1956-08-10

[Stage Direction]
On the orders of the day:
Hon. W. Earl Rowe (Acting Leader of the Opposition):: Mr. Speaker, I should like to ask the Minister of Finance this question. In view of the announcement last night by the Bank of Canada that its interest rate has been raised to the unprecedented high level of 3J per cent, will the minister advise the house what is the purpose behind this new move on the part of the Bank of Canada?


Hon. W. E. Harris (Minister of Finance):: The minister of Finance was expecting to have his estimates called tomorrow, and I shall be glad to discuss this point at that time.


William Earl Rowe: I think this is a very important matter and I should like to ask the minister, in view of the fact that this is the fifth time in 12 months that the interest rate has been raised by the Bank of Canada, from 1-| per cent to 3i per cent, or almost a 125 per cent increase, whether the minister does not consider that such spectacular increases, coupled with other credit restrictions imposed upon the chartered banks now as directed by the Bank of Canada, may have a very dangerous and unsettling effect on the business and general economy of the country.


Walter Edward Harris: The duty of the Bank of Canada is to regulate the interest rate, which is commonly known as the bank rate. That duty and responsibility is imposed upon the bank and not upon the government, and it has not been customary in the past for any Minister of Finance to comment on the actions of the bank in discharging its duty. As a matter of fact, however, without admitting some of the opinions or facts that have been stated in the question, I may say that there is a considerable body of opinion in the financial world today that unless action of this kind were taken there might be more serious results than if no action were taken.


Mr. J. G. Diefenbaker (Prince Albert):: I should like to direct a supplementary question to the Minister of Finance, in connection with actions such as this on the part of the 67509-467
Bank of Canada which, in regard to house building and the like, may have a very detrimental effect, and also in connection with the fact that it raises the costs of production at a time when we are endeavouring to compete in other parts of the world. Is the government or any member of the government consulted by the Bank of Canada before a decision as momentous as this one is made?


Walter Edward Harris: I answered this question some two months ago by saying that the governor of the Bank of Canada is one of the several advisors to the Minister of Finance. In this particular matter, however, he has statutory authority to make his own decisions, that statutory authority having been conferred upon him by parliament. I think it would be correct to say, as I said on the former occasion, that I was advised of this course before it was taken.


John George Diefenbaker: Did the minister in any way suggest, having regard to the inflationary tendencies in this country today, that this action should be taken or might be taken by the bank?


Walter Edward Harris: Mr. Speaker, I also answered that question two months ago by saying that this action is the action of the governor of the bank and his responsibility alone.


William Earl Rowe: Mr. Speaker, surely that is not a good enough answer. I should like to ask the minister or the government if they approve of this policy or does the Bank of Canada have the business of this country by the throat and can raise the interest rate from 1 per cent to 5 per cent or anything they like? When one stops to realize the importance of it and what it does to contractors, business people and builders across the country I sometimes wonder if the minister really appreciates how significant this is, and I should like to ask the government if they approve of this policy.


Walter Edward Harris: Mr. Speaker, as I said earlier, I propose to discuss this tomorrow and I will give my own opinion at that time with respect to what I would do if I were governor of the Bank of Canada.


William Earl Rowe: You told me that two months ago.


Walter Edward Harris: I am still telling you.

Inquiries of the Ministry


William Earl Rowe: And business people are
worrying.
Mr. M. J. Cold well (Roseiown-Biggar):
While it is true that the governor of the Bank of Canada makes the final decision in these matters, is it not a fact that the Bank of Canada was established in order that it might control the economy and carry out government policy in that particular? Is it not a fact that was the main reason for its establishment?


Walter Edward Harris: I do not think that is a correct interpretation of the statute, though anyone can put such an interpretation on it if he so desires. I think the purpose was not only to vest ownership of the bank in the government, as has been done, but to vest in the officials of the bank independent authority because, as I recall it, some members of the opposition thought that perhaps the government might not do this thing properly.


William Earl Rowe: Still most evasive.


John George Diefenbaker: Possibly a question to the Prime Minister can clear up this matter. Having regard to the effect not only on business but on agriculture and labour of what has been done by reason of the change in the discount rate, does the Prime Minister, on behalf of the government, believe that what is being done is necessary to meet an inflationary trend?


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, the Prime Minister, like, I think, most of his colleagues, has a large degree of confidence in the work that is done by the officials of the Bank of Canada and feels that they have discharged their duties in a manner which in their opinion, founded upon their research and investigations, is in the best interests of all classes of the population of Canada to which the hon. gentleman has referred in his question.


William Earl Rowe: Then you approve of it.


Mr. E. D. Fulton (Kamloops):: Does the Prime Minister know the reason for the increase in the rate and, if so, does he agree that it is necessary?


Louis Stephen St-Laurent: The Prime Minister is not the governor of the Bank of Canada, and while I hope that if he were perhaps the hon. gentleman would have more confidence in his decision than in the decision of the present staff, I can assure the hon. gentleman that the matter received very serious consideration and the government has not decided to recommend to parliament any amendment to the act which places that responsibility on the governor of the Bank of Canada.


Edmund Davie Fulton: I appreciate the Prime Minister's reply but it did not deal in any sense with the question. It was a reply to a question that was not asked. Is the right hon. gentleman willing to answer my question? Do he and the government know the reason for the increase and do they believe it is necessary? Do they agree with it?


Louis Stephen St-Laurent: The government knows the reasons that the governor of the bank had for making that decision. Those reasons were communicated to us and we believe that they are the best judgment of the governor of the bank founded on his research and the information at his disposal.


John George Diefenbaker: Will the Prime Minister, having had the reasons from the governor of the Bank of Canada, now give the house the benefit of what those reasons were?


Louis Stephen St-Laurent: No, Mr. Speaker, the Prime Minister will not undertake to have parliament or the members of the opposition act as a court of appeal from the decision made by the governor of the Bank of Canada-


Some hon. Members:: Oh, oh.


Louis Stephen St-Laurent: -unless and until parliament amends the act which now governs the Bank of Canada.


Edmund Davie Fulton: Mr. Speaker, one does not want to be unfair, but must we take from the Prime Minister's answer the inference that he believes that parliament is not entitled to be informed of the reasons for the governor's action?


Louis Stephen St-Laurent: The Minister of Finance can discuss those reasons tomorrow on his estimates.


Edmund Davie Fulton: Then we are entitled to have the reasons, are we? If so, will the Prime Minister not give them today?


Mr. Pickersgill:: This is degenerating into a debate.



BRIDGES


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I should like to direct a question to the Minister of Public Works and in his absence to the acting minister. Can the minister advise the house if a permit has been granted under the Navigable Waters Protection Act to the Lameque-Shippigan Bridge Corporation for the construction of a bridge to link Shippigan island and the mainland?


Hon. James Sinclair (Aciing Minister of Public Works):: The department approved the application this week and the necessary order in council has been prepared.



CANADIAN-UNITED STATES TAX CONVENTION ACT

Hon. J. J. McCann (Minister of National Revenue) moved: the second reading of Bill No. 451, to amend the Canada-United States of America Tax Convention Act, 1943.
He said: Mr. Speaker, the purpose of these amendments in this Bill No. 451 is to clarify and to bring up to date the agreement for the avoidance of double taxation and the prevention of fiscal evasion relating to income tax. One item of importance in the convention reduces from 95 per cent to 51 per cent the percentage of share ownership entitling a United States parent company to a reduced rate of 5 per cent on dividends from its Canadian subsidiaries. The purpose of the amendment is to encourage United States parent corporations to give Canadian investors opportunities to purchase share ownership in their subsidiary companies in Canada.
Another item allows as a tax deduction charitable donations made by residents of one country to a charitable organization created in the other country. This supplementary convention will come into force as an integral part of the 1942 convention as modified by the 1950 convention with respect to taxation years beginning on and after the first day of January of the calendar year in which instruments of ratification of the convention are exchanged between the two governments.
Mr. Speaker, I do not feel that it is necessary to go into any long explanation of this bill. The bill in itself is very short, having but two subdivisions and there is attached to it a schedule which indicates that this convention has been signed on behalf of the government of Canada and the government of the United States. In the schedule the several articles which are modified are outlined. When we come to the schedule I shall be glad to attempt to give an explanation of the changes.


Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, as the minister has said, this is a very short bill. There are two clauses in the operative portion of it. To it is attached the new convention signed on August 8 with the United States of America.
The new convention itself contains a total of seven amendments to the 1942 Canada-United States tax convention, as amended by the convention of 1950. As to six of these 67509-4671
Canada-United. States Tax Convention Act amendments, I suppose it is fair to describe them as relating to matters of detail and administration raising no particular question of principle. But there is one amendment which involves what may properly be regarded as a matter of principle. It relates to the taxation of Canadian corporations which are subsidiaries of United States corporations. The change in the existing convention in this respect aims to encourage them to permit the sale to Canadian investors of the common stock of their Canadian subsidiaries. The principle of the bill, as so understood, is sound. The government's attempt to give effect to it is regrettably belated and hesitant. The purpose is sound, and we support the bill.
I have just a brief word to say on some features of this convention, Mr. Speaker, before concluding with some observations on this matter of investment in Canada through Canadian subsidiaries.
This is now the fifth measure which has come before this parliament in relation to tax conventions with the United States. The first convention of March 4, 1942, had for its purpose the avoidance of double taxation and the prevention of fiscal evasion in the case of income taxes. In 1944 came the second convention, along similar lines as applied to succession duties. In this respect, sir, there is an error in the bill, and I just point this out in passing now. The marginal note opposite the preamble refers to the 1944 act as though it had amended the 1942 convention. The reference to the 1944 act is to the one dealing with succession duties and it has nothing whatever to do with the matter now before us. Similarly, the marginal note is in error in referring only to the bill passed at the 1951, second session. The amendment to the convention of 1942 was made by the 1950 act and the 1951 bill which is referred to here was simply the Canadian acceptance of the United States rejection of paragraph 2 of article 7.


James Joseph McCann: In my preliminary remarks, I said 1950.


Donald Methuen Fleming: Yes, 1950 is the important amendment to the 1942 convention. There was a further amendment in 1951 but the marginal note makes no reference to the 1950 statute and does refer to the 1944-45 statute, chapter 31, which has really no bearing on the tax convention relating to income taxes. It related purely to succession duties.
Our interest, of course, is in the treatment of Canadian subsidiaries taxwise under this convention. It is, however, reciprocal in its provisions and the amendments that are now
7354	HOUSE OF
Canada-United States Tax Convention Act before us for decision also cover the case of Canadian corporations which have subsidiaries in the United States.
It should be remembered that the ordinary rates of tax and all deductions at the source on dividends paid by Canadian corporations to shareholders resident abroad is 15 per cent, with some few exceptions. Article XI of the 1942 convention placed a limit of 5 per cent on the income tax which may be imposed by Canada on dividends paid by Canadian subsidiaries to United States parent corporations.
The 1942 convention contained a definition of subsidiaries and that definition, in effect, provided that a subsidiary was a corporation whose shares, apart from directors' qualifying shares, were wholly owned by an American corporation, with the exception that not more than a quarter of the gross dividends of the subsidiary should be derived from interest and dividends, other than interest and dividends received from its subsidiary corporations. This was the way the convention defined "subsidiary" until 1950, when the amendment of that year was approved by parliament by 1950 statutes, chapter 27, reducing the requirement from 100 per cent ownership of the stock of the Canadian subsidiary corporation to 95 per cent.
That is the provision which we are now asked to change further. The bill eliminates altogether the terms "parent" and "subsidiary". They disappear now entirely from the convention. "Subsidiary" becomes "payor corporation" and "parent" becomes "recipient corporation", that is to say, the recipient of the dividends from the payor corporation; and the percentage of required stock ownership in the Canadian subsidiary by the parent corporation is reduced from 95 per cent to 51 per cent. The provision continues, however, that it must be "at least" 51 per cent.
There is one further qualification. The 51 per cent does not now need to be owned entirely by one United States recipient corporation. Fifty-one per cent may be owned by four corporations, each with at least 10 per cent of voting stock of the payor corporation.
Now, sir, I wish to say just a word by way of putting the effect of this amendment in its true light. Let us see at once, then, that there is no change in the rate of taxation. The change that is brought about by this amending convention is in the percentage of stock in the Canadian subsidiary or payor corporation which must be held by the United States parent in order that the Canadian subsidiary may be subjected to an income tax rate not exceeding 5 per cent; whereas if the percentage of stock ownership by the


United States parent falls below 51 per cent, an income tax rate of 15 per cent is then applied on the dividends paid to it by the Canadian subsidiary corporation. Therefore, the United States corporation today which owns 100 per cent of the stock of a Canadian subsidiary is not affected. Likewise, a United States corporation which owns 95 per cent of the common or voting stock of a Canadian subsidiary corporation is not affected. In the case of United States corporations holding less than 51 per cent of stock of a Canadian subsidiary, there is no change. The Canadian subsidiary in the latter case still pays and deducts the 15 per cent rate on its dividends; but it is in the case of Canadian corporations whose voting stock between the 51 per cent mark and the 95 per cent mark is owned by United States parent corporations that the change is made. It is in this area that the change is effective, and corporations in this group will now obtain the benefit of the 5 per cent limit on income tax and also more combinations of United States corporations owning control of Canadian corporate subsidiaries may now qualify for the lower rate. There is, therefore, no advantage in the form of any tax reduction offered by this bill in the case of the wholly owned Canadian subsidiary. This bill simply means that in the case of the Canadian subsidiary, the United States corporation which controls ownership of its common or voting shares may dispose of shares in the Canadian corporation up to 49 per cent of the issued total without losing the benefit of the 5 per cent income tax rate. In other words, this is a negative form of encouragement to these Canadian corporations to sell some of their common stock to Canadian investors.
So far as foreign investment is concerned the bill affects only the United States, and only its corporate investors. There is today, it is estimated, about $11 billion of United States capital invested in Canada and that sum is constantly growing. We have had occasion in the past to pay tribute to the very useful and welcome part that United States capital has played in the development of Canadian resources. At the same time we Conservatives have taken advantage of all our opportunities to urge that there should be more and more Canadian investment participation in the ownership of corporations which are engaged in the development of the resources of this country.
That can be done in two ways. First it can be accomplished by increasing the proportion of Canadian total capital needs that is met out of domestic sources, and, in the second place, it can be done by adopting fair and

reasonable policies which will encourage nonCanadian owners of corporations to permit Canadian participation in the ownership of Canadian branch plants and subsidiary corporations.
This we have urged for some time. The kind of measure we have before us today was urged in the plainest terms by a great Canadian who on July 9, 1956, expressed it in these words as reported at page 5778 of Hansard:
Canadian tax laws should be changed to eliminate the tax penalty which a British or United States company must suffer when it allows Canadians to own a substantial minority interest in a wholly-owned Canadian subsidiary.
Those significant words were uttered, as I said, by a great Canadian, the Leader of the Opposition, and I am glad to see that the government has now seen fit to give heed to his wise words; for the time is certainly ripe to permit Canadians to participate more widely than has been the case heretofore in the purchase of the common stocks of Canadian subsidiary companies which are controlled by United States parent corporations.
This is no appeal based upon emotion. This is a proposal based upon sound logic and sound national objectives. On the boards of directors of these Canadian subsidiary corporations, in our view, there should be opportunities for wider Canadian participation. There should be more Canadians on the boards of directors of such corporations and more research should be done by such corporations in Canada.
This is a vast problem; for the extent of the ownership of corporations engaged in the development of Canadian resources is something that all hon. members would do well to ponder upon.
In the dominion bureau of statistics daily bulletin of July 6 this sentence appears. Speaking of the extent to which the ownership of stock of various lines of Canadian industry and resource development companies is in United States hands it says:
In manufacturing alone excluding petroleum refining the non-resident controlled portion in 1953 was some 47 per cent, and in petroleum 70 per cent, and in other mining 55 per cent. These percentages are much higher than formerly.
Therefore I say the time is ripe for measures of this kind. Mr. Muir, the president of the Royal Bank of Canada, sounded a note of warning and exhortation to Canadians on this subject last January when he said, as reported in the press:
Mr. Muir objected to the exclusion of Canadians from an ownership position in corporations doing business in Canada.
"Participation by Canadians in enterprises financed by outside (especially American) capital would be greatly encouraged were it not necessary
Canada-United States Tax Convention Act
in many cases to buy stock in the parent company in order indirectly to secure some voice in the operations of the Canadian subsidiary."
"In other words," Mr. Muir asserted, "Canadians should be allowed to buy stock directly in any Canadian corporation."
This measure should assist in that respect. It will at least give some encouragement in that direction. It is not going to produce wonders but it will give some encouragement. The same thought was stressed on May 24 by Mr. Crawford Gordon, president of Avro Canada Limited, speaking to the Canadian Club of New York, where he was reported as saying:
American companies setting up plants in Canada "would be wise to develop a higher degree of Canadian management" . . .
"U.S. capital is heartily welcome," he said. "Without it, much of our postwar development would not have occurred. But Canadians feel that too often that investment has taken the form of an American-managed branch operation."
He also urged American companies to permit a much wider stock participation in U.S. subsidiaries in Canada.
"This tendency to keep Canadian investors out is the subject of increasingly critical comment in our financial press. It is a factor, too, in the increasing concern being felt all over at the extent of total U.S. investment in Canada."
To the extent that this measure does indicate that parliament is aware of this problem, is concerned about it and wants to do something to point the way to United States corporations to enlarge the extent of Canadian participation in ownership of stock in their Canadian subsidiaries, it may be said now that this gives the United States corporations an opportunity, and in a sense puts a burden upon them, to busy themselves now and cut Canadians in on a larger share of the stock ownership and the consequent profits that are being made in this country. Mr. Ralph Blackmore, the financial editor of the Globe and Mail, in yesterday's issue said:
And now, as we say, we will see what happens. Readers know that we have been pounding this drum for a long time, our point being, now as when we started, that if a non-Canadian firm operates a successful subsidiary here, using Canadian manpower, materials, selling to Canadian customers and living under the protection of Canadian laws in a nation favourably disposed to private enterprise, that Canadians are entitled to a portion of the profits as share owners in those subsidiaries.
We of Her Majesty's loyal opposition share that point of view. We are glad to see that the policies that we have been advocating in this house and outside it have been in this respect adopted by the government. We say again that ours never was an appeal to mere emotion. Those who said so to your right, Mr. Speaker, and outside the house were completely mistaken in their assessment of the situation. Our policy never was based on mere emotion. It was based upon a sound
7356	HOUSE OF
Canada-United, States Tax Convention Act view of what is the healthiest line for development of Canadian resources and Canadian participation in the ownership of those resources.
This measure is undoubtedly in response to a public demand for which we in the Conservative party have had the privilege of being the mouthpiece. Public thinking has been far ahead of governmental policy in this regard. We have deplored the delay. The measure could go further; we hope the government is not going to content itself simply with this as though it were a solution to the whole problem.
To the extent to which it will assist and give encouragement we approve it and support it, but we call upon the government to study the problem further with a view to taking other measures. There is one at least that is deserving of consideration. I realize this has to be a matter of negotiation with the United States authorities because it would have to be a matter of amendment of the convention, but thought ought to be given to setting up some form of graduation of the rates in relation to the extent of Canadian participation, so that within the permissible rates of taxation the rate would be reduced within those limits in accordance with certain specified proportions of Canadian ownership of the common or voting stock. That would give a more active and positive encouragement to a policy which, so far as this bill does give effect to it, is worthy of support.


John George Diefenbaker: 
There is one further thing I should like to mention, and this is really my reason for rising. It has to do with the question of the need for United States corporations expending in Canada a far greater amount for research than is the case today. The major portion of the research on the part of these great corporations in the United States operated in Canada is being done in the United States. That has the result of preventing many Canadian scientists, training chemists, physicists and the like from being employed within their own country and making their own contribution in Canada.
I know that a considerable number of scientifically trained Canadians have had to leave Canada to give the benefit of their talents to another country, although desirous of remaining in Canada.
I hope that this is but a step in the general direction and that everything will be done to the end that a fair proportion of the research expenditure by these corporations will be made in Canada so as thereby to allow Canadians, in the international economic race that the U.S.S.R. has now launched in all parts of the world, to provide that trained group of scientific personnel without which Canada cannot take its place in the international world.


Mr. Solon E. Low (Peace River):: I think it is unnecessary for me to say anything more and that those who have preceded me have set out the reasons why this legislation should be put through. I believe it is, as has been stated, a step in the right direction. We approve of it, and I think that is all we need to say.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
Clauses 1 and 2 agreed to.
On the schedule.
Donald Methuen Fleming: Would you call the schedule article by article or perhaps it might be better to call it clause by clause in order to make the questions more specific.


The Chairman:: Is that agreed?


Some hon. Members:: Agreed.


William Alfred Robinson: Article I.


Donald Methuen Fleming: Perhaps you would not mind calling them by the letter of the subclause. The provision found in article I, subclause (a) is confined to enterprises engaged in the operation of motor vehicles. The article in its earlier form related to the operation of ships and/or aircraft. Would the minister state the reason for applying an amendment

with respect to one form of transport when
others are still not covered by the convention?


James Joseph McCann: The explanation I have for article I is that the new paragraph 2 which is to be inserted in the present article V merely extends the present exempting provisions of that article to apply to the profits from the operation of trucks. It is an extension. As the hon. member said, it now applies to aircraft. This provision is concerned with the operation of trucks between Canada and the United States, and the paragraph is worded to ensure that a corporation incorporated in Canada but managed and controlled in the United States will not escape tax entirely. Article VII is amended by adding at the end of the paragraph the words "or of a permanent establishment in Canada of a United States enterprise". Under the present article a resident of Canada temporarily employed in the United States is required to be employed by a Canadian company in order to fulfil the requirements of subparagraph (a) of that article. By this amendment such a person will be eligible for the exemption if temporarily employed for less than six months in the United States by a permanent establishment in Canada of a United States company.


Donald Methuen Fleming: The minister is getting into clause (b) now.


James Joseph McCann: It deals with article I.


Donald Methuen Fleming: My question was just on (a). I have a different question on (b). With regard to (b) I should like to make one comment about the expression "taxable year". It is obviously an American expression. I think it is a horrible expression. You do not tax the year. In this parliament we are accustomed to use the expression "taxation year". It may not be a happy use of a noun in place of an adjective but at least it is an expression preferable to "taxable year". I hope that when these conventions are negotiated we can eliminate expressions like that in favour of "taxation year".
I was going to ask the minister one question on this clause. This is the particular clause that gave difficulty at an earlier stage. The United States did not accept the antecedent clause in the original convention for some reason or other and in 1951 this parliament accepted the American rejection of paragraph 2 of article VII in the original convention. I take it that this relates in part to that situation. The amount of $5,000 has been in the section before, so I will say no more about it, although I will have a
10, 1956	7357
Canada-United States Tax Convention Act question on the other bill to come before us a little later as to why the amount there is different.


William Alfred Robinson: Shall the schedule carry?


Donald Methuen Fleming: I thought you were calling the clauses. I have a question now on (c). The question is as to the reason for the insertion of the words "other than earned income" in the new text in article XI.


James Joseph McCann: The words to be inserted in paragraph 1 of article XI merely ensure that the reduced 15 per cent rate of tax imposed upon income of non-residents of Canada will apply only to investment income received by such non-residents and not to income derived from a business being carried on in Canada or from employment in Canada.


Donald Methuen Fleming: The intention is that the
latter type of income shall be taxed at the higher rate.


James Joseph McCann: Yes.


William Alfred Robinson: Shall the schedule carry?


Donald Methuen Fleming: There is one misprint on page 4 of the bill under article XIII D. It is found in the third line of clause 2. An "r" has been omitted from the word "organized". I presume that ought to be corrected in the bill.


William Alfred Robinson: It is merely a clerical error.


Donald Methuen Fleming: Yes.


William Alfred Robinson: Are there any further questions on the schedule?


James Joseph McCann: That will be corrected.


Donald Methuen Fleming: That is all on the schedule.


[Stage Direction]
Schedule agreed to.
Title agreed to.
Donald Methuen Fleming: Are you going to call the preamble, Mr. Chairman? There is a correction required in the marginal note.


William Alfred Robinson: There is no preamble to the bill.


Mr. Garson:: I made a note of the remarks of my hon. friend from Eglinton before, and I have sent a note to the draftsman so we can check my hon. friend's observations before we incorporate them in the final form of the bill. As I understand his remarks, he would consider the side note correct if it read as follows: "1943-44, c. 21; 1950"-we will have to get the reference to that statute or have you it there?


Donald Methuen Fleming: 1950, chapter 27.


Stuart Sinclair Garson: Then, "1951 (second session), c. 5." My hon. friend says there is some doubt but I think it is better to include it.

Income Tax


Donald Methuen Fleming: What the minister has just read would be correct. In other words, the reference to the act, 1944-45, chapter 31, has no bearing on this bill because it related to the other convention in relation to succession duties. It has nothing to do with the convention we are dealing with here which related purely and simply to income tax. The reference to the 1950 statute, chapter 27, was omitted here. It has a very definite place here because it made a number of important amendments to the 1942 convention which was approved by the statute, 1943-44, chapter 21.


Stuart Sinclair Garson: I appreciate that, but the
draftsman possibly may not agree with regard to the 1951 reference and in that case we would prefer to follow the draftsman.


Donald Methuen Fleming: The 1951 reference is all right.


Stuart Sinclair Garson: Oh, yes. You have no objection to that?


Donald Methuen Fleming: No, the 1951 reference is correct, but I quarrel with the inclusion of the 1944-45 reference and the omission of the reference to 1950, chapter 27.


Stuart Sinclair Garson: Yes, so if it is corrected in accordance with what I read to my hon. friend a moment ago it will be correct.


Donald Methuen Fleming: Quite.


Stuart Sinclair Garson: Will it be agreeable to hon. members if the officials check it and incorporate these corrections?


William Alfred Robinson: My recollection is that this is in the nature of a clerical correction anyway.
Bill reported, read the third time and passed.



INCOME TAX


James Joseph McCann: the second reading of Bill No. 452, to implement an agreement between Canada and the Federal Republic of Germany for the avoidance of double taxation with respect to income tax.
He said: Mr. Speaker, the purpose of this bill is to give legal effect in Canada to the agreement which as the result of negotiations and subsequent exchanges has been reached between the government of Canada and the government of Germany for the avoidance of double taxation and the establishment of rules for reciprocal fiscal arrangements in the matter of income tax, which agreement

was signed at Ottawa on the fourth day of June, 1956. The provisions of this agreement are similar in their effect to those contained m the agreement which Canada has made with the United States, the United Kingdom, Sweden, New Zealand, France, Ireland and Denmark. It is designed to avoid double taxation and provides for exchange of information. By means of an exchange of reciprocal tax credits the country of residence gives credit for the tax in the country in which the actual income had its source. As in the other agreement taxation by a state on trade profits of an enterprise in the other state is limited to those attributable to the practical establishment of such enterprise in the first mentioned state. In addition, certain specific provisions are made regarding the profits from the operation of ships and aircraft and the exemption from tax on exchange of teachers and students.
I think that is all the explanation that I need to give at this time, Mr. Speaker. As I said, this is very similar to agreements that we have with other countries. As in the previous bill there is a schedule attached. If explanations are needed with reference to the changes in the schedule, I shall be very glad to give them.


Donald Methuen Fleming: Mr. Speaker, Her Majesty's loyal opposition is always glad to support any measures that will give relief from taxation, and particularly, I suppose, relief from double taxation.
The bill follows the same form as those on earlier occasions with respect to other agreements. As the minister has said, Canada has similar tax agreements with the United States, the United Kingdom, Sweden, New Zealand, Denmark and France. The last of these agreements that was before us was the agreement with Ireland in February, 1955. The bill is identical in all respects with the bill to approve the tax convention with Ireland, although the convention itself is not at all identical with the Irish agreement. There will be some questions in relation to the differences. But as to the purpose of the bill, we are always in full sympathy with any measure to eliminate double taxation, to facilitate the exchange of information and to prevent tax evasions.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, we in this group support this bill as a proper measure for arrangements between the two countries with respect to income taxation. However, I think this is an appropriate opportunity to bring certain things to the attention of the minister and the house. Last session, when I was trying to get away from the heat one Sunday afternoon,
I went out and sat down beside the bank

of the Ottawa river where the canal enters the river. While sitting there I had what I thought to be an old gentleman join me. I found out later that he was only something over 40 years of age, but that he had served six years in a German concentration camp. We got into quite a discussion. He gave me his life history. He told me of the fight for democracy in Germany and of things that had happened during his lifetime. During that conversation he mentioned to me that he had noticed that there was some indication that the Krupp interests were trying to establish subsidiary industries in Canada. I am not going to deal at length with what he had to say except to say this. He said, "I hope that you Canadians do everything you can to stop those people from entering your country. They have blighted Europe for a century."
The remarks I wish to make at the present time are, I know, supported by a large number of veterans in this country, a good many mothers and widows, and a large section of the Canadian public. From the women's paper Equality, which is the paper of the women's association of the German socialist party, I just want to read an extract as follows:
Shortly before the 1870-71 (Franco-German) war Krupp wrote to Napoleon urging him to order armaments from his plants. He sold armament secrets to the French before the first world war. He sold steel to the States at a cheaper rate than he did to his own country's navy. He sold the patent for a percussion fuse for high explosives to Vicker-Armstrong. After the war he demanded one shilling for every high explosive manufactured by that firm. High explosives which had killed thousands of German soldiers.
During the Chinese-Japanese war (1894) he sold arms to both sides and prevented the German government from taking part in united action to stop that war.
In 1914 the German government sent a protest note to the sultan because Krupps did not receive any armament contracts from him. They threatened to withdraw the German military mission. Another example of Krupps influence on German foreign policy.
In 1904 after England and France had settled their differences in Morocco, Krupp felt left out of things and persuaded the German government to land troops in Tangier.
Krupp together with other industrialists founded the "All German Association"	("Alldeutschen
Verband"). He was also active in the "German Naval Association" ("Deutschen Flotten Verein") and the "Army Association" ("Wehrverein") which called for the strengthening of German forces. The association's paper called for aggressive war and propagated the myth of German invincibility.
Krupp and other industrialists donated 500 million mark to the Freikorps. (That corps- was instrumental in bringing Hitler into power and helping him to remain there. E.C.) That same body donated 3 million mark after a secret meeting with Hitler in 1933. Krupps own words were that on behalf of the 25 industrialists present he would like to thank Hitler for the clear picture
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he gave of his future plans. He also wrote to Hitler "that the changes on the political scene were in complete accord with his wishes and that of his directors".
On one or two occasions I have asked the Minister of Trade and Commerce if he knew whether the Krupps were attempting to establish an industry in Canada and he replied that he had no knowledge of that action being undertaken. However, I want to bring to the attention of the house some information contained in a copy of a letter written by Mr. A. Alex. Cattanach, director, companies division, to a lady who made inquiry with regard to this matter. It reads as follows:
Dear Miss McCaw:
I acknowledge receipt of your letter of July 8, 1958, in which you inquire concerning Ardelt Industries of Canada Limited.
A company of that name was incorporated by federal letters patent dated March 31, 1954.
The names and addresses of the directors were disclosed in the annual summary filed with this department as at March 31, 1956, as follows-
Dr. H. Herrmann, Essen, Germany.
Mr. Edward Volckmar, 200 St. Clair West, Toronto, Ontario.
J. Schroedar, Essen, Germany.
S. Ding, Wilhelmshaven, Germany.
A notification of the grant of the letters patent was published in the issue of the Canada Gazette dated April 17, 1954.
The application for incorporation was supported ",y- " consent thereto executed by Ardeltwerke G.M.B.H. of Welhelmshaven.
Yours very truly,
A. Alex. Cattanach,
Director, Companies Division.
in that connection I should like to point out to the house and to the minister that the name of J. Schroedar, Essen, Germany, should bring to their attention the fact that that name is very closely associated with the Krupps industry over there. I have here some photostatic copies of an interview with this gentleman in which he does some whining about the treatment the Krupps industry received at the hands of the allies after the war. While the minister has not any knowledge of this, and I am quite sure he has not, we find a press dispatch from the Cornwall Standard-Freeholder of June 2, 1956, after this matter was raised in the house. It says: Dr. Hans Weddingen, commercial attache of the German embassy here, has lent support to reports a Canadian subsidiary of the giant Krupps steel works of Essen, Germany, plans a major steel industry on the shores of the St. Lawrence river near Cornwall.
Then, it quotes the commercial attache:
"I know they (Krupps) have something in mind for Canada,"-
I hope it is not what they had in mind for other countries.
-he said Friday. "Their first intention was to do something in Labrador but they changed their mind."

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He said he believes there will be confirmation within a year of reports that the Krupps Canadian firm of Krupps-Ardelt plans to build a giant steel plant in the Cornwall area.
Agents in Cornwall Thursday said options have been taken on five large farms in the area.
Krupps of Essen Friday denied the reports a steel plant was planned on the St. Lawrence.
But Dr. Weddingen said "this is typical of German industry".
"First there is a story, then a denial, then silence for a while and they start building a plant."
I think this is a firm which we should indicate is not welcome in Canada. We can get investment capital from other industries outside of this country if we require it. This firm has blighted the history of Europe for 100 years. I am afraid if they are allowed in this country they will continue the same machinations they continued in Europe during that time and right up to the present time. They have plants in Spain. The very publicity advisers to Nasser in Egypt were formerly associated with this firm. They are expanding into Indonesia and looking for opportunities in Asia. They are looking for opportunities and think Canada is a ripe plum to pick.
Now, Mr. Speaker, I could give voluminous evidence as to the history of this firm but I am not going to do that. I am merely going to quote from the Montreal Star of February 10, 1946. This article was written by Mr. DeWitt Mackenzie. It reads:
This house of Krupp was created from the profits of war piled up through the generations, and in this sense it was built on the bodies of men who died in battle that Krupps might prosper.
History pins the responsibility for much of German aggression during the past century on Krupp's and it will be history which will tell us how many conflicts this firm fed among Germany's neighbours.
It was Alfred Krupp, founder of the firm, who provided the sinews of war for Germany's onslaught against France in 1870. It was Krupp's which carried Kaiser Wilhelm on its back to near victory over the Allies in the First Great War. And it was Krupp's that was one of the main contributors-perhaps the main one-to Hitler's all but successful attempt to conquer Europe. . . .
One could write a book about the villa Hugel, but the purpose of this article is to draw attention to an aspect of German aggression which we don't see emphasized fully enough. This is that militarism has been supported by and encouraged by the titan armament firm of Krupp, which has been the motor of the war machine.
All members of this house welcome any democrat who wishes to come to this country to live here and help it develop. We have a good many democratic Germans who have come in recent years. I have had conversations with many of them and I know what they have suffered. I know their attitude towards a firm such as Krupps, and its effect on German and European history for the last 100 years. We should welcome all these people but in my opinion, Mr. Speaker,

fully realizing the difficulties as between the federal and provincial jurisdiction, I urge this government to indicate that this firm is unwelcome in Canada. To permit this company, with a century of blood-stained hands, to come into this country and assist us to develop is morally wrong, thoroughly unsound, and is putting blinkers on ourselves with respect to the history of its past.


[Stage Direction]
Motion agreed to. bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
Clauses 1 to 5 agreed to.
On the schedule-
Donald Methuen Fleming: Perhaps it will facilitate a few questions if you would call the schedule article by article.


William Alfred Robinson: Is that agreeable to the committee for the purpose of discussion?


Some hon. Members:: Agreed.


William Alfred Robinson: Article I.


Donald Methuen Fleming: In article I there is a new change introduced here in the description of Canadian taxes. These are defined as "income taxes, including surtaxes, and the old age security tax on income." This is the first time of which I am aware that the old age security tax on income has been expressly included. Is this a deliberate new departure in this agreement?


James Joseph McCann: This article specifies the respective taxes to which the agreement applies. In Canada it applies to income tax, including surtax, and in Germany to income tax, corporation tax and the Berlin emergency aid tax, all of which taxes are imposed by the federal government of the Republic of Germany. I am not just sure what they mean by the Berlin emergency aid tax. This article also provides that the agreement will apply to any substantially similar tax which may be imposed by either Canada or Germany. All the article does is specify particularly the type of taxes to which it applies.


Donald Methuen Fleming: The minister has not dealt with the point about which I am inquiring, which could be briefly answered. So far as I am aware, this is the first time that any of these conventions in defining the Canadian income tax, which is of course the subject matter of the convention, has included the old age security tax on income. Now, I do not know whether the practice in administration has been to include that 2 per cent levy anyway as being part of the income tax, but I think an explanation is due because of the fact that this is the first time it has been included specifically in the definition.


James Joseph McCann: I am told it is of no particular significance except that the representatives of the German government requested that it be included. I presume that was because of the fact that we had included in the taxes for Germany, which have been spelled out here, the corporation tax, the income tax, the Berlin emergency aid tax-that would be some sort of aid tax for security. Obviously that is the reason they wanted the old age security tax included in this.


Donald Methuen Fleming: Perhaps we could approach it more directly in this way. In the other conventions, the last of them being the Irish convention, which was ratified in February, 1955, have the words "income tax" as defined in those conventions been construed as including the 2 per cent levy by way of old age security tax as income tax?


James Joseph McCann: Yes, it does.


Donald Methuen Fleming: It has been construed in that way? Then, I take it this specific inclusion of the old age security tax on income has been inserted here merely for the sake of clarity. It is not a new departure?


James Joseph McCann: It is not a new departure.


William Alfred Robinson: Article II.


Donald Methuen Fleming: On article II, Mr. Chairman, if the minister will look down page 3, in clause (g), as in various other subclauses, he will notice that the language of this convention in relation to the definition of "permanent establishment" and the following provisions, is quite different in form from the language of the Irish agreement. I am not saying that there is a difference in substance, but there is quite an elaborate difference in form. May we have an explanation?


James Joseph McCann: This is a general definition article. It should be noted that the definition "permanent establishment" includes a construction or assembly project, or the like, the duration of which exceeds or will likely exceed 12 months. This provision ensures that a German construction company which might not have a permanent establishment here within the ordinary definition of that term nevertheless will be taxable on its profits on its operations and over a period exceeding one year.


Donald Methuen Fleming: Mr. Chairman, the minister has read a statement on the section-


James Joseph McCann: I am told that apart from that there is no difference in substance from former treaties.


William Alfred Robinson: Article III; article IV;
article V.
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Donald Methuen Fleming: On article V, I should just like to draw attention to the fact that in clause (2), line 1, there is an error in spelling in the word "likewise". Can that be noted?


William Alfred Robinson: That will be noted as another clerical error. Article VI.


Donald Methuen Fleming: Mr. Chairman, article VI puts the percentage of the voting shares in the subsidiary company at 25 per cent. I note that the Irish agreement puts, the percentage of voting shares at 50 per cent. What is the reason for the lower percentage in the case of this agreement?


James Joseph McCann: At the present time Germany taxes all dividends paid to non-residents at 25 per cent as against Canada's rate of 5 per cent on dividends paid by wholly-owned subsidiaries; 75 per cent on all other dividends. Under the provisions of this article Germany agrees to reduce its rate to 15 per cent on dividends paid to Canadian companies owning more than 25 per cent of a German company. I am told that we made no concession in this article. I am further told that this is as far as the Germans were prepared to go.


William Alfred Robinson: Article VII, article VIII.


Donald Methuen Fleming: In the second paragraph, third line, there is another of these mistakes in spelling. The word "formulae" is spelled wrongly. May I ask a question in regard to the use of cartels in Germany? Is there going to be any problem arising out of the application of this convention in such cases?


James Joseph McCann: Would that have to do with royalties, copyright?


Donald Methuen Fleming: I am thinking of the whole of the clause.


James Joseph McCann: Paragraph 1?


Donald Methuen Fleming: Probably more particularly the second one, "patents, designs, plans, secret processes and formulae".


James Joseph McCann: Paragraph 1 of the article exempts copyright royalities in respect of literary, dramatic, musical or artistic work. Paragraph 2 applies a ceiling of 15 per cent on the rate of tax imposed upon all other royalties.


Donald Methuen Fleming: The minister is not dealing
with my question, Mr. Chairman. I know what the article says. My question has not been touched on by the minister's answer.


James Joseph McCann: This, I presume, would be
in our favour because Canada has made no concessions whatever on royalties to the German government.

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Donald Methuen Fleming: Again, that is not my question. I asked whether there was going to be any difficulty in the application of this provision iri cases where the Germans may be resorting to the use of cartels?


James Joseph McCann: I am told that we cannot
see any problem in that particular connection.


William Alfred Robinson: Article IX, article X, article XI.


Donald Methuen Fleming: I have one question on article XI, Mr. Chairman. The maximum rate of compensation is established in paragraph (2) (b) and it is $3,000 gross. This is substantially less than the figure in the Irish treaty, which was $5,000. What was the reason for changing the lower figure here?


James Joseph McCann: This article means that an
individual from Germany may perform services in Canada free from tax if his stay in Canada does not exceed 183 days during the year and his compensation is received from a person resident in Germany, or does not exceed $3,000. The same rule applies reciprocally to a Canadian individual. The point is, we asked that the amount be the same as it was in the Irish treaty, $5,000. They would not agree to it and this is a compromise; we accepted $3,000.


William Alfred Robinson: Article XII, article XIII,
article XIV, article XV, article XVI, article XVII, article XVIII, article XIX, article XX.


Donald Methuen Fleming: Mr. Chairman, article XX
provides for the making of regulations to carry the convention into effect. Do those regulation's have to be joint regulations promulgated by both of the contracting states?


James Joseph McCann: No, they do not. The article provides for enabling legislation, and again by the competent authorities of each state.


Donald Methuen Fleming: It does not say "each state", though. That is my point. The article says: The competent authorities of the two contracting states may prescribe regulations necessary to carry into effect this convention within the respective states.
Now, having regard to the extent to which such regulations may apply I would have thought that the natural reading of the section would suggest that the regulations ought to be concurred in jointly by the competent authorities of the two contracting states; but I take it that the minister construes that expression as equivalent to the competent authorities of each of the two contracting states.


Mr. Marler:: The word "respective" seems to suggest that, does it not?


James Joseph McCann: Any regulations that may
be made cannot go beyond the treaty itself; the hon. member understands that. But our understanding of this article was that each state might make its own regulations.


Donald Methuen Fleming: This is a new provision. It is not in the Irish agreement. I just wonder whether, in the light of the interpretation that the minister is proposing today, the situation might arise where the regulations promulgated by the prominent authorities of the two states might be quite different?


James Joseph McCann: All agreements are not
exactly similar in detail and one has to consider getting the best deal he can with the people with whom he is carrying on negotiations. Most of the regulations that are made in one country or in the other have to do with the internal procedure.


William Alfred Robinson: Article XXI, article XXII.


Donald Methuen Fleming: Mr. Chairman, I have one question concerning article XXII. In paragraph 2(a) we have the expression, "in respect of Canadian tax, for the taxation years beginning on or after the first day of January 1954". I looked up the Irish agreement and I find the same expression, "on or after" was used there. I would have thought the more normal expression to look for in that context would have been "on and after". It would then refer to the taxation years beginning "on and after". Is there any point there that might give some difficulty?


James Joseph McCann: It actually means in respect of Canadian tax for the taxation year beginning on and after the first day of January. The treaty is signed with those words and cannot be changed; however, that would be the interpretation.


Donald Methuen Fleming: May I take it that is the interpretation that has been given to the Irish agreement?


James Joseph McCann: Yes.


Donald Methuen Fleming: It likewise has the expression "on or after", and I think in future negotiations it might be well to have it read "on and after".


[Stage Direction]
Schedule agreed to.
Bill reported, read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Applewhaite in the chair.

The Deputy Chairman:: Four items were allowed to stand last night. Is it the wish of the committee that they be called first?


George Carlyle Marler: That is quite agreeable to me, Mr. Chairman.


Some hon. Members:: Agreed.
Railway and steamship services-
459. Construction of new dock and terminal facilities at Port aux Basques, Newfoundland, $413,000.


Mr. Nowlan:: Mr. Chairman, item 459 deals with the construction of docks and terminal facilities at Port aux Basques. I notice there is a proposal that this year we spend $413,000 as compared with an expenditure of $750,000 for last year. I wonder if the minister could give us a statement as to where this matter now stands.
There has been some publicity given in the press, in the east at least, within the last few days with respect to this matter. The committee will remember that the harbour at Port aux Basques was the one which was, shall we say, reconstructed for the benefit of the William Carson and after having been reconstructed it was found a further expenditure had to be made. Apparently it is proposed to spend an additional $413,000 this year.
A statement appeared in the press about two or three weeks ago which presumably came from the office of the Minister of Public Works in which was stated the fact that the breakwater had been replaced. The committee will remember that some dredging and blasting had been done. The natural breakwater which had been there had been in part removed and replaced by the Department of Public Works.


George Carlyle Marler: That is not correct. The hon. gentleman is certainly not correct in making that statement.


George Clyde Nowlan: Well, if it is not correct I must say no one knows what is correct and we are very glad to have the minister correct us this morning with respect to these matters.-As regards the natural breakwater, I thought I was being very moderate so as not to arouse the sensitive minister, because I know how sensitive he naturally would be with respect to this matter. At any rate, some expenditure has been made and it was found necessary to reconstruct or construct an additional breakwater.


George Carlyle Marler: Now the hon. member is talking about the facts instead of something imaginary.


George Clyde Nowlan: All right. The reason any imagination is necessary is because of the conflicting, vague and inconclusive statements which have been issued by the Department of Transport, the Department of Public Works
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and the Canadian National Railways, each trying to pass the buck with hon. members from Newfoundland adding something to it by way of general background, and altogether we get a pot-pourri which the minister with his vivid imagination and his experience in the opposition will realize it is very difficult for a poor person sitting over here not having access to all the government reports to fully understand.
I am endeavouring to get this down to a simple compass this morning and I do not want to indulge in any pyrotechnics or anything of the kind. What I am trying to find out is just where this matter now stands.
The Minister of Public Works is reported in the press as having said that the breakwater had been completed and the sum of $186,000 is the figure used in the press. I do not know whether or not that is correct. The report also says that a 600 foot breakwater had been put in at Port aux Basques harbour and apparently the Minister of Public Works intimated that the next step was for the C.N.R. to have the William Carson make a test run or two into the terminal to see whether it could be accommodated in the harbour with the new installation.
I do not want to offend the delicate feelings of the minister in this matter, as I say, and so I shall say that in addition to the breakwater which was to be built-the minister can call it what he will-the national research council were asked to erect a model of Port aux Basques harbour in which experiments could be conducted. We have now reached a situation where the Minister of Public Works says that we have reconstructed it or constructed it-


George Carlyle Marler: That is better.


George Clyde Nowlan: Yes, I will use the term "constructed", if you like.


George Carlyle Marler: Well, use the accurate one.


George Clyde Nowlan: All right, I will use the accurate term. God constructed the first breakwater and then someone removed it and the Minister of Public Works has constructed a new one and now the Minister of Public Works says to the C.N.R., "Why don't you use the harbour for a test run?" According to the press the C.N.R. says, "No, we do not want to use the harbour". I am not attempting to quote the press report but according to it the Department of Transport and the C.N.R. have suggested to the Department of Public Works that the trial runs for the William Carson be postponed and that the Department of Public Works should conduct further tests on the $70,000 national research council hydraulic model. One would almost infer, Mr. Chairman, that the C.N.R. and

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the Department of Transport were not certain that the expenditures on the harbour were completed and that they required further tests to be made on the harbour.
In any event there is apparently some difference of opinion between the two departments with respect to this matter. The Minister of Transport may be justified in this and I am not criticizing him for it but it almost appears as if he or his departmental officials felt that the situation at the Port aux Basques harbour is such that they do not want to operate the ferry there until the tests are carried out on the model. According to the statement which was issued some time ago, this could not be done until September. It is certainly a matter of importance as to when this can be done and I would like to have the minister clarify the situation if he would.


George Carlyle Marler: I am always amused when I hear the hon. member talk about Port aux Basques and the William Carson-


George Clyde Nowlan: If you were impressed I would be much more comforted.


George Carlyle Marler: -particularly as he draws liberally on his imagination in order to add humour to what he has to say. If we could get back to the facts of the matter, perhaps it would be easier for the committee to understand exactly what the situation is at Port aux Basques. Perhaps I should say this to the hon. gentleman who has just spoken. If he had not made the several humorous speeches on the subject of the William Carson that he made during the last session and on every conceivable occasion, I think there would have been much less confusion in the minds of the public as to what is the real situation. As someone who has experienced political life in opposition, I think that the hon. gentleman should feel a certain satisfaction in having added this element of confusion to the situation.


George Clyde Nowlan: I cannot compete with the minister in that respect.


Mr. Green:: There was plenty of confusion before he started.


George Clyde Nowlan: You dispel it, if you will.


George Carlyle Marler: After these preliminaries, I shall try to do exactly that. I shall not promise that the hon. member will understand but I shall give him an opportunity at least of knowing the facts. The first thing I should like to say is about the $413,000 which is covered by this vote. This is not in connection with the dredging but it is, as I

understand it, the cleaning up of the expenditures in connection with the construction of the new dock and terminal facilities at Port aux Basques.
Hon. members will recall that we discussed the subject of Port aux Basques approximately towards the end of the last session of parliament and at that time, I think, I told the committee that we were going to retain the services of an expert in order to advise us as to the situation in Port aux Basques harbour. I should like first of all to correct an impression, which somehow or other has got around, that the work that was done in Port aux Basques was such that there was not enough water for the Carson to go in. That has not been the case, and at no time has that been the problem.
I have a very delightful cartoon that appeared in the Gazette of my trying to get the William Carson down a chimney, and the Carson obviously was much too big for the chimney. All I can say is that the cartoonist, who has an excellent reputation as an artist, must have been inspired by the hon. gentleman who has just spoken on this item, because if he had been inspired by the facts he would not have drawn the cartoon at all.
After the last session ended, I asked the high commissioner in London if he would be good enough to ascertain what experts in matters of harbour engineering might be available at short notice to visit Port aux Basques and to examine the situation from beginning to end. I want to say right away that I did not seek somebody in England because there was no one available in Canada, but I am sure hon. members will agree that there was no one available in Canada who had no association either with the government or with the Canadian National Railways. I felt that it was desirable to have someone who had no attachments of any kind and whose impartiality and independence could not reasonably be challenged.
The expert who was appointed, after we had made these inquiries, was Mr. R. D. Gwyther, who is one of the senior partners of the firm known as Coode and Partners. It was interesting to learn that one of the predecessor members of this firm had had a connection with Port aux Basques many years before; not that that was material to the case, but it was merely a matter of interest. When I met Mr. Gwyther, about a year ago, the first thing I told him was that I wanted to get from him a completely independent report and that I was not asking him to justify what had been done. I wanted to know what were the facts and whether a mistake had been made.
Hon. members perhaps should realize that the obligation to establish a service between

North Sydney and Port aux Basques results from the terms of union with Newfoundland. The obligation was that of providing services which would accommodate passengers, automobiles and cars. I am not talking about these two places except so far as the distance between them is concerned. That obligation necessitated the building of a ship which would be speedy and which would load and unload rapidly so that the round trip between North Sydney and Port aux Basques could be covered within the least possible time so as to make the operation as economic as possible. That accounts for the dimensions of the Carson and the necessity for having a vessel strengthened for ice and having high power, and, because of the desirability of rapid loading and unloading, the rather complex arrangement of the facilities at the terminals both at North Sydney and at Port aux Basques. That very factor of special facilities prevents the Carson from being used just anywhere at any time.
If I might return to my conversation with Mr. Gwyther, I asked him to make an exhaustive study of the matter and to give me a completely impartial report. One of the first things that Mr. Gwyther considered was whether or not the dredging that was done between Pikes and Vardys islands had been harmful to the situation. I was jesting a moment ago when I spoke of the hon. member, but an impression has been created that the dredging that was done between these two islands ruined the harbour. I believe that the hon. member, when speaking on the estimates of the Department of Public Works, quoted some newspaper article, though how the word "ruined" ever got into the newspaper article I find it difficult to say. No one has used that word authoritatively, and it will certainly not be found in the Gwyther report. The rather liberal interpretation put on the Gwyther report certainly does not find any justification in the actual words he used. I should like to read from the Gwyther report his comment with regard to the channel between these two islands. He says, in paragraph 9:
The channel which existed between Vardys island and Pikes island has been enlarged to give a minimum depth of 23 feet at low water for a width of 350 feet. This dredging increased the cross sectional area of the original channel by only 17 to 20 per cent and we cannot believe that this caused any appreciable increase in the ranging at the new wharves.
I did not dictate that paragraph to Mr. Gwyther, and I think that is a fair comment on the situation that exists in Port aux Basques harbour. The whole difficulty that we have had to meet is the fact that the facilities as they now exist in Port aux Basques harbour are such that there is not the quiet
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water that should be expected for a ship of this dimension which is going to be moored at the terminal We asked Mr. Gwyther what work ought to be undertaken in order to provide a quiet harbour for the William Carson, and I might just read another paragraph from the report, paragraph 12, which reads as follows:
12. Suggestions have been made for Improving these conditions and are as follows:
(i)	to close the channel between Vardys and Pikes island and to widen the approach channel on the west side of Vardys island and between the middle and west Baldwin rocks;
(ii)	to construct breakwaters at the Baldwin rocks closing the channel between the middle and west Baldwin and enlarge the channel eastward of the east Baldwin;
(iii)	to construct a short breakwater running northeast from Vardys island leaving the new channel clear and widening the existing channel between Vardys island and Pancake rock and at the Baldwins.
I am not going to read the whole report, which is somewhat lengthy, but the point I should like to emphasize is that these suggestions were considered by Mr. Gwyther, and his recommendation will be found in paragraph 14 which I shall read:
14. We strongly recommend that a model should be made of the harbour and the effect produced by the construction of breakwaters tested on the model. This need not delay the start of work on the landward breakwater or on the improvement of the channel between Vardys island and Pancake rock.
The breakwater which has been constructed does not replace anything that existed before. It is something that is entirely new, and that was the reason why I objected to the rather liberal interpretation which the hon. gentleman placed on the facts of the matter just a few moments ago. This is a new breakwater. Mr. Gwyther recommended that we should build a model and that we should at the same time build this breakwater which he considers would be essential.
As hon. members know, the Department of Public Works has built the model and model tests have been continuing and are still continuing. The hon. gentleman seemed to imply from some clippings that have been read from the newspapers that the national research council has reached some conclusions. I hope I am not wrong in that inference I took from what the hon. gentleman said, but that is not in conformity with the facts. No report has been made by the national research council as to the result of its studies. However, I should like to tell hon. members of the committee that there may have been formed in the minds of some of those who are conducting the studies some preliminary ideas that the studies and tests so far have developed. But so far as my department is concerned, and I consider we are very vitally interested

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in the matter, we have no report whatever as to the conclusions to be reached from the model studies that have been undertaken up to the present.
I made some inquiries this week to find out what was the state of affairs so that it would be possible for us to know what progress was being made, and I was told that it was hoped that the report would be available within a matter of two or three weeks. I think the hon. gentleman will probably realize that what Mr. Gwyther had in mind in recommending the construction of the model was to tell from the model where other protective works should be placed if other protective works were necesary after the construction of the breakwater which has since been built and completed.
We have not yet got the results of these studies and consequently we are not in a position to say today-I regret it very much -just what further works, if any, require to be done in the harbour so as to make it entirely usable by the William Carson. I understand there has been comment in the press, or perhaps I should call it speculation, as to trial runs for the William Carson. I have discussed this subject with the Department of Public Works and with the Canadian National Railways, and I was under the impression a few days ago that arrangements had been concluded by the Canadian National Railways and public works to make some trial runs. But this week I took the trouble to verify the exact situation and when I found that definite arrangements had not been made I asked that a meeting be convened of all of the parties interested, national research council, public works, Canadian National Railways and officials of my department, in order that the matter should be examined fully so that we could see whether it was desirable to have trial runs of the Carson into Port aux Basques. That will be the subject of discussion at a meeting to be held next week.
But the point I should like to emphasize particularly, because I do not think it is desirable that wrong impressions should arise from carrying out trial runs, is that a trial run must for all practical purposes be carried out with a ship that is carrying neither freight, automobiles nor passengers. It is not possible to organize it for passengers for the simple reason that it would be an entirely new service and there is no reason why passengers should participate in it. Naturally what we have in mind is the commencement of the service just as soon as we can be certain that the harbour will be a safe, quiet harbour for the Carson while she is in service there. Consequently, if it is decided that the Carson will make trial runs as part of the
[Mr. Marler.l
studies which are in process by the national research council no one should expect that she will be used for the carrying of passengers, freight or automobiles. It is a technical test, and I take it that those who participate in it will be the technical officials of the four bodies interested that I mentioned a moment ago.
I have no hesitation in confessing that I had really hoped after I had seen Mr. Gwyther in August of last year and had read his report, received some time around the middle of August, that the model studies would have been completed long before this and we would have had a conclusive report as to what ought to be done in order to settle the matter fully and finally.


Howard Charles Green: Are they being done here in Ottawa?


George Carlyle Marler: Yes, they are being done in Ottawa. I have not seen them personally. Unfortunately time seems to be so much at a premium that I have not been able to get out to see them. I do not suggest that my going out there would make any difference to the studies but I had hoped to see them and I had hoped that they would have led to a conclusive report before this. However, my hopes have been disappointed. But I do hope it will not be long before we have a definite recommendation as to what works must be done.
I do not blame the opposition for the fact that the impression has been created by them that the government has made a mistake in this matter. I am quite sure if I had been a member of the opposition I would have done my utmost to create that impression.


George Clyde Nowlan: We do not have to create it.


George Carlyle Marler: I will leave the hon. gentleman with his opinion, but perhaps people who will take an impartial, objective view of the facts might not agree. I do not blame the opposition for endeavouring to create the impression that there has been a grave mistake, but perhaps the grave mistake was in agreeing that Port aux Basques should be the northern terminal of this route. But, Mr. Chairman, that is a fact; that is part of the terms of union. The terms of union provide that the service shall be between Port aux Basques and North Sydney, not between North Sydney and some other place in Newfoundland. It is my personal conviction that, having chosen Port aux Basques, we were, perhaps unconsciously at that time but fatally committed to provide that kind of service and to do so on the most economic terms possible, committed to doing the physical works in the harbour which will cost us a great deal.


Howard Charles Green: May I ask a question? Was there ever any attempt made by the dominion government to negotiate with Newfoundland for a change to some other port?


George Carlyle Marler: Mr. Chairman, I am handicapped by the fact that I was not a party to the negotiations in 1949. I do not know what considerations entered into the discussions at that time.


Howard Charles Green: Perhaps the minister can find that out at the noon adjournment.


George Carlyle Marler: I feel perfectly sure that it was chosen because of the factor of distance and because of the factor of the railway; in other words, that there were certain obvious reasons why Port aux Basques had to be chosen. My understanding of the matter is that it really was not possible to consider establishing the service to another point. When one looks at the map, I think one cannot help concluding that the service had to be provided between those two points. Having reached that conclusion, the question then arose as to the kind of ship. If you provide a smaller vessel, then you cannot accommodate passengers, freight and automobiles as the terms of union call for, in the same volume, let us say, as is to be provided in the William Carson.


Howard Charles Green: Was there any agreement
between Canada and Newfoundland with regard to the type and size of ship?


George Carlyle Marler: No; there was not. But I suggest to the hon. gentleman that the undertaking to carry freight, automobiles and passengers, coupled with the fact that you had to provide a rapid turn-around in order to accomplish the operation in 24 hours, imposed certain conditions that had to be met, certain physical conditions that could not be met in any other way than those provided by the William Carson itself.


Howard Charles Green: The minister is not suggesting that Newfoundland is in any way responsible for the fact that the ship was built but could not use the harbour? He is not doing that, is he?


George Carlyle Marler: No, I am not suggesting any such thing as that at all. I am merely suggesting that, having laid down these specifications, the economics dictated that you should have a fairly large vessel, powerful, able to operate during the winter months, able to carry passengers, freight and automobiles, and to meet the necessity of rapid loading and unloading. I suggest that when you read these specifications and when you say the service must be between Sydney and Port aux Basques, then you are fatally led to the situation which now exists. Had we
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been so foresighted and so gifted as to have complete information as to Port Aux Basques, it is quite possible that we would have said at the time of union, "We will have to spend a great deal of money on the harbour in order to provide for the facilities which are called for under the terms of union." I am sorry but I do not know how much the breakwater that has been constructed has cost. I think perhaps the matter was dealt with on the estimates of the Department of Public Works, as it is an expenditure of that department. I do not know what further works will have to be built. All I can say is that we will know when the model studies are completed. I hope they will show us that the work that remains to be done is not of major dimensions.
Mr. Chairman, I am sorry I am taking so long on this item but I want to repeat that I think it is perfectly clear to an impartial person that the relatively small amount of dredging that was done in the channel between Pikes island and Vardys island has had no substantial effect on the harbour itself.


George Clyde Nowlan: I do not think the minister needs to apologize for the time he has spent on this item. I realize that the committee is working under pressure and no one wants to delay it, I least of all. I do not propose to enlarge on the matter at any undue length and I am not going to indulge to any imaginative or pyrotechnic speech as the minister almost invited me to do. I refrain from doing that. But this is a matter of tremendous importance to all eastern Canada, as well as to the province of Nova Scotia. The confederation pact with Newfoundland has been in abeyance and is now, one might say, dishonoured because we are not fulfilling our obligations there at all in so far as transportation is concerned back and forth between Newfoundland and eastern Canada, and, I presume, all of Canada, having regard to anyone who ships to Newfoundland. The situation is just one horrible mess. That is the only way in which it can be described.
The minister speaks about the opposition and rather pays it the compliment of having created-and I emphasize the word "created" -an impression that there was something wrong in connection with this matter. We certainly have not created it, Mr. Chairman. There is not a newspaper you can read in eastern Canada or a newspaper in Newfoundland that has not stressed that fact. In my opinion we have been, as usual, very conservative in our statements and in our approach to this matter. If there has been any touch of humour at all, it is only because we felt so sympathetic with the minister who was loaded down with such a tragic error that we

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felt that if we really dealt with the thing too seriously he might feel that he should be called upon to resign or something of that kind. So perhaps when mentioning it I will introduce a little bit of humour in order to lighten the load which otherwise he would carry.


George Carlyle Marler: Do that.


George Clyde Nowlan: I have here an editorial-I am not going to read it-from the Cape Breton Post of August 2 dealing with this matter. It says that everything is a fog with respect to the William Carson.


George Carlyle Marler: It is what?


George Clyde Nowlan: It reads:
Everything having to do with the operation of the splendid new ferry, William Carson, between North Sydney and Newfoundland, continues to be wrapped in mystery, as if an impenetrable fog descended every time the circumstances arise for lucid explanation.
Then it goes on to say this:
It has ceased to be funny, this is to say if anyone ever found it amusing.
Articles have appeared in the Halifax Herald, in the Newfoundland papers and all the rest. I am not going to accept for one second the suggestion that the opposition are responsible for having enlarged on this matter in any way. There are a few facts about this matter which I want to get clear, and we shall not have time to do it before one o'clock. After all, if there is a touch of humour in the matter, it is in the minister's statement this morning. I wish I had Hansard before me. He, of course, always has a delicate touch. The minister spoke almost sadly about the fact-I have forgotten some of the words-that the facilities at Port aux Basques did not lend themselves to, shall we say, a smooth harbour. I think that was the effect of what he said. He spoke as if this came as a great surprise and a great shock. That, of course, is as humorous as anything could be. Apparently, they never heard of John Sebastian Cabot who discovered Newfoundland and who reported that Port aux Basques was a pretty tricky harbour. Of course there was another John Sebastian Cabot Pickersgill who made a discovery. I am not sure whether he discovered Newfoundland or whether Newfoundland discovered him. But certainly he knew that Port aux Basques was far from being a smooth harbour.
The minister says we are under an obligation to carry cars, to carry passengers and to carry freight. They certainly are not carrying out the obligation, are they? That ship cannot do it under the existing situation. If errors were made in accepting Port

aux Basques-if you were bound to accept it, and I think there is some merit in that suggestion; there was a railway connection there-instead of having that palatial liner which was too big for the harbour, I think that serious consideration should have been given to having two small boats as recommended by the Newfoundland captains, seamen, fishermen and press.


George Carlyle Marler: I can tell the hon. gentleman that I have heard often about that so-called recommendation but nobody seems to have found it in my department or in the Canadian National Railways.


George Clyde Nowlan: That is why the Cape Breton Post says there is such a fog.


George Carlyle Marler: Let us stick to the facts.


George Clyde Nowlan: I do not want to be unkind, but the Cape Breton Post says that the Minister of Transport apparently has not even heard from his colleague the Minister of Public Works about the fact that he wants the boat to make a trial run or runs into the harbour.


George Carlyle Marler: That is pure conjecture and without foundation.


George Clyde Nowlan: It may be conjecture but at least that is not disseminated by the opposition. Those are statements that have been made. What we want to do this afternoon and in perhaps three or four minutes after this committee reconvenes is to have the minister tell us what is going to be done and when, and also what it has cost us so far. He says that he is still waiting, as I understand it, and that he feels that there should be further experiments carried out or tests with respect to the working model of the harbour.


George Carlyle Marler: I wish the hon. gentleman would stick to what I said. It would make it much easier for me.


George Clyde Nowlan: Is that not what the minister said?


George Carlyle Marler: No. I told the hon. gentleman that we were waiting until the present studies are completed by the national research council.


George Clyde Nowlan: That is what I said.


George Carlyle Marler: It is not a question of further studies. Surely the hon. gentleman understands that we are still talking about studies that were initiated to determine what works ought to be done in order to make Port aux Basques a quiet harbour.


George Clyde Nowlan: I am not going to engage in a dialectical discussion with the minister

with regard to the word "further". I accept his word that they are waiting to learn the results of the study. I realize that you have only one study and that there are no further studies. The only comment I have to make is that they built the harbour for a certain type of operation and then they decided to build a working model and to make studies. Now the studies are not over. After lunch I should like it if the minister would please fell us when they can operate that service and if he can give any intelligent-I do not mean "intelligent" unkindly-any relatively accurate estimate of what can be done.


George Carlyle Marler: I do not want to spoil the hon. gentleman's lunch but I cannot add anything to what I have already said. He knows, just as I do, the danger of making promises as to dates and holding out expectations that might prove to be wholly unjustified. I may be spoiling his lunch, but I can add nothing this afternoon to what I have already said.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
William Alfred Robinson: Order. Resolution 459.


George Clyde Nowlan: Mr. Chairman, I wonder whether the minister can answer a few questions with respect to this item of $413,000 which is for, as I said earlier, the construction of new dock and terminal facilities at Port aux Basques, Newfoundland, during this coming year? Can the minister tell us what has been spent to date on the new dock and terminal facilities in so far as it comes within his department, or of which he has knowledge, and also what is proposed to be done with the $413,000 this year?


George Carlyle Marler: Well, Mr. Chairman, I am not in a position to give the absolutely final detail but I would like to tell the hon. gentleman that the expenditure to March 31, 1955, was $5,067,223. The estimated expenditure for 1955-56 is $369,140; the estimated requirement for 1956-57 is $413,000; the estimated requirement for 1957-58 is $470,000, making a total of $6,319,363. To that must be added a further amount payable by Canadian National Railways of $488,000, making an estimated total cost, which includes the provision of modern freight handling equipment of $6,807,363.


George Clyde Nowlan: Does that include the cost of the containers of which we have spoken before?
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George Carlyle Marler: No, I do not think it does, Mr. Chairman. My deputy minister points out that half of the total cost of the containers is included in the total estimated cost that I have just given, and the other half of the cost of the containers is included in the costs in the Sydney area.


George Clyde Nowlan: Does that include all expenditures made by the Department of Public Works as well?


George Carlyle Marler: No, these are transport or C.N.R.


William Alfred Robinson: Shall the item carry?


George Clyde Nowlan: I have one other question before the item does carry. As I understand it, from what the minister said this morning, there will be an interdepartmental meeting next week between his department, public works and I think he said the Canadian National Railways and national research, and at that meeting it would be determined if and when a trial run or runs would be instituted by the Carson into Port aux Basques harbour. Is that correct?


George Carlyle Marler: I think I should make a purely verbal correction in what the hon. gentleman has just said. I am not asking the officials to make a decision. I ask them to make a recommendation but I shall take the responsibility.


George Clyde Nowlan: Surely. No decision will be taken till next week, and no decision has been taken at the moment.


George Carlyle Marler: No. I would like to emphasize, because of the news that has appeared in the press, that at no time has any decision been taken. Consequently, there has been no postponement. The date has not been fixed. I hope-if that seems the intelligent thing to do-we shall come to some decision next week.


George Clyde Nowlan: Is this a fair question? Is the minister in a position to give any intimation as to when he would expect the Carson would start regular service to Port aux Basques?


George Carlyle Marler: I think the question is a perfectly fair one, but I am unable to give a fair answer.


[Stage Direction]
Item agreed to.
460.	To provide for the payment during the fiscal year 1956-57 to the Canadian National Railway Company (hereinafter called the national company) upon applications approved by the Minister of Transport made from time to time by the national company to the Minister of Finance and to be applied by the national company in the payment of the deficit (certified by the auditors of the national company) in the operation of ferry and terminal services between North Sydney. Nova Scotia and
[Stage Direction]
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Port aux Basques, Newfoundland, and on a temporary basis between North Sydney, Nova Scotia and Argentia, Newfoundland and between North Sydney, Nova Scotia and other Newfoundland ports, arising in the calendar year 1956, $3,4S6,250.
George Clyde Nowlan: This is the deficit item for the operation of the William Carson for the year. This is for the calendar year 1956, or arising in the calendar year 1956. I believe there is an item in the supplementary estimates of $1,100,000, which would make in all $4,596,250. The detail speaks of the calendar year 1956, but the item says, "fiscal year 1956-57". Can that be clarified?


George Carlyle Marler: I do not want the two items to be added together because that will give a misleading impression. First of all, I would like to emphasize that this item of $3,496,250, covers the deficit of all of the ferry operations, all of the Newfoundland railway and steamship services, North Sydney, Port aux Basques, Argentia and other Newfoundland ports, and not just the William Carson, and the figures are for the calendar year 1956. If the hon. member would like to have a breakdown, they represent $2,925,000, being the estimated deficit for 1956 on the service between North Sydney and Port aux Basques. This deficit excludes the Carson because she is not in that service at the moment; approximately $500,000 for the service in which the Carson is running for purposes of freight between North Sydney and Argentia, and $71,250 for services between North Sydney and other Newfoundland ports. Now, there are some other figures covered in the supplementaries. Perhaps we can deal with them when the supplementaries are called, but they are not for the same purpose.


George Clyde Nowlan: What is included in the deficit? Is that something of an operating item or does it include interest and sinking fund?


George Carlyle Marler: This is a straight operating deficit and it does not include interest.


George Clyde Nowlan: Can the minister tell us what was the total capital cost of the Carson so that we can-


George Carlyle Marler: I have not the figure immediately at hand, but it is somewhat slightly in excess of $11 million.


George Clyde Nowlan: Perhaps the minister can get the total.


George Carlyle Marler: I will have a look for it and I will give it.


George Clyde Nowlan: The minister said it does include the deficit on the existing service

between North Sydney and Port aux Basques as well as the operating deficit on the Carson itself.


George Carlyle Marler: I have just given those figures: on the North Sydney and Port aux Basques run, $2,925,000; between North Sydney and Argentia-that is the Carson-$500,000 and the other ports, $71,250. The exact cost of the Carson is $11,243,000.


George Clyde Nowlan: That deficit on the service between North Sydney and Port aux Basques is exclusive of any deficit on the Carson at all; it is on the other small ships that operate?


George Carlyle Marler: Yes.


Howard Charles Green: Can the minister give the figure for the deficits on the earlier years of the operation of the Carson?


George Carlyle Marler: There were no earlier years for the operation of the Carson.


Howard Charles Green: This vote is for 1956?


George Carlyle Marler: Yes.


Howard Charles Green: What about 1955?


George Carlyle Marler: The operations of the
Carson for 1955 are covered by the supplementary vote, and perhaps we can deal with it when we get to that item.


[Stage Direction]
Item agreed to.
461.	Construction or acquisition of auto-ferry vessels and equipment as listed in the details of the estimates, provided that treasury board may increase or decrease the amount within the vote to be expended upon individual listed projects, $1,914,000.
George Clyde Nowlan: What is proposed in this item? Can the minister give us a breakdown?


George Carlyle Marler: The main item, Mr. Chairman, is for the ferry for service between Wood Islands in Prince Edward Island and Cariboo, Nova Scotia. It represents an amount slightly in excess of $1 million. The item includes also $250,000 of the expenditures on the Carson; $500,000 for the Bluenose; and $44,000 for construction or acquisition of equipment.


George Clyde Nowlan: That is additional expenditure made on the Carson?


George Carlyle Marler: No; these are included in the total I gave the hon. gentleman a moment ago.


[Stage Direction]
Item agreed to.
462.	Yarmouth, Nova Scotia-Bar Harbor, Maine, U.S.A., ferry service-deficit, 1956, $230,000.
George Clyde Nowlan: This item, Mr. Chairman, covers the operating deficit of the motor vessel Bluenose operating between Bar

Harbor and Yarmouth. Again 1 would ask the
minister if that simply covers the operating amount or if it includes any charge for depreciation or interest on the Bluenose. I also wonder if the minister could now give us the total cost of the Bluenose, the amount that was paid toward that cost by the province of Nova Scotia, and then after I receive that information there is one other comment I want to make in respect to it.


George Carlyle Marler: The estimated deficit of $230,000 is very largely an operating deficit. I would like to mention that in the operating expenses the following items are included which are perhaps not wholly an operating expense in the ordinary sense of the word. There is a fee to the Canadian National Railways of $35,000, interest on working capital $7,000 and $61,000 for the amortization of loans, making a total of $103,000 that strictly speaking might be considered not to be an operating expense.


George Clyde Nowlan: What loans?


George Carlyle Marler: These are in connection with the facilities at Bar Harbor and at Yarmouth.


George Clyde Nowlan: It is money borrowed for the construction of those facilities?


George Carlyle Marler: Yes.


George Clyde Nowlan: I do not think anyone can criticize the size of the deficit for the first year in which that was in operation.
I would like to make one or two suggestions to the minister. He has just told us that the Canadian National is getting an operating fee in connection with this boat. I have heard from some people-some of whom are in the range of our voices now who propose to travel on that boat-about what anpears to be a rather anomalous situation.
If the minister proposed to go across on the Bluenose as a passenger I understand that he could make a reservation in Ottawa for a certain day and embark his car and go across but he cannot buy his ticket here for some reason or other. I think this is a minor thing that should be rectified because it causes a lot of irritation.
I know civil servants here in Ottawa who have gone across there within the last few weeks. They could not buy a ticket at the C.N.R. office in Ottawa. When they arrived at Bar Harbor they had to buy their ticket there and pay excise tax to the state of Maine on their ticket to travel on a Canadian ship which was built by Canadian money. I think that is just carelessness somewhere possibly on the part of Canadian National administration.
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I will be perfectly frank and say that I took this up with the passenger department in Ottawa because certainly they have always given me the greatest co-operation and I did not wish to say anything by way of criticizing them.
Recently I had occasion to go to California. I bought a ticket here from the Canadian Pacific to go to San Francisco and to return to Ottawa. They gave me what they call a prepaid voucher and thereby I saved a few dollars in excise tax which I would have had to pay to the state of California.


George Carlyle Marler: Tax evasion.


George Clyde Nowlan: If that can be done in the state of California I think it could also be done in the state of Maine. As I have said it has caused some irritation. I think the excise tax is 15 per cent. I do not see any reason in the world why people going from Canada and travelling into the United States are compelled to buy a ticket in Bar Harbor and pay excise tax to the state of Maine. I think this is one matter that should be rectified before another year elapses.
Another matter I would like to mention is something which I spoke to the minister about a year ago. The minister, as I recall it, indicated that this was being done on a trial basis and I want to remind him again of the present system whereby the boat ties up in Bar Harbor, goes over to Yarmouth and then back to Bar Harbor. I think the minister told us at one time they were trying this-I am not trying to quote or paraphrase him in any way-but I think the effect of his statement was that we were going to try it and that it was likely or possible that we would change it, depending on the experience. I hope the experience has been such that the department is considering changing the present system.
There are several reasons that could be advanced which make a change desirable. One reason is that the crew is practically all Canadian and is made up of Nova Scotians and they are compelled to live in Bar Harbor because they tie up there every night. Another matter is that Canadian and United States tourists have to stay in Maine at Bar Harbor overnight. This is good for the hotel keepers and hostels at Bar Harbor. More than one United States tourist in my own town tell me that when they started on two weeks' vacation they would have preferred to spend the first night of that vacation in what they called "a foreign country", in other words Canada; but they have to go to Bar Harbor, stay there overnight, get up at 4.30 in the morning and catch the boat.

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There are several other reasons that could be advanced. This present system is detrimental to the hotel business in the western part of Nova Scotia. Perhaps there is some advantage in it to my triends in the eastern part of the province who can get in their cars and catch the boat at 2.30 in the afternoon, but the present system results in a fairly substantial loss to the people of western Nova Scotia. Some Americans have told me that when they started their vacation they would have preferred to spend the first night in Canada, a foreign country, rather than in Maine. I think this is something the minister could again review and see if, having tried it on the present basis, a change could be made in order to learn whether a new system would be just as effective.
The third suggestion I mentioned a year ago is this. There has been a great deal of criticism concerning the rates which are imposed on truck transport on the boat. I realize that transport rates are fixed by various yardsticks, one of which is what the traffic will bear. Certainly in the summer time when the tourist season is on the traffic will meet the rates which are now being imposed because there are reservations every day and the boat could probably carry many more cars than it has facilities to carry; but some time around the middle of September the volume of traffic is going to fall off rapidly and I suspect the boat will not have such a heavy loading. At the same time there is going to be an increase in the trucks going from Nova Scotia to New England, particularly this year, because of an abnormal situation which has developed whereby the apple crop in many parts of the United States has been hurt by frost. There is every indication that barring hurricanes there is going to be a substantial movement of apples and other farm products as well from Nova Scotia into the markets of New England, and this presents an opportunity to develop a market there which would be of great importance in the future.
I have been told this by fruit exporters and I got this second hand from them, but I understand that the rates presently charged by the Canadian National, shall I say, are such that it would be cheaper to haul the apples by truck all the way up to Amherst. Moncton and across New Brunswick and into the New England states rather than taking the apples across by boat.
If this matter were referred to the Canadian National perhaps they would consider adopting lower rates for the fall and winter months. The boat is going to be crossing anyway and it will cost the same to operate it whether or not it is loaded. Seasonal rates are a recognized procedure amongst common

carriers and if lower rates were put into effect this year it would substantially reduce the deficit, and would materially assist the agricultural industry of Nova Scotia and particularly the fruit growing industry, and it might also help to develop a future market in New England and be more satisfactory all the way round.


George Carlyle Marler: Mr. Chairman, I would just like to say a few words concerning the points raised by my hon. friend. The first two points I shall certainly draw to the attention of the Canadian National. I had heard something along the same lines of the remarks made by the hon. member concerning tickets and reservations but unfortunately I had not received any information as to what the situation really is.
With regard to the question of trucks I would just like to point out to the hon. member that we are still in a period of experiment. We have not yet had a complete 12 months' period of operations.
Earlier in the year I gave some consideration to having a seasonal rate for trucks, but after careful consideration we came to the conclusion that we should not inaugurate the seasonal rates at the present time but should give consideration to the matter when we had finished one year's operation of the vessel. I shall draw these points to the attention of the management and I hope it will be possible to deal with them satisfactorily.


George Clyde Nowlan: Although the decision may have been made, I should like again to impress upon the minister the fact that there is an abnormal situation this year because of the possibility of substantial movements of fruit into New England and as far as the New York and Virginia markets. Perhaps the minister could take that into consideration.


[Stage Direction]
Item agreed to.
468. To authorize the governor in council to grant to the government of the province of British Columbia a subsidy of $25,000 per mile, but not exceeding 50 miles, towards the construction of a line of railway of the Pacific Great Eastern Railway northward from Prince George in the province of British Columbia: such grant of subsidy to be made in such manner and in such amounts and subject to such conditions, if any, as the governor in council deems expedient; estimated requirement for the fiscal year 1956-57, $500,000.
Mr. Leboe:: I should like to make a few observations. The committee will recall that the government has offered $25,000 per mile for 50 miles in the construction of the Pacific Great Eastern Railway going north from Prince George. You will also recall that the department of Northern Affairs and National Resources was set up, put emphasis on the

north country, and that, of course, means that we must look forward to more transportation in that area.
It is my understanding that the British Columbia government has made an extensive survey of that northern area. The object, of course, is for the promotion of a railway going north into the Yukon and on into Alaska. I think the government would be wise to avail itself of any information that could be gathered from that survey and to get a real look at the prospects for this Pacific Great Eastern Railway.
It was interesting to note that the Prince George Citizen, in an article the other day, said that on August 2 the President of the United States signed a bill for an international rail and highway commission to look into the prospects of building a railway to Alaska.
I think that this emphasizes the importance that is being placed on the rail connection from Vancouver into Alaska. There is news coming out of the north that there are 100,000 square miles of oil leases in the Yukon, which would naturally indicate that there is going to be a great deal of work going on in that area in the prospecting for oil. There has been a new oil strike in Muckman pass, south of Dawson Creek, which apparently is going to have a bearing on the activity in that area.
The pipe line going south from Fort St. John has now reached the stage where we have 150 miles of the pipe already welded, and this means that it is not going to be long before the scrubbing plant at Fort St. John will be in the production stage of the by-products, which is going to mean an additional amount of freight originating in that area, for the two train loads of sulphur that are expected to be released from that plant every week will be carried over the Pacific Great Eastern Railway to the pulp mills in southern British Columbia.
There has been an outstanding increase of activity and population all through that northern area. The figures in the census just completed will show a sharp rise in population and economic growth generally. This again points to the fact that this railway is of the utmost importance, with the development that is taking place in that area today, to say nothing of the development that has taken place over the years.
There is another factor as well, I think, that should be taken into account. For the past two years this railroad has made a profit for the first time in its history. I think that is indicative too of the necessity for pushing the railroad north into the Peace river country. When it is pushed through to the
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Peace river country, it is evident that it will save the Canadian taxpayers money because there are going to be less carloads of subsidized freight-grain-going 1,400 miles over the present road to Vancouver. It will only need to travel 700 miles. Naturally when freight is subsidized only for 700 miles instead of 1,400 miles, there will be effected a great saving of the taxpayers' money.
We have no figures available for the northern Alberta railroad to show what the freight out of that area is. The question is asked on page 2011 of Hansard, and the answer given shows that the dominion bureau of statistics has no figures relative to the freight carried out of that area. It will be recalled that I put three questions on the order paper, and it was found that the federal government had no statistics whatever as to the potential of the Peace river country, as far as freight or any other potential is concerned. I did not look it up, but that too may be found by looking in the index of Hansard.
In conclusion I should like to say that I think it is about time the government moved to clear itself in respect of the ridiculous position in which it has found itself in offering the amount of $25,000 per mile for only the first 50 miles of the railroad. Anyone who goes into that area and sees the tremendous expansion will certainly say that the figure just not does not make sense.


Howard Charles Green: I should like to say a few words on this particular item because in my opinion the government is not acting fairly with regard to this subsidy. It was announced in the House of Commons by the Prime Minister on June 3 last year, at the same time that he announced a subsidy to aid in the construction of the line from Chibougamau to St. Felicien in the province of Quebec. In dealing with the subsidy to the Pacific Great Eastern Railway in British Columbia, the Prime Minister endeavoured to justify the limitation of the assistance to 50 miles on the ground that there was some timber 50 miles north of Prince George and, whilst the government felt that it would be economic to build that far, it was not prepared to subsidize into the Peace river, which is a total of 271 miles from Prince George. The Prime Minister also said that in later years, if there should be some change in the situation, the government might have another look.
I point out to the minister that the admitted purpose has been to get a railway into the Peace river district so that there will be an outlet from that area to the Pacific coast by a direct route rather than having to go back to Edmonton and then from Edmonton either to Prince Rupert or to Vancouver, which is

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the case at the present time. The present Minister of Fisheries dealt with this situation very clearly in 1949. At that time the government was paying a subsidy of $15,000 a mile for the extension of this same Pacific Great Eastern Railway from Quesnel to Prince George, a distance of approximately 80 miles. The Minister of Fisheries, in speaking on that question, warned the government very convincingly that the fact that they were making this payment at that time must be considered as assuming the obligation to subsidize a railway to the Peace river. I have the discussion here. His statement will be found at page 1450 of Hansard for November 4, 1949. The important words which I wish to stress are these:
. . . when we are passing this appropriation I think we should be fully aware of all the implications, since we are committing ourselves to a policy of subsidizing the extension of this provincial railway.
Actually that was the situation in 1949 and it is the situation today. This subsidy should be made available for the whole extension into the Peace river district. I am not arguing at the moment anything about a subsidy to Alaska because that is not a practical question at the present time. But this line is no good at all if it only goes 50 miles north of Prince George. It has to go from Prince George through to the Peace river. The present Minister of Transport himself said last year, as found at page 6516 of Hansard of July 21:
As soon as we have further Information and further representations from the British Columbia government the matter will be re-examined and reconsidered.
That was a year ago and yet we find that the vote in the present estimates is only $500,000 which covers, I think, a subsidy for 20 miles. The vote last year involved a subsidy covering 10 miles, and it was only $250,000. I believe the government must face the fact that this whole extension should be subsidized. When the Minister of Fisheries spoke in 1949 there was a coalition government in power in British Columbia. I am not suggesting that influenced his views-


James Sinclair: It certainly did not.


Howard Charles Green: -or made any difference in his remarks but it certainly looks to me, as a neutral between the provincial government and the federal government, that one reason this subsidy is not being made available for the whole line is that there is now a Social Credit government in the province of British Columbia. I certainly do not believe it is possible for the minister to justify limiting this subsidy to the first 50 miles and I do not think it is possible for him to justify a refusal

to pay a subsidy on the whole extension when he is paying a subsidy on the whole extension in the province of Quebec.
I am not quarrelling for a minute with the subsidy for the line in Quebec. I think it is very appropriate. As a matter of fact, I think I was the first member in the house to insist that the line from Chibougamau to St. Felicien should be completed right away rather than being left in the air while the western half of the new line, that is, from the west into Chibougamau, was to be built. The original intention of the C.N.R. and of the government was that they would only build the line from the west, I think from Beattyville into Chibougamau, but as a result of pressure brought to bear in the house and by the residents of the Lake St. John area the government finally moved to build the whole line, including the eastern half from Chibougamau to St. Felicien.
I cannot see on what grounds the government can now refuse to grant this subsidy for the whole extension from Prince George into the Peace river area. I would ask the minister to tell the committee whether there has been any further consideration given to this subject and what the policy of the government is at the present time.


George Carlyle Marler: Mr. Chairman, we will talk
about the Chibougamau situation when we come to the next item. I do not want the hon. gentleman to walk off with the paternity of that branch line in the way he has just done but we might talk about that subject when we get to the next item. Hon. members will probably recall that last year the government announced, as the hon. member for Vancouver-Quadra has just said, simultaneously with the announcement concerning the Beattyville-Chibougamau-St. Felicien branch line, its intention to provide a subsidy at the rate of $25,000 a mile for the Chibougamau line and also for an extension not exceeding 50 miles in' length northward from Prince George of the Pacific Great Eastern Railway.
At that time the government was convinced from the information which had been placed before it and information which was already in its possession that it was doubtful whether an extension beyond 50 miles would be economic, and when I say "economic" I am thinking not in the strict interpretation of the word, that is to say, entirely self-supporting with a subsidy of $25,000 a mile. Because we believed on the information we then had that the 50 miles would be economic whereas a much greater extension would promise not to be economic, we limited our offer of assistance to 50 miles and to a sum of $25,000 a mile, which is the largest

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amount of subsidy in recent years at least the problem. If not and if the hon. gentleman that has been paid by the government in wants to put further questions to me, I shall respect of any project.	try to answer them.


Howard Charles Green: It is the same figure as the
Quebec subsidy.


George Carlyle Marler: Yes, but it is in fact the
largest amount of subsidy per mile applying to any project in recent years, and I would say perhaps for a good many years. We discussed this question of the P.G.E. subsidy last year. The hon. member of the Social Credit party who spoke just a moment ago spoke in rather glowing terms of the P.G.E. and its prospects but it seemed to me that his argument was rather contradictory in this sense. According to his argument here was a profitable venture. If it is a profitable venture, then it does not need a subsidy. If it is an unprofitable venture, then it does need a subsidy. The question is just how unprofitable it is going to be.


Bert Raymond Leboe: Mr. Chairman-


George Carlyle Marler: Perhaps if the hon. gentleman will let me finish he may find it will not be necessary to put his question. When we discussed the matter last year representations were made during the discussion that we should go farther than merely 50 miles, and so we ourselves asked the government of British Columbia to submit further facts, figures and information as to their own survey of the prospects of this particular region. The hon. member for Cariboo spoke a moment ago of the fact that the dominion bureau of statistics did not have any statistics for this area. I am sure he will realize it is not a matter of statistics but rather a matter of prospects. It is a projection of possibilities, an evaluation of what the future may hold.
We asked the provincial government to supply additional information. I say this by no means as criticism but merely as a statement of fact. It took the government of the province a long time to submit information to us in order for us to take a second look at this whole question. I should like to tell the members of the committee that we have gone very thoroughly into the further representations that were made by the province after considerable delay, and that the subject of providing an increase in subsidy-that is to say making it applicable to a greater extent of line than 50 miles-is under consideration at the present time. I do not want to express any final opinion in the matter because the matter has not yet come before cabinet. However, I do not exclude the possibility of a subsidy being provided for a greater length of line than 50 miles. I hope I have dealt with the significant aspects of


Howard Charles Green: I hope the government is considering a subsidy for the whole of the remaining mileage to the Peace river and not merely say for another 50 miles, making a total of 100 miles that has been subsidized. As I pointed out in my earlier remarks, this is not a railway to go 50 miles or 100 miles north of Prince George. The railway does not make sense at all unless it goes through to the Peace river, and it should be treated on that basis. I hope the further subsidy which is being considered by the government is a subsidy on the whole of the 271 miles rather than on only a limited portion of that gap between Prince George and the Peace river.


Bert Raymond Leboe: I should like to offer one word of explanation with regard to a railway being profitable and asking for a subsidy. Even if the railroad is a profitable scheme, and if it is going to save the Canadian taxpayers money-and it certainly is going to do so,-*


An hon. Member:: It never will do so.


Bert Raymond Leboe: -I fail to see why the Canadian government should not participate in it. It is like your senior citizen's pension without a means test. Everybody gets it whether they have money or not. In the cafeteria, even though I have $5 in my pocket, I pay the same price as does the fellow who has a dollar in his pocket. There is no question about it at all; it is a matter of principle.


[Stage Direction]
Item agreed to.
469. To authorize the governor in council to grant to Canadian National Railway company a subsidy of $25,000 per mile, but not exceeding $7,450,000 towards the construction of the line of railway referred to in chapter 49 of the Statutes of Canada, 1953-54, as branch line number 1 (described approximately as a line of railway from St. Felicien to Chibougamau and from Chibougamau to Beattyville in the province of Quebec); such grant of subsidy to be made in such manner and in such amounts and subject to such conditions, if any, as the governor in council deems expedient; estimated requirement for the fiscal year 1956-57, $2,725,000.
George Carlyle Marler: Mr. Chairman, I just want to deal with the suggestion made by the hon. member for Vancouver-Quadra as to his having been the cause of the government's decision to extend the old eastern section as well as the western section. I cannot admit the suggestion that it was the pressure either from the hon. gentleman or from members of the opposition that led to the government decision in that connection. Perhaps the hon. gentleman will recall that, when he made this assertion last year, I reminded him that I had also been in opposition and that I was familiar with the technique by

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which the opposition claims the credit for all that the government does.


Howard Charles Green: That is a very nice political speech, Mr. Chairman. The minister was not a member of this house when this question first came up. I am not particularly interested in getting credit or not getting credit. The Hansard record will speak for itself.


George Carlyle Marler: Hear, hear.


Howard Charles Green: When that bill came up for second reading I pointed out that if only the western half of the line were built, the result would probably be that the business from Chibougamau would be turned into the Toronto area, and I urged very strongly that the eastern end of the line to Lac St. Jean should be built at the same time. In that suggestion I was supported by the hon. member for Chicoutimi, various members of the Conservative party and, I think, by one or two of the Liberal members from the Lac St. Jean area. Then when the bill went to the committee we took the same stand again. We took it when the bill came back to the house. We took that stand throughout. While I am not particularly concerned about the paternity, I certainly do not want to have my child stolen away right under my nose. If the minister is sufficiently interested and will read Hansard for that time, I think he will find that what I have set out this afternoon is correct.


Mr. Harrison:: On item 469, Mr. Chairman, before we dispose of the railway services item, I have a few remarks to make. I think what I have to say is about as relevant to this item as to any that I can find in order to ascertain from the minister what I want to know. I should like to ask him a question with regard to the Northern Alberta Railway. This railway serves directly the northern part of my constituency. My constituents are rather concerned about the fact that the railway, after about 25 or 30 years, is still under construction. Being under construction after that period of time has elapsed means only that this is a device for limiting service and increasing the freight rate. For some years that might have been something that you could justify because it was regarded as a fur trade route that had served for Mackenzie and so on, but those days have disappeared.


William Alfred Robinson: Order. I am sorry to interrupt the hon. member but I must point out that this vote is strictly confined to the railway between St. Felicien and Chibougamau. I am afraid that the remarks he is now making are out of order on this item.


George Carlyle Marler: Make them under item 494, under board of transport commissioners.


John Hornby Harrison: Very well.


[Stage Direction]
Item agreed to.
471. Railway employees' provident fund-to supplement pension allowances under the provisions of the Intercolonial and Prince Edward Island Railway Employees' Provident Fund Act so as to make the minimum payment during the period January 1, 1956, to March 31, 1957, the sum of $30 per month, instead of $20 per month as fixed by the said act, $11,000.
Mr. Purdy:: I just want to say a word on item 471 as to the railway employees and old employees on the Intercolonial Railway, whereby we are bringing their pensions up to $30. That is not good enough for this day and age. I would ask the minister next year please to take under consideration increasing this vote to bring the pensions of those retired intercolonial railway men up to a little bit more than $30 and at the same time to try to see if he cannot bring their widows under the provisions of this fund.


Mr. Vincent:: With regard to the South Shore Railway, I wonder whether the men will be given any benefits since the railway-


George Carlyle Marler: Mr. Chairman, I am afraid these remarks have no relevancy to the item that we are discussing at the present time.


[Stage Direction]
Item agreed to.
General-
473. To provide for the expenses of an inquiry into the coasting trade of Canada authorized under the Inquiries Act, including the payment, notwithstanding the Civil Service Act, of honoraria or allowances as may be authorized by the treasury board to officers, clerks or employees permanently employed in the civil service for services rendered by them in connection with the inquiry, $32,000.
Mr. Bell:: I wonder whether the minister can tell us when we may expect some word from the royal commission on postal shipping?


George Carlyle Marler: Mr. Chairman, I am afraid I am unable to give a positive answer to the hon. gentleman. I have made some very casual inquiries to ascertain when the report was likely to come to hand, but I do not think it is likely to be much before the end of the year. I have not had any positive assurance from the chairman. I could not do more than merely hazard an expression of hope that it perhaps would be about that time.


Thomas Miller Bell: The minister does not anticipate any unreasonable delay in its findings?


George Carlyle Marler: I do not think any delay is likely to be unreasonable. I think that the members of the commission are very well qualified for the task they are performing. I think that any delay that might be so

called is attributable to the fact that they are giving the matter the most serious consideration.


[Stage Direction]
Item agreed to.
Air services-
474. Air services administration, $816,760.
Mr. Hamilton (York West):: Mr. Chairman-


Mr. Barnett:: I have one or two remarks that I should like to make on this.


William Alfred Robinson: The hon. member for York West.


John Borden Hamilton: I intend to talk about competition, but I did not know I was going to meet it so quickly.


George Carlyle Marler: You have a monopoly now.


John Borden Hamilton: There will be a monopoly for a few minutes, that is quite true. As a matter of fact I had prepared my notes for these remarks as long ago as March 16 and I have now had about six days of silent waiting so far as these estimates are concerned. Actually, I do not know whether this is a good day to talk about competition anyway because we seem to be facing competition with Marilyn Bell and the democratic national convention, so we find it fairly hard going right here.
I am not going to repeat what I have said before in connection with the overall competition picture in so far as our air services are concerned. As a matter of fact, I feel that the case for competition has been made out very well by several speakers in the house and certainly has been made out before the agency set up by the government to consider such matters, the air transport board. I should like to say, however, that the theory of competition in air transport matters deals with the protection of air routes and not with the protection of companies. I think that the whole idea is to ensure that a particular air route is allowed to develop so that adequate service may be obtained to any point on the route and it is not designed specifically for the protection of a company. Once it is assured that the particular areas in Canada do have adequate air transportation, then I think it is time that we looked at the position of the companies involved as to whether it might be possible to widen the scope of the service by the introduction of other air lines.
This particular matter, as it affects the whole industry from top to bottom, has been referred to in the press almost constantly over the last two or three years. As a matter of fact, two very able writers for our daily newspapers, Allan Kent of the Telegram and Muriel Snyder of the Globe and Mail, have,
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in a series of articles, set out very adequately the present position of the case for competition. I might refer to just a few remarks that they have made by reading perhaps a sentence or so out of each of the articles as we go along.
Here is one which says:
Consider the plight of the general manager of a laundry whose president insists he must use washboards and not washing machines-all because the president is interested in developing a washboard factory.
This reference, of course, is to the fact that the government owned air line was saddled with tourist class equipment long after the leading air lines in the United States were able to have much more up to date equipment.
Here is a second little paragraph which says:
Trade Minister C. D. Howe's determination to protect T.C.A. against competition wherever possible is depriving Toronto of the status of an international air terminus.
Here is another one:
A beautiful dream-quite an intriguing one, though some people thought it impractical-was outlined last December to the air transport board who promptly shattered it.
It was a plan to inaugurate an inter-city aerobus service across Canada from Halifax to Vancouver,
which would be something like street car service_
you d just hop aboard the next one to come along.


George Carlyle Marler: Will the hon. member permit a question? Is he personally in favour of the kind of service that Pacific Air Lines was talking about and which is covered by the newspaper clippings to which he just referred?


John Borden Hamilton: I would think that is an unfair question.


George Carlyle Marler: I will withdraw it, then.


John Borden Hamilton: I would think the question to be determined is what type of company should provide the competition, and that should be decided by the agency set up to consider such problems. I think it is well established that within government policy the air transport board is that governmental agency. I do not believe we here should decide that any particular company or any particular plan should be the one when such an agency exists.
I might go on to answer the minister by saying this, that the attitude of the government has been such that it would discourage almost any operator from making such an application to the air transport board. It might be wise, in view of the lapse of time since we had the air freight hearing in Ottawa, for the board, under its terms of reference, to hold a hearing to determine at this time whether competition on a national

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basis should be permitted. I might say that I am not exactly sure that the overall competition picture may require one service from coast to coast. It may be that there are secondary air companies which could provide this service on the basis of Winnipeg to Vancouver and another one from Halifax to Winnipeg. It may be that such competition now may consist of only two or three flights during the week during peak load periods. There appears to be a lack of space at peak load periods which could be taken care of without any detrimental effect to the government owned air lines.
I am not going to read the rest of these articles because apparently the minister does not find them too pleasant to listen to. I might say that one of them referred to the fact that someone had suggested in the house that perhaps we might even dispose of the government owned air lines to private interests. I think perhaps the writer was referring to the hon. member for York West. He asks who would buy it, principally because he says the return on the money is not great enough to interest investors. He points out that on a comparative basis the net return on the invested capital in comparison with other world operating air lines is very low. I am quite sure there would be an adequate number of people here in Canada quite prepared to invest in this type of enterprise. I might point out that there was an article in the Telegram just the other day which said that K.L.M., the Royal Dutch Air Lines, is prepared to issue common stock to the public and some may be sold in North America. So far as I recall, Mr. Chairman, this is a government owned air line and here is a situation where even Canadians may have an opportunity of buying into this company. I would suggest that there are plenty of patriotic Canadians interested in our air development who would be ready to take advantage of the opportunity to invest.
I may say I am pleased to see the Minister of Trade and Commerce has entered the chamber because I am speaking about one of his particular babies and perhaps my remarks should be addressed to him and not the Minister of Transport. There is another phase I should like to speak about in connection with competition and that is the international picture which is now developing. I believe that the gateway principle, in so far as international aviation is concerned, is going to be as dead as the dodo, the same as the steam locomotive. If we are going to pursue a policy of attempting to funnel international traffic by our own government controlled air lines into a particular port for embarkation overseas, then we are going to
[Mr. Hamilton (York West) .1
hold back the progress of international air travel in this country. It would appear that is the line we are presently taking. The Canadian Pacific Air Lines had great difficulty in reaching a stage where they could carry out overseas operations from Vancouver.
I know someone will say it is the international air transport association that effects and supervises the rates in connection with that transportation, but we have the situation -and I presume it is subscribed to and agreed to by our own national government air carrier-that even if you fly 1,500 miles less to go to Europe by Canadian Pacific Air Lines, you will have to pay the same fare that you would pay if you flew from Vancouver to Montreal and flew from there overseas. If that type of attitude is going to be carried out, as I say, it will minimize our chances of being in the forefront of international air travel development.
The same situation concerns our companies in connection with other runs; that is, the narrow point of view that we may lose eight or 10 passengers a week from Windsor to Toronto who take a trip to Mexico city prevents our international and other international carriers from landing in Windsor as well as in Toronto. Surely, that type of flight should be permitted to land in Windsor, Toronto and Montreal and surely the fortunes of our national air carrier service are not so tightly squeezed that they cannot stand losing the number of persons who once or twice a week travel between those cities to catch an international air carrier.


George Carlyle Marler: That was part of the agreement with the Mexican government. That was a condition imposed by the Mexican government, not by ourselves.


John Borden Hamilton: I would say this, Mr. Chairman. Probably this government did not waste any too much effort in ensuring that those stops were asked for and obtained in an international agreement.


George Carlyle Marler: Will the hon. gentleman permit me to interrupt him on that point? I am just going to ask him this question. As between Canadian Pacific Air Lines flying between Windsor and Mexico and the Mexican air lines flying from Windsor to Mexico, which line would the hon. gentleman use?


John Borden Hamilton: I do not know whether this question has anything to do with what I am saying, but I am quite satisfied that I would use Canadian Pacific Air Lines.


George Carlyle Marler: That was just exactly what the Mexican government thought. If the competition were between the two air lines from

between the same two points, Windsor to Mexico city, their air line would not get the business.


John Borden Hamilton: I am quite sure that with respect to the Mexican air line- if they have a minister of transport, and I know they have because I have been down there-if the minister of transport were asked the same question he would get the same answer, namely, that those who are flying from Mexico in all likelihood would have a preference for flying on his air line. Surely, if both carriers were accorded this privilege the public would have the advantage. Now, these particular observations apply not only to Toronto but apply, and will apply in the future, to cities like Winnipeg which at the present time might be able to have the advantage of direct service to Europe, which they have not at the present time.
In the foreseeable future, direct service will be available from the major cities in Canada, or should be available, if this government sees the light, for people to travel directly to Europe. When I say "direct service" I can easily see it happening to Edmonton. Certainly, I think it could be made available almost immediately there. It could be made available to Calgary and to cities of that kind. If we are looking ahead I do believe it is time that we dropped the gateway principle in so far as our international air traffic is concerned.


Mr. Howe (Port Arthur):: May I ask my
hon. friend a question? Would he arrange to let any foreign airline drop into any city it liked and pick up passengers?


John Borden Hamilton: Mr. Chairman,
I am having a very busy time with the government benches. No, I do not think I would let it drop into any city. I do not see any necessity for that question. I believe the traffic potential will be there. The question of how many lines are required to serve that particular potential may be surveyed by your agency and determined at that time whether it is ready to absorb, or at least fill, the demand for the service.


Clarence Decatur Howe: Regardless of what rights we have in the other man's country, I suppose?


John Borden Hamilton: No; I would think you would be bargaining for rights in the other country.


Clarence Decatur Howe: That is your idea.


John Borden Hamilton: I might ask the minister this. Does he not see the time in the future when one will take off from Chicago or Detroit and fly directly to Europe,
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and when one will take off in Toronto and fly directly to Europe? Does he not see that in the future as far as he is concerned?


Clarence Decatur Howe: No, I would not think so; no.


John Borden Hamilton: Well, then, I should say that the minister's optimism which is usually quite apparent in this house does not apply in the particular instance where it affects his government-owned airline which he has brought along, and I may say brought along very well, from infancy; but surely we are not going to pull down our sights at this stage and end it there.
Perhaps I might be allowed to go on. I think I have built up a fair case in the past on precedent and on quoting cases. I am not going to do that today, but I should like to repeat, if I may, the Prime Minister's words, dealing with competition in the air field. This is what he said before the air industries and transportation association in November, 1953, at which time there was no decision yet in the application for a competitive air freight system.
I will assure you that the government does not necessarily intend to guarantee every operator a permanent monopoly in his area.
Let me assure you that whichever way the decision goes now-
And he was referring to the Canadian Pacific Air Lines case.
it will not in the long run be a decision in favour of perpetuation of monopoly conditions. I have stated many times, before representatives of other industries that the government to which I belong believes that as a general rule the public can be best served under competitive conditions. And I believe that once the air transport industry is soundly established, the decisions to be made by any Canadian government should be in favour of opportunities for competition.
And in view of the tremendous development of our resources that has been taking place, a development which shows no sign of relenting, the demands for the services of commercial aircraft should increase to such an extent that increase in competition will be both desirable and beneficial.
I do not think I have to look any further for an authority in connection with this situation than the Prime Minister of this country, Mr. Chairman, and I ask again, as I have asked before, have we not reached the stage in our development covered by the quotation I have just read?
This particular feature does not simply affect the operation of a couple of air companies. Clamping down on competition at the top is felt right through the industry. If one has travelled through the north country he will have seen that there has been a foreclosure to a great extent on the expansion of adequate air services. Of course, if we are to have this service we have to improve our airports. I know the minister has said that

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conditions in Europe are different. They may have one major airport in a country and that is all they have to worry about and they are really doing a nice job on it; whereas we have 3,000 miles and many airports to look after. But I for one find little excuse for the condition, as an example, in which we find the Malton airport today. I have articles here which say that agreements are being reached and that plans are going ahead. As a matter of fact, Malton is a disgrace to the city of Toronto. The airport facilities there are entirely inadequate, and the plans which are being undertaken now to push out a few partitions leave conditions still in the position where people are being herded in and herded out like cattle. In addition, I may say, even the washrooms are a disgrace. It does not matter what time of the day you go there, they are never clean. I do not blame the contractor, if there is a contractor on the job. I simply say the facilities are so inadequate that it would be almost impossible to do anything about them.
When I read a heading in the Telegram about what we are looking forward to, about Malton being one of the great airports of the world-that is, provided we can have the Minister of Trade and Commerce raise his sights a bit-if we are getting ready for that stage then I should say we certainly are not making very rapid progress.
There is one other matter I would like to speak about before I sit down and that is the question of over-all safety. Very seldom now does one leave a civil airport without hearing the whine of jet aircraft in one's ears. I noticed an article not too long ago which gave an indication that jet military aircraft were not going to be allowed to operate from civilian airports. When I asked the minister about it in the house I was informed that there were no plans concerning this.
I think people should realize we are entering a new stage in air transport development when we can talk about jet military aircraft and super constellations in the same area that may be approaching each other at the same speed as a Colt automatic bullet. It takes at least three miles for a pilot to be able to see the image and transfer it into action by avoiding danger that might be involved.
In addition to this we have had two investigations in the United States which have disclosed that there is an indication that the turbulence set up from the wing tips and jet engines of jet aircraft constitutes a great danger to lighter types of planes. The boards of inquiry have come to the conclusion in two cases that the only explanation is that getting into such a situation has resulted either in complete loss of control of the aircraft or disintegration of the plane itself.

I think there was some indication of that happening in the Toronto area in the loss of an Otter aircraft not too long ago.
I would suggest, sir, that consideration be given immediately to the separation of military and civilian aircraft at civilian airports. This may not mean a great expense because we have a great many unused airfields some of which are in commuting distance of our major cities. With car travel as it is today it would be possible to commute back and forth.
As far as the safety situation is concerned I believe that in Washington they are presently working on a reduced speed plan not just in the immediate airport area, which I understand to be within three or five miles, but in the general area of about 30 miles, and they are extending their landing pattern to that extent. I understand that good results have been obtained in Washington as a result of this reduction in speed. It appears to me that something of that nature is necessary over and above the separation of flying heights which has been the plan of the department and by which certain aircraft fly above 9,500 feet. In fact, I do not think this alone will overcome the real danger which exists in the airport areas.
One matter which comes to mind in connection with the dangers of the situation is the matter of investigations of accidents. I am not going into a lengthy discussion of what the Canadian pilots association has charged plane operators and the government with or the answers that were obtained, but I think it is notable that in one case partial responsibility was placed on the department. As I understand it, this was the only occasion on which an outside party has been appointed as a member of the board of inquiry.
In many instances we do not appear to receive any answer as to the reason for these accidents although the R.C.A.F. has a good record as far as investigations are concerned. I understand they are able to trace down the cause of the accidents in almost 90 per cent of the cases.
I think that in the future if there is an indication that the operator is at fault there should be a new method of assessing the situation and conducting the investigation. A board of inquiry might include an officer from the R.C.A.F., a member from the Department of Transport and an outside party as well. If this procedure were followed it seems to me we would be able to leave a better taste in the public's mouth concerning the findings of many of these investigations.
In conclusion I would repeat that I am hoping the vision the Minister of Trade and

Commerce displayed in 1937 and 1938 will not be restricted in 1956. We are on the threshold of great developments in the air transport field and at one time this country was rated No. 1 in this regard. With the great stretches of territory we have in Canada it is most essential that rapid development take place here. I hope we lift our sights and insure that we will soon be in the top spot again.


Mr. Gillis:: Mr. Chairman, I merely want to obtain some information. I agree with what was said by the hon. member who has just resumed his seat concerning the fact that the pattern of air travel is changing rapidly and it is in connection with this change in pattern that I would like to get some information from the minister.
As the minister is aware, the airport at Sydney is one of the main stations for the overseas trade. Most of the ships from Europe, England and many from the United States returning from Europe use that port. It is pretty busy all the time.
I observed an item in the press this morning to the effect that T.C.A. proposes to put into service a larger jet ship which would carry 120 passengers. In view of such developments I am wondering about the adequacy of this particular airport to retain its place of importance in the overseas trade.
The runways at that station are about 8,000 feet in length and I am informed it will require a runway at least 4,000 feet longer than that to accommodate the type of aircraft that it is proposed will be in use in the not far distant future.
My reason for raising the matter at this time and seeking to obtain information from the minister is that this is a question which has been agitating the board of trade in the Sydney area for some considerable time. They have been in touch with the department with a view to ascertaining if it is the plan of the minister's department to make any extensions or renovations at that airport.
In the same connection there is another matter I would like to mention. The passenger building at that airport is an old converted hangar. The general set-up there is, I think, as good as any in Canada; certainly it is better than the airport at Malton or Dorval. The service and catering are both good. They are able to handle the immigrants arriving at that station very expeditiously. However, the roof on that old hangar is nearly as high as the roof of this chamber and the old roof girders are exposed. It would not be an expensive job to cover up that overhead mess. The fact that it is uncovered means that the building is cold
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and drafty in the winter months and it is difficult to work under those conditions.
I took the matter up with the minister's predecessor on several occasions and I thought I almost had it nailed down, but Mr. Chevrier went on to other work. Is the minister in a position to give me any information as to whether there are any plans with respect to the expansion of the airways and the renovation of that station and is he prepared at least to think about doing something about what is a very bad sight?


George Carlyle Marler: If I might deal with the question the hon. member for Cape Breton South just raised, I should like to tell him in a general way that the introduction of jet aircraft is unquestionably going to thrust upon us a very considerable burden in the matter of the extension of runways at a great many airports in Canada. If I were not optimistic in my outlook, I might be somewhat oppressed by the magnitude of the expenditures that seem to be in prospect. But I think the hon. member will agree that these difficulties in anticipation are always greater than they are seen to be when we are faced with reality.
Bearing that fact in mind, I am not discouraged or oppressed by the magnitude of the expenditures that unquestionably we shall have to make in order to meet the changed conditions that jet aircraft are going to bring about. Having that principal thought in mind, I am quite sure that the hon. member will agree with me that we must place the emphasis first on the essential facilities, and by that I mean runways and facilities for safety in the air, rather than on what I might describe as conveniences.
The hon. gentleman has referred to the terminal building in Sydney, which I know, though not nearly as well as he does. I can think of several places in Canada that would be quite happy if we could transport the building at Sydney and place it elsewhere.
I am quite appreciative of the fact that the people of Sydney would not care for the idea, but the building is by no means a bad building, and I would doubt very much if I should hold out any real hope of making any substantial change to the building in the near future. I am quite sure that members of the committee will agree with me that the emphasis must be on the facilities for the aircraft themselves, so as to make air travel possible, rather than on providing excellent terminal facilities.
Before I leave that subject, I should like to say that very recently we initiated discussions with T.C.A. as to the works which they believe will be necessary in order to

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meet their program of expanded services and at the same time to meet the different operating conditions that will be created when we have jet aircraft, when we have to increase the number of points served by Viscount aircraft and when we consider particularly the places that will be served by these long-range jet aircraft. Those discussions are going to be resumed very shortly, but I will say that there will be an extensive program of work to be carried out.
Now I come back to the question of competition, which the hon. member for York West mentioned in his remarks. I am not going to try to deal with the subject quite as fully as he has done. I am quite ready to admit that there is much to be said for those who argue in favour of competition but I do not think that those who are arguing for competition are being realistic about the matter. I think their arguments are based primarily on theoretical considerations and do not take account of the realities of the situation in Canada.
I know that the hon. gentleman knows full well that it is quite difficult, looking across the whole field of national and international aviation, to find countries where there are truly competitive services. We know, of course, that in Europe there are competitive services between points such as London and Paris, London and Zurich, Athens and Rome, and one could go on multiplying the examples very easily, but when you look into those cases you find that the so-called competition exists because the service was established as a result of a bilateral agreement between the two countries concerned. Each country, quite naturally and quite properly, was interested in providing its service through its national airlines so that it could share with the airline of the other country concerned the business that was there to be developed.
However, though I have looked very carefully to find examples that would seem to justify the opinions of those who believe that we should have competition of the same kind in Canada, I cannot say that I have succeeded in finding any example that seems to me to have any very real merit. I do not want to bore the members of the committee with a lot of figures, but when one examines the volume of traffic carried between, let us say, the European capitals or between important cities in the United States where there are these competitive services, we find that they are so much greater than anything we have in Canada that they invalidate entirely the arguments in favour of competition in Canada right across the country.

I am going to give just a few figures. I have not the figures for 1955, but in the case of the service between London and Paris in 1954 the total number of passengers carried was 415,000. As far as I can make out, that is the biggest of the intercity services in Europe. Let us look at some of the figures in the United States. Between New York and Chicago there are four major airlines operating services. When you look at the total of their figures you find that in 1954 these four lines between them carried 541,600 passengers. Between New York and Boston, another service where there is heavy traffic, three airlines divide up the business, and there were 534,600 passengers in 1954. Between Montreal and New York, a service which was divided between Colonial and T.C.A., there were 166,700.
We have no service in Canada that comes anywhere near to approaching those figures.
I have figures here for the passengers between Toronto and Montreal. I do not think it includes people who would be travelling from Montreal to Toronto and on to Winnipeg, but it gives a good idea of the volume of business between Montreal and Toronto. In 1954 the total was 101,000. Here we have an example of the two cities between which the traffic is at the highest point, and the total is only slightly in excess of 100,000, whereas, as I pointed out, the London-Paris service is over 400,000, the New York-Chicago and the New York-Boston each over 500,000.
I am not trying to argue that it would not be possible in theory to establish competitive services between Montreal and Toronto but I think it is foolish to consider only this one rather small aspect of the whole problem. What is important is that as Canadians we should take an over-all view of the situation. If we do that we can reasonably say to a nationally owned line: We want you to provide a transcontinental service and we want you to provide other services which are not inherently paying and are not inherently economic. I do not believe we can expect that to be done if we are going to say the field is open, anybody can compete, and whoever can stand the competition wins out.


John Borden Hamilton: May I be permitted a question?


George Carlyle Marler: Certainly.


John Borden Hamilton: I do not think we have suggested that just anybody should come into the picture. Would the minister answer this question. If we have eight transcontinental flights today and it becomes apparent that two more are needed, would there be any detrimental effect on the

nationally owned air line if one other operator, no matter whom it might be, were permitted to handle those two extra flights?


George Carlyle Marler: I suppose it is a question of degree. It seems to me that when one looks at it in the abstract one might be inclined to say that it would not make any difference, but I think when you come down to examining it you will find that the moment you establish two air lines you must immediately establish two ground organizations, and when you establish two ground organizations then, I think, you have ultimately to divide the business between the two operators. When you do that you come to the point inevitably, I think, that both cannot operate at a profit, which means that you have a choice between competition and a subsidy on the one hand or the kind of thing we have now with service at cost to the Canadian people.
I think that is the essence of the matter, and quite candidly I believe that the policy we are now following with respect to T.C.A. is conducive to the development of civil aviation in the best interests of Canadians. I cannot believe that competition can have any other effect than that of raising the cost to Canadians either through higher fares or through the necessity of providing subsidies to keep the operators going.


John Borden Hamilton: How does the minister reconcile his closing sentence with the statement made by the Prime Minister three years ago?


George Carlyle Marler: I have read what the Prime Minister has said, not only on the occasion to which the hon. gentleman referred but on other occasions, and I did not find anything in what the Prime Minister has said that suggested that any time in particular had been fixed when competitive services would be instituted. When the Prime Minister spoke in the house on November 16, 1953, on the question of competitive services he quoted what Professor Curtis, I believe, had said on the subject and I do not see any harm, even if it does take a minute, in putting on the record again the words the Prime Minister cited. The Prime Minister said that the matter had been put in a manner that had made some impression upon him, and then he quoted these words:
Competition is only useful for what it achieves. If it achieves greater efficiency, lower costs and charges and better service, it is an admirable principle to insist upon. But if it achieves overexpansion of expensive facilities with division of the market amongst competing carriers, it will lead to heavy burdens on carriers, shippers and taxpayers alike.
I do not think I can improve on that quotation, and I think it shows very clearly what was in the Prime Minister's mind at that time.
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Clarence Gillis: The minister's answer to my question was not very informative. I asked him a specific question with respect to a specific airport. Press dispatches I have seen would lead me to believe that the Sydney board of trade is afraid of the airport there being by-passed unless some renovations are made. I should like to ask the minister if there is any possibility of that happening.


George Carlyle Marler: I wish I were sufficiently
omniscient to be able to predict the future accurately. I think a great deal is going to depend on the pattern of flying that develops once jet aircraft go into operation. Their range and speed are so much greater than that of aircraft now flying the north Atlantic. They are talking, for instance, in the case of the DC-8 of a speed of 600 miles per hour, and I should not be at all surprised if we find, just as the hon. member for York West suggested a little earlier, that we may have flights leaving London and flying directly to Montreal without any intermediate stops.
What is perhaps more important is the situation at the moment in Sydney, and I do not hesitate to tell my hon. friend that Sydney is on the list of airports at which T.C.A. is asking us to do some work. I do not think it is contemplated that there should be a runway extension of 4,000 feet. I do not know how long the existing runways are, but I do not think it is contemplated that it should be quite as much as that.


John George Diefenbaker: Mr. Chairman, I must say that the arguments advanced by the minister in opposition to the need of competition for Trans-Canada Air Lines seemed to me to lack the cogency and logic usually exhibited by the minister. He seemed to be labouring at some length and with considerable diffidence to advance the argument that there would be no improvement in air service in the event that there was competition.


George Carlyle Marler: I do not think I said just that.


John George Diefenbaker: No, the minister may not have said quite just that. He contended that if there was opposition subsidies might be necessary.


George Carlyle Marler: If there was competition subsidies might be necessary.


John George Diefenbaker: Yes. He joins the two together.


George Carlyle Marler: Higher fares or subsidies.


John George Diefenbaker: It seems to me that argument is one that would be dissipated very shortly if an opportunity were given for competition. I am one who uses Trans-Canada Air Lines a great deal and I have a

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high regard for the officials of that organization. I believe there would be a vast improvement in the service with competition because, human nature being what it is, an organization that has a monopoly over a service function such as Trans-Canada has does not exert diligence like that exerted by those who are subject to competition.
However, it was not that matter I rose to discuss for a moment. I wish to refer to the need for establishment across the northern areas of Canada of a freight or cargo line. So far as the western provinces are concerned, generally speaking Trans-Canada today serves the southern portions of those provinces. The minister will immediately say that Trans-Canada passes through Saskatoon. Saskatoon is at least 250 miles south of the centre of Saskatchewan. That gives one some indication of the fact that the concentration of Trans-Canada service is in the southern portions of the western provinces.
Two or three years ago an application was made on the part of Canadian Pacific Air Lines to permit the establishment of a regular freight or cargo service from Montreal to Winnipeg, thence through northern Saskatchewan, thence to Edmonton and finally to Vancouver. The development in the northern portions of the western provinces in recent years has been phenomenal. Anyone who has not visited northern Alberta, northern Saskatchewan or northern Manitoba has no conception of the mineral development that is taking place. Surely we in the western provinces, in those northern portions that deserve service, should not be denied cargo freight service when Trans-Canada Air Lines itself refuses to inaugurate such a system but adopts this attitude toward a competitor that is not asking for any subsidy but wants to establish a regular freight cargo transport service.


George Carlyle Marler: Where does the hon. gentleman mean with respect to this cargo service? Is it transcontinental or what?


John George Diefenbaker: As I recall it, the original application was from Montreal to Winnipeg or to The Pas, Prince Albert, Edmonton and then on to the coast. Trans-Canada Air Lines is denying the development that should be available in those northern portions of our country by adopting a dog in the manger attitude in this regard. It refuses to enter the field itself. Canadian Pacific Air Lines does not ask for any subsidy. It asks merely for the opportunity to perform a service that is necessary.


George Carlyle Marler: You mean they did ask. They are not asking now.


John George Diefenbaker: They what?


George Carlyle Marler: They did ask. They are not asking now.


John George Diefenbaker: Oh, that is not correct.
I say that with great deference. They asked the right to establish a line.


George Carlyle Marler: That is a question of the past but not of the present.


John George Diefenbaker: I am going to ask the
minister whether further application has been made. As I recall the matter, when they made their application two and a half or three years ago Trans-Canada Air Lines said "No, under no circumstances". We are being denied-I refer to Winnipeg; The Pas; Prince Albert; I am not so sure about North Battle-ford, whether it was to connect there or not; Edmonton and thence on to the coast-the freight cargo service for which there is available traffic sufficient to permit Canadian Pacific Air Lines to inaugurate it. However, it is faced by this monolithic organization that refuses to go into the field itself and stands in the position of guard against those who would.
The boards of trade throughout western Canada particularly have asked that something be done in this connection. There can be no justification for the holding back of advances in transportation on the bare supposition that some time Trans-Canada Air Lines will feel constrained to establish a government freight cargo service. I care not where one goes throughout western Canada, in every province there is a constant and continuing demand for service which is being denied. Because of that denial there is denied to vast areas the advancement and development that would otherwise take place.
When my hon. friend advances arguments in opposition to the establishment of a competitive passenger line, his arguments cannot in any way apply to a freight cargo line for which there is a demand; for which there have been repeated requests from boards of trade everywhere; and in respect of which mining corporations, expanding as they are, provide a fertile source of traffic. But Trans-Canada Air Lines stands as a guard against that development. It was never intended that so paradoxical a situation should be created that the creature of the government should deny expansion in this country because it stands, as it were, as a bulwark against private enterprise performing a proper, necessary and desirable function.
The minister says there has been some change in the application.


George Carlyle Marler: No, I did not say that.


John George Diefenbaker: Two years ago or thereabouts the Prime Minister said that reconsideration would be given to this question.

At that time he indicated that that reconsideration would not be far removed. We have now waited for a year and a half and there has been no change in so far as the public is concerned. I would ask the minister to explain why this situation should exist. With the vast developments that are taking place in my own province and which are making for a potential uranium production unequalled anywhere in the world; when in the neighbourhood of Lac la Ronge vast copper finds are being made; when in the neighbourhood of 60 miles northeast of Prince Albert a tremendous area is now being weighed with a view to ascertaining its potentialities as one of the great iron-producing areas of Canada outside of the Labrador area and the province of Quebec, when Trans-Canada Air Lines is unwilling to take the step which is so necessary, namely to inaugurate a freight cargo regular service, why should they not be willing to step aside and allow private enterprise to do it, whether it be Canadian Pacific Air Lines or another air line, whatever one is prepared to give the best service, and having regard to previous performance and financial reliability? Why is it that this service should not be permitted?
I would ask the minister to go into this question at some length, for it represents one of the major reasons-I refer to the failure to establish this service-that we in the western provinces find ourselves discriminated against in respect of freight rates to a degree that in other provinces of Canada would not be tolerated.


George Carlyle Marler: Mr. Chairman, I am not going to take very much time to reply to the hon. gentleman, despite his invitation that I do so at length. The hon. gentleman's speech might well have been made in 1953; but the conditions in 1956 are not the same as those that existed in 1953. The hon. gentleman speaks of T.C.A. having refused to go into the field themselves. He says he does not care where the services go, that we should consider this application of Canadian Pacific Air Lines.
There is no application of Canadian Pacific Air Lines that is currently before the air transport board for a cargo service. The hon. gentleman knows that there was one in 1953, but that it was rejected. When an application is rejected, a new one must be made. No new application has been made. But the most significant fact that has escaped the hon. gentleman entirely is that there is daily- from Montreal to Toronto, to Winnipeg, to Edmonton and Vancouver-an all-cargo service operated by Trans-Canada Air Lines. I do not see how he can suggest that we should have another. The great difficulty about an 67509-4691
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air cargo service is that the traffic is strictly one directional; it moves westward, but very' little moves eastward.
My own assessment of the situation, without having studied the figures with great care, is that there is enough for one, for one flight per day, but not for two. So far as the service to some of the other points the hon. gentleman mentioned is concerned, for the most part Trans-Canada services are east-west lateral services, whereas the private operators are carrying on, I think at some profit to themselves, operations in a north-south direction or vertically. How can the hon. gentleman suggest, when he already complains against the T.C.A. monopoly, that T.C.A. should invade these fields which are taken care of by private operators? All I can say, Mr. Chairman, is that the hon. gentleman has gone astray owing to the fact he does not know about this cargo service which is run daily.


John George Diefenbaker: I know about that, but that does not help us at all in the northern part.


George Carlyle Marler: I take it the hon. member for Prince Albert is also saying that somehow or other we should also have the Canadian Pacific in there. There is nothing to stop Canadian Pacific Air Lines from making an application. I doubt if they want to.


John George Diefenbaker: My hon. friend has removed himself from the ambit of my argument. I am speaking about the northern parts of Manitoba, Saskatchewan and Alberta, thence to Vancouver, not about the southern part. The southern parts of those provinces are well served by T.C.A., but T.C.A. is not in the northern part; and because T.C.A. is not in the northern part we are asking, whether it be Canadian Pacific Air Lines or some other private corporation, that there be established a cargo freight line through the northern parts of those provinces.


George Carlyle Marler: Many of those points have service already, including C.P.A.


John George Diefenbaker: When the last application was made, you opposed it.


George Carlyle Marler: We are talking about the 1953 application, which was for an east-west service.


John George Diefenbaker: I am not speaking about north-south, I am speaking about east-west.
I mentioned Montreal to Winnipeg to Le Pas and so on through the northern portion to Vancouver. The minister said there has not been a recent application. The Prime Minister indicated that reconsideration was being given to the question and there might not be opposition.

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George Carlyle Marler: When did the Prime Minister say that?


John George Diefenbaker: About a year and a half ago; it would be in May, 1955. I am glad to hear that suggestion. The minister says that no application has been made recently. A company is not going to make application knowing that it is going to be opposed and that the same result is going to be achieved which was achieved the last time. There is no use in an applicant, however worthy, butting its head against a stone wall of opposition. The air transport board will not consider the application if it is a matter of government policy that this northern route shall not be permitted for air cargo.
The minister says let us talk about the situation today. I give him an opportunity to talk about it. If an application were made now to the air transport board for a northern route, would the government take the same stand it did two and a half or three years ago and oppose it, or does the government intend to adopt a disinterested attitude in regard to such an application? That is bringing the question right up to date, and I thank the minister for suggesting it be brought up to date. What is the government's attitude now?


George Carlyle Marler: What the hon. member is suggesting is that I should decide now what might be the circumstances if Canadian Pacific Air Lines made an application to establish an east-west cargo service. First, in my opinion, it is very unlikely that Canadian Pacific Air Lines will ask for the right to carry cargo from Montreal across the country to Vancouver. I think they would have been very sorry if their application had been granted in 1953. I say wait until we see what is their appreciation of the present situation before I attempt to say what the government will do.


John George Diefenbaker: I have just one more question of the minister. What is government policy? You do not have to wait and see to know what government policy is. What is government policy now with reference to allowing a competing trans-Canada route for cargo transportation east and west which will not cover areas that are covered by Trans-Canada but will cover' areas that today are not receiving the attention they should receive in this regard? What is government policy today? If the minister will say that, then the whole thing is clarified. I was invited by him to bring it up to date, to 1956, and I am glad to do so. What is the policy now?


George Carlyle Marler: The hon. member for Prince Albert thinks he has just uncovered a gold mine here. I will not hesitate to answer his
flVBr. Diefenbaker.]
question if he will be more precise as to the points to be served; if we know what traffic is available and who is at present carrying it and where the traffic is to originate. Then we will have an opportunity of knowing at least what are the facts. If the hon. gentleman would like to have my opinion as to whether or not, on a transcontinental basis, there is enough business for two carriers, I would express the opinion that there is not. I do not think the government would encourage an applicant to try to divide what is not sufficient business for one carrier. I do not think it would make sense that we should have two carriers taking care of what is not enough for one.


John Hornby Harrison: I am very pleased, Mr. Chairman, that you were not able to see me a little sooner, because it has given me an opportunity to listen to a very excellent debate and, so to speak, make possible a very good preface for something I want to discuss. I am not perturbed by the troubles that are brought forth by the hon. member for York West and the hon. member for Prince Albert even though I am, as they are, interested in free enterprise. I have, like the hon. member for York West, attended the committees where we have discussed T.C.A. and all the relative factors. In view of this I have to go along with the minister, and I think he made a very able reply. I appreciated very much the quotation he gave in reply from the Prime Minister regarding air transport matters. I think that, in a brief way, covers what should be our aim in all air matters.
Just to show that I do subscribe to the free enterprise theory in some air transport matters I am going to register a complaint about air transport in the northern part of my riding, which extends into the province of Alberta. I think this complaint will fit into the delineation of the remarks of the Prime Minister as to what constitutes something that should be under free enterprise. This is very important to the area at Beaver-lodge and Uranium City which, over the past two years during the development of the uranium mines, has come into the air transport picture in a rather big way. I doubt very much if there is any place in Canada which continuously has an airlift of freight into it that this place has.
I want to talk about government policy with regard to air freight going into there and some of its detrimental effects as now constituted. I hope the minister will have a new look at this policy. I can see why it was instituted in the first place and maybe why it has been continued up to the present

time, but I think if the facts are considered now there may be some reason for changing the policy somewhat.
On July 19, 1955, an application was heard in Edmonton by the air transport board for a second air line to carry freight from Edmonton into Uranium City and the Beaverlodge area, roughly 400 miles. Under the original policy Canadian Pacific Air Lines were granted a sole charter into that area. I can quite recognize why that was good government policy in the first instance. It was a new and embryo country, particularly a new and embryo industry, and it was not known whether there was a lot of uranium there or maybe not quite so much. The main interest was to get a company which could perform a service in that area and would guarantee to maintain that service. Therefore I can see the point in making an agreement with a company such as Canadian Pacific Air Lines that was in a position to give that kind of service.
We have now had it for a period of three or four years, and in the light of our experience we can now see that it is a highly profitable proposition as far as Canadian Pacific Air Lines are concerned, or should be. The hon. member for Prince Albert mentioned subsidies to Canadian Pacific Air Lines. I can assure the committee that if all the lines are like that one we would not need much in the way of subsidies. They charge 12 cents a pound or $240 a ton from Edmonton to Uranium City.
At the hearing before the air transport board another line, I believe Associated Airways, wished to put freight over that same route northbound for 6 cents a pound, or just half the Canadian Pacific Air Lines' rate. Nothing was heard of that for some months, though I believe they made a pretty fair case before the air transport board. I believe the air transport board was considerably impressed, and thought this might be a good thing to grant. To this day you cannot tell the people in that area that it was a coincidence that there was a cabinet meeting on the morning of November 30, and the air transport board's decision was rendered that afternoon in a negative way.


George Carlyle Marler: I can assure the hon. gentleman that the cabinet does not have any power of review over the air transport board's decision. What the hon. gentleman is implying was a pure coincidence.


John Hornby Harrison: That is just exactly the interjection I wanted, to disabuse that idea in that area. I have been trying to disabuse it myself. I hope they will take the minister's
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word where they would not take mine. However, this double air freight rate is charged there by, as you might say, government decree, because this other company was prepared to operate in there for $120 a ton or 6 cents a pound, compared with 12 cents a pound or $240 a ton charged by Canadian Pacific Air Lines.
There are other yardsticks to use to find out whether or not this can be done. In the recent committee on research I asked the chief of Atomic Energy and of all our uranium works, Mr. Bennett, why his Eldorado Company did not patronize Canadian Pacific Air Lines. He said, "It costs too much". That is exactly the answer I expected. If you examine Eldorado's operations you will find that they have been forced by this policy to put in their own air line, as other uranium companies have, if they are big enough to own an air line. Economics force them to do it, because no mining company wants to go into the air transport business. They are miners, and they want to stay in the mining business. Such companies as Gunnar have done that, and now because of this policy Lorado, which is building a big new plant for uranium production, are putting in their own air transport service.
I think if you will look into the operation of Eldorado's air arm you will find that they have been transporting their own goods at something in the neighbourhood of $100 a ton, or 5 to 5J cents a pound. They are not an air line exclusively; therefore the question might be asked as to whether they function just as smoothly and economically as a proper line would. This policy of agreeing to a certain rate, and theirs is $240 a ton, puts companies in this position. Lorado, I may say, went to Canadian Pacific Air Lines this year and asked whether they would give them a special rate if the mining company gave them all their business at the new mill going in. They said yes, they would give them a rate of $240 a ton, or 12 cents a pound, which is exactly what they charge all the companies. Another company was prepared to do it for half that, a sound company.
I believe other companies besides the one I just mentioned are prepared to go in and do it for half the rate charged right now. I think we can show that the air arm of the government's own company, Eldorado, are putting it in there for less than 6 cents a pound, but we must also keep in mind that they are allowed accelerated depreciation on their aircraft, and so on. Therefore I do not think it is going to be difficult to show that a second company could well make money at the 6 cents a pound or $120 a ton rate.

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The man on the street up there who is not able to put in his own air line has to pay the Canadian Pacific Air Lines' rate. The fact is that practically all groceries and perishables have to go in by air, and the ordinary man on the street is compelled to pay 60 cents a quart for milk, for instance. This is an item that is a good example to everybody, because it brings home to everyone just what it means to that area. It is not the doubling of the truck rate or the doubling of the rail freight rate, which are peanuts compared with the doubling of the air freight rate. The average person thinks that if this other company had been allowed to go in and compete, milk would be 35 cents a quart instead of 60 cents.
I was happy to have the minister read the observations of the Prime Minister on this very point, because it gives me some ray of hope that this is not a permanent situation; that another look will be taken at it, and that is all I am asking. All I am asking is that it will be given another look, in view of all the factors. I think it can be proved that other companies can operate at a profit at the rate at which they said they could operate.
These are some of the reasons they should be able to operate at a profit. The picture is rapidly changing, particularly with respect to uranium shipments. It is quite likely that the Minister of Transport will have to confer with the Minister of Trade and Commerce, because they are both concerned in it. Uranium production is increasing very rapidly in that area. Gunnar is going to double the size of the plant it put in last year. The government's Eldorado plant is being tripled in size this year, and Lorado is putting in a brand new plant, with the result that for a little while we are going to have an effect something like the effect of iron ore itself on the St. Lawrence seaway. Within a little while the majority of freight is going to move up river on the St. Lawrence, with the advent of full production of iron ore.
With the advent of full production of uranium, which may take place in about 18 months, the southbound freight will exceed the northbound freight. These companies which are prepared to go in and cut the northbound freight rate in half are prepared to bring out the concentrate, as I understand it, and there will be a volume of between 20,000 and 40,000 pounds a day within the next year and a half or two years. They will have to pay something between 2 and 3 cents a pound.
I asked Mr. Bennett if he would be interested in prices of that sort, and he said definitely they would be. One thing disturbed him somewhat, and that was how they were

going to get the concentrate out of Great Bear lake, which is a separate operation; but I think that could be overcome all right through some free competition in that area. Whoever got the contract for hauling the concentrate out of Gunnar and Eldorado and these other places would, I think, give a fairly good rate on hauling it out of Great Bear as well.
I hope the government will take another look at this policy of maintaining the double air freight rate up there, because it is not a small consideration. This is an air freight rate and what results is that $120 is added to the cost of every ton of groceries and the necessities of life that go into that area; and this has been done by the decree of the present government. It has had the result that companies have had to put in their own air lines, whereas the ordinary working man up there cannot take advantage of the volume of freight that is going in. If there were competition everyone in that area could enjoy the advantages of this volume of freight that is moving up there.
I hope, Mr. Chairman, the Minister of Transport will get together with the Minister of Trade and Commerce and review this policy in the light of the facts I have mentioned, which can be easily ascertained and verified.


Thomas Speakman Barnett: Mr. Chairman, I was quite interested in listening to the reply the minister made a while ago to the hon. member for Cape Breton South and in hearing him say that he intended to place the emphasis on providing facilities that will make travel by aircraft possible, because that is just what I want to talk about. I might say that by and large the area I am referring to would be quite satisfied with one good air service. We are not yet at the stage where we are worrying about two or more.
The minister may recall that earlier this year I exchanged some correspondence with him with respect to the establishment of an aeroplane float at the settlement known as Whaletown on the coast of British Columbia. In the last letter I received from him concerning this subject some little time ago he said he was having a review made of the matter and expected to inform me about it later.
I am not rising on the subject of the Whale-town aeroplane float at this moment primarily because I want the minister to give me an answer concerning this particular float on the floor of the house today,* but I am rising at this time because I do feel the provision of aeroplane floats appears at the moment to be in somewhat of an administrative no-man's-land. I asked some questions earlier

this year concerning how many installations of this kind the department has on the British Columbia coast, and I believe I could count the number on less than the fingers of one hand.
I think the minister will realize that a great deal of our air travel on the coast is carried on by planes which land and take off from the water; and because I feel this is a matter of importance I wanted to bring it to his attention under the discussion of the administration of air services.
Accompanying some of the correspondence that originated from the people at Whale-town in respect to this float was a diagram which I think illustrates very well the point I am trying to make. They submitted a sketch of some existing floats which were put in by the Department of Public Works in that area, and their suggestion was that by the simple addition of an extra float which would not be held in place by the ordinary piling arrangements but by anchor cables so there would be no obstructions to the landing of planes at the float, smaller planes could land there. I think the illustration makes clear a situation which I feel the minister should consider.
As I understand it, this is a matter which comes under the air services division but as far as I am concerned from what looking into the matter I have done I quite frankly have been led to wonder if this is not a matter which could not be looked after more effectively and expeditously by the marine services division, because of the fact that generally speaking these floats up and down the coast are installations which were put in for the use of boats and vessels, and are the concern of the marine services division and the marine agent of the district.
If this matter were looked into I feel that because of the long and close consultation that has existed between the marine services division and the Department of Public Works, provision could be made for the installation of floats that would be suitable for aeroplane landings in many of the smaller centres without the necessity of providing special installations intended solely for the use of planes. I feel this is something that could materially increase the available places that are suitable for aeroplane service without in the long run adding any great additional cost to the facilities on the west coast.
I hope the minister will give consideration to an examination of the administrative setup with respect to these aeroplane floats. Within the next few years I can foresee that there are going to be a great many requests for additional floats which can serve as floating airports for the smaller planes that
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fly our coast. It seems to me that if this matter were studied at this time it might be possible to evolve a plan of providing such facilities at a good deal less cost than would be involved if all such requests for this type of installation were channelled directly through the air services division and involved special votes or allocations for that purpose.
In many cases, as far as I can see, all that would be required would be to work out a plan with the Department of Public Works to ensure that when some of the floats are installed the present arrangements, whereby they are held in place with piles which project above the deck level of the floats and constitute a hazard to planes, would be changed in order to remove the possibility of wing damage. Because of the hazard of the projection it is impossible for planes to use many of the existing installations except during very calm weather. I hope the minister will give me some indication as to whether he would be prepared to look into the various aspects of the matter that I have put before him.


Mrs. Fairclough:: I have in my hand a copy of a letter which was sent to the minister. Since he has been busy with these estimates, it is possible he has not yet read it. It comes from the president of the electrical, radio and machine workers' union at Hamilton and inquires from him with reference to the granting of a contract for the radar sets which will constitute the cross-country civilian radar network. It quotes a press report of a month or so ago in which it was stated that these radar sets are being produced to the specifications of the Department of Transport by a company in Waltham, Massachusetts.
The specific questions which are asked in this letter are whether or not any company in Canada was given an opportunity to undertake this work in the first place. In the event that it was thought by the department that Canadian companies were not yet equipped to do it, I would doubt that, because certain Canadian companies have gone into this work extensively in latter years. They ask whether or not any encouragement had been given them to go into this field.
I wonder whether the minister would answer these questions. Was an opportunity given to any Canadian company to undertake construction of these sets?


George Carlyle Marler: I think I can deal with this matter very quickly. I received a letter from the union this morning, and I have already dispatched a reply to it. I should like to say to the hon. member that this is substantially the information I conveyed to the union.

Supply-Transport
When it came to ordering these 15 surveillance radar units public tenders were called, and the lowest tender was that of Raytheon Manufacturing Company of Waltham. As they were public tenders, everybody had an opportunity of bidding, and some of the Canadian companies did bid.


Ellen Louks Fairclough: Do you remember how many?


George Carlyle Marler: I think there were four or five companies altogether that tendered. I am sorry to say it, but the Canadian prices were much higher than those of Raytheon; in fact the nearest bid was $1,400,000 higher than that of Raytheon.


Ellen Louks Fairclough: What proportion of the total price would that be?


George Carlyle Marler: It is probably approximately 20 to 25 per cent, or perhaps even over 25 per cent. My recollection of the exact figure is not very clear, but the point I want to emphasize is that not only was Raytheon the lowest tenderer but it agreed with a firm in Kitchener, Ontario, to establish a Canadian subsidiary for the carrying out of this work. That decision and the fact that it was awarded the contract meant that through the subsidiary it was possible for other Canadian manufacturers to develop a very large part of this order by subcontract. So really not only do the Canadian taxpayers save well over a million dollars as the result of our accepting a lower tender, but a new industry is going to be established and there will be subcontracting work in Canada.


Ellen Louks Fairclough: I recognize that the minister's reply to my question is plausible, but I pointed out that some of these Canadian companies have been working for many years, and at great expense, in the development of this field, and some of them have produced amazing results. I am not sure, when it boils right down to what is best in the long run for the Canadian taxpayer, that so much of a net saving actually results to the taxpayer. There are such things as corporation profits, and so on, which would enter into it, and it would take more time and research than I have been able to put on this matter.
The minister said he received his letter this morning; I did not receive my copy until this afternoon. I have not been able to go into it, but it seems to me that when a contract is awarded to a United States company there are a great many ramifications to the awarding of that contract other than the fact that it is going to cost 20 per cent less.
It may be that some of those are covered by the taxation that will accrue to federal

coffers from the subsidiary company in particular, provided that company is taxed as a Canadian corporation. There may be a difference there, but if there is to be a difference in the amount of tax paid, then it seems to me that this matter of a 20 or 25 per cent spread in the price should be considered in the light also of the taxation which the respective companies will pay to the government of Canada through the Minister of National Revenue.


[Stage Direction]
Item agreed to.
William Alfred Robinson: It being five o'clock, the work of the committee will be interrupted.



PRIVATE BILLS


Mr. Claude Richardson (St. Lawrence-St. George) moved: the third reading of Bill No. 166, to incorporate Signature Loan and Finance Company.


Mr. R. R. Knight (Saskatoon):: It is the
intention of this group to oppose third reading of this bill. We are conscious of the fact that this is the last opportunity on which it may be presented at this session. Since the bill was passed in the committee-if my memory serves me right there were only four votes against it-on this occasion my hon. friends in the Conservative party joined my hon. friends on the government side to set up this incorporation; and since the majority was large we think that we should not use any device to hold up the legislation. But we believe we should have an opportunity to stand up and be counted in regard to our opposition to it, because we do not wish to be associated with those who vote for this incorporation.
We have the peculiar situation here of a group insisting upon incorporation under this bill after the representative of the company time after time declared in the committee that the action of the government under Bill No. 51, which puts some limit on the amount of interest which may be charged by such companies, threatened to put them completely out of business. We find that the promoters of this bill are persisting in their original intention to go ahead with the incorporation and, according to the statement of their colleagues, go broke in the process. However, we were never convinced in any case that they would be going broke in the process.
Branches of these small loans companies are spreading out all over this country. In our opinion the amount of credit of this particular type has become too great. It might be argued, and with some reason, that perhaps competition helps; that if you have one more company join the throng it may

have some effect in the bringing down of interest rates. At the hearings the president of the Canadian small loans association made an answer to a question I put to him which was rather surprising to me, but he knows his business. He said that in his opinion the amount of interest charged would make no difference to the amount of business done. That seems almost incredible but I suppose what it means is that people who are in the condition where they have to borrow money from these institutions are so desperate for money that the rate of interest is not even considered, or not mathematically worked out.
We are not too hopeful, then, that the addition of another company to the number already existing will have the effect competitive-wise of bringing down the interest rate to the borrower. One more company will mean something else. It will certainly mean more advertising. It will mean more branch offices being opened in the cities of this country. It will mean more bright neon lights and more places into which unfortunate people may be lured in the hope of improving their financial position by adding to the amount of their debt.
It is admitted that there is some need for this type of service, but as I suggested in committee at another stage of the bill we are already well supplied with facilities which, if they were only generally known, could carry on in a better way anything that the small loans companies are doing for this type of borrower. I shall now refer to what I mean, because I think it is reasonable that I should be able to bring forward alternatives. We certainly think that the banks could play a more active part in this business. The Canadian Bank of Commerce has already shown its ability in the field, and while the rate of interest is somewhat higher than in the case of the credit unions because they have the habit of discounting the loan before they make it, nevertheless the chairman of the Canadian Bank of Commerce said that they were making a profit at a rate of interest of between 10 and 11 per cent. We would urge upon the other chartered banks of Canada that they have some social responsibility so far as this matter is concerned.
As another alternative we suggest that the bill should not be passed because the facilities of the credit unions and the caisses populates in the province of Quebec are already being used to perform a function which this company would duplicate in the matter of the lending of money, and are giving a service which cannot be duplicated by these small loans companies. We had evidence in the
Private Bills
committee that kindred companies to the company we are now asked to incorporate are allowed by law to charge 26.8 per cent per annum. I use the term "per annum" advisedly. In referring to the matter I think such a term should be used because it is generally understood by most people who have anything to do with these companies, while it is rather difficult to figure out what a rate of 1 per cent or 2 per cent per month means.
I would suggest that from the evidence we had these alternatives, notably the credit unions, should be given serious consideration; because in comparing the rates which this company, if incorporated, will charge with the rates of the credit unions we find there is a tremendous difference. Evidence was given to the committee that under the present set-up a loan of $500 could cost the borrower $100 more over the two-year course of the loan when borrowed from one of these finance companies compared with the same amount of money borrowed from the Caisses Populaires Desjardins.
In my own province the average rate charged by the credit union is for a start 1 per cent per month, but as many of my friends from the west know, and I presume the same is true of the east, the credit unions have been notable for their tremendous growth in co-operation and we quite often have a rate of one-half of 1 per cent per month. Then we have the added feature of their excellent method of insuring loans, so that in the case of the death of the borrower those who inherit the estate of the deceased will not be harassed in the matter of paying the debt. So great is the benefit from that sort of thing that many people whom I know have joined one of these credit unions-


Walter Edward Harris: Talk about the bill, not about credit unions.


Robert Ross (Roy) Knight: -in order that they may get the benefit of being protected by such insurance. I shall reply to the minister. I am talking against the incorporation of this particular company, and I am entitled to say why. My case has been that other facilities are available, and I am simply dealing with some of the services provided. Probably the minister would get along faster if he would let me finish my remarks.


Walter Edward Harris: We would get along faster if people spoke to the point.


Robert Ross (Roy) Knight: I would be out of order if I made the answer that I am prompted to make to that- remark. The minister has challenged me. I can enlarge upon this subject, but I would not recommend it at this late stage.

Private Bills
You have had the example of some other ministers doing the same sort of thing and we know with what result.
I had been saying that there were alternatives to this type of company and I had been giving the reasons why I think they should be used. I am relating strictly what happened in the committee when this particular bill was under discussion; and may I say that the very people who wanted to set up this corporation decried the credit unions because you have to be a member of a credit union. Everybody knows that where two or three are gathered together, if I may use that phrase, and want to set up an organization of this kind they can do it without the least trouble on a geographical, occupational or any other suitable basis. Rather than having a company of this sort simply interested in lending money, getting dividends from that money and paying them to their shareholders, we are interested in the type of thing which promotes thrift in the first place and which serves the purposes which this small loans company will serve if it is set up.
That is why I would rather see people use facilities which encourage thrift, which accommodate them temporarily and provide them with a guaranteed system of insurance. Let me say to the minister quite frankly that I am interested in the success of the credit union movement, which after all is simply the principle of co-operation applied to the small loans field. For the reasons I have advanced we do not want to endorse the opinion of those members of the committee who voted for the setting up of this company, and on that account we propose to call a vote upon this particular measure.


Walter Edward Harris: I am not sure, Mr. Speaker, but I believe it is the desire to stand all the items under public bills.
Holowach
Jones
Knight
McCullough (Moose Mountain) Nicholson Quelch Thomas Winch
Zaplitny-20.


Mr. Speaker:: The business reserved for this hour being disposed of, the house will revert to consideration of the business which was interrupted at five o'clock.

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



DEPARTMENT OF TRANSPORT

[Stage Direction]
474. Air services administration, $816,760.
Mr. White (Middlesex East):: When the work of the committee was interrupted at five o'clock I had just risen to make some comments on item 474. I find it rather difficult

to deal with the three things I want to mention because of the overlapping of the minister's department with that of trade and commerce as it applies to Trans-Canada Air Lines. The minister's department deals with the airports, so I feel I should deal with the airport at London first and then just refer to T.C.A.
The minister will recall that about a year and a half ago the hon. member for Middlesex West, the hon. member for London and myself along with his worship the mayor of the city of London and some of his council, as well as representatives of the chamber of commerce presented the views of the city of London as they relate to the airport there. At that time the plea was not for the beginning of new runways but the completion of them. There is one full length runway now being used by the Department of National Defence, and there is another runway which it is proposed should be extended so that jet planes and the Viscounts now in use on T.C.A. could use that airport. At the time this delegation waited on the minister I should say, in all fairness to the minister, that he promised nothing and he has kept his promise.
The city of London is quite concerned about this, because it appears as if the Department of Transport regards London as a whistle stop in their Trans-Canada plans. It would appear as if the Department of National Defence regards the city in the same light because of the grounding of No. 420 squadron. It has been adequately pointed out that there is a lack of air transport for an airborne army, yet we have a well established airport in a thickly populated area, which is not being used to advantage. It is a very vital area, also, when you consider Windsor, London, Sarnia, Woodstock, Brantford and Hamilton are all within close proximity of that London airport, yet they are given the go-by.
Some time ago it was reported that there would be 13 major airport radar installations across Canada, and that one of those 13 installations was to be made at London, Ontario. Now for some unexplained reason it is mooted that London is going to be given a smaller installation. The reason given was that there would be overlapping between London and Toronto. Be that as it may, there is a lot of overlapping in other government departments and it does not seem to worry them a great deal. It would not cost a great deal to extend the one other runway so it could service the Viscounts that are now in use, so I am asking the minister to give that very serious consideration for the immediate future.
There was a transport department official before a Senate committee, and he said
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London would get a full scale weather station. This has been requested by the city of London and the surrounding area because of the importance of weather reports not only to T.C.A. and the air activities in the vicinity, but because of their importance to farmers who are so dependent on the weather. I hope the minister, when he replies, will say that this weather station is going to be installed in the very near future.
I mentioned earlier that the Department of Transport, the Department of Trade and Commerce and national defence are all tied up in this airport business at London. I should think, in view of the fact the Minister of Trade and Commerce has gas lines, air lines and party lines in his hands, he would transfer Trans-Canada Air Lines to the Minister of Transport.


George Carlyle Marler: I am sure I am flattered by the suggestion that I should have more work to do, but it is not one to which I shall accede very readily.
I would like to reply very briefly to what the hon. member has just said about the airport at London. My recollection is that it was not a year and a half ago that this delegation called on me, but something like six months ago. It may, of course, be the length of the session that has made the time seem longer, but my impression is it was in the early part of this year that I received the delegation and, of course, I have received representations from the hon. member and also from the hon. member for Middlesex West.
I should tell members of the committee that I believe the extension of the second runway at London has a high priority. We have been giving consideration to the matter, and I know that Trans-Canada would like to establish Viscount service on a permanent basis. The difficulty is, of course-there is the difficulty of money; there is never enough to do all the projects-there is really the basic difficulty of getting the technical personnel that we need to carry out all those projects. Hon. members all know that when you develop capable individuals and engineers, they are a very fair target for private enterprise which can and does offer them much higher salaries than the government can afford to pay.
My great apprehension with regard to these future projects is that of the difficulty of finding the skilled personnel we need for the work, and being able to carry out the projects in the highly active situation in which we are living at the present time. I would tell my hon. friend that we are fully conscious of the needs of London, and he does not need to

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feel for an instant that it is being forgotten or that it is being relegated to an inferior position.


Mr. Winch:: I have only one question I should like to ask the minister. Vancouver is growing very rapidly; international plane travel is growing very rapidly. I know that the airport in Vancouver is still owned on the local level. Have there been any further changes in negotiation or plans as between the ownership on the local level and on the federal level? This is the important question. In view of the growth of plane travel and the growth of Vancouver, what are the plans of the federal government, either on their own or in co-operation with Vancouver, for the expansion and enlargement of that airport so the Vancouver airport can take its rightful place as a major airfield of this country?


George Carlyle Marler: Mr. Chairman, when I went to the west coast last October I had the privilege and pleasure of meeting the mayor of Vancouver and some of the members of the airport commission. We discussed the present situation, and we were all in agreement that the question which merited the most immediate attention was that of providing additional terminal facilities. It was quite clear that had the responsibility for doing so been discharged by the city of Vancouver the legal formalities would have taken a very long time to accomplish, and since we realized this we said at once we were ready to make arrangements with the city of Vancouver by which we would finance the expansion of the existing terminal building, and an agreement was reached in principle at that time as to the expansion of that building.
I perhaps might add that since our discussion then they have had the plans and specifications for the work prepared. They have called for tenders. Unfortunately it appears that the cost is going to be greater than we estimated, but we have told them that we were agreeable to the increase in cost, and I think the conclusion of the action or document or agreement between the department and the city is a matter of a few weeks' time. At all events, we agreed that the expansion of the terminal building should be proceeded with first, as quickly as possible, and I think no stone has been left unturned to make that a reality.
So far as the airport as a whole is concerned, the hon. member knows that a substantial part of the area used for the airport belongs to the city of Vancouver. At an earlier date arrangements had been considered by which the department would

acquire the rights of the city for a consideration, I believe in the neighbourhood of $1 million. The proposal was submitted to a referendum and, as I think the hon. member will probably recall, the referendum was defeated and the city therefore has remained the owner of the airport. In the meanwhile, I cannot help thinking that so far as aviation is concerned, the question of whether the city owns the airport or whether the department owns it does not change materially the usefulness of the airport, and therefore the question of the title is secondary to the question of the terminal building.
I informed the mayor and the airport commission that we would be perfectly willing to re-examine the question of the department taking over the international airport, and suggested to them that they should submit to us a statement of the capital expenditures which were made by the city since the offer of $1 million was made some years ago. I say without any criticism whatsoever that this information has not yet been submitted to us by the city authorities.


Harold Edward Winch: I have another question on the same subject. I agree with the minister the question of the ownership is very definitely of a secondary nature. What I had in mind when I asked the question was this. About 18 months ago all the members of parliament of the lower mainland area were called to a meeting of the commission and a number of members of the council. The position was explained, to the effect that in a period of about 10 years a great many millions of dollars would have to be spent at the airport to complete almost a new plant. What I wanted to find out from the minister was whether any definite acceptance by his department had taken place on this 10-year period of the development of the airport?


George Carlyle Marler: I would just like to say to the hon. gentleman that really the question of whether the city owns the airport or whether the department owns it is not material to the carrying out of the program of capital improvements that would require to be made.
I am quite unable to give the hon. gentleman information as to what the program contemplated, but I do assure him that the question of who owns the airport or who operates it is not material to the program itself. It is our feeling, because we consider it to be a federal responsibility, that if the extension of a runway is required, or if the provision of an additional runway is required, or other facilities, that is something we should do, and that is one of the principal reasons why personally I do not attach vital importance to the question of title to the airport. I can

merely repeat that if Vancouver is anxious that we should take it over we are perfectly ready to discuss the matter with them at any time.


Harry Oliver White: 1 wish to ask the minister one question. He did not deal with whether a full-scale weather station was contemplated for London. What are the plans?


George Carlyle Marler: Well, Mr. Chairman, my
deputy minister tells me that we have no plans for the establishment at London of further meteorological facilities. In that field in particular it is exceedingly difficult for us to recruit trained personnel, and I do not think the additional facilities which the hon. gentleman contemplated are really needed at this particular time. At all events, we are not in a position to deal with it at the moment.


Harry Oliver White: Mr. Chairman, according to my information one of the minister's officials, in giving evidence before a senate committee, said this was in the books.


George Carlyle Marler: Yes, I heard the hon. gentleman say that; but I must admit it came somewhat as a surprise to me.


Mr. Nesbill:: May I say a brief word on this matter. I was very glad to hear the minister say that London airport is not being forgotten and that something is going to be done about it because, like my colleague for Middlesex East, it affects me very much and a great many other hon. members in this house from that area. Hon. members are probably aware that London airport serves not only London but the very rich industrial area of western Ontario, Stratford, St. Thomas, Woodstock, and Sarnia, and the rich agricultural area around.
There is one other matter that I should like to mention in about a minute's time, and it is this. It is quite apparent that there is no competitive business with respect to the Trans-Canada Air Lines run between Montreal, Ottawa, Toronto, London and Windsor. Since no competition is in the air, so to speak, at the moment I certainly hope the minister will recommend to T.C.A. that something be done to increase the service on that run. A person who uses that service finds it is almost impossible to obtain a reservation no matter how far in advance he makes application, and it is particularly difficult to obtain reservations on week ends.
Hon. members know it is sometimes necessary to visit one's constituency and return as quickly as possible. It has been my experience and that of many others that you cannot get reservations on that particular run.
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If no competition is envisaged let us at least have more aircraft. I know the minister tells us it is difficult to get technical people and money, of course, is alleged to be a consideration in this case, but I do wish something would be done about it. I know a great many people who would like to fly by T.C.A. between London, Toronto, Ottawa, Montreal and Windsor, and the only reason they do not do so is because they cannot obtain reservations. If there is not going to be competition let us have more planes.
There is just one more thing I would like to add in this respect. T.C.A. cannot be very anxious to obtain business for this particular branch of the air line. As I understand it, formerly there were certain inducements offered to travel by T.C.A. No doubt this was done in the early stages to accustom people to the idea of flying. I was informed that commercial travellers used to get special rates on T.C.A. I am also told that other transportation companies such as the C.P.R. used to get some slight commission for selling T.C.A. tickets, but that is no longer the case. In addition to that I understand they cannot even telephone to make reservations for London or Toronto, wherever it may be.
It seems to me that if what I have said is true, and I am informed that these are the facts, T.C.A. cannot be looking for business. Particularly in view of the great difficulty one encounters in obtaining accommodation on this particular T.C.A. run I certainly think the minister and his department, if they are not considering competition, should at least consider increasing the number of flights between the points I have mentioned.


Mr. Blackmore:: Mr. Chairman, before we leave this item I wish to express to the minister the gratitude of the Lethbridge constituency for the improvement which is being made in the airport there. Word has reached me that the tenders are in, the lowest tender has been accepted and all they are waiting for now is for the minister to let them know whether they are to finish the airport with asphalt or with cement.


[Stage Direction]
Item agreed to.
Radio aids to air and marine navigation-
476.	Administration, operation and maintenance, $8,925,412.
John Borden Hamilton: Mr. Chairman, I have just a word to say concerning this item, which involves radio aids to air and marine navigation. This matter is becoming of more importance daily to the small transport companies. I would like to point out to the minister that there is increasing difficulty in getting wave lengths allotted to these small companies. From the standpoint of

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safety it is becoming increasingly important that wave lengths be made available to the smaller types of operations.
It seems to me that the minister should reassess the requirements of the industry in this respect in order to see if we can squeeze out a few more wave bands for their use. It does not make these people feel any better to come to Ottawa and get a lecture on the spectrum, how it is divided and how many wave lengths are available, because the need is urgent and something should be done about it. I only hope that the minister will look into this problem in a serious way to see if there could be some improvement in the allotment of frequencies.


[Stage Direction]
Item agreed to.
477.	Construction or acquisition of buildings, works, land and equipment, $4,234,725.
Howard Charles Green: Mr. Chairman, there is one question I would like to ask the minister on this item. Would the minister tell the committee what role the Department of Transport plays in the construction and operation of the mid-Canada line?


George Carlyle Marler: Mr. Chairman, my information is that the only expenditure which is included in the estimates of the Department of Transport for the mid-Canada line relates to items in the marine services-that is, transportation by sea-with which we have already dealt. We have no others.


Howard Charles Green: What I had in mind was the role of the Department of Transport "in the construction and operation of the mid-Canada line.


George Carlyle Marler: My deputy minister tells me the answer to the question is that we have no role whatever in the matter except so far as the allocating of wave lengths is concerned.


Howard Charles Green: You have no role whatever in the construction?


George Carlyle Marler: No.


Howard Charles Green: When the line is in operation will the Department of Transport have any responsibility? We have been told during the discussion of other estimates that the Bell Telephone Company would be operating it, but I understood that the Department of Transport was involved some way or other. That may be wrong, but perhaps the minister could inform me.


George Carlyle Marler: I would like to say, Mr. Chairman, we do not expect to have any responsibilities in connection with the mid-Canada line when it becomes operative. Our present responsibilities are two-fold, as I

said a minute ago, and involve first the allotment of wave lengths and second a small part that we play in the ship to shore movement, both of which come under marine services which have already been discussed.


Howard Charles Green: What is the situation with regard to the distant early warning line?


George Carlyle Marler: The answer, Mr. Chairman, is that our role is very similar to that which I described in relation to the mid-Canada line.


[Stage Direction]
Item agreed to.
Radio Act and regulations-
478.	Administration, operation and maintenance, including contributions as Canada's share of the administrative costs of various international radio, telegraph and telephone conferences, as detailed in the estimates, $1,691,165.
Thomas Speakman Barnett: Mr. Chairman, I made a few remarks concerning the general subject of the Radio Act when I spoke on March 16, and I did so at that time in the hope that when we reached the estimates of this department the minister might be prepared to make some comment on the questions I raised. I realize that was quite a while ago and I do not know whether or not the minister took any notes at the time. If he has I will not take any of the time of the committee to restate any of the points I raised.


George Carlyle Marler: Mr. Chairman, the hon. gentleman spoke about the increasing congestion of radio frequencies available for the use of fishermen, particularly in British Columbia, known as the fishermen's band 2318. He said the fishermen would welcome a greater measure of control over the use of that band. I will tell him that we are trying to accomplish this, but I am sure he will appreciate the difficulty of our task.
There is also the question of fishermen who operate small vessels objecting to the fact that some of the larger vessels employ high powered sets, and those who employ low powered sets in the area find themselves obliterated from the air. We hope by the process of education to persuade them to use better equipment, and we think that better sets will produce better results.


Thomas Speakman Barnett: I had one other question with regard to the licensing of operators and the possibility that some of the fishermen who are affected will have to make long journeys to take examinations. Has there been any formulation of policy with respect to the question of licensing operators?


George Carlyle Marler: According to my note, it is a question of staff. If we had more staff it would not be necessary for us to ask these

people to go to Vancouver or Victoria in order to write these examinations as operators of radio stations. If and when we have more staff, I hope we can make a change in that situation.


Thomas Speakman Barnett: The minister has again made reference to the question of staff. When he spoke on March 16 he also made a reference to this matter in respect of the question of radio interference, and inspection to avoid it. I think the house should give sympathetic consideration to the plight of the minister in respect of this matter of the insufficient staff, because in doing so we are giving sympathetic consideration to the problems that affect many of us as citizens.
I would suggest that the other members of the government should take note of what the minister has said and see whether we cannot do something about this matter. I had made some notes earlier about bringing up the matter of interference from the ordinary radio stations. I do not want to make an extended speech on the matter now, but I know it is a continuing problem in my area. If, as the minister suggests, the crux of the problem is the insufficiency of staff and, I presume, insufficiency of funds to pay and train them, I am happy to see the Minister of Finance has just come into the house and I hope he will do something to assist his colleague to meet this problem.


[Stage Direction]
Item agreed to.
Telegraph and telephone service-
480. Administration, operation and maintenance, $515,320.
John Hornby Harrison: I should like to make a formal protest to the minister on the closing of the telegraph line north of Meadow Lake on July 1. I hope another look can be taken at this proposition, because it has been there for a number of years. It was put there by a Liberal government, not as a money-making proposition-if that had been the consideration I do not think it would have been put there in the first place-but to provide communication and a certain humanitarian service in an area that is sparsely settled. At least it was sparsely settled at that time, but it is not nearly as sparsely settled now.
This is the particular area of northern Saskatchewan where the people are also denied the family allowance, and between these two things I think they are wondering whether they are not being taken particular advantage of as compared with other people in the province. This line has served a great need over a number of years. It is used by the R.C.M.P. in the area, and naturally on my last trip through there both the R.C.M.P.
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officers and the assistant agents of the Indian branch protested vehemently to me that the removal of this service was going to impede them in their work. I think representations have been made to that effect to the Minister of Citizenship and Immigration by his Indian agents.
The hospitals in the area are small and scattered. There is only one doctor within 150 miles, and on many occasions major operations have been performed by the sisters at places like Portage la Loche on instructions from the doctor over this telegraph line. They have performed amputations and many such things. I should hope the minister would have a further look at this before it is discontinued. As I have said, it was put in there by a Liberal government on humanitarian grounds, for which I hope we are noted, and I hope this will still be regarded one of the guiding principles of the party.


[Stage Direction]
Item agreed to.
Meteorological division-
483. Administration, operation and maintenance, $8,164,815.
John Borden Hamilton: In the Globe and Mail of March 13 this year there was an article headed "Weather Office Taxed to Limit, Official Claims". It said:
The resources of Canadian weather forecasting are taxed to the limit by the demands of aviation, the controller of dominion meteorological service said last night.
In an address to the board of trade club in the King Edward hotel, Andrew Thomson said "we really are pressed beyond what we can do."
We just want to ask the minister whether the allocation of funds here is going to put the department in a position to handle the requirements facing it, especially air traffic requirements.


George Carlyle Marler: I would merely say that the difficulty is not one of funds. It is that of getting trained personnel.


John Borden Hamilton: Is an attempt being made by the department to get personnel, because this would appear to be rather serious?


George Carlyle Marler: We are doing our best to get additional staff.


[Stage Direction]
Item agreed to.
Civil aviation division-
485. Control of civil aviation, including the administration of the Aeronautics Act and regulations issued thereunder, $1,102,846.
John Borden Hamilton: Would the
minister reply to the suggestion I made that in future cases of accident investigations, where there is an indication that responsibility might lie on the operating party, he

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might consider that the composition of the board of inquiry might include, say, a representative of the R.C.A.F., a representative of his department and a representative from outside?


George Carlyle Marler: In two or three cases that I can think of the inquiries have been presided over by a member of the judiciary. We have had outside members on the board of inquiry. I do not think I can lay down any rule of universal application. I can assure the hon. member, though, that we are anxious that these inquiries should be as complete as possible, even if perhaps they may lead to a conclusion that somebody in the department has not done all that he should have done. Again it is the difficulty of getting the right people at the right time. I would not wish to subscribe to the idea that the position should be always the same and that we should always have a judge. We have to have a certain amount of discretion, and in a general way we have appointed competent people to undertake these investigations.


[Stage Direction]
Item agreed to.
Airways and airports-*
Operation and maintenance-
4S6. Civil aviation services, $9,855,840.
Howard Charles Green: On this item, I should like to place one problem before the minister. As he knows, several attempts have been made to get a secondary airport in the vicinity of Vancouver for the use of light aircraft. Different sites have been mentioned. As I understand it, as yet no definite decision has been made by the government. Last year I brought up this question by way of urging upon the minister that he should not under any consideration agree to the establishment of a secondary airport at Spanish Banks, and the minister said at that time that he had not completed his investigations but that he was inclined to agree with me that it would be very unwise to take this property for a secondary airport. I thought that had been settled.


George Carlyle Marler: The hon. member is right.


Howard Charles Green: If the minister can assure the committee now that under no circumstances will Spanish Banks be taken for a secondary airport, then that is all I want to know.


George Carlyle Marler: I should like to reassure the hon. member for Vancouver-Quadra that no serious consideration is being given to the establishment of a secondary airport at Spanish Banks. To say "never" would be too categorical, but I will say that we are not considering it at this time. We are considering the possibility of a secondary airport at

White Rock and we are also considering what use can be made of Langley Prairie, but Spanish Banks is not being given serious consideration.


Howard Charles Green: Can the minister assure us that no move to place an airport there will be taken without ample warning being given? The city council has gone on record against it, the parks board is against it and the university is against it. It is adjacent to a residential district, and the residents are all against it. It would be the worst kind of tragedy to take that beach, which is probably the most frequented in the whole of the Vancouver area, for an airport. What was the minister going to say?


George Carlyle Marler: I was going to try to answer the hon. gentleman. I was going to say quite frankly that personally I have been very much impressed by the arguments that have been advanced against the use of Spanish Banks for a secondary airport, and it would take a great change in my approach to the problem to say that it was going to receive serious consideration.


Howard Charles Green: Would the minister look into the possibility of having the old Jericho air base, which is adjacent to this beach, turned over to the city for use as a park and as part of the beach? That air base was really established for seaplanes shortly after the first war, I think. It is used very little for flying. As a matter of fact, I know that a year or two ago it was used as an armoury for one of the anti-aircraft units. I do not suppose it comes under the minister's department. I think it is under the Department of National Defence.


George Carlyle Marler: It is, and I suggest that perhaps when the Minister of National Defence next has his estimates before the house the hon. member try twisting his arm instead of mine.


Howard Charles Green: The Minister of National
Defence lives in my riding and very near this air base. Perhaps the Minister of Transport will help me to work on him in order to see that this air base is turned over as a park.


Mr. Hansell:: Mr. Chairman, I want to ask one question and I am not certain whether it comes under 486 or 488. The details of 486 would indicate that it comes under that item, but the amount of the money spent would indicate that it might come under 488. It may not come under either, but I will ask my question and the minister can answer.
There seems to be some misunderstanding among employees who are civil servants as to the rates of pay that are paid at one site or location compared with the rates of pay at

73S9
another location for the same type of work. This matter has been drawn to my attention and I have tried to explain that there must be an explanation. However, it leads to dissatisfaction among employees if they hear that at a neighbouring airport an employee doing the same kind of work is receiving more pay.


George Carlyle Marler: So far as classified positions are concerned, they are the same regardless of the airport involved. However, for labour engaged at prevailing rates the prevailing rate at one airport may be lower or higher than at another. Obviously when we are considering prevailing rate labour we are considering something that is essentially local. We cannot pay less than the prevailing rate in the neighbourhood, nor do I think that we should pay more.


[Stage Direction]
Item agreed to.
488. Construction or acquisition of buildings, works, land and equipment, including construction work on municipal airports and payments to municipalities as contributions towards construction done by those bodies, $15,453,350.
John Borden Hamilton: Can the minister give some indication of what the plans are for future development at Malton, especially in view of the fact that I feel that a temporary exenditure of money on the airport building itself is going to be a great waste. We really need something on a much larger scale, and we need it right away.


George Carlyle Marler: Quite frankly I must admit that I do not think the facilities at Malton have kept up with the need. I think what has happened in the past can be justified, but I do not really believe any useful purpose would be served by going over the past to attempt to explain and justify what has been done. What we are doing at the present time is to try to relieve the very real congestion at the terminal, and that is the purpose of the alterations that are now being carried out. The hon. gentleman does not need to feel they are going to be wasted because they will not be wasted. Earlier this afternoon, when the hon. gentleman brought up the question of Malton, I made inquiries and I understand that it is our plan to try to start a new terminal at Malton in approximately two years.


John Borden Hamilton: I did not get
that.


George Carlyle Marler: In approximately two years.


John Borden Hamilton: If all that is being done is what is apparent to the eye, it certainly is not going to do the trick for the next two years. It seems to me that the air traffic statistics last year indicated that
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Malton had the largest volume of ins and outs in Canada, and I would respectfully suggest to the minister that every effort be made to step up the time of starting construction.
I have one further question. In Ottawa is the department working closely with the committee on the capital plan to tie in the access roads to the airport in order to see that the best possible use is made of the present site in connection with the over-all development?


George Carlyle Marler: It has been, yes.


[Stage Direction]
Item agreed to.
490. Contributions to municipalities or public bodies for construction and improvements of airports on land acquired by such organizations, SfiO.OOO.
John Hornby Harrison: May I ask the minister to indicate briefly whether negotiations have been completed for payment to Meadow Lake of the $9,000 or so for the work on the main runway of the airport?


George Carlyle Marler: The answer is that we have asked Meadow Lake to supply us with some information and it has not yet come to hand.


John Hornby Harrison: Can the minister also indicate whether the $3,000 or $4,000 that will be necessary to sand and oil the runway so that it will be available for use in wet weather will be available next year?


George Carlyle Marler: I think we will have to give consideration to that.


John Borden Hamilton: These observations will apply to the next three items. The very latest publication of the Canadian owners and pilots association indicates the great preponderance of private flying that is going on and the fact that the main line air companies really only do a relatively small proportion of the amount of flying that is being done. It seems to me that in the future, as the country develops from the industrial standpoint, we are going to see airports at every community across the country, and I sincerely hope the department is making a real survey so as to assist any municipality that has shown an inclination to develop itself along this line.


[Stage Direction]
Item agreed to.
Air transport board-
493. Salaries and other expenses, including the Canadian delegation to the international civil aviation organization. $292,040.
John Borden Hamilton: This is the last item of the air estimates. In closing the discussion on these items I should just like to say that I was very much interested in the remarks made by the hon. member for Meadow Lake. He gave a factual account of

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the situation in the far north. In some respects he did not see eye to eye with me in the observations which I have made, but I think his remarks confirm what I have said previously, namely that the strangling of competition at the top has had its effect right down through the industry. If there cannot be competition with T.C.A., apparently there cannot be competition with C.P.A., and the same result goes right on down to the smaller carriers to a great degree.
As a start I think we might do one thing. We might insist that this particular branch of the affairs of our country be placed under the minister's department, as a first step in seeing that an over-all picture is obtained which will be to the benefit of the whole country. After that I think I might sincerely suggest that the work of the air transport board be cut off entirely and separated from any interference or influence in any way by over-all government policy which has had the effect of closing down, as I have indicated previously. With that, we would hope that a new horizon might be obtained for air transport.


[Stage Direction]
Item agreed to.
Board of transport commissioners for Canada-
494. Administration, operation and maintenance, $867,930.
Mr. Cardiff:: Mr. Chairman, may I call it six o'clock?


Some hon. Members:: No.


Lewis Elston Cardiff: Discussion on this item is going to take some little time.


An hon. Member:: Let us do a little work.


Mr. Argue:: Let us sit longer.


Some hon. Members:: No.


Edward Turney Applewhaite: It being after six o'clock I do leave the chair.
It being fifteen minutes after six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Lewis Elston Cardiff: As an introduction to some of the remarks I intend to make, I may say that I do not know whether the minister has any idea of the kind of country from which I come.


George Carlyle Marler: If the hon. gentleman would not take too long, I might be able to get up there this year.


Lewis Elston Cardiff: I shall not be very long. We live in perhaps one of the best farming communities there is anywhere. We have some of the best farms and some of the best farmers you will find anywhere in Canada. For a long time we have been trying to entice industries to come up to our smaller towns. We have been having some success.
Now, however, the Canadian National wants to eliminate some of our train service. I would suggest to the minister that instead of eliminating some of the train service they should give us a little more service. Then they would have no reason to want to discontinue the trains in that section of the country. For example, not so long ago the railway installed a new scale at Palmerston to weigh the rock that comes down from the Durham pit. It is a small scale and they cannot weigh a car. They have to weigh half a car at a time. Can you imagine any outfit trying to make money on a road, pulling a car in and weighing one half and then weighing the other half. Not long ago 42 cars of stone came down at one time, and they were all night weighing the 42 cars. Then they were only guessing. They might just as well have weighed one car and guessed at the rest. This will give you an idea of the kind of service we are getting.
Last Saturday night, August 4, two old passenger cars left Toronto, old cars with oil lamps and some of the lamps were not working. There was no drinking water for the passengers. You would actually think the railway was trying to see how bad they could make the service so nobody would use the trains. I am not going to give names, but the railway put a foreman on that section not long ago, a young man of good education but with no experience. He was trying to tell some of these old trainmen who have been on there for 40 years what to do. This is another example of what they are doing in that section of the country.
The other day the post office was instructed to find some other means of transportation after September 30, because the train service would be discontinued. We went to the transport commission's offices and we could not find any evidence there that they were going to discontinue these trains. We went to the Post Office Department and they told us they had been informed the service would be discontinued after September 30. Naturally they had to find some other way of carrying the mail, so they undertook to call for tenders for trucks to deliver the mail. This was not because they wanted to do that, but they were forced to do it. We want an opportunity to appear before the board of transport commissioners to state our case.

We believe these trains are not losing money but are making money. If we got improved service they would pay well.


George Carlyle Marler: Would the hon. gentleman tell me to which trains he is referring?


Lewis Elston Cardiff: Those trains out of Palmerston north and west on the Kincardine line and the Southampton line. Apparently they are going to cut off the service on both those lines. I believe there is another section of the line which goes up to Goderich about which I saw an item in the newspaper to the effect that service is going to be discontinued. This is a good section of the country and there are good farms up there.
I should like to refer to a statement made last night by the hon. member for Wellington South. I was not in the house at the time, but according to Hansard of August 9, 1956, page 7342, this is what he said:
I spoke on this item four years ago along with the hon. member for Bruce, the hon. member for Perth and the hon. member for Wellington North. We approached the minister on this same issue and after our representations and private presentations these lines were not closed up. I think it should appear on the record that members from this district four years ago prevented this line from being closed.
I was here at that time, and I would hate to be so narrow-minded as to make a statement like that. I am getting sick and tired of hon. members getting up in this house and stating that unless you belong to the government side you are of no benefit here. This is not the only time that has happened. It has happened frequently in this house, and it is not very becoming to those who make these utterances. As a matter of fact I am glad to be able to state that the departments have a much wider vision than this particular gentleman has, because I have gone to them on different occasions and was very well treated. I have not any complaints to make, but I do not think that kind of thing should be left unchallenged.
I have not very much more to say. I wrote the president of the railroad and told him what we wanted to do. I wanted to find out who was putting the pressure on to have this service discontinued. Of course I have not had time to have a reply yet. All we want is a chance to go before the board of transport commissioners and state our case. I do not think we will have any difficulty in keeping the service.


Auguste Vincent: In a few months the Montreal and Southern Counties Railway will discontinue its service from Montreal to the south shore. I thought I would bring to the attention of the minister a few points in connection with this subject. First of all there is the matter of the re-employment of the old
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employees of the Montreal and Southern Counties Railway. I have quite a few of them in my constituency, so I think it is my duty tonight to ask the minister to confer with the authorities of Canadian National Railways in order that these employees be given the best possible opportunity to regain employment with the C.N.R., because the Montreal and Southern Counties Railway is a subsidiary company of the C.N.R.
I know that up to now certain of these employees have been out of work. Actually they were told by the Canadian National Railways that sooner or later they would be given the first opportunity. There is not only the question of employment involved in this matter, but there is also the question of pensions.


George Carlyle Marler: I do not want to interrupt the hon. gentleman, but I must say that I feel a discussion of these matters which have no relationship, either direct or indirect, to the board of transport commissioners cannot properly be had on this item. The question of an abandonment of facilities, the question of a reduction of service, is something that could perhaps be justifiably discussed on this item. I do not believe that matters of internal management of the C.N.R. really ought to be discussed on this item.


Auguste Vincent: I wanted to bring this to the attention of the minister this afternoon but I was told I was under the wrong item and I was then informed that I could discuss this matter under item 494. I do not wish to take up too much of the time of the house, but I thought these remarks would have to be put on the record.
There is one section in the statutes of 1955, volume 1, chapter 29, which gives the Canadian National Railways the opportunity of operating buses. If the railway is to be replaced by buses, I suggest that the minister see to it that the best company possible be chosen. At the moment the Montreal and Southern Counties Railway is operating on a seven months' option. This service is about to be discontinued completely and I think buses will replace the railway. I am not particularly in favour of the C.N.R. operating buses, but should they not be able to find an entirely responsible company I should like the minister to see to it that the C.N.R. does operate a service between Montreal and the south shore.
At the same time I wish to say that the Victoria bridge is now in very good condition for such a bus transport service, and I wish to thank the minister in that behalf, because I know he had some influence with the Canadian National Railways to get this thing going. The bus service between Montreal

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and the south shore should cause no trouble whatsoever. Therefore i hope the best possible company will be chosen. If we cannot get the best company, I hope the Canadian National Railways will operate it.


Mr. Quelch:: I wish to voice a protest against the action of the Canadian National Railways in attempting to close so many of the agencies in my constituency. I say "attempting" because fortunately the board of transport commissioners has refused them permission to close a number of them. Would the minister not agree that at any point where there is a certain volume of business and where the volume of business is at least as great as, or greater than, it has been in the past, the C.N.R. should attempt to maintain the agencies and leave the agents there? For instance, the minister must be familiar with the town of Munson, in one of the best wheat-growing districts in Alberta and a heavy producer of grain. They sought the right to close that agency last year. Then again, they sought the right to close the one in Huxley, in another very prosperous mixed farming district. Fortunately, in both these cases the board of transport commissioners refused to grant the permission.
I think the C.N.R. are acting out of all reason in apparently making an attempt to close out the agencies at so many points. It should not be merely a question of revenue. Surely the question of service should be taken into consideration. I hope the minister will try to use his influence with the railway to see that this policy of closing down agencies is halted. An effort should be made to keep them from attempting to close more of these agencies. I do not know how many have been closed in my constituency in the past five years, but it is a considerable number.


Mr. Small:: Mr. Chairman, last week I quoted the decision of the board of transport commissioners with respect to the Canadian National Railways, and tonight I wish to make some reference to commuter rates, particularly to the decision handed down by the board on an application of the Canadian passenger association for a rescission of the board's order, 75234, dated September, 1950, which ruled that the railways were entitled to out of pocket costs and authorized as an adjustment in the Toronto area a 100 per cent increase in the commuter fares, to be effective in three stages, the first being 50 per cent on September 30, 1954; the second 25 per cent on March 31, 1955; and the third, 25 per cent on September 30, 1955, making the full 100 per cent within a year and a half. The railways stated that this would only give them a fighting chance to break

even, and asked that the board give them discretionary power to fix commuter rates at a higher level if the new rates proved to be below the compensatory level. The municipalities contested this and contended that 35 per cent would be sufficient.
The board further held that the railways had on their own initiative over the years set their own rates in given areas, and that their allowance of a 50 per cent increase in all areas other than in the Toronto area was an interim judgment while further evidence was gathered, and their investigation would have to be continued before they could give a final judgment.
I might mention that the Canadian National Railways said that 44 per cent of their passenger traffic was commuters. This increase which was granted to the railways augmented their revenue considerably. The increase granted to the railways on commuter fares should have supplied sufficient incentive for them to make an improvement in service on the commuter lines, but that did not turn out to be the case. In fact they did not follow that up. In the submission of the president of the Canadian National Railways to the royal commission on Canada's economic prospects on January 19, 1956, Mr. Gordon made a statement to this effect. He said that the commuter service is an unprofitable operation because the benefits of the service are localized at present in Halifax, Saint John, Quebec, Montreal and Toronto; and with the future expansion, plus the past expansion, there would be additional demands for new or more service to new centres. The demand would be made by municipalities finding that they would have to have extra service.
The conclusion was that the railway commuter service was unprofitable at any level of fares that the commuters could afford to pay. No matter what rate was set it would not be satisfactory. Naturally you would expect that. He said that the decentralization of urban communities, to what he termed metropolitan satellite residential districts, meant that they must have high-cost streets and arterial systems for motor vehicles and road transportation, and that this created a demand for increasing railway commuter service. That is natural, too. He said, "Under these circumstances, if a municipality will make good our losses we are prepared to design a commuter service adequate to the demand" and he offered this suggestion, which is a proposition, as the only practical solution for the future.
Then later on, when he appeared before the railways and shipping committee, he was questioned about this submission to the royal commission. He said that what he had said

before the royal commission had been distorted. He said he had not asked for subsidies from the municipalities, but he did state that commuter service was unprofitable, and if any municipality wanted to talk to the railways about expanding commuter service they must talk in terms of benefit to their communities, that the whole of Canada should not have to pay for the losses on the Canadian National Railways to benefit one area only. He said that if more commuter service is to be built, then there should be a contribution from the area that receives the benefit. Then he made the further observation that all solutions so far advanced had missed the cardinal point that the railway facilities around Toronto were at complete saturation now and it is a problem to handle present business and traffic. It was mentioned that they had come to the end of the possibility of supplying better service.
Another statement which appeared in the press was made by Mr. Kyle, vice president of the central region of the Canadian National Railways. He had this to say in a well thought-out statement. It is physically not possible. The Canadian National Railways should not superimpose fast regular service on existing lines already jammed with long-haul freight and passenger trains. He said that local industries were coming into the metro areas so fast that his lines are likely to be overcrowded for years ahead. He said the Toronto union station cannot handle the present traffic, let alone thousands of additional commuters.
Then after making that statement he had this to offer. One solution is to parallel present lines and build a new station, and he proffered an estimate on the cost of purchasing and building a right of way of over $100 million, which the municipality would have to pay. I think it is time we had a clear understanding concerning how and why the railways received their charters and franchises. Was it not for the prime purpose of moving goods and people, and on the understanding that the extent of their prosperity and progress would hinge on the kind of service they gave as is the case in any other enterprise?
When the country was sparsely populated the railways were given aid to get started and were further assisted in lean years; but they were also required to strive for top service in the carriage of goods and passengers and were expected to apply all their effort to increase every phase of their operations and provide for the continual expansion of their systems. Have the railways ever tried to find out what kind of service the commuters required and what rate they
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could pay or would be prepared to pay in any given area? Have they ever given a fast, improved service with reasonable frequency and punctuality as an inducement to increase patronage? Obviously the answer is that they have not. Instead they have curtailed the number of runs, as we heard here tonight, and have complained about the handicaps they encountered. Other enterprises encounter difficulties but they manage to overcome them, and the railways have not done this. They have always adopted a defeatist attitude.
One can see by their statements that they would prefer to haul only the freight traffic because it is the most profitable.


An hon. Member:: Turn another page.


Robert Hardy Small: If the railways do not co-operate in providing service that will take commuters to their work where they fabricate the merchandise that the railways will haul, where will the railways get their freight traffic?
Let us see what the railways have done by way of planning in the past for inevitable future expansion. They have done nothing to secure property and needed facilities, and on their own admission they are stymied concerning the Toronto area because they failed to take such provident steps. They have not kept pace with progress in the last three decades and now they say to the municipalities, and this applies particularly to metropolitan Toronto, "You must pay cash on the barrelhead for the kind of service you want, to provide us with the physical assets which we failed to acquire during the past 30 years." How brazen can they get? Well, the last proposition of the Canadian National Railways is a glaring example.
Over 30 years ago Sir Adam Beck had envisaged a great network of electrically operated radial railways in a gradual expansion plan for Ontario that would have provided a fast commuter service as well as an intercity service. He advanced his campaign to the point of public acceptance, and then a whole horde of those who were envious of the success of the hydro project, wrathfully joined forces with those who personally disliked him because of his aggressive nature and adamant stand and opposed his radial project, and they were successful in their campaign which effectively scuttled the radial plan.
Where does the Canadian National Railways enter into this picture? What has it done concerning commuter rates and services? Through different days and different ways people forget over the years. Sir Henry Thornton, then president of the Canadian National Railways, aligned himself with

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those who stood in opposition to Sir Adam Beck; and the weight of Sir Henry Thornton's prestige gave the necessary impetus to the campaign and he is given the credit for having scuttled Sir Adam Beck's radial plan. Even at this date the Canadian National Railways cannot detach itself from the culpability of Sir Henry Thornton's actions.
Sir Adam Beck died shortly afterwards. Had he lived to see his radial plan put in operation there would be no commuter problem in Ontario today. Is it any wonder that there should be resentment at the Canadian National Railways' cash on the barrelhead proposition, when they had not done anything to provide an efficient commuter service? They have made no attempt during the three decades I have referred to.


Mr. Castleden:: Mr. Chairman, I have a few words to say under the item concerning the board of transport commissioners. This is the board which hears applications from the railway companies for permission to increase freight rates and alter passenger service and depot facilities and various other things having to do with the railways. I might say that I have always been appreciative of the service they have rendered and the attention they have paid to any recommendations or briefs which have been presented on behalf of groups or communities when the railways have made such applications. In the past year out of four applications which have been made for the closing of stations or depots in my constituency, in only one case was the application granted and the company given permission to withdraw its depot service.
There is an application before the board of transport commissioners at this time which is of great importance to all producers in western Canada. That is the application of the railway companies for permission to charge demurrage on cars which are still loaded with grain at terminal elevators 48 hours after reaching that point.


George Carlyle Marler: Mr. Chairman, I raised a point of order last Saturday when an hon. member was attempting to discuss the question of demurrage, and I think the Chair ruled that inasmuch as this case was now before the board of transport commissioners and was therefore sub judice it was not in conformity with parliamentary practice to discuss the issue of such a case.


George Hugh Castleden: I realize, Mr. Chairman, that the application has been heard and there has merely been a postponement to September 10 which will of course completely remove the possibility of our discussing it in this house if the Chair so rules.
[Mr. Small.!
Speaking aside from the board itself, I would point out to the minister that there is a great need for storage space at terminal elevators, and also that the railway companies have a great need for cars for the movement of grain. I hope the problem can be solved in order that for the movement of grain cars will be made available which have been tied up at critical times in the past, which has caused the producers to suffer. It is also my hope that something can be done to prevent the cost of this increase being passed on to the already overburdened producers. I shall leave this subject at this point if that is the ruling of the minister-


George Carlyle Marler: It certainly is not my ruling.


George Hugh Castleden: I am sorry; the ruling of the chairman with reference to the minister. I would now like to ask a question. In cases such as I have mentioned does the board carry out the policy of the government or are they left entirely to reach a judgment based on their own findings?


George Carlyle Marler: Mr. Chairman, I can say immediately they are a quasi-judicial body. The government does not attempt to direct the board as to the course of action they should take in any circumstances. Hearings are conducted before the board and evidence is adduced by all parties interested in the particular case. The board then renders its decision. In some cases there is an appeal to the supreme court and in some cases there is an appeal to the governor in council, so there really is no reason why the governor in council should intervene. I can assure the hon. member that the government does not attempt to influence the board in any way whatsoever.


George Hugh Castleden: I would like to refer to the position of the transport controller.


George Carlyle Marler: That item has already passed.


George Hugh Castleden: What item does that come under?


George Carlyle Marler: Under the first item.


George Hugh Castleden: Under administration?


George Carlyle Marler: Yes.


George Hugh Castleden: The whole matter is discussed under the one item?


George Carlyle Marler: Yes.


George Hugh Castleden: 
George Carlyle Marler: That is really not covered by the item, but I can dispose of it by saying that when the hon. gentleman raised the question I drew the matter forthwith to the attention of the transport controller. I think the hon. gentleman should not really expect me to act as a sort of messenger between the members representing different constituencies and the transport controller. If that were added to my already numerous duties I fear that my other work would be sadly neglected.


George Hugh Castleden: I was not asking the minister to do that. He requested that I should call any particular incident to his attention, and I merely did so.


George Carlyle Marler: I think I shall have to withdraw that offer.


John Hornby Harrison: The minister indicated a little while ago that the question I wish to raise should be asked on this item. It is in regard to the Northern Alberta Railways having been under construction for a great number of years. I do not think there are any physical reasons why it should be still under construction; very likely it is a device for maintaining a little higher freight rate. This railway is now far removed from a trappers' railway and is carrying a tremendous amount of freight, and I do not doubt that that is now a fairly remunerative part of the railway's operations. I know that in these times, when their costs are rising, they like to get revenue when they can get it, but that should be tempered with a little equity. I just wanted to ask the minister how long he might contemplate that this railway would be termed as under construction.


George Carlyle Marler: I am afraid I cannot answer that off-hand but I shall make inquiries and try to give the hon. member the information.


[Stage Direction]
Item agreed to.
Canadian maritime commission-*
495. Administration, $139,228.
George Carlyle Marler: This deals with the Canadian maritime commission. Inasmuch as questions were raised earlier in the discussion with regard to the government's interest in Canada's merchant marine, I should like to take this occasion to make public some changes that have been made in connection with both the replacement plan and the transfer plan. I think the quickest way for me to deal with the matter is to read the short statement I have in this connection.
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Immediately after the war the government sold the bulk of its war-built fleet to private Canadian operators, subject to a flag covenant requiring that the ships be kept on Canadian registry. To overcome some of the practical difficulties arising from this covenant the government, on the recommendation of the Canadian maritime commission adopted two measures:	the replacement plan and the
transfer plan.
The replacement plan enables the owner, with the approval of the Minister of Transport, to sell his ship off Canadian registry, free of the flag covenant, provided the proceeds of sale are deposited in escrow to be used for the acquisition of an acceptable replacement for the ship sold. Up to the present time in all cases where escrow funds have been used, the replacement vessel became subject to the flag covenant without any limit of time.
The transfer plan enables the owner to transfer his ship from Canadian to United Kingdom registry under special arrangements. This allows him to overcome the handicap of the substantially higher costs of operating on Canadian registry and to carry cargoes for sterling freights, of which the profit is convertible into Canadian dollars.
To encourage a greater use of the replacement plan, the government has now approved certain modifications of the flag covenant on ships acquired in whole or in part with escrow funds. These modifications were recommended by the maritime commission after extensive discussions with the Canadian shipowners' association. They do not apply, however, to the original flag covenant which was assumed by the purchasers of ships from the crown and which remains unchanged.
From now on the flag covenant for a replacement vessel will be for five years if the vessel is built in Canada for the operator effecting such replacement, and for ten years in all other cases. This modified flag covenant will be applicable to the replacements which have already been effected.
As a further encouragement to the shipowner to replace the vessel originally sold by the crown and to invest his own funds for this purpose, the terms of the replacement plan have been modified so that if during the currency of the flag covenant the owner sells his replacement vessel off Canadian registry, he will be obliged to redeposit in escrow only a proportionate part of the escrow funds used for its acquisition. This proportionate part will be the sum which represents the same proportion of the

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escrow funds invested in the vessel as the unexpired term of the flag covenant bears to the full term of the flag covenant. For example, if a vessel subject to a five-year flag covenant were sold when three years of the term remained to run, then three-fifths of the amount of the escrow funds invested will require to be redeposited in escrow.
Holders of escrow funds will now be allowed to use them for tanker type ships.
Furthermore, the use of escrow funds will be allowed for improvements to a vessel, excluding of course ordinary repairs and maintenance, whether effected in Canada or abroad, subject to conditions generally similar to those applying to the acquisition of a replacement vessel, unless modified by the maritime commission in special circumstances. The commission envisages that there would be no extension of the flag covenant if the conversion or alteration were carried out at the time of the purchase of the vessel. If, on the other hand, the conversion were carried out later, but during the life of the flag covenant, the commission does envisage an extension of the covenant based upon the amount of money used, expressed as a percentage of the original cost to the owner of the vessel. For such expenditures of up to 10 per cent of the cost of the vessel, there would be no extension of the flag covenant, but thereafter, in the case of a Canadian-built vessel with a five-year flag covenant, for each 20 per cent or part thereof one additional year would be added to the covenant, and in the case of a vessel built outside of Canada with a ten-year flag covenant, for each 10 per cent or part thereof one additional year would be added to the covenant.
Further modifications will also be brought about in the realm of capital cost allowances. At present, for income tax purposes, it is compulsory to pool vessels that have an exemption from recapture of depreciation, under section 4 of the Canadian Vessel Construction Assistance Act, with other vessels that do not benefit from this exemption. Consequently, when the owner disposes of some or all of the vessels so pooled, his exemption can readily become dependent upon the order in which they are sold. Broadly speaking, if the qualified ships are sold earlier and the unqualified ships later, the sale of the qualified ships may serve to wipe out the undepreciated value of the class. This situation could be remedied by permitting an owner, if he so elects, to treat as a separate prescribed class any vessel or vessels that qualify under section 4 of the act; that is, a vessel the proceeds of sale

of which had been used for replacement under conditions satisfactory to the commission.
It is the government's intention to recommend to parliament at the next session the legislation required to remedy this situation.
At present under the income tax regulations a ship does not qualify for any capital allowances until she is, and I quote, "a ship as defined in the Canada Shipping Act". In practice this has meant that a ship must be practically completely built before being eligible for depreciation unless she is built under the provisions of the Canadian Vessel Construction Assistance Act. Generally speaking, therefore, the shipowner was placed in a position inferior to that of other enterprises which can claim capital cost allowances on assets as progress payments are made during construction. It is the government's intention to take the necessary steps to remedy this situation.
I must apologize, Mr. Chairman, for the length of the statement, particularly at this stage of the discussion, but I am sure hon. members will realize that these are significant changes in the provisions of the transfer plan and the replacement plan, and I think they go a long way toward meeting the requests which Canadian shipowners have made in recent months. Broadly speaking, while this does not represent all that we have been asked to do, it represents a very high proportion of what we have been asked to do and I think it is a very constructive move.


Howard Charles Green: Mr. Chairman, it would be quite impossible to deal with the minister's announcement this evening because we have not had an opportunity to study the details of the statement. However, as I understood him, it is in effect a change in the transfer and replacement plans and the purpose is to make it easier for shipowners to get modern ships. That would apply almost entirely to ships owned by Canadian shipping companies which are now flying the British flag and are manned entirely by British officers and seamen. It seems to be of no help whatever in re-establishing a Canadian merchant marine. In fact it may make it even more difficult to establish such a marine under the Canadian flag, because it is easing the covenant which provides that the shipowners must keep their ships under the Canadian flag if they wish to get certain benefits.


George Carlyle Marler: It is for the replacements that the covenant is being eased.


Howard Charles Green: That certainly will not make it more likely that we will have a larger Canadian merchant marine. I believe the time is long past when the government should have

adopted a policy to bring about the establishment of a modern Canadian merchant navy. But here again in the announcement tonight of this new policy the government is evading that question, failing to meet the main question, which is whether or not the Canadian flag is to fly on the high seas and Canadians are to have the opportunity of manning ships of their own country.
It is very appropriate that this discussion should come up under a vote for the Canadian maritime commission. As the minister knows, that commission was set up after the second world war, and for very definite purposes. It was given a very high status. I have here the act entitled the Canadian Maritime Commission Act, which was passed in 1947. Section 4 of the act provides that the commission and the persons employed by the commission shall constitute a department of government over which the minister shall preside, and the chairman of the commission was given the status of a deputy minister.
In other words this was not just an ordinary commission. This commission was set up as one of the most important commissions under the whole governmental framework. It was also given very wide powers. They are contained in section 6, which reads as follows:
The commission shall consider and recommend to the minister from time to time such policies and measures as it considers necessary-
For the following purposes, which I should like to emphasize in my remarks.
-for the operation, maintenance, manning and development of a merchant marine and a shipbuilding and ship repairing industry commensurate with Canadian maritime needs.
Then the act went on to outline in some detail the different ways in which these powers were to be exercised. Some of us had been advocating the setting up of a Canadian maritime commission for some years before the government actually took that step. When the bill was introduced in 1947 it was introduced by the present Minister of Trade and Commerce. I have here Hansard for June 23, 1947, and should like to quote from page 4514 what that minister had to say with regard to the functions of this commission. He said:
The bill seeks to set up an authoritative body to advise the government on shipping and shipbuilding matters and to administer certain matters relating to those industries. The proposed commission is to consist of three full-time officials who, as a body corporate-
This is important when we consider what has happened since.
-will be responsible to and subject to the direction of the Minister of Transport.
Then he went on further:
The function of the commission in its advisory capacity is to consider and recommend to the
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minister such policies and measures as it considers necessary for the operation, maintenance, manning and development of a merchant marine and a shipbuilding and ship repairing industry, commensurate with our maritime needs.
The minister also dealt with the power given to the commission to set up advisory committees from the various industries which were interested in the merchant navy. He said:
It is our thought, amongst others, that a standing advisory committee consisting of representatives of ship operators, shipbuilders, and seafaring personnel should be set up as soon as possible, which will provide a forum for discussion on a number of matters concerning the efficiency and development of the industries.
Before I go on to point out how the government has failed to keep the commission functioning as it was meant to function in the first place, I should just like to read what this same minister said about the need for Canada to have a merchant navy, as found at page 4214 of Hansard of June 16, 1947. He said:
I would not suggest that we have a merchant navy sufficient to carry all our exports. I would suggest that we require a merchant navy able to carry a substantial part of our exports and to protect Canada's position in the matter of freight rates and other problems of carriage. Today-
That was in 1947.
-we are the fourth maritime nation in the world-
We have slipped a long, long way since then.
-and when the boats now on British register are returned we shall probably be the third maritime nation in the world. Whether Canada in the future will require to maintain that position is a question for the maritime commission to study, so that it will be in a position to advise the government. Being a shipping and shipbuilding nation at the moment, it is important that we shall remain a shipping and shipbuilding nation.
I propose to point out now the tragedy of what has happened in spite of that statement made in 1947 by the present Minister of Trade and Commerce. A commission was duly set up. The chairman chosen was Mr. J. V. Clyne of Vancouver, a marine law expert and a man who understood thoroughly the problems of shipping. I think the minister will agree with that statement.
He did a magnificent job here as chairman of the Canadian maritime commission. The first three reports were submitted by Mr. Clyne. Then he resigned, and shortly afterwards was appointed to the supreme court of British Columbia, where he is rendering the same type of efficient service that he rendered here. Under Mr. Clyne the advisory committees were set up. The second report contained an analysis of the whole history of

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Canada's shipping, shipbuilding and ship repairing industries and contained clear recommendations. I believe those advisory committees have never met since Mr. Clyne resigned.
When it came to replacing him, who was chosen? The man chosen was the deputy minister of the Department of Transport, who had probably as many duties as or more duties than any other deputy minister here in Ottawa. By that very action the government made it impossible for this Canadian maritime commission to function as it was intended to function, and the decline has continued steadily. I am not criticizing the present chairman, although I believe he has other duties to perform in addition to his duties as chairman of this commission.
The second member is one of the key men in the St. Lawrence seaway authority. He succeeded Mr. Lessard as the deputy minister of the Department of Transport, and is still a member of this commission. You can realize at once how much time he would have to work on those problems which were allotted to this commission under the original statute. The third member, Mr. Angus McGugan, unfortunately passed away a few weeks ago. He too had done excellent work, and I should like to pay tribute to his memory. That is the position of this maritime commission today.
My first suggestion to the minister is that he take steps at once to reconstitute this commission as it was intended to be in the first place. It was never intended to be just a back-office branch of the Department of Transport. It was intended to be set up as an almost independent commission able to consult with the people interested from coast to coast and to make independent recommendations to the government.
The policy recommended by this commission is contained in the second report. I am not going into any details other than to say that they recommended that Canada should have 50 dry cargo vessels. The tonnage was to be 500,000. They were not to be old wartime ships. The objective was 50 modern dry cargo vessels. That was the recommendation in 1949. The previous year this commission had worked out a transfer plan under which a large number of Canada's wartime merchant vessels were transferred to United Kingdom registry, where they remain to this day.
That was done because at the time ship owners were unable to operate these ships profitably under the Canadian flag, but the result was that all the Canadian sailors on those ships were put on the beach. They lost their jobs. Ever since then these ships have

been under British registry, have been manned by British sailors and have been directed by the British government.
Within the last few days I believe that at least three of those ships have been requisitioned for service in connection with the trouble at Suez. That just shows how little they can can be regarded as Canadian ships. They are directly under the British authorities, and they are only Canadian in that they are owned by Canadian shipping companies which, of course, pay taxes to the Canadian government.


George Carlyle Marler: And, of course, they may be recalled at any time by the Canadian government.


Howard Charles Green: It will be very interesting if the minister will table the exchange of notes or the agreement with regard to these ships that were transferred to United Kingdom registry. When they can be requisitioned and sent to the Suez, as has been done within the last week, it does not look as though the Canadian government has very much authority over them. Furthermore, they are not modern vessels. They are all old, slow wartime ships.
So much for the transfer plan which is being modified to some extent by the policy announced by the minister this evening. In 1949 the replacement plan was arranged. I am not sure whether it was in 1948 or 1949 that the plan was commenced.


George Carlyle Marler: I believe it was 1948.


Howard Charles Green: 
George Carlyle Marler: I think that is right; I think it was $3J million.


Howard Charles Green: Under that policy $34 million was set aside, which amount was to subsidize 35 or 40 vessels so they would be able to operate without loss. That plan was in operation only for the one year, but as a result of that assistance given in 1949, these ships were able to operate successfully until 1953. In 1953 there was trouble again. Ocean freights were down, the ships were having trouble, and another plan was announced on November 12, 1953. That plan- just as is the plan which the minister has announced tonight-was aimed primarily at easing the replacement plan, making it easier for the ship owners to get new ships. The

announcement with regard to that plan had this interesting final paragraph:
It is further announced that, after due consideration, the government has decided that the request made by the Canadian shipowners' association for operating subsidy could not be approved at the present time. However, if it appears feasible to establish modern Canadian flag vessels on certain routes that would be of a benefit to the development of Canadian trade, Mr. Chevrier indicated that consideration might be given at a later date as to whether or not some form of assistance ought to be provided in such cases.
In other words, that was a half promise that there would be a subsidy for the operation of Canadian vessels on certain routes which were the most vital to Canada. Nothing ever came of that last proposal. There never has been any such assistance given. From time to time changes have been made in the replacement plan, just as a change has been made this evening.
Last year we raised this question in the house, of the situation of the merchant navy, and the minister told us he was concerned about it and was going to study it after the house prorogued. Well, he studied it until November and then an announcement was made which, in effect, said that the government would do nothing.


George Carlyle Marler: Which, in effect, said the government was not going to subsidize these ships.


Howard Charles Green: In effect it said the government was simply going to allow what did remain of the merchant navy to disappear. The government accepted absolutely no responsibility for the rebuilding of the Canadian deep sea fleet. This was in November and now, nine months later, we are getting this watered-down change in the transfer and replacement plan.
What is the situation of the Canadian deep sea fleet today? I have here the ninth report of the Canadian maritime commission, and it shows that of this fleet which ranked fourth in the world in 1947, we now have left under Canadian registry five 10,000 tonners; six 4,700 tonners; three diesel cargo ships and three other cargo ships, for a total of 17. All these 10,000 tonners and the 4,700 tonners are old wartime ships. There are three of the 10,000 tonners that belong to Dosco and are engaged in trade between Newfoundland and Sydney, Nova Scotia; one belongs to the Mersey Paper Company of Liverpool, Nova Scotia and the fifth, although it is under Canadian registry, is in Italy. It has not been back here for years and is manned by an Italian crew, with the exception of a British captain and a British chief engineer.
Then of the 4,700 tonners, incidentally reduced by one since last year, five belong
67509-470J
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to the C.N.R. and one is owned by the Mersey Paper Company. The diesel cargo vessels, of which there are three, all belong to the C.N.R. The other three cargo vessels all belong to the Mersey Paper Company. The tonnage of Canada's deep sea fleet of cargo vessels is now down to 87,085 tons, the lowest it has been in 40 or 50 years.
In spite of what we did during the war in the way of building, manning and operating merchant vessels, only the crews are left to man these ships. All the rest of the Canadian merchant seamen are on the beach; have had to find other jobs. The ship-owning companies, which are experienced and have done a good job, are working toward liquidation. Perhaps this new plan will stave that off for a while, but that is the trend into which the shipping companies of Canada have been falling.
So far as the amount of our own trade that we carry is concerned, that is set out also in this report. It shows that in 1954, which is the latest year for which figures are given, Canadian vessels carried only 2-1 per cent of Canada's overseas trade, down from 1947 when it was 20-2 per cent. United Kingdom ships carried 33-8 per cent, down from 45-2 per cent in 1947. The ships of other flags in 1954 carried 64-1 per cent of Canada's trade, and in 1947 they only carried 34 -6 per cent. I venture to say that in 1955 the percentage carried in Canadian vessels was even lower than 2-1 per cent, and in 1956 it will be lower still.
In so far as shipbuilding is concerned, the only thing that has kept our shipyards active has been building for the Canadian navy. This report shows how that dropped off. Compared with 1954 there was a fall-off of 60 per cent in the gross tonnage and 50 per cent in the dollar value of ships delivered. Ship repairing is also dealt with. The total value of merchant and naval repair work completed in 1955 amounted to $27,039,805, and compared with 1954 this constituted a decrease of $11,104,723 or 29 per cent. This includes naval repair work. The average monthly employment in the industry, that is in the shipyards with 17 yards reporting, was 12,432, a decrease of nearly 20 per cent compared with 1954.
There is the sad story of what has been happening to Canada's deep sea fleet. At the same time, practically every other nation in the world has been building up its merchant navy. Switzerland, which does not touch the sea at all, has a much bigger merchant navy than Canada. We are building naval escort vessels costing millions of dollars. What are they going to escort? There are no Canadian merchant vessels for them to escort.

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By the way, I should have given the figures for the Canadian-built ships which are under British registry. At the time this report was completed there were 99, and that was four less than the year before. Four of those ships have gone oil the register. This minister and his predecessor have said that we have these old ships under British registry and if trouble comes we can use them. Apparently there are two pools if war should come, the United Kingdom pool and the United States pool. These Canadian-built ships go into the United Kingdom pool, and Canada will have to fall back on the United States to supply any merchant vessels she might require.
The situation on our coasts is tragic. Of course, coming from the west coast I am particularly concerned about it, as are the east coast members about their coast. Here is a dispatch that appeared in one of the Vancouver newspapers on February 18 of this year. It is headed, "Canadian Registered Freighters Fading Fast". It reads:
Last year only six Canadian-registered deep sea vessels cleared the port of Vancouver. I think it is the lowest total of Canadian ships to sail from this port in the last 50 years. Ten years ago there were nearly 50 deep sea ships owned and registered in this port, carrying our lumber, wheat and other products all over the world. Most of those ships were built here. All of them carried Vancouver crews. Wherever one went in the world, those ships carried the name of the port of Vancouver.
Today there is not a single Vancouver-registered ship on the high seas.
Then there is this significant paragraph:
Rightly or wrongly, Ottawa has given up the ghost. The merchant service no longer exists, and all the royal commissions in the world won't bring it back to life against the hard facts of international competition.
I suggest that the minister go down and spend a weekend in a resort on the St. Lawrence river where he can watch the ships going up and down that river which is to constitute Canada's great inland seaway. I did that a few weeks ago. There is not one Canadian ocean-going ship operating on that seaway at the moment, and there is not going to be one unless the government changes its policy. Ships from Holland, Sweden, Norway, France, the United Kingdom and Germany are going up and down through that canal system even before the seaway is built, but not a sign of a Canadian vessel anywhere.
The eighth report of the commission set that out. It said:
There were 11 steamship lines operating regular ocean services to and from the great lakes in 1954. Including liners and tramps, 99 ships, none of which was under Canadian or United States registry, made 275 trips from overseas ports to the great lakes.
IMr. Green.]
In the ninth report we find the same situation; no Canadian ships, no United States ships, and a larger number of ships from the continent where they are building ships for the St. Lawrence trade.


Edward Turney Applewhaite: Order. I am sorry to interrupt the hon. member, but it is my duty to tell him that his 30 minutes have expired.


Howard Charles Green: I am not quite through.


George Carlyle Marler: Go ahead.


Edward Turney Applewhaite: Shall the item
carry?


Howard Charles Green: No.


George Carlyle Marler: I have no objection if the hon. member would like to continue.


Edward Turney Applewhaite: With unanimous consent the hon. member may continue.


Howard Charles Green: The United States has moved to meet this situation. In February the United States maritime administration stated that its trade from the great lakes to Europe would be considered essential, and under the terms of their law it became eligible for subsidy. I have a dispatch dated Washington, February 8, which says:
The United States maritime administration today made American ship operators on the great lakes eligible for government subsidies by declaring the ocean route between American lake ports and western Europe to be "essential" to U.S. trade and economy.
The aim, officials said at a press conference, is to permit the United States vessels to compete with cheaper foreign shipping.
The report goes on:
A reporter asked whether the subsidy would mean more competition for Canadian shipping.
"It will certainly be competitive," maritime administrator Clarence G. Morse replied. "We'll needle our operators to do their damndest."
He suggested the Canadian lake ports of Toronto, Hamilton, Windsor and Sarnia, Ontario, would benefit from increased trade.
I have other dispatches here, including the report of a speech made by our own minister, pointing out just exactly what that United States policy would do, and I do suggest to him that Canada should adopt a policy which would have the effect of putting a Canadian fleet on the St. Lawrence seaway to carry some of the Canadian goods overseas to Europe. Last year the minister criticized me by saying that I had not made any suggestions-


George Carlyle Marler: I was thinking the same thing this year.


Howard Charles Green: The minister is thinking the same thing tonight. Well, I am a little bolder tonight. I do urge in all earnestness that the government delay no longer in adopting

a policy which will put a Canadian flag deep sea fleet in being again. It may mean subsidization. No subsidy would be required at the present time because the ocean rates are so high. In many of those intervening years Canadian ships could have earned their way had they been given some encouragement by the government, but even if there has to be subsidization in order to keep a minimum number of Canadian ships at sea, then let us face that necessity and subsidize them. I believe that at the present time subsidies certainly would not be as much as $100,000 a year; probably $75,000 a year would be sufficient.


George Carlyle Marler: Per ship.


Howard Charles Green: Per ship, to keep those ships competing because the United Kingdom wages have gone up and, as I said, the freight rates are high. I do not believe it would cost this country very much money if a bold policy were adopted. Then I suggest that the government, having adopted the plan of having a merchant fleet, should appeal to the national spirit of the Canadian people. They are a maritime people. That has been shown time and again and, as a matter of fact, in the last war I believe the young men from the prairies made an outstanding record as Canadian sailors. Therefore it is not only a matter of the people on the coasts and on the St. Lawrence. Canada is now in a position where she could have a modern merchant navy, and it is far more important to us now than it has ever been, particularly because of the development of the St. Lawrence seaway.
I do urge upon the minister that he should not be content with this policy he announced tonight as the great cure-all. This is only a palliative. I do urge upon him that he see to it that his fellow ministers approve a policy which will once again put the Canadian flag on the high seas.


George Carlyle Marler: Mr. Chairman, I shall be very brief in replying to the hon. gentleman. He has adopted a very convenient line of argument. He has started with the recommendations which were made by the Canadian maritime commission in its first or second report, and he has very conveniently disregarded all that has happened since 1947; the fact that since 1947 other important shipping nations of the world have added materially to their shipping; the fact that the shipping market has changed entirely; the changes that have taken place in freight rates, and now the change that has taken place even with regard to these very vessels which constituted the nucleus of the Canadian merchant marine. He described the position
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of the owners as working toward liquidation. Now, Mr. Chairman, the fact-


Howard Charles Green: I said there was a trend toward liquidation.


George Carlyle Marler: Call it a trend toward liquidation, or working toward liquidation. I do not see very much difference between the two. The fact of the matter is that the owners of those vessels, which are now 99 in number, on the United Kingdom register bought those ships for an average price of around $400,000, and they can sell them today for prices varying from $700,000 to $1 million, notwithstanding the fact that they have been able to take depreciation on them during the intervening years.
The great difficulty in this matter is the tremendous disparity in operating costs on Canadian register in contrast with those on United Kingdom register. A moment ago the hon. gentleman seemed to imply that no subsidy was now required. Those are the words I thought he used; but the fact of the matter is that it is estimated that under present conditions it costs somewhere between $80,000 and $100,000 a year more to operate a 10,000 ton dry cargo vessel on Canadian register than it would to operate it on United Kingdom register. That is the crux of the situation.
When we discussed this matter last year and I told the hon. gentleman and other members of the committee that we were giving consideration to this problem of a Canadian merchant marine, that was an accurate statement of the facts. Consideration was given to the possibility of granting an annual subsidy to a limited number of modern vessels, but after the most careful consideration the government reached the conclusion that it would not be desirable to establish a system of annual subsidies to bonus operators of ships on Canadian register.
Following that announcement made last October I have had a number of interviews with representatives of the shipping owners, and I have suggested to them that we should consider the ways and means that should be taken in order to facilitate their operation of vessels even if it were necessary that they should operate them on United Kingdom register.
The conditions I have outlined tonight will, I think, do a great deal to stimulate the replacement of the present Park ships which are on United Kingdom register by new vessels which may be either on Canadian or United Kingdom register, depending on the circumstances; although, as I say, I think it is pretty clear that when Canadian costs are so much higher than those of the United

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Kingdom there is a very natural tendency for an operator to desire to have his ship on United Kingdom register.


Howard Charles Green: There is not really much doubt that they will be on United Kingdom register?


George Carlyle Marler: No, but sometimes taxation and other reasons militate against a simple solution, and consequently there may be cases in which an operator will keep his ship on Canadian register rather than transfer to United Kingdom register.
I want to make it clear to the committee that under the arrangements that have been concluded, the so-called transfer plan, these ships that have been transferred to United Kingdom register or retained on United Kingdom register, may be recalled by the Canadian government at any time.
I would much prefer it if conditions were such that ships operating with Canadian crews, and paying Canadian wages, and carrying out their repairs in Canadian yards, were able to compete in the international market for freight; but it is perfectly manifest that so long as our Canadian costs are so much higher than United Kingdom costs we cannot do so without introducing a policy of subsidy. I would like my hon. friend to tell me where we will stop if we start subsidizing h!s industry, because there are many other industries which would get along very nicely if the government would pay subsidies and thus enable them to meet the cost competition of other countries.


Howard Charles Green: You are doing it every day in other cases.


George Carlyle Marler: I did not hear what the hon. gentleman said.


Thomas Miller Bell: I would like to ask the minister what other industries want subsidies. I think almost every industry and everything else in Canada is subsidized and protected, and I do not see why we cannot do the same thing for our merchant fleet.


George Carlyle Marler: Mr. Chairman, when the hon. gentleman has an opportunity of carrying his opinions into effect it will be very interesting to see whether he will still preach the policy of subsidization.
I want to conclude by saying that one of the great difficulties we have been faced with up to now has been because the flag covenant originally contracted also applied to any new vessel that might be acquired or built as a replacement, ship operators, despite the most attractive price they could get for the ship they were operating, have hesitated to sell and have hesitated to effect replacements-because they were bound by the

same covenant to maintain the ship indefinitely on Canadian register. The situation under the modifications I referred to earlier is that if the ship is built in Canada the term of the covenant will be for five years, and if built elsewhere it will be for 10 years. In other words there is a definite limitation, and I believe a very real encouragement to replace and build in a Canadian yard.
What is gratifying, Mr. Chairman, is to find that the Canadian yards are receiving an increasing number of inquiries from people who desire to build in Canada. There again we are faced with similar difficulties. It costs approximately $1.60 to build in Canada something that you can build in the United Kingdom for $1.


Howard Charles Green: But they can deliver much quicker.


George Carlyle Marler: Yes, they can deliver much quicker, as the hon. gentleman says, and for that reason Canadian shipyards are receiving inquiries in increasing numbers. I am hoping there will be more dry cargo vessels built this year than has been the case for a number of years past.


Thomas Miller Bell: Mr. Chairman, I would like to make a few brief remarks on this item. First of all I want to associate myself with the very fine review the hon. member for Van-couver-Quadra has made of this extremely sad and outrageous situation that exists concerning our merchant fleet today. At the same time, Mr. Chairman, I want to be generous enough to say that I appreciate the difficulties the minister has in interesting his colleagues in the future of our fleet and our problems with respect to the sea.
There is no doubt about it, Mr. Chairman, our big difficulty is that we are a nation of landlubbers. That is one reason we have not a merchant fleet today. We are controlled inland by industrial central Canada. We do not have the background and the interest we should have in our coasts and their trade. Without carrying that thought further I want to say that probably the best example we can find in relation to our problem is the situation of the Canadian National Steamships West Indies fleet.
For quite a few years now we have let these ships operate from year to year without any definite future plans. We finally realized last year that they had a future, that there was some trade and some revenue there. The department has proceeded with a five-year plan now, and perhaps some credit is due to the minister. The fleet has been modernized, and we have taken that progressive step.
I say we should be making the same kind of plans for the future of our merchant fleet,

along the lines outlined by the hon. member for Vancouver-Quadra, in order that Canada may take her place among the great trading nations of the world. The minister laid great stress on the fact that salaries and operating costs were a problem. Certainly they are a problem. We cannot blame our sailors who when they go to sea want the same conditions and salaries they enjoy at home, because we have a high standard of living in this country.


Mr. Dupuis:: We do not blame them.


Thomas Miller Bell: I am simply suggesting, Mr. Chairman, that our seamen want what they are accustomed to at home.


George Carlyle Marler: Of course they do.


Thomas Miller Bell: We do not blame them for this but fortunately-or unfortunately, perhaps- we have a high standard of living in Canada. Some of us think it is slightly artificial, but we do have it. These men want the conditions to which they are accustomed, and when they are in competition with fleets from other parts of the world they have difficulty. The same difficulties exist in many of our industries in this country. How many of the industries in Canada today, apart from the few that are living off our natural resources, are not protected and subsidized to some extent? I make the plea that our merchant shipping fleet should have the same consideration. This is absolutely essential, and it accompanies the fact that we are emerging as a major power in this world.
One evening recently I mentioned the fact that 24 nations are meeting in London to discuss the Suez crisis, and Canada is not one of them. No responsibility; isn't that great? It may be very well to say we have no responsibility, but we know it is because we are not considered in the oceans of the world. How proud we would be to be able to see the Canadian red duster. We do not even have any argument about the flag that would be flown in all the parts of this world.
I say we have an example in the Canadian National Steamships where a little forward thinking might have helped the situation which, the department now admits, indicates a future with respect to trade in the Carrib-bean sea and related areas. I suggest that the salaries are an old excuse. It does not mean anything nowadays. We hold no brief for the seamen and their strikes in the past, but we have to wake up. We have to realize that central Canada is not everything in this country. We can talk of industry and the profits from war materials and some of the easy money we made in the last war, but we
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still have to take our place at the council tables of the nations when war conditions are concerned.
Those are my serious thoughts, and in that connection I have a question to ask the minister. The hon. member for Vancouver-Quadra asked a question and the minister replied to it, but I do not think he went far enough. He asked what exactly are the terms of an agreement with respect to the return of these vessels from their registry in the United Kingdom. I think the minister said, "When they are needed." I should like to ask him whether he would give me a more specific answer.


George Carlyle Marler: The answer is very simple. The British government can at any time return those ships to Canadian registry if it so wishes; and any time the Canadian government desires that they be returned to Canadian registry they must be returned.


Thomas Miller Bell: In other words, if we were to indicate at any time that we needed those ships back in Canadian waters, they would be our own without any strings attached?


George Carlyle Marler: Correct.


Thomas Miller Bell: My second and final question is with regard to the inquiry I made of the minister concerning the brief of the naval officers' association of Canada, a very responsible body which convened in Montreal at an annual dominion association meeting about six weeks ago. There it was suggested that it was imperative that a merchant fleet be considered, and I think a subsidy was mentioned. At that time the minister said he would not comment but that he would look into their brief in detail.
Is he in a position now to say what he thinks of it? I admit that I have never seen the brief. The difficulty with any thought of promotion of the merchant fleet is that naval matters always receive first consideration; they are under a budget. But I feel personally that if a group of officers who know and understand the past history and record of the merchant navy say that we are in a serious state, then we should take cognizance of that. Would the minister comment on that?


George Carlyle Marler: What I have said in response to the comments of the hon. member for Vancouver-Quadra applies with equal force to such representations as have been made by the body to which the hon. gentleman has just referred. There cannot be two different answers to the same question.


Mr, Green:: May I ask the minister how it would be possible for Canada to man these ships if she did recall them from the

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United Kingdom? I understand that the United Kingdom is now having great trouble in getting sufficient seamen to man her own ships. The Canadian seamen have all been shoved off on to the beach. How would Canada man these ships if she did recall them?


George Carlyle Marler: The problem of manning ships has arisen before. When these ships were built we needed men to operate them, and we got them. I think if an emergency arises and Canada decides to have these ships retransferred to Canadian registry, we would not do it in such a way that they would all arrive on the same day; we would do it in such a way that the manning facilities would be equal to the task.


Howard Charles Green: What is the explanation for the United Kingdom government requisitioning these ships in the last week?


George Carlyle Marler: I take it that if these ships are on the registry of a particular country they are subject to the laws of the country of registry.


Howard Charles Green: That is the whole point.


George Carlyle Marler: That is an advantage or disadvantage, depending on the circumstances. I cannot see that they are being exposed to any particular disadvantage in the circumstances.


Howard Charles Green: Will the minister table the
agreements or the exchange of notes for whatever contains the agreement between Canada and the United Kingdom covering these ships.


George Carlyle Marler: I would have to look into that. I could not give an answer, either negatively or affirmatively, at this time.


Thomas Miller Bell: May I follow that up by asking this. If the Canadian government indicated a need for the ships, would it be subject to the fact that the United Kingdom herself would not want them for any sort of emergency state?


George Carlyle Marler: What I said is perfectly clear, and the hon. gentleman has no reason to add those qualifications.


[Stage Direction]
Item agreed to.
496. Steamship subventions for coastal services, as detailed in the estimates, $4,016,800.
Mr. Matheson:: I have a question concerning the new and modern ferry that is now being built to carry passengers, cars and other motor vehicles between Caribou, Nova Scotia, and Wood Island in my constituency. Has the minister the latest information regarding the possible target date for launching the ferry,

when it will be completed, and whether it will go into operation at the start of the tourist season next year?


George Carlyle Marler: In view of my recent experience with ferry vessels I should be very hesitant to predict the exact date on which this new ferry is going into service, but it is our hope that we shall be able to have the vessel launched by the end of this year and that it will be in service by the summer of 1957.


[Stage Direction]
Item agreed to.
National harbours board-
497. Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1956 on any or all of the following accounts:
Reconstruction and capital expenditures-
Halifax	 $1,942,000
Saint John	 845,000
Quebec	 1,687,000
Prescott	 40,000
Port Colborne	 80,000
Generally-
Unforeseen and Miscellaneous ..	200,000
TOTAL	 $4,794,000
Less-Amount to be expended from replacement funds	 79,236
Mr. Fairey:: I have a question that I have been asked to address to the minister by the hon. member for Verdun, who unfortunately had to leave. Would the minister be kind enough to tell the committee whether the site of the proposed bridge that is to span the St. Lawrence river at Nuns' island has been already chosen and, if so, would it be premature to disclose it now?


George Carlyle Marler: I believe the national harbours board has reached a decision as to the location of both ends of the bridge to cross the river by Nuns' island in Montreal, but I am unable to give an exact description of the site at either end. So far as the north end of the bridge is concerned, it has been the subject of discussions with the municipalities of the city of Montreal and the city of Verdun. So far as the south end is concerned, it has been the subject of conversations with representatives of the provincial government, but we have not received final approval from the provincial government of the site of the south end of the bridge.


Mr. Hamilton (Notre Dame de Grace):: Has
the minister made any progress in attempting to negotiate for a fire boat for Montreal harbour? I would point out to him that more and more, with the immediate advent

of the seaway, this is becoming a sheer necessity for that area. The St. Lawrence municipal bureau has made a study of it in conjunction with the shipping federation of Canada. They point out that if there were a fire in the channel in the area of Montreal harbour the seaway itself could very well be blocked for an indeterminate period of time.
I am not so much worried about that at this point, serious though it is, as the very simple fear that a day will -come, as it does in most harbours, when there is going to be a serious fire on board a vessel in the harbour. The fire fighting equipment in Montreal harbour consists of a few piddling little hoses on one or two tugs for which fire fighting is very definitely a secondary consideration, and when such a fire occurs the fire fighting equipment will be totally inadequate. People will die and the harbour will be disrupted.
The damage may be tremendous, and it will be almost completely because of a lack of liaison and a lack of activity on the part of the federal government in pushing this thing through. I realize the minister's argument is that it is partially the responsibility of the city of Montreal but I remind him again that the national harbours board is not the property of the city but the property of the federal government, and it is the federal government's prime responsibility to provide fire protection on the water side.
I would also point out to the house that the federal government is now putting up $33,000 a year for the city of Vancouver alone toward the operating costs of a fire boat, and it would seem to me that something like this should be done and done immediately in the city of Montreal.


George Carlyle Marler: May I say just a word on that subject. When I first became a member of the city council of Montreal in 1941 that subject was discussed. I think I may say it was one of those perennial subjects that were discussed on some occasion every year during the seven years I was a member of the municipal council. The hon. gentleman has just compared the situation in Vancouver with that in Montreal. The two harbours are not comparable. The fact is that the harbour of Montreal extends over a very considerable distance, and it is a fact that fire protection can be much better afforded by the very excellent fire department of the city of Montreal than if these facilities were to be provided by fire boats.
The speed in reaching the scene of a fire when the apparatus travels by road is so much greater than if it travels by water. In the past there have been fires on vessels in the harbour, and there were fires before 67509-471
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I became a member of the city council. I think the fire department has dealt with them most capably and competently, and I do not really believe that an improvement -can be made on what they are doing.
The subject has not been recently discussed between the city authorities and the national harbours board, but if the city authorities feel that the subject should be re-examined we would be very happy to study any fresh representations they would like to make.


William McLean Hamilton: Is
the minister prepared to make a grant to the city of Montreal on the same basis as that to the city of Vancouver if the city should desire it?


George Carlyle Marler: As I said, the two harbours are not comparable, and I could not give a categorical answer, either yes or no, to the hon. gentleman's question.


Auguste Vincent: Mr. Chairman, I have a supplementary question with respect to the Nuns' island bridge. There is a great deal of interest in the bridge in my constituency, and I should like to know if the minister can tell me at this time the approximate date of commencement of construction and the approximate date of completion.


George Carlyle Marler: I am sorry, but I cannot give either the date on which the work will start or the date on which it will be finished. I will tell the hon. gentleman that Dr. Pratley and the firm of Lalonde and Valois have been retained for the preparation of the plans, and they have been engaged on the project for some months now. I think the work is progressing in its present stage as rapidly as can be expected.
(Translation) :


Hector Dupuis: Mr. Chairman, since we have been dealing with bridges, more particularly the Jacques Cartier bridge, without repeating the arguments I used, I should like to ask the Minister of Transport once again to be so kind as to tell us whether or not he has considered the many suggestions which were made to him for the abolition of toll charges on the Jacques Cartier and Victoria bridges. I understand that these tolls are still in force.
I wonder if it would not be possible, after considering the points we have brought up, to grant this request in the nearest future possible.
At any rate, if they are maintained, I suggest again that toll charges be applied to vehicles only, and not to passengers of automobiles crossing the bridge. I believe that revenues have increased considerably; there

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are no more deficits. Again may I say that, if it is impossible to abolish toll charges altogether, I think that they could at least be limited to vehicles.
Now, there is another matter I had raised and upon which I would like to speak very briefly. It concerns the site of the toll collection booths. I had suggested that they be located at the south end of Jacques Cartier bridge simply because that would give the citizens of Montreal free access, without having to pay tolls, to St. Helen island, which belongs to them. This will hardly be news to the minister, since he is perfectly aware of the situation, having been a member of the municipal council. I repeat this request out of regard for the citizens of Montreal. It is only fair that they should be allowed to go to the island without having to pay the toll to cross the bridge.
Now, during the debate on the address, I had asked whether it would not be possible, at least on the Montreal bridges if not throughout the province and this country, to make toll charges uniform? That is to say, why would it not be possible to use the same tickets on the bridges which belong to the government as such or to the harbours board?
To sum up I would like to ask the minister to take into consideration the suggestions that I have put forward to the effect that toll charges be levied on vehicles alone, and not on passengers, that the people from Montreal be allowed to go into the St. Helen island without having to pay anything and, finally, that toll charges be made uniform on these various bridges. This would be until such time as toll charges are abolished altogether.


George Carlyle Marler: Mr. Chairman, I will answer very briefly the questions just put to me by the hon. member for St. Mary. First, that of toll charges on bridges. T may say that a committee was formed in early 1955 to study this whole question.
Following the studies made by that committee, we came to the conclusion that, for the time being at least, it would be preferable to consider the creation of new facilities, even toll facilities, rather than the abolition of present toll charges, a course that would deprive the population of Montreal of the benefits resulting from the construction of a new bridge. It is as a consequence of the studies made by that committee on toll charges and as a result of the representations submitted by the delegates of the city of Montreal that the government came to the conclusion that the construction of a new bridge through Nuns' island would be justified.
Following these recommendations, we studied the possibility of undertaking the

construction of a bridge through Nuns' island. The national harbours board is at present considering a change in rates so as to exempt automobile passengers. I must give at least a word of encouragement to the hon. member by telling him that it is the national harbours board intention, when rebuilding the approaches at the south end of the bridge, -which will be made necessary by the construction of the seaway-to locate the toll collection booths at the south end of the bridge and thus to provide facilities so that traffic will be delayed as little as possible.
The hon. member has asked for the abolition of the toll charges; we shall give him half a loaf since the collection booths will be located at the south end of the bridge.
I must tell him that there have recently been talks between the authorities of the C.N.R. and the national harbours board with a view to standardizing the tolls on both bridges; I do not know whether the required order in council has been passed, but the matter will be settled shortly.
As far as the St. Helen island matter is concerned, we are investigating the possibility of admitting free traffic going to St. Helen island, but there are certain difficulties for, as soon as people could cross the bridge free of charge, there would be too much congestion. At any rate the matter is under consideration, and it is possible that the national harbours board may come to the conclusion that it would be advantageous to do something along the lines suggested by the hon. member.
(Text):


Auguste Vincent: Mr. Chairman, I shall not be taking up much of the time of the committee but these two bridges, namely the Victoria bridge and the Jacques Cartier bridge, happen to be in my constituency. For some time, as you know, this question of bridge tolls has come up perennially in the house. I was surprised this year that no motion was on the order paper, because the matter usually creates a long debate. I understand that the Minister of Transport is not the only authority responsible for the construction of bridges between Montreal and the south shore.
I think that we should review the situation a bit and find out what could be done in order to give a new slant to this problem. It is a known fact that the roads department of the province of Quebec must connect the various cities and towns in the province. Consequently they should also connect Montreal with the south shore. But there are problems which arise. For example, the St. Lawrence seaway being constructed at the moment will necessitate the construction of higher bridges.
, CJGUST 10, 1958
I can therefore just imagine the provincial authorities saying, "We will not build the bridge because we think it will cost more owing to the fact that it must be higher". This is a fact that we should bear in mind.
Also there is the question of the Canadian National Railways. In my opinion the C.N.R. is not obliged to provide facilities for motor vehicles. If it does so, it does so purely as a matter of grace. I can well understand the fact that tolls are being charged for doing it; but I thought maybe it could be possible, as is done in certain other commissions or authorities, to have a joint authority which could comprise the municipal, the provincial and the federal authorities to form what'we would call the Montreal bridge authority.
This bridge authority would be responsible for the construction of bridges. It would also be responsible for their maintenance. Its revenue would be derived in direct proportion to the interest of each government agency in the proposition. For example, the Montreal harbour bridge was constructed with the primary idea in mind of helping the port of Montreal. That is a known fact. The C.N.R. bridge is constructed with the idea of getting the railroad across. As I said a while ago, since the seaway comes into the picture it must foot a part of the bill, because bridges from now on will not be able to be flat, or they will be too low for the passage of ships. Consequently in this respect I thought all the agencies concerned would more or less give a certain amount for capital expenditure and an amount for maintenance and upkeep which would be proportionate to the amount of the capital outlay at the outset. This is the proposition I make to the house.
I know it is not only a matter of the responsibility of the Minister of Transport. It would be a matter which would have to be studied by the Canadian government. The provincial authorities would have to be contacted, as well as the authority of the city of Montreal because, after all, the city of Montreal has certain responsibilities in connection with getting the citizens of that city outside the island. I think it is preposterous that 2 million people should live in the city of Montreal without having any decent outlets over the St. Lawrence river. It is true that the city of Montreal has certain responsibilities in this respect. The department of roads of the Quebec government also has a responsibility. I wish each authority concerned would see to it that they take to heart their 67509-471J
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respective responsibilities and co-operate in forming this Montreal bridge authority.
One of the main reasons for forming that authority is this. At the present time I think the Minister of Transport is always receiving requests-as is the C.N.R. and as is the seaway authority-for the construction of bridges. If the petitioners cannot obtain favour from the C.N.R., they go to the seaway authority; and if they cannot obtain it from the seaway authority they go back to the C.N.R. or they may go on to the national harbour board. We therefore have a population of 100,000 people right there on the south shore who do not know where to turn in order to get their proper bridge connection with Montreal. At times I think they are inclined to bite the hand that feeds them. We cannot blame them too much for that because, being between the C.N.R. and the seaway, they feel as though they were between the devil and the deep blue sea. That is the whole thing.
If we had this authority it would control the construction of bridges. It would alleviate the responsibility-which, as a matter of fact, is not a total responsibility-on the part of the Department of Transport. I repeat that the harbour commission is not obliged to build transport facilities between Montreal and the south shore. Their obligation is only partial. So is that of the C.N.R. Consequently if we link up all these partial responsibilities into one responsibility, namely the Montreal bridge authority, and if they control the thing; and if the Canadian government would vote an expenditure every year for the Montreal bridge authority, as would the provincial government and as would the municipal government, we would do away completely with the tolls, and the people would not have to go around asking for a political hand-out in connection with bridge communication between Montreal and the south shore.


William McLean Hamilton: Mr. Chairman, a few moments ago, in answer to one of my observations, the minister said he would not commit himself with regard to any financial assistance to the port of Montreal in connection with a fire boat. I would remind him that his remark seems to me to be directly contrary to a remark of his predecessor on May 27, 1954, when Mr. Chevrier, having pointed out that in Vancouver the city had paid for the boat and the

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federal government paid the subsidy to the city, continued as follows:
On all occasions I have clearly indicated, in this house, and elsewhere, that if the city of Montreal or any other national harbour wishes to do the same thing as the city of Vancouver, their application will be considered in the same way.
Since the Vancouver application was considered and accepted, I assume the Montreal application if considered in the same way would be accepted. I just thought I would draw this to the minister's attention, because I am wondering if it is a case of the government going back on a promise it has made or whether the minister did not remember this promise being made.


Howard Charles Green: There are two questions I should like to ask about Vancouver harbour. In a press dispatch of June 15 there is reported a visit to Vancouver by at least two members of the national harbours board. It says:
Possibility that a new $10 million deep sea shipping pier will be built by the federal government in Vancouver harbour was strengthened today by two members of the national harbours board.
NHB members C. H. Malcolm and E. J. Alton said in an interview today they will support a recommendation for a new pier just west of Ballantyne if shipping business here continues to boom.
The new pier was first proposed 25 years ago but Mr. Malcolm said today "if business of the port continues to increase the way it has we'll probably recommend a go ahead on the pier."
"It will be needed."
I would like to hear from the minister as to whether or not that pier is to be built. I cannot find any item in the estimates which appears to be earmarked for that purpose. Perhaps the minister could tell the committee what the situation is with regard to this pier?


George Carlyle Marler: Mr. Chairman, the estimates contained no provision for an expenditure for this purpose, but I should like to tell the hon. gentleman that the subject has not yet been discussed by me with the board. I have not yet received any formal recommendation on the subject from them.


Howard Charles Green: Then I take it the statement was rather premature?


George Carlyle Marler: If I said it was premature, perhaps that would be incorrect. So far as I am concerned, if the commissioners made the statement I am sure they knew what they were talking about. I can merely say that it has not yet been the subject of discussion between myself and them.


Howard Charles Green: I hope the minister will give this subject very serious consideration. The business of the port has been growing very rapidly and the pier has been needed for a long time.

The other question has to do with an investigation which was made by the research council on behalf of the Department of Transport into the tides and currents in Burrard inlet which, as the minister knows, is the main portion of Vancouver harbour. This report as a matter of fact is dated December 30, 1954; I did not realize it was that old.


George Carlyle Marler: I did not even realize there was such a report, because it is certainly not at the instance of my department.


Howard Charles Green: Is the minister's department not involved at all? Surely it would be, because there is a proposal for a tidal dam at the second narrows, and that would certainly involve the national harbours board in some way or other.


George Carlyle Marler: All I can tell the hon. gentleman is that I have no knowledge whatever of the subject, and I can only believe that it must have been a study initiated at the request of the Department of Public Works.


Howard Charles Green: No; some years ago we had- before the minister came to the house-a discussion about the deepening of the first narrows, and it was as a result of these debates that this investigation was made. The minister involved was the Minister of Transport and probably also the Minister of Public Works. Would the minister go into this question with the Minister of Public Works and see what has been done?


George Carlyle Marler: I shall make inquiries to find out how the study came to be initiated. Just at the moment I do not detect any element of responsibility of the Department of Transport.


Mr. Van Horne:: I should like to mention one word about the Campbellton-Cross Point bridge


George Carlyle Marler: We are not discussing bridges under the national harbours board item, except the bridge that is being constructed by the national harbours board directly, and I believe that one should have been discussed under the supplementary estimates. The bridge the hon. gentleman has in mind is a proper item for discussion under the Department of Public Works and not the Department of Transport.


[Stage Direction]
Item agreed to.
Loans, investments and advances-
531. Loans to St. Lawrence seaway authority in such manner and subject to such terms and conditions as the governor in council may approve, $75,000,000.
Wallace Bickford (Wally) Nesbitt: I had three 30-minute speeches prepared on this subject, but perhaps it would better suit the minister if I confined myself

to a few very brief questions. If the minister will permit I have about eight short questions I should like to ask him. If it is possible to give the answers, it might facilitate things.
How far behind schedule is the work on the St. Lawrence seaway in the international rapids section?


George Carlyle Marler: It is not behind schedule.


Wallace Bickford (Wally) Nesbitt: The reason I ask the question, Mr. Chairman, is there is a reference to that in an address given by Hon. Lionel Chevrier on May 4 last. At page 6 of his remarks he said:
The Canadian share in the work in the international section at the present time is the construction by the St. Lawrence seaway authority of a canal and lock at Iroquois required to by-pass the control dam. Work has now been going on for over a year. Here, the contractor has completed 40 per cent of the excavation and the work is slightly behind schedule.


George Carlyle Marler: As a matter of fact, Mr. Chairman, perhaps I was a little too categorical in my answer. There is one contract in the international rapids section which has proven to be exceedingly difficult and the contractor has had some difficulty. I do not believe the delays that have occurred so far are material or will delay the project itself.


Wallace Bickford (Wally) Nesbitt: The second question is, is the seaway program in the Lachine section at present behind schedule? As I understand it from Mr. Chevrier's remarks earlier this year at that time it was, or has the program been caught up?


George Carlyle Marler: I am not aware, Mr. Chairman, that in the Lachine section there is any delay in the execution of any of the contracts. If Mr. Chevrier indicated by some public speech that there was some contract that was behind, I am not attempting to question his statement. All I am saying, Mr. Chairman, is that in no case, with the exception of the Iroquois lock, has the subject been considered sufficiently important for Mr. Chevrier to discuss it with me.


Wallace Bickford (Wally) Nesbitt: Referring to Mr. Chevrier's remarks, he said:
This one has been delayed because of high water, but with normal conditions again prevailing, it will catch up.
That is why I specifically phrased my question to ask whether it was up to schedule at present.
The next question I should like to ask the minister refers to remarks made by Mr. Chevrier in this same speech, at page 7. He said, referring to the lake St. Francis section:
The lake St. Francis section includes the portion of the river throughout the lake St. Francis area,
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a distance of approximately 15 miles. Here dredging will be undertaken in three locations at a total cost of $6 million.
Last year in answer to some questions I asked in the house the minister sent me an estimate of the cost of the various sections of the seaway. I see the lake St. Francis section here is estimated to cost $9,830,000. I was wondering, in view of the fact these figures were given at different times, if there had been some change or which figure is correct, the $6 million suggested by Mr. Chevrier or the $9 million given to me in the report by the minister last November.


George Carlyle Marler: I quite frankly do not recognize the figure of $9,800,000 for the lake St. Francis section. I had always understood that the expenditures there would be approximately $6 million.


Wallace Bickford (Wally) Nesbitt: Well, possibly. I can send it over to the minister and he might confirm it. Is there a page available?
There are one or two other questions I would like to ask regarding the deepening of the upper portion of the seaway. I realize, of course, Mr. Chairman, that the seaway as it is envisaged at the present time just goes to the entrance of lake Erie, but eventually access will have to be had to the upper lakes. Let me refer to a news item from the London Free Press of Friday, May 18, of this year. It says:
Equipment shortage penalizes Windsor, upper lake ports.
First of all, I should like to ask the minister a question with regard to the deepening of the Detroit and the St. Clair rivers. Is the Canadian government taking any part in that, or paying any part of the cost, or is that to be done largely by the United States?


George Carlyle Marler: I think, Mr. Chairman, it will be done by the United States because it is not a part of the seaway project and traditionally, I think right back as far as confederation, dredging in that part of the waterway has always been done by the United States government.


Wallace Bickford (Wally) Nesbitt: Another question that arises in my mind is this. I have been given to understand that the depth of the new seaway is 27 feet, and vessels of a certain draft will be able to pass through. Can the minister tell us exactly the draft of vessels that will be able to go through. Is it 26 feet?


George Carlyle Marler: My understanding is that we have been thinking of ships of 24 and 25-foot draft.


Wallace Bickford (Wally) Nesbitt: Owing to the difference in the specific gravity of salt water and fresh water,

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ships which draw 24 feet in salt water would probably draw 25 or 26 feet in fresh water. Is this taken into consideration with respect to the type of ship that will be moving up the seaway?


George Carlyle Marler: I have never been good enough at mental arithmetic to be able to convert sea water into fresh water.


Wallace Bickford (Wally) Nesbitt: I was just giving an approximation.


George Carlyle Marler: Consequently the draft figures 1 have just given are obviously the draft figures in the seaway, regardless of what the situation may be when they get into salt water.


Wallace Bickford (Wally) Nesbitt: Last year I asked the minister a question on his estimates with respect to whether or not any report had been prepared, either by the Department of Transport or by the seaway authority itself, on some sort of future estimate of the economic effects of the seaway on the surrounding territory, and possibly with respect to the country as a whole. The minister replied last year that such a study had been made by the seaway authority and that it would be ready this year. Can the minister tell us anything about how soon that study might be available?


George Carlyle Marler: Well, Mr. Chairman, I believe the work is continuing, but I have not been advised that the study was approaching completion. I do not think the seaway authority would consider that was something that was of urgent importance, and I do not believe it has been possible to make a great deal of progress with it.


Wallace Bickford (Wally) Nesbitt: Perhaps the minister can let me have the information on this at a later date. Has the minister any statement to give us at this time with respect to the proposed tolls on the seaway? There has been some suggestion that there might be a toll of 50 cents a ton, for instance, on iron ore coming from Labrador. I wonder whether the minister has any comment to make on that?


George Carlyle Marler: I can only tell the hon. gentleman that the question of tolls has been the subject of discussion between the authority and the St. Lawrence Seaway Development Corporation, but that the question has not advanced beyond the stage of discussions.


Wallace Bickford (Wally) Nesbitt: I take it the discussions are in a preliminary stage at the moment.


George Carlyle Marler: That is my understanding.


Wallace Bickford (Wally) Nesbitt: I have just one or two more questions. Has any consideration been given by the seaway authority, in conjunction with the Department of Transport, with respect

to harbours on the great lakes, particularly lake Ontario and lake Erie, which might have to be deepened as a result of the completion of the seaway in order to accommodate ships coming up from the ocean, and and also with respect to any harbour works that would be contemplated? Has any study, or any survey, been made on this up to date?


George Carlyle Marler: Mr. Chairman, this is a question which primarily comes under the Department of Public Works, not under the Department of Transport. Our only contract, or our only connection with it would be in cases where the smaller harbour commissions brought the matter forward for the consideration of the Minister of Transport, who speaks for them in parliament.


Wallace Bickford (Wally) Nesbitt: I quite realize, of course, that public works constructs this type of thing. In view of the fact that certain markings, buoys at entrances to harbours, the consideration of lighthouses to be placed, and that sort of thing, come under the Department of Transport-


George Carlyle Marler: I am not talking about that, Mr. Chairman. The question did not deal with aids to navigation. I was talking about the construction of harbours which might be built or deepened because of works undertaken by the seaway, and I think I made it perfectly clear that if work of that kind were to be contemplated or to be carried out it would be done by the Department of Public Works and not by the Department of Transport.


Wallace Bickford (Wally) Nesbitt: I am quite aware of that.
Perhaps I did not phrase my question just as I intended. What I had intended to ask the minister was this. In view of the fact that a large number of ships are expected to be using lake Ontario and lake Erie after the construction of the seaway and after it is opened, has the Department of Transport given any consideration to making a survey of the harbours that might require additional aids to navigation or might require additional works or deepening, as the case may be.


George Carlyle Marler: Mr. Chairman, all I can say is we have had no such request at the present time.


Wallace Bickford (Wally) Nesbitt: In other words, Mr. Chairman, as I understand it no survey has been made either by the authority or by the Department of Transport?


George Carlyle Marler: Neither by the authority nor by the Department of Transport.


Some hon. Members:: Carried.


Wallace Bickford (Wally) Nesbitt: If hon. members are going to insist on calling "carried" I have quite a

number of questions I can ask. I have only-one more at the moment. When is it expected that the seaway will be completed?


George Carlyle Marler: Toward the end of 1958.


John Borden Hamilton: think it is on this item that the minister planned to make his statement on Victoria bridge.


George Carlyle Marler: I had not planned to make a statement, Mr. Chairman. I thought the hon. member wished to discuss some matter on this particular item of my expenditures, and I had hoped to be able to satisfy him, if he had some questions he wanted answered.


William McLean Hamilton: Would the minister care to tell the committee what the present plans are for the southern end of Victoria bridge and the handling of the trains in the immediate area of that bridge? He will remember, of course, that the people in that area are very disturbed because a great deal of valuable residential property is in danger.


George Carlyle Marler: Mr. Chairman, two possibilities have been considered. One was to build what we have called, for want of a convenient term, a diversionary bridge on the south end of Victoria bridge. As I say, two possibilities were considered. One was to build a diversionary bridge on the downstream side, the other was to build it on the upstream side. The upstream side, in my opinion, seemed to have the most to commend it because, as the hon. member will probably recall, in February or March of 1955, I think, the railway company announced its intention of building this diversionary bridge for highway purposes on the upstream side of the Victoria bridge.
That, I think, was a logical proposal, because approximately three-quarters to 80 per cent of the highway traffic which crosses Victoria bridge originates from or is destined for highways or places which lie on the upstream side of the Victoria bridge; consequently the first lock in the seaway was located so that the downstream end of the lock would be located slightly above or slightly upstream from the Victoria bridge and the diversionary bridge would pass over the upstream end of this first lock, the result being that as both gates of the lock would never be open simultaneously there would always be one bridge that would be available for highway traffic.
Consideration afterwards came to be given to the needs of the railway itself. The railway reached the conclusion after a great deal of consideration that railway facilities of a similar kind ought to be provided so
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that the railway operations would not at any time be interrupted by the movement of ships in the seaway itself.
In about March of this year, I think, a project was devised by which the diversionary bridge on the upstream side would be designed to carry both rail and road traffic. As soon as that decision had been reached the matter was discussed with the municipal authorities in St. Lambert, and it was explained to them that if that project were carried out it would be necessary to expropriate 28 properties, I think, which lie in the path of the right of way of the railway leading to that upstream diversionary bridge.
Representations were made to the Canadian National in favour of building the diversionary bridge on the downstream side, but I believe those who had the opportunity of considering the matter came to the conclusion that it would have been most unfortunate for the residents of St. Lambert if all the highway traffic carried by Victoria bridge were discharged into the very heart of St. Lambert, and thus produce a traffic problem that would be of no small dimensions.
Consequently, of itself, common sense in my opinion dictated that the diversionary bridge be built on the upstream side; however, representations were made to the Canadian National Railways and the seaway authority by the municipal authorities and very serious consideration was given to them. The province had previously through the Quebec hydro given its approval to the construction of the diversionary bridge on the upstream side.
Then, as the hon. member knows, a general election took place in Quebec. The hydro authorities asked the railroad to defer taking any action in the matter for the time being, and I am not sure if since the election the Quebec hydro has given confirmation to the railway of its original consent in connection with the diversionary bridge on the upstream side. There were some other technical questions involved concerning the nature of the diversionary bridge and whether it would be built partly as a causeway or wholly as a bridge. I believe those were questions which somewhat disturbed Quebec hydro, because it was interested in the development of power in that part of the river.
I do not know whether a decision has yet been taken in the matter, but I think the fact that in the meanwhile the construction of the lock has had to progress has led us into the situation where the construction of the diversionary bridge is possible now only on the upstream side. There does remain

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this question with the Quebec hydro, concerning which I am not in a position to advise the hon. member as to whether or not definite consent has been given.


John Borden Hamilton: think in summary, Mr. Chairman, if I understood the minister correctly, it was originally hoped that the trains would be able to run off the end of Victoria bridge without any diversionary procedure whatsoever. Subsequently it was found that this was not possible, and after study it was decided to have this shoo-fly, I think it is called-


George Carlyle Marler: Yes.


William McLean Hamilton: -
on the upstream side. Objections were raised to that. The decision was reconsidered and at the present time, while no final decision may have been rendered, the construction has proceeded to a point where it is almost certain that the shoo-fly will have to be on the upstream side. I think perhaps that is a fair summary of my understanding of the minister's outline of the situation.


George Carlyle Marler: Yes, I think that is correct.


William McLean Hamilton: Having said that, Mr. Chairman, I would remind the committee of one thing, which is that since Victoria bridge appears to most of the citizens of Montreal as an antique-perhaps a well-loved one, but none the less an antique-there has been a great deal of effort put forward to try to persuade certain people tHfct a tunnel under the St. Lawrence river would be a satisfactory alternative.
Recently there came to my hand a copy of the Montreal Daily Star of Thursday March 31, 1949, which 1 found interesting in this connection because we now have a situation in which considerable inconvenience is being caused. There is some doubt as to how effectively the railway will operate simply because they chose to go over the river rather than underneath it, but here we have an example of the type of sell-out-


George Carlyle Marler: What did the hon. gentleman say?


William McLean Hamilton: I
said here we have an example of the type of sell-out and inefficient planning for which this government is becoming noted. You will remember of course, Mr. Chairman, that in the fall of 1949 there was a federal election. Here we have a newspaper for March, 1949, and the headline reads, "Government to Build St. Lambert Tunnel"; that is the proposed tunnel underneath the river. The second headline says, "Newfoundland Joining Canada

Tonight" but that has nothing to do with it. The story reads:
Ottawa will spend millions in district-
Project to aid traffic will be started immediately.-
The following appears in the body of the story:
The multi-million project calls for:
1. Construction of a tunnel under the St. Lawrence river between Montreal and St. Lambert to accommodate Canadian National Railways trains and so relieve traffic on Victoria bridge.
And then later:
The tunnel projects will be submitted to the cabinet for formal approval within the next few days, the Ottawa announcement said. When the cabinet has formerly approved the plans work will commence almost at once.


George Carlyle Marler: Who made this statement?


William McLean Hamilton: Hon. Lionel Chevrier. I should be perfectly accurate; this is a newspaper story and these statements are not in quotation marks. However, let me read the following paragraphs.


George Carlyle Marler: Did Mr. Chevrier make these statements? Are these words attributed to him or are they attributed to "a well informed source"?


William McLean Hamilton: 1
was endeavouring to save a moment of time. The story starts off by saying this:
Hundreds of millions of dollars will be spent-


George Carlyle Marler: I heard that part.


William McLean Hamilton: No,
you did not, sir. I continue:
Hundreds of millions of dollars will be spent on the island of Montreal and district to improve traffic facilities, with work to start on the projects almost immediately, it was announced in Ottawa this morning and later confirmed by J. O. Asselin, chairman of the city's executive committee.
There we have reference to an announcement from Ottawa-


George Carlyle Marler: It appears to be one of those announcements that come out of thin air.


William McLean Hamilton: Perhaps that is right. Subsequently the story refers to Hon. Lionel Chevrier, and perhaps the article will indicate who made the announcement. I continue:
Hon. Lionel Chevrier, minister of transport, indicated today that he had interviews with members of parliament from the island of Montreal and district, and that it had been decided to share the costs of the tunnel projects, with Ottawa paying two-thirds and the city of Montreal one-third. The city will assume the maintenance costs.
That, I think, is a reasonable indication that this story which had its source in Ottawa had the backing of Hon. Mr. Chevrier. I suggest to you, Mr. Chairman, that one can have little confidence in a government which

in 1949, immediately before an election, promises something which is badly needed in this area and which many experts-in fairness I cannot say all of them, but many experts-agree is a solution to a pressing problem, and after promising that preceding an election conveniently forgets all about it following the election. We have now reached a point where, by the minister's own statement tonight, they have chopped and changed on this business of getting road and rail traffic over Victoria bridge. There has been uncertainty about it from beginning to end. They have now proceeded to do the necessary construction work, before they actually have the final or revised approval from the agency of the Quebec government concerned.


George Carlyle Marler: I wish the hon. gentleman
would keep to the facts.


William McLean Hamilton: That is my understanding of the facts, which I summarized for the benefit of the minister and with which he agreed. I can only say, although one could say a great deal more about it, that these broken promises, particularly in this field, are most unfortunate.


George Carlyle Marler: I am quite unwilling to leave those words on the record, which, it seems to me, have very little foundation in fact. The hon. gentleman was talking of a joint municipal-federal project which dates back to 1949, and he speaks of broken promises. The fact of the matter is that the construction of a tunnel to carry traffic across the St. Lawrence river was considered-I could not say whether it was in 1949, 1948 or 1947- by the Canadian National Railways. At that time it would have been possible to have built a tunnel which would have carried the rail and highway traffic across the river at a cost of about $85 million to $90 million.
The only difficulty that arose was that this presupposed that the Quebec government was going to develop power at Victoria bridge; and that the height of the water, in consequence of the damming of the river, would enable the laying on the bed of the river of a tunnel which would have cost about $80 or $90 million. However, that was only possible if the province decided to develop power. It decided not to develop power at Victoria bridge. In fact I am not perfectly certain that it has decided to develop the Lachine rapids by a development at Heron island, but the fact of the matter is that the decision of Quebec hydro not to develop power at Victoria bridge ruled out entirely the possibility of a tunnel costing $85 to $90 million.
There were two other alternatives that might have been considered. One was the building of the tunnel below the surface of
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the river bed. The other was that of building a high-level bridge which would carry rail and road traffic over the seaway at a height sufficient to permit vessels to pass beneath it. The engineers reported that either of these projects would have been somewhere between seven and eight miles in length, in order to provide grades that would be satisfactory for the railway operations, and that would not impose a penalty because of grades that would require an increase in motive power used for handling the traffic. When a preliminary estimate was made of the cost of a high level bridge it was discovered that the cost far exceeded the realities of the situation. One project was contemplated having a lift bridge over the seaway, and the cost of that bridge was in the neighbourhood of $90 to $95 million. The high-level bridge and the tunnel, which would accommodate rail also, would have cost, according to information supplied by the railways, in the neighbourhood of $175 to $200 million.
When one is faced with expenditures of that magnitude it is necessary to consider what are the needs of the situation and what are the realities. The fact is that so far as the railway was concerned, none of the numerous projects considered by its engineers appeared to provide better communication between the facilities on the south shore and those on the north shore than the arrangement for the diversionary bridge over the seaway in connection with Victoria bridge, and its cost is infinitesimal in relation to the figures I mentioned a moment ago for a high-level bridge or a tunnel.
The hon. gentleman may say that this does not provide any additional facilities for highway traffic. That, as he knows, is not the responsibility of the Canadian National Railways, but the Canadian National Railways have provided an additional lane on the downstream side of the bridge. The government, because it already has certain facilities in that area, has announced its intention of building the Nuns' island bridge, which will provide more capacity for road traffic than was provided by the Jacques Cartier bridge and Victoria bridge before the recent changes were made.
The hon. gentleman talked about broken promises. I should like to see the promises that were given. At all events, even if promises were given they could not have been carried out by reason of the decision of Quebec hydro. After having considered the matter most carefully and having studied it with the officials of the Canadian National Railways and the St. Lawrence seaway authority, I am quite convinced that the plans for Victoria bridge afford the best

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method for the railway to get its traffic across the river. The added lane on Victoria bridge, plus the new Nuns' island bridge, represent a very real contribution to the provision of facilities for highway traffic now from the island to the south shore and vice versa.


William McLean Hamilton: should just like to confirm a point. Does the minister not agree that in 1949 there was a very clear indication, as shown in that article, by the federal government that it was going to participate in the construction of the tunnel between Montreal and St. Lambert, and that that understanding was derived from the remarks and statements of the then minister of transport? Perhaps in order to convince the minister of that I should point out to him that at least two other projects of those that were listed in that same article have since come completely into being.


George Carlyle Marler: I can assure the hon. gentleman that the other project certainly will not come into being.


Wallace Bickford (Wally) Nesbitt: Now that the minister has had the opportunity of seeing the memorandum to which I was referring, can he tell us whether the cost of dredging in the lake St. Francis section is $6 million or, as indicated there, $9,830,000?


George Carlyle Marler: The figures in the memorandum the hon. gentleman sent me are prepared on a different basis than the figures I have in my book. I think that arises from the fact that there is a slight difference between the conception of the lake St. Francis section in this memorandum and that which I have in my book, and what I have always understood to be the case.
My understanding has always been that the cost of dredging in the lake St. Francis section-and that is the only work it is proposed to carry out in the lake St. Francis sectioK-is expected to be slightly less than $6 million. I am sorry that I cannot reconcile that $6 million with the figures of the memorandum, but I can assure him that the expected expenditure in the lake St. Francis section, which does not include canal works at all, is no more than $6 million.


Auguste Vincent: I have had the opportunity of sitting in on many of the meetings in regard to the spur of Victoria bridge. I want to say to the house very emphatically that the agencies of the government have done their duty. They have done so with the utmost care, and I wish to thank the municipal authorities of St. Lambert for having been so co-operative and having studied

the problem so closely. As the minister said, after having looked over the different plans made by Canadian National Railways, I think for the moment, taking what we have in hand, there is nothing else to do but what the C.N.R. is doing at the present time.
Whether or not Victoria bridge answers the concept of communication between the south shore and Montreal is a different question. I think if it comes down to the question of getting a tunnel it may be that the bridge authority I have suggested is the answer to the problem. It may be that with the co-operation of the provincial, federal and municipal authorities we may be able to get a tunnel from the south shore to Montreal.


[Stage Direction]
Item agreed to.
Air services-
533. To provide for the acquisition of land required to control properties in the vicinity of main terminal airports in order to prevent the erection of hazards to flying and for future development of those airports, $5,250,000.
John Borden Hamilton: Would the minister tell us what are the major areas that are covered by this provision of $5 million?


George Carlyle Marler: This provision tentatively
covers Vancouver, Calgary, Lethbridge, Saskatoon, Sault Ste. Marie, Windsor, London, Toronto, Montreal, Quebec, Moncton and Sydney.


John Borden Hamilton: Would the minister tell the house if all the claims in respect of lands in the case of Malton, for example, against which the department has registered their bylaws, or whatever they wish to call them, have been settled?


George Carlyle Marler: The answer to that, of course, is no. There is what is considered to be a test case which is before the courts, and I think until that test case has been decided it will not be possible to settle many of the cases.


John Borden Hamilton: How much is involved in the total amount of claims that are held up by this test case, and can the minister give the house any idea when he expects a decision in that case?


George Carlyle Marler: No, Mr. Chairman, I cannot give any answer to that question. I should like to draw to the hon. gentleman's attention that this item is not related to zoning. This is not a provision for damages. It is a provision that is required for land that may be purchased in connection with an airport but which is not going to be used immediately for airport purposes. It is really an investment item. When the land is put into service the investment will be reimbursed out of current expenditures.


John Borden Hamilton: I am satisfied with the explanation given by the minister. On the other hand, the wording of the item indicates that it is a restricted use of land which is concerned, and it is most important that the people who have these registrations against their titles should have them cleared up at the earliest possible moment so they can otherwise deal with their properties.


[Stage Direction]
Item agreed to.
534. Loan to the Canadian Overseas Telecommunication Corporation in accordance with the provisions of section 14 of the Canadian Overseas Telecommunication Corporation Act for additions and betterments to facilities, $4,506,725.
Wallace Bickford (Wally) Nesbitt: This subject, as the minister well knows, has had a great deal of discussion in committee and also in the house, and in view of some of the minister's comments in the committee and the house I cannot help but observe that while the minister may have referred on another occasion to another cable company, the Commercial Cable Company, as being subsidized in an indirect way to the tune of around $10 million a year on a proposed coaxial cable-


George Carlyle Marler: Not $10 million a year.


Mr. Nicholson:: 


Wallace Bickford (Wally) Nesbitt: I thank the hon. member and the minister. It is $1,600,000 a year for ten years. In view of the fact that loans are being made to Canadian Overseas Telecommunication Corporation at the rate of $4 million or $5 million a year, one cannot help but reach the conclusion that at least an indirect form of subsidy is taking place here. I know the minister is going to say that the loans have to be repaid. So they do; but when they are government loans to a crown corporation I do not imagine there is any hurry about repaying the money. I do not think there is very much likelihood of a fire sale or bankruptcy proceedings taking place.


George Carlyle Marler: The hon. gentleman should start relating his remarks to reality.


Wallace Bickford (Wally) Nesbitt: The minister speaks about reality. If Canadian Overseas Telecommunication Corporation does not pay back the loan, or does not pay the interest one year, I should like to know what the government are going to do about it. Are they going to sell the assets of the company? My remarks relate to reality. If they cannot pay back the loan and cannot pay their interest I suppose they will get a larger loan next year. However, that is just a passing observation in view of the many remarks that have been made in the house and in committee on previous occasions, and I realize I should not refer to them.
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However, suggestions have been made that probably in the very near future television programs from Europe and the United Kingdom may be available in this country. Of course, as most hon. members know, there are at present only two ways of transmitting television programs successfully, by microwave relay or by coaxial cable. I think it very unlikely that television programs from Europe will be sent over here by microwave relay. It is not very likely that towers will be built in the middle of the Atlantic. The only other way would be by coaxial cable.
Previously, of course, as I have already mentioned, we have had reference to a proposed coaxial cable that the Commercial Cable Corporation wishes to lay with certain outlets in this country. It is also my understanding that at the present time Canadian Overseas Telecommunication Corporation has an interest in a cable that the Bell Telephone Company is building, and expects to have certain channels in that cable. What I am curious about is this. Has the Canadian Broadcasting Corporation been consulted by the Department of Transport as to the interest of C.O.T.C. in the telephone company's coaxial cable with respect to television programs coming from Europe to this country?
Then there is a second point in which I am interested. When, in the fairly near future, these programs are being sent to this country, will it be the policy of the government to confine the transmission of these programs via coaxial cable wholly to the lines of communication operated by C.O.T.C., or will some sort of competition be allowed, for example, by the Commercial Cable Corporation?


John Borden Hamilton: Before the minister replies I think it should be pointed out that last year some $5,470,000 odd was voted to the corporation and this year the amount is approximately $4,500,000. I am also informed there is an additional amount in the supplementary estimates. It would appear that this is going to become common practice. This communication system apparently is going to grow from year to year, and the taxpayers are going to be required to put up money from year to year to provide for that growth. If we were in a field, as was the case at one time in the creation of the C.B.C., where it was felt that the private stations were not providing the type of programs that the government felt were needed, then there might be some justification for a continual line of credit

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being extended. But I am certainly directed to a few words in the report of this company which read as follows:
. . . we shall also introduce a multiplicity of new telegraph circuits in sufficient numbers to meet adequately the needs of Canadian users for some years to come.
Right here there is an indication that, it is the intention of this crown corporation to take over completely, if at all possible, this means of communication. Yet at the same time-


George Carlyle Marler: Mr. Chairman, surely it is not necessary to go all over again the same arguments and the same debate that we had on the Telegraphs Act. What we are concerned with here, Mr. Chairman, is whether or not the amount of $4,506,000 should be placed at the disposal of C.O.T.C. as a loan. Surely we do not have to review the whole question of competition between C.O.T.C. and other telecommunication corporations. It seems to me that is most irrelevant.


John Borden Hamilton: I am sure the minister jumped to the bait much too quickly. I had only one more sentence to go and that would have ended the problem from our standpoint.


George Carlyle Marler: I surrender.


John Borden Hamilton: My concluding sentence is this. Surely there is no necessity for this type of expenditure and for the type of control that has been vested in the minister to ensure that this corporation should advance from year to year, when it has been indicated very clearly that there has been an alternative method which would have provided all the things which are referred to in a report of this kind without the advancing of one dollar by this government.


Some hon. Members:: Carried.


Edward Turney Applewhaite: Shall the item carry?


Alexander Malcolm Nicholson: Mr. Chairman, will you call for the yeas and nays on this item?


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, I have a question which I should like to ask here. During the period of time the government has had this crown corporation, how much money has now been lent and how much has been repaid?


An hon. Member:: This is not cricket at all.


George Carlyle Marler: The amount of advances from the government which have been received by this company under section 14 of the C.O.T.C. Act is $8,050,000, and the company surplus is $283,906. Mr. Chairman, in case anybody has any idea that this is a lame duck,

may I say that this company has reported a surplus for six consecutive years after paying income tax like any other Canadian corporation. There is no more element of subsidy in the advance of money by the Minister of Finance to C.O.T.C. than there is in an advance to any other body.


Howard Charles Green: Will these two votes, namely the item in the main estimates of $4,506,725 and the item in the supplementary estimates of $1,908,256, making a total of $6,414,981 for this year, be added to the total advances shown in the annual report of the company?


George Carlyle Marler: Yes.


Howard Charles Green: In order to show what the government will have invested in this crown corporation by the end of this current fiscal year?


George Carlyle Marler: That is correct.


Howard Charles Green: So the total will then be about what?


George Carlyle Marler: About $14 or $15 million.


Howard Charles Green: 
George Carlyle Marler: Somewhere around that.


Howard Charles Green: By the way, the minister promised to give me the amounts that this crown corporation has invested or will invest in the cable in respect of which it is in partnership with the British post office, the American Telephone and Telegraph Company and the Eastern Telephone and Telegraph Company. As he will recall, during the discussion of the amendments to the Telegraphs Act he suggested that I wait until we reached this estimate in order to get that information.


George Carlyle Marler: All I can tell the hon. gentleman is that the estimated share of the C.O.T.C. in the cable is about $4J million. I can send him the exact figure, but that is the figure I have here as being the total estimated cost to the corporation of its share of the T.A.T. cable.


Howard Charles Green: What is the total cost of the cable?


George Carlyle Marler: That represents a little over 9 per cent of the total cost.


[Stage Direction]
Item agreed to.
Edward Turney Applewhaite: That completes the Department of Transport. Department of Labour, resolution 179, which may be found at page 36 of the blue book, the details at page 248.


William Earl Rowe: Mr. Chairman, I think it is eleven o'clock. We have made fairly good progress today.


Some hon. Members:: Oh, oh.


William Earl Rowe: I think we had better call it eleven o'clock, Mr. Chairman.


Walter Edward Harris: Mr. Chairman, could we call those two items in the Department of Citizenship and Immigration that were left over the other night?


Some hon. Members:: Agreed.


William Alfred Robinson: Is it agreed?


Some hon. Members:: Agreed.


William Earl Rowe: Mr. Chairman, I do not think those that were taking part in the discussion of those items are here. I do not think it will take very long to dispose of them.


John Whitney Pickersgill: They are both here.


William Earl Rowe: I do not think it would be fair at eleven o'clock to go on with those items.


Claude Sartoris Richardson: May I ask the hon. gentleman a question? During the past hour we have sat here and noticed on the average about five members on your side. Is it not fair now that we continue for a few minutes while we are here in the assembly?


William Earl Rowe: Mr. Chairman, that is not exactly right. The hon. member for St. Lawrence-St. George is very vociferous. May I tell him that I have sat here and seen only five members on the other side on various occasions during the past week. I have counted this house on various occasions. The hon. member is trying to give the impression to the country that we are not here. I have counted the house on various occasions when, with the great mob majority you have, you had not as many in the house as we had in this party.


James Joseph McCann: That is not so.


William Earl Rowe: We have other things to do.


Edward Turney Applewhaite: The question having been asked and answered, the question now before the committee is not how many are or are not here but whether it is agreed that we call item 59.


Some hon. Members:: Agreed.


William Earl Rowe: Mr. Chairman, there is also in this house a staff who work harder than does the hon. member for St. Lawrence-St. George. They are here all day. I refer to the Hansard people and others. I think we had better call it eleven o'clock.


William Alfred Robinson: Order. Am I to take it that there is not unanimous consent to continuing? It being after ten o'clock I do leave the chair.
Progress reported.
Business of the House
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Walter Edward Harris: In the past week it had been my understanding that we would wind up tomorrow night. That being the case the following is what will have to be disposed of: labour, citizenship and immigration, legislation, justice, fisheries, post office, public works, C.B.C. and finance.


Mr. Deputy Speaker:: It being after ten o'clock, I do leave the chair.


Howard Charles Green: May I ask the minister in what order these estimates will be taken?


Walter Edward Harris: We will accommodate ourselves to the opposition in that, on the understanding of course that we will finish tomorrow night.


George Clyde Nowlan: Then you had better give us the order.


Howard Charles Green: The minister will not get very
far ahead in that way.


Walter Edward Harris: We have not got very far anyway.


Howard Charles Green: I ask in what order the minister is going to call the business.


Walter Edward Harris: Mr. Speaker, for the whole of this session I have accommodated hon. members in the calling of the business in this house.


Mr. Mcllrailh:: We have tried to accommodate hon. members on all sides.


Howard Charles Green: We have accommodated each other and got along fairly well.


An hon. Member:: Everything your way.


Mr. Hosking:: This is the most unfair thing we have ever seen; absolutely disgraceful.


William Earl Rowe: Let your house leader speak for you; don't all talk at once.


John Borden Hamilton: He just came in for the last half hour.


Henry Alfred Hosking: I have been here for far more votes than you have.


William Earl Rowe: Let your house leader speak for you; he does it better than you do.


Howard Charles Green: I suggest it will help facilitate the business tomorrow if the house leader will tell us in what order he is going to call the business.


Walter Edward Harris: I must say that I have done that every night and we have never met the timetable that has been laid down. If there is a change and tomorrow we can meet the timetable by my giving the order of business,

Business of the House
I shall be glad to do so. May I point out that we have never been successful in doing so this week.


Howard Charles Green: May I point out that members from all parties in the house have been speaking today, and quite properly so. It is their right to do so. The minister must not expect that the official opposition can set these times. I would suggest he tell the committee tonight in what order he is planning to call the estimates tomorrow, and we shall do our best to facilitate them.


Mr. Weir:: And you have been the biggest offender.


Henry Alfred Hosking: Your best is pretty terrible.


Walter Edward Harris: Quite a while ago I made it quite clear that if I had the assurance that we would, in fact, wind up tomorrow night, as
has been planned, I would give the order in which we will take the business.


Howard Charles Green: Unfortunately we cannot give him that assurance because it is not in our hands, but I do suggest he tell us the order in which he will call the estimates tomorrow.


Walter Edward Harris: We will call them tomorrow.


Henry Alfred Hosking: You want to sit here and we will sit here.


Mr. Charlton:: You have been away for two weeks.


Henry Alfred Hosking: You are the one who has
been away for two weeks.


John Alpheus Charlton: That is not so.


[Stage Direction]
It being five minutes after eleven 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. Philpott: 1.	How many Canadians suffer from arthritis and rheumatic diseases?
2.	What is the estimated annual cost to Canada in working time loss, and otherwise, because of these rheumatic diseases?
3.	Does the federal government give grants for basic research into the cause and cure of rheumatic diseases?
4.	If so, (a) what is the amount of such grant
for the year 1956-57;	(b) what universities are
beneficiaries of such grants?
5.	What is the total amount of the federal health grant allotted to the Canadian arthritis and rheumatism society during the past seven years?
Answer by: Hon. Paul Martin (Minister of
National Health and Welfare):
1.	It is estimated from Canada's sickness survey and previous surveys that 225,000 disabled Canadians are suffering from arthritis and rheumatism. Of this number, 155,000 are severely or totally disabled.
2.	From the survey it was found that in persons suffering from arthritis symptoms were present for more than half the year. In persons suffering from rheumatism symptoms were present for about one-quarter of the year. During much of this time the person would be able to carry out his usual activities, which in the case of older people might consist of little more than self care. From information available at the present time, it is estimated that during a year approximately nine million days are lost from usual activity through arthritis and rheumatism. Of this loss from usual activity, over one-third applies to persons of 65 years and over.
3.	Yes.
4(a). $91,261; (b) McGill University, University of Montreal, Queen's University, University of Toronto, University of Western Ontario, University of British Columbia.
5. $330,670.


CORNWALLIS RIVER, KENTVILLE, N.S.   REHABILITATION
Mr. Balcom: 1.	Is work contemplated or in progress under the Maritime Marshland Rehabilitation Act on the Cornwallis river at Kentville, Nova Scotia?
2.	If so, what work is contemplated and will it result in the flooding of any houses?
Answer by: Right Hon. J. G. Gardiner
(Minister of Agriculture):
1.	Yes, portions of planned work are in progress and additional work is contemplated.
Questions
2.	Dikes and aboiteaux are being constructed on certain tracts of the Kentville and Belcher street marshes. It is reported that in the past high tide, ice and freshet conditions have combined to create flood conditions. The work contemplated will relieve these conditions to some extent. This work involves the co-operation of the department, the provincial department of agriculture, owners of marsh and the town of Kentville. The contemplated work is to be approved by the interested agencies.


NATIONAL DEFENCE
Mr. Nicholson: 1.	How many Canadian children are attending national defence schools in Europe in (a) elementary schools; (b) high schools?
2.	How many Canadian teachers employed by national defence in Europe are in (a) elementary schools; (b) high schools?
3.	What is the estimated cost per pupil per year, taking into account salaries, transportation, rental of buildings and other cost factors for (a) elementary schools; (b) high schools?
Answer by: Hon. R. O. Campney (Minister of
National Defence):
1.	(a) 3,708 in grades one to eight; (b) 221 in grades nine to 13.
2.	(a) and (b) There are 145 elementary school teachers and 28 high school teachers in national defence schools in Europe. They are not directly employed by the Department of National Defence, but rather by school boards in Canada which have contracted with the department for the loan of teachers for two-year periods. The teachers' salaries are paid by the school boards, to protect superannuation and other benefits, and the school boards are reimbursed by the department.
3.	(a) and (b) The average estimated cost per pupil per year for elementary and high school grades is $256.52. Since high schools and elementary schools are as yet integrated in the same buildings, even to the extent that there is some interchange of subject-teaching between the two, no figures are available from which to show separately the per capita costs for elementary and high school pupils. The figure of $256.52 comprises the cost factors for salaries, supplies, transportation, heating, and rental of schools; it does not include small per capita costs for lighting, gas, and maintenance, which are incorporated in an over-all figure for married quarters, schools, and recreational areas.


SALT FISH INDUSTRY, N. S.  ASSISTANCE
Mr. Balcom: How much assistance has been given to the Nova Scotia salt fish industry under the 1955 salt assistance program?

Supply-Transport
Answer by: Hon. James Sinclair (Minister of Fisheries):
Fishermen:
598	claims	 $59,909.71
Fish plants:
121	claims	 87,454.15
Total
719	claims	 $147,363.86


TRANS-CANADA HIGHWAY  PROVINCIAL AGREEMENTS
Mr. McCulloch (Pictou): 1.	Have any provincial governments signed agreements since June 27, 1956, pursuant to the amended Trans-Canada Highway Act which received royal assent on June 7, 1956?
2.	It so, which provincial governments have so signed?
3.	Which provincial governments have signed agreements to date under the amended statute?
Answer by:	Mr. Bourgei, Parliamentary
Assistant, for the Minister of Public Works:
1.	Yes.
2.	Ontario.
3.	Agreements have been concluded with the provincial governments of Prince Edward Island, New Brunswick, Ontario, Manitoba, Saskatchewan and Alberta. Nova Scotia has returned a signed agreement but with a revision in schedule "A", the detailed designation of the route of the trans-Canada highway in the province. British Columbia has submitted only a revised schedule "A". Before agreements can be signed with these provinces, further clarification of the schedules "A" is required.
[The following items were passed in committee of supply]:


DEPARTMENT OF TRANSPORT
[Stage Direction]
Railway and steamship services-
459.	Construction of new dock and terminal facilities at Port aux Basques, Newfoundland, $413,000.
460.	To provide for the payment during the fiscal year 1956-57 to the Canadian National Railway Company (hereinafter called the national company) upon applications approved by the Minister of Transport made from time to time by the national company to the Minister of Finance and to be applied by the national company in the payment of the deficit (certified by the auditors of the national company) in the operation of ferry and terminal services between North Sydney, Nova Scotia and Port aux Basques, Newfoundland, and on a temporary basis between North Sydney, Nova Scotia and Argentia, Newfoundland and between North Sydney, Nova Scotia and other Newfoundland ports, arising in the calendar year 1956, $3,496,250.
461.	Construction or acquisition of auto-ferry vessels and equipment as listed in the details of the estimates, provided that treasury board may increase or decrease the amount within the vote to be expended upon individual listed projects, $1,914,000.
462.	Yarmouth, Nova Scotia-Bar Harbor, Maine, U.S.A., ferry service-deficit, 1956, $230,000.
468.	To authorize the governor in council to grant to the government of the province of British Columbia a subsidy of $25,000 per mile, but not exceeding 50 miles, towards the construction of a line of railway of the Pacific Great Eastern Railway northward from Prince George in the province of British Columbia; such grant of subsidy to be made in such manner and in such amounts and subject to such conditions, if any, as the governor in council deems expedient; estimated requirement for the fiscal year 1956-57, $500,000.
469. To authorize the governor in council to grant to Canadian National Railway company a subsidy of $25,000 per mile, but not exceeding $7,450,000 towards the construction of the line of railway referred to in chapter 49 of the Statutes of Canada, 1953-54, as branch line number 1 (described approximately as a line of railway from St. Felicien to Chibougamau and from Chibougamau to Beattyville in the province of Quebec); such grant of subsidy to be made in such manner and in such amounts and subject to such conditions, if any, as the governor in council deems expedient; estimated requirement for the fiscal year 1956-57, $2,725,000.
Pensions and other benefits-
470.	Amount required to pay pensions at the rate of $300 per annum to former pilots: Arthur Baquet; Adelard Delisle; Raoul Lachance; Jules Lamarre; Wilhelm Langlois; Auguste Santerre, $1,800.
471.	Railway employees' provident fund-to supplement pensions allowances under the provisions of the Intercolonial and Prince Edward Island Railway Employees' Provident Fund Act so as to make the minimum payment during the period January 1, 1956, to March 31, 1957, the sum of $30 per month, instead of $20 per month as fixed by the said act, $11,000.
472.	Supplemental pension allowances to former employees of Newfoundland railways, steamships and telecommunication services transferred to Canadian National Railways, $27,000.
General-
473.	To provide for the expenses of an inquiry into the coasting trade of Canada authorized under the Inquiries Act, including the payment, notwithstanding the Civil Service Act, of honoraria or allowances as may be authorized by the treasury board to officers, clerks or employees permanently employed in the civil service for services rendered by them in connection with the inquiry, $32,000.
Air services-
Administrative division-
474.	Air services administration, $816,760.
475.	Construction services administration, $1,026,700
Telecommunications division-
Radio aids to air and marine navigation-
476.	Administration, operation and maintenance, $8,925,412.
477.	Construction or acquisition of buildings, works, land and equipment, $4,234,725.
Radio Act and regulations-
478.	Administration, operation and maintenance, including contributions as Canada's share of the administrative costs of various international radio, telegraph and telephone conferences, as detailed in the estimates, $1,691,165.
479.	Construction	or	acquisition	of	buildings,
works, land and equipment, $330,000.
Telegraph and telephone service-
480.	Administration, operation and maintenance, $515,320.
481.	Construction	or	acquisition	of	buildings,
works, land and equipment, including capital assistance to local telephone systems in sparsely settled areas, $543,000.

482.	Northwest communication system-construction or acquisition of buildings, works, land and equipment, $924,870.
Meteorological division-
483.	Administration, operation and maintenance, $8,164,815.
484.	Construction or acquisition of buildings, works, land and equipment, $947,700.
Civil aviation division-
485.	Control of civil aviation, including the administration of the Aeronautics Act and regulations issued thereunder, $1,102,846.
Airways and airports-
Operation and maintenance-
486.	Civil aviation services, $9,855,840.
487.	Airway and airport traffic control, $2,971,684.
488.	Construction or acquisition of buildings, works, land and equipment, including construction work on municipal airports and payments to municipalities as contributions towards construction done by those bodies, $15,453,350.
489.	Grants to organizations for the development of civil aviation, in the amounts detailed in the estimates, $360,000.
490.	Contributions to municipalities or public bodies for construction and improvements of airports on land acquired by such organizations, $60,000.
491.	Contributions toward airport development and other airport projects on cost-sharing basis, in the amounts detailed in the estimates, $267,000.
492.	Contributions, as detailed in the estimates, to other governments or international agencies for the operation and maintenance of airports, air navigation and airways facilities, including authority to pay the amounts specified in the currencies of the countries indicated, notwithstanding that the payments may exceed or fall short of the equivalent in Canadian dollars, estimated as of December, 1955, which is, $231,027.
B-General-
Air transport board-
493.	Salaries and other expenses, including the Canadian delegation to the international civil aviation organization, $292,040.
Board of transport commissioners for Canada-
494.	Administration, operation and maintenance, $867,930.
Canadian maritime commission-
495.	Administration, $139,228.
496.	Steamship subventions for coastal services, as detailed in the estimates, $4,016,800.
National harbours board-
497.	Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1956 on any or all of the following accounts:
Reconstruction and capital expenditures-
Halifax	 $1,942,000
Saint John	 845,000
Quebec	 1,687,000
Prescott	 40,000
Port Colborne	 80,000
Generally-	#
Unforseen	and Miscellaneous ..	200,000
TOTAL	 $4,794,000
Less-Amount to be expended from replacement funds	 79,236
[Stage Direction]
Supply-Transport
St. Lawrence seaway authority-
531.	Loans to the St. Lawrence seaway authority in such manner and subject to such terms and conditions as the governor in council may approve, $75,000,000.
Canal services-
532.	To	provide	for	the	acquisition	of	land
required in connection with the development of the 27 foot Cornwall navigation system, $1,000,000.
Air services-
533.	To	provide	for	the	acquisition	of	land
required to control properties in the vicinity of main terminal airports in order to prevent the erection of hazards to flying and for future development of those airports, $5,250,000.
534.	Loan to the Canadian Overseas Telecommunication Corporation in accordance with the provisions of section 14 of the Canadian Overseas Telecommunication Corporation Act for additions and betterments to facilities, $4,506,725.
National harbours board-
535.	Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1956 on any or all of the following accounts:
Reconstruction and capital expenditures:
Three Rivers	 $	35,000
Montreal	 12,736,500
Vancouver	 525,000
[Stage Direction]
Less-amount to be expended from replacement funds	 1,503,010
[Stage Direction]
A-Department-
Canal services-
706.	Construction or acquisition of buildings, works, land and equipment, including payments to provinces or municipalities as contributions towards construction done by those bodies-further amount required, $408,507.
Marine services-
Marine service steamers-
707.	Construction or acquisition of vessels and equipment-further amount required, $926,000.
Aids to navigation-
708. Construction or acquisition of buildings, works, land and equipment-further amount required, $503,460.
709.	Nautical services-administration, operation and maintenance, including grants and contributions as detailed in the estimates-further amount required, $1.
Pilotage service-
710.	Administration, operation and maintenance -further amount required, $32,100.
711. Construction or acquisition of buildings, works, land and equipment, $36,000.
Railway and steamship services-
712.	Reconditioning and refit of ferry vessel "Scotia 11" for the Prince Edward Island car ferry service-further amount required, $150,000.
Strait of Canso
713.	Transportation improvements and facilities -further amount required, $100,000.
714.	To provide for the payment during the fiscal year 1956-57 to the Canadian National Railway Company (hereinafter called the National Company) upon applications approved by the Minister of Transport made from time to time by the
[Stage Direction]
Supply-Transport
National Company to the Minister of Finance and to be applied by the National Company in the payment of the deficit (certified by the auditors of the National Company) in the operation of ferry and terminal services between North Sydney, Nova Scotia and Port aux Basques, Newfoundland, and on a temporary basis between North Sydney, Nova Scotia and Argentia, Newfoundland and between North Sydney, Nova Scotia and other Newfoundland ports-further amount required to provide for payment of the balance of the deficit incurred in the operation of these services in the calendar year 1955, $1,123,830.
715.	Yarmouth, Nova Scotia-Bar Harbor, Maine, U.S.A., ferry service, deficit, 1956-further amount required, $308,000.
716.	Construction or acquisition of vessels for Newfoundland coastal services-further amount required, $152,452.
General-
717.	To provide for the expenses of an inquiry into the coasting trade of Canada authorized under the Inquiries Act-further amount required, $52,000.
Air services-
Telecommunications division-
Radio aids to air and marine navigation-
718.	Construction or acquisition of buildings, works, land and equipment-further amount required, $618,000.
Radio act and regulations-
719.	Administration, operation and maintenance, including contributions as Canada's share of the administrative costs of various international radio, telegraph and telephone conferences, as detailed in the estimates-further amount required, $9,000.
720.	Construction or acquisition of buildings, works, land and equipment-further amount required, $84,900.
Northwest communication system-
721.	To authorize, notwithstanding the financial administration act or any other act, the disbursement of revenues derived from operation of the system by such agent as the governor in council appoints, for maintenance and operation of the system, and the payment of such management fee as the governor in council prescribes, $1.
Meteorological division-
722.	Construction or acquisition of buildings, works, land and equipment-further amount required, $85,000.
Civil aviation division-
Airways and airports-
Operation and maintenance-
723.	Civil aviation services-further amount required to authorize, notwithstanding the financial administration act or any other act, the disbursement of revenues derived from the management and operation of hotel, bakery, restaurant, staff messing, staff accommodation and similar facilities
at Gander airport, in accordance with such arrangement as the governor in council prescribes for the operation of these facilities, and to authorize payment of such deficit that may occur in the management and operation of these facilities, $1.
724.	Construction or acquisition of buildings, works, land and equipment, including construction work on municipal airports and payments to municipalities as contributions towards construction done by those bodies-further amount required, $3,374,000.
725.	Contributions to municipalities or public bodies for construction and improvements of airports on land acquired by such organizations- further amount required including a contribution to an appropriate authority in respect of an airport at Lourdes-du-Blanc-Sablon, Quebec, $96,717.
726.	Contributions toward airport development and other airport projects on cost-sharing basis in the amounts detailed in the estimates-further amount required, $359,835.
B-General-
Canadian maritime commission-
727.	Steamship subventions for coastal services as detailed in the estimates-further amount required, $1.
National harbours board-
728.	Advances to national harbours board, subject to the provisions of section 29 of the National Harbours Board Act, to meet expenditures applicable to the calendar year 1956 on the following account: reconstruction and capital expenditures- Halifax-further amount required, $1,932,000; less- amount to be expended from replacement funds, $334,500; $1,597,500.
Transport-
Air services-
736.	Loan to the Canadian Overseas Telecommunication Corporation in accordance with section 14 of the Canadian Overseas Telecommunication Corporation Act for additions and betterments to facilities-further amount required, $1,908,256.
National harbours board-
737.	To authorize and provide for the construction, maintenance and operation by the national harbours board, either by itself or in co-operation with others, of a bridge for general traffic across the St. Lawrence river in such location at or near the harbour of Montreal as may be approved by the governor in council upon the recommendation of the Minister of Transport; such bridge, during construction and when completed to be a work under the jurisdiction, administration, management and control of the national harbours board for all purposes of the National Harbours Board Act and to be subject to all the provisions of that act, and to constitute a part of the facilities of the harbour of Montreal; amount to be credited to the national harbours board special account, subject to the provisions of section 29 of the said act, $400,000.
[Stage Direction]
Saturday, August 11, 1956