up the wheat. There are physical difficulties of storage in the way, among others; and therefore I have never been prepared to suggest that the wheat agreement is a guarantee of a minimum price. Perhaps it contributes to that end, but the guarantee simply is not there.
The great advantage it seems to me is that through the international wheat agreement the exporting countries and the importing countries are brought in to a meeting at frequent intervals to discuss the marketing
International Wheat Agreement of wheat, the price and the conditions under which exporting countries sell to importing; countries. I believe that is very valuable.. We have established the fact that importing and exporting countries believe that for the next three years a price range of from $1.50 to $2 is a reasonable price range and we are not likely to be pressed by any country to move either below the minimum or above the maximum. As a matter of fact, regardless of our situation that more wheat is sold outside of the agreement than within the agreement, we have been able to maintain remarkably stable prices for Canadian wheat. The present price is $1.75 in gold dollars and the only periods in which the price has been below $1.75 were periods when the Canadian dollar was selling at a substantial premium. On the other hand, the maximum price has not exceeded $2, even at times when wheat was in short supply. Therefore, we have maintained price stability over a number of years, and I think the wheat agreement has contributed greatly to that end.
In spite of the rather pessimistic statements about the condition of surplus that we have in this country, resulting from a series of crops unprecedented in size, we have been making progress towards reducing our surplus. The crop of 1954 was merely an average, perhaps a little less than an average crop, and in that year we reduced the carryover of wheat by something over 100 million bushels. The crop of 1955 was the third largest crop we ever grew, and during the past year we have disposed of just about the equivalent of that crop. The actual figures will not be known until the bureau of statistics brings in its report, but I would say that whereas the crop was about 500 million bushels the disappearance of the crop will just about equal that figure. Therefore over the past two crop years, one of which witnessed a normal crop and the second a bumper crop, we have reduced the carryover by about 100 million bushels.
This year should cause us no great concern about marketing problems. In spite of a slow start, and in spite of the pessimistic view that was taken of the situation just about a year ago by so many people, both in Canada and abroad, the crop year 1955-56 ended with a most gratifying record of sales, exports and farm deliveries. This has been the third largest wheat export year since the war years. In order to find a large year we must go back into the 1920's and I think the year 1928 was perhaps a larger export year. This would be certainly no worse than the fourth largest export year.
New all-time records were established for shipment of grain through Halifax, Saint.


Clarence Decatur Howe: The United States does not take the local currency home. They accept payment in local currency and then lend that currency back to the country.


Solon Earl Low: No one suggested that we bring it home.


Clarence Decatur Howe: We are not rich enough to sell all our wheat to England for pound notes and then lend the same pound notes back to Britain, without interest, for a long period.


Solon Earl Low: Does the minister say we are not rich enough to be able to finance the sale of 150 million or 200 million bushels of wheat to Great Britain? He has not any faith in his own country.


Clarence Decatur Howe: We are able to finance anything internally. I point out that the United States is a creditor country and Canada is not and that fact makes a considerable difference in the point of view on external loans.
Early in the last crop year I expressed confidence that western farmers would be

able to deliver as much grain as they had delivered the previous crop year. In fact, they were able to deliver over 540 million bushels of grain, which is 40 million bushels more than the previous year. Preliminary figures indicate that wheat deliveries were 340 million bushels against 300-7 million bushels in 1954-55, and that deliveries of other grain has amounted to 203 million bushels against 196-3 million bushels in the previous year. Once again deliveries by producers have been larger than deliveries which might have been expected from an average crop produced in the prairie provinces.
These satisfactory results are a tribute to the work of the Canadian wheat board and the transport controller and to all those who helped in the marketing and the transportation of the Canadian grain crop under very difficult circumstances.
It has been suggested that we are not getting our share of the British market. The British market is not controlled by the government; it is a free enterprise market. We sell in Britain to the grain trade. I noticed that the hon. member for Assiniboia was less bitter about that fact at this time than in his previous speeches. I take it that his present mildness is a repercussion from the Winnipeg convention.


James Sinclair: Pale shadows of the Liberal party.


Clarence Decatur Howe: As a matter of fact, our sales to the United Kingdom have increased considerably in the past year. The increase has been largely in the field of agricultural products. Canada has gained a larger share of the United Kingdom market than was ours before the war. Of the major farm products which the United Kingdom has freed from restrictions we now supply over 60 per cent of the United Kingdom market for wheat as compared with 30 per cent in the prewar period. Similarly, we supply over 80 per cent of the United Kingdom market for flour as compared with about 50 per cent in the prewar period.


Edmund Davie Fulton: What do we take from them?


Clarence Decatur Howe: Our share of the United Kingdom market for barley has increased from 23 per cent prewar to 70 per cent in recent years.


Edmund Davie Fulton: What do we take from them?


Clarence Decatur Howe: We are fully
aware that the best way to expand our trade with the United Kingdom is to enable the British people to increase their dollar earnings by developing their sales in Canada. In this connection, I am happy to note that in the

first four months of this year United Kingdom exports to Canada have increased by over 30 per cent to record levels, and that this appears to be a continuing trend.
It is often asked, why does the government not balance our trade with England? I point out to hon. members that Canada has a free economy. Every member of the opposition can buy where he likes. If he would like to buy in England it would help us greatly to balance our trade with England. The government does not control the flow of trade. It is a matter of individual preference, and I hope it always will be. It may not be if we get in great balance of payments difficulties. We have had occasion where we could not permit the flow to go unchecked. However, if people who talk about balancing our trade with England were sincere about it I think the buying pattern of the Canadian people could be quite different.


John George Diefenbaker: Was J. S. Duncan not sincere in his article?


Clarence Decatur Howe: I am sure he is. I do not know where J. S. Duncan buys his household effects, but I have never noticed any outstanding preference for products from England.
It is quite a simple matter to talk about more trade with England. My hon. friend knows as well as anybody in this house, because he talks more about it, that to have something done about it involves a great wave of enthusiasm through the country. Even then, you are faced with difficulties. You have to worry about the availability of foreign goods. Someone asks, why do we not balance our trade with Russia? Well, we are selling a good many dollars' worth of wheat to Russia at the present time. We sell other things to Russia. To the best of my knowledge Russia has never offered anything in this market. Until Russia is prepared to offer goods here how can we balance our trade with Russia? It is quite impossible. No sane economist would suggest that it is possible to balance our trade with every country with whom we trade. For instance, in our trade with Venezuela we import about $130 million worth of goods from that country and we export to them $30 million worth. "We do our best to balance that trade, but in spite of our best efforts we have never been able to do so.


Mr. McCullough (Moose Mountain):: Why
do you not take some of the tariffs off British goods, particularly textiles?


Clarence Decatur Howe: The tariffs on British goods are very low, indeed. I think 60 per cent of all the goods that come in from England bear no tariff.
International Wheat Agreement


Edward George McCullough: There
was a $500 dumping duty on English cars.


Clarence Decatur Howe: No, there was never any dumping duty charged on English cars. Please do not repeat that remark again. I noticed your speeches, but no dumping duty was ever charged on British cars coming in.


Hazen Robert Argue: You told them it would be, or else.


Clarence Decatur Howe: You told your
audiences there was.


James Sinclair: You make that speech down in Windsor.


Clarence Decatur Howe: We read those speeches; we do not feel we have to answer them all.


Edmund Davie Fulton: We had better follow this up on the estimates of the Department of Trade and Commerce.


Clarence Decatur Howe: I would be very glad to have you do so. Then we would be able to answer such statements.
With respect to the world food bank, we attend all the meetings that discuss the world food bank and the great international programs for disposing of world surpluses of food. If an idea would ever come from those meetings that has any basis of practicality whatever, we would be delighted to consider it. We read the speeches that are made there but we have never seen any practical plan for a world food bank that could carry anyone's judgment. As a matter of fact, it never has carried anyone's judgment so far as I know, except possibly the judgment of the delegates who attend the convention.
There are no storage facilities anywhere in the world to hold such a world food bank. We think the place for a world food bank is in the countries that produce the food, and we have maintained here in Canada a food bank of wheat that we would be very glad to supply, in case the FAO should decide that it is needed in any particular part of the world. We have here one of the greatest food banks in the world. It is a great oratorical feat to say that someone should start a world food bank. The hon. member for Prince Albert can make the rafters ring with that remark, but some time or other he should perhaps explain just what it is he has in mind.


John George Diefenbaker: Sir John Boyd Orr was able to describe it.


Clarence Decatur Howe: He is the one man; he has had his share of publicity over it and so has my hon. friend.


Hazen Robert Argue: You are going to have your share now.
7070	HOUSE OF
Royal Canadian Mounted Police Act


Clarence Decatur Howe: But I think we can-


Hazen Robert Argue: You have not got a Nobel prize yet.


Clarence Decatur Howe: -look back on a year of reduced surpluses. I am happy to say we are moving into the new crop year with more sales than we ordinarily have on the books at this time of year. I believe that next year is going to be as good an export year as this has been. I also believe that production in this country is not always going to keep up to the quantities of the last five or six years.
I cannot be one of those people who worry about carryovers and hope for poor crops. I hope we will always have good crops but my experience tells me that we will not always have bumper crops and one more poor crop such as we had in 1954-although that was not a poor crop, perhaps just an average crop-but one more crop of that kind will make this surplus look like something we had better preserve instead of something we had better worry about.


Edmund Davie Fulton: While the minister is in this expansive mood I wonder if he would care to tell us what he thinks of Professor Underhill's speech?


Clarence Decatur Howe: I did notice that he said something about there being too many old men in government; but I also notice that the old men who have cracked up during this session of parliament are not members of the present government.


John George Diefenbaker: They take their responsibilities more seriously than the government does.
Motion (Mr. Howe, Port Arthur) agreed to.



ROYAL CANADIAN MOUNTED POLICE ACT


Hon. Stuart S. Garson (Minister of Justice) moved: the second reading of Bill No. 446, to amend the Royal Canadian Mounted Police Act.


Edmund Davie Fulton: Mr. Speaker, I do not think there is any need for any extended remarks on this bill. There are certain things that should be asked about it in committee but I want to make one observation concerning it and that has to do with the position of the members of the force who have already retired.


I am not going to make these remarks at any great length but I do want to express the regret of hon. members on this side for the fact that when an opportunity presents itself, as it has in this bill when we are amending certain pension regulations, the government did not take the opportunity to increase the amount of pensions paid to those members of the force who have already retired.
I am not going to accuse the government of a lack of sympathy because I suspect they are just as human as we are, but I do accuse them of neglecting the opportunity which should be taken to make an adjustment in the pensions of those who have retired. A great number of these individuals whom I know are up against a great hardship at the present time.
When we think of the service those members of the Royal Canadian Mounted Police have given to this country in pioneering the west and enforcing law and order in the west, not by force of arms but by the force of personality, reputation and character, when we think of those very splendid men who have carried the tradition of this force throughout Canada and have in fact in very large part enhanced the reputation of Canada as a whole, and then realize the condition of poverty and the narrow financial circumstances in which they have to pass their last years, then I think we are justified in saying to the government that they are doing a very grave injustice to these retired members of the Royal Canadian Mounted Police in that they are not making a revision of the pension rates in respect to those who have retired.
I realize that the bill before us is concerned with pension revisions for those who are now in the force and who will retire in the future, but I hope it will not be more than one year from now, in the session to come, that the government will introduce legislation making an adjustment in the pension rates for those who have already retired. If the government will not do it, I assure them there will be a change of government and the new government will do it.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I am going to be quite brief in speaking on behalf of this group. For some inexplicable reason we find ourselves in support of the views expressed by the hon. member for Kamloops (Mr. Fulton) and think there is no necessity to lengthen this debate.


John George Diefenbaker: Mr. Speaker, first I want to say a word with regard to the views expressed by my friend

Royal Canadian Mounted Police Act
the hon. member for Kamloops (Mr. Fulton).
I think his words were very timely and proper.
I have known members of this force for a great many years and I have seen them in action since the days when they were the Northwest Mounted Police. My father commenced to teach school near Fort Carlton in 1903 when the memories of the rebellion were still very fresh in the minds of those who had served.
Very few, if any, of those who served in the rebellion are still living although I believe there are three or four. However, many of those pioneers were discharged in the period from 1900 to 1910. The amounts they receive as pension are not in keeping with the service those men gave in preserving for British America the western plains. I remember old Lieutenant Colonel Sam Donaldson, a former member of this house and one of those who made the trek in 1874; I remember also men like Sergeant Dorion and Sergeant Pook, both of whom served in the rebellion.
When things were dark these men served and, as the hon. member for Kamloops said, they maintained law and order to a degree that few of us realize today. They did it by force of personality, by the tradition that the force had built up and above all by the ability of that force to attract to it the finest young specimens of manhood not only from Canada but also from the United Kingdom and to a lesser extent from France.
These men have no way to press their views before parliament. I do think that in appreciation of what they did we should not put them in the position many of them are in today of living in a state of near destitution. There are not many of them left; the old guard of the Northwest Mounted Police is practically gone. The cost of raising the pensions of those who were discharged before the new act came into effect would not be great. They are not legion but they are representative of a tradition and a service that deserves the highest appreciation from the Canadian people.
I join with the hon. member for Kamloops in asking that at the next session of parliament the pensions of discharged veterans of the Northwest Mounted Police-I like to think of them as that; they were later called the Royal Northwest Mounted Police and finally the Royal Canadian Mounted Police- be brought up to a fair and reasonable level.
Secondly, I want to say a word for those who are serving today. There are many retirements at the end of 20 years' service because these men are able to command considerably more money in civil life than in
the service of this country. They realize that the state cannot compete with private industry. I submit that at the earliest possible date reconsideration must be given to raising the rates of pay of the members of this force. In the early days of Canada the police received 50 cents a day and certain allowances. We have gone far beyond that as the years have gone by, but the increase has not been in keeping with the responsibilities and the need for maintaining the force at its present high level. Commissioner Nicholson has come up through the ranks to his present high post and is one of those who represent the finest traditions of this force.
I do not often ask that expenditures be made by the government, but I do believe that if the Royal Canadian Mounted Police is to be able to maintain in the years ahead the great principles embodied in its motto there must be a fair and reasonable increase in the pay and allowances of those now serving. The result will be that in recruiting for this force the state will be able to mobilize the best men possible and will be able to keep the good men when their period of 20 years' service and the like is terminated. Those men will not be as subject to the magnetic attraction from outside forces.
I do not intend to say more as the Royal Canadian Mounted Police needs no special advocate. Knowing what they have done, knowing of the unequalled service they have given to Canada, I think we all appreciate their work.


Mr. Ray Thomas (Welaskiwin):: Mr. Speaker, I should like to concur in what has been said by those hon. members who have spoken and to point out the absolute necessity for an increase in the pensions of these men. I should like to give the particulars of one case. A former member of the R.C.M.P. who is 66 years of age and who spent 25 years with the force is in receipt of a pension of $91.25, which incidentally will be discontinued at his death because there is no widow's pension. An amount of $7.65 is deducted in Ottawa for health insurance; his municipal taxes cost him $9 per month; he pays $10 per month for electricity and $4.41 for his telephone, or a total of $31.06. That leaves him exactly $60.19 per month to feed and clothe himself and his wife.
I think it is a sad state of affairs when a man who has served the Royal Canadian Mounted Police, a force which has such a tremendous reputation not only here but all over the world, should be forced to live on such a miserly pension. Surely the service which this man and others like him have

Royal Canadian Mounted Police Act given to this country entitles them to a larger income than their present pensions provide. I go along with those who have spoken already in asking the minister to consider the advisability of increasing these pensions in order to provide these men with at least a moderate living.


Stuart Sinclair Garson: Mr. Speaker, my only purpose in speaking is to clear up the record of this discussion because I am afraid the ordinary reader of Hansard would get a somewhat mistaken impression from the remarks of those speakers who have preceded me as to the pay and pension rates of the mounted police.


Mr. Churchill:: What if they stopped reading at that point?


Stuart Sinclair Garson: They would still get the wrong impression. I am trying to provide another chapter from which they would get the right impression. Listening to the hon. member for Prince Albert (Mr. Diefenbaker) one would almost get the idea that my attitude toward the mounted police is that of a Simon Legree. The hon. member for Prince Albert has been a member of this house for a good many years and I am sure he can recall more than one occasion on which I have brought into the house measures to provide for increases in the pay and allowances and pensions of the mounted police, which I am glad to say no member of the opposition has ever opposed in any way.
By and large we have had increased pay and allowances for the mounted police on more than one occasion in recent years. I am not claiming any particular virtue on our part for doing that. We had to do it in order to get our enlistments. In other words, when we are in a state of great prosperity as we are at the present time the Royal Canadian Mounted Police as an employer must compete against other employers in the country and must provide pay and allowances which compare favourably with those paid by free enterprise.
With regard to the matter of pensions, I am sure that all hon. members who have preceded me in this debate realize that increasing mounted police pensions for those who have already retired is indissolubly bound up with the pension position of retired members of the civil service and the armed forces. The hon. member for Prince Albert has said that the number in the mounted police who would be affected would be quite small in relation to the civil service, but I am sure that if he approaches this matter with the slightest degree of realism he will know that it is quite impossible to raise the 

vested pensions of one group of the civil service already on pension as compared with another group.


John George Diefenbaker: Are they civil servants?


Stuart Sinclair Garson: Yes, in the sense that they are paid with the taxpayers' money. I am sure that there are many cases of civil servants who have retired with quite modest pensions. My hon. friend has been in the opposition for a good many years. Should he become a member of the government with a government member's responsibility, he would realize then if he does not realize now that you cannot pick and choose in your treatment of those who are paid with taxpayers' money. If you are going to increase the vested pensions of one group you must be prepared to increase the vested pensions of all.


Edmund Davie Fulton: You be the trail blazer.


Stuart Sinclair Garson: So far as the Department of Justice is concerned, and so far as I as the minister in charge of the Royal Canadian Mounted Police am concerned, I have no objection at all to occupying such a role of trail blazer; but the government as a whole and the Department of Finance may have different views in these matters.
I must say in all fairness that in their attitude towards both pensions and pay and allowances they have been, I think one can say, quite generous.
There is another factor in connection with the pension of the members of the Royal Canadian Mounted Police. That is that the work which they do is such that they have to be in the very best of condition mentally and physically. For that reason it is always the practice in all police forces to retire their members at a considerably earlier age than members of the civil service are retired. When they are thus retired, on a basis of actuarial equality with members of the civil service, they will not get as large a pension as the civil servants, but they will get it earlier in life when they retire.
In most cases there will follow a period of some considerable time during which they will be able to supplement that pension, or perhaps it would be better to say that that pension will supplement the not inconsiderable amount which they will be able to earn from their own efforts. We have had many cases in which police forces of this country have been very glad indeed to take on as their chiefs of police high ranking members of the R.C.M.P. For example, if I am not mistaken, the chief of police of Edmonton at the present time and the chief of police of Vancouver are former Royal Canadian Mounted Police officers who have been retired by us and are on our pension. They are

obtaining from these other services a salary, I am sure, greatly in excess of our pension. When each retires from his present employment, he will receive two pensions, one from us and one presumably from the force to which he has gone.
Apart from these points that have been raised, I am sure that the purposes of this bill and the explanatory notes are so clear that for me to spend any more time on them would be to take up to no purpose the time of the committee.


[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-Regulations.
Edmund Davie Fulton: I am not going to repeat the debate we had on second reading except to make it clear that we do not agree with the implications of the minister's statement that the members of the R.C.M.P. are on all fours with those who are employed in the civil service of Canada. I am not going to go into a long debate, but if I did not make that plain, then, in the light of the minister's statement, it might be taken that we agreed.


Stuart Sinclair Garson: What I said applies only in so far as the increase of a vested pension is concerned.


Edmund Davie Fulton: Even with that qualification, I think there should be some serious discussion of the matter, but on another occasion, because it raises an issue. We do not accept 100 per cent even the qualified statement the minister has just made.
With respect to clause 1, I wish to ask the minister one question. The purpose of this clause is to provide that succession duties payable on pensions and allowances will be paid out of the consolidated revenue fund and recovered by instalments after pensions or allowances. We regret that the bill does not go further along the lines indicated. However, in connection with clause 1, there is a question I should like to ask. The purpose of that clause is to provide that where the estate of a deceased member of the force is liable to succession duties, then, at the request of the beneficiary of the estate, the government may settle the succession duties, pay them over and then deduct annually a pro rata portion from the pension. I am concerned about the words in the clause at lines 14 and 15:
such portion of the succession duties payable by that successor
It occurs to me that that may, as it appears in the bill, apply only to dominion succession duties. It is understood, of course, that under dominion succession duty law an estate of under $50,000 is not liable to duty, and there
Royal Canadian Mounted Police Act may not be very many estates of the retired members of the force liable for succession duties, but some provinces do still impose succession duties, and I am not being factious when I say that Ontario is an outstanding example.


Stuart Sinclair Garson: And British Columbia.


Edmund Davie Fulton: No, British Columbia does not impose succession duties. It imposes probate fees. I speak subject to correction. I have probated a number of estates in my capacity as a lawyer, and it is a long time since I have had anything to do with succession duties. If British Columbia imposes them, it is a matter about which I shall have to quarrel with the provincial government. There are provinces that impose succession duties. In Ontario the minimum estate liable to succession duties is $25,000. I do not know what the rates in other provinces are, but it means that there may be an appreciable number of estates that may be liable to duty. I want to know whether the words as used in this bill apply to the provincial succession duties as well as the federal. I think that the benefit of this clause should extend to the settlement of provincial duties as well as duties imposed by the dominion, and I would appreciate it if the minister would say whether it applies to both.


Stuart Sinclair Garson: My hon. friend will be glad to know that they apply to both provincial and federal duties.


[Stage Direction]
Clause agreed to.
On clause 2-[DOT]
Herbert Wilfred Herridge: I am pleased to see this clause in the bill as applying to former members of the police in British Columbia who are now members of the force. I should like to ask the minister how the adjustment is made with the province for the provincial police to pay into their fund. Is there some adjustment financially between the federal and provincial authorities to provide this?


Stuart Sinclair Garson: Yes, I can show my hon. friend the rather lengthy clause in the agreement between the two governments covering this particular matter. Briefly, this is that the provincial governments turn over to us the amount that stands to the credit of the particular member of the British Columbia force who has been transferred from that force to the Royal Canadian Mounted Police. It is all spelled out at some length. If my hon. friend is interested, I can show him the text of that clause.


[Stage Direction]
Clause agreed to.
Clauses 3 and 4 agreed to.
Bill reported, read the third time and passed.
7074	HOUSE OF
Female Employees Equal Pay HOUSE OF COMMONS

Mr. Speaker:: Before the deputy clerk announces the next order of business, may I announce to the house that, after consideration, the Clerk, the chief of the page boys and I have come to the conclusion that if we are to give the page boys some relief, one solution might be that they all come in in the morning in order to take care of the members' files, that seven of the 14 could work in the afternoon until six o'clock and then leave, and that the other seven who would not have been working in the afternoon could come in to work in the evening and leave at nine o'clock, and those who would be working in the evening would not be the ones who would come in the next afternoon. So one group would have a long day, and the other group would have a short day. I think in that fashion we can release the page boys and give them some rest before they start going back to school in September. If that is agreeable, that will be the arrangement.


Mr. Mclvor:: Mr. Speaker, I have often
appreciated the treatment that the boys have received from you, the Sergeant-at-Arms and others, and I hope it will continue next year.



PUBLIC SERVICE


Milton Fowler Gregg: the second reading of Bill No. 445, to promote equal pay for female employees.
He said: Mr. Speaker, I am just going to say a few words on second reading of the bill. It will be noted that the bill applies to all the "works, businesses and undertakings" considered to be within the jurisdiction of parliament, without exception, including crown companies. It will not apply to the civil service because parliament has already legislated in the Civil Service Act on that matter.
The bill provides that an employer is not to employ a woman at a rate of pay less than he pays a man for identical or substantially identical work, and it is the "job, duties or services the employees are called upon to perform" that are to be looked at to determine whether the work is identical or substantially identical. However, if in the case of a difference in the rates paid a woman and a man for identical or substantially identical work the employer can show that the difference is due to a general rule of personnel practice on such a matter as length of service 

or seniority, which he applies to all his employees regardless of sex, this is not a failure to comply with the act. The bill protects an employee who makes a complaint under the act from discharge or other kinds of discrimination on account of her action in making complaint.
The rest of the bill has to do with enforcement. I might outline how I visualize complaints may be dealt with under this proposed legislation. The bill provides that a woman who considers that she has a grievance under the act may make a complaint in writing to the Minister of Labour. The complaint will be investigated by a fair wage officer of the department who will endeavour to help the parties to a clear understanding of their position under the act, which may result in settlement either through withdrawal of the complaint or an adjustment in the wage rate. This stage in the procedure is to provide an opportunity for voluntary adjustment.
If a settlement is not reached the fair wage officer will make a report to the minister setting out the facts and his recommendations. If the complaint has merit, the minister will appoint a referee who will make a full inquiry, hear the representations of both parties, decide whether there has been a failure to comply with the act and make any order necessary. The order may require an adjustment in pay for as far back as the six months preceding the date of the complaint. Failure to comply with the order is an offence under the act.
This administrative procedure for dealing with complaints does not hinder an aggrieved person from initiating proceedings in court if she prefers to do that at any point up to the appointment of a referee. If an employer is convicted for failure to comply with the act, the convicting court may order the payment of the wages due the employee, in addition to any other penalty.
What I am about to say will answer the question raised by the hon. member for Cape Breton South (Mr. Gillis) at a former stage. Where an employer is bound by a collective agreement that contains an equal pay provision substantially to the same effect as in the bill, grievances are to be dealt with according to the machinery provided in the agreement and not through the complaint procedure or court action which I have described. This is to encourage the parties to collective bargaining to take the responsibility for applying the equal pay principles themselves if they wish to do so.


Ellen Louks Fairclough: Mr. Speaker, the bill now before us for second reading is an interesting document and,

generally speaking, is a very good piece of legislation. However, there are two or three things I should like to mention that I think might have been improved upon, and the very first one is the title of the bill. The minister has chosen to use the words, "an act to promote equal pay for female employees", but in the explanatory note on the opposite page the minister has said "the purpose of this bill is to provide for equal pay". I suggest to him that the bill would have been more attractive had he used the words "to provide for" in the title instead of "to promote". I know it is a small thing, but nevertheless it seems to me that we would like to feel that this provision is a certainty and not merely something that is just in its initial stages and which it is hoped will grow.
The minister has answered a question which I had intended to ask him with regard to coverage for the civil service. Of course we are aware that the Civil Service Act takes [DOT]care of the provision of equal pay as far as it goes, but I wonder whether the minister will tell us at a later stage how the leglisla-iion will apply to crown corporations and to contractors who are working under federal jurisdiction.
I should like to take some exception to the term "identical or substantially identical work" used in the bill. I must admit I was intrigued by those words and I went to the *dictionary to find out what the experts on the English language might have to say about it. I should like to quote briefly from two different dictionaries. In Funk and Wagnall's New Standard Dictionary of the English Language "identical" is defined as meaning "absolutely the same, as in essence or in all respects; the very same; one and ihe same: opposed to different, and contrasted with similar." There are other aspects of the definition but those are the ones that apply in this case, and none of the other definitions in this dictionary differs materially from them. Then, in Webster's New International Dictionary, second edition, "identical" is defined as "the same, not different or other". Under the heading of "synonyms" there is the following explanatory note:
''Identical" is the strictest term for entire and absolute agreement or negation of difference . . .
This brings up a question which has been raised from time to time with respect to all equal pay legislation. It has been stated by several persons who have knowledge of the subject that in all such legislation there should be an effort to get away as far as possible from a narrow interpretation. A narrow definition may prove very difficult of interpretation, and I suggest to the minister that is particularly so in this bill which makes
Female Employees Equal Pay provision for complainants to resort to the courts under certain circumstances, as the minister has outlined in his introductory remarks. The intention of the bill may be perfectly clear in the minister's mind and the minds of the officials of his department, but where a case goes to court I wonder how the court is going to rule with reference to the words "identical or substantially identical". I should like to say further that it seems to me that the words "substantially identical" are surely a contradiction in terms. The two things being identical, I cannot see where the word "substantially" qualifies it to the extent of broadening the interpretation in any way.
I do not wish at this stage to prolong my remarks unduly, because I am very anxious to see this bill passed, even with the few flaws that I think I detect in it. I should say that generally speaking the sections having to do with enforcement procedure seem very reasonable, except that I do wonder if a time limit should not have been put on the length of the proceedings. There has been a time limit placed on the payment of any back wages or any differential in wages, and that time limit is six months. But even that time limit in the bill is permissive and not mandatory. It seems to me that in a section which covers enforcement procedure there should have been some recognition of a time limit, because these cases can go on for months or even years if they are not checked up. The only chance a complainant has of achieving equality is to have the possibility of reimbursement for the whole period of the proceedings.
To stretch it to its ultimate, it could very well be that a complaint would be lodged and time would elapse to the point where the complainant would never receive recognition of the discrimination which she thought was practised against her. If that should happen, it could be that her employment would cease under natural procedure before she had her case recognized, either by the courts or the board of referees who were given the job of making the decision. I suggest to the minister that there is still time to place some limitation on the length of time proceedings may take. We would be very happy to support an amendment if he wished to propose one at the committee stage.
As I said the other day at the resolution stage, Mr. Speaker, a great deal will depend on the regulations which are drawn up and on the interpretation which is given to those regulations. I feel it is extremely important that there should be no misunderstanding of the intention of this act. I would point out that there is one last problem which presents
7076	HOUSE OF
Female Employees Equal Pay itself on reading this bill, and that is the lack of the definite pronouncement of an effective date. Already this bill has been delayed nearly seven months from the time the resolution first appeared on the order paper. It is now August 6, and the first date upon which this measure appeared in Votes and Proceedings was January 10, yet there is still no effective date mentioned in the bill. Here again it seems to me that the minister could have named a date on which this act would come into force. The members of his staff who are conversant with conditions of employment under federal jurisdiction surely could have suggested to him a date which would have been practicable and not completely upset the employer-employee relationship of those persons who would be affected.


Mr. M. J. Coldwell (Rosefown-Biggar):: do not think one needs to say very much about this bill. As a matter of fact it is long overdue. It has been suggested, not just since it was put on the order paper on January 10, but over a good many years. We welcome this bill. My colleagues in this party spoke on it at the resolution stage and strongly supported it.
All I want to do at this stage, Mr. Speaker, is not to question the minister on the clauses or details of the bill, which I believe would be out of order, but simply to say we support the bill and we hope it will be proclaimed at an early date. We hope, too, that the women of Canada will benefit from this piece of legislation which they have long urged the house to place on the statute books.


Mr. J. A. Smiih (Bailie River-Camrose):: Mr. Speaker, the members of this group have supported the principle of equal pay for female employees for a number of years. I am given to understand that the members of this group have watched with great interest and supported the efforts of the hon. member for Hamilton West (Mrs. Fairclough) in her consistent struggle over the years to have a bill similar to this passed by the house. I feel it is only right and proper that the members of the house at the present time should pay homage to her for her efforts in this regard.
In closing, I should just like to say that I listened to the comments of the hon. member for Hamilton West with regard to the title of the bill. I can only say it is the hope of this group that the passage of this bill will do something to promote the recognition of the principle of the bill in industry as a whole, so those ladies engaged in industry will be given the same consideration that this bill proposes for those employed under federal labour jurisdiction.


Mr.  C. W. Carier@Burin-Burgeo: On two
previous occasions I voted against bills introduced by the hon. member for Hamilton West (Mrs. Fairclough) which were, in many ways, similar to the one now before the house. I feel therefore that I owe hon. members and my constituents an explanation of my position with respect to this legislation. At first sight this bill appears to be quite simple and straightforward. Actually it involves factors which go to the very root of our present concept of work and labour, which in turn form the basis of our present wage and salary structure. In my opinion these factors deserve more consideration than they are likely to receive at this stage of the session, and for that reason I would have preferred to have this legislation left over until next session.
The purpose of the bill is quite simple. It is to eliminate discrimination as between male and female employees with respect to pay when employed on the same or similar jobs. With that purpose I am fully in accord. No one could be more opposed to discrimination of any kind or in any form than I am. But it does not necessarily follow that all such differences in pay are due to discrimination. In some cases it may be due to economic factors, such as the more rapid turnover of female personnel as compared to male personnel. Airline stewardesses afford a good example of this.
Cases where pay differences are due to economic factors are not examples of discrimination. I think we should be clear on that point. But in those very cases where pay differences are due to economic factors, this legislation will tend to cause discrimination because, since the pay will be the same, it will obviously be in the employer's interest to employ men in preference to women.
This is one of the reasons I voted against the bills introduced by the hon. member for Hamilton West. But apart from that, I am not at all convinced that this legislation is necessary. The only employees it will affect are those under federal labour laws. They are mainly civil servants, employees of crown corporations and employees of companies with federal contracts. It has already been pointed out that it will not affect civil servants, because a policy of equal pay for similar work already applies to civil servants. If the civil service can initiate such a policy without this legislation, why is it that crown corporations cannot do the same thing? Certainly we have it within our power to write this policy into a clause in our federal contracts.
A third reason I voted against the earlier bills can be found in the New Testament, in the 20th chapter of Matthew, to be exact.

It is the story of a man who went out at different hours of the day and hired labourers for his vineyard. With the first ones he hired he made a definite contract for an agreed wage for the day's work. With the others there was no definite contract and no specified wage agreement. The employer merely said he would pay them what was right, and they went to work on that basis. At the end of the day they all received the same pay. The first ones were disappointed because, having worked longer, they expected more.
Whatever lessons can be drawn from this story, no one can say that it teaches equal pay for equal work. Actually those labourers received equal pay for unequal work. I think hon. members will agree that the New Testament contains a great deal of wisdom, much of it far beyond human thinking, and when we embark on a course that appears to be contrary to its teaching I feel it is wise to pause and take a second look. I believe there is much more to this story than its emphasis on the binding nature of a contract. I think it rejects the purely materialistic concept of human labour, and implies that other factors besides time and output should be taken into consideration with respect to wage and salary scales.
I am not going to take the time of the house now to develop these points further, but I hope there will be an opportunity to do so at another session. There are other questions in my mind, such as what would be the impact on the fresh fish processing industry in my province if this legislation were universally adopted.
In conclusion, Mr. Speaker, I hope I have made it clear that I am not opposed, and have never been opposed, to the principle of equal pay for equal work for women. I appreciate the problem, but I believe that a better solution can be found by revising the basis of our present wage and salary structure.
I do not intend to vote against this bill. All parties have declared themselves in favour of it, and it is not for me to take the attitude that I am right and the world is wrong. But actually it is not important who is right. The important thing, in my opinion, is that we are seeking together to find out what is right. On the other hand, for the reasons I have just stated, it would not be honest for me to lead anyone to think that I have suddenly reversed myself and developed an enthusiasm for legislation which I voted against in good faith on two earlier occasions.


Mr. George H. Hees (Broadview):: Mr. Speaker, it was very interesting to listen to the speech just concluded by the hon. member for Burin-Burgeo and to learn that he is reversing himself after voting against
Female Employees Equal Pay this legislation twice. Now he has suddenly decided that he is going to vote for it. This is nothing but a complete reversal, of course. He has said that he is not against equal pay for equal work; yet he said also that he had voted twice against the measures introduced in the last two years by the hon. member for Hamilton West. If that is not reversing yourself I do not know what is. One thing on which we can agree with the hon. member is that his ideas on labour legislation go back about 2,000 years, and are just about that much out of date.
I think the vast majority of members in this house will agree that this is good legislation because it provides a fair deal for women workers, which is long overdue. Three years ago the hon. member for Hamilton West first placed this measure on the order paper. It has taken the government three years to introduce what is a very straightforward piece of legislation. This legislation could have been introduced three years ago if the government had been big enough to accept the bill brought forward by the hon. member for Hamilton West. However, they did not accept it because this government finds it impossible to give credit for a good and needy measure being put into legislation by an opposition member. To me it is the height of smallness on the part of the government to make women workers throughout the country who come under this legislation wait three years just because they would not give the credit which is due to the lady member for Hamilton West who introduced it.
As well as being good legislation because it provides a fair deal for women workers, it is also good legislation for men workers because it protects their jobs. In the past many men were displaced in jobs by employers who found that the jobs could be done as well by women workers who could be employed at a lower rate of earnings. This has been very detrimental, of course, to the men concerned because they have been displaced in jobs which had formerly enabled them to provide for their families.
This kind of legislation is now on the statute books of five of our provinces, and I hope our action here today in passing this measure in this house will be an example to the other five provinces and that they also will follow the good example of the five provinces that have adopted this type of legislation and put it on their statute books, so it will be a universal measure from coast to coast in Canada.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Applewhaite in the chair.
[Stage Direction]
Female Employees Equal Pay
On clause 1-Short title.
Clarence Gillis: I should like to say on this clause that I also listened with a great deal of interest to the hon. member for Burin-Burgeo, and I did not take the same position as the hon. member for Broadview. A wise man changes his mind once in a while but a fool goes on forever.


George Harris Hees: He should admit it when he does.


Clarence Gillis: He is quite justified in changing his mind and, of course, the hon. member for Broadview knows very well that as a rule governments do not accept legislation from the opposition.


George Harris Hees: Why?


Clarence Gillis: They do not get elected if they do. They incorporate it sooner or later, if it is a good idea. This is a good idea.
What I rose to say is that I do not agree with the reasoning of the hon. member for Burin-Burgeo. One of his main objections was that it might disturb the hiring of female *employees. Well, it would also discourage the employer from exploiting. In many industries today, the automobile industry for example, the machinery is such that female employees can be trained in a very short time to operate many of the machines that are presently being operated by men. This legislation will prevent employers from exploiting female labour in cases of that kind. Another point I would like to make is with respect to the quotation from the New Testament. At the time they were out seeking labourers on the highways and byways there was no automation and no machinery, and I do not think it is applicable to the 'ituation today.
I do not think the hon. member has any reason to doubt this legislation. It has been pioneered for the last 50 years and the whole question has been carefully studied. The subject has become particularly pertinent since the end of the war, when new machinery has been applied to industry after industry and employers, if permitted to do so, can cut wages pretty drastically by using female help.
I was particularly pleased with the minister's statement with respect to enforcement, that where it is desirable the employee can make a direct appeal where there is no organization but where an organization exists and there are collective bargaining agreements, the union as such can carry the appeal to the referee and have the matter adjusted in that way.
I am quite pleased with the bill, Mr. Minister. I think for a start it is as good
[Mr. Hees.J
as it can be made; and while it covers only the employees of the federal government who are not members of the civil service, nevertheless it establishes on a national scale a principle that has already been accepted in five of the provinces. We hope with this example of the thinking of the federal government the principle will be established across the entire country in the near future.


[Stage Direction]
Clause agreed to.
On clause 3-Application of act.
Ellen Louks Fairclough: Mr. Chairman, I am not sure whether this relates to clause 2 or clause 3. The minister made the remark about the civil service, and I asked him in my introductory remarks to say whether crown corporations and contractors enjoying government contracts would likewise be bound by this act?


Milton Fowler Gregg: Section 2, of course, sets out again those categories that are covered and that does include crown corporations. To answer the question which was asked a little while ago concerning how it will function with relation to crown corporations, it will function in exactly the same fashion as is the case with corporations such as railways, banks or what have you. It will not apply to those corporations under contract to the federal government when those corporations have their labour relations under the provincial labour law. In such cases the matter of equal pay would come under the provincial legislation, if they have it.
I might draw to the attention of my hon. friends the phrase to "promote" and "provide for". I am absolutely certain it will not make any difference in the forceful fashion in which this legislation will be administered. Personally I prefer the word "promote" to the words "provide for" because the latter words imply a command, a "thou shalt" attitude. In any event I prefer to see it stand as "promote".


Ellen Louks Fairclough: That is exactly what we wanted.


Donald Methuen Fleming: I have one question concerning the use of the word "established" in clause 3(d).
Even without the explanation the minister has just given I think it is quite obvious that the intent here is to confine the subclause to crown corporations. On the other hand, while he has made it clear that it is not the intention of the bill to include independent contractors with the government, a reading of clause 3(d) and particularly the word "established" might suggest to some that it could include a corporation which has been

incorporated for the purpose of obtaining a specific government contract and carrying out the work under it.


Milton Fowler Gregg: I will take notice of my hon. Eriend's point and check on it.


[Stage Direction]
Clause agreed to.
On clause 4-Equal pay for identical work.
Mr. Philpott:: Mr. Chairman, I have just a word or two on clause 4. As members of this house know, I have been a supporter of this type of legislation for many years and I have always supported such proposals no matter from what side of the house they came. I think this is an excellent bill and I am extremely gratified that we have it, but there is just one consideration in clause 4 I would like to bring to the attention of the committee. That is that the operative part of this bill would entirely depend on giving equal pay to female employees. Clause 4(1) reads.
No employer shall employ a female employee for any work at a rate of pay that is less than the rate of pay at which a male employee is employed by that employer for identical or substantially 'dentical work.
As we gain experience, Mr. Chairman, we may find that we do not need any safeguards to provide equal pay for male employees as compared to female employees, but I do not think it necessarily follows. For instance, only three years ago when renewing the charters of the banks of Canada we had as a witness the president of the Canadian Bankers' Association, who told us quite plainly that female employees in one category of work definitely received more than male employees who were doing exactly the same type of work.
We cross-examined the witness as to why that was so and he gave us the explanation which was, of course, that in some cases young men were willing to work for the banks for less money because they knew it was going to be a lifetime job and they expected to receive benefits later in life which the girls could not expect to obtain, because for the most part they accept work in the bank for only two or three years.
I would just like to submit to the minister and his department that we should keep a close eye on this particular phase of the legislation. I think quite often the agitation for equal pay for women or equal rights for women tends to extend into a request for what might be called a little bit of extra rights or privileges for women.
For instance, I drew to the attention of the house at the time the estimates of the Minister of National Defence were before us that whereas up to last year there was a flat clothing allowance of $10 a month granted to
Female Employees Equal Pay members of the armed services, male and female alike, there was a rather significant change this year in that women holding the rank of chief petty officer class 1 and below -and I am now referring to page 21 of the latest report of the Department of National Defence-got $9 a month and men holding the same rank got $8 a month, while men below the rank of petty officer got $7 a month. In other words, women who are very smart whether they are in the services or in civilian life receive a clothing allowance of $2 a month more than the men.


Ellen Louks Fairclough: We wear more clothes.


Elmore Philpott: The Minister of Fisheries may claim that it costs more to raise a family of daughters than a family of sons, but I just do not think that is true. I would like to point out in all good nature to the committee and especially to the minister that he should keep his weather eye open so that these smart girls who are to receive equal pay for equal work under this bill will not come along next year with a proposal that will give them extra privileges.
I am entirely in favour of this bill, but I believe the principle should be equal pay as between men and women, and not just equal pay for women because they are a little bit behind the men.


Ellen Louks Fairclough: Mr. Chairman-


Walter Edward Harris: Oh, no.


Ellen Louks Fairclough: I can appreciate the concern of the hon. member because, as may have been expected, I have received representations on a number of occasions to the effect that I should be taking exactly the stand he is taking now. I can assure him and other hon. members that if I am in the house when the day comes that I think male employees are being discriminated against, I shall return the compliment and support any measure he wishes to bring in to provide for equal pay for males.
I suggest that some additional words are required in clause 4(1). It starts off with the words "No employer shall employ". It seems to me that it should read "No employer or any person acting on behalf of an employer". In most cases it would not be the actual employer who would take the action, though he is assumed to be responsible for the acts of his employees. Will not the minister give consideration to amending that clause in that respect so there could be no evasion on the part of someone acting for an employer?


Milton Fowler Gregg: I would have been glad to accept that suggestion except for the fact that the committee, of which there are two

Female Employees Equal Pay representatives in front of me now, submitted that same point when it was at the planning stage to the Department of Justice, and that department considered it did not need to be spelled out in that way, that the word "employer" would automatically include anyone acting on his behalf whether an individual or a corporation.


Ellen Louks Fairclough: I hope with the words the hon. minister has just spoken being on the record that will be sufficient to ensure that this will be the case. If we should have instances of evasion on those grounds I trust the minister will amend the legislation by adding the proper words.


Donald Methuen Fleming: It will be noted that section 4(1) is stated in negative terms, "No employer shall employ a female employee" and so on. Could not that be just as well stated in positive terms, that is, "Every employer of a female employee shall pay her equal" and so on? I should think that in stating a principle there would be some value in stating it in positive terms rather than in the form of a prohibition. I should think there would be no problem from the point of view of enforcement, because any breach would still be punishable in the manner set forth in the following sections when any employer failed to pay a female employee remuneration equal to that paid to a male employee for identical or substantially identical work.


Milton Fowler Gregg: I am told that the law officers expressed preference for the negative wording.


Donald Methuen Fleming: I do not propose to debate the matter further, but I must say I do not see that there is any drafting problem involved. When the house is being asked to give effect to the principle of equal pay I think it would have been a happier result if the statement had been put in positive rather than in negative terms.


[Stage Direction]
Clause agreed to.
Clause 5 agreed to.
On clause 6-Enforcement procedure.
Ellen Louks Fairclough: This is the clause to which I referred when I spoke about there being no time limit placed on the proceedings. Clause 6 (4) (d) refers to the provision for the payment of additional remuneration that might have accrued to the complaining employee, and it contains the phrase "a period not exceeding six months". That same wording appears in clause 8. In both cases the permissive word "may" is used so there is really no pressure upon the referee, in the
[Mr. Gregg.1
one case, or the court, in the other, to actually impose this procedure upon an employer who has been found guilty of practising discrimination.
As I tried to say in my introductory remarks, it is well within the bounds of reason that a claimant would find that the processing of her claim took a couple of years. If she were justified in her complaint and received a decision by the referee or the court, as the case might be, she could collect the moneys which were due to her only for a period of six months. I ask the minister to consider that carefully, because the fines provided by this bill are not excessive by any means, and there must be some restriction on the employer.


Milton Fowler Gregg: My hon. friend is referring to the time limit in connection with the retroactive period?


Ellen Louks Fairclough: There is no time limit placed on the proceedings but there is a time limit on the length of time during which she can claim payment for additional remuneration.


Milton Fowler Gregg: My idea was that it would be possible to cover that time limit of the proceedings by regulation.


Ellen Louks Fairclough: If the minister is going to cover it in that way, all right.


Milton Fowler Gregg: If my hon. friend would express her thoughts a little more fully as to the length of time I am sure the officials will be glad to take them into consideration.


Ellen Louks Fairclough: I would suggest that the length of time for proceedings should be the same as the period for which she can claim additional remuneration.


Milton Fowler Gregg: I shall see that the suggestion is considered.


Ellen Louks Fairclough: There is the other point of the additional remuneration. It is permissive in both clauses 6 and 8. If a decision is made in favour of a complainant, why should not the employer be required to make that payment; why should it be merely a matter of choice with the referee or the court as to whether it would be so decreed?


Milton Fowler Gregg: It was in the minds of those who were working on this that in initiating this bill there should be a degree of flexibility on several points during the period experience was being gained in putting it into effect. If it is found from that experience that it would be useful to amend the wording of this clause I shall be glad to do so, but there were considerations which caused us to believe that the permissive word should be used rather than the more rigid word.


Mrs. Shipley:: It seems to me there could be cases where it would not be wise to have it compulsory, for instance in the case of female school teachers. Certainly they understand the act. If they do not choose to force the issue, it seems to me some municipalities might find themselves in a serious financial position if it were compulsory for the referee to order six months' back payments, if the employees have not raised the issue themselves, as is their privilege. I think it really should be permissive.


Ellen Louks Fairclough: I suggest that this would not affect school teachers in a municipality. They would come under the provincial laws. This merely covers those under federal jurisdiction.


Marie Ann Shipley: I simply use that as an example of what may happen.


Ellen Louks Fairclough: I must say that I have not changed my mind. If the minister is willing to keep this in mind and at a later date, when the act has become fully operative, change these words, probably that would suffice; but I point out that along with the very low fines which are set out in the bill, if an employer wished to evade the provisions of the act he might very well console himself with the thought that even if he were convicted after a complaint, the fine would be so small that he would actually be ahead financially in any event. It is useless having legislation that is going to leave a loophole whereby he could not exactly evade the provisions but he would feel that it would be to his advantage to defer action until such time as they caught up with him, and he would suffer no financial reverse because of it.


Milton Fowler Gregg: I can assure my hon. friend that the administration will be carried out conscientiously, and that is perhaps more important than the words that are used. I should prefer to have it stand as it appears in the bill now and give the officials an opportunity to carry it out in that way.


Ellen Louks Fairclough: Since most of these matters, I presume, will be settled by the referee, who will be from the minister's department, I think the minister should pass on to his staff the word that where there is the least doubt of the intention of the employer, they should make sure that he does not get off with an evasion of the act.


Milton Fowler Gregg: I should like to insert here also that the word "may" will apply to the statement that my hon. friend has just made. The referee may be found from the minister's department or he may be from outside.


[Stage Direction]
Clause agreed to.
Female Employees Equal Pay
On clause 7-Offences.
Donald Methuen Fleming: I should like to ask the minister if he thinks these fines are adequate. After all, they are only permissible maxima in each case, and it strikes me that if there is a flagrant breach of the act a fine of $100 in the case of an individual or $500 in the case of a corporation is very light.


Ellen Louks Fairclough: It is the maximum.


Donald Methuen Fleming: As I have said, this is the maximum. This is to cover the most flagrant case. If it is a small case of an oversight or something that is caught very quickly and does not represent a settled scheme on the part of some employer to evade the act, then presumably the magistrate will impose a fine of only a fraction of this amount. But here we are dealing with the maximum amount, which would then be applied inferentially in the most flagrant kind of breach of the act. It seems to me that for a flagrant breach of this statute a fine of $100 in the case of an individual or $500 in the case of a corporation is not a very serious sort of penalty to impose.


Milton Fowler Gregg: I agree with my hon. friend that it is not a very great punishment to mete out to the corporation that is the employer. On the other hand, if a given case carries through all the stages and comes to the point where a fine has to be imposed, we can say $1,000 or $20,000 and so on. But I think the main deterrent there is the social stigma that would be attached to the action that caused the fine, rather than the amount of money involved. Again I say that we are breaking new ground and I should like to do it quietly without great threats at the start.


Ellen Louks Fairclough: May I ask the minister what will happen if one of these cases comes to court and the employer chooses to fight the case with all the legal machinery at his command and succeeds in holding it up for a great length of time. That brings me back to the point I mentioned previously, on the length of time of the proceedings. I hope there is not going to be an opportunity for the use of legal machinery to prolong proceedings.


Milton Fowler Gregg: As indicated by the bill, the woman has the right to go to court at any time up to the appointment of a referee to look into the complaint. Should she do so and should the complaint which she has lodged with the minister up to that point appear to have merit, it would seem to me that the minister or his officials should take some interest in the matter, even though she does go to court, and see that it does not drag on to interminable lengths.

Female Employees Equal Pay


Ellen Louks Fairclough: There is no recourse for the employer who has been convicted under this?


Milton Fowler Gregg: No.


Ellen Louks Fairclough: Who has a judgment issued against him by a referee?


Mr. Barnett:: I should like to ask one question in connection with the fines to be imposed. I must say that I am inclined to agree with the suggestion of the minister that the chief value of the penalty is the social stigma, as he put it, attached to it. But I should like to know this. In the event that an employer be shown to be discriminating against say 100 female employees, would it be correct to say that under this clause he could be convicted of a separate offence in relation to each of those employees?


Milton Fowler Gregg: If a complaint were lodged and dealt with satisfactorily and that woman were one of 100 others in a similar position, one could expect the employer to clear the whole situation up at once. However, if the other 99 had felt the need of making a complaint, we are asking that the individual herself lodge the complaint in the first instance. Of course if she wants somebody to help her present the case that is a different matter, but the individual must make the complaint.


Thomas Speakman Barnett: Theoretically it would be possible for each of those 100 individuals to make the complaint and for the employer to be convicted for each instance?


Milton Fowler Gregg: I should think so, but I think the fair wage officer would want to see the employer and discuss the matter with him on behalf of all 100.


Donald Methuen Fleming: One of the minister's previous answers, I think, was somewhat lacking in clarity. There was some expression used about a judgment. Of course the referee cannot make a judgment; it would be quite unconstitutional to legislate in that form. All the referee can do is make an order. There is no appeal from this order, but if his order is ignored by the employer, then presumably prosecution follows. If a conviction is entered on a summary conviction procedure, then the employer of course has his normal right of appeal from such conviction, but the bill gives no appeal from an order of the referee as such.


Milton Fowler Gregg: I am glad my hon. friend has pointed that out, because at that next stage the employer does have the right of appeal.


Donald Methuen Fleming: Yes, if he is prosecuted for a breach of the referee's order.


Milton Fowler Gregg: That is right.


John George Diefenbaker: I did not hear the previous discussion, but I should like to ask the-minister a question with respect to section 7. On what basis was the determination made that the penalties should be so minimal as they are under this section? I refer particularly to the penalty in the case of a corporation, a fine not exceeding $500.


Donald Methuen Fleming: I raised that point.


John George Diefenbaker: My hon. friend says he raised this point. The thing that impresses me about this legislation is that an act with penalties such as that simply means that the enforcement has few teeth in it. The general penalty in respect of individuals for most convictions punishable on summary conviction is up to $500, and that would be the amount of the penalty if it were not particularly set out here. In the case of corporations the corresponding penalty is up to $5,000.
The minister has given an answer as to why the penalties were reduced to these very small proportions. If there are good reasons for it, well and good, but it seems very strange when for petty offences punishable under the summary conviction provisions of the Criminal Code the penalty in the case of an individual is up to $500 and up to $5,000 in the case of a corporation. The minister might be able to explain why the penalties should be of such a character as actually to invite breaches of the law in respect of a piece of legislation so important in its purpose.


Milton Fowler Gregg: I do not think there is a good reason except that in the companion piece of legislation, the Fair Employment Practices Act, and in this legislation the federal Department of Labour is entering quite a new field. The several very satisfactory solutions of complaints that have been achieved under the other piece of legislation were achieved with penalties exactly the same as in this bill and with the same degree of satisfaction as would have been realized if the penalty had been $50,000 in each case.
I do not believe that the amount of the penalty is a factor here. We did not think it was in the Fair Employment Practices Act. We believed that legislation was in the realm of education in the main, and we also believe that is true of this bill. We set these amounts under that act and we are using the same amounts in this legislation for much the same reason. As I mentioned a little while ago, with further experience in the administration of both these pieces of legislation we may

have cause to change our minds. If we do, we shall certainly act upon that experience.


[Stage Direction]
Clause agreed to.
Clauses 8 to 10 inclusive agreed to.
On clause 11-Inquiries.
Herbert Wilfred Herridge: Would the minister explain the necessity for this clause? I thought all ministers had the right and responsibility of [DOT]conducting interdepartmental inquiries if they wished with respect to any legislation they administer.


Milton Fowler Gregg: I think that is probably true. On the other hand, this is related to what I said a few moments ago. The officials working on the bill thought it would be better to have parliament spell out the fact that the minister has duties in connection with the administration of the legislation other than to impose the maximum penalty; in other words, in the educational field.


[Stage Direction]
Clause agreed to.
Clause 12 agreed to.
On clause 13-Equal pay provisions in collective agreements.
Ellen Louks Fairclough: The minister gave an
explanation in reply to a question asked previously by the hon. member for Cape Breton South, I believe, with regard to those persons who are covered by collective agreements. Does this clause mean that there must be an equal pay provision in the agreement in order to remove the employee from the realm of immediate contact with the referee? If there is a collective bargaining agreement and there is no equal pay provision in it, the complainant may still make a complaint direct to the referee. Is that correct?


Milton Fowler Gregg: That is correct. It is felt that a collective bargaining agreement covering a number of women employees should have a section along the lines of this bill. If it has no such section or there is no part of the agreement covering equal pay grievances, then the woman would come under this bill.


Ellen Louks Fairclough: I want to make sure of that, because in some of these cases there are so few women employees in a large group that either because they have not pressed for it or because they could not convince their fellow employees, they have not been covered by equal pay provisions. I have one case in mind at the present time which I now think would come under this legislation. The question has been asked whether employees of D.V.A. hospitals would come under it. They will, will they not?
Female Employees Equal Pay


Milton Fowler Gregg: Yes.


Thomas Speakman Barnett: There is one question I should like to ask with respect to subsection 2 (b). There are various types of settlement provisions in different collective agreements. The phrase "of all differences" is used in this subsection, and I take it that the grievance settlement provision must cover settlement of all grievances by arbitration or otherwise. Has consideration been given to any form of appeal from any decision that might be reached under a grievance settlement provision, provided that the union has gone through all the steps required in the contract and feels that it has not had proper redress? Why was no provision made that they could then appeal under the provisions of this legislation?
I can think of one collective agreement I know of where for the settlement of certain types of disputes they have reference to a sole arbiter whose decision, under the terms of the agreement, is final and binding upon both parties with respect to the provisions of the agreement that are classified as referable to him. In that case there might be no provision for the referral of this type of thing to the sole arbiter. I am wondering whether consideration has been given to some arrangement for allowing an appeal to a referee under this legislation if there should be a case where the sole arbiter has made a ruling with which the parties are not satisfied.


Milton Fowler Gregg: Thought was given to that
point but no action was taken along the lines suggested by my hon. friend because it was felt that to some extent it would be a vote of lack of confidence in the collective bargaining process carried out by the union. That was very strongly felt by the head of my conciliation branch within the department, who was a member of the committee. The process under these collective agreements is very clear cut, culminating in most cases, I think, with the appointment of an arbitrator if it goes that far. After that arbitrator has given his ruling, then if that lady were to come to us and go through the same process and we carried it to its final conclusion, we would in truth be attempting to give judgment over and above that of collective bargaining.


Thomas Speakman Barnett: If I understand the meaning of this correctly, the agreement must contain a provision, both (a) and (b), that is to say an equal pay provision and an agreement settlement provision before this exemption applies?


Milton Fowler Gregg: That is right.


[Stage Direction]
Clause agreed to.
7084	HOUSE OF
Female Employees Equal Pay
On clause 14-Transitional.
Ellen Louks Fairclough: With regard to clause 14, Mr. Chairman, this means where there is a collective agreement in effect the shortest period of time before the act can become applicable to those persons is one year from the date of the coming into force of the act as proclaimed by the governor in council; that is true, is it not? I think that lends force to my argument-perhaps I could now speak about clause 15 also, Mr. Chairman, with your permission, because they tie in together-that a date should have been set for the act coming into force rather than leaving it in the air. We have not any idea now when it may come into effect.


Milton Fowler Gregg: Perhaps I could refer to the two points together. The first one is quite clear. The reason for section 14 is to provide that employers and employees shall not be caught off balance during the first period of the operation of this act.
Now, as to the date of the coming into force of the act, if when this bill went on the order paper we had put a date in clause 15, it would have been March 1.


Ellen Louks Fairclough: That would have been just fine.


Milton Fowler Gregg: However, we would never have got to it. When this bill receives royal assent I and my officials are anxious to put it into effect at the very earliest date possible, and I concur in that point of view.


Ellen Louks Fairclough: Then I take it that it would come into effect within a few days after the close of this session?


Milton Fowler Gregg: Very shortly after.


[Stage Direction]
Clause agreed to.
Clause 15 agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Applewhaite):: When shall this bill be read a third time; now?


Hazen Robert Argue: By leave.


Milton Fowler Gregg: the third reading of the bill.


Ellen Louks Fairclough: Perhaps I might be permitted to say one word at this stage. I am sure all of us were pleased to see on the floor of the house the director of the women's bureau. I believe this is the first time she has been here as adviser to the minister, and this piece of legislation which has gone through affects her department. I should like to say that it gave us all pleasure to find her here in this capacity.


Milton Fowler Gregg: Mr. Speaker-
The Acting Speaker (Mr. Applewhailek
If the minister speaks now, he will close the debate.


Milton Fowler Gregg: I want to thank the hon. member for her kind words with reference to the director of the women's bureau. She will hold a watching brief on the administration of this legislation.
Motion agreed to and bill read the third time and passed.



INCOME TAX ACT

[Stage Direction]
The house resumed, from Tuesday, July 31, consideration in committee of Bill No. 418, to amend the Income Tax Act-Mr. Harris-Mr. Applewhaite in the chair.
The Depuiy Chairman: I believe the committee was discussing an amendment submitted to clause 5. Perhaps if the committee would give me a moment I could find where we left off.
Walter Edward Harris: I had moved an amendment to subparagraph 5 at the top of page 3 of the bill.
On clause 3, paragraph 5-Clergymen's residences.


Donald Methuen Fleming: When this bill was last before the committee on Tuesday evening, July 31, I had, with others, urged upon the minister that his amendment to this clause did not go far enough and had proposed for consideration, within the ambit of the framework of the amendment, the case of the clergy engaged on the teaching staffs of theological colleges. I expressed the hope that in the interval the minister would reconsider his position in the matter.


Walter Edward Harris: I have done so, Mr. Chairman, and I find the objections which I mentioned to the committee on the last occasion we were discussing this amendment are still valid. For the moment I do not feel I should go beyond what I have done in the amendment.


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
Paragraphs 6 to 9 inclusive agreed to.
On paragraph 10-
Walter Edward Harris: I have an amendment to this paragraph which I would ask my colleague the Minister of National Revenue to move. It is as follows:
That Bill 418, an act to amend the Income Tax Act, be amended by deleting lines 34 to 36 on page 4 thereof and substituting therefor the following:

"(10) subsection (2a) of section 11 of the said act as enacted by subsection (6) of this section is applicable in the case of a regulation made under paragraph (b) of subsection (1) of section 11 of the said act after the coming into force of this act.
(11) for greater certainty it is hereby declared that a regulation made under paragraph (b) of subsection (1) of section 11 of the said act before the coming into force of this act may. in so far as such"
Then the wording continues as it is in line 37. It is merely to make it clear, sir, that the amendments to the regulations will take effect only from now on and will not be retroactive.


James Joseph McCann: I so move.


[Stage Direction]
Amendment agreed to.
Paragraph as amended agreed to.
Clause 3 as amended agreed to.
On clause 4-Special corporation taxes.
Donald Methuen Fleming: Clause 4 is the first of several clauses in this bill which hinge on the legislation recently passed by the house in relation to the fiscal arrangements with the provincial governments. Where there is to be a provincial corporation tax or personal income tax as well as that levied by the federal government there must of course be provision for deduction in the case of such taxpayers. The question that must always be asked is, how much. Our position in this respect was, I think, made abundantly clear in the debate on that measure, which passed this house a fortnight ago. We do not think, under all the circumstances, that the amounts which are permitted to be deducted in such cases, as set forth in that legislation, are adequate.
Bill No. 418 is simply a companion measure which sets up the actual provision for deduction in such cases. I am saying this now, Mr. Chairman, to put our position again on record and to avoid repetition. What we had to say on the other measure stands. We accept, of course, the principle that the taxpayers in such provinces should be entitled to make the deduction rather than be faced with double taxation; but we repeat what we said then, namely that the percentages allowed to be deducted in such cases are inadequate. Those percentages are now carried into the provisions of section 4, and a couple of sections which follow, of the bill.
Therefore we reassert the position we took on the other bill. We say those percentages are not adequate under all the circumstances, but we do of course recognize the necessity for there being deductions. We are then left in the position, Mr. Chairman, where the
Income Tax Act
principle of deductions is regarded as strictly necessary but in our view the percentage of deduction is inadequate.


[Stage Direction]
Clause agreed to.
On clause 5.
Ellen Louks Fairclough: Clause 5 brings up the whole question of the amounts allowed as statutory exemptions in the case of those persons who come into the country under any assisted passage scheme, I take it? If my memory serves me rightly, the matter of persons who receive one or two months' family allowances was taken care of a couple of years ago. The minister made provision for permission to be given to refund the amount and claim the full exemption. Am I correct in that?


Walter Edward Harris: Yes.


Ellen Louks Fairclough: But I understand in this case, if an immigrant comes in under an assisted passage scheme it is automatically taken as an indication of the receipt of family allowance, and the immigrant is automatically moved from the $400 to the $150 exemption for such children brought in with him under that scheme.


Walter Edward Harris: Mr. Chairman, this provision does for the immigrant with respect to any moneys received by him in connection with the allowance for his children during the first year of his residence in Canada the same thing as is now done, as my hon. friend has said, for a person in receipt of family allowance.


Ellen Louks Fairclough: I should like to have it made clear how this is actually going to work. He comes in under an assisted passage scheme, and a certain time is required for him to pay the amount which has been expended to assist him to come into the country. Even if the total amount he has had given to him is spread over a year for the purpose of repayment, can he, by refunding the two months' allowance, to the department, claim the total statutory exemption?


Walter Edward Harris: If I may say so, Mr. Chairman, the hon. member for Hamilton West has confused the loans made for passage with payments made to immigrant parents for their children during the first year of their residence in Canada.


Ellen Louks Fairclough: I hope that is a fact. That is precisely what I was trying to find out. The explanatory note says:
This clause provides that any children in respect of whom amounts are paid as family assistance to immigrants and settlers shall be classed as children qualified for family allowance for income tax purposes.

Income Tax Act
I am concerned with these words, "family assistance to immigrants and settlers". Do they mean family allowances?


Walter Edward Harris: It is a payment made, Mr. Chairman, during the first year of the residence in Canada of the immigrant family. The payment is made with respect to the children and the parents receive it and have it quite freely. There is no repayment. This is to arrange the Income Tax Act in such a way that the receipt by them of those sums of family assistance will be treated for our purpose precisely as family allowances would be.


Ellen Louks Fairclough: What is family assistance if it is not family allowance?


Mr. Pickersgill:: Perhaps I can explain to the hon. member. I made an announcement one day, possibly when she was not here, that from July 1 onward it was proposed to pay to children of immigrants who came into the country until, under the Family Allowances Act, which is one year, they were eligible for family allowances, $60 a year, or a fraction thereof. So that family assistance is the equivalent of family allowances, but it is called family assistance because it does not come under the Family Allowances Act.


Ellen Louks Fairclough: Does it come under the Department of Citizenship and Immigration?


John Whitney Pickersgill: It is paid through my department.


Ellen Louks Fairclough: May I say to the Minister of Finance what I said to the Minister of National Health and Welfare when we were discussing his estimates, that there is still some confusion in the minds of people who come into this country with reference to their status for tax purposes in respect of family allowances. I believe that when these people come into the country at the present time the Department of Citizenship and Immigration supplies them with a pamphlet or some sort of document which outlines to them precisely what their rights are taxwise in respect of their children with or without family allowances.
I have had two letters from and one conversation with persons who came into the country and were given no such information and who, because of that, were forced to pay. The time had elapsed when their assessments came back to them in which they could have made restitution of the one or two months, as the case may be, of family allowances which they received in the one year in which the children became eligible. Consequently they lost the benefit of the tax computation in that regard. One of those gentlemen told me that had anyone given

him such information at the time he entered the country he would have known how to handle the matter, but no one had done so. Does the Department of Citizenship and Immigration make sure that everyone who comes in now is given the benefit of this information?


John Whitney Pickersgill: We do the very best we can. You know, it is sometimes a case of leading a horse to water, but I think the establishment of family assistance makes it much more certain that they will get the information because there is an immediate benefit available now. It is of more interest than something you will get a year hence.


[Stage Direction]
Clause agreed to.
On clause 6.
Donald Methuen Fleming: I am sure hon. members will be glad to welcome the addition of oxygen to the group of medicines, the other four having been in the act for some time, which may be included within allowable medical expenses under section 27 of the act. It does draw attention to what some of us argued when the present provisions in this respect were introduced, that the list of drugs is not large enough, and I think the time has come to submit this to the minister and the committee for some future review.
This particular amendment arises out of the decision of the income tax appeal board last December when a gentleman by the name of Anatole Brunet of Verdun had sought to deduct from his 1954 income the sum of $742 expended by him on oxygen treatments for his wife who had pulmonary tuberculosis. Testimony of the doctors was that constant medical use of oxygen was needed to bring her relief and to prolong her life, but it was held that this was not a permissible deduction; it was not one of the things that could be included within the scope of allowable medical expenses.
It is unfortunate that the amendment does not make any retroactive provision. In taxation legislation we always oppose retroactive legislation where any burdens are imposed. Where the provisions are remedial there is no reason why, unless some discrimination were thereby created, legislation should not be made retroactive.
I raise the point, first of all, that there is strong reason for making the provision retroactive when one sees as striking an example as was raised in this case. This man will derive no benefit for this heavy expenditure made by him in 1954, or 1955, if he did make a similar expenditure in 1955.
The second point I make is that while an example has arisen now underlining in a very

striking way the strength of the case for the inclusion of oxygen within the scope of these medical expenses, there must be many other medical items deserving of inclusion. There are many drugs that are required by persons who are chronic sufferers from some ailments for which the case is just as strong as it is for insulin, cortisone, ACTH, oxygen and liver extract.
I realize that in the first instance this is a matter for the Department of National Health and Welfare, but when recommendations are made from that department to the Minister of Finance I am sure they must then become his responsibility as to whether they are to be the subject of amendments to the Income Tax Act that he is prepared to father in the house.
I do not know whether or not this study is being made at the present time in the Department of National Health and Welfare, but I do urge very strongly that such a study should be made by the proper government department, because I am satisfied that the present list is not adequate and that there are many chronic sufferers in this country who have just as strong a case for including within the scope of allowable medical expenses the substantial outlays they are making for drugs to alleviate their sickness as the case which exists for insulin, cortisone, ACTH, oxygen and liver extract.
While there is only one addition being made to the list this year I would suggest that there must be many others, and they should be diligently inquired into and legislation ought to be brought forward to enlarge this list.


[Stage Direction]
Clause agreed to.
On clause 9-Deduction from corporation tax.
Walter Edward Harris: Mr. Chairman, I move:
That Bill No. 418, an act to amend the Income Tax Act, be amended by deleting lines 11 and 12 on page 7 thereof and substituting therefor the following:
"(2) This section is applicable to the 1957 to 1961 taxation".


[Stage Direction]
Amendment agreed to.
Donald Methuen Fleming: Mr. Chairman, I should like to have the remarks I made concerning clause 4 apply to this clause, without my repeating them.
Clause as amended agreed to.
On clause 10-Averaging for farmers and fishermen.


Ellen Louks Fairclough: Mr. Chairman, I wonder if the minister would explain what is meant by clause 10. Let us take the case of a farmer who has just started up and taken over his 67509-450
Income Tax Act
own farm. In the first year he has a loss and probably he has a loss in the second year; then he begins to make money. Unless he has filed an election for the first year by April 30 of the following year I take it that he will not be allowed to use those two years of loss in averaging his income, is that correct?


Walter Edward Harris: Mr. Chairman, the purpose of this amendment is to provide something different from what my hon. friend has in mind. The year of averaging is the fifth year in this particular case and this is to require the farmer to file a return on time in the fifth year even though he may not be taxable in that particular year.


Ellen Louks Fairclough: But it would not affect the losses in earlier years?


Walter Edward Harris: No.


Ellen Louks Fairclough: I presume the point the minister made is that he might not normally file the return but under this amendment whether or not he is taxable he must have filed a return by April 30 and have indicated his intention?


Walter Edward Harris: Yes.


Hazen Robert Argue: Mr. Chairman, I do not see any advantage in this particular amendment. I have had a situation brought to my attention a number of times and I wonder if the minister is also aware of it. Frequently farmers have made money in two or three years and have filed returns and paid their taxes; then in a year when they have had a loss, through neglect or as a result of not knowing the terms of the act tney have perhaps failed to file a return. The history of farming is such that we all know in some years a farmer may make a great deal of money and in other years he may incur substantial losses.
What is to be gained by requiring the farmer to file a return every year even in the years when he has had a loss, in order to take advantage of the averaging? It would seem to me that within a five-year period, if the farmer has filed a return when he has had a taxable income, that he should then have fully met the law and should be able to average over the five years despite the fact that inadvertently he failed to file a return when he was not subject to tax.


Walter Edward Harris: The purpose, of course, is to be helpful to the administration of the tax laws of Canada and at the same time not to be harmful to the farmer.
My hon. friend would understand that if the farmer is not taxable in the fifth year, let us say, and then in the sixth or seventh year

Income Tax Act
he becomes taxable and flies a return and discovers at that time in the course of going over his returns that he was in fact taxable during the fifth year, he has lost an opportunity to elect back. In this way we can keep him up to date and he is able to take advantage of the averaging.
If in the seventh or eighth year he were to discover he was taxable in the fifth year it would be very difficult for him to average back in view of the lapse of time. This is not intended to be restrictive on the farmer; rather it is intended to be helpful to him to keep his tax returns up to date in order that he can take the full advantage of the law.
My hon. friend says we know that farmers are not aware of the law. There are some who are not, of course, but most of those who are familiar with income tax realize the advantage of averaging, and this is to assist them in making sure they are able to average for the five-year period.


Mr. Patterson:: Mr. Chairman, the point I wish to raise relates more perhaps to the realm of the administration of the act than to the actual clause. I had a very unfortunate case brought to my attention recently. One of my own constituents previously operated a farm in the province of Alberta and built up a dairy herd there. In 1953 he sold his herd, moved to British Columbia, and started up in the dairy business in that province.
This man filled in the forms in which he elected to average and made arrangements with a particular individual in the city of Chilliwack whom he understood to be dependable, and paid him a fee for filling in his income tax forms. Apparently the forms were filled in on time but through some circumstance which was beyond the control of the gentleman in question the forms were not received by the income tax office until approximately the 17th of the month, I think it was. Because of that unfortunate circumstance this man's request for averaging was disallowed and the result was that he was assessed a little over $1,000 in the form of income tax whereas if the forms had been filed on time the whole matter would have been taken care of and he would have been saved that amount.
Perhaps the problem lies in the administration. I realize there has to be a cut-off date, but this particular man had the receipt indicating that he had paid his fee and that the forms were being filled out. Because the man whom he had engaged to fill out his income tax return was lax, the return was not received in time and his client was penalized.
I took this up with the Department of National Revenue, taxation division, and also

with the Minister of National Revenue, but apparently nothing could be done under the circumstances. Although this is the law it is unfortunate that something could not be done in a case like this. 1 do not know whether any comment is necessary by the minister, but I suggest that something be done to take care of cases like this.


[Stage Direction]
Clause agreed to.
Walter Edward Harris: I have an amendment to insert a new clause 11 and renumber the succeeding clauses in the bill. It reads:
That Bill 418, an act to amend the Income Tax Act, be amended by renumbering clauses 11 to 26 thereof as clauses 12 to 27 respectively and by adding thereto, immediately after clause 10 thereof, the following clause:
"11. (1) Paragraph (b) of subsection (4) of section 46 of the said act is repealed and the following substituted therefor:
'(b) within 4 years from the day of an original assessment in any other case,'
(2) This section shall come into force on the 1st day of January, 1957."


James Joseph McCann: I move accordingly.


Walter Edward Harris: The purpose of the amendment is to reduce the time limit within which a reassessment may take place.


Donald Methuen Fleming: Is this a new amendment beyond those the minister indicated earlier he intended to introduce?


Walter Edward Harris: That is right.


Donald Methuen Fleming: It is not difficult to grasp the effect of this amendment. The present section 46 (4) reads:
The minister may at any time assess tax, interest or penalties and may
(b) within six years from the day of an original assessment in any other case, reassess or make additional assessments.
The hon. member for Kamloops earlier in the session introduced an amending bill to reduce the period within which a reassessment might be made in any case except where fraud was involved. To the extent to which the amendment now introduced by the minister is the outcome of the efforts of the hon. member for Kamloops I think my colleague is entitled to all commendation, and the minister in turn to congratulations for having adopted the sound proposal put forward by an hon. member of the opposition.


Walter Edward Harris: I am grateful, but just for the record I would point out that over a year ago I said I was studying this matter and that some day I would move an amendment.


[Stage Direction]
Amendment agreed to.
William Alfred Robinson: Shall I call the clause numbers as they appear in the present bill?


Some hon. Members:: Yes.

On clause 11.


Ellen Louks Fairclough: May I say that I am pleased with the amendment the minister has brought in to introduce a new clause 11 in the bill. I think it will work out to the advantage of all concerned.
Dealing with this clause, 1 should like to ask the minister if it has not occurred to him that a situation might arise where an employee would be receiving supplementary unemployment benefits as his total income for the year. I realize that supplementary unemployment benefits are comparatively new and I suppose the department is feeling its way with regard to tax deductions, but it seems to me that if an employee can testify that this is his only source of income there should be an opportunity for the employer to refrain from making deductions if he is reasonably sure that the employee will not exceed his statutory exemption. The clause as it now stands makes it necessary for the employer to make the appropriate tax deductions under any circumstances.
I grant you that if it started at the beginning of the year and he received less than the amount there would be no basis on which the employer could make a deduction, because the amount would not appear in any tax table. But it is possible that a man may have been employed for three or four months and at the end of his employment have a refund coming at the end of the year. I wonder if the minister will say whether he thinks the wording of this clause is sufficiently clear to cover the situation where an employee may have deducted from him amounts which would only be returned to him at the end of the year.


Walter Edward Harris: This deduction would be made not by an employer but by the trustee of the fund. No doubt the trustee of the fund will obtain from the person receiving supplementary benefits an indication of his status and will make whatever deductions are required according to that particular declaration. Should an employee receive, shall we say, a modest sum, he would not likely be taxable at all, having no status whatsoever with respect to income tax deductions.


Ellen Louks Fairclough: It is intended that the ordinary tax table shall be used in making these deductions and not a set amount, as is the case with some other special benefits?


Walter Edward Harris: Quite so.


[Stage Direction]
Clause agreed to.
Walter Edward Harris: The next amendment reads: That Bill 418, an act to amend the Income Tax Act, be amended by renumbering clauses 13 to
67509-450J
Income Tax Act
27 thereof as clauses 14 to 28 respectively and by adding thereto, immediately after clause 12 thereof, the following clause:
"13. Paragraph (b) of subsection (1) of section 57 of the said act is repealed and the following substituted therefor:
'(b) shall make such a refund after mailing the notice of assessment if application therefor has been made in writing by the taxpayer within 2 years from the day on which the overpayment was made or the day on which the notice of assessment was sent.' "
I think the amendment is self-explanatory. Instead of one year the refund can now be secured up to two years.


Donald Methuen Fleming: A good amendment.


[Stage Direction]
Amendment agreed to.
On clause li.
Donald Methuen Fleming: This clause is entitled to be supported because it extends as it should the principle of the 20 per cent dividend tax credit to a situation where it has not hitherto applied. There is no reason why in principle it should not have been.
This gives me the opportunity to raise again a question I have raised for several years and with which the minister, so far as I am aware, has not yet dealt. That is the case of a taxpayer whose wife has a dividend income of under $1,000. The full amount of her income is deducted less $250 from her husband's exemption. No benefit accrues to either him or her because of the fact that her income is in whole or in part composed of dividends from taxable Canadian corporations. In that case it has always seemed to me to be very unfair that no benefit should accrue to either of them from the fact that the wife's income is composed of those dividends from taxable Canadian corporations.
I should like to press that on the minister. There have been representations made to him. As I recall it, the Canadian Chamber of Commerce made representations of this kind to the minister in each of the last two years, and I wish the minister would introduce legislation to give effect to that proposal that surely is justified in principle m relation to dividends. Is the minister going to tell us anything about his position on this matter?


Walter Edward Harris: I was just beginning to wonder whether I would leave the opposition anything to urge upon me if I dealt with all the remaining matters.


Donald Methuen Fleming: There are many more.


Walter Edward Harris: The short answer is that the purpose of the 20 per cent dividend tax credit was to avoid double taxation. When the dividend is in the hands of the wife who is not taxable there is no double taxation,

Income Tax Act
but I would prefer not to argue that case at the moment, because it does not particularly apply to this clause, though it could be said that it did. On another occasion I can perhaps dispose of the argument at great length.


Donald Methuen Fleming: If the minister thinks he is disposing of the argument, I can assure him that he is not.


Walter Edward Harris: I said I would do so on another occasion.


Donald Methuen Fleming: In the case I put double
taxation does result.


[Stage Direction]
Clause agreed to.
On clause 14-"Investment company" defined.
Walter Edward Harris: I have an amendment of one word or so in the last two lines of page 8. It is as follows:
That Bill 418, an act to amend the Income Tax Act, be amended by deleting lines 40 and 41 on page 8 thereof and by substituting therefor the following:
" (ba) not more than 50 per cent of its gross revenue for the year was from interest,"


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 15-Saving provision.
Mr. Monteith:: This has to do with patronage dividends and how to arrive at the capital employed in a certain period. I know this has nothing to do with the question be-for us, but how was the 3 per cent of the capital employed arrived at?


Walter Edward Harris: I think it was an arbitrary decision based on much experience with cooperatives, at a time when there is a very considerable body of opinion that co-operatives ought not to be taxed at all and another body of opinion that they ought to bear at least some part of the cost of maintaining the government of Canada.


[Stage Direction]
Clause agreed to.
Clauses 16 and 17 agreed to.
On clause 18-"Employees profit sharing plan" defined.
Donald Methuen Fleming: In clause 18 we have the minister introducing in two subclauses the expression "capital gain". I simply draw attention to the fact that there is in the act no definition of capital gain. The income tax appeal board and the courts are operating under some old judicial definitions of capital gain. As Mr. H. Heward Stikeman pointed out in a recent address entitled "The Vanishing Capital Gain", from which I read on a recent occasion, and I should like to urge

upon the minister that the time has come to undertake some proper statutory definition of capital gain that will take into account modern business practices and will be a realistic approach to a problem that exists today largely because of the fact that very old judicial interpretations of this expression are now being used in the courts, rather than something created by this parliament.


[Stage Direction]
Clause agreed to.
Clause 19 agreed to.
On clause 20-Idem.
Walter Edward Harris: I have an amendment to clause 20, as follows:
That Bill 418, an act to amend the Income Tax Act, be amended
(a)	by deleting line 30 on page 12 thereof and substituting therefor the following:
"following subsection:";
(b)	by deleting lines 44 to 46 on page 12 thereof and lines 1 to 10 on page 13 thereof; and
(c)	by deleting lines 14 to 22 on page 14 thereof and substituting therefore the following:
"(4) subsection (2) is applicable in respect of losses"


[Stage Direction]
Amendment agreed to.
Donald Methuen Fleming: The amendment the minister has introduced does not touch, as I recall it, the provisions in clause 20 of the bill, which are rather lengthy, in connection with the matter of the mining corporations as predecessor corporations.


Walter Edward Harris: Perhaps I can explain. As a matter of fact, when I presented the bill originally we thought we had to deal with the decision of the supreme court in the Consolidated Glass case. Since introducing the bill, the court has said that it would rehear the case, and we are dropping the legislation we had in mind in view of their judgment. I do not know whether or not we shall come back with it again another year, but that has nothing to do with mining; that comes in the next clause.


[Stage Direction]
Clause agreed to.
On clause 21-Property acquired by successor corporation.
Walter Edward Harris: I move the following
amendment.
That Bill 418, an act to amend the Income Tax Act, be amended
(a)	by deleting lines 15 and 16 on page 15 thereof and substituting therefor the following:
"products or natural gas, exploring or drilling for petroleum or natural gas, or mining or exploring for minerals, all or substantially all of the property of the";
(b)	by deleting line 2 on page 16 thereof and substituting therefor the following:
"of subsection (1), paragraph (b) of subsection (2), paragraph (d) of subsection (3)''; and
(c)	by deleting lines 16 to 20 on page 16 thereof and substituting therefor the following:

"The production of petroleum or natural gas from wells, or the production of minerals from mines, situated on property from which the predecessor corporation had, immediately before the acquisition by the successor corporation of the property so acquired, a right to take or remove petroleum or natural gas or a right to take or remove minerals;"


Donald Methuen Fleming: Clause 21, subclause 4, on page 15, was designed to add a new subsection 8a to section 83A of the act and to provide that where an oil or mining corporation acquires the property of an oil corporation it may deduct the undistributed exploration expense incurred by the predecessor corporation. As the clause originally was drawn up, it permitted the oil or mining corporation to adopt the same practice with respect to deferred items of this kind in the predecessor corporation as it followed with respect to its own current development expenses.
The anomaly that existed was that while a mining company was empowered to do this with respect to a predecessor oil company which it might acquire, it was not authorized to take similar action in the event that it acquired a predecessor mining company. As I understand it, the effect of the amendment which the minister has introduced is to remove that anomaly and to provide that the mining corporation, where it acquires a predecessor mining company, is entitled to make a deduction just as the section originally provided with respect to oil companies.


Walter Edward Harris: That is correct.


Mr. Michener:: I take it this is the matter I raised on the resolution stage, and which the minister then indicated he would review.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Clauses 22 and 23 agreed to.
Walter Edward Harris: Mr. Chairman, we are becoming a little involved with the renumbering. I have an amendment which, as a matter of fact, will be new clause 25 but would be before 23 in the order in which we are doing it.


James Joseph McCann: I move:
That Bill 418, an act to amend the Income Tax Act, be amended by renumbering clauses 25 to 28 thereof as clauses 26 to 29 respectively and by adding thereto, immediately after clause 24 thereof, the following clause;
25. (1) The said act is further amended by adding thereto, immediately after section 85G thereof, the following heading and section:
"Sale of Farm Property.
85H. Notwithstanding subsection (4) of section 20, where a taxpayer's chief source of income during a taxation year or during the 12 months immediately preceding the taxation year has been farming, and the taxpayer has, during the taxation year, sold to a child of the taxpayer a farm or a farm and other property used in farming
Income Tax Act
operations carried on by him, for the purposes of section 20 and regulations made under paragraph (a) of subsection (1) of section 11 the capital cost to the child of the taxpayer of depreciable property included in the property so sold shall be deemed to be the lesser of
(a)	the capital cost to the child of the taxpayer of that depreciable property determined in accordance with paragraph (g) of subsection (6) of section (20), or
(b)	the fair market value, at the time of the sale of that depreciable property."
(2) 85H of the said act as enacted by this section is applicable in determining, at any time after 1955, the capital cost of depreciable property in the case of any such property sold after 1948.


William Alfred Robinson: Do I understand this is moved after the present clause 23 and that it would be 25 as renumbered?


Walter Edward Harris: It is 25 as renumbered.


William Alfred Robinson: Have hon. members heard the amendment?


Donald Methuen Fleming: We have heard it but that is all. It is regrettable that the minister was not able to warn members on this side of the house as to the purpose of this very long amendment. It might prove to be simple enough on analysis, but to hear it read it sounds somewhat abstruse. I think we will have to have an opportunity to look at it.


Walter Edward Harris: We will let it stand, Mr. Chairman.


William Alfred Robinson: This amendment shall
stand.
Amendment stands.
On clause 24-Definitions.


Donald Methuen Fleming: I have this observation to make on clause 24. I am glad the minister has seen fit to introduce this provision, which has been the subject of representations made to him on behalf of the Canadian Bar Association by a committee appointed by that association for the purpose. I think it is a sound approach. I am aware that the professional accountants in this country have urged that somewhat similar legislation be introduced with respect to documents of taxpayers in the possession of accountants.
There is one matter I bring forward. I do not like the use of the word "lawyer" all the way through the clause. Surely some better designation could have been chosen for this purpose. I can see the reason for trying to choose a term that will fit the description of the profession in all provinces, but the result is that an expression has been chosen which is not one that is applied to the bar in any of the provinces except in a colloquial sense.


Walter Edward Harris: That may be so. Personally I do not feel that any error has been made. It was not only clear to us but in many

Income Tax Act
respects the clause was drafted in part by the bar association and they took no exception to this.


Donald Methuen Fleming: At various places throughout the clause you use the expression "solicitor-client privilege". I would have thought that the word "solicitor" would have been the proper one to use under the circumstances.


Walter Edward Harris: We happen to be legislating for ten provinces, so I think that perhaps "lawyer" will do. I should like to move an amendment.


James Joseph McCann: I move:
That Bill 418, an act to amend the Income Tax Act, be amended by deleting lines 43 to 46 on page 19 thereof and substituting therefor the following:
"of the Attorney General of Canada, is satisfied that neither the client nor the lawyer has made an application under paragraph (a) of subsection (4), or, having made that application, neither the client nor the lawyer has made an application under paragraph (c) thereof,"
The purpose of the amendment is to make it clear that both the lawyer and the client might have made an application.


[Stage Direction]
Amendment agreed to.
Donald Methuen Fleming: May I ask the minister if he has yet introduced the new clause 24 dealing with the repeal of subsection 6 of section 123?


Walter Edward Harris: No, I was about to do that.


James Joseph McCann: I move:
That Bill 418, an act to amend the Income Tax Act, be amended by renumbering clauses 27 to 29 thereof as clauses 28 to 30 respectively and by adding thereto, immediately after clause 26 thereof, the following clause:
"27. Subsection (6) of section 123 of the said act is repealed."


William Alfred Robinson: This is to follow the present clause 24?


Walter Edward Harris: It follows clause 23.


William Alfred Robinson: Shall the present clause 24 as amended carry?
Clause as amended agreed to.


William Alfred Robinson: Shall this amendment following the present clause 24 carry?


[Stage Direction]
Amendment agreed to.
Clause 25 agreed to.
On clause 26-Registered pension fund or plan.
Walter Edward Harris: I have an amendment for a new clause 29.


Donald Methuen Fleming: Had you not better deal with clause 26 first?


Walter Edward Harris: All right.


Ellen Louks Fairclough: I want to ask the minister a question. The present clause 26 of the bill obviates any necessity for reapplication. It makes any superannuation or pension fund a continuing plan under the act and there is no change in essence between former superannuation or pension fund plans and newly registered plans?


Walter Edward Harris: No, it is a use of words. I have an amendment.


James Joseph McCann: I move:
That Bill 418, an act to amend the Income Tax Act, be amended by striking out line 15 on page 21 thereof and substituting therefor the following:
'(2) Paragraph (p) of subsection (1) of section 139 of the said act is repealed and the following substituted therefor:
"(p) "farming" includes tillage of the soil, live stock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees, but does not include an office or employment under a person engaged in the business of farming;"
(3) Subsection (1) of section 139 of the said act is'


Herbert Wilfred Herridge: We have not got the other sections of the act here. Would the minister mind explaining what this does?


Walter Edward Harris: It takes care of the case of a dairyman wholly in the dairy business and who took advantage of the benefits under the act for farmers by saying that the act included dairying as being an occupation of a farmer. The purpose is to make sure that anyone who is conducting a dairy but is not a dairy farmer should be excluded from the benefits that are available to a farmer as such.


Donald Methuen Fleming: This was the subject of a recent decision by the income tax appeal board within the last few days.


Walter Edward Harris: Yes.


Donald Methuen Fleming: I think we ought to have an opportunity to take a look at this amendment. It apparently changes only one word in section 139 (1) (d) of the act, but as we have one other amendment to look at I suggest that this one might stand too to give us an opportunity over the dinner hour to examine it.


William Alfred Robinson: This is an amendment to the present clause 25, and it shall stand.
Amendment stands.
Clause 26 agreed to.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
William Alfred Robinson: When the committee rose at six o'clock two amendments had been allowed to stand. I believe one comes after the present clause 23. Shall this amendment carry?


Donald Methuen Fleming: I understand, Mr. Chairman, that the one you are calling is to be the new clause 25, subsection 1; that is the one relating to the sale of farm properties?


William Alfred Robinson: Yes.


Donald Methuen Fleming: There has been an opportunity during the dinner hour to examine this amendment and I may say now that we welcome it and support it wholeheartedly. As a matter of fact, this is the amendment that has been asked for, indeed urged, in the committee on estimates by the hon. member for Perth and the hon. member for Middlesex East. It concerns the matter of giving to the son of a farmer who acquires the father's farm the right to depreciate his property from that point on, although apart from such a provision as this the transaction would not be regarded as one between parties dealing with each other at arm's length. I may say that we have advocated this remedial provision and we welcome it and support it.


Mr. Brooks:: I just wanted to ask a question with reference to this definition of farm property and depreciation. It will be recalled that a few years ago the matter of cutting timber on a farm was being considered. A good many farmers in my province and other provinces cut timber perhaps after 25 or 30 years. Previously the income was included in the income for the particular year in which they cut the timber. I want to ask the minister whether that has been changed. I was not a member of this committee on estimates and I have not followed this bill too closely, but I wonder whether any change has been made in the act regarding the cutting of timber?
At the moment I think it can be averaged over five years, but as the minister understands it takes 30 or 40 years for a crop of timber to grow, and if it is all cut in one year it certainly should not be considered as income for that one year. However, I should like to have the minister's comments on that subject.


Walter Edward Harris: There is nothing in the present bill which alters the existing law with respect to timber. My understanding is that
Income Tax Act
if a farmer cuts timber annually for sale, it is considered income.


Alfred Johnson Brooks: That is different, of course.


Walter Edward Harris: But if he happens to have a bush lot which he sells, perhaps once in his lifetime, that would be in the nature of a realization of capital and it would not be income in the taxation period.


Jay Waldo Monteith: Does that mean so long as the farmer does not cut the timber himself but lets somebody else cut it-is that more or less the idea?


Walter Edward Harris: Not necessarily; the real test is whether it is income in the sense of a recurring receipt from a crop or whether it is the sale of an asset, once and for all.


Jay Waldo Monteith: For the sake of argument, suppose he sold half his bush lot one year to some outsider who would cut the timber, that is what I understand to be considered a capital gain. Then suppose he sold the other half in another year, would that also be considered a capital gain?


Walter Edward Harris: I think that would be so. I did not mean to imply he could only have one sale. The point is whether it is an asset being sold in the sense of a capital asset or whether it is an annual crop of timber.


Alfred Johnson Brooks: As a matter of fact I think it is a matter that should be looked into very carefully. The explanation of the minister is that if a man cut the annual growth every year that would be considered income. However, if he cuts every 25 or 30 years that man's farm has been depleted in value to that extent, and it certainly should not be considered as income for that particular year.


[Stage Direction]
Amendment agreed to.
William Alfred Robinson: The next amendment was to present clause 25.
Shall this amendment carry?


[Stage Direction]
Amendment agreed to.
Clause 25 as amended agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall this bill be read a third time; now?


An hon. Member:: By leave.


Walter Edward Harris: the third reading of the bill.
Motion agreed to and bill read the third time and passed.

Post Office Act POST OFFICE ACT



AMENDMENT WITH RESPECT TO TRANSFER OF CONTRACT

[Stage Direction]
The house resumed, from Tuesday, July 3, consideration in committee of Bill No. 351, to amend the Post Office Act-Mr. Lapointe- Mr. Robinson (Simcoe East) in the chair.
On clause 1

Transfer of contract.
Mr. Lapointe:: When the committee rose after studying this bill the last time, I undertook to secure certain information which had been requested by hon. members opposite. I should like to bring this information before the committee now. At the outset I may say that the statistics which I will be giving are for the same period which had been given previously, that is from October 1, 1953, to September 30, 1954, at which time all transfers were stopped.
The hon. member for Notre Dame de Grace asked for a breakdown of the total number of tenders invited during that period. I find that during the period in question, that is from October 1, 1953, to September 30, 1954, there was a total of 1,141 cases in which tenders were invited for contracts. The breakdown is as follows: New and rearranged services, 204; services under temporary arrangement to secure regular contract, 250; death of the contractor where the estate asked to be relieved from any obligation to continue the contract, 16; unsatisfactory services, 32; tenders invited after the transfers which had been asked were not approved by the department, 5; cases where the contractor gave three months' notice as he is entitled to do under the terms of his contract and where he did not ask for a transfer, 197; cases where the contract expired, either because the contractor refused to renew or because the rate at the expiration of the contract was considered too high, 437. This makes a total of 1,141.
The hon. member requested information as to the exact amount of the largest contract which had been transferred up to that date in 1954. The particulars are as follows: Rural route contract, $3,600; side services, $1,617; stage services, $6,561; city services, $36,827. The hon. member for St. Paul's also inquired as to what contracts in what he described as the greater Toronto area had been subject to the practice which this bill would authorize. I am advised that during the period from October 1, 1953, to September 30, 1954, no contracts in the greater Toronto area were involved. As a matter of fact a search was made by the officials of the department, going back many years, and no such transfer could be found.


William Alfred Robinson: I called clause 1. Perhaps I should have mentioned to the committee that we are also dealing with an amendment of the hon. member for St. Paul's in the following terms:
That clause 1 of Bill 351 be amended by adding after the last word the following words: "until the expiration of the term of the contract".


Daniel Roland Michener: Mr. Chairman, one of the bits of information which I wished to obtain from the minister was the annual value of the contracts in the Toronto area. I was not concerned with those that were transferred.
I wanted to find out what amount of money was involved in the larger contracts to which this amendment might apply in the future.
I wonder whether the minister can indicate the annual value of the largest contract in the Toronto area.


Hugues Lapointe: Yes, Mr. Chairman. These contracts for city services are, generally speaking, on a completely different basis from contracts for rural mail service, which are the contracts most affected by this amendment. The contracts in the cities are of different types. There are contracts for street letter boxes, for taking mail to postal stations, and relay bundles, special deliveries, parcel post, and so on. Some of these contracts are on an hourly rate for the hire of truck and driver, and that is the basis of most of them. In certain localities they are, for instance, on parcel post on a per item basis, so that any figures I give are the cost of that service over the last year. For instance, in Toronto the street letter box service is on an hourly basis of $2.40 per hour, or $3.45 per hour whenever a helper is required. The last figure I have for a period of one year for that service is $361,124.
In the case of the service for postal stations, the rate is the same, $2.40 per hour for truck and driver and $3.45 when an additional helper is concerned, and the amount is $275,000.
In the case of special delivery and parcel post service, it is $2.40 an hour; where an additional helper is needed, $3.45 per hour. I am sorry, when I gave the figure for special delivery, the rate quoted was for evening service. The day service is on a different basis. It is on a fixed allowance per month plus an item basis, and this fixed allowance is $45 a month plus 15 cents per item.


Daniel Roland Michener: May I take it from the minister's answer that the largest amount paid to any one contractor within the definition of the section before the committee was $361,124, the amount paid with respect to street letter box service?


Hugues Lapointe: For one individual contractor for one service, yes.


Daniel Roland Michener: That was the largest amount paid to any one contractor?


Hugues Lapointe: That is right.


Daniel Roland Michener: Can the minister tell me approximately how many contracts of that kind there are in the Toronto area?


Hugues Lapointe: How many contracts there are altogether?


Daniel Roland Michener: Yes.


Hugues Lapointe: On parcel post there are 36 individual contractors, and the same contractor has the other contracts to which I referred a few minutes ago.


Daniel Roland Michener: Mr. Chairman, if I may just refer again briefly to the amendment, the bill permits a practice of which one does not wish to disapprove; that is, the transfer of a contract for its unexpired term. But having done that it goes further. Where such a transfer is made without tenders being called -and it relates only to the unexpired term of the contract-the section then makes the rest of the act applicable so that when that unexpired term is over it is not necessary to call tenders with respect to that contract, and it might continue indefinitely.
As I pointed out before, very large contracts of considerable annual value, as much as $361,000 a year in the city of Toronto, could be transferred by one person to another, and continue in the possession of the transferee over a number of four-year terms without there ever having been an actual call for tenders to see whether that work might be done more cheaply by a satisfactory contractor. It is for that reason that I suggest the amendment, which does not limit the transfers of unexpired terms of contracts but would limit those transfers to the unexpired period, then apply the usual provisions of the act to renewal for a new term and make it necessary to call tenders.
I think that is a desirable amendment so long as the awarding of those contracts is based on the calling of tenders as a matter of principle and practice. It does not appear to me to be sound legislation to make it possible to bring in exceptional cases through the back door.


Mr. Hamilton (Notre Dame de Grace):: I
A'onder whether the minister has an answer ;o another question asked the last time this matter was up. It was asked by the hon. member for Victoria-Carleton, and appears on page 5597 of Hansard. The words were: 67509-451
Post Office Act
What is the average cost of calling for tenders where you have to post notices for three weeks, when a contract runs out?
The parliamentary assistant to the Postmaster General undertook at that time to find out and let us know.


Hugues Lapointe: On the basis of the last year for which I have been given statistics the average cost would be $75 per contract. Of course that might vary from one year to another, depending on the number of cases for which tenders were asked, as my hon. friend realizes.
I believe the hon. member for Victoria-Carleton also asked the amount of time involved between the closing of tenders and the actual awarding of contracts. I am informed that it will vary from three weeks to three months in some exceptional cases, depending on the locality and the amount of work that might be involved in the investigation of the individuals who have submitted tenders. As my hon. friend realizes, there are some localities which are rather difficult of access, and we find it necessary for an official of the department to go into the locality and make an investigation of the prospective contractors. In the latter case it will involve much more time.


Alexander Bell Patterson: Mr. Chairman, I find that the longer I listen to the discussion relevant to this amendment the less desirable it seems to be in the original form. As we have been advised, this amendment is just to legalize a practice that has grown up across the years and has now come to be looked upon more or less as an accepted procedure; but as the hon. member for Bow River said in speaking on the question some time ago, why legalize a bad practice?
It would seem that the procedure that has been followed, which it is suggested be now legalized, could lend itself to a great many serious abuses. I would like to refer to the explanatory note which could in itself be rather misleading, taking it as it now stands, for it reads:
The purpose of this amendment is to permit the Postmaster General to transfer a contract for the unexpired term.
It seems to me the inference is that when the term expires, the contract would be open to tender, but apparently such is not the case. I do not think this could be justified on the ground that it would save the department and the taxpayers a considerable amount of money. I do not think that would be true in this particular instance.
As has been pointed out, it would mean there may be cases where contracts may never be open to tender. On the other hand it may
709B

Post Office Act
mean that those desirous of obtaining a contract for the transportation of mail may never have an opportunity of doing so because it is just passed from one to another. Certainly I would feel that in the case of major contracts at least this would be a very undesirable situation, and it would also be undesirable as far as the lesser contracts are concerned.
The amendment now before us, which would limit it to the expiry of the original contract, possibly alters the picture somewhat and this would provide for the calling of tenders at the expiration of the original contract. If that amendment were to be accepted tonight then we would support the amendment and also the measure; but unless that is put in I personally feel-as perhaps hon. members of the group to which I belong mignt also feel-obliged to vote against the amendment.


Alfred Johnson Brooks: Mr. Chairman, I would like to ask the minister just what investigation he would anticipate making with reference to the recommendation by the ex-contractor? Suppose the first recommendation was unsatisfactory; would the minister ask that contractor to make a second recommendation? What would be the procedure in that case?
As the minister knows, frequently when tenders are called three or four men will tender. The contract is not always given to the lowest tenderer, because when an investigation is made the lowest tenderer is sometimes found to be unsatisfactory. If the minister found that the man who was recommended was completely unsatisfactory, would he then ask the contractor to make another recommendation to fill the position?


Hugues Lapointe: Not as a rule, Mr. Chairman. The practice has been that the contractor will write to the department and say that he wishes to be relieved of his contract, and he informs the department that he has found someone in the locality who is willing to continue the contract under the same terms and conditions-


Alfred Johnson Brooks: Usually a relative.


Hugues Lapointe: -and if this proposed transferee is not found to be satisfactory then tenders will be asked, as a general rule.


Mr. Cameron (Nanaimo):: Mr. Chairman, I am just wondering whether the wording of this amendment actually carries out the purpose that may have been in the Postmaster General's mind. As it reads now it seems to me to require the consent of the contractor not merely to have his contract transferred to somebody else but also to have his approval for a substitute contractor. I cannot quite understand the necessity for

that. I can see why the existing contractor cannot have his contract taken away forcibly and he must agree to that; but surely he should have no say in who is going to be put in his place. That is the way it appears to read now, and I cannot imagine that this was the Postmaster General's actual intention.


Hugues Lapointe: Well, Mr. Chairman, as the department is bound under the contract with this particular contractor his consent is necessary for the transfer. If he did not agree to a certain individual as transferee then his consent is not given to change the contract, and the contract cannot be changed without the consent of both parties.


William McLean Hamilton: Mr. Chairman, at this point I would like to make an apology to the Postmaster General for a little misunderstanding which arose in the last debate. At the conclusion of that debate after we had pressed very heavily for certain information, I understood the Postmaster General to say that he did not intend to give that information to the house, and I wrote down those words.
Upon referring to Hansard I now learn that the minister's actual words were to the effect that he did not pretend to be able to give us that information. The entire sentence containing his words is as follows:	'
I am not in a position to furnish detailed statistics about every operation of the Post Office Department, and I do not pretend to be able to do so.
This reference can be found at page 5610 of Hansard for July 3, 1956.
I must say that by missing one syllable of the Postmaster General's remarks his statement was turned from a confession of an inability to supply information into a denial to give the house information. I would like the minister to know that, because I have quite enough to charge him with on the basis of his own remarks without any unfortunate misinterpretation on my part of some remarks which he may not have made. I apologize for my error.


Hugues Lapointe: I shall try to articulate more clearly the next time.


William McLean Hamilton: And
I shall endeavour to listen more closely, too. As a matter of fact it would be very excellent advice if the Postmaster General and other members of the cabinet were to listen attentively to the suggestions which come forward from this side of the house.
Very briefly, Mr. Chairman, we find on the basis of the information the Postmaster General has brought down tonight that in the period under review 25 per cent of the

contracts were handled without any reference whatever to tender. Under the provisions of the legislation which is about to be put into effect there were 1,141 tenders called and there were 303 transfers without tender. This is information which became available in the last debate. It is to legalize such transfers that this legislation is being introduced.
I suggest that for any department of government to transfer from one individual to another 25 per cent of the contracts which become renewable in a year is a situation which does not deserve and should not have the support of this house. We can understand that there might be isolated instances where the minister's argument might apply, although we are sceptical even then, but I do not think any of us have sympathy with a situation in which 25 per cent of the department's business is being carried on in that way.
Briefly, this bill is designed to legalize a system under which government contracts, which can be most lucrative in certain instances, can be transferred from one individual to another without any reference to the contract procedure and simply at the discretion of the minister and his department. Once these contracts have been placed there will be no necessity and no requirement that they ever become subject to the tender procedure. The net result of this is that eventually the entire rural mail service of Canada and the entire pick-up and delivery services which are contracted for in our major cities could become matters not subject to tender. That I suggest is serious business. We must remember that while the minister has emphasized the rural mail contracts, some of these other contracts are worth up to as much as $1 million.


Hugues Lapointe: I should like to correct the figure I gave last time. The figure of approximately $1 million represents all such contracts, not just one contract at Montreal.


William McLean Hamilton: The
last time the minister gave the impression that there was a $1 million contract, but he now tells us that that is the aggregate of the contracts, that several large contracts total $1 million. But the situation remains the same in that those contracts will not be subject to tender.
I do not think it is necessary to labour this point any more. It is very simple. Should government business be subject to tender when it becomes available or should it be something to be transferred from one individual to another at the whim and discretion of the minister and the department? We feel that it should be subject to tender.
67509-451J
Post Office Act


Thomas Speakman Barnett: I should like to ask the hon. member for Notre Dame de Grace a question. Does the 25 per cent figure refer to the number of contracts or the dollar value of the contracts?


William McLean Hamilton: It
refers to the number of contracts. In the period October 1, 1951, to September 30, 1954 there were 1,141 tenders invited-I am assuming for the purposes of my argument that each of those resulted in a contract- and there were 303 contracts transferred without tender from one holder to another. That is where I get my figure of over 25 per cent of the contracts being moved without the use of the proper tender process.


Thomas Speakman Barnett: I take it that the hon. member has made his calculation from the figure given earlier this evening by the minister. Has the minister any figures which would indicate the correlation between the number of contracts presently involved as indicated by the hon. member for Notre Dame de Grace and the dollar value of the contracts let without tender?


Hugues Lapointe: I have a breakdown of the contracts under $1,000 and the contracts over $1,000. The total number of contracts existing in the department under $1,000 as of March 31, 1956 was 7,600, and the number transferred in one year of contracts under $1,000 is the figure mentioned by the hon. member for Notre Dame de Grace, 303.


William McLean Hamilton: The figure 303 was made up of two items, the contracts under $1,000 which I think were 162 or something like that, and the contracts over $1,000.


Hugues Lapointe: I have the figures here.
There were 303 transfers of contracts under $1,000 out of 7,600 contracts existing, which represents 4 per cent; there were 162 transfers of contracts over $1,000 out of 5,200 contracts existing which represents 3-1 per cent; out of the total number of existing contracts amounting to 12,800 there were 465 transfers, or approximately 3-6 per cent.


Thomas Speakman Barnett: Has the minister given any consideration to the suggestion made by the hon. member for Okanagan Boundary and by myself and I think other hon. members the last time we were discussing this bill in committee? The suggestion was to place some limit on the dollar value of contracts which could be transferred and extended beyond the expiry date without calling for tenders. If the minister has taken any steps along that line I for one would be only too glad to hear it now, because it might have

Post Office Act
some relation to the position I would take on the amendment moved by the hon. member for St. Paul's.


Mr. Montgomery:: I could not remain in my seat and let the statement just made by the minister go by without comment. It is true in fact but most misleading. The minister said that out of 12,800 contracts only 465 had been transferred under the system he now wants to legalize, but the minister has not told the committee that those contracts run for four years and there would be only so many coming due each year. How many came due in 1955-56 out of which these 465 transfers were made? I think we should have that information. The amendment proposed is not going to go into full force and effect until all those 12,800 contracts become renewable. We shall see the full effect of it only perhaps three or four years hence. Therefore I think the minister should give us a little more explanation on that point.


Hugues Lapointe: I did point out when I gave those figures that they were the number of contracts that existed at the present time. The figures were given for the year ending in 1954, because that was the last year when transfers were permitted. There were 1,141 tenders called and 465 transfers. Those are the figures I gave previously.


Gage Workman Montgomery: There were 1,141 in the
same year renewed by tender?


Hugues Lapointe: Yes.


William McLean Hamilton: The
minister's figures revise upward the percentage I previously put forward of the number of these contracts which are being changed over without tender. We now have a total for the year under discussion of 1,141 tenders invited and 465 contracts that were transferred without calling tenders. That means that some 40 per cent of the department's business in that year was being done without tender. If the situation was obnoxious when it was 25 per cent, it is almost doubly obnoxious when it becomes 40 per cent.
Amendment (Mr. Michener) negatived: Yeas, 32; nays, 62.


William McLean Hamilton: Would the minister say why he would not be prepared to put a limitation on the dollar value of the amounts covered by this amendment? As we know, this particular item refers not only to rural routes, where the Postmaster General has rested his defence; it also refers to contracts representing $75,000 and $100,000 in the aggregate; in Montreal there are some that could reach $1

million. Could he explain to the house why he wants the privilege of transferring $50,000 and $100,000 contracts?


Hugues Lapointe: The reasons I gave for putting forward this amendment prevail regardless of the amount of the specific contract. I might say that in some cases the assurance to the department of continuity of service is even more important, in some of the contracts where large amounts are involved, as in city services, where we must be sure that the service is not impeded at any time and that it will continue from day to day. That is the reason I would not accept an amendment limiting the amount.


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


Walter Edward Harris: It has been agreed that at this point we will take second reading of the unemployment insurance bill.


Howard Charles Green: Not at this point.


Walter Edward Harris: It has been.


Donald Methuen Fleming: It was agreed that we would finish the day's business first.


Howard Charles Green: My understanding was that we would finish the business that was indicated and announced for today.


Walter Edward Harris: But as an accommodation to those who were interested in this and who might not want to sit as late as we would otherwise sit, I understood that by unanimous consent it was decided that we would not have any debate on second reading, and I would suggest that we do that now, and let it go on to the industrial relations committee.


Some hon. Members:: Agreed.


Milton Fowler Gregg: the second reading of Bill No. 449, to amend the Unemployment Insurance Act.


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


[Stage Direction]
The house resumed, from Tuesday, July 17, consideration of the motion of Mr. Harris for the second reading of Bill No. 440, to amend the Public Service Superannuation Act.

Public Service Superannuation Act
Donald Methuen Fleming: As to
the contents of the bill, I think it may be said that we are generally in agreement with them; but we regret that the views expressed at the resolution stage of this measure by the Leader of the Opposition have not been given effect in the terms of the bill that we now have before us.
When speaking on July 2, as will be found at page 5579 and following of Hansard, the Leader of the Opposition urged that the bill when introduced should take account of the plight of those former members of the civil service and retired personnel of the armed services whose pensions, in the light of the depreciation of the dollar and the consequent diminution in the purchasing value of their pensions, now require action on the part of parliament. Redress is needed in the case of those deserving persons whose pension provisions at the hand of parliament have become quite inadequate in the light of changing events.
At that time the Leader of the Opposition drew attention to the forward steps that have been taken in both Great Britain and in the United States to deal with similar situations. He pointed out that, apparently with the concurrence of all political parties in Great Britain, legislative steps have been taken within the past year. He quoted what was said in the British House of Commons recently, in these words:
What we have to do is to take into account a total body of about 600,000 pensioners, who have retired after different kinds of services, with different kinds of pension, at different times over the past 30 years and more. What matters is to do justice, as far as possible, among all those individuals. One has to discard the idea of a simple, new scheme as soon as one discovers that whatever scheme of that kind one can devise, it will do justice that is too rough to be called justice at all.
Sir, that seems to be the situation here. Since many of these good people retired the value of the pensions to which they became entitled on retirement has depreciated, in many cases to the extent of 50 per cent or even more. It may be that in the case of some of those who have been retired now for a time they have become entitled to the old ugc pension, but then so has everybody else who has reached 70 years of age. There is no answer to the claim for equity on the part of those many people who have served this country well.
One must express a keen sense of regret that the plea made by the Leader of the Opposition for these worthy people has apparently fallen upon deaf ears. The Minister of Finance did not choose to participate in the debate at the resolution stage or to
make any comment on the plea that was made by the Leader of the Opposition in very earnest terms on behalf of these worthy people.
I do not know how many members of the house are aware of the fact, Mr. Speaker, that any retired civil servant who receives a pension of $1,200 per annum or more is not permitted to take on even part-time or casual work for the government without having the sum so earned deducted from his pension. Take the case of a retired civil servant who has not enough to live on and who may, for example, obtain a few days' work at some exhibition under federal auspices or something of that kind to make a little money to eke out an inadequate pension. Under existing government regulations, if his pension amounts to $1,200 or more he cannot take that employment, or if he does the amount so earned will be deducted from his pension. It strikes me that is a very striking form of injustice, an inadequate pension to begin with and then the deprivation of an opportunity to earn a few more dollars through casual employment by the government. Many of these people are in a position otherwise to be of service in such situations of casual employment.
I do not intend to enlarge on these remarks, except to express again very keen regret that the minister has not grasped the opportunity afforded to him to insert in the bill some provision to meet the needs of persons in the group to which I have made reference. So far as the contents of the bill are concerned, we are in general agreement with them, but we deplore the omission from the bill of any provision to meet the needs of a very worthy group of people who have served this country well in a variety of capacities.


Herbert Wilfred Herridge: Mr. Speaker, the hon. member for Winnipeg North Centre (Mr. Knowles) has expressed the opinions of the members of this group on this legislation at great length and in great detail. We do not think there is any necessity to repeat those arguments at this time.


[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-Coming into force.
Mr. Benidickson:: Mr. Chairman, we have heard from several hon. members opposite that there is much agreement with us on the points covered in the clauses of this bill, but I may say that clauses 1, 2 and 3 deal with the same point. Were these changes not to be made in the superannuation act the
7100	HOUSE OF
Public Service Superannuation Act law as enacted in 1947 would become operative next August. As a result, if someone in the public service were retained after the age of 65 they would no longer continue to be able to get superannuation benefits that are now open to them. They would be more restricted. In certain instances they would not be able to work out 35 years of total service. They would not be able to average years of service after 65 with respect to the 10-year averaging provision.
It has been recommended by the joint council of the public service that if someone is sufficiently worthy to be requested to stay in the service after the age of 65 we should not have provisions for their employment after that age less attractive than they are under the present law.


Howard Charles Green: Mr. Chairman, during the discussion at the resolution stage I raised a point having to do with section 13, subsection 4, of the act which deals with the amount of pension payable to a widow if she is more than 20 years younger than her husband. It reads as follows:
Notwithstanding anything in this act, the amount of any annual allowance to which the widow of a contributor may be entitled under this act shall, if the age of the contributor exceeded that of his widow by 20 or more years, be reduced by an amount determined in accordance with the regulations.
There has been no amendment included in the bill to deal with that point, and I would urge upon the minister that he give consideration to modifying those regulations. This problem has come to my attention with respect to the case of a woman who had been married for 25 years, I believe, at the time her husband died. She is about 60 years of age and unable to go out and earn anything for herself. Apparently they did not understand at all that if there was that difference in age she would not get the full amount of the widow's pension. The reduction comes as a great shock.
I do suggest where a civil servant has been married for a large number of years, and where the widow has reached that age or approximately that age, the regulations should be modified to meet a situation of that kind. It does seem very unfair. Perhaps it would not require an amendment to the act itself. In view of the fact that the last words of that clause read, ". . . to be reduced by an amount determined in accordance with the regulations . . ." it would seem that the difficulty could be met by some slight change in the regulations under that section. I hope the minister will take this point into consideration and see his way clear to making some change accordingly.
[Mr. Benidickson.l


William Moore Benidickson: My hon. friend is right; a change of that kind could be made by regulation and does not require an amendment to the act. I am sure it will be given consideration by the advisory council to the minister.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On clause 4-Application of part I of Superannuation Act.
Mr. Castleden:: This has to do with the inclusion of those civil servants who transferred to the federal government after the bringing in of Newfoundland. How many civil servants are affected by this, and what would be their salary range?


William Moore Benidickson: I believe the number affected is about 20. There was a general understanding that the people in the service of the Newfoundland government at the time of union who had a status equivalent to our permanent civil servant would be eligible for the benefits of this act. Through a technicality in drafting, something not intended, these 20 or so have not been properly transferred.


George Hugh Castleden: How about their previous contributions to their own pension fund, if they have any?


William Moore Benidickson: Actually I think they have been contributing, but a technical objection has been raised by the Auditor General and this will validate entry into the superannuation scheme.


George Hugh Castleden: Have they been contributing to a fund of their own?


William Moore Benidickson: Before union. I understand that in Newfoundland it was noncontributory and paid entirely by the government.


George Hugh Castleden: What are they doing about the financing of that? Is the Newfoundland government making any contribution to this fund?


William Moore Benidickson: We get reimbursed for the pension they would have paid, to put them on equal status with our scheme.


George Hugh Castleden: Then you are getting a contribution from the Newfoundland government. Can the minister give assurance that there are not more than 30 persons affected.


William Moore Benidickson: I think that is correct.


[Stage Direction]
Clause agreed to.
On clause 5-Service countable by employee entering public service.
Mr. Dinsdale:: The minister will recall that at the resolution stage I raised the special

case of public service employees who interrupt their period of service for further study. I presume that subclause 6 of clause 5 covers the situation?


William Moore Benidickson: No, it is the next clause; clause 6, subclause 1 which gives the governor general the power by regulation, to define this matter of "immediately prior employment."


[Stage Direction]
Clause agreed to.
On clause 6
Herbert Wilfred Herridge: Subclause 3 of clause 6 reads:
defining, for the purposes of this act, the expressions "prevailing rate employee", "seasonal employee", and "sessional employee".
I presume that also includes the sessional employees of this house. I should like to bring to the minister's attention the fact that apparently there is considerable confusion amongst the sessional employees with regard to their rights so far as superannuation is concerned, the cost to them and that sort of thing. I do feel some special effort should be made by an official of the branch to get these people together and explain to them clearly what their rights are with respect to superannuation, the cost to them and so on.


[Stage Direction]
Clause agreed to.
On clause 7-Election to continue as participants.
William Moore Benidickson: There is an amendment to clause 7 which I would ask the Minister of Fisheries to move. It is:
That clause 7 be amended by striking out lines 10 to 14 on page 4 and substituting therefor the following:
"(b) purported, by instrument in writing made within one year prior to, or within thirty days after, the period during which he was under section 40 or 41, as the case may be, entitled to make an election, to elect to continue to be a participant under part II of the Public Service Superannuation Act after the time he ceased to be employed or ceased to be such a member,"
This is a more generous provision in so far as election is concerned for death benefits. It would allow the privilege of election for 60 days after the termination of service instead of the rule that is now in existence in sections 40 and 41, which provide for only 30 days.


James Sinclair: I so move.


Donald Methuen Fleming: I wonder if the parliamentary assistant would enlarge a little more his explanation in regard to the time features. The amendment was read so quickly. Could he deal with the time features?


William Moore Benidickson: That is all that is involved in the amendment. If my hon. friend
Customs Tariff
will look at the old sections which appear on the right hand side of the bill, he will note that sections 40 and 41 provide that the election must take place within 30 days, and under the new section they will have 30 days beyond what was stated in sections 40 and 41. The two added together make 60 days.


[Stage Direction]
Amendment agreed to.
Clause 7 as amended agreed to.
On clause 8-Application.
Jay Waldo Monteith: I wonder if the minister or his parliamentary assistant would explain the meaning of "substantially without interruption"?


William Moore Benidickson: It has been three months.


Jay Waldo Monteith: That is considered to be a definite period?


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Applewhaite):: When shall this bill be read a third time; now?


George Hugh Castleden: By leave.


Walter Edward Harris: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



CUSTOMS TARIFF

Walter Edward Harris: the second reading of Bill No. 448, to amend the Customs Tariff.


Jay Waldo Monteith: This matter was dealt with, of course, originally in the minister's budget speech, and again at page 3744 of Hansard of May 9 at the resolution stage. I do not think there is anything further to be said on it at the moment.


Edmund Davie Fulton: I have a word or two to say on this bill. It concerns the fruit and vegetable industry of British Columbia. It is very much regretted by our potato industry that the action recommended with respect to tariff protection against the importation and dumping of United States potatoes has not been taken. The minister said he would make a statement on that on his estimates. I am not going to elaborate on that. I regret it has not been done in this bill.
I thought that when the estimates came around it would be too late to take remedial action this year. In the light of the situation that our potato growers face, it is a matter for great regret and criticism of the government for its failure to deal with the situation.


James Joseph McCann: Where?


Edmund Davie Fulton: So the reduction in price for that month is in the area somewhere around 40 per cent below the average; in fact it is nearly 50 per cent; it is somewhere between 40 per cent and 50 per cent below the average price. If that does not constitute dumping within the wording of our various statutes, then I think it is high time the statutes were amended so that effective antidumping action could be taken.
The report continues that this representative, Mr. Burrows, the secretary of the council, met with Mr. Plumptre and Mr. Glass of the Department of Finance, and Dr. Richards, Mr. Pearsall and Mr. Abel of the Department of Agriculture, all of whom said the same thing that had been said the previous day by the minister and the officials of the Department of National Revenue, namely that no remedial action could be taken under the Canadian legislation. This was the situation with which our apricot growers were faced last year, and so far as they can tell they are faced with very much the same situation this year.
I have been asked by the policy committee of the Penticton Conservative association to lay before the committee and the minister their recommendations with regard to tariff policy and action that has to be taken to protect the fruit-growing industry of that area, as follows:
The policy committee of the Penticton Progressive Conservative association through research has found the following:
(a)	The Okanagan fruit industry like many other agricultural centres throughout the country is going through a state of serious recession;
(b)	The situation is serious as many growers now have to look for outside employment.
I think I detected some laughter from the Minister of Citizenship and Immigration, who we understood today was happy that some of his recommendations with regard to the situation of his fishermen had finally resulted in effective action being taken by the government. I think it ill-behooves any minister of this or any other government to laugh at a serious submission made by the fruit growers of any province, or of any area in Canada. I hoped that the minister, instead of laughing, would listen to what is being said and appreciate the fact that these people are facing a really serious situation, and might therefore do what he could to have his colleagues take effective action with regard to that situation.


John Whitney Pickersgill: Mr. Chairman, if I hurt the hon. gentleman's feelings I apologize.


George Harris Hees: It is not his feelings; it is the fruit growers you are insulting.


Edmund Davie Fulton: The Minister of Citizenship
and Immigration gives himself credit for more effectiveness than he has. It would take more than his laughter to hurt my feelings; but what I am seeking to point out to the committee and to the country is that when we bring up a serious situation it ill-behooves members of the government to laugh in a facetious way at the plight that faces any segment of the Canadian population. It is not my feelings I am worried about. If the minister has not the common sense to be concerned about his own feelings, then I shall leave it to others to deal with him. The submission continues:
(c)	The fruit growers themselves have attempted to improve their own lot but it is felt that the main help should come from the federal government.
Of course I should pause here to say that the only effective help that can come to deal with this situation is through action under the anti-dumping provisions under the tariff legislation. The submission continues:
On the basis of the preceding paragraph our committee feels that tariff protection and more realistic anti-dumping laws should be passed by the federal government.
We would therefore suggest that:
(a)	New tariff legislation along the lines as set out by the tariff committee of the British Columbia fruit growers' association be set up.
(b)	Anti-dumping laws should be revised in order to protect the Canadian fruit grower.
(c)	With regard to the question of the antidumping laws, an example of this is contained in the British Columbia fruit growers' association brief on apricots, which brief is dated August 6, 1955.
There, of course, they refer to the telegram to the horticultural council to which I referred in that portion of my remarks dealing with the efforts made through Mr. Burrows to get the government to take action.
They continue:
We would therefore suggest on the basis of the above brief that the anti-dumping laws be revised so as to take in all three fruits so that if there happens to be a surplus in the United States they will be prevented from dumping their surplus on the Canadian market to the detriment of the Canadian grower.
With regard to tariff, particularly tariff on apricots which is one cent per pound, we feel this is entirely inadequate. We feel that the tariff should be at least two cents a pound.
The argument for the increase of the tariff with regard to apricots is fully expressed in the report of the British Columbia fruit growers' association committee.
To sum up we would therefore suggest:
1.	That increased tariff protection be given to the British Columbia fruit grower.
2.	That the anti-dumping laws be revised in order that the British Columbia fruit grower may not have to fight unfair competition from the United States.
Customs Tariff
In placing that submission before the committee and the minister it will be appreciated that I am speaking on behalf of a long established industry which is vital to the interior of the province of British Columbia. It is not a newcomer to the field; it is one of the senior primary industries of our province and they have been experiencing increasing difficulty, particularly over the past few years, with respect to this problem of the dumping of United States surplus fruits and within that field particularly the dumping of United States soft fruits.
Not too many years ago there did seem to be a considerably more flexible arrangement whereby the government of Canada could take action in the season and could apply anti-dumping provisions. My impression is that as a result to a considerable extent of the agreements made at Geneva we have lost some of the flexibility of action which we previously had. What these men are asking is that this be restored, because the people of the United States are showing very great flexibility with regard to the dumping of their surplus products. If we are going to protect our own growers in their own markets then we have to be able to take effective action to deal with these seasonal situations.
I urge upon the government both with respect to potatoes, concerning which I have not gone into detail because the details have been rehearsed here on a number of occasions previously, and also with respect to soft fruits in British Columbia, that the tariff policy be carefully reviewed and if necessary that the legislation be revised so that the effective action which is being asked for can be taken.


James Joseph McCann: Mr. Speaker, may I ask the hon. member a question. When he was comparing prices, is the price he quoted from the invoice on the United States goods with the Canadian price, the basis of his comparison, or was he comparing them with the price at which those goods were sold in the country of origin? I might state that dumping only applies when the price at which the goods were invoiced is less than the price in the country of origin. In this particular instance I would judge from what the hon. member has said that the price was comparable to the selling price in the country of origin, and therefore dumping could not be applied.


Edmund Davie Fulton: I think the minister has summarized the situation correctly, because according to the brief I have here I gather that the domestic price in the United States
riOUSE OF COMMONS
Customs Tariff
virtually disappeared, and therefore they simply threw their crop on to the market and they threw it on the Canadian market at prices about 50 per cent below what had been the average price for that crop over the preceding ten years.


James Joseph McCann: In the Canadian market?


Edmund Davie Fulton: Yes. The whole point being made is that if this is not defined as dumping so that no action can be taken, then we should have another look at our tariff laws and if necessary revise them in order that effective action may be taken to protect the Canadian market and Canadian growers against such a situation.
I would gather from what the minister has said that if they suddenly had a surplus in the United States or anywhere else and their domestic market disappeared-in other words if the price went down to virtually zero-they could flood our market by simply throwing the produce into it at salvage prices; and therefore, because the price for which the product was sold in Canada was not less than the price for which it was sold in the United States, I gather from what the minister says that nothing could be done about it.
We feel something should be done in such a situation in order that our markets and our growers can be protected against the fire sale prices or salvage sales of surplus products from the United States or any other country.


James Joseph McCann: Your complaint is that you want the tariff raised?


Edmund Davie Fulton: My request as presented in the brief is that if the government is powerless in the light of present legislation to protect our growers from that situation, then the necessary changes should be made in the law to enable them to apply seasonal protection, whether it be called anti-dumping duties or anything else, so that our growers will not be ruined by seasonal surpluses in another country whose crop is dumped on our market.


Herbert Wilfred Herridge: Mr. Speaker, the hon. member for Kamloops has presented the difficulties and viewpoints of the soft tree fruit growers' and the potato growers fairly, accurately and I think in sufficient detail. However, I must explain that I had not been asked by the Progressive Conservative policy committee of Penticton to make representations in this house, but I had been asked by a number of growers in my own constituency who are seriously affected; and the points made by the hon. member for Kamloops are quite accurate.

The fruit grower and the tree fruit grower particularly is in a somewhat different position from any other type of farmer. He has a very heavy long-term investment in an orchard. When a crop becomes unproductive it is not possible for him to switch to another crop in the next year or even in two or three years. On the average he waits from 10 to 15 years for trees, depending on the variety, to come into full production, and therefore he suffers very severely if he finds himself affected, as he has been in the past two or three years, by this dumping situation that exists.
I believe the hon. member for Kamloops was quite correct; possibly under the present legislation it is not possible to do more than is being done at present. If this is so, then I think we should have another look at the legislation. I know the circumstances personally and I have spoken to a great many growers who have suffered very keenly in the last two or three years from this situation. I think further consideration should be given to an amendment to the legislation to meet this particular, and I think somewhat unusual situation.
I do ask the minister to give further consideration to the problems of these tree fruit growers and potato growers in British Columbia who have been faced in recent years with abnormal and unfair dumping on the part of the United States shippers.


James Joseph McCann: May I ask another question, Mr. Speaker? Are the seasons about comparable?


Herbert Wilfred Herridge: We are somewhat later.


James Joseph McCann: Somewhat later?


Herbert Wilfred Herridge: Yes, possibly two weeks on the average,


James Joseph McCann: Does not the seasonal tariff meet the situation?


Edmund Davie Fulton: When the price goes down by nearly 50 per cent all the market goes down by nearly 50 per cent, and as I understand it the seasonal tariff rates are not sufficient to take care of that drastic reduction in prices.


George Harris Hees: Mr. Speaker, the hon. member for Kamloops briefly mentioned the duty that Canadian potatoes are charged when entering the United States, and he referred to the fact that United States potatoes are able to enter Canada free of duty. This is a situation which I think is completely unfair. It is a situation which is resented very strongly by the potato growers of this country, and it is something which should be righted immediately.

It is unbelievable to me that we allow United States potatoes to come into this country free, and yet the people of the United States charge a very substantial duty against Canadian potatoes. There should be equal treatment for the potatoes going into either country. Either there should be an equal duty charged or they should both enter free, and I find it unbelievable that the government has allowed a situation like this to come into existence and to continue for the length of time it has without making any apparent attempt to right a situation which is very wrong indeed.
New Brunswick potato growers have told me that potatoes from Maine cross the border free of duty, are loaded in Canadian freight cars and shipped to Montreal and Toronto under the maritime freight rates arrangement to compete with New Brunswick and Prince Edward Island potatoes on those markets. That to me is completely unfair. I should like to have assurance from the government that this completely wrong state of affairs will be righted.
I am interested in hearing the hon. member for Kootenay East make fun of a serious presentation on behalf of growers in this country who are trying to make an honest living.


Mr. Byrne:: I am making fun of you, not of a serious situation.


George Harris Hees: If there is anything to make fun of in an hon. member standing up and arguing the case of the growers of any product in this country, then the hon. member is justified.


James Allen (Jim) Byrne: What about the consumer?


George Harris Hees: I take it that the hon. member for Kootenay East thinks it is fair that United States potatoes should be allowed in free while our potatoes are charged a substantial duty when entering the United States. I take from his laughter and derisive remarks that he considers that is a fair and equitable situation.


James Allen (Jim) Byrne: You can make any assumption you like.


George Harris Hees: That is all I have to say on this matter, but I should like to have assurance from the minister that this completely wrong situation will be righted in the near future.


Mr. J. T. Richard (Ottawa East):: Mr. Speaker, I think when some hon. members are talking about righting situations some of us should speak for the consumer. I for one am a consumer, and as a consumer I know what prices I pay. I feel that there has not been much injustice done to many growers in this country as long as potatoes cost the
Customs Tariff
people around here $8 and $9 a bag, and apples at such a high price that we have to treat them as if they were gold-plated. I should think that before this government takes any action which would raise prices to satisfy the growers in one part of the country they should think of the vast number of consumers affected.


George Harris Hees: Mr. Speaker-


Some hon. Members:: Order.


George Harris Hees: There is not a-


The Acting Speaker (Mr. Applewhaite):: am afraid I must point out to hon. members that at the moment we are not in committee of the whole.


Alexander Bell Patterson: Mr. Speaker, I was not intending to take part in this debate until the hon. member for Ottawa East made the statement he did. I do not know just how that comes into a consideration of this matter. Certainly we are concerned about the consumer and the price he has to pay, but on the other hand I cannot see why such an unfair measure should remain as it is at the present time. Why should potatoes be allowed to come in from the United States without any tariff against them when we cannot ship our potatoes to the United States? Certainly I cannot see any justice in a set-up like that. For six weeks of the year there is a duty on potatoes coming into Canada, but there is a duty on Canadian potatoes entering the United States all the year round. I do not think the hon. member for Ottawa East ought to get up and take part in this debate when apparently he knows so little about the situation we are talking about.
While we are on this matter I should also like to bring up the matter of dressed poultry. In British Columbia we are faced with the same situation. It has been pointed out that at times you cannot buy a Canadian turkey, even around Christmas time, because United States turkeys have been shipped in and offered for sale at a price which makes it impossible for the Canadian producer to compete.
I should like to protest and say that something ought to be done; if this government are interested at all in the processes of justice and equity they ought to get down to business and make some necessary tariff changes. A short time ago we were given to understand that the matter was under discussion. I was under the impression that the Minister of Finance had said that the matter was being considered and perhaps something was in the offing. Nothing has been indicated as yet, and I have no hesitation in rising tonight to make my protest against such an unfair

Customs Tariff
tariff that discriminates against Canadian producers in my province and other provinces as well.


Alfred Johnson Brooks: Mr. Speaker, I had not intended to take part in this debate because I have spoken on potatoes on a number of occasions in this house. I am satisfied that if the hon. member for Vic-toria-Carleton or the hon. member for Queens were here they would join in the debate. My constituency in New Brunswick is not a potato producing constituency, but the provinces of New Brunswick and Prince Edward Island are the largest potato producers in the Dominion of Canada.
I was very much surprised to hear the remarks of the hon. member for Ottawa East. The farmers of New Brunswick do not get $8 or $9 a barrel for their potatoes. Many times because of the importation of potatoes from the United States, farmers in New Brunswick and Prince Edward Island have been compelled in the spring of the year to dump hundreds or thousands of barrels of potatoes for which they get nothing. At other times they have been assisted in selling their potatoes to the starch factories for 50 cents, 75 cents or $1 per barrel which is much below the cost of production.
I join with the other hon. members who have taken up this matter. This duty on our potatoes is a serious matter as far as the maritime provinces are concerned, and I am surprised that the government has not given due consideration to it long before this. It is not a matter that has only recently been brought to the attention of the government. I have been in this house now for 20 years, and I think I have brought this matter to the attention of the government nearly every year in those 20 years. But nothing has been done. We want to get through this session and I do not wish to prolong this debate, but since it has not been given attention this year I hope the matter will receive the attention of the government at the next session, and that this grave injustice to the potato producers of this country, particularly in the maritime provinces, will receive the attention which it should receive.


Daniel Roland Michener: Mr. Speaker, this might be an appropriate time to direct the attention of the minister to a matter of customs relating to the manufacture of small parts. There is nothing in the bill which relates to small parts, but the problem is that small parts of United .States manufacture come into Canada at a minimum duty, but in reverse there is no such opportunity for Canadian small parts to enter the United States market. That problem is not being dealt with in this bill, but
[Mr. Patterson.!
I want to bring it to the attention of the appropriate ministers. If we are to have a really skilled industry in this country such as would be useful in time of war and certainly would be valuable in time of peace, there must be fair trade across the border and reciprocal advantages to those on both sides.
I bring up this matter just briefly because it has been brought to my attention as a serious problem for the manufacturers of small parts.


Donald Methuen Fleming: May I ask the minister if when closing the debate and complying with the request made by my colleague, the hon. member for Kamloops, he would also deal with the matter of the import of turkeys from the United States? The imports are increasing very rapidly over last year. The imports of turkeys from the United States into this country are many times those of exports of Canadian turkeys to the United States. Indeed, our exports of turkeys to the United States are nothing more than nominal, and the inequalities in the tariff treatment in the two countries are such as to favour greatly the importation of United States turkeys into this country. The matter has been brought up repeatedly in this house, particularly in discussion of the agriculture estimates, and surely the time has come for a statement on it by the Minister of Finance.


Walter Edward Harris: Mr. Speaker-[DOT]


The Acting Speaker (Mr. Applewhaite):: the Minister of Finance speaks now, he will close the debate.


Walter Edward Harris: think I should make a very brief reference to all three questions. I am surprised that the hon. member for Eglinton would raise the question of the turkey tariff at this time.


Edmund Davie Fulton: Do you want him to wait until Christmas?


Walter Edward Harris: No. I have reconciled myself to being here until Labour day, but I have not expected to go till Christmas.
In the first place, sir, everyone seems to think that trade can be a one-way street. Everyone wants the products that he has in mind kept out of Canada and he wants the products he is producing shipped into the United States; and he expects the government of Canada to induce the government of the United States to agree to that on all occasions.
Let us consider for a moment the turkeys. At the close of the war and for a good many years after that, there was an active trade with the United States for Canadian turkeys. Through that time the United States did not raise the tariff against us on turkeys; they

accepted the situation, and we developed a turkey industry in this country beyond the expectation of most people up to that time. Now the trade has turned the other way, and they would expect us to stop the trade, even if it is only temporary, for a two or three-year period, during which time there is competition in Canada for the Canadian turkey grower.
The Canadian turkey grower has not had a surplus of turkeys in any given year; he has sold every turkey he has produced in every year to which I have paid any attention. When the turkey producers see me every year they admit that they are able to sell their product, and only once have I received representations that there was some difficulty in the price, in so far as getting their costs out of the article were concerned.
However, in addition to that, there did seem to me to be some case for consideration for turkey growers, and we took it up at Geneva in the recent negotiations. I tabled in the house two months ago the result, and that result is that the tariff on turkeys going into the United States and coming into Canada is about the same. I am a little surprised to hear anyone raise the question at this late date.
With respect to the fruit growers in British Columbia, I must say that I was not aware of the discussion with my colleague this evening, but it seems to me that my colleague has correctly interpreted the statute with respect to the anti-dumping legislation and that if, as my hon. friend from Kamloops says, there is any deficiency in that law, then it would be a matter for consideration whether we should change the law. In so far as my responsibility goes, I shall have a look at the problem he has raised.
On the subject of potatoes, may I say to my hon. friend from Broadview that he seems to be labouring under the impression that he is going to succeed the late R. B. Bennett with respect to the nature of Canada's trade. That gentleman who headed the last Conservative government seemed to think that all you had to do was stand up in the House of Commons and demand tariff changes and demand that the other countries should agree to take your suggestions regardless of what their tariff might be. In 1935, after this government came into office, we renegotiated our trade arrangements with the United States, and we made particular tariff arrangements with respect to potatoes. The potato growers of Canada have enjoyed a long period of prosperity they had not experienced under the Tory government.
Customs Tariff


George Harris Hees: Do you mean to say that the potato growers of Canada are satisfied with the arrangements in force at present?


Walter Edward Harris: We have seen the potato growers a few times in the past two years, and they presented to us a proposal that they would ask us to ask the United States to consider in their tariff law. That was that the United States government would reduce its tariff on Canadian potatoes but permit Canadian seed potatoes to go into the United States free and with a quota as large as was negotiated in 1935, without alteration. Anyone who looks at the potato trade from the standpoint of the Canadian producer alone would assume that was a good result, but the United States government has potato interests that it has to consider too. This request of the Canadian potato growers' association was simply that they might have access to the United States without paying anything whatever for the concession under the general agreement on tariffs and trade. Under these circumstances it would not be surprising-


Edmund Davie Fulton: Was that not only one of their requests? Did you not at their request refer the matter to the tariff board for investigation and report?


Walter Edward Harris: Yes, that was precisely the presentation they made to the tariff board. That was that we should ask the United States government that they should reduce their tariff without compensation.


Edmund Davie Fulton: That was not the only one.


Walter Edward Harris: That was the only one we made. That was made to the tariff board a year and a half ago. The tariff board report was made and I assured the house at the time that we would give careful consideration to it. The tariff board report indicated quite clearly that some of the problems, or in fact many of the problems, of the Canadian potato growers had to do with the production of potatoes rather than the tariff or the cost of potatoes; that every three or four years there seemed to be a cycle in which there was an excess production of potatoes, perhaps on both sides of the line, which resulted in a reduction in price, mostly because the demand could not keep pace with the supply; and that if one disregarded those particular cycles, there had been quite a good stability of price for the Canadian as well as for the United States producer.
Nevertheless there seemed to be an opportunity here for consideration of some changes, particularly having in mind the changed pattern of trade, and I indicated, I think, in my budget address that I might have something to say about this at a later time. I

Customs Tariff
might just put it in a nutshell now rather than wait for the estimates. It would not be possible for us to induce the United States government to change its tariff in accordance with the requests of our potato producers. It is too much to expect that we would be given greater access to the United States market without paying something in compensation under our treaty arrangements. However, there may be other means whereby we can meet the requests of the potato producers at least to some extent. We have been considering that and shall continue to do so.
At the moment, as my hon. friend from Ottawa East has said, the matter is not very pressing, though I recognize that it might be on a future occasion. Nevertheless, the policy of this government is and will continue to be to make the best possible trading arrangements with our neighbours and with other countries, and not to resort to blasting ourselves into markets and destroying them all at the same time.


[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-Schedule A amended.
Edmund Davie Fulton: In view of the minister's last remarks on potatoes and the reference to the tariff board, I think something more should be said. I was going to leave the detailed discussion to the minister's estimates, but I suggest-I am sure it was unintentional-that the minister has entirely misconstrued and therefore misrepresented the effect of the submission made to the tariff board and the request of the potato growers of Canada out of which that submission grew.
The minister said that their request was that we should make representations to the United States government to permit our potatoes greater access to the United States market. I must say that was a part of the submission, but the main point the potato growers had in mind was that we should have additional protection in Canada against the flooding of our markets by United States potatoes. It was that aspect of the submission that the minister entirely failed to deal with tonight. I know I am accurate because I have here a copy of the report of the tariff board on reference No. 117, having to do with potatoes. They quote from the minister's own letter to them as the result of which consideration was undertaken. They say as follows:
The letter from the Minister of Finance, dated April 22, 1955, directing the tariff board to conduct the inquiry which is the subject of this report, was as follows:
"I have received numerous representations to the effect that there has been a significant increase in imports of potatoes in recent years"-

There is nothing there about difficulty in getting into the United States market. It refers to imports of potatoes into Canada.
-"and that this has caused serious concern among Canadian potato producers."
There is nothing there either about excessive production of Canadian potatoes. The whole problem that we were discussing earlier was the flooding of the Canadian market by surplus crops from below the border.


Walter Edward Harris: May I interrupt my hon. friend. Of course I understood that was the basis of the whole argument, but the Canadian potato producer did not want to abandon the favoured position he had in the United States market with respect to certain quota arrangements for the export of seed potatoes.


Edmund Davie Fulton: It was not on the quota arrangement; he was asking for somewhat similar protection as the American market has against general Canadian imports.


Walter Edward Harris: That is quite true. I am sorry if I did not make it clear that the request was that we should retain the advantages we have in the United States market and close the Canadian market to them to a great extent without paying compensation.


Frederick George Hahn: Am I to understand from the minister's last remarks that it is not a fact that the Americans are buying our seed potatoes because they need seed potatoes and we are the only suppliers of seed potatoes at this time?


Walter Edward Harris: I quite agree with my hon. friend that the Americans need our seed potatoes, but when we asked the potato producers' association in the course of these negotiations if they wanted to risk that advantage they were a little careful in their answer.


George Harris Hees: Mr. Chairman, the Canadian poato producer is not asking for any special kind of arrangements in dealing with the United States. He is simply asking that Canadian potatoes going into the United States receive the same treatment as United States potatoes receive coming into Canada. That is a very fair submission. That is not the situation today. As I understand the minister's rather lengthy and involved explanation, he believes that the present situation is quite satisfactory. It is not satisfactory, and it is not satisfactory to any fair-minded person. Canadian goods going into another country should receive the same kind of treatment as we are willing to give their goods coming into Canada.


Walter Edward Harris: I do not want to pursue an argument with my hon. friend, who apparently feels that all tariffs should be equal. If

Small Loans Act SMALL LOANS ACT
that is the case, all I can say is that there are a good many exporters in this country who would not support him in the next election.


Edmund Davie Fulton: I am not going to take the time to summarize the tariff board report, but their report makes it clear that they recognize there is a very serious situation confronting Canadian potato producers with respect to the flooding of the Canadian market by United States potatoes. Apparently, however, we are to assume that the government does not intend to do anything about it.


Walter Edward Harris: I concluded my lengthy and rather involved explanation by saying it was a matter on which I thought something might be done and that we would consider it.


Frederick George Hahn: Would the minister indicate which of the potato-growing associations was not prepared to accept a change in the tariff in lieu of what they might lose with respect to seed potatoes?


Walter Edward Harris: I would rather not do that. I think we have had quite substantial agreement among all those with whom we have been dealing as to what we might or might not do, and I do not think it would be of any assistance to the potato-growing industry if we went into any detail.


William Moore Benidickson: Some hon. members have asked me whether or not the schedules to the bill now before us involve any changes in rates or wording compared with the schedules that were passed by the house in committee on the resolutions on Wednesday, May 9. I want to assure them that in every respect the schedules are the same as appeared in Votes and Proceedings of May 9.


Donald Methuen Fleming: Will the parliamentary assistant add that these tariff changes have nothing to do with the recent agreement to amend the general agreement on tariffs and trade?


William Moore Benidickson: No, they are not involved.


[Stage Direction]
Clause agreed to.
Clauses 2 to 5 inclusive agreed to.
Schedules A to D inclusive agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Walter Edward Harris: Mr. Speaker, some time ago I was asked what we would do this evening if we ran out of legislation and I suggested that we would be free to go on with the small loans bill. If it would meet the wishes of hon. members, we could do that now.


Some hon. Members:: Agreed.



AMENDMENTS RESPECTING COST, LICENCES, REPAYMENT, ETC.

[Stage Direction]
The house in committee on Bill No. 51, to amend the Small Loans Act.-Mr. Harris- Mr. Robinson (Simcoe East) in the chair.
On clause 1-Cost.
Colin Cameron: Mr. Chairman, I have one or two things I should like to say on this bill. I do not want to take much time, but there are some things I think should be said about it. In the first place I want to express my satisfaction-in fact, I might go so far as to say my relief-that this bill has finally reached the floor of the House of Commons for third reading. I wish it had gone further in some aspects. I wish it had been in its original form. I think we may have unplugged one of the loopholes that was plugged in the original bill and that this may cause us trouble in the future, but I am sure the fact that it has been passed substantially in the form in which it was given second reading in the house is a matter of considerable satisfaction to most members.
But I do think, sir, that the situation that was revealed during the hearings on the bill in the banking and commerce committee is something that should receive the very greatest concern of all members of the house. I have a feeling that, while this measure will perhaps curtail at least some of the possible abuses in consumer credit operations, nevertheless the situation in that field is, I think, almost alarming.
The figures produced recently by the Bank of Canada show what the situation is. I have been putting down in short form some of the significant statistics released by the Bank of Canada in its statistical summary, and I find that consumer credit between March 31, 1955, and March 31 of this year, on selected items, increased from $1,776 million to $2,128 million, an increase of 20 per cent. At the same time and during the same period, personal savings increased only from $5,226 million to $5,865 million, an increase of only 12 per cent. Labour income during the same period increased only some 10 per cent. Net profits after taxes by corporations, however, increased 28 per cent in the same period.
I think, sir, these figures present a picture that should cause grave concern to most responsible Canadian citizens. It is quite useless for us to scold the citizens of Canada, or so many of them, who are indulging in this consumer credit spree at the present time, and tell them that they should moderate their demands on our economy and on our society. We sometimes forget, I think, that

Small Loans Act
the yardstick of what is a desirable or an acceptable standard of living is a yardstick that is constantly changing, constantly increasing in our economy; and that while we may perhaps congratulate ourselves that practically every family in Canada can, if it wishes, get enough to eat, enough to clothe itself and possibly enough living accommodation, if it is prepared, in the case of many of them, to forgo altogether all hope of having a vast variety of things held in front of their eyes seven days a week as not only desirable but as absolutely necessary if they are going to classify themselves as decent citizens at all. The consequence is that the real income of a vast number of people is no longer sufficient to meet these demands for the rising standard of living which is displayed in front of their eyes. Then we get this ballooning of consumer credit, which I think produces at the present time a very dangerous situation.
During one of the hearings of the banking and commerce committee last week a very distinguished parliamentarian from the other place pointed out to us that there are some very dangerous and sinister parallels to be drawn between this consumer credit situation today and the situation that existed in 1929, though he was careful to point out that the parallel should not be pressed too far. I do think, sir, that now that we have, as I say, plugged some of the loopholes and have placed some curbs on possible abuses, we should deal with the fundamental issue, the necessity of a vast number of Canadian citizens having access to a much larger income than they have at present. Unless they do, then this situation is going to get continually worse as our gross national product goes up by leaps and bounds, as the disparity between the percentage increase in profits, personal savings and personal incomes continues to get wider and wider, as it has done in recent years.
Just in case any member wants to console himself by thinking that measures have already been taken to cope with this situation and we are levelling off, I may say that is an entirely false impression. The last lump from March 31, 1955, to March 31 this year has been the largest jump, not only absolutely but in percentage. The matter is getting steadily worse, and this parliament will eventually have to deal with it much more fundamentally than in the bill which I have great satisfaction in supporting tonight, although as I say I wish it had been in the form in which it was originally presented to this house.


Mr. Holowach:: We have made considerable progress today, and I do not want to be

accused of stalling further progress so my remarks will be very brief. We all recognize that it is in the public interest to enact legislation that will protect the person who may be obliged to seek a small loan from being forced to pay an excessive amount of interest to the lender. Unfortunately the common practice of money lending has not in the past been without abuse. It should always be our aim to eliminate the unscrupulous money sharks who prey on the distress in which people sometimes find themselves. I believe, in any consideration of the problem, we should try to enact legislation that will be fair to the legitimate licensed lender in order that he may provide services which are needed, and therefore make it unnecessary for people to seek out the operator who works illegally.
I suppose it was to effect that purpose that the bill, in its original form, was sent to the banking and commerce committee. This was to allow a study of the terms of the original act and give an opportunity to make it more equitable. I was not a member of that committee from the very beginning. My membership started quite late in the hearings. Nevertheless I received some very astonishing impressions. The consumer credit of our country has reached an all-time high.
I noticed an item in Business Week of August 4, 1956, in which it is stated that personal income in the United States for June stands at $324 billion, and that 63 per cent of the United States families have debts. It seems to me that indicates very strongly that today people just have not enough money. It should be the objective of our fiscal policies to try to leave more of that purchasing dollar in the pocket of the average Canadian. Unfortunately the taxation laws of the country at present remove too much of that purchasing power. As indicated by the previous speaker the rates of interest called for in the bill will bring some relief to the small borrower. I cannot agree that they will seriously damage the business of the licensed operator.
I should like to see the chartered banks of Canada get into this field to a greater extent. While it may not be as profitable for them as other fields, I believe they ought to realize they have a great stake in the economy and well-being of the people as a whole. The availability of small loans, I believe, is a help to mass markets and the support of mass production, and it is in loans to this latter field that the banks do make substantial profits. I should like to see, therefore, some inducement given the chartered banks to operate to a greater extent in the small loans field.


[Stage Direction]
Clause agreed to.

Clauses 2 to 9 inclusive agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall this bill be read a third time; now?


An hon. Member:: By leave.


Walter Edward Harris: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


Walter Edward Harris: Mr. Speaker, the only item remaining on the order paper for today is the Indian Act. I am wondering whether the house could take until eleven o'clock to consider it?


Howard Charles Green: We would have no objection to the minister making his statement and then for the debate to be adjourned.



INDIAN ACT


[Stage Direction]
The house resumed, from Tuesday, July 24, consideration of the motion of Mr. Pickersgill for the second reading of Bill No. 439, to amend the Indian Act.
John Whitney Pickersgill: Mr. Speaker, when I made the first part of my presentation on this subject at about a quarter to ten one evening some little time ago-I think it was July 24-I said there was only one other aspect of the bill that I wished to say anything about. It would not have occurred to me to say anything about it if it had not been for some of the observations which were made at the resolution stage in anticipation of the bill, when it was suggested, because in one or two places-as a matter of fact I have made a count of them and I think there are five-in the present bill the minister is substituted for the governor in council, that this was an attempt to make constitutional changes that might be either detrimental to the Indians or derogatory to the proper control which parliament has over the ministry.
So far as the effect on the Indians may be of any of those changes, I think hon. gentlemen would very quickly see that they all relate to very minor matters about which it is just not conceivable that the governor in council would in fact take a different view from the view taken by the minister. But because the question was also brought up in other contexts in this present session, and because it does seem to me to have some real importance for the future of our parliamentary institutions, I do want to take a very few
Indian Act
minutes to explain to the house why certain powers are transferred to the minister in this bill and why it has been done in some other bills that over the last few years have been presented to parliament.
In the first place, it does not seem to me that there is any valid argument for the proposition that there is the slightest diminution of ministerial responsibility to parliament, if a minister is empowered to do something rather than the governor in council. In fact an argument could be made that it really increases the responsibility to parliament because it identifies in inescapable fashion the person who really is responsible and the person who can be called to account. The responsibility of the governor in council is, I admit, both an individual and a collective responsibility. But the responsibility of the minister, when the power is given to the minister by parliament, is a purely individual responsibility, and nobody but the minister in question can be blamed if the action taken under the powers given to him by parliament is an action of which parliament does not approve, or of which any member of parliament does not approve. It places the responsibility, in other words, squarely on the shoulders of the minister.
This subject is not a new one. As long ago as 1912 Sir Robert Borden, one of the Canadian prime ministers for whom I have always had a great admiration and a great respect, engaged a very distinguished British civil servant, who had been at one time a private secretary to Mr. Gladstone when he was prime minister of Great Britain to make a report upon the executive government of Canada and the way in which it was carried out. There is not much doubt that a good many improvements in our executive procedure would have been carried out long ago if the first world war had not intervened and this report of Sir George Murray had not been sidetracked.
Because this report so completely justifies the course taken in this bill and in other legislation that has already been before parliament, and I hope will be found in many bills that will come before parliament in the future, I should like to read to the house the first part of the report which was made by Sir George Murray to Sir Robert Borden. He was not Sir Robert Borden then; he was Mr. Borden on November 30, 1912. The report begins in this way:
The Right Hon. R. L. Borden, K.C.,
Prime Minister.
Sir:
I have the honour to inform you, that so far as the time at my disposal will permit, I have completed the inquiry, with which you were good

Indian Act
enough to entrust me, into the organization of the public service of Canada; and X beg to submit the following report.
(2)	At the outset I may perhaps be allowed to say that no one can be more conscious than I am how- little weight any views of mine on this subject are entitled to carry, owing to the difficulty of forming a judgment on matters depending so largely on local conditions and local sentiment, the effect of which cannot be fully realized without a prolonged stay in the country. I ought, however, to add that while there are some points to which I should have been glad to give more attention if time had permitted, there are others on which I think it is unlikely that my conclusions would have been affected by further consideration.
(3)	I propose to deal with the questions referred to me in the order in which they stand in my instructions.
I.	The methods employed in the transaction of public business.
(4)	My suggestions under this head will be confined almost exclusively to the functions of ministers and the possibility of affording them relief, leaving for a later portion of the report some other questions of departmental organization.
(5)	Nothing has impressed me so much in the course of my inquiry as the almost intolerable burden which the present system of transacting business imposes on ministers themselves. They both have too much to do and do too much.
And I do not think it is any less true in 1956 than it was in 1912. I continue:
(6)	Speaking broadly, it may be said that every act of the executive government, or of any member of it, requires the sanction of the governor in council which, under present practice, is identical with the cabinet.
(7)	The number of these orders in council averages from 3,000 to 4,000 per annum,-
That was in 1912. The report continues.
-and their subject matter ranges from questions of the highest importance, such as the approval of a treaty with some foreign power, the disallowance of provincial legislation, the appointment of a judge, or the exercise of the prerogative of mercy, down to the acceptance of a tender for the erection of a pump, the promotion of a clerk from one grade to another, and the appointment of a lighthouse keeper or an excise man.
(8)	Almost every decision of a minister, even of the most trivial importance, is thus-at least in theory brought before his colleagues for the purpose of obtaining their collective approval, which is necessary for its validity.
(9)	Provisions to this effect can be traced in almost every act of parliament which has been passed since confederation; and it seems clear that the statesmen of that time thought it necessary to ensure that the collective responsibility of the cabinet for the action of individual ministers should be protected by safeguards of this kind.
(10)	But I need scarcely point out that a great deal has happened since 1867-
And I might add a great deal more has han-pened since 1912.
-and the methods of administration which may have been well adapted to the circumstances of those days have become quite unsuitable after the lapse of nearly half a century.
And that half century has now grown to 89 years.
(11)	With the increase of population, the extension of trade, and the development of the

various activities of the state, the business of government necessarily grows both in amount and in complexity.
(12)	The only means by which this growth can be met is by division of labour and devolution of power. In the absence of some continuous process of this kind the machinery of government must gradually become less efficient and must ultimately break down under the stress imposed upon it.
(13)	Many topics which, in the early stages of national life, may properly form the subject of collective discussion and decision, will in the course of time diminish in relative importance, and must be dealt with in some more summary fashion.
Before reading the next paragraph I might remind hon. members that this was written in 1912. I continue:
(14)	The first suggestion which I have to offer is that many of the powers now vested in the governor in council should, by some process of devolution, be transferred to individual ministers. At times mistakes will no doubt be made.
Of course this was written in 1912.


Edmund Davie Fulton: It has been proven true in 1956.


John Whitney Pickersgill: These mistakes will occasionally be inconvenient to the administration-
The hon. member for Kamloops would doubtless agree with that.
-and it may be conceded that some of them are such as might have been avoided by fuller discussion or consideration. But these are risks which must be run, and which are inherent in the working of any highly developed organization. Under present conditions it is practically impossible that all ministers should take part in all decisions.
(15)	Legislation would, of course, be required in order to effect such a change, since the duties to which I have referred are imposed on the governor in council by statute; but the legislation, though complicated in detail, would not be likely to raise many questions of a controversial character.
I think Sir George Murray on this point underestimated Canadian party politics, and perhaps he also underestimated the paucity of real issues which the opposition could bring up against the government.


Edmund Davie Fulton: Your party was in opposition in those days, so of course you are probably right; in 1912.


John Whitney Pickersgill: No. As a matter of fact the hon. gentleman is historically wrong. My party was in office in those days, and I was a supporter of Sir Robert Borden.


An hon. Member:: At the age of four.


George Harris Hees: Whoever is in you are supporting, eh Jack? The jumping Jack supreme.


John Whitney Pickersgill: Mr. Speaker, I think I can say that I understand what I am supporting, and I doubt if the hon. member for Broadview can say that.


George Harris Hees: You certainly do understand, because you are supporting whoever is in power and can give you a job.


James Sinclair: The big potato expert is heard from.


John Whitney Pickersgill: Mr. Speaker, if I may be
permitted to continue with this letter to Sir Robert Borden.


George Harris Hees: You started it.


John Whitney Pickersgill: I continue:
It would I think be generally conceded that a minister should be able to give leave of absence to the officers of his department; to grant statutory increases of salary; to sanction the acceptance of tenders, except where very large amounts or questions of principle are involved; to make appointments to vacancies; and to promote the clerks in his department from one class to another.
I only mention these as illustrations of the general character of the changes proposed. There are many others which will readily occur to any one who will examine the details of the existing system.
Now, sir, there have been a few useful changes made in recent years. The most important of these changes, I think, was the passing by this parliament of the Financial Administration Act, which did provide that many of the functions which were formerly performed by the governor in council and which imposed an utterly intolerable burden of purely routine work upon-not really the whole cabinet after the beginning of the war of 1939, but upon a large number of ministers-could	be discharged by the
treasury board and in many cases could be discharged by a very small committee of the treasury board.
What the effect of that change has been can be illustrated when I remind hon. members of what they no doubt know already; that in the year 1951 there were 6,874 orders in council passed in Canada and 10,066 orders of the treasury board, and in the year 1955 there were 1,847 orders in council and 2,116 minutes of the treasury board.
This does not mean that the government did less business in 1955 than in 1951. It does mean, however, that the work was done with a great deal more efficiency because of an enactment of this parliament about which I think there was very little controversy.
When one comes to look at the difference between the practice in Canada and the practice in the United Kingdom it is evident that we still require the governor in council to do an enormous amount of work which in the United Kingdom is entrusted to individual ministers. I had a look at the statistics for the United Kingdom for the
Indian Act
year 1954, the last year for which figures are available here, and they had 1,761 statutory instruments which were issued in the year 1954. Of that total of 1,761 there were 102 orders in council, of which 38 related to colonial matters. In other words out of a total of 1,761 much less than 10 per cent were orders in council.
In 1954 we in Canada had 705 statutory orders and regulations, a considerably smaller number than the British had, though hon. gentlemen opposite are always fond of talking about our having government by order in council in Canada. Of our 705 statutory orders and regulations 478 were orders in council, and I think that number is still too great.
I believe it would be very desirable if we could go on and make more progress along the road that Sir George Murray pointed out to the Borden government in 1912, and the very modest step in this direction in the present bill is one that I am not in the least ashamed of because I think it is moving in the right direction.


Edmund Davie Fulton: Mr. Speaker, I think the arrangement arrived at was that the minister would complete his statement and then the debate would be adjourned, and it will therefore be my intention in a moment or two to move the adjournment of the debate. In the meantime perhaps I might just speak for a moment in connection with the last part of the minister's remarks tonight.
That of course the hon. gentleman speaks with a knowledge which dates back beyond the time he actually entered the cabinet is undeniable. I might also say-and I say this seriously and in a friendly way-that the hon. member is never more interesting or more serious than when he is discussing matters of this kind relating to the administration of the government or of the governor in council; but I might also add that the hon. gentleman is never less interesting or less effective than when he stops a stimulating discussion and interpolates his political remarks. However, I suppose that is a temptation to which we are all prone to yield.


John Whitney Pickersgill: We are politicians, after all.


An hon. Member:: Well, some of us are.


Edmund Davie Fulton: As I say, the hon. gentleman speaks with an authority which for obvious reasons I cannot bring to bear upon this subject; and when he says there were 478 orders in council-


John Whitney Pickersgill: Statutory orders.

Indian Act


Edmund Davie Fulton: -he refers to those of a nature requiring the collective decision of the cabinet, I take it.


John Whitney Pickersgill: Perhaps we could get this straight at this point. The total number of Canadian orders in council in 1954 was 2,081. Of that number 478 were orders that were published in the statutory orders and regulations as having statutory effect. There was a total of 705 statutory orders in 1954 and the rest would be ministerial orders or orders of the boards and commissions.


Edmund Davie Fulton: I am not quite sure I fully understand this, but am I correct in concluding that the 475 are those which would be approved by the governor in council?


John Whitney Pickersgill: There were 2,081 orders in council approved by the governor in council, but of that number only 478 were statutory orders, the others covering appointments and things like that.


Edmund Davie Fulton: I think I had better defer any further remarks on this until I have an opportunity to study the figures. I would therefore move the adjournment of the debate.
Motion agreed to and debate adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, 1 understand that tomorrow evening at ten o'clock the chamber will be used by the C.B.C. for certain purposes. I am just saying this to remind hon. members that it will not be possible to sit past ten o'clock tomorrow evening and therefore I know they will give more careful consideration to the expedition of business during the daytime.


An hon. Member:: What do you mean?


Walter Edward Harris: We have not done too much today. Tomorrow we shall continue the debate on the Indian Act, then take the excise tax resolution and then estimates of the Department of Citizenship and Immigration.


Howard Charles Green: Will there be legislation to implement the tax agreement between Canada and the United States?


Walter Edward Harris: I am not in a position to let my hon. friend know now, but perhaps I shall be able to say tomorrow.


[Stage Direction]
It being thirty-five minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.

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

Mr. Low: What are the names and addresses of the legal advisers to the Canadian Broadcasting Corporation in the city of Vancouver, British Columbia?
Answer by: Hon. J. J. McCann (Minister of National Revenue):
The Canadian Broadcasting Corporation advises as follows:
The Canadian Broadcasting Corporation employs or retains no legal advisers in Vancouver, British Columbia, but has, on occasion, in Vancouver as elsewhere, engaged the services of different legal Arms for assistance in the conduct of its business.


USE OF FLAG ON MAY 25
Mr. Stuart (Charlotte): 1. Has the Minister of Public Works concluded the investigation in connection with the ownership of the flag used by the hon. member for
Questions
Hamilton West to drape the desk of the hon. member for Eglinton in the House of Commons on the afternoon of May 25 last?
2.	If so, whose property was the flag?
3.	By whom, and for what purpose was it requested, and from whom was it obtained?
4.	Was the request for the flag made previous to 4 p.m. of May 25? If so, at what time?
5.	Has the flag been returned to its owner, and, if so, when?
Answer by:	Mr. Bourgei, Parliamentary
Assistant, for the Minister of Public Works:
1.	Yes.
2.	The red ensign was the property of the House of Commons.
3.	It was requested by the office of the Leader of the Opposition for a "party". The flag was obtained from the assistant chief of equipment and purchaser, House of Commons.
4.	The request for the flag was made at 12.20 p.m. (noon), Friday, May 25, 1956. It was delivered to the office of the Leader of the Opposition at 1 p.m. on the same day.
5.	The assistant chief of equipment and purchaser went to the office of the Leader of the Opposition at 9.30 a.m., May 28, 1956, and recovered the flag.


Tuesday, August 7, 1956