1956-06-29

[Stage Direction]
Friday, June 29, 1956

Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I rise both on a question of privilege and of major public importance. In view of the intolerable situation created in this house by the utterly unprecedented actions of the Speaker in improperly impugning the motives of many of the hon. members in a letter, I ask the Acting Prime Minister (Mr. Howe) to assure us that the government will deal with this situation in the only way in which it can be dealt with effectively, by taking the necessary steps to dissolve the house and give the people of Canada the earliest possible opportunity to elect a new parliament.


Mr. M. J. Coldwell (Roseiown-Biggar):: must say that I rise to support the Leader of the Opposition (Mr. Drew) in this matter. I feel very sick at heart over this whole matter, and having had respect for the house and the Chair, I feel that the situation has become quite intolerable and that there is no way out but the election of a new parliament and the assembling of a new group in this House of Commons.


Mr. Speaker:: May I be allowed to say a
word of personal explanation? It seems to me the point at issue at the moment is whether or not a person who occupies the office that I have the honour to occupy at the moment is or is not deprived of being able to write personal correspondence. It has been established, I think-if it has not been established, I am prepared to establish it to the satisfaction of all hon. members, I am sure-that I made the comment in a personal letter which was not directed to a newspaper, which was never intended to be published and which I never thought would ever be published-I can assure you of that-and which unfortunately has been published.
Now, because one or two paragraphs of a private letter that I addressed to a man who is a free lance writer appears in a newspaper-a letter addressed to his residence-of course it becomes known that with respect to a certain matter I have an opinion which 67509-350
is at divergence with the opinion held by other hon. members. Now, I submit this to hon. members for their consideration. We had a debate concerning a certain measure over which I had to preside. I think hon. members, if they want to be fair, will agree that the chair during those days was not a bed of roses. Members who are not satisfied with rulings, or with the conduct of the Chair, because the Speaker is the servant of the house, have two recourses provided by our traditional forms of procedure: one, appeals from the Speaker's rulings; two, motions of censure. Both of these two recourses have been taken advantage of.
Now, I cannot participate in debate. I must, however, put questions affecting myself. See Beauchesne's third edition, citation 86 and Bourinot's fourth edition, page 179. I presided over the debate which took place on the motion of censure against myself, and I put the question affecting myself. During that debate I did not speak. Some hon. members here know that before the debate on the motion of censure started I wanted to speak. As a matter of fact I thought I had the right to be heard.


Mr. Winch:: You did have the right to be heard.


Mr. Speaker:: Well, at that time there was a question as to whether or not I had that right. My program on Sunday before the Monday on which this debate was initiated, as I suggested, was that the Leader of the Opposition and the leader of the C.C.F. party speak on the motion of censure and I wanted to take the floor immediately after that; but there was hesitancy as to whether I should do that, or whether I had the right to do it.
I want to tell hon. members this. I have received several letters, some very critical, others commending my attitude during the pipe-line debate. In replying to those letters which I have received, whether of criticism or of commendation, I said several things, and I am sure that if they were all to be published, as this personal letter was, it would indicate one thing, that a man who is accused and has not been able to say his piece is in a very deplorable situation indeed.


Some hon. Members:: Hear, hear.


Mr. Speaker:: The worst criminal in this country, the man accused of spying, is asked before sentence is passed, "Do you have anything to say?" Now, I am not blaming the

House of Commons
house; I am not blaming any hon. members; I do not say that you did not provide me with a chance to be heard. But I just say that, in order to ask you to understand what may be my personal position, I am somewhat tense about this. I am not going to say anything further with respect to the event nor as to whether the opinions that have been expressed have been right or wrong, but I want to say this. The fact that I have not been heard-well, as I say, I have been tense about this ever since and I have been looking up authorities.
The hon. member for Vancouver East (Mr. Winch) just interjected a moment ago, "You had the right to be heard". I am inclined to go along with his view because I have looked at a debate which took place in 1931 when the deputy speaker, Mr. LaVergne, had been attacked by the then member for Labelle, Mr. Bourassa and later rose to speak. Mr. King on a question of privilege indicated that the deputy speaker should not take part in any debate. The debate took place on March 20, 1931, and it will be found in volume I of the debates for 1931, pages 173 to 180.	In defence of Mr. LaVergne, in
justifying his contention that he had the right to speak if he was attacked, Mr. Bennett said that in exceptional cases he thought the Speaker was warranted in taking the action he did.	He was referring to the case of
1927 when Mr. Speaker Lemieux had spoken in the debate in this house and then later he said:
Obviously the Speaker cannot take part in the debate and preside at the same time.
Then later he said:
... if the deputy speaker is not to participate in debate obviously he should not be attacked. That is fair. How but by participation in debate would he be able to answer attacks made upon him? That, Mr. Speaker, seems to be the crux of the whole matter and it will be found that Sir Robert Borden in discussing the matter of a resolution of the then leader of the opposition, Sir Wilfrid Laurier, directed the attention of the house to that particular point. Is it right merely because one of our hon. members has been elected chairman of committees and chairman of the committee of the whole house that he should be deprived of the right to speak to the house?
And then later he said:
Let us, however, consider what happened the other day when he was attacked in this house.
He is referring to Mr. LaVergne.
As a member he takes his seat and as one of the deputies of this chamber is he to be silent? May he make reply? Is it right that he should be silent?
Later on he said again:
Has his acceptance of the position of deputy speaker placed him in a position where he can no longer reply to the attacks which are made upon him?

And he concluded that part of his remarks by saying this:
I still claim for the deputy speaker, as I would claim for any other member of the house, the right to make any response he thinks adequate to any attack that may be made upon him. In other words, you should not make him a judge unless you treat him as such; and if you enter into controversy with him you must afford him an opportunity to answer the observations directed to him.
At that point Mr. King interjected:
No one denies that.
Looking further back into the record I find that in 1814, when Mr. Speaker Abbott had a motion of censure moved against him in the United Kingdom, he did take part in the debate soon after Lord Morpeth had moved the motion against him. His speech will be found in Hansard of 1813-14, volume 27, extending from column 475 to column 485, which I would think would be the equivalent of a 40-minute speech.
I am very sorry that part of that letter has been quoted. I may say that, as if I did not have enough trouble so far, I was certainly hoping that no other trouble would arise and I was greatly shocked when I saw that those paragraphs had been taken out of that private letter and put in a newspaper article.
Having said that, that view having been made public, I understand that it might arouse the indignation of some hon. members in this house when someone says that someone distorts the facts for his political ends.


George Alexander Drew: Falsifies.


Mr. Speaker:: Or falsifies. Of course if you want to use the most prejudicial translation you will use the word "falsifies" but for my purpose the translation would be "distorts".


Mr. Diefenbaker:: Would Your Honour table the letter?


Mr. Speaker:: I will table that letter if the hon. member wishes me to do so. I do not know to what extent I can as this is private correspondence. Would the hon. member for Prince Albert (Mr. Diefenbaker) be good enough to take a look at all the correspondence and then if he wants it-I do not table documents-to be circularized I could have mimeographed copies made of the translation of every letter. I might explain what the correspondence is about. The first letter I received from the hon. gentleman was dated May 14, 1956, in which he asked for an interview. Perhaps I should give my own translation and the hon. member can check when I send him the documents. He asked:
Would you be kind enough to give me an interview of a few minutes at your office in the near

future. It has to do with a communication that I want to make to you and which is absolutely foreign to my occupation as a newspaperman. Would it be possible to receive me on Saturday next or on any other Saturday? Please let me know as soon as possible.
I replied to that letter on May 15 in which I said-


Mr. Gardiner:: Before you continue, may I be permitted; is it proper for personal correspondence either to be placed on the table or read to this house? Are we going to be put in the position where if we have any personal correspondence at all as members somebody can suggest that it ought to be put on the table or read to this house?


Mr. Speaker:: 
George Alexander Drew: Before the Acting Prime Minister replies, may I make some comments in regard to what has been said by the Speaker.
I direct my remarks to the Acting Prime Minister as the acting head of the government. I do so in the utmost solemnity.
Already, at the suggestion of Mr. Speaker himself, a motion of censure was presented in view of certain discussions that had taken place. When the Speaker said that there was any hesitancy about hearing him, I would point out that no one indicated any unwillingness to hear the Speaker and, in fact, there was every indication that the Speaker felt perfectly free to present to the house any facts he deemed advisable, as evidenced by the proposition he put before the house on one occasion in regard to certain decisions he himself has made.
However, these are irrelevant, so far as the central issue is now concerned. In fact, the question as to whether it was or was not intended that this letter be published is in itself irrelevant, when we recognize the rule of the Speaker in relation to this house. Whether the Speaker is a permanent Speaker, as at Westminster, or a Speaker chosen by a motion of all the members, as is done here, the Speaker, if there is to be any dignity in the proceedings of the house, must command the confidence of the members that the decisions he makes will be impartial decisions within the reasonable bounds of human frailty. Whether it was intended that this letter be published or not is in itself unimportant. We now know that the Speaker, whose impartiality we are expected to respect, holds the opinion that arguments that were made here falsified the facts or, to use the alternative expression the Speaker has used, distorted the facts for political ends.
I would point out that if these words were spoken of any member in this house it would be the duty of the Speaker to call for a retraction immediately. They would not be permitted. Whether or not it was intended that they be published, these were the thoughts of the Speaker, and we know they were the thoughts of the Speaker because,

House of Commons
whatever the circumstances were, they have now been given widespread publication in the press.


Mr. Speaker:: Would the Leader of the Opposition allow me to indicate that there is a distinction with respect to the word "deliberately"?


George Alexander Drew: I did not use the word "deliberately".


Mr. Speaker:: No, but the Leader of the Opposition said that if any member of the house were to say of another member that he falsifies or distorts facts for his own political ends that would be an unparliamentary expression and I would ask that it be withdrawn. I had a case the other day when the hon. member for Kootenay East -said that the hon. member for Rosetown-Biggar attempted to distort the facts, and in correcting him I said that the hon. member for Kootenay East should withdraw the expression because he was not allowed to insinuate or impute that the hon. member for Rosetown-Biggar had made a deliberate attempt to distort the facts. That is the only distinction.


George Alexander Drew: I repeat my statement that if these words were spoken in the house a retraction should be demanded. They are words that are not regarded as being a parliamentary expression because the motives of members must not be challenged. That is fundamental to the debates in this house. The Speaker has said that he is sorry the document was published. So are we. But it has been published and unfortunately it is now before the people of Canada that the Speaker, whose role it is to maintain dignity in debate in the house, has used words in relation to what has been said by many hon. members in this house which should not be permitted in orderly debate at any time. It removes from the Speaker any possible suggestion of impartiality.
I point out that the Speaker had a right to speak in two ways. When he suggested the motion of censure he indicated that this would give him an opportunity to speak. No one challenged that right. However, there is another way in which the Speaker is perfectly free to speak, and that is to resign and as a private member express his opinion outside of the house within bounds of decency imposed by himself in any way he sees fit, or to express his opinion in this house under the rules that have been established and which it is his high duty to administer. He is merely the temporary occupant of a chair which is symbolic of the relationship between government and opposition.

Whatever the unhappy circumstances were which resulted in the publication of this communication, the hon. members who disagreed with the procedure which took place have now been told that in the Speaker's opinion they distorted or falsified facts for their political ends. How is it possible for any hon. member to divest himself of that knowledge and to start afresh with any pretence that there is impartiality in the mind of the Speaker? No matter by what process these words became public, the Speaker disclosed what was in his mind. That we now know. For that reason this house can no longer proceed with its deliberations in the manner that it should with a recognition by many of the hon. members that that is the opinion of the Speaker to whose impartiality they must appeal over and over again during the course of debates.	,
Mr. Speaker, I ask anyone to go back to the Hansard record of what was said during the discussion of the motion that was before the house. It is impossible to find at any point any statements that were made which were not made with full recognition of the solemnity of the occasion and with due regard for the position which the Speaker had occupied until those tragic events occurred. Nowhere in the statements that were made in support of that motion is there a single statement that justifies the implication contained in the words that have now been published.
The Speaker says he is sorry that they were published. They have been published; they are in our knowledge and therefore I submit that for the sake of the people of Canada, whose servants we are, for the sake of the dignity of this House of Commons that is an integral part of our great parliament with its rich traditions, I submit that the responsibility rests now entirely with the government. I ask the government in all earnestness to meet this situation in the only way it can. It is for the government to decide how long we must continue to do the business which is necessary for the passing of the moneys required for the business of the country. We should now have the assurance that when that is done there will be immediate dissolution brought about by the constitutional procedure available to the government and that the people of Canada, with the full knowledge of the facts, then will have an opportunity to elect a new parliament in harmony with the traditions and sentiments of our people.
Right Hon. C. D. Howe (Acting Prime
Minister): Mr. Speaker, the house has listened to the remarks of the Leader of the Opposition (Mr. Drew) and the leader of the C.C.F.

party. It has listened to your explanation of what happened. The fact that an extract from a private letter written by the Speaker was published is a matter that is unfortunate, but to suggest that parliament should be dissolved because of it is, I think-


Mr. Low:: Nonsense.


Mr. Howe (Port Arthur):: The leader of the Social Credit party has used the word, so I will adopt it.
The Speaker was elected not by the government but by the House of Commons. He was nominated by the Prime Minister and that nomination was seconded by the Leader of the Opposition. He was elected unanimously by the whole house. This is a situation for the house to consider. The government was elected by a large majority to carry on the Queen's business for the usual period. It has now been in office a little less than three years. Whether or not the government should go to the country is a matter apart from the present dispute and will be settled by the procedure that governs dissolution of parliament under the usual circumstances.
The conduct of the Speaker has been impeached by the Leader of the Opposition. The motion was voted upon and voted down. Whether or not the publishing of an extract from a private letter changes that situation is a matter that must be considered.
Unfortunately, the Prime Minister is away and I would not wish to comment on the situation until he returns. However, I shall report the situation to him and he will make such statements as seem appropriate at that time.


John George Diefenbaker: suggested to you, Mr. Speaker, when you were making your explanation that you might table the correspondence and you were kind enough to forward the original correspondence to me. Having translated it in the few moments at my disposal, I feel that it should be tabled. Expurgated portions of the correspondence have already appeared in the press. In addition to that, in today's press there is a full reference to the statement. The apology, if you will, of Mr. Cinq-Mars is published in detail, and that was prepared in your office last evening.
Under the circumstances, sir, in view of the fact that you refer to hon. members who have entrusted to your custody the rights and prerogatives of parliament and the preservation and maintenance of the honour of every member in this house, irrespective of his position in the house; in view of the fact you have referred in that correspondence to the hon. members whom you represent in
House of Commons
your high and dignified position as accusers, and have referred to the arguments that they advanced in parliament as a falsification of the facts for their own political ends, I say that the correspondence should be published. It is not a question of whether or not you, as Speaker of the house, should be able to defend yourself; that is past. What took place is past. What we have before us even today is that, although you are in a position where hon. members have entrusted to you their honour, they are here described by you in correspondence, whether personal or public -it is now public-as having falsified the facts. This is something which, in my opinion, deserves a very complete retraction on your part.
I ask, sir, for the tabling of the correspondence, the letter that you wrote to Mr. Cinq-Mars. The copy is marked "Personal" in lead pencil, but other than that there is no indication of personal correspondence whatever, from the beginning to the end, as I read it.


Mr. Speaker:: I have no hesitation whatever in placing this correspondence at the disposal of the house on the understanding, of course, that when you table private correspondence in this house it means it is at the disposal of hon. members who may wish to take a look at it at the table. These are not documents produced by way of a motion. I know that Mr. Cinq-Mars, who has had this correspondence with me, will have no objection whatever because we discussed it last evening.
When the hon. member for Prince Albert (Mr. Diefenbaker) says that the letter of regret by Mr. Cinq-Mars was prepared in my office, I must say it was not prepared in my office in my presence. Mr. Cinq-Mars said, what can I do in order to repair whatever damage I may have caused you? I said, go out to my secretary and do whatever you please. I was not there when he dictated this letter. He did that, and he signed it and it was left with me.


John George Diefenbaker: There was no such suggestion in my statement. The press reported that it was done in your office, that is all.


Mr. Speaker:: So far as I am concerned, I have no hesitation in putting this correspondence in the possession of the Clerk for all hon. members to consult and verify for themselves.
Now, the hon. member for Prince Albert has taken exception to me qualifying my colleagues as "accusers". Well, when you write a letter, and you have several to reply to, and you are writing to a gentleman who is asking you for an interview and you are

House of Commons
thanking him for having written a favourable article about you and you comment upon the act, you do not always choose your words. I want to tell you gentlemen that I did not give 24 hours of thought to this letter. It is not something, you know, that I gave considerable meditation to. In the course of a great many letters, I wrote that letter. If I had written it to be publicized, I want to assure hon. members that I would never have included that sentence in it.
If I had had the chance to speak on the motion against myself my presentation would have been an objective one, wifhout taking sides, as far as the arguments which were not concerned with rulings were to be dealt with.
Now, the hon. member for Prince Albert (Mr. Diefenbaker) says that I should retract.


Mr. Castleden:: I cannot see the value of that at this time.


Mr. Speaker:: I did not hear the remark.


George Hugh Castleden: I said, I cannot see the value of that at this time in this situation.


Mr. Speaker:: Well, if there is no value in dealing with the request of the hon. member for Prince Albert and to give an explanation of my interpretation of the words, I will not deal with it further. But I want to tell hon. members that ever since I was appointed on November 12, 1953 my resignation has always been at the disposal of the house. If one wishes to move a motion, after 48 hours' notice, stating the reasons why and concluding that the Speaker be removed I will resign immediately. See Beauchesne's third edition, citations 127, and 225 and 46.


Mr. Mclvor:: Mr. Speaker, on a question of privilege, I have listened to the debate from both sides of the house and have seen what is going on. I think of another situation where the life of an individual was at stake, and the Divine Teacher said, Let him who is without sin cast the first stone.


Clarence Decatur Howe: May I point out that there is nothing before the house. I suggest we proceed with the business of the house.


Mr. Speaker:: I understand there is nothing before the house. Nevertheless, this matter is one of great importance. I would think that the hon. member for Nanaimo, if he wishes to speak at this moment, should be allowed to do so.


Mr. Colin Cameron (Nanaimo):: Yes, Mr. Speaker. I am astonished that the Acting Prime Minister (Mr. Howe) takes this

situation so lightly as to say there is nothing before the house and to attempt to deny to hon. members the right to speak on a question of this importance where we are charged with deliberate falsification.


Mr. Tucker:: On a point of order, this may be important. If it is important, it should be dealt with properly under the rules. It can be dealt with under the rules by notice of motion, in which event everybody can take part in the debate. I object to the people on the other side making the statements they have made without a chance for anyone on this side to answer, and to say why things were dealt with in the fashion they were. That is exactly what the situation is.
If the members on the other side want to carry this thing farther and suggest that you have no right to your private opinions, and for that reason you should be censured; in other words that you should be asked to have no private opinions, then I think we on this side have the right to express our opinions. I do suggest, Mr. Speaker, that if this is important-and I agree it is important -then it should be put before the house properly so that we can all take part in it.


Colin Cameron: If you are in any
doubt, Mr. Speaker, on account of the point raised by the hon. member for Rosthern, I wish to raise another point of privilege, my own personal point of privilege, because, in this statement that appears here, I, like every other opposition member who took part in the debate on the motion of censure of yourself, have been accused, and lie under the accusation, of having falsified the facts to meet my own political ends.
I suggest to you, sir, that having gone so far you must go farther. You must indicate to this house what members falsified the facts, in what respect they falsified the facts, and if you are unable to do so, sir, then it would seem to me there is only one course open to you and that is the course suggested by the Leader of the Opposition just now. That is the situation we are in today. We all lie under this imputation. It has gone all across the country that, in your opinion, some of us at least falsified the facts in this debate.
I must say, sir, I cannot take too seriously your suggestion that you wrote this letter in a moment of light-hearted carelessness. People do not carelessly make serious accusations of this sort. They are not the sort of things you slip in by accident when you are not thinking. I suggest, sir, you have to go farther now and indicate to this house precisely which members falsified the facts and in what respect they falsified the facts. If

you are unable or unwilling to do so, then there is only one course open to you, because this raises the whole question as to whether or not members who have been accused of this can any longer sit under your presidency in the chair.


Solon Earl Low: Mr. Speaker, I hesitated for quite some time to say anything on this question of privilege, but I think we are now beginning to generate some more heat, and I believe it would be well for me to say just a word.
I have listened very carefully to the statements made by the Leader of the Opposition, by the hon. member for Prince Albert, by the leader of the C.C.F., and others. It seems to me there are one or two things that ought to be said that have not been said, and they should be emphasized. What Your Honour wrote in your letter to Mr. Cinq-Mars has been likened by the Leader of the Opposition and others to an hon. member speaking in this house and saying the same thing about other members. It has been suggested that when an hon. member speaks in this house and says something similar to what you wrote in your letter about other hon. members you call on him to retract, and therefore that you should be called on to retract what you wrote in a personal letter.
May I suggest, Mr. Speaker, there is no relationship whatsoever in the two situations? I wonder whether it is possible that the Leader of the Opposition was implying that Your Honour has no right as a private member in this house, and in your capacity of a private member representing a constituency, to write a letter and say in that letter whatever you feel is in your own mind?


John George Diefenbaker: No.


Solon Earl Low: I wonder whether the Leader of the Opposition thinks for a moment that other hon. members of this house have not written private opinions about the distortions that took place in the pipe-line debate. I am going to tell you, Mr. Speaker, that I have expressed my opinion in letters just exactly as I suspect the Leader of the Opposition, the leader of the C.C.F. and others have expressed in letters their private opinions about your partiality, so-called, private opinions about how you possibly leaned over backwards to favour the government, and so on.
Now, Mr. Speaker, it has been suggested here that you have no right to do that. I suggest it is not a sensible piece of accusation to say that you have not that right as a private member representing a constituency. I think you have that right and I think it is your duty on occasion to write to private individuals and to express your private opinion.
House of Commons
Now let me go further. It has been suggested, Mr. Speaker, that it was some sort of crime or sin for you to suggest that certain members of the opposition in speaking in the pipe-line debate distorted facts for their own political purposes. I suggest that practically everything that is done in this house is done with a view to building up one's own particular political ideas and beliefs, every single thing. I might suggest, sir, that the whole course of the pipe-line debate was taken for the purpose of creating a political issue. If the facts were not distorted, certainly they were not completely placed before the house by every hon. member.
The very fact that, you, Mr. Speaker, exercised your right to write a letter to a private person and in it expressed your private views certainly should not be seized upon as an excuse for again calling for the dissolution of this house and the holding of an election. I do not see that you have done anything reprehensible at all. It appears to be reprehensible in the minds of those people who are accused, of course, and I do not blame them for protesting under the circumstances, but to make a mountain out of it at this time seems to me to be very foolish.


John George Diefenbaker: Would the hon. member permit a question?


Solon Earl Low: Yes.


John George Diefenbaker: Would your remarks
apply if the letter had been signed "Mr. Speaker" or was written as the Speaker of the house?


Solon Earl Low: I would think that even then he has the right to write a personal letter to anyone in his constituency or anywhere else and express his own private opinion. He is not doing it as the occupant of the chair but as the hon. member for whatever constituency he represents.
I thought I should express those points of view because it seems to me they have been suppressed by what has been said thus far. So far as we are concerned, Mr. Speaker, we want to make it abundantly clear that we feel that any member of this house who represents a constituency-whether or not at times he occupies the chair-must be granted the right to express his own private opinions in private letters and correspondence to anyone outside the house without being called to account for it in this house. If that were not so, then every single one of us would be called to account for the private letters we write and the private opinions we express in those letters and I do not think that is any business of this house at all.

Inquiries of the Ministry FOREIGN INSURANCE COMPANIES ACT



AMENDMENTS RESPECTING FILING OF STATEMENTS, ETC.

Hon. W. E. Harris (Minister of Finance) moved: the first reading of Bill No. 437 (from the Senate), to amend the Foreign Insurance Companies Act.
Motion agreed to and bill read the first time.



CANADIAN AND BRITISH INSURANCE COMPANIES ACT


Walter Edward Harris: the first reading of Bill No. 438 (from the Senate), to amend the Canadian and British Insurance Companies Act.
Motion agreed to and bill read the first time.



ROYAL CANADIAN AIR FORCE

[Stage Direction]
420 SQUADRON, LONDON

[Stage Direction]
On the orders of the day:
Mr. H. O. White (Middlesex East):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. In view of the apparent shortage of air transport facilities disclosed in the white paper recently issued by the Department of National Defence, would the minister reconsider the disbandment of 420 fighter squadron, London, and re-establish the squadron as a trainee and transport squadron?
I also have a second question. Would not a reorganization along these lines utilize the personnel and airport facilities at London rather than waste them, as now seems apparent?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, as I said the other day, each of the auxiliary squadrons was considered from all the angles which I have mentioned on two occasions in the house and the decisions that were taken were taken in the light of those factors. It is my recollection, and I speak subject to correction, that the flying activities of the squadron at London were not very great. If I am wrong I can be corrected in that, but I think it is true. I believe it was felt the activities of those who are air-minded in the London auxiliary-and there are some very good people-could be better tied into the Royal Canadian Air Force organization in the way which is proposed under the revision of duties which has been worked out.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Transport arising out of the 7 per cent increase in freight rates scheduled to go into effect on Tuesday next. Has the minister considered the heavy burden such an increase will impose on primary producers and consumers in this country? Will the government use the authority given it under section 53 of the Railway Act to rescind the order of the board of transport commissioners and thus prevent any increase in freight rates at this time?


Hon. George C. Marler (Minisfer of Transport):: Mr. Speaker, I would like to reply that I have just received a copy of the judgment. I have not had an opportunity of reading it and I therefore am not able to express any opinion upon it.


Hazen Robert Argue: In view of the urgency of the question I wonder if the minister will study the judgment and make a reply on Monday?


George Carlyle Marler: Mr. Speaker, I do not think I can give that undertaking but I shall read it as soon as I can.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Mr. Maurice Boisvert (Nicolel-Yamaska):: Mr. Speaker, I am rising on a question of privilege. Yesterday the hon. member for Vancouver East (Mr. Winch) made a statement to some newspapermen which is published today in the Montreal Gazette. This statement accuses members of the committee on capital punishment of having cast their votes against their personal beliefs. As a member of that committee and speaking for myself I want to say I have given to this extremely important question of abolishing the death penalty very long and cautious study and when I voted to retain capital punishment I voted, as I have always done throughout my life, according to my conscience and according to my conviction which is the conviction of the majority of the people of the province of Quebec. I think it is most unfair for a member of parliament, inside this house or outside of it, to make a statement such as that which appears today in the Montreal Gazette.


Harold Edward Winch: Mr. Speaker, if there is any personal imputation that is taken by my hon. friend I shall be glad to withdraw any personal imputation but on general principle I stand on exactly what I said. I will be glad of the opportunity of debating this matter and expressing my views on the floor of the house when the report on capital punishment comes before the House of Commons for discussion.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Acting Secretary of State for External Affairs and ask him whether he is in a position to advise, now that several weeks have gone by since consideration commenced on the part of the cabinet respecting the issue of export permits for fighter and jet aircraft to Israel, whether a decision has been arrived at to allow such export to take place. What is the present position of the matter? When does the minister expect, if a decision has not been made already, that a decision will be arrived at? Urgency seems to be of the essence.
Hen. Paul Martin (Acting Secretary of State for External Affairs): Mr. Speaker, my hon. friend gave me notice yesterday morning of this question and in reply I would say that individual applications for export permits are considered each on its merits, as has been previously reported to parliament. The specific question of jet aircraft is under consideration by the government and in reaching any decision the views of other countries concerned are and will be taken into account.


John George Diefenbaker: May I ask a supplementary question. Have any of the great powers suggested to Canada that it would be in order for Canada to issue export permits? Has there been any indication that such action on the part of Canada would meet with the approval of Great Britain and the United States?


Mr. Martin:: I believe my hon. friend will agree readily that in these matters careful consideration should be given to every aspect of the problem. This is a matter of great importance and I do not want to add anything now to what I have said already.
29, 1956	5517
Inquiries of the Ministry GRAIN



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Mr. F. G. J. Hahn (New Westminster):: Mr. Speaker, in the absence of the Minister of Public Works (Mr. Winters) perhaps the acting minister can take my question as notice if he is not in a position to answer. Would the minister make a statement in connection with a newspaper article in the British Columbian of June 27 to the effect that the Searle Grain Company might close the elevator because ships could not reach the dock by reason of the fact that the south side of the Fraser river is not dredged sufficiently often to allow ships to proceed to and from the elevator without danger of being caught on a sandbar?


Hon. James Sinclair (Acting Minister of Public Works):: I shall draw that matter to the attention of my colleague and I would hope there will be an answer early in the week.



BRIDGES


[Stage Direction]
On the orders of the day:
Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I should like to direct a question to the Minister of Public Works (Mr. Winters) or in his absence to the minister acting in that capacity. Would the minister comment on an article in the June 27 issue of the British Columbian to the effect that the British Columbia government has made a formal application to Ottawa to have the federal government pay half the construction costs of two lower mainland bridges and the Deas island tunnel? I might say that notice of this question and a copy of the article were sent to the minister's office.


James Sinclair: I am sure that is a question which the Minister of Public Works would want to answer himself and I shall draw it to his attention.



REFERENCE TO SURVEY ON RESULTS OF SMOKING

[Stage Direction]
On the orders of the day:
Daniel (Dan) McIvor: Mr. Speaker, I should like to ask the Minister of National Health and Welfare a question arising out of an article which appeared in the

Inquiries of the Ministry press of yesterday morning indicating that there would be a government survey on smoking and lung cancer. This seems to be an answer to my request of six years ago and I would ask the minister if this survey will include all uses of tobacco in Canada?


Paul Joseph James Martin: Mr. Speaker, I well remember my hon. friend's interest in the question of smoking. I would not want what I have to say by way of reply to be regarded as either an affirmation or a denial of the position which he took. I simply want to say that Canadian cancer research workers and scientists, along with those of other countries, are engaged in a most important study of cancer generally, and, in this particular instance, of lung cancer. One of the important incidents of the research is an assessment of statistics concerning individuals in a particular group. The particular group referred to are co-operating and will share with the scientists themselves whatever fruitful results ensue.



PIPE LINES


[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilton (Notre Dame de Grace):: Mr. Speaker, in view of the possibility of a strike by steelworkers in the United States, can the Minister of Trade and Commerce inform the house how long Trans-Canada Pipe Lines will be able to continue to construct their pipe line across this country without obtaining further supplies of pipe?


Clarence Decatur Howe: Mr. Speaker, I presume that in the event of a steel strike the production of plate for pipe for Trans-Canada will be suspended for the duration of the strike. How long the strike will last of course neither my hon. friend nor I can say. Whether the manufacture of pipe will also be suspended depends upon the stockpile of plate at the pipe mills, and that will be a matter to be determined.


Mr. Hamilton (Noire Dame de Grace):: supplementary question; is the minister undertaking any investigations or action to facilitate the continued construction of this pipe line?


Clarence Decatur Howe: The pipe line is being constructed by the present owners of the pipe line and there is no occasion for the minister to make any investigations. The minister has reports on the progress of the line and the last report indicated that pipe had moved into the country to provide about
[Mr. Mclvor.l
100 miles of pipe line. That is the only progress report I can give my hon. friend.


John Borden Hamilton: What was the date?


Clarence Decatur Howe: What was the date of what?


William McLean Hamilton: this last report. I was questioning the minister as to the date of the progress report to which he referred when he said that there was pipe on hand for approximately 100 miles of construction.


Clarence Decatur Howe: As a matter of fact I think I got that word yesterday. If my hon. friend will explain his personal interest in the situation perhaps I-


An hon. Member:: He does not have to.


Mr. Fulton:: Are we to take it from the minister's last remarks that he regards the pipe line as his personal property and not as something of interest to the public generally?


Clarence Decatur Howe: The pipe line is the personal property of a corporation. It is corporate property.


An hon. Member:: Government money.


Clarence Decatur Howe: The government has loaned certain money to the corporation for the purpose of building the pipe line and has taken a mortgage on the pipe line to cover the indebtedness. The government is not responsible directly for the building of the pipe line.


Edmund Davie Fulton: Public money is going into it.

The house in committee of supply, Mr. Applewhaite in the chair.



DEPARTMENT OF DEFENCE PRODUCTION

[Stage Direction]
85. Departmental administration and payments to Canadian Commercial Corporation and other corporate agencies for services provided in connection with defence purchasing and production, $6,145,727.
Clarence Decatur Howe: Mr. Chairman, when the estimates of my department were before the committee previously I was outlining the position of the aircraft industry. To complete this picture of the work of the current year I should like to review, in less detail, the other principal elements of the defence production program. In the electronics field-one of growing importance to defence-there has been a slight increase in the volume of spending and the present level is likely to continue for some time to come. This is attributable in part to expenditures on the mid-Canada line, but many other

developments are involved, since the electronics program relates to a growing range of equipment needs.
Throughout this fiscal year the mid-Canada line will continue to be the largest single item in the program. Construction work on the line, as well as the manufacture and installation of equipment, are proceeding on schedule, which incidentally is a very tight one. This has involved very close co-operation between Canadian contractors and suppliers and the government agencies responsible for the project, and I would like at this time to pay tribute to the way in which industry is tackling the problem in order to ensure that the job will be completed on time.
The construction of the distant early warning line, as you know, is being undertaken and financed by the United States. However, Canadian industry has shared very substantially in this work. There has been close liaison with responsible authorities in the United States and with regard to the construction phase and the provision of electronic equipment Defence Construction Limited and the Department of Defence Production have worked with the United States to ensure that Canadian industry was given a chance to bid wherever it was possible to so arrange.
As you know, the two very large construction contracts were placed in this country, as were important transportation contracts, and a very large proportion of the materials and supplies required under these contracts has come from Canadian suppliers. In addition, the installation of communications equipment required during the construction phase is being carried out by a Canadian company. Wherever delivery schedules and technical factors permitted and where costs were competitive, contracts for electronic and related equipment have been placed in this country.
Among other major electronic projects, the current year will see development work started on an integrated electronic system for the CF-105, combining navigation, flight control and fire control equipment. As the house may realize, electronic systems of immense complexity are needed for navigation and flight control at supersonic speeds and for the extremely precise fire control required to engage targets which may themselves be travelling above the speed of sound. Work is continuing on the CF-100 flight simulator, which is one of the most complex undertaken by a Canadian company. New types of aircraft are creating requirements for new types of simulators but, as the field of flight simulation is such a highly technical one and our requirements are so limited, many factors 67509-3514
Supply-Defence Production have to be taken into account in determining where this work should be done. The contract for one of these new simulators, the CS2F Grumman, has been placed and the equipment is being produced in the United Kingdom. As a second project, there is a requirement for simulation of the CL28 maritime reconnaissance aircraft, to be undertaken this year. Large new projects are also in prospect in the area of air defence communications.
From the foregoing it will be appreciated that the over-all impact of this year's defence production program on the Canadian electronics industry will be roughly comparable with that of 1955-56. It is likely that there will be some differences in the distribution of defence work among the numerous firms in the industry. However, it should be recognized that, unlike certain other sectors of our industrial base, of which the aircraft industry is a good example, the electronics industry has a large civilian market for its products and is consequently less dependent, as a whole, on defence orders. On the other hand, it is recognized that certain segments of the industry have developed special facilities and engineering skills that are essential to the continuing defence electronics program and that have little or no civilian application. We are all aware, in this electronic age, that new developments in aircraft and weapons call for new and increasingly complicated electronic control systems, but just what this will mean to Canadian industry in the future is impossible to predict at this time.
The longer manufacturing cycles required for the production of ships mean that shipbuilding programs undertaken in previous years will be continuing throughout the current fiscal year. Work on the 13 destroyer-escorts remaining to be delivered will continue, and it is now expected that final trials will be completed on four of these ships during the year. Progress is being made on all six of the MCB class coastal minesweepers and the lead vessel is scheduled for completion this fall. The second frigate conversion program, involving five ships, is also well under way, and the first two should be completed by next spring. The aircraft carrier Bonaventure is nearing final completion in the United Kingdom, and delivery is expected for the late fall.
In the gun and ammunition programs, some further reduction in activity is now likely. The small arms program will be sustained throughout the coming year by the service needs arising out of the adoption of the FN rifle. The production of heavier calibre weapons and ammunition to meet current requirements may be substantially completed during the current fiscal year, and we have to consider ways of maintaining, as far as possible,

Supply-Defence Production the industrial facilities and production skills associated with this work.
In this connection, I should like to refer briefly to the contracts for the three-inch 50 calibre anti-aircraft guns to which reference was made in the report of the Auditor General for the last fiscal year. These contracts were carried out by Sorel Industries Limited in its gun plant at Sorel, Quebec, on behalf of the United States and Canadian governments, and the difference of some $112,000 each in the cost to the two governments provides a good example of the heavy expense of re-establishing a facility to do this type of work.
Apart from minor extras for special equipment required by the Canadian navy, the difference in price was accounted for mainly by three items of expenditure which were considered to apply to Canadian account only, inasmuch as they related to the re-establishment of Canada's only facility for the production of heavy guns urgently required by the armed services at the outbreak of the Korean war. These were plant and staff house rehabilitation expenses totalling some $908,000, or $19,900 per gun; plant maintenance costs, covering partial compensation for the expense of retaining this highly specialized gun facility -which had little or no economic commercial use-during the period from 1945 to 1950, amounting to $35,074 per mount; and the preproduction and learning expenses amounting to $33,158 per gun. These figures represent general overhead costs of the first year's operations which could not properly be absorbed in the relatively small volume of production during that period, bearing in mind that the plant had to be reactivated and staffed from a virtual shutdown condition.
While it is true that the recorded price of guns for Canadian account exceeded the price to the United States government, it should be remembered that the payment of the foregoing costs has resulted in substantial benefits to all subsequent production contracts, including the 105 mm. and 155 mm. howitzers. A further advantage to Canada, which should not be overlooked, is that the United States order for 180 guns, contrasted with Canada's requirement of 46, absorbed approximately four-fifths of the fixed overhead charges relating to the program, and resulted in substantial cost reductions, by reason of increased efficiency over the greater production run, which were shared by both governments.
In summary, whereas, in 1951, we were faced with problems of growth and expansion in our defence production program, we are today encountering problems of maintenance and stabilization. Whereas, in the early years,
[Mr. Howe (Port Arthur) .1
our task was one of developing sources of supply to meet the demand, we are now more concerned with directing the continuing demand to established supply sources in such a manner as to use our production resources most efficiently and to safeguard their future most effectively.
The Minister of Defence Production is also responsible for a number of crown corporations, most of which are closely related to the defence production program; therefore, some mention of their activities is in order.
Canadian Arsenals Limited, in the current year, will continue to supply ammunition, small arms, instrument, and radar equipment, under contract to the Department of Defence Production, in approximately the same dollar volume as in 1955-56. Ammunition production, covering a wide range of both small arms and larger calibre gun ammunition, will again account for the greater part of the deliveries.
This year will see the first deliveries of both drawn and spiral-wrapped steel cartridge cases. The defence chemical facilities are to be augmented to permit the production of propellants for rockets and mortars, and further improvements will be made in the facilities and technique employed in the filling program. The small arms weapons plant will this fall deliver the first production models of the new FN-C1 rifle, and production will continue thereafter at a rising rate. It might be pointed out that, in addition to its role of defence contractor, Canadian Arsenals Limited, as an agent of the crown, has certain responsibilities for the development and maintenance of government arsenals and the preservation of appropriate skills and techniques.
Expenditures by Defence Construction (1951) Limited during the year ending March 31, 1957, are expected to total in the neighbourhood of $145 million. This is nearly 20 per cent higher than the expenditure figure for last year, largely as a result of the increased volume of work carried over from previous years, but it is well below the peak year of 1952-53. On the other hand, it is estimated that new contracts to be awarded during the year will decline by approximately 10 per cent to $135 million. Work on the mid-Canada line will account for the largest single share of the total expenditure, with the Camp Gagetown program in second place. It is expected that the latter project will be substantially completed by the end of this fiscal year.
Two of the remaining crown corporations operating under direction of the Minister of Defence Production, the Canadian Commercial Corporation and Crown Assets Disposal Corporation, require no appropriation since

they are financed by means of a surcharge on the volume of business handled. The annual report of Crown Assets Disposal Corporation indicates a particularly satisfactory operation for the past year, having reduced the total costs of disposal to less than 7 per cent of the proceeds realized. Last, but not least, Polymer Corporation continues to show most encouraging results, having established during the past year new record levels of sales, production and payment of dividends to the crown, after all necessary provision for depreciation and payment of normal income taxes.


Mr. Fleming:: May I ask the minister a question?


Clarence Decatur Howe: Yes.


Donald Methuen Fleming: Is the new corporation,
Northern Ontario Pipe Lines, coming under the Department of Trade and Commerce or under the Department of Defence Production?


Clarence Decatur Howe: It is under the Department of Trade and Commerce.


Donald Methuen Fleming: Mr. Chairman, departments of government, particularly when we come to the stage of reviewing estimates, should not have their importance judged simply by the amount of money that they ask for to finance their own departmental operations. The Department of Defence Production certainly should not be judged as to its importance by that standard. There are departments of government whose estimates greatly exceed those of this department. This department, for instance, does not compare in its expenditures with the large spending departments like national defence, finance, national health and welfare, public works, post office and others. Indeed, sir, the proposed appropriations this year amount to $22 million and comprise only seven items.
But, sir, the importance of this department is rather to be measured in other terms. First, it is to be measured by the vast powers that the department possesses and that are vested in the minister. I recall to the minds of hon. members the review of those powers in the debate during this same period of the 1955 session, powers that are unparalleled in their extent and on which, indeed, the only legal limit remaining is the limit preserved last year after an epic struggle by the opposition. I refer, of course, to the time limit.
The second factor is the amount of actual spending that this department does. This department has confided to it the expenditure or commitment of vast sums of money on behalf of other departments, in particular the Department of National Defence, that do
Supply-Defence Production not enter into its own departmental appropriations. Indeed, since its inception on April 1, 1951, this department has spent or committed a total of approximately $6 billion. Its expenditures, the commitments it undertakes on behalf of other departments, are running now at approximately $1 billion per annum.
The third factor, of course, is the concentration of functions and responsibilities under the present minister, for with this department, the other one he heads and the various crown corporations that are associated with these two departments this situation is like the hub of a wheel. As to the crown companies, there is a list on page 2 of the second volume of the public accounts in which it will be seen that of the 29 crown corporations there enumerated they are responsible to ministers of the government in these numbers: the Minister of Trade and Commerce, eight corporations, the Minister of Defence Production five corporations, the Minister of Transport seven corporations, the Minister of Northern Affairs and National Resources three corporations, the Minister of Finance three corporations, the president of the privy council one corporation, the Minister of National Revenue one corporation,, and the Minister of Public Works one corporation.
Lately there has been added a thirtieth-crown corporation, namely, Northern Ontario Pipe Line Crown Corporation, bringing to a total of 30 the number of crown corporations. Under the two portfolios which the minister holds, trade and commerce and defence production, 14 out of the 30 are responsible to him, and I am not including in that total the national research council which is also responsible to him.
The fact that so much purchasing is carried on in this department does create a position of unpredecented power so far as the minister is concerned. No other man in Canadian history has had $20 billion to spend as he has since 1939-indeed, few people in all the world at any time.
There are five crown corporations in this particular department and with respect to these crown corporations, as with the other crown corporations in the total of 30 that I have mentioned, I say that there should be a periodic and intensive review by a committee of the house of the operations of each of these crown corporations. At the present time they are much too remote from parliamentary control, and in committee of supply the machinery provided for a review of the operations of a crown corporation or, indeed, the operations of a department of this kind, is most inadequate. The committee of supply
5522	HOUSE OF
Supply-Defence Production is a committee of the whole house. It is a big, unwieldy piece of parliamentary mechanism if parliament is to approach seriously the task of undertaking a detailed review of a department with all the ramifications of the Department of Defence Production and with all the important crown corporations that are associated with it and are responsible to the minister of this department and to the same minister also as the Minister of Trade and Commerce.
Sir, what is needed is a more effective way of reviewing the operations of this department and its crown corporations. The committee on estimates has sat for the past two sessions. In each of those two years it has reviewed the estimates of four departments. So far the Department of Defence Production and the Department of Trade and Commerce have escaped the review of that committee, although we did ask at the beginning of this session that one of these departments at any rate should be referred to the committee this year. I say, Mr. Chairman, that this department is one that calls preeminently for a detailed review before a select committee of the house. In 1953 the committee on defence expenditures touched on certain aspects of the operations of this department, but so far as it touched on those operations it merely scratched the surface.


Clarence Decatur Howe: May I make a comment? I may say that no department of government has been examined before a committee so closely as the department for which I am responsible. From 1940 to 1953 the committees on war expenditures and defence expenditures sat and considered the department every year. The work of the department was practically the only work considered by that committee on war expenditures.


Donald Methuen Fleming: You will observe that I was not speaking about the war expenditures committee. I was speaking about this Department of Defence Production which has been in existence now for five years. I have drawn attention to the fact that there has not been at any time in that period a detailed review of the operations of that department. I have pointed out that the ramifications of this department are so extensive that this is preeminently a department whose operations ought to be reviewed by a committee in the well established method of review of its estimates.
Now, I was mentioning the fact that in 1953 the committee on defence expenditures had touched at certain points on the operations of this department. It was principally concerned with the expenditures charged to the Department of National Defence. It


touched on certain operations of Defence Construction Limited, but so far as a review of the operations of this department is concerned I say that it did not, and could not under the circumstances, do more than scratch the surface.
The minister's statement on Wednesday-


Mr. Dickey:: Both the committees in 1951 and in 1952 dealt with the department.


Donald Methuen Fleming: The committee in 1951 sat for only about a month and this department had only come into existence at that time, so my friend is not going to pretend there was any review of the operations of this department at that time. So far as 1952 was concerned, the concern of the committee at that time was the direct expenditure on war materials and equipment. This department did not come in, except at a few odd points, in the review by that committee. So I say, Mr. Chairman, that the time is ripe and I think there should have been such a review this year. But certainly the time is ripe when there should be a detailed review of the operations of this department in a committee where there would be an effective opportunity for reviewing the business of the department, its administration and its operation in the fullest detail. This is not possible, as everyone must recognize, in this big, clumsy committee of supply.
The minister's statement on Wednesday touched on one question. He concentrated on aircraft production and procurement, admittedly a very important subject. In his statement this morning he has briefly delivered certain observations in regard to electronics and gun production and about the five crown corporations.
Now, sir, our first responsibility must be to ask ourselves, as a committee, how closely are we to assume that this department has estimated in putting before the house its request for appropriations totalling $22 million? As this department is not asking for sums comparable with those for which it was asking three or four years ago, any margin of error or excess in estimating is naturally correspondingly reduced. But I had occasion to look back, Mr. Chairman, to try to reckon the degree of accuracy that has characterized the estimating done in this department since its inception. I will give the committee the round figures. I find that for the fiscal year 1951-52, the department asked for and obtained a vote of $115 million and it expended $31 million. For the fiscal year 1952-53, it asked for and obtained $123 million and expended $89 million. For the fiscal year 1953-54, it asked for and obtained $73 million and expended $48 million. For the fiscal year 1954-55, it asked for and

obtained $40 million and expended $19 million. We have not yet received the actual expenditures for the fiscal year 1955-56.
If we take these first four years of the life of the department in aggregate, we find that the department asked for and obtained votes totalling $353 million and it actually expended-that surely is the best test of the actual needs-$187 million.


Clarence Decatur Howe: Mr. Chairman, that statement is not accurate because in those votes a considerable amount was for revotes. You are counting the same money twice.


Donald Methuen Fleming: Now, those are the figures of the actual votes; those are the figures of the actual expenditures. I have a comment to make upon them if the minister will just bide his time. Those are the moneys the house was called upon to vote to date and those are the figures of the actual expenditures from government records. When the house is asked to vote moneys-


Clarence Decatur Howe: It was not all
new money, though.


Donald Methuen Fleming: Mr. Chairman, those are the votes year by year that the house was asked to vote.


Clarence Decatur Howe: But I am pointing out that a considerable part of the money was a revote from the previous years.


Donald Methuen Fleming: It does not matter about the revote. You can measure, surely, the accuracy of estimating by what the department asked for each year and what it expended.
Now, Mr. Chairman, the bulk of the difference is in the figure on capital assistance. The next item accounting for some of the difference is the figure for Canadian Arsenals, but the great bulk of the difference between what was asked for and what was found to be necessary was in the figure on capital assistance. This year, of course, the figure on capital assistance is down somewhat from last year. We wish to have, in the case of each item, a statement of the amount actually expended last year, and that has not been available as yet. We will wish to know, with respect to each item, what in detail is the best calculation of requirement.
There are important questions that arise, and will arise, in the course of a review of the administration and operations of this department. The first question that naturally arises is as to the administration of the Defence Production Act itself. In the light of the extended debate that was held last year in reference to the time extension of the minister's wide powers under that act, I wish to ask how many orders have been
Supply-Defence Production made under that act and ask for their listing or classification under the various sections of the act. In other words, what orders have been issued under each of the sections of the act conferring powers upon the government or minister?
I pass over, in the second place, the subject of the Northern Ontario Pipe Line and its relationship to Trans-Canada Pipe Lines in view of the announcement by the minister this morning that that corporation is going to be associated with him in his capacity as Minister of Trade and Commerce. We can come to that when the estimates of that department are before the committee of supply.
The third question that arises naturally in view of the discussion in other years is the relationship of the department with national defence. Are those relationships precisely the same as in earlier years?
Fourth, the minister has not made any comment upon the revolving fund in the department. In the annual report of the department there are certain financial statements to be found on pages 53 and 58 concerning the revolving fund. There is available in this department first of all under section 16 $100 million, and under another vote in 1951 a further $50 million, or an aggregate of $150 million as a revolving fund. All hon. members will appreciate the difficulties presented in enforcing the strict rule of parliamentary control in the case of revolving funds. The Auditor General has been questioned in the public accounts committee and in other committees concerning revolving funds in other departments. The turnover of that fund many times, of course, does permit the use of the same funds many times over, and I think it only right and proper that this committee should ask for a much more extensive review and report of the operations of the revolving fund in this department than is contained in the annual report of the department.
There is another matter to which I have referred on other occasions. It is the matter of the distribution of purchases in the department. As the discussion proceeds there will be opportunity to develop this subject in its wider context, but while the committee has noted the statement of the minister of Wednesday last to the effect that the percentage of total purchases from the United States has been greatly reduced from the original 25 per cent in the first year of operations of this department to 2 per cent last year, one must, in looking at the figures contained on pages 46 and 47 of the 1955 annual report of the department, express again regret that the department did not find it possible to make in the United

Supply-Defence Production Kingdom more of the purchases that it was unable to make in Canada and in that way assist the United Kingdom with its dollar problem in order that it might in turn purchase more of our products in this country.
Hon. members will see by looking in the annual report, on the pages I have mentioned, that the net value of defence orders placed in the United States by this department in the period from April 1, 1951, to December 31, 1955, a period of 4f years, aggregated $545,340,000, and the value of actual expenditures on defence orders placed in the United States by the department was $572,219,000.
I turn now to the purchases in the United Kingdom. In the same period the net value of Canadian defence orders placed in the United Kingdom by this department was $163,490,000, and the value of expenditures on Canadian government defence orders placed in the United Kingdom by this department was $126,441,000. It was a very small percentage indeed of the total of purchases made in the United States.
Now, I come to two matters in concluding these remarks, Mr. Chairman. First, I refer to the basis of purchases. The annual report of the department contains this sentence on page 24:
With the increase in Canada's industrial defence potential it has been possible to purchase more goods in Canada, to increase the number of cases in which contracts are placed on the basis of competitive tender, and to move from cost plus to target price or negotiated firm price contracts in those fields in which Canadian firms have gained more operating experience.
Now, that is an interesting statement, Mr. Chairman, and we shall certainly wish to have much more elaborate information on the subject. Therefore, I ask that we be given detailed information on the number and value and proportion out of the total of contracts placed on competitive tender and the numbers and amounts and percentages of those placed on a cost plus basis, or a target price basis, or negotiated firm price basis.
Now, sir, I come in conclusion to one other matter. I referred already to the fact that the minister heads two departments and that 14 crown corporations report to him. He has many other burdens as well, including that of Acting Prime Minister at the present time. In this house on June 14 I referred to a matter which relates to the fact that the minister is one of the executors of the estate of the late Sir James Dunn. My remarks are to be found at pages 5031 and 5032 of Hansard.


Clarence Decatur Howe: I made comment on that in the newspapers.


Donald Methuen Fleming: In restrained and temperate terms I referred in the house to that subject and I dealt with it strictly on the basis of
[Mr. Fleming.!
principle. I want to make it quite clear, Mr. Chairman, that it was not a personal matter on my part. I spoke for Her Majesty's loyal opposition. I dealt with the matter as a question of principle. There was nothing personal as relates to the minister himself. Although the debate went on for some time the minister did not choose to enter it, but on the following day he made a statement to the press outside the house in which he did not deal with the principle that I had raised, but directed at myself aspersions and defamatory statements. I hope that the two weeks have been a sufficient cooling-off period.


Clarence Decatur Howe: My hon. friend speaks about the remarks made outside the house?


Donald Methuen Fleming: I ask the minister to take back what he said about me.


James Sinclair: I thought it was an accurate statement of fact.


The Deputy Chairman:: Shall the item
carry?


Donald Methuen Fleming: I ask the minister to take back those personal remarks.


Clarence Decatur Howe: I said nothing that is unparliamentary or anything else. As I remember my statement-would you like me to repeat it?


Donald Methuen Fleming: No.


Clarence Decatur Howe: I was asked quite casually by a reporter what I was going to do about your remarks and-


Donald Methuen Fleming: That is not the part I refer to.


Clarence Decatur Howe: What is the part?


Donald Methuen Fleming: The personal remarks the minister made about me. He is quite entitled, of course, to deal with the subject. I am not finding fault with what the minister says about that at all. The minister is perfectly at liberty to deal with the subject of his own plans in relation to the executorship or to anything like that. What I refer to are the personal remarks that he directed toward me. They were defamatory remarks, and I ask that those remarks be taken back.


Clarence Decatur Howe: Mr. Chairman, as I remember what I said, I said that of the 263 members of the House of Commons the hon. member is the last one I would ask to instruct me on ethics. Does my hon. friend object to that?


Donald Methuen Fleming: Yes.


Clarence Decatur Howe: Who else of the 263 would he pick out to succeed himself?


Donald Methuen Fleming: This is not such a funny matter. When remarks like these are made

outside the house I think it is best that hon. members, when they have things to say about a question of principle that arises in the house, should make the remarks in the house. This minister made such a remark and he also went on to make a further remark about myself.


Clarence Decatur Howe: What was that?


Donald Methuen Fleming: It was on the subject of ethics.


James Sinclair: Let us have that, too.


Donald Methuen Fleming: The minister knows quite well what he said.


James Sinclair: Put it on the record.


Donald Methuen Fleming: Why should I put it on the
record?


James Sinclair: Then you will find that the feeling is unanimous.


Donald Methuen Fleming: The minister knows what he said. I think the matter should be dealt with in the way I have suggested, and I simply ask the minister to take back what he said about me. I think that would be the fair way to dispose of it.


James Sinclair: It is so accurate.


Donald Methuen Fleming: I am addressing my remarks through the Chair to the Minister of Defence Production, if the Minister of Fisheries does not mind.


Clarence Decatur Howe: Mr. Chairman, I
try to be scrupulously fair to everyone. After studying the operations of the hon. member for the past six weeks I have nothing to take back.


Edward Turney Applewhaite: Shall the item
carry?


Some hon. Members:: No.


Edmund Davie Fulton: Well, Mr. Chairman, in view of what the minister has just said, and in view of the way in which the remarks of the hon. member for Eglinton were greeted on the other side, I think the matter requires further discussion. The situation which arises out of the fact that the Minister of Defence Production, who is also the Minister of Trade and Commerce, has accepted an executorship of the estate of Sir James Dunn is a most unusual one and is one that requires to be dealt with on the basis of principle. It involves the question of a conflict of interest between the role of an individual in his capacity as Minister of Defense Production and the role of that same person in his capacity as a private citizen and as an executor of this particular estate.
In what I have to say I am not for the moment going so far as to suggest that no
Supply-Defence Production person, simply because he happens to be a cabinet minister, can accept an executorship of the estate of a friend; I certainly would not for a moment present that as a general proposition. I think in these matters each case has to be judged on its own circumstances. I am putting this to the minister and asking him to accept that it is put on the basis of principle, as something that requires discussion and decision on that basis, whether or not the minister feels that we interpret correctly the principles that are applied here. I ask him to accept that in our view it is a matter of principle, one that requires decision, and he should review the matter on that basis and allow us to discuss it on that basis, because his is not a normal situation.
The estate through its share holdings controls the operation and fate of one of the largest companies in Canada and at the present time certainly one of the most important, the Algoma Steel Corporation, which as the minister knows, and everybody knows -


Clarence Decatur Howe: Mr. Chairman, is my hon. friend suggesting that the shares are vested in the executors? The Algoma Steel Corporation is operated by the board of directors of Algoma Steel Corporation. The executors have no right to exercise control through shares. My hon. friend is a lawyer and he knows that as well as I do.


Edmund Davie Fulton: I do not accept for a moment the minister's statement of the position. Does the minister mean to suggest that the executors who control the largest single block of shares, if my information is correct, have no say as to the appointment of the board of directors and thus as to the decisions made?


Clarence Decatur Howe: Certainly not.


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: This must be an extremely unusual company. I did not want to put this matter on a personal basis, so perhaps the minister will allow me to say this with a smile; that knowing the character and personality of the Minister of Defence Production I think I can fairly say he is not an individual who fails to make his weight felt in any business or organization with which he is connected.


Clarence Decatur Howe: I may say, Mr. Chairman, that after I found out I had been appointed executor and after I learned the reason why Sir James wished me to be an executor, I consulted a firm of lawyers which I think command the respect of my hon. friend. I received a report from them and I was assured that, if I confined my work as I stated I intended to do to them and to the other shareholders, there could be no possible

Supply-Defence Production conflict. My hon. friend can make what he likes of that but if he would like to see the report from the lawyers I would be glad to show it to him. Their reputation is just as high as that of my hon. friend or anyone in his group.


Edmund Davie Fulton: I am sure that may very well be so. It would be interesting to see the letter and it would be equally interesting to know the thoughts in the mind of the minister when he asked for an opinion.


John George Diefenbaker: He must have been in doubt.


Clarence Decatur Howe: Of course I was.


Edmund Davie Fulton: I think there may properly be a difference of opinion in this matter and that is one of the points I intended to deal with. According to press reports-and I am reading now from one which appeared in the Montreal Gazette on April 21, 1956-the minister said:
Asked today about rumors that he would withdraw-
That is, withdraw from the executorship.
-Mr. Howe said he had been asked by Sir James to serve as an executor in order that he might help ensure the holdings are disposed of in the public interest.
That would be his only responsibility, Mr. Howe said. He would not play any part in handling tax payments or other financial arrangements apart from property disposal.
I assume it was that statement of the position the minister was referring to when he said he had an opinion from these solicitors that if he confined his activities to those matters there would be no conflict of interest. I do not know what the minister's legal advice might have been in specific terms but it certainly is a proposition I have never heard suggested that you can have a split personality as an executor.
An executor in my understanding-and my hon. friends who practice law in Ontario can tell me if the law here is any different from that in my own province, and I do not believe it is-an executor cannot accept only a limited executorship. He is an executor for all purposes and he is jointly responsible with his co-executors for any decisions that are arrived at and is bound to an equal extent with his co-executors by the actions of the executors; therefore for the minister to say he intends only to concern himself with the matter of the eventual disposition of the property and not to take any part in or accept responsibility for any valuations or tax payments-


Clarence Decatur Howe: I did not say that I did not accept any responsibility. I said I would be taking no part. It was understood

by my co-executors that I would take no part. Of course, an executor takes the responsibility for what happens to the property for which he is the executor and I share that responsibility with four other executors.


Edmund Davie Fulton: Exactly.


Clarence Decatur Howe: Well, don't worry about it.


Edmund Davie Fulton: I stated the proposition that the minister cannot split his personality or limit his responsibility as an executor. As I said, the minister is not a person who is in the habit of controlling his actions and expressions, his words and conduct, in such a way that they do not have a very great influence on those with whom he is associated.


Clarence Decatur Howe: You are giving your opinion now, are you?


Edmund Davie Fulton: I am giving my opinion based upon observations and based upon facts.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Edmund Davie Fulton: Mr. Chairman, when the committee rose at one o-clock I was dealing with the position of the Minister of Defence Production and the conflict of interests between his position as minister and his position as an executor of the estate of Sir James Dunn in the light of the fact that the estate controls, through its shareholdings, the Al-goma Steel Company and its affiliated or subordinated companies. Before one o'clock, in the few minutes I had been speaking, the minister indicated pretty clearly that he felt it was entirely inappropriate for us to raise this matter and to question his position. I regret to say that in so far as his personal relationships are concerned I regard this as a matter which has to be discussed in the House of Commons because there is too important a principle involved to let it go by.


Clarence Decatur Howe: May I ask my
hon. friend what reference it has to the estimates of the Department of Defence Production?


Edmund Davie Fulton: I intend to show that.


Clarence Decatur Howe: Would it not be a good idea to show that now?


Edmund Davie Fulton: I mention it now on the estimates of this department because the policies adopted and the practices followed by this department will have a most important and immediate bearing upon the welfare of the

company to which I have referred, namely the Algoma Steel Company. The minister cannot, and I hope will not, try to pretend that the welfare and indeed the income and revenues of that company are not going to be affected by the policies of both departments of which he is minister. I shall refer to this in somewhat greater detail during the course of my remarks.
I had assumed that it was only going to be necessary to state the principles which we in this party believe to be applicable to a situation of this kind and outline the conflict and leave it at that, and that we might then leave it to the judgment of the minister or, if he refused to change his course after having reflected on the matter, to the judgment of the country. But unfortunately, or fortunately perhaps, the minister had already raised some questions as to the legal basis upon which I rest the case which I am making and I shall therefore deal with that particular aspect of the matter at once.
The minister has said outside the house, and as I understand it he has repeated it in the house, in justification of his position that the only role he intends to pursue as executor and trustee of this estate is one with respect to the ultimate disposition of the assets. As he says, his duty will be simply to ensure that they are disposed of in the national interest and that in that exclusive role he will be serving, not only the national interest but also the wishes of the testator, his personal friend. With the motives of that position I of course have no quarrel but I do have most serious disagreement with the minister, both as to whether he should have undertaken the duty of executor and trustee in the light of the issues involved and also as to whether an executor can be a limited executor in the sense which the minister prescribes for himself. Some question was raised as to whether I was on sound ground in saying that the minister cannot limit his executorship and I should like to refer to Widdifield on Executors' Accounts, a Canadian authority, published in 1944. At page 37 of the fourth edition I find the following extract under the chapter headed "Duty of an Executor-Realizing Assets":
The first duty of a trustee, whether an executor, an administrator or a guardian, is to acquaint himself, as soon as possible, with the nature and circumstances of the trust property; to make a complete inventory thereof; to obtain, where possible, the possession or control of the trust property to himself, and, subject to the provisions of the will, get in the trust money invested on insufficient or hazardous security:	Underhill on
Trusts, 8th ed., 222.
Persons who become trustees are bound to inquire of what the trust property consists and look into the trust documents and papers to ascertain the condition of the estate:	Hallows v. Lloyd, 39
Ch. D. 691.
Supply-Defence Production
That is a statement of the general principle applicable to executors and trustees. There then follow in that chapter a number of detailed authorities. The minister has told us that he has a letter from a solicitor in Toronto whose authority and knowledge I cannot question even if I would, because I do not know who he is. The minister has said that the effect of that letter is that he could-I hope I am stating fairly the effect of the minister's statement-that he could in fact be a limited executor and that there is no conflict of interest between his position as executor acting in that limited capacity and his position as minister.
As I say, I do not accept for a moment the principle that the minister as executor can divorce himself from responsibility for any and all of the actions, responsibilities and liabilities of the executors as a whole. In case the question may be raised that an executor is not bound and therefore is not liable or responsible for the decisions of his co-executors or co-trustees unless he has knowledge of them, I should like to refer to another passage in Widdifield. My contention is that the minister cannot take that position because his duty as executor and trustee is to have knowledge of all the actions and decisions of and dispositions made by his co-trustees. If he fails to have such knowledge, not only is he guilty of a breach of his duty as trustee but he would not be relieved from liability simply because he had refused to acquire that knowledge. In support of that I would cite Widdifield at page 339 as follows:
A trustee who does nothing, accepts without enquiry what is said by his co-executor, and is satisfied with any explanation given by him, does not act ''honestly" within the meaning oi the act.
The act referred to there is the Trustee Act. Then certain authorities are quoted in support of that proposition. Even if he wishes, the minister cannot personally evade his responsibility by failing to acquire knowledge of the acts or decisions of his co-trustees in every field of their responsibility. Secondly, if he should refuse to acquire that knowledge he is not acting honestly as trustee. I use the word "honestly" in the sense in which it is used in the textbook.
The simple proposition is that the minister, however much he may wish to, cannot accept an executorship in a limited capacity. His only course is to accept it and be responsible for and bound by and interested in every one of the duties and liabilities of an executor, or to renounce entirely. Up to date the minister has stated that he does not intend to renounce, therefore in my submission there is an immediate conflict of duty and interest between the minister as executor and the
5528	HOUSE OF
Supply-Defence Production minister as minister of two departments of this government and as a senior member of the government as a whole.
The first area of conflict is in the matter of the evaluation of the estate assets and settlement of succession duties, and payment of income taxes on the revenue from the property before there is final distribution. This is one of the largest, if not the largest, estates in the history of Canada. As such it is going to be liable for very substantial succession duties, duties owing to and exigible by the Department of National Revenue, duties which it is the obligation of this government, exercised in this case through the Minister of National Revenue, to assess and collect at the largest amount properly assessable and collectible as against this estate.
As executor and trustee, however, Mr. C. D. Howe is under the obligation of negotiating with the Department of National Revenue, one of the departments of this government, to ensure that the duties assessed and collected are the minimum which can properly be held to be due on this estate.
Sir, the very statement of the position- a department of government whose duty it is to collect the maximum properly collectible, and an executor whose duty it is to see that the smallest amount properly payable is in fact assessed and paid-the statement of that position reveals at once the conflict of interest.
Secondly, there is a conflict of interest in that one of the executors of the estate is also the Minister of Defence Production and Minister of Trade and Commerce of this government. It is an inescapable fact that the policies of those two departments and the practices followed by those departments in the exercise of those policies are going to have an immediate bearing and effect upon the welfare, the revenues and the incomes of the estate of which he is an executor.
The Department of Defence Production, as the agent in its capacity described earlier by the hon. member for Eglinton, the purchasing agent particularly for the defence department and some of the other departments of government, is through its policies going to have a very direct bearing upon the future of the steel industry and the related industries of Canada. As Minister of Trade and Commerce-and I shall deal with this in more detail later-but particularly as the minister responsible for the trans-Canada pipe line and other related aspects of the economy of Canada, his policies and the policies of that department under him are going to


have a bearing upon the future conduct and welfare of the Algoma Steel Company and therefore of the estate of which he is an executor.
These facts have to be stated. Every increase, sir, in the value of the shares of the Algoma Steel, from the day after the day of Sir James Dunn's death until duties are paid, is going to have a bearing upon the ability of that estate to pay succession duties and the ease, if you like, with which they are paid. In other words, an increase in the value of the shares after the death will represent a profit to the estate which can be used, in part at any rate, towards the payment of duties when they are realized without depreciating or lessening the value of the estate as it may be determined to have been at the date of death.
The policies of two departments of government are going to have an effect upon the value of those shares every day and from day to day. Those are facts which the minister cannot escape. I have no compunction or regret in stating the facts, however much the minister may resent my doing so. They are facts that have to be stated in order that their implications may be understood, because they are demonstrations of the extent to which there is a direct conflict of interests and of the extent to which the minister's position as executor of this estate and as minister of these two departments is improper.
The third area of conflict, related to the other two, is of course the fact that the affairs of the company, and therefore of the estate, and the affairs of the steel industry in general, are affected by the pipe-line bill which the minister has just jammed through this parliament.


Edward Turney Applewhaite: Order. I am going to ask the hon. member-and I think perhaps I have intentionally given him considerable latitude-not to pursue that particular line of thought further. Previously a speaker on this same item of the estimates ascertained which of the present minister's departments the pipe-line bill came under and voluntarily, I think, and willingly immediately dropped that line of thought and discussion, indicating that it would come up under the Department of Trade and Commerce. I think that what has been done for one member should be done in the case of another, and I would ask the hon. member for Kamloops not to follow that particular line of thought further.


Donald Methuen Fleming: Mr. Chairman, with respect, I think I am the member to whom you refer. I think it is a different situation altogether. I indicated that I had a number of questions

to ask at the appropriate time, concerning the Northern Ontario Pipe Line company, and in particular what has been done since the enactment of the bill. That relates to administration. In view of what was said this morning, that will properly come under the other department, but what my hon. friend from Kamloops is now saying is not to open up that subject at all. He is simply alluding to a situation that has arisen which bears directly upon the point of conflict of interests. The two things are quite different, as I think you will realize if the member proceeds.


Edward Turney Applewhaite: I am not arguing whether or not there is a conflict of interests as between the government and an estate which might be connected with the pipe-line bill. I did not object to the allusion. I asked the hon. member for Kamloops-and I think he indicated his assent by nodding his head-not to proceed further because, quite frankly, what I am trying to head off is other members following a similar line of thought and perhaps discussing at some length under this department the crown corporation which doubtless will be discussed at great length under another department, and I do not think the committee of the whole would want to discuss the same thing twice.


Edmund Davie Fulton: I think I can accommodate myself to your suggestion, Mr. Chairman, without in any way weakening my argument. I have stated the fact and I do not think it requires any elaboration. The principle is equally applicable to that situation, that is, the pipe-line situation, as it is to the whole area of the Department of Defence Production. Having referred to the situation, I can then leave it there.
These conflicts exist. The potential areas of conflict exist. I call them potential, but in fact the situation cannot continue without an actual conflict arising. It is useless for the minister to say that by raising these matters we are bringing his morals or his personal honesty or integrity into the question. He may be the most-


Walter Edward Harris: He is.


Edmund Davie Fulton: He may be the most able, and most honest of men, a man of fullest integrity-


Some hon. Members:: Hear, hear. We
know he is.


Edmund Davie Fulton: -as I say, he may be, but he cannot occupy those two positions without a fundamental moral conflict arising, and if he wants to preserve his reputation for integrity and honesty then it is up to him
Supply-Defence Production to resolve that conflict, because that is the situation in which he is placed and from which he cannot escape.
I believe, sir, that the people of Canada should not have their government or any member of it placed in a position where these questions and these sorts of conflict arise so that questions must arise and be asked as to how the situation can be permitted to continue. For it cannot continue without either an abdication of responsibility and duty on the part of the minister in his private capacity as executor or, on the other hand, disadvantageous results accruing to the general interests of the country which the minister represents in his official capacity as minister. That situation, sir, is not a tenable one, not one which should be imposed upon the people of the country or their interests by any man however able, however honest, however much he may have succeeded in doing in the past.
The minister says, however, that he has accepted this executorship, and I understand that at the moment at any rate he says he is going to continue in it because he regards it first as a patriotic duty and, second, because it is an undertaking, a position he was asked to accept by a friend. With the dictates of friendship and the acceptance of the obligations imposed by friendship I have no quarrel as a general proposition. I stated at the outset that I am not seeking to lay down a general proposition that no minister of the crown can accept the executorship of the estate of a friend. I said that every case has to be judged upon its particular circumstances, and this case unquestionably is one where the circumstances raise the questions that I am now raising.
The minister may have felt that he was under obligation to a friend but, sir, I suggest, indeed I state as a fact, that the minister is under a higher obligation. He is under an obligation to the government of which he is a member and to the country which that government is called upon to serve, and where he finds his inclinations as the result of friendship and his duty as a member of the government in conflict I suggest to you, sir, without reservation, that the higher duty is that towards the government and the country, and that this must override even the obligations of friendship.
As for the patriotic duty, the minister says that he is anxious to accept this executorship in order to be able to ensure that the assets, which are of importance to the welfare of this nation, are disposed of in the national interest. The very acceptance of that proposition substantiates my point that an estate controlling an industry of

Supply-Defence Production this national importance must inevitably have its welfare, its revenues and its income affected by the policies of the government of which the minister is a member. On the one hand the very fact that the disposal of it involves considerations of the national interest indicates its size and its ramifications; on the other we have a minister of the government whose duties, as he has accepted them, also in their ramifications extend into almost every facet of our economy.
But it is to me a strange confession of impotence, which this government has never been willing to make before, that in order to influence or determine the disposition of a vast industry so essential to the national welfare as this one, the Minister of Trade and Commerce has to accept the executorship of the estate. Does the minister seriously mean to say that this government as such, with him there, Minister of Trade and Commerce, Minister of Defence Production, controller of steel and all his other powers, could not determine the disposition of this company without his being an executor of the estate? Of course it could, and the argument he uses there is but the most absurd of rationalizations in an attempt to justify what is an impossible position.
I realize that in these remarks I have been discussing a matter of principle. It is a matter of principle, this question of the conflict of interest between the private capacities of ministers and their public duties, and it does affect the very structure and foundation of our government. These principles, principles we talk about in the House of Commons, may not be important to the minister personally. They may be regarded by him as a nuisance. He may have the view, and it does achieve results, that it is what you do that counts, not how you do it, and that therefore these matters are but of secondary importance and when they get in his way they are to be brushed aside.
But these principles, although they may not be important to the minister personally, are important to the system under which the government of this country and the government of every democratic country works. They are fundamental to the system. They are an integral part of the system and the system cannot be preserved, cannot work and will not continue into the future as a vital, effective system unless these principles are observed and maintained. These principles are not only fundamental and vital to the system but they are also fundamental and vital to the people who are the beneficiaries of this system of government founded upon the principles that I have been discussing.

Finally, sir, I say again that it is the minister's duty, however inconvenient he finds these principles and their observance, to resolve the conflict of interest by ending that conflict in whichever way he wants, but in my view he has to make the decision and to end it. I only trust that he himself will do so and that if he does not see fit to do so the Prime Minister will insist that it be done, and that he will, by ending the conflict, show respect for our system and the principles upon which it is founded.


Mr. Nicholson:: Mr. Chairman, I wish to support the argument advanced by the hon. member for Kamloops. A year ago my colleague, the hon. member for Winnipeg North Centre, presented to the house bill 379, an act to amend the Senate and House of Commons Act. While the bill did not pass it did result in the Leader of the Opposition, the Minister of Finance and the hon. member for Winnipeg North Centre all making very interesting contributions to the discussion. The bill was very simple. Its main provision was in these words:
No person who is a director of a company incorporated under the Companies Act or under any other public general act of Canada, or incorporated by a local or private act of Canada, shall be eligible to be a member of the Queen's privy council for Canada and a minister of the crown.
The member for Winnipeg North Centre did not make any reference to a member of the cabinet being an executor but I think the spirit of the discussion which took place at that time should have been observed by all members of the cabinet. I think that we all appreciate the position in which the minister found himself when an old and trusted friend made this sort of request, but those who seek public office have to be prepared to make sacrifices. One of my best friends passed away while the pipe line debate was on. The invitation to be present at the funeral was one that I found very difficult to turn down, but I had been elected by 50,000 people to represent their interests in parliament and much as I sympathized with the relatives of my very close friend I felt obliged to say that I could not go west to attend the funeral.
I am sure that the late Sir James Dunn would have understood the position of his very good friend if the minister in charge of this department had said: In the event that I am no longer a minister of the crown when you pass away I shall, of course, be prepared to discharge my obligations as an executor but should I be a minister of the crown then in the interests of the estate, in

the interests of the people of Canada I feel that I should not be placed in this impossible position.
I find that on July 20 last year, near the end of the session, the Leader of the Opposition found occasion to raise this very important question because, as hon. members will recall, the Minister of National Revenue was involved in an estate in connection with his duties as a director of a trust company. It seems hard to understand why, although we discussed that question on July 20, the Minister of National Revenue had resigned his position and yet did not inform us. I submit that that was a typical disregard for parliament of which this government, which has been in office so long, has been guilty on so many occasions. I think that when the Leader of the Opposition raised this question it would have been a very easy matter for the Minister of National Revenue to have risen and stated: While I insist that I have not abused my position as a minister, in view of the public criticism and to protect the good name of parliament and parliamentary institutions, I have resigned. But the minister did not show us that courtesy.


Edward Turney Applewhaite: The hon. member, I think, will sympathize with me if I ask him if he will come back to the Departmnt of Defence Production.


Alexander Malcolm Nicholson: Very well, Mr. Chairman. I submit that the discussion we had a year ago, with reference to a cabinet minister who had disregarded the traditions which have been accepted in Great Britain for so many years, is a matter that we should have before us now. The point of view of the hon. member for Winnipeg North Centre when he presented his bill last year is, I think, relevant. He referred to a discussion which took place here away back in 1921 when the Liberals were in the opposition, and when Mr. McMaster had this to say as reported at page 586 of Hansard of March 4, 1921:
I say that no man who is a minister of the crown in this country has any time left to fulfil the duties of a director. That is my first proposition, and I think it is a proposition which will appeal as a reasonable one to members of this house. We have the best of authority for the statement that no man can serve two masters. Either he will have to neglect his duty as a minister or he will have to neglect his duty as a director, if he holds both positions at one and the same time.
Instead of the word "director" I am sure that if Mr. McMaster were discussing it he would substitute the word "executor".
Then, at page 587 of the same volume Mr. McMaster went on to say:
Now, we should be, and I trust we all are, Jealous for the good name of this house. We are told by authority, almost as great as the authority I have just quoted, that we are to
Supply

Defence Production "abstain from the very appearance of evil". Years ago Tennyson wrote about "The fierce light that beats upon the throne".
Well, I do not think that light is comparable to the fierce light that beats upon men who enter parliament at this time of the world's history. I do not think that I am using the language of extravagance when I say that all governmental institutions are on trial and are being subjected to criticism which is not only strong but often bitter and often unjust.


An hon. Member:: Get back to defence production.


Alexander Malcolm Nicholson: I am sure the hon. member who just interrupted will have the greatest respect for his former leader, Mr. Mackenzie King, who took part in the debate and shared the views of Mr. McMaster on this important question. I think the point Mr. McMaster raised is true, that a minister is busy enough performing his duties as a minister without being asked to be responsible as an executor of what is, I understand, the largest estate that has ever been built up by a single person in Canadian history. I find in the telephone directory-


Clarence Decatur Howe: That is not true, incidentally.


Alexander Malcolm Nicholson: The minister says it is not true, but it is one of the largest. My information that it is the largest comes from one newspaper, but if the minister will tell us of a larger estate that will be of interest. I find that the minister is responsible to the parliament of Canada for Atomic Energy of Canada; Canadian Arsenals; Canadian Commercial Corporation; Crown Assets Disposal Corporation; Eldorado Mining and Refining Limited; T. C. A.; Polymer Corporation and Trade and Commerce. Surely there is enough work in the Department of Trade and Commerce to keep any ordinary person busy for all the hours that there are in the days and in the years.
I submit, Mr. Chairman, in view of the discussion last year which resulted in the Minister of National Revenue giving up a connection with a corporation with which he had very sincere and close connections, this Minister of Defence Production should not place his colleagues in the position in which they are now placed. I refer again to the part the Prime Minister took last year when this matter was before parliament, as indicated on page 6451 of Hansard for July 20, 1955. The Prime Minister of Canada said that when he was asked to take a cabinet portfolio, there was not any question about what his course of action should be. He said:
I had felt that there would have been no possibility of conflict of interest in the way I discharged my duties as minister, when I became one, and those other connections, but I did not want to be exposed to any unfair criticism, which

Supply-Defence Production is unfortunately frequently the lot of those who do attempt to serve their fellow citizens in public life.
Having set that example himself as the leader of the government, I cannot understand any member of parliament considering accepting a cabinet position without matching the example set by the Prime Minister. As the hon. member for Kamloops pointed out, the corporation with which the minister is now associated in such an intimate position is one corporation that benefits very directly from the policies of the government. The Algoma Steel is one of the very important beneficiaries of the decisions made by the minister in his capacity as Minister of Defence Production or in some of the other capacities in connection with other responsibilities. I feel that in order to maintain the good name of parliament, which is receiving so much criticism at this particular time, the minister should make his choice. He should either give up his post as minister of the crown or give up his connection as executor looking after one of the largest personal estates which has been accumulated in Canadian history.
Before I sit down I also want to express the hope that the minister, who apparently receives very little criticism as a result of his decisions as Minister of Defence Production, would use similar ideals and similar policies in dealing with some of the other departments, more particularly the department which affects the people I represent, the department which looks after the marketing of farm products. I think in due course we will have a discussion of that. I wish he would carry over to his other departments the idea that those who perform essential services should be paid on a cost plus basis.


John Horace Dickey: I do not want to take any lengthy part in this discussion, Mr. Chairman, but I do want to say a word or two. First of all, I want to deal with the implication, which I think was very unwarranted and improper, contained in the final portion of the remarks made by the hon. member for Kamloops. He very clearly implied that he considered what had occurred indicated that the Minister of Defence Production is not personally concerned about the principles with which the hon. member for Kamloops was dealing and which he was trying to explain and expose. That is, on the facts, a completely unwarranted imputation and I am sure that if the hon. member for Kamloops had realized what the facts are that have been explained to him, and to the house, he would certainly agree. What is the position? The position is that the Minister of Defence Production has explained he was
[Mr. Nicholson.!
asked to accept this executorship for a particular purpose by his late friend. He then secured the opinion of counsel, an opinion which he asked for and which was to guide him as to whether or not there would be any impropriety in his accepting this trust. He explained to the committee that the opinion of counsel he had engaged was that there would be no conflict of interest which would require him to refuse to accept the responsibilities that he had been requested to accept.


John George Diefenbaker: Has the parliamentary assistant the letter and also the opinion that was given?


John Horace Dickey: No, I have not the opinion. The opinion was to the Minister of Defence Production. The point I am making, and which I am sure the hon. member will appreciate, is that this was an honourable and proper approach to the question of principle with which the hon. member for Kamloops was trying to deal.
Any Canadian citizen who is in doubt about his rights under the law has the proper recourse of going to a reputable firm of solicitors, requesting their advice, getting their advice and acting upon it. Now, that advice may, in the opinion of some other people, be wrong, but it is quite improper and quite unreasonable for the hon. member to impute, as he did, that what has occurred indicates any lack of concern on the part of the Minister of Defence Production for the principles which are involved. I submit it is clear that he acted as any honourable and sensible Canadian would act under similar circumstances, and that his position is protected in so far as that is concerned by the actions which he took.
Now,-let us look at the matter of principle. First of all, I think I should put on the record something which will perhaps be presumed but should, I think, be definitely stated, and that is that the acceptance of an executorship is a fiduciary capacity; that accepting it does not create any personal interest of any kind in a person who acts as such executor or trustee; that he, as an executor or trustee, has no personal interest in the assets of the estate which he accepts, or anything of that kind; that this is purely a fiduciary capacity which carries no personal interest of any kind in any shares or in any other asset which may be in the estate.


Edmund Davie Fulton: Will the parliamentary assistant not agree with me that once having accepted, the trustee is under the personal obligation

to discharge the terms of the trust, and in so discharging them to fulfil his duty to the estate? His duty to the estate is a fiduciary one, but he is under a personal obligation to discharge it.


John Horace Dickey: I will deal with that. The point I was making, so that it would be clear on the record, is that there is no personal advantage or interest to the Minister of Defence Production involved. That is the first thing. The second arises out of the remarks of the hon. member for Mackenzie. He drew in the position with respect to directors. I want to state it clearly so that it will be shown on the record. No trustee or executor of an estate of this kind becomes a director, or has any connection with a company like the Algoma Steel of a directorship nature. The direction of the company remains, as it always was, in the duly elected members of the board of directors, and that the only duty or authority of executors is to deal with the assets of the estate, and if they happen to be shares in one or more companies, the trustees do not in any sense become connected with those companies in the kind of way, or in the kind of association that I believe the hon. member for Mackenzie was trying to indicate.
Let me deal as briefly as I can with the question of the principle that the hon. member raised. I suggest, Mr. Chairman, that the hon. member should have gone a little more deeply into a number of principles and understood and appreciated them better before he took the attitude that he has taken. He quoted a number of references from a particular work and he made the general exposition of the responsibilities of an executor. With that I have no particular quarrel.
What the hon. member overlooks, and what any person who tries to argue the same position that the hon. member tried to establish will overlook, is that the acceptance of a fiduciary relationship or capacity of this kind is one that can only be taken by personal acceptance. As the hon. member knows, the appointment of a certain person as an executor or a trustee under a will does not mean that that person has to become an executor or trustee and accept the responsibility. What the minister has said is that he, after having taken competent legal advice, decided that as he had been assured that he was not going to place himself in a position where there would be a conflict of interest he was prepared to accept the responsibility which had been offered to him. He was accepting that responsibility fully but, with the knowledge and consent of the others who were to act in a similar capacity with him, his activities in that capacity were to be very strictly
Supply-Defence Production limited, and limited to the particular purpose which had been set out by the person who had named him an executor and indicated his desire that he should act in that particular capacity and in that capacity only. The position, as stated by the minister, is that he realizes he has a full, joint responsibility with the other executors for the manner in which this estate is administered, but that he is voluntarily limiting his own activities in that position to the particular purpose for which he was asked to act and in which he accepts to act.


Edmund Davie Fulton: My point is, he is saying that but he cannot do it.


John Horace Dickey: That may be the hon. member's opinion but it is not the legal position. What is the position? The position is simply this: If this estate is not properly administered and if a creditor of the estate, or if one of the beneficiaries who are the real owners of all of the assets of the estate, or if some person in that capacity complains that the estate has not been properly administered and brings an action in that respect, the Minister of Defence Production will be equally responsible with all the others to answer to that action. However, he has voluntarily restricted his activities in this position to the responsibility that he has been particularly singled out and requested to assume and that is understood by the other executors and by everybody interested in the estate. The hon. member says he cannot do that. I suggest that he clearly can do that. For example, to go to a field that is a little more familiar, let us look at what is the position of directors of a company. They are in a fiduciary position with respect to the interests of the company. If a question arises for decision before that board of directors in which a director has a personal interest contrary to the interests of the company or where there is any conflict he does not cease to act as a director; all he does is disclose to his co-directors that he has a personal interest in this matter and that in so far as any decision with respect to it is concerned he will take no part in it and will not vote on the motion resolving question.
That is a case which is clearly on all fours with the position of an executor who accepts full responsibility with his other executors but who voluntarily limits his participation in the administration of that estate to the particular point that he has been requested to act upon. I assume from what the hon. member said he does not suggest for a moment that the fact the Minister of Defence Production has accepted the responsibility of remaining an executor of this estate, to take no other part in the administration except

Supply-Defence Production to see that the disposal of the assets is under- will affect the steel industry of Canada and taken in the national interest, would con- the multitude of other interests involved in stitute a conflict of interest which would this estate.
justify their complaining of his acting in that Mr< Dickey; well, Mr_ chairman, the situa-capacity.	tion is that the minister announced publicly
I am not going to deal with the various	intention with respect to his activities
points raised by the hon. member as potential wjth regard to the estate at the time he areas of conflict because my submission is accepted the responsibility. In so far as his that there is no conflict by reason of the ministerial duties are concerned I can assure
fact the minister clearly stated at the time he accepted the responsibility of the executorship that he was voluntarily limiting his participation in the administration of the estate to that one specific and limited field.
The fact is, the Minister of Defence Production is taking that position and in view of that position he is not accepting any executor's fees or any emolument of any kind from the estate. Therefore the position is that he has no personal interest in the assets, he has voluntarily put aside from himself any activity connected with the estate or with any of the matters the hon. member has raised with the exception of the particular responsibility that has been clearly stated and which I submit to this committee is obviously not one which involves any conflict of interest with his public duties.


Mr. Campbell:: I wonder if the parliamentary assistant to the minister would answer a question. What would be the position of the minister, for instance, if the Department of Defence Production wanted a supply of steel? Steel might be in short supply and the Algoma Steel Corporation might say, "We will give you the steel but we will jack up the price". Would the minister not be in a position between the two forces that might be detrimental to him and to the country?


John Horace Dickey: Not at all, Mr. Chairman, because he has no voice in the management of .he Algoma Steel Corporation at all, even acting as an executor with full authority; but certainly in accepting an executorship under the circumstances outlined there is not the slightest possible conflict.


Alexander Maxwell (Max) Campbell: But he is putting himself in a very dangerous position.


William McLean Hamilton: Mr. Chairman, might I ask the hon. member who has just resumed his seat a question. The hon. member has claimed that the minister plans to abstain from certain aspects of the operation of the estate where there might be a conflict of interest. I wonder if the hon. member knows the position the minister will take concerning abstaining from his ministerial duties and some of the operations of his department which in some way or another

the hon. member and the committee that the minister will continue to perform his ministerial responsibilities in the outstanding manner he has always performed them in the past.


Edmund Davie Fulton: That does not answer the question.


William McLean Hamilton: Might I ask if perhaps the minister would care to announce his intentions in this respect at this time.


Edward Turney Applewhaite: The hon. member for Peel.


William McLean Hamilton: Mr. Chairman, I am certain the minister would like to give an answer to the point I raised.
Mr. Pallet!: Mr. Chairman, I had some other remarks to make concerning this department but since the speech was made by the senior member for Halifax I think there are certain suggestions contained in that speech which might be dealt with at this time.
The law in Nova Scotia may be different from the law in Ontario; I do not know. But I was always under the impression that the duty of a trustee was to carry out the business of a trust exactly as he would carry out his own business, and that to my mind is the fundamental role of trust. In accepting a trust a man must accept that fundamental role and if he does carry out the business exactly as his own then he must take every means to limit the liability of this trust and increase the profits of it. That is the proper function of a trustee. At the same time it is the proper function of a minister to ensure that the very best interests of the country and the government are carried out in all aspects.
It seems to me there is a head-on collision between those two interests and I think that head-on collision was recognized by the minister when he sought legal advice. The very fact that he asked for the opinion suggests, to me at least, there was some doubt in his mind; and if there is doubt I suggest that it should be resolved in favour of the ministerial position and a resignation from the other so that no doubt can be cast on the position of this minister, or any minister of this government, whoever he may be. His position as minister and his position in the

government are much higher than a mere personal interest. There is a standard to which we have looked in the past in relation to governments in this country; they must at all times be above reproach. The very tact that there must have been doubt in the minister's own mind of itselt casts some shadow. To suggest, as did the senior member for Halifax, that the majority shareholders do not call the tune in a company-after all, you have to be over 21 years old before you are elected a member of parliament.


An hon. Member:: No mention of I.Q.


Mr. Lesage:: Is the hon. member 21?
Mr. Pallet!: The minister of northern affairs interrupts and says that I am not 21.


Jean Lesage: You have the brains of a seven year old.
Mr. Pallet!: My six year old boy shows more intelligence than some people across the way. But that the majority shareholder of a company does not call the tune is a suggestion we are being asked to accept today. The directors of a company are elected annually. The annual meeting of this company has just been held, and in anticipation that dividends would be declared or that there would be a stock split the shares went up in the neighbourhood of $10 per share. Apparently that did not happen and they went down again.
At the annual meeting of a company the directors report, and they are either allowed to retain office or are removed at the will of the shareholders. The majority shareholder controls who are elected as directors. That must go on the record, and that must be taken as demonstrating that the majority shareholder in a company does in fact control it. For the senior member for Halifax to suggest to us that that is not the position is to ask us to stretch our imaginations just a little bit too far.
When listening to the hon. member I had occasion to reflect upon his statement that the minister should ask for an opinion on a question of principle. That is a serious statement to make about his own minister, that he is not able in his own mind to formulate an opinion on a question of principle. The minister did ask for an opinion after he learned he was to be appointed executor, and I give him full marks for doing so. But to suggest that he would have to ask for an opinion when a principle is involved is for the parliamentary assistant to cast some reflection upon the minister. I suggest that the minister deal with him accordingly in due course.
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The parliamentary assistant suggests that the fact that you are named an executor does not mean you assume the full responsibilities of an executor. You do not, provided you renounce. But when you sign the application form you sign an affidavit that you will faithfully administer the assets of the estate. You do not agree to faithfully administer this part or some other part, you swear you will faithfully administer the -estate.
As the hon. member for Kamloops has said, in this particular instance the minister found himself in a position perhaps not of his own choosing. He was faced with the conflict between carrying out a duty for a friend, a friend who had built up a large steel industry in this country, a friend who had many other interests in the country, a friend who in the conduct of affairs in the company had not shown too much regard for individual shareholders when declaring dividends, a friend who wanted his friend to carry out the affairs of the estate in the best interests of the company, and carrying out the best interests of this country. The minister can best carry out the best interests of this country as Minister of Defence Production and his other portfolio without having any conflict, without having to resolve in his own mind which is right.
What happens if there is a labour dispute? Supposing the steel strike in the United States extended to Canada; what would be the situation then? The minister would then be in the position of acting as the controller or owner who would call the shots as owner and not from labour's viewpoint, and he would also be in the position of a minister of the government whose function it is to protect labour in this country. How would he resolve that question? There would be a very definite and marked conflict.
I think we have every sympathy for him. I do not envy the position in which he finds himself. I think it is a soul-searching decision which he has to make. About a year ago the Minister of National Revenue was called upon to make a similar decision, and I give him full marks for making it in the right way, no doubt at some personal expense and loss to himself. The Minister of Defence Production has stated that he is not accepting any remuneration from this estate, so there will be no loss incurred. The minister would not be walking out and asking some stranger to be appointed in his place, as there are four other executors of this estate. I leave it to him; his duty to the country is higher than his duty to any individual.


Mr. Churchill:: Mr. Chairman, during the remarks of the parliamentary assistant to the Minister of Defence Production the remark

Supply-Defence Production was made that in this instance there is no conflict of interest. That raises the question of what constitutes a conflict of interest in so far as a minister of the crown is concerned. The parliamentary assistant drew attention to the fact that the minister had consulted a legal firm and received an opinion. I submit that in matters of this sort where questions of parliamentary government are concerned an examination of the precedents and parliamentary practice would be a better guide.
There is a body of opinion which serves as a guide for all commonwealth parliaments. We have had an instance or two in this house in other years where there have been conflicts of interest affecting cabinet ministers. This is a point which deserves serious consideration. Ministers of the crown are charged with heavy responsibility which we and the people of the country recognize. They have a responsibility for the welfare of the country as a whole.
Over the years the problem of conflict of interest has arisen in the mother of parliaments at Westminster and has been resolved. Statements have been made at different times by prime ministers with regard to what cabinet ministers should do in instances where there was or appeared to be a conflict between their public duties and their private interests.
In this particular case that is before us, though it differs from the problems which have arisen in other instances-that is, it differs from the directorships and it differs from the holding of shares in companies- nevertheless there is an analogy to be drawn from the decisions arrived in the past in relation to those two matters. There are numerous instances within fairly recent times in the house at Westminster of this question of conflict of interest.
The standard work on cabinet government by Ivor Jennings devotes a portion of a chapter to this very problem, and I think the parliamentary assistant to the Minister of Defence Production might very well have applied his mind to this before making his statement in the house. Members might be interested in what Professor Ivor Jennings says on this particular question, and I propose to quote from pages 99 and 100 of the book called "Cabinet Government". In 1913 one of the startling cases that occurred in England dealt with the question of shares in the Marconi company. There was an extensive debate. People like Lloyd George were involved. The prime minister of the day, Mr. Asquith, dealt at some length with that exceedingly difficult problem and laid down the following propositions. Some of these, of course, do not


apply directly to the point at issue, but I suggest that by analogy the inference may be drawn. Here is what he said:
The first . . . and the most obvious is that ministers ought not to enter into any transaction whereby their private pecuniary interest might, even conceivably, come into conflict with their public duty. . . . Again, no minister is justified under any circumstances in using official information, information that has come to him as a minister, for his own private profit or for that of his friends. Further, no minister ought to allow or to put himself into a position to be tempted to use his official influence in support of any scheme or in furtherance of any contract in regard to which he has an undisclosed private interest. . . . Again, no minister ought to accept from persons who are in negotiation with or seeking to enter into contractual or proprietary or pecuniary relations with the state any kind of favour. ... I will add a further proposition, which I am not sure has been completely formulated, though it has no doubt been adumbrated in the course of these debates, and that is that ministers should scrupulously avoid speculative investments in securities as to which, from their special means of early or confidential information, they have or may have an advantage over other people in anticipating market changes.
Then Professor Jennings goes on to make this comment:
These he stated as "rules of obligation". He added that there were certain "rules of prudence" which had never been formulated and which could hardly be put on precise or universal terms. "One of those rules is that in these matters such persons should carefully avoid all transactions which can give colour or countenance to the belief that they are doing anything which the rules of obligation forbid."
In 1937 Sir John Simon, one of the most distinguished members of the bar of England and of the House of Commons at that time, speaking on behalf of the Prime Minister in a debate which dealt with conflict of interest, used these words:
In the first place, it is plain that in no circumstances must a man who holds the position of a minister ever allow himself to be in such a situation that his public duty will conflict with his private interests. . . . The second principle is that no man should allow himself to occupy any portion of the time which he is bound to devote to his public duties in disregard of his public duties, and pursuing any private interest whatever, whether it is in playing golf or in the nature of business. The third principle is that inasmuch as the secrets of the government are specially in charge of cabinet ministers, no minister, and particularly, no cabinet minister, must in any circumstances put himself in a position where he is not able to be the complete guardian of those secrets in that there is any possibility of any private interests being served through a knowledge of those secrets.
I do not propose speaking at length on this subject, but I thought it wise to draw attention to this body of opinion that has been built up in England and which is worthy of note in any parliament. The position of cabinet minister is such an important position

that parliaments and the public have generally recognized that the interest of the state takes precedence over any other interest a cabinet minister might have, and it is important to bear that in mind. It is important to review that from time to time.
The practice in England, from what I have read about it, is that the Prime Minister takes an interest in the matters in which members of his cabinet may be privately interested, and ensures that there shall be no actual or apparent conflict of interest between their public duty and anything that concerns them privately. That is a fundamental principle with regard to cabinet government.
I think in this particular instance before us the Minister of Defence Production has to examine his position very carefully and consider whether or not a conflict of interest might arise. If there is any possibility that a conflict of interest might arise, I should think his duty would be to divest himself of any obligations that would result in any conflict of that nature. If all ministers of the crown kept before them this fundamental principle there would not be any shadow of suspicion in the minds of the public with regard to anything that was being done by ministers of the crown as such. The feeling would be that they were devoting their whole time and their whole attention to the welfare of the country at large, and that they were not permitting anything in the nature of their own private interests or the private interests of friends of theirs to interfere with their public duty. It is on that basis that I think the minister should consider his present situation.


John Borden Hamilton: Mr. Chairman, ordinarily back here I think we feel a great desire to take part in debates and we And that on a great many occasions we do not seem to have the opportunity. I must say that today I approach this particular task with considerable reluctance. I should like to borrow an expression that is often used by the hon. member for York-Humber, that I approach this job more in sorrow than in anger.
There is a rule, I think, or legal principle that testators cannot rule succeeding generations from the grave. As a matter of fact our laws have been designed to ensure that that does not happen. We have heard of estates being tied up for the lives in being and 21 years thereafter to ensure that no matter how much certain people wished to carry out what they thought were the testator's wishes, there was a restriction upon their position.
Supply-Defence Production
I have listened today to the senior member for Halifax and the minister, and it seems to me that they are trying to convey to the house that there is some type of overriding moral obligation on the minister to the late Sir James Dunn. I do not feel that there is either a legal obligation or a moral obligation. I would rather imagine that the testator, had he known the real and true position in which he was putting the minister today, would not have inserted his name as one of the executors and trustees of his estate. I might say that there is a provision for the renunciation of the duties that fall upon an executor or trustee, but that renunciation must be before or at the time of the application for probate.
I say to the senior member for Halifax, as the hon. member for Peel has said, that once the oath is taken the duties are not divisible. Once the oath is taken the responsibilities are there, and I do not feel that you can divide your job as executor and trustee of an estate. I listened to the senior member for Halifax talk about who runs the company and about the directors, and I want to tell him it is very elementary that in actual fact the operations of a company are controlled by the shareholders.


Mr. Richardson:: Not at all.


John Borden Hamilton: We will have the opportunity to hear from the corporation experts on the other side of the house. The ultimate authority for the operation of a company rests with the controlling shareholders. I wonder whether the minister is a shareholder. I do not think there is any doubt that under the devolution of estates act upon the death of a testator the full benefit of the shares goes to the executors and trustees. There may be a mechanical requirement, an application for transmission of the shares, but I would assume that in this case even that has been done. I would say that at that time not only are the shares vested in theory but they are vested in fact, and I would not doubt that at this very moment the controlling block of shares in the Algoma Steel Corporation and the share certificates that represent that control read in the names of the executors and trustees of the estate of Sir James Dunn. I would say that in that case the minister is the actual owner of shares in that company.
We have heard a lot about people being directors of companies. We have even asked in this house that a member of the treasury benches resign his office as a director, and I would not doubt that he only owned one share. Here is a case where the shares are vested in a minister who has the right to elect and remove directors and to control the fortunes of this company.

Supply-Defence Production We are not the only people who feel this way about the matter. I am looking at an editorial in the Winnipeg Tribune. X am not going to read it, Mr. Chairman, but it points out how ridiculous this situation is.
It indicates the position that would arise if the Steel Company of Canada should suggest that now that the minister is controlling some phases of the operation of Algoma he might also be interested in becoming a director of Stelco. We can see how ridiculous that situation would be.
There is no doubt that in addition to the legal arguments that have been made there is a grave problem of principle. This problem might easily be overcome without any sacrifice of the prestige or the position the minister holds by a simple renunciation at this time of his position as executor of this estate.


Mr. Michener:: Mr. Chairman, before dealing with one aspect of this problem with which the committee is now engaged I should like to ask the parliamentary assistant if in the will there is any limitation on the appointment of the minister as an executor.


John Horace Dickey: My understanding was that the reason the minister's name was placed in the will as an executor was stated in the will, and that he was to perform the functions indicated.


Daniel Roland Michener: He was named as one of the five executors without any special or limited duties?


John Horace Dickey: By a separate codicil, not in the will itself where the other four are named.


Daniel Roland Michener: I submit if there is any limitation or special provision which differentiates his position as an executor from that of the other four it would be relevant to have that clearly on the record so the limitations of that position would be clear to the committee. I am not proposing to speak about the minister's responsibilities as an executor. They have been discussed at length. It is clear what an executor's responsibilities are. It is also clear that the estate has the controlling votes with respect to the corporation in question, the Algoma Steel Company, and that the controlling votes have the power to elect the board of directors. Whether or not the executors are directors, they have the power to name directors at the annual meeting each year, and perhaps the power to recall directors in the course of the year if the bylaws so provide.
But I should like to call the attention of the committee to the other role which the 
minister has been occupying for a great many years and is engaged in at the present time, in order to point up the possibilities of conflict, whether or not in fact they arise.
It seems to me that the standard of conduct of a minister was sufficiently defined in the debate last year. I recall that a great many definitions by statesmen of the past and present were put on the record. We have heard today from the hon. member for Winnipeg South Centre, so there is no need to repeat the discussion of the standard of conduct. It really amounts to this, that the important thing is to avoid even the appearance of conflict in the discharge of public duties.
The matter I wish to bring to your attention, Mr. Chairman, is the position in which the minister stands with a number of commercial corporations which are agencies of the crown. There are in fact 14, as has been said today, that are responsible directly to this minister, five of them in his capacity as Minister of Defence Production and the others in his capacity as Minister of Trade and Commerce. One might take two or three of them at random to see the scope of the activities of these corporations and how their affairs might impinge on the affairs of some commercial corporation like Algoma Steel. One . might very well begin with the Canadian Commercial Corporation. I have its report here for the year ending March 31, 1956. On page 5 the report states:
The purposes of the corporation are to assist in the development of trade between Canada and other nations: to assist in the disposal of goods and commodities that are available for export from Canada; and, when requested, to act for the Minister of Defence Production and others in the manner provided by statutes of Canada.
That is the minister whose estimates we are now considering. That corporation carries on very extensive operations. Its balance sheets are set forth in the report, showing assets of $147 million at the end of the fiscal year 1956, and also recording its transactions for the year.
Then the next corporation that I think is worth while considering in this connection is Defence Construction (1951) Limited, whose annual report for 1956 has just been received by the members. This corporation, as its name indicates, does work for the national defence department and it sets out in its report the contracts it has awarded during the year under review. On page 5 the report sets out that 773 new contracts were awarded which, together with change orders issued, had a total value of $143 million. That was a sizeable volume of business, and it is business of a character which undoubtedly brings it into business relationship with

the steel companies, including Algoma. These contracts are for the navy, army, air force, and so on.
Now, there is a place where the minister, though not a director of the corporation, is the ministerial head of the corporation and responsible to parliament for a very large commercial operation. If a minister in that position saw fit to do so he could have a very profound effect on the affairs of a corporation in which his interests on the other side, as a private citizen, are involved by reason of his executorship.
That is the kind of situation in which the potential is there and which these rules of conduct and the standard of ministerial integrity are designed to prevent. None of us, so far as I am aware, today have made any charge or suggestion of impropriety, but the impropriety is that this possibility of conflict should be allowed to continue.
Another corporation whose report I have here is Canadian Arsenals Limited, another corporation responsible to the minister as Minister of Defence Production. On the first page of this report I see that it states:
This year marks the 10th anniversary of Canadian Arsenals Limited which was established in the year 1945, by letters patent, under part I of the Companies Act, 1934: The company:-
(a) produces warlike stores and equipment to the order of the Department of Defence Production. Such stores and equipment may be for the Canadian fighting forces, members of NATO-
And so on. The volume of business transacted by this corporation is also of a very high order.
Those are only three of the five corporations that report to and are under the direction of the Minister of Defence Production. Then there are, as I say, nine more corporations reporting to the same individual in his capacity as Minister of Trade and Commerce, including Atomic Energy of Canada which carries on a very substantial operation and uses many of the products of Algoma. There is Canadian Patent and Development Limited, which seems to be more or less in a field by itself; Eldorado Aviation Limited; Eldorado Mining and Refining Limited; export credits; northern transportation; Trans-Canada Air Lines and more recently the Northern Ontario Pipe Line Crown Corporation.
So it is evident, I think, that of all the members of the government the Minister of Defence Production, by reason of his great authority and activity in the commercial field in the manufacture and procurement of supplies of all kinds for defence purposes, occupies a role which least of all should have any conflict of interest or the possibility of any conflict of interest with private commercial activities.
Supply-Defence Production


John George Diefenbaker: I do not intend to cover any portion of the arguments that have been advanced, but I do intend to ask two questions both of which arise out of the explanation made by the parliamentary assistant to the minister during the course of his remarks this afternoon. I began by a reference that I believe summarizes the general attitude of parliaments in the British tradition to the need for ministers of the crown at all times to act in such a way that their conduct is in keeping with the proprieties of parliamentary traditions, and also in their conduct at all times to appear to keep within the limitations that the traditions of the past have imposed upon all who hold the high and honourable position of minister of the crown.
Sir Winston Churchill, as prime minister, enunciated the principles which in his opinion should at all times govern. Those principles are set forth in the British House of Commons Hansard of February 25, 1952. They represent the attitude of a man who was fond of describing himself as a House of Cotimons man. Because the right hon. Minister of Trade and Commerce also chose a few months ago to describe himself as a House of Commons man as well, I am sure the suggestions of the then prime minister of Britain will appeal to him. These suggestions regarding the general principles that govern ministers were circulated amongst the ministers and are as follows; I am going to read only those that are pertinent:
1.	It is a principle of public life that ministers must so order their affairs that no conflict arises, or appears to arise, between their private interests and their public duties.
2.	Such a conflict may arise if a minister takes an active part in any undertaking which may have contractual or other relations with a government department, more particularly with his own department. It may arise, not only if the minister has a financial interest in such an undertaking, but also if he is actively associated with any body, even of a philanthrophic character, which might have negotiations or other dealings with the government or be involved in disputes with it. Furthermore ministers should be free to give full attention to their official duties, and they should not engage in other activities which might be thought to distract their attention from those duties.
In accepting these two general principles I suggest this. It is difficult to understand why the minister persists with such persistency and stubbornness in holding a position as an executor of Sir James Dunn's estate which, however honourable his conduct may be, none the less does permit of a suggestion of a major clash of interest.
The hon. member for Halifax says there is no conflict. I cannot follow him in that. On the one hand there is the position of the minister as executor of one of the largest estates that has ever been administered in
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Supply-Defence Production this country, an estate that is conservatively valued at over $60 million, in respect of which the Canadian people will, through the medium of taxation, take a very large portion in succession duties. On the other hand the minister, however much he circumscribes his activities, cannot but unconsciously affect the amount of taxation which will be levied against that estate. It is all right; that in no way ascribes anything dishonourable to him. I follow the course in parliament of not casting aspersions of personal impropriety against those who oppose me or those on the opposite side. I think parliament must be above those considerations, and I try to follow that, sir.


Paul Joseph James Martin: And particularly in this
instance.


John George Diefenbaker: In all instances.


Paul Joseph James Martin: Particularly in this one.


John George Diefenbaker: If I ever rise-and I hope the time never comes that I do-to ascribe to thc^e who oppose me personal wrongdoing, or make that suggestion, it will be more than a suggestion.
I mention that because I felt rather keenly the remarks the minister made to the press regarding the hon. member for Eglinton following a reference to this question in the House of Commons. The minister ascribed to the hon. member for Eglinton what I do not believe should be ascribed to any hon. member inside or outside of the house. I do not intend to quote the words because I do not intend to have those words, unfair as they are to the hon. member for Eglinton, inscribed in the records of the House of Commons and embalmed there for future generations to look at.
However much the minister may wish to dissociate himself from that conflict of interest, it is there. It cannot be removed by the mere say-so of the parliamentary assistant. The minister said he received counsel's advice on this question. The mere fact that he sought counsel's advice indicates that he had in his own mind-


John Horace Dickey: Indicates ordinary prudence in a matter of this kind.


John George Diefenbaker: Ordinary prudence? He had in his own mind some grave doubt as to whether or not what he was about to assume in respect to an executorship would have the result of causing a conflict of interest which would be incompatible with either the discharge of his high responsibility as a minister of the crown or his responsibility under the will as an executor.


John Horace Dickey: It was a perfectly proper matter on which to get a legal opinion.


John George Diefenbaker: I am not arguing about whether it was perfectly proper to ask counsel for the advice.


John Horace Dickey: Yes, you are.


John George Diefenbaker: As a matter of fact we lawyers would not have a profession unless people sought our opinions.


Walter Edward Harris: We could not afford to be here.


John George Diefenbaker: Well, now, as a matter of fact I could not agree more than I do with the Minister of Finance in that connection; but certainly the extent to which our opinions are sought after we come here does have a very diminishing effect on our incomes in the profession. However, in order to find out whether or not the advice given is apprehended within the criticism that has been offered here this afternoon I intend to ask these two questions. I ask first that the letter from the minister to his counsel, which will set out the questions that were placed before the counsel for opinion, be tabled in the house. Second, I ask that counsel's opinion be tabled. After all, it is so easy to say that counsel's opinion was secured on the question as to whether or not there would be a clash of interest.
As a matter of fact counsel, in order to give that opinion, would have to consider not only legal principles but would also have to consider the principles that have been followed in parliaments which follow British traditions in respect to this matter. That is the first suggestion I make. Let us have the letter asking for the opinion, and also let us have the opinion; for unless we have both of them, merely the ex parte statement on the part of the parliamentary assistant that we have counsel's opinion-


John Horace Dickey: No, the minister's statement; the minister was the one who originally said he had sought a legal opinion.


John George Diefenbaker: The opinion of counsel quoted as a buttress and support for the contention that there is no clash of interest should be produced so that each of us may judge as to whether or not the point that has been raised here this afternoon is effectual. Without it the mere say-so on the part of the parliamentary assistant that the opinion was secured by the minister is meaningless. We want to find out what questions were asked and what evidence was placed before counsel in order that we may learn whether or not counsel was giving support to the proposition advanced by either the minister or the parliamentary assistant.
Secondly, the contention is that there is very little interest; after all, it is merely the estate's interest in Algoma Steel. Would the

minister advise the number of common shares held by the estate of Sir James Dunn in Algoma Steel? Those are simple questions, and they would go a long way toward clarifying the atmosphere.
Certainly it is passing strange that the opinion of counsel should have been secured by the minister if in the innermost recesses of his mind he had not entertained considerable doubt concerning the propriety of accepting a position with an estate the major assets of which are in a company which, directly or indirectly, has contracts with the Department of Defence Production. In addition to that the estate has an interest in keeping to a minimum the amount of taxation which will be levied against the estate, and it is the responsibility of the executors to preserve that interest.
No doubt there is an explanation, though it has not been forthcoming, of why it should have been necessary to place the minister in an invidious position, one that is difficult to justify; for if we are to maintain our parliamentary position one of the major means of achieving that end is that in our business and personal relationships we must abdicate many of those things which would bring us monetary returns. We must give them up as part of the ransom we pay for the opportunity of public service.
When I hear men in the public service being criticized I always think back to one principle, and it is this. How many men in the House of Commons who are making their contributions would, outside of the house, make much greater returns were it not for the fact that in their hearts and souls they have a desire for public service, to enter public life. All of us must resign ourselves to having less of the material benefits of life. All of us have to make that sacrifice, and because we do that an unwritten law exists which has for its authority generations of parliamentary government. That unwritten law is that not only must we be actually above suspicion in any way but our actions must have that appearance as well.
I believe the answers to the two questions I have asked will go a long way toward clarifying the situation, for until replies to these two simple questions are given all we do is meet a declaration of principle, whether answered by the parliamentary assistant or the minister, by the simple statement that there is no clash of interest. I suggest that the minister place before parliament the opinion he received. He is using the opinion as the explanation of his conduct. Let us see the opinion and the basis upon which it was given.
Supply-Defence Production


William McLean Hamilton: Mr. Chairman, earlier in the afternoon I had occasion to ask the parliamentary assistant to the Minister of Defence Production what the minister's attitude might be toward his ministerial responsibility in connection with the problem we are now discussing. I received a rather unsatisfactory answer from the parliamentary assistant and no answer from the minister. I assume the parliamentary assistant has been carrying the ball for the minister in this respect.
I thought it would be interesting to check very quickly into some of the expenditures shown in the public accounts for last year that might be involved in this connection. Unfortunately I was handicapped by not having a list of the companies over which the minister will have some control in his capacity as executor of this estate. As a very minor example, and to show how far down the line this sort of thing can go, I would point out that last year the Department of National Defence, for which the Department of Defence Production procures supplies, equipment and services, is charged with over $100,000 for payments to Canada Steamship Lines Limited. Canada Steamship Lines Limited is one of the major holdings in the Dunn estate-


Clarence Decatur Howe: No.


William McLean Hamilton: -
through an intercorporate structure.


Clarence Decatur Howe: No.


William McLean Hamilton: see that the minister shakes his head. Would he like to deny that the Dunn estate and Sir James Dunn had any connection with Canada Steamship Lines Limited?


Clarence Decatur Howe: Indirectly the Dunn estate may have an interest but the shares in question are owned by Algoma Steel Corporation.


Edmund Davie Fulton: Exactly.


William McLean Hamilton: There we are again. The minister shakes his head and then says that indirectly Canada Steamship Lines Limited is controlled by the Dunn estate. That is the type of thing which makes it so difficult to follow these matters through. We receive one answer in one breath and a completely contradictory answer in the next breath. We have established, however, by the minister's own words just now, the fact that this estate of which he is an executor has a very substantial interest in Canada Steamship Lines Limited. We have established from the accounts of the government for the year ending
5542	HOUSE OF
Supply-Defence Production March 31, 1955, which are the latest available, that the government through the Department of National Defence under the control of the Department of Defence Production is a major customer of Canada Steamship Lines Limited. I think this reduces to its essential principle the conflict of interest which exists here.
This is not the biggest conflict of interest by any manner of means, Mr. Chairman. If we had a list of the multitude of companies in which this estate is involved we could take that list and the thousands and thousands of companies with which the Department of National Defence has had some connection, and could show in case after case that there was close correlation between the two.
It seems impossible to me that a man fulfilling his responsibilities as conscientiously as I know the minister will fulfil them as executor of this estate would not come into conflict with his responsibilities as Minister of Defence Production. I lay no claim to high legal knowledge, any more than is in the possession of the average businessman, but I think anyone who has had anything to do with the settlement of an estate or the work of an executor knows that one of the fundamental responsibilities of an executor is to maximize the amount to be realized from that estate, to make it as great as the executor possibly can make it. On the other hand, the responsibility of a conscientious minister is to minimize the expenditures of his department and of the government. I realize, of course, that the minister is not one of those who is known as having an interest in minimizing the expenses of his department or of the government as a whole, out that-


Clarence Decatur Howe: On a question of personal privilege, I have been a minister of the government for 21 years and it has been said in this debate that I have spent more government money than any other man who ever lived in Canada. If every little twerp- excuse me-some one who is just out of kindergarten can get up here and slander me as he likes, I do not like it. I think my hon. friend had better withdraw his statement that I have not spent this country's money carefully.


William McLean Hamilton: I do
not know to whom the minister was referring when he said just out of kindergarten, but I know it was not to me.


An hon. Member:: Have you not graduated yet?
[Mr. Hamilton (Notre Dame de Grace).!


William McLean Hamilton: Undoubtedly the minister was carried away by his feelings at the moment and I quite understand and excuse him. However, I have no intention of changing or withdrawing any words unless-


Clarence Decatur Howe: Go right ahead; no one expects you to do anything decent. You have never bothered about decency since you have been in this parliament; the official snooper of the opposition.


William McLean Hamilton: have no intention of withdrawing words.


George Alexander Drew: Mr. Chairman, are there no terms of decency to be imposed by the Chair in this house?


Some hon. Members:: Oh, oh.


Edward Turney Applewhaite: I am not too certain to what the hon. Leader of the Opposition is referring. I heard statements from both sides of the house both of which were in the nature of a negative. I do not pretend to be able to quote them word for word. The hon. member for Notre Dame de Grace said something to the effect that the minister was not famous for his spending of the funds of the country with care. In his reply the hon. minister stated something to the effect that the hon. member for Notre Dame de Grace was not famous for decency, for doing the decent thing, or something to that effect. If I may say so quite frankly to both sides of the house, I am not called upon to express an opinion as to the courtesy of either expression, but I do not think either one of them went so far as to justify an interruption by the Chair.


William McLean Hamilton: As I
was saying when the minister made his interjection, I have no intention of withdrawing, unless you so direct, remarks which are perfectly parliamentary and which have been borne out time and again in this house by the minister's own observations and the minister's own answers. When I speak about minimizing the expenditures of this government I am reminded of a French expression which I think is quite adequate, bon pere de famille. That is a person who is careful, a person who is cautious, a person who examines expenditures in detail before making them, and above all a person who has a frugal attitude toward money he is expending. I suggest that the minister's rather famous observation of two or three years ago, "What's a million dollars?" hardly indicates a person who is going to be noted for care in the expenditure of public funds.
A few minutes ago the minister said rather proudly-I forget his exact words-that he had spent more money than anyone else in the

history of this country. I admit that immediately. I admit also that in many ways and at many times the minister has done a job which has brought great credit to himself and great benefit to Canada. But that has not necessarily made him immune from criticism nor is the minister, because he has a satisfactory record in some respects, necessarily perfect in all respects.
I think as the years have gone by the hon. and venerable gentleman has come perhaps to have great confidence in himself, but that is a confidence which some of us do not always share. I underline the word "always" because I think we should be left in this house-


James Sinclair: Even the gallery does not like it.


An hon. Member:: One of your playmates.


An hon. Member:: Calling for mother.


An hon. Member:: Probably a taxpayer.


An hon. Member:: A taxpayer crying
protest.


William McLean Hamilton: Someone has pointed out that may very well be a taxpayer crying in protest, or it may be a visiting member of the Port Arthur Liberal association.


An hon. Member:: The Canadian public.


William McLean Hamilton: No
matter what the minister thinks I believe we on this side should be privileged to examine his actions, to go into them with some care, to question him about them if we do not agree, and to criticize him on occasion. That seems to be the major point of difference between the Minister of Defence Production and ourselves. He objects to criticism of any sort.
Returning to the argument which I was making before, and which seemed to cause the minister some concern, the argument is that if anyone will take the areas of economic interest which have come to the minister as executor of the Dunn estate and compare those areas of specific economic and business interests with the suppliers of this federal government, from whom the Minister of National Defence is purchasing supplies, equipment and services, they will find that there is a close correlation between these two fields. In the matter of two or three minutes between the time 1 came into this house with the volumes of these public accounts-and I went to my office to get them-and the time I got up to speak, I was able to find one of those areas of conflict, and it is a comparatively small one, just over $100,000. Incidentally I was also able to get the minister to contradict himself in the first few minutes 67509-352i
Supply-Defence Production of his speech, but that was a by-product and has nothing to do with this particular argument.
As long as those areas of conflict continue -and they will continue as long as the minister holds this executorship-I do not think that we can have the same confidence in his ministerial decisions.


Clarence Decatur Howe: Don't worry
about that, smart boy. I don't care whether or not you have confidence.


William McLean Hamilton: Mr. Chairman, it might be a good idea to remind the minister of one of the basic principles of debate in this house, which is that all remarks are directed to the Chair. I remember that on a previous occasion he called the Speaker of this house "junior"; now he is calling you a smart boy.


James Sinclair: Not to the Chair in committee, but to the Speaker of the house.


Edmund Davie Fulton: Certainly in committee-.-


William McLean Hamilton: enjoy these interruptions. They show how little the members of the cabinet know about the rules of the house.


Clarence Decatur Howe: 1 will say that this is the most intelligent speech we have had on this subject from the other side.


William McLean Hamilton: This afternoon the senior member for Halifax, had I taken his words as they were intended to impress me and had I no other knowledge of the subject, would have left me with the feeling that the minister was almost a ghost in connection with the executorship of this estate. He had chosen to renounce all his rights, he had chosen to renounce his control over the details of the administration of the estate, and he was only to come in at the very end as a sort of guiding light or spiritual adviser to the executors after everything else had been taken care of.
I must say that the arguments which have been made since that time, which have been from a legal point of view, have satisfied me of the very great responsibilities of the minister in connection with this estate and his obligation to carry out those responsibilities by a very active connection with the detailed administration of the estate. I know he has a lawyer's opinion that indicates that he does not need to follow through on these matters, but I suggest to you that we would not even have lawyers if all of them were always in agreement. I wonder how much trust or confidence can be placed in this one opinion which, as far as I know, has not actually been read into the records of this house, nor has the source itself been defined.

Supply-Defence Production
I have some other observations on the first item of this department, but before entering upon those I shall resume my seat so that anyone else who wishes to touch on this specific matter will have an opportunity to do so and so that the debate may be kept together.


Mr. Dinsdale:: I do not intend to pursue the question that has been before the house during the earlier part of the afternoon, because as I have listened to the discussion I have felt that it has been very adequately covered by my colleagues on this side of the house. I am not discontinuing the discussion at this time because my feelings are any less intense on the matter. I should like to support to the full the statements in regard to this point of principle that has been raised by the other members who have taken part in the discussion.
Before I came to the House of Commons, as a private citizen I was of the opinion that [DOT]anyone who assumed the position of minister [DOT]of the crown did so with a sense of responsibility and a sense of humility, as becomes a servant of the public; and I still think anyone who carries out the high responsibility of service to Her Majesty should do so with singleness of purpose and without allowing any other outside interests to interfere or overlap in that peculiar responsibility in a democratic country.
Now I want to give some attention to certain aspects that could be properly discussed under this first item of the departmental estimates before the house at the present time. I want to deal in the first instance with Canada's aircraft production program; second, with the guided missile program, and finally I have some comments to make on the development of our radar screen in general with particular reference to the D.E.W. line development, which is the last aspect of the three-line radar screen to be undertaken in the defence of Canada and the whole North American continent.
The minister, in his statement in introducing the estimates, spent some considerable time on the progress of our aircraft production industry. It was encouraging to note that certain aspects of the program undertaken in the build-up just before, during and after the Korean crisis have now reached completion. He mentioned specifically the Harvard program and the T-33 program as having been completed and the CF-100 Canadian all-weather jet fighter program as well under control at the present time.
I must admit at the outset, Mr. Chairman, that following the drastic decline in our aircraft industry at the end of world war II


we have made a fair degree of recovery. At the peak period of production during world war II the aircraft industry in Canada, largely devoted to military production of course, was employing some 120,000 Canadians. I remember receiving some correspondence from a friend of mine, a lady some 65 years of age at that time, and she enclosed a photograph of herself in overalls. During those emergency days she had been called into the aircraft industry and was working on the Mosquito assembly line. Underneath the picture she had written: "I build 'em and you fly 'em."
That was the sort of spirit manifested by Canadians during world war II which made it possible to achieve such a tremendous output in a relatively short time after years of delay by the government in building up a sufficient defence industry in this country. It was the spirit of the people, as demonstrated in that particular incident, that made it possible to achieve such a remarkable level of production in a relatively short time. But by 1946 the aircraft industry had almost completely melted away, with the total number of employees being some 6,000, a tremendous drop from such a high employment level.
The minister told us that the industry has come back in the Canadian economy so that now it occupies ninth place in factory value and is in third place so far as employment of Canadian labour is concerned. In the 10-year interval since 1946 we have recovered to a large extent the ground that was lost through the rather hasty, unwise demobilization of the industry that took place in the immediate post-war years.
It is not necessary this afternoon to discuss in detail the mistakes that were made in the hasty build-up. During the years I have been a member of the house these mistakes and errors in judgment have been pointed out on many occasions. For example, there has been reference to the CF-100 program. After it was realized that we had not made the world safe for democracy and that it was going to be necessary to have some continuing defence measures we moved rather rapidly to produce an aircraft that would be suitable to carry out an essentially defensive role, and the CF-100, or the XF-100 as it was originally called, was gradually put into production.
After many setbacks and mistakes in judgment, which I suppose could have been expected in developing an aircraft of this type from scratch, the CF-100 is now in service in Canada carrying out a basic fighter defence role, and we are informed that it will continue to serve adequately in that capacity for at least one or two years more. In fact it has to serve for the next one or

two years, because according to the information we are able to obtain its successor, the CF-105, will not be off the assembly line or in production until two years hence.
I give that brief survey of the history of the CF-100 because I sometimes feel that, with respect to the program under way at the present time, we are heading into some of the same mistakes that dogged our footsteps in our first effort at producing an allCanadian military aircraft. It was originally expected that the CF-100 would be in demand by the R.A.F. and some of the other allied countries which did not have a modern allweather jet interceptor available or even in process of production at that time. As it turned out, the CF-100 was never sought by any other country and the total demand for the Canadian all-weather fighter came from our own Royal Canadian Air Force. Today in military or aircraft production-I can almost use the words interchangeably, because by the very nature of the circumstances aircraft production and the stimulus to aircraft production have been pretty closely tied to the demands of defence and military activities-we are gradually shifting the emphasis toward the CF-105 delta wing interceptor and the CL28 anti-submarine or coastal reconnaissance aircraft which is being developed from the Bristol Britannia.


Edward Turney Applewhaite: Order. It being five o'clock, the house must proceed to the consideration of private and public bills.
Progress reported.



PRIVATE BILL


[Stage Direction]
The house in committee on Bill No. 434, respecting Niagara Lower Arch Bridge Company Limited-Mr. Houck-Mr. Applewhaite in the chair.
Edward Turney Applewhaite: This bill comes to the committee from the standing committee on railways, canals and telegraph lines, where one amendment was made.
On clause 1-Declaratory.


Daniel Roland Michener: Would the chairman inform the committee what amendment was made? My copy does not show it.


Edward Turney Applewhaite: In the railways, canals and telegraph lines committee, clause 2 of the bill was amended by adding the word "sale" immediately after the words "provided that such". The clause then would read: "Provided that such sale, assignment, transfer or conveyance shall have been first approved-"
Supply-Defence Production


Daniel Roland Michener: This, I take it, is a noncontentious bill and I do not know that it needs any explanation to the committee. The bridge in question is one with which members, I think, may be familiar. It crosses the Niagara river in the city of Niagara Falls, Ontario, to Niagara Falls, New York, and is one of two bridges in that locality, the other being called the Rainbow bridge or honeymoon bridge which is closer to the falls than this by about a mile and a quarter.
This bridge, unlike most of the bridges in the Niagara district, is a privately-operated bridge, being operated by the company described in this bill and a corresponding company on the United States side. The Rainbow bridge is operated by a semi-public commission appointed by the government, as is the Peace bridge at the top of the Niagara river. The only other bridge which spans the Niagara in this district is the one at Lewiston.
As the bill indicates, the purpose is to clear up the authority of the private company which operates the bridge to dispose of its assets, including its franchise, and there appears to be no reason why they should not have the full authority to carry out whatever plans they may have. The bill seems to be limited to that one specific objective, and there seems to be no objection to it.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Preamble agreed to. ,
Title agreed to.	.
Bill reported, read the third time and passed.
The Acting Speaker (Mr. Applewhaite):: The
business reserved for the private and public bills hour having been disposed of, the house will resume consideration of the business interrupted at five o'clock.

The house in committee of supply, Mr. Applewhaite in the chair.



DEPARTMENT OF DEFENCE PRODUCTION

[Stage Direction]
S5. Departmental administration and payments to Canadian Commercial Corporation and other corporate agencies for services provided in connection with defence purchasing and production. $6,145,727.
Walter Gilbert Dinsdale: Mr. Chairman, continuing the discussion that was interrupted at five o'clock, I was making the point that the new developments in our Canadian aircraft industry emphasize the CF-105, the delta wing fighter, plus the CL28, the Britannia coastal reconnaissance aircraft. While these, as military types are meeting a fundamental and primary need
5546	HOUSE OF
Supply-Defence Production in Canada, there is a possibility that we are going to repeat the same mistake that caused some bitter discussion in this house about the CF-100 program. I should like to suggest that mistake was a failure to integrate our military and civilian needs in our Canadian aircraft production policy.
I said previously that by the very nature of things, and it is a matter of record, the military demands for aircraft have been largely responsible for the periods of rapid development in the aircraft industry in all parts of the world. The aircraft is a relatively new invention which came into its own during world war I, made comparatively slight progress between world wars I and II, and has come into its own as a means of transportation since the end of world war II largely as a result of the stimulus during that world conflict.
However, Canada has a very unique opportunity. Perhaps Canada, the U.S.S.R. and the United States are unique in this respect, in that their civilian transport needs provide a real basis for rapid and widespread development of aircraft production. Canada particularly, as an underdeveloped, youthful nation, has an almost unlimited demand for air transportation.
During recent months our shortsightedness in this regard has become increasingly evident. With the demand that has arisen in connection with the development of the north, arising from the construction of the distant early warning radar screen there, we have been made painfully aware of the fact that we have not geared our domestic aircraft industry to supply our own civilian domestic needs. As I look at the program for aircraft development outlined in the annual report of the department, as I examine any other reports that are available, such as the reports of the Department of National Defence, for example, I see no evidence that an attempt is being made to overcome this earlier deficiency in our aircraft program.
Admittedly it is difficult to develop a fighter aircraft that has flexibility of function. The Mosquito aircraft to which I referred, which became the jack of all trades during world war II, was perhaps unique in this respect. So far as the CF-105 delta fighter is concerned, which is being designed for the exclusive purpose of bringing Canada up to date in her fighter defence role, I can readily see there is no possibility of adapting it to civilian uses. That, however, does not remove the possibility-


Edward Turney Applewhaite: On a point of order, I am sorry to interrupt the hon. member but in his own interest I think I should point out to other hon. members in the house who


sit in his locality that at this end of the chamber we are getting very loud noises from the loud speakers, and it is not very clear.


Walter Gilbert Dinsdale: Thank you, Mr. Chairman. It is impossible to adapt the CF-100 and the CF-105 to civilian uses. However, there must be some way in which the resources of Avro Canada, which has built up such extensive facilities in a relatively short period of time, can supplement its purely military function with some kind of civilian function so we can have a more balanced production level.
The minister referred to the necessity of holding back on the production of the CF-100 until such time as the CF-105 comes into production, and that has been the story down through recent years as a valiant attempt has been made to keep in a fully operational state the excellent production facilities, the engineering skills and the engineering personnel that have been developed by Avro Canada. I recall there was an early experiment in this regard as Avro became reactivated after the war, and Canada went so far as to produce a flying prototype of a jet liner, the first jet liner to fly, in anticipation of the jet transport age which is now upon us.
I can recall, for example, the general manager of Avro Canada at that time, a Mr. Walter Deisher, speaking before the Empire Club in Toronto back in 1946, expressing high hopes that Canada would be ahead in the pioneering of the jet age. That was a very visionary approach to the future of aircraft production in Canada, and I felt it was an approach that was heading in the right direction when you think of the nature of our Canadian geography and the peculiar transportation needs that we have on this continent. However, for inexplicable reasons, after the jet liner prototype was produced and had flown successfully, the whole project was dropped, after an expenditure of some $8 million had been made.
I recall at that time, too, that there was some statement to the effect that T.C.A. would be requiring this jet liner, though no specific orders came from T.C.A. The only order forthcoming came from a United States company, the National Airlines of the United States of America. Because the project was dropped that order, of course, could not be filled. That was an attempt to integrate military and civilian needs, and so far as I can see it was definitely the type of aircraft program that Canada required. We have suffered because of our failure to continue development along that line.
Today all the major air lines in all the countries of the world are on the threshold of moving into jet liner transport. We have

heard of the tremendous strides Russia has made in this regard. The first appearance of the Russian jet transport aircraft in connection with the visit of Khrushchev and Bulganin to England brought some rather surprised comments from the aircraft experts of the western world. Trans-Canada Air Lines itself is now thinking in terms of a shift to jet planes, and I understand that rather substantial orders, involving the expenditure of some $35 million, have been placed for the DC-8 jet liner. This is money that could have very well been poured into the development of our own Canadian aircraft industry.
In regard to the CL28, which is a version of the Bristol Britannia, it seems to me that in the production of this aircraft it would be much easier to tie in military needs with civilian needs. The Bristol Britannia aircraft is an outstanding turbo-prop aircraft. In fact it is one of the more efficient and more popular aircraft in production at the present time. I believe Canadian Pacific Air Lines are going to adapt the Bristol Britannia turbo-prop jet aircraft to meet their needs in the interim period before the turbo-jet transports become fully operational. On the basis of the statistics that are available they have chosen the Bristol Britannia because, in comparison with other similar aircraft available, in terms of pay load, fuel costs per mile, fuel costs per pay load unit and general operational proficiency, the Britannia 310, the Bristol Britannia, is far ahead of any other similar types.
I must confess that I have never had an opportunity to look into this situation in detail, but looking at it from a common sense, layman's standpoint it would appear to me that Canada, with her rapidly growing need for transport aircraft of this type, by going into the production of the CL28 might easily adjust the production line of Canadair to have both a military and a civilian operation.
There is another aircraft company in this country which does not come directly under the minister's purview but which during world war II played a most important role in providing military aircraft for use by Canadian air force personnel. I refer to the de Havilland company. They have a nicely balanced civilian-military operation in that they are producing the Otter and the Beaver which are being used-the Otter particularly-in increasingly large numbers by the United States air force. They also are the main stand-bys as light transports in northern Canada. That is the sort of program that will produce the most efficient and effective type
Supply-Defence Production of aircraft industry in this country, and it would avoid the mistakes involved in our earlier programs, the initial production of the CF-100, and so forth, which resulted in the expenditure of large sums of money which would have been quite unnecessary if the whole scheme had been carefully thought out beforehand. I believe my colleague the hon. member for York West will deal with this more comprehensively.
I wish now to move on to the guided missile program that has been referred to by the minister in his comments and in various reports. It would appear that Canada is undertaking some research in the realm of guided missiles, one of the most costly military programs in the modern military scheme of things. In the white paper on defence, at page 35, there is a sentence which reads:
In 1950 it was decided to undertake a practical but experimental Canadian project. The prime purpose of the project was to build up within the board's staff-*
That is the defence research board.
-and throughout Canadian industry a team of scientists and engineers capable of developing and producing guided missiles in this country, while familiarizing officers of the Canadian services with problems and techniques involved in using such weapons.
I presume that program gave birth to the "Velvet Glove" missile. There was newspaper comment to the effect that the "Velvet Glove" missile had been completely successful but it was being abandoned because it was not up to the standards of similar missiles under development in the United States. I would just like to refer to the double talk involved in that excerpt from the white paper which I read a moment ago. The sentence reads:
... it was decided to undertake a practical but experimental Canadian project.
The words "practical but experimental" are used there but obviously the word "practical" is redundant because after an expenditure of several million dollars this particular missile was discarded as being of an entirely experimental nature, and it will never reach the practical level because it has been decided by those concerned that it is inferior to other available missiles.
I do not know how far Canada can go in competing in this extremely expensive program of dabbling in guided missiles research. When the secretary for defence in the United States, Mr. Wilson, first took office he came to the conclusion it was a project that was much too expensive for that country with its tremendous financial resources to tackle, and he was of the opinion that the whole thing should be scrapped as visionary and in the realm of the Buck Rogers scheme of things. His advisers have since been able to persuade

Supply-Defence Production him that the scheme is not visionary but very practical and extremely necessary, and some $2 billion have been provided for research in this particular field of defence production and development.
I do not think Canada can compete with that sort of money; we do not have $2 billion to devote to research of this kind, and I hope the minister and the officials concerned will not become embroiled further in throwing money down the drain in this regard. I repeat that this sentence containing the words "practical but experimental" is double talk. The "Velvet Glove" missile was intended to be practical but it did not turn out to be as practical as was intended, so it was passed off as being merely an experimental project. I do not think Canada has the resources to throw away on that type of research development, particularly when we have an ally, a neighbour on the North American continent, who is as anxious as we are to see that this continent is properly defended and is doing outstanding work in this field.
From time to time it has been pointed out by the Minister of National Defence and the Minister of Defence Production that the share of Canada and the United States in a program of this kind has to be apportioned on a coordinated basis. We have been informed that Canada's defence role is just that; it is defensive. It is not offensive but defensive. We have agreed that with our resources the essential function of Canada, in the air in particular, is to provide the necessary fighters to meet any attack that might come across the northern regions. I have been interested to note that at the commonwealth prime ministers' conference all the prime ministers concerned have come to the conclusion that we in North America are very vulnerable in this regard and that an enemy who might contemplate attacking this continent from the north would certainly consider Canada as the primary target.


Edward Turney Applewhaite: I am sorry to interrupt the hon. member, but he has exceeded his time.


Walter Gilbert Dinsdale: I started at 5.15 p.m., Mr. Chairman.


Edward Turney Applewhaite: I am glad the hon. member brought that up. I have been looking for several days for an opportunity to mention this to the committee. The hon. member spoke before five o'clock and we recognized him again after five. The chairman and I have proposed always to do that: where in committee of the whole a member was interrupted, to recognize him more or less as a matter of course or right after we resumed, whether it is later that day or the


following day. But if we are going to continue to do that it will be necessary for us to add the two times together for the purpose of one speech. Otherwise, of course, we would be permitting one hon. member to make two consecutive speeches, which would hardly be fair to the committee.


Gordon Minto Churchill: Mr. Chairman, just following up what has been said by the hon. member for Brandon-Souris, I think the minister might elaborate a bit on the guided missile program for Canada. He touched upon it in the course of his remarks, but I think much more should be said about it because of the complexity of the issue involved and the fact that other countries have moved into this field on a much more elaborate scale than Canada. I think it is important for us to find out exactly what we are doing and what we can expect to accomplish with the limited funds at our disposal. I appreciate the fact that it is important to have people trained in this particular field.
We are informed that the guided missile is the weapon of the future, that it will not be many years before the bomber will be outmoded and the intercontinental guided missile the ultimate weapon. In the few years remaining before that development is complete guided missiles with a shorter range are considered to be desirable, and it is important to know just what we can do along this line and whether or not it would be better to work more closely in cooperation with the United States or adopt some of their developments along that line.
The report of the Department of Defence Production for the year ending December, 1955, does not say a great deal about guided missiles. I find just one paragraph on page 16, which indicates that during 1955 a guided missile called "Velvet Glove" was produced to a limited extent for service trials by the Royal Canadian Air Force. From that valuable experience was gained. The paragraph continues:
A fully developed missile production complex has thus been added to the defence production base. Although it appears that the "Velvet Glove" will be superseded by another air to air guided missile in the operational requirements of the air force, the benefits gained from this program will facilitate the development of production in Canada of the new equipment.
Is the guided missile which is superseding the "Velvet Glove" well advanced in its development or has it been outmoded by developments elsewhere? There was an article in the Financial Post of April 28 of this year which cast some doubts on the matter. It referred to an air to air missile called the "Sparrow", which I presume is

the one that is superseding the "Velvet Glove". The article indicates that some difficulty has arisen in connection with that development. I wonder if the minister would give us a little more information on this program.


Clarence Decatur Howe: Mr. Chairman, my hon. friend wishes me to comment on the missile program. Some two or three years ago an appropriation was made by the Department of National Defence to undertake an experimental project in the field of guided missiles. The project was to be an air to air missile. By undertaking that work we sort of joined the club of those who were attacking the same problem. This allowed us to exchange information with the United Kingdom and the United States regarding the missile program. Several air to air missiles were under development at that time, I would think as many as ten different missiles. We had one, I think there were five or six in the United States and certainly two or three in the United Kingdom.
We proceeded to develop the "Velvet Glove" and we brought it to the stage where firing tests were made. By that time we had to choose whether to go into production with the "Velvet Glove" or whether there was a better missile. Obviously the fact that we had developed a missile was no reason to proceed with its full-scale production if there was a better or more appropriate missile in production elsewhere. We found by that time that the United States had adopted the "Sparrow" missile for a similar project. The project we had in mind was armament for a supersonic plane. Thorough investigation of all projects of a similar kind indicated that the "Sparrow II" was an appropriate weapon for the CF-105. We have therefore made arrangements to undertake production of the "Sparrow II" missile as the weapon for the CF-105 aircraft.
Comment has been made that we lost money spent in the development. I say to hon. gentlemen opposite that if we are to be held to account for every miss we make in a design and development program the position will become hopeless. We would just have to give up design and development work. We in Canada have been exceedingly fortunate in this connection. I do not know of any country with the record we have. We undertook to design an all-weather fighter plane, and we did so successfully. We undertook to develop a jet engine, and we did so and built it in great numbers. We found both the aircraft and engine to be the equal of anything produced within that power range before or since. That was a very lucky stab, in my opinion.
29. 1956
Supply-Defence Production In fact I made a little bet with a man associated with one of the projects when we were starting both programs. I offered ten to one that both those programs would not come off and I paid up later on.
Just look at the results in England. A number of planes have been developed there and brought to the stage of prototypes, but few have survived to go into quantity production. I would think the average would be about one in six or one in eight. The proportion in the United States is similar. I made a trip two years ago to look over the aircraft testing at Muroc lake and I think they had some five or six aircraft of the type of the CF-100, of which only two have survived.
We must expect that some of the developments undertaken by the government will be casualties, but the attitude of the opposition seems to be that if we spend money we must produce a weapon and the weapon must be successful or a crime has been committed against the taxpayer. My hon. friend referred to our first attempt at building a jet liner. It is true we had the manufacturing capacity and we wished to keep a nucleus staff working at Malton. Therefore we undertook to produce a jet passenger plane. We brought it to the prototype stage; and while it is true it flew, there was everything wrong with it. It had to carry sand bags in the tail to fly properly.


Walter Gilbert Dinsdale: Not according to reports.


Clarence Decatur Howe: I get my reports and the hon. member gets his. I have to trust mine and I am sure his are not accurate. Nevertheless, we spend the money allocated to us for specific projects, and we get reports which we believe are accurate. It so happened that the Comet was being developed at the time, and although the Comet did not come into production until two or three years later there was nothing encouraging about the results of that prototype at Avro on which we had spent $6-6 million.
There was a demand for warplanes. We had developed the CF-100 in the meantime. It was coming into production, and all the floor space at Malton was needed for that project. I may say that as Minister of Defence Production I was very happy indeed to call it a day with the jet transport. After the second world war we had a similar situation at Canadair, and we also needed transport planes. The result was that we developed there a plane which is known as the North Star in Canada and the Argonaut in England. We had the usual production and starting up troubles. What was the result? We fought the 1949 election on the question of whether or

Supply-Defence Production not the North Star and the Argonaut were good planes. It is not much encouragement, it seems to me, for this country to undertake design and development of its own equipment if, in the event that we do not produce the best product coming out at that time, we are to be attacked politically in this house.
That is the position with the "Velvet Glove". It was not the best air to air missile of its day. We are choosing the best with which to go into production. I have no apologies to make for the "Velvet Glove". We created manufacturing facilities and trained a considerable number of men in the manufacture of components for an air to air missile. What we cad the learning curve has been brought up to a point, and that fact will be a saving as we get into production on the "Sparrow II".


Gordon Minto Churchill: The minister has given us a good account of what has been going on. I think he has not been quite fair to the opposition to suggest that just because ill fate attends some of the efforts of the Department of Defence Production, we think it is all wrong. That is not so. We realize that a certain amount of experimentation is necessary, and it is quite true that in the United States and the United Kingdom a great deal of experimentation has been carried out and they have had to drop certain projects. I was reading just the other day about their aircraft program in the United Kingdom, where the government admitted that too many projects had been attempted and they are now concentrating on much more limited numbers.
That is inevitable, I presume, in any of these fields, but there is one point with which the minister did not deal. When we are critical of a project such as the guided missile it is because we have this in mind. The guided missile is being produced for a very definite purpose, that is defence. At what stage are we going to be ready to provide that defence? If we are constantly in a stage of experimentation we have nothing on the production line to turn over to the air force, hence the criticism that we are prepared to offer to a program that is constantly in a state of experiment and not in a state of production. It is the defence of the country that is of major concern, and the earlier our aircraft are provided with a suitable guided missile that will assist that defence the better. But if, from year to year, we are to be told that the experiment is going on, that we tried the "Velvet Glove" a few years ago and it is not very satisfactory, that now we are trying the "Sparrow" and next year it will be some other type of guided missile, in the interval what has the air force got?


It seems to me that a program of experiment and design has to go along hand in hand with one of production of a recognized suitable missile. It may be from time to time, if the United Kingdom or the United States has devised a missile that is satisfactory, that should be procured for our air force until such time as experiments in Canada prove that there is a superior type available and that production can be commenced immediately.
The same holds true of aircraft. We have dealt with that on other occasions. Now, referring again to guided missiles, there is the whole field of ground to air guided missiles. Are we entering into that field, or are we going to rely upon the experience of the United Kingdom and the United States? Somewhere or other the minister has to draw the line. As the member for Brandon-Souris has pointed out, the guided missile program is extraordinarily expensive. How much of Canada's money should be put into that? Or are we going to draw on the experience of these other larger and wealthier countries? I should like the minister to say whether they are intending to do anything on the ground to air guided missiles.


Clarence Decatur Howe: Mr. Chairman, as a matter of fact this debate should take place on the estimates of the Department of National Defence. The Department of Defence Production does not decide military programs; it has no money other than that vote in the estimates before us today, totalling about $22 million, I think. We take up projects that are chosen by the air force and for which the air force is willing to provide a budgetary encumbrance, and we proceed to develop the weapon designated by the air force. It has been suggested that we are experimenting with the "Sparrow II". That is not the situation. We are arranging to produce the "Sparrow II". The "Sparrow II" is a proven weapon, and we shall go into production on a proven weapon.
I cannot say just what the defence research board is experimenting with. That is outside my purview. We procure for the defence research board as instructed, but we do not go inside their laboratories officially to know what they are doing. As far as I know, no one has an operational ground to air missile except the United States, which has the Nike. The Nike is the only proven ground to air missile today. I understand that the military view is that the Nike would not be of much assistance to us here in Canada.

Supply-Defence Production
Therefore, to the best of my knowledge we say the Nike would have some important are doing nothing important on a ground strategic value in our Canadian defence to air missile.	set-up.


Gordon Minto Churchill: Why do you say the Nike will be of no use to us in Canada?


Clarence Decatur Howe: We have not the large centres of population that are adapted to protection by the Nike. The Nike is a very expensive weapon, calling for a very expensive installation. To warrant that there must be a very considerable concentration of population.


Walter Gilbert Dinsdale: Is the Nike not designed to destroy intercontinental ballistic missiles or strategic bombers?


Clarence Decatur Howe: No. My hon. friend has been reading detective stories.


Walter Gilbert Dinsdale: No, I have been reading Russian reports, and I would well advise that the minister give some attention to that point. For example, I have in my hands a report of last January which is fairly authoritative. It comes from the Alsop brothers, who seem to have pipe lines into high level military circles in the United States. It is most impressive the way their forecasts or their comments finally come true. On January 3 of this year the Alsop brothers said:
Last Thursday Marshal Bulganin grimly boasted to the meeting ot the supreme Soviet in Moscow that the Soviet armed forces would soon have an intercontinental ballistic missile, or ICBM in current Pentagon jargon.
That is not from Buck Rogers; that is from very responsible journalistic commentators. The article goes on to say:
The truth is that the Soviets have quite regularly telegraphed their weapons development punches boasting about each new weapon as soon as they were confident they had solved the design problem and were preparing for a test. For instance Vyacheslav Molotov told another Moscow audience that the Soviets already possessed an A-bomb just about a year before the first Soviet A-bomb test in September, 1949.
Apparently it is reports of that kind from responsible sources that caused Mr. Wilson to change his mind with regard to his attitude toward the missile program in the United States. I understand that weapons like the Nike and even more advanced types are designed to destroy bombers and ICBM weapons far beyond the range of built-up areas, because once the bomber or this more deadly weapon, the ICBM, got through to a built-up area, defence would be useless inasmuch as the lethal power of thermonuclear weapons is such that total destruction would be the effect in any case. Therefore I would 67509-353i
While I am on my feet I should like to ask the minister if there is not continuous consultation with the United States counterpart of defence production. Are we not coordinating? Do we not consult as to sharing the financial responsibility and so forth, or do we make our own suggestions and proceed without reference to anything they are doing south of the line?


Clarence Decatur Howe: There is constant consultation. I think Canada is aware of everything the United States is undertaking in the way of production, just as the United States is familiar with what we are undertaking here. Teams go back and forth between production plants constantly. There is no difficulty about that. My difficulty is to follow the imagination of my hon. friend when he talks about intercontinental ballistic weapons as in being and the fact that the Nike will shoot them down, both of which are fantastic suggestions.


Walter Gilbert Dinsdale: Our whole defence program is fantastic and out of date if the minister says that, because by a combination of the CF-105 and air to air guided missiles we contemplate meeting any possible offence from the air for the next ten years, or until such time as we have ground to air missiles that will meet the threat of weapons contemplated not by me but by responsible commentators such as the Alsop brothers.
I have followed them closely for years. Members of the house have to depend for information on sources such as that because we have difficulty getting inside information from government sources. I follow as carefully as I can these news commentators on international affairs. I read the second paragraph concerning the Soviet prophecy regarding the development of the A-bomb which was scoffed at at the time but which became an actuality within a year. Based on that pattern, Stewart and Joseph Alsop expect that within a year from last January there will actually be ICBM missiles in production.
Just after the last war I remember there was a scramble for the German scientists who had done advanced research in this particular field during the war. The minister says I am dabbling in fantastic dreams. As a night fighter overseas I remember that we had to cope with the V-2, and I think the minister knows as well as I do that the V-2, which was actually in operation in 1945, was something from Buck Rogers' dreams of the future because it was a substratospheric weapon. Perhaps it was not intercontinental but it was certainly an intercountry ballistics

Supply-Defence Production missile. It was completely indestructible by any known defence measures. All we could do was sight the point of take-off by spotting the rocket discharge and give a radio reference, with the hope that an intruder force would be able to move in soon enough to destroy the launching sites.
The Germans had the V-2, the earliest equivalent of an ICBM weapon, in 1945, and the only improvements necessary on the V-2 are a hydrogen warhead, which is now available, greater range and greater accuracy. Those are the only improvements necessary. Russia was successful in getting most of these German scientists who had developed both the V-2 and V-l. That was ten years ago. Therefore I defend myself in the strongest terms possible and say that this is not a pipe dream. It is a cold and hard factual reality, and we should be giving some attention to it.


Clarence Decatur Howe: As I have said, I think we had both better depend on military intelligence, and I do not have it in my possession except as I get it from my colleague the Minister of National Defence. I have had the privilege of visiting rocket experimental stations in the United States. I have seen the Nike shoot down planes, and I saw what the situation was at that time. I do not know what it is today, but certainly there is no military intelligence indicating that there is an intercontinental ballistics

weapon in being or likely to be in being for some years. I think I can state that quite accurately. However, as I said before, I am not qualified to discuss the defence of Canada. That is the responsibility of my colleague the Minister of National Defence.


Walter Gilbert Dinsdale: There should be co-ordination.


Clarence Decatur Howe: Well, we coordinate in that I build nothing except as my colleague gives me the money to pay for it, but I think I am qualified to discuss war production in Canada during the fiscal year under review, and if we can get back to that subject I think we will make progress. In the meantime, it is six o'clock.


Daniel Roland Michener: Before the minister closes-


Some hon. Members:: Six o'clock.


Daniel Roland Michener: -would he tell us the arrangements with regard to the production of the "Sparrow"? Is it on licence from the United States or-


Some hon. Members:: Six o'clock.


Daniel Roland Michener: Well, we will leave that until next day.
Item stands.
Progress reported.


[Stage Direction]
It being two minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, July 2, 1956