1956-06-13

Mr. Speaker:: Hon. members will permit me, I am sure, to draw to their attention the presence in our gallery of the Prime Minister of New Zealand. We all wish to extend to him the assurance of our most sincere friendship and our best wishes; and that assurance we extend to him personally, to the members of his parliament and to the people of New Zealand.



BANKING AND COMMERCE

[Stage Direction]
Eighth report of standing committee on banking and commerce.-Mr. Hunter.

['1.\tWas the government of the province of New Brunswick consulted regarding the legislation passed by the federal government in 1954, to provide allowances for disabled persons?\n2.\tWas the government of New Brunswick consulted with regard to (a) regulations:\t(b)\ndefinition of "total and permanent disability", as set forth in section 2, under the Disabled Persons Act?\n3.\tDid the government of New Brunswick, in 1954, at the time the regulations and definitions were being considered, make any suggestions or proposals for broadening the coverage of the act, that were not adopted?\n4.\tHas the government of New Brunswick at any time made representations to the minister as to the desirability of amending the legislation, the regulations, or the definition of "totally and permanently disabled", contained in the act?\nAnswer by: Hon. Paul Marlin (Minister of\nNational Health and Welfare):\n1 and 2. The government of New Brunswick was represented by Dr. J. F. Mclnerney, minister of health and social services, and Mr. J. Ernest Anderson, chairman, old age assistance board, at a conference with all the provinces convened on January 26, 1954, to discuss the proposed federal legislation on the subject of disability allowances. Again on September 20 and 21, 1954, it was represented by Dr. Mclnerney and by Dr. Stewart, chief welfare officer of the provincial department of health and social services. In the course of: these meetings the New Brunswick representatives expressed their views as to the desirable scope and extent of the proposed legislation, the age of eligibility, the income ceilings which should be considered, and the provisions to be included in the regulations having to do with the definition of "total and permanent disability". The definition which now appears in the regulations was agreed to by all the provinces, including New Brunswick, after full discussion, in the course of which various suggestions made by the provinces were incorporated into the wording of the regulations.\n3. No. Except in respect of one item, the age of eligibility, the present legislation and regulations conform fully in all respects tq', 'Orders for Returns\nthe positions taken and suggestions made by the representatives of the province of New Brunswick at these meetings.\n4.\tNo.']
Mr. Robertson (Parliamentary Assistant, for the Minister of National Health and Welfare):: Mr. Speaker, questions 53 and 54 as asked by the hon. member for Charlotte (Mr. Stuart) deal essentially with the same matter. In view of the extensive nature of the reply I wonder if I might have the permission of the hon. member and the house to table these replies?


Some hon. Members:: Agreedi.


Mr. Speaker:: Does the same request apply to question No. 54?


Frederick Greystock Robertson: Yes.


Mr. Speaker:: Agreed. Questions Nos. 53 and 54 are answered.



Mr. Sluart (Charlotte): 1.	How many applications for disability allowance have been received from persons in the province of New Brunswick since the Disabled Persons Act came into force?
2.	How many applications have been granted?
3.	How many individuals are now in receipt of disability allowances in New Brunswick?
Answer by: Hon. Paul Martin (Minister of
National Health and Welfare):
1. The total number of applications for disability allowance received in the province of New Brunswick from November 1954 to February 1956 numbered only 2,887.
2 and 3. The number of applications granted already exceeds 1,000. The number of allowances paid in April 1956 was 992 and will exceed 1,000 for the first time in the present month.


DISABILITY ALLOWANCES
Mr. Stuart (Charlotte): 1.	Was the government of the province of New Brunswick consulted regarding the legislation passed by the federal government in 1954, to provide allowances for disabled persons?
2.	Was the government of New Brunswick consulted with regard to (a) regulations:	(b)
definition of "total and permanent disability", as set forth in section 2, under the Disabled Persons Act?
3.	Did the government of New Brunswick, in 1954, at the time the regulations and definitions were being considered, make any suggestions or proposals for broadening the coverage of the act, that were not adopted?
4.	Has the government of New Brunswick at any time made representations to the minister as to the desirability of amending the legislation, the regulations, or the definition of "totally and permanently disabled", contained in the act?
Answer by: Hon. Paul Marlin (Minister of
National Health and Welfare):
1 and 2. The government of New Brunswick was represented by Dr. J. F. Mclnerney, minister of health and social services, and Mr. J. Ernest Anderson, chairman, old age assistance board, at a conference with all the provinces convened on January 26, 1954, to discuss the proposed federal legislation on the subject of disability allowances. Again on September 20 and 21, 1954, it was represented by Dr. Mclnerney and by Dr. Stewart, chief welfare officer of the provincial department of health and social services. In the course of: these meetings the New Brunswick representatives expressed their views as to the desirable scope and extent of the proposed legislation, the age of eligibility, the income ceilings which should be considered, and the provisions to be included in the regulations having to do with the definition of "total and permanent disability". The definition which now appears in the regulations was agreed to by all the provinces, including New Brunswick, after full discussion, in the course of which various suggestions made by the provinces were incorporated into the wording of the regulations.
3. No. Except in respect of one item, the age of eligibility, the present legislation and regulations conform fully in all respects tq

Orders for Returns
the positions taken and suggestions made by the representatives of the province of New Brunswick at these meetings.
4.	No.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Hahn: What was the total gross and net of federal debt in 1935, 1939, 1945 and 1954, and what was the gross and net debt of each province for the same years?



FEDERAL EXPENDITURES


Mr. McCullough (Moose Mountain): 1.	What was the total expenditure in each province for the fiscal year 1954-55 by the federal government, including the statutory subsidy and payments under the tax rental agreements?
2.	What was the total expenditure during the fiscal year 1954-55 by each federal government department and agency?



H.M.C.S. &quot;QUADRA&quot;  CATERING CONTRACT

Mr. Barnell: 1.	Is the messing for H.M.C.S. Quadra (formerly H.M.C.S. Naden III) provided by a caterer under contract?
2.	If so, is this contract awarded on an annual or other basis?
3.	Was the contract awarded after call for lenders?
4.	Is the contract on a per head per day basis?
5.	If so, what rates have been paid in each of the last three years?
6.	If not, on what basis and at what rates have ^payments been made during the last three years?



FEDERAL EXPENDITURES, QUEBEC

Mr. Lafontaine: Since April 1, 1944, how much money has been spent or paid in the province of Quebec, each year, by each department or agency of the federal government?



UNEMPLOYMENT INSURANCE COMMISSION, CAMPBELLTON, N.B.

Mr. Van Horne: 1.	Does the unemployment insurance commission have offices in the Rosenhek building in Campbell-ton, New Brunswick?
2.	If so, how long have they occupied such premises?
3.	What is the total amount of money paid for such premises to date?
4.	What is the current monthly rental?
5.	Does any other government agency rent space in this building?
6.	If so, what is the rental paid?
7.	Does any other government agency rent space elsewhere in Campbellton? If so, what rental is -paid?
IMr. Martin.]



TRANSPORT-USE OF PRIVATE RAILWAY CARS

Mr. Hamilton (Noire Dame de Grace): 1.	Between April 15, 1956 and May 28, 1956, what trips were made by private railway cars controlled by the government from (a) Ottawa to points in the province of Quebec; (b) points in the province of Quebec to Ottawa?
2.	Who was carried on each such trip?



PORT STANLEY, ONT.  FEDERAL PROPERTY

Mr. McBain: 1.	Is any land at Port Stanley, Ontario, owned by government departments? If so, what departments?
2.	How extensive are these property holdings and how are they defined?
3.	How much of this property, if any, is leased to any municipality or individuals or businesses, and who are the holders of such leases?
4.	For how long are such properties leased and on what terms?



MOTION FOR PAPERS


[Stage Direction]
Motion No. 81-Mr. Hodgson:
For a return showing a list of the names and head offices of all Canadian subsidiaries of United States corporations in Canada.
He said: Mr. Speaker, after talking to the parliamentary assistant I have learned this would probably entail a lot of work and it is quite all right to take that motion oil.
Mr. Speaker:: Is it agreed the motion be dropped?


Some hon. Members:: Agreed.
Motion dropped.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Elmore Philpott (Vancouver South):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. Will the minister inform the house how many of the provinces have intimated acceptance of the federal government's proposal to establish the first stage of a nation-wide system of health insurance, and how many more will have to agree before the government can go ahead with the scheme?


Hon. Paul Martin (Minister of National Health and Welfare):: Mr. Speaker, the hon. gentleman was kind enough to indicate yesterday that he intended to ask this question. Three provinces have announced that they would accept in principle the proposal made by the federal government for a system of

hospital insurance. Under the formula announced by the Prime Minister (Mr. St. Laurent) it requires six provinces representing a majority of the people in the country.


Elmore Philpott: May I ask a supplementary question? Does the minister consider that the appointment by the government of Ontario of a commission to report on hospital administration indicates early acceptance of the federal government's offer?


Paul Joseph James Martin: I could not say whether or not the decision of the Ontario government to appoint a hospital commission indicates any more than what was said by the premier of the province when the personnel of that commission were appointed. I can only say what I have said elsewhere, that I remain very hopeful.


Mr. Dufresne:: Could the minister give us the names of the provinces which have accepted?


Paul Joseph James Martin: Alberta, Saskatchewan and British Columbia.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, may I ask if the Minister of Finance or the Minister of Public Works is in a position to answer the question I asked yesterday concerning the dearth of mortgage money in the metropolitan area of Toronto?


Hon. Robert H. Winters (Minister of Public Works):: Mr. Speaker, the Minister of Finance did speak to me this morning about this question which I understand arose out of a telegram which he received. I might say that I have received the same telegram as have other members of parliament.


Donald Methuen Fleming: The metropolitan home
builders' association.
Inquiries of the Ministry was down somewhat from the levels of last year, we are nevertheless assured of a good level of completions for 1956. The matter is kept under constant review by the government. I might point out that at the present moment the government does not contemplate any direct steps to increase the flow of mortgage funds for housing purposes.


Donald Methuen Fleming: Is the minister not conscious of a contradiction in government policy as indicated by the express wish of the government through Central Mortgage and Housing Corporation to assist in the expansion of home construction, on the one hand, and the operations of the Bank of Canada with government approval of making money tight and dear, on the other hand?


Robert Henry Winters: Just before coming into the house I read the story in the Toronto Globe and Mail which referred to a contradiction, as did the telegram. I am aware of no contradiction. As a matter of fact, before we decided recently to raise the interest rate from 5j to 5J per cent we had detailed discussions with the Department of Finance and the Bank of Canada. I am satisfied that what we have done is in harmony with the government's over-all fiscal policy.



INQUIRY AS TO REDEVELOPMENT IN MONTREAL

[Stage Direction]
On the orders of the day:
Mr. Claude Richardson (St. Lawrence-St. George):: Now that the Minister of Public Works has had a good rehearsal, may I ask him a question? It relates to a question that I asked on May 16, as recorded on page 4003 of Hansard. Has the government of the province of Quebec asked the federal government to co-operate or participate with the city of Montreal and the Quebec government in a slum clearance or rehabilitation project? If not, has there been any communication between the federal and the Quebec governments on this question?


Robert Henry Winters: The telegram told of diffi- Hon. Robert H. Winters (Minister of
culties being experienced by some builders Public Works): The answer to the first part in obtaining mortgage credit. Briefly the of the question is no. Regarding the second situation is that up to the end of May, 1956, part, I have received a resolution passed housing starts, in centres of 5,000 population by the Montreal city council approving the and over, numbered 31,000, slightly above* project. After studying the terms of the the corresponding period of 1955. Housing resolution, I wrote to the premier of Quebec completions have run ahead of last year asking if the government of Quebec is during the same five months, 35,000 in 1956 prepared (a) to give approval as required as compared with 33,000 in 1955. In a few under section 23 of the National Housing Act, centres there is some evidence of a decline for a slum clearance project and (b) to enter in the volume of lending under the National into an agreement with the federal govern-Housing Act. At the end of the fifth month ment, as required under section 36, for a of this year, although the number of units housing project on the cleared site. My letter approved for National Housing Act loans to the premier was dated May 31, 1956.

Inquiries of the Ministry TRADE



POSSIBLE EFFECT OF TARIFF CON- CESSIONS ON TRADE DEFICIT

[Stage Direction]
On the orders of the day:
Mr. O. C. Trainor (Winnipeg South):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Would the minister care to comment upon what will be the possible effects of the tariff concessions to the United States under GATT which he announced recently upon the already formidable Canadian deficit in the balance of trade between the two countries?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, I am convinced that the concessions gained from the United States will have a considerable effect in stepping up our exports to that country. On the other hand, I think the concessions Canada has made to the United States will have a very limited effect upon the trade in the particular articles indicated, practically all of which are of a class or kind not made in Canada.



PARLIAMENT BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. George H. Hees (Broadview):: I should like to direct a question to the Minister of Public Works. Could the minister advise the house what steps have been taken during the past three weeks, the time since I first asked my question, to reduce the temperature in the cooking and serving area of the cafeteria to a liveable temperature?


Robert Henry Winters: The hon. member raised the question in the house, and it was brought to my attention as well by other people. Admittedly the temperature in the cafeteria on warm days is high.


Donald Methuen Fleming: It is about 110 degrees up there right now.


George Harris Hees: Particularly in the cooking and serving area.


Robert Henry Winters: The matter is being investigated, and we do propose to take some steps to correct it. There are several other parts of the building as well that need corrective action to be taken. They will be corrected at the same time, at the earliest possible moment.


George Harris Hees: Could I ask the minister when this action can be expected? It is now three or four weeks since the question was brought up, and the conditions are unliveable. I have


investigated them personally, and the minister would know from his own knowledge if he went into that cooking and serving area what they are like. Can he give us some idea of when this job will be started?


Robert Henry Winters: The design work is being undertaken now. While I am not in a position to say when the work will be started, I should think it could be within the next, say, four weeks.



CANADIAN FORCES ACT


Hon. R. O. Campney (Minister of National Defence) moved: the third reading of Bill No. 416, respecting the Canadian forces.
Motion agreed to and bill read the third time and passed.



EMERGENCY GOLD MINING ASSISTANCE ACT


[Stage Direction]
The house resumed, from Tuesday, June 12, consideration in committee of Bill No. 417, to amend the Emergency Gold Mining Assistance Act-Mr. Prudham-Mr. Robinson (Simcoe East) in the chair.
On clause 1-Application of act to 1955, 1956, 1957 and 1958.
Donald Methuen Fleming: In speaking on second reading last evening, I asked the government, through either the Minister of Finance or the Minister of Mines and Technical Surveys, to make some statement concerning government policy, the kind of policy that might, we hope, lead to a solution of the problems of the gold mining industry rather than simply depending upon stop-gap emergency palliatives of the kind embodied in the Emergency Gold Mining Assistance Act. May I ask the ministers if they will now make a statement of government policy in that regard? That statement should embrace government policy in regard to the price of gold so far as that is determined by the international monetary fund; second, their efforts to persuade the government of the United States .to increase the price at which it is prepared to buy newly mined Canadian gold and, third, the policy of the Canadian government in purchasing newly mined gold for the Canadian government's own reserves.


Mr. Prudham:: Mr. Chairman, I think that the question the hon. member has brought up with regard to the government's policy of holding gold reserves could much better

be directed to the Minister of Finance when his estimates are before the house. So far as the efforts of the government to persuade the United States to increase the price of gold are concerned, I am sure that everything possible has been done in that regard. The fact that the United States is willing to buy all the gold offered at $35 per ounce gives a stability to the gold mining industry that does not exist in any other section of the mining industry or any other industry that I know of.
Hon. members have urged that the United States be requested to abandon that policy and to free the market for gold. As yet I have never heard anyone in the gold mining industry suggest that would be a good thing. At the present time the so-called free market for gold is below the fixed price of $35 per ounce. The high prices that have been quoted as having been obtained on the free market in years past have, I think, been related to conditions of panic that existed in various parts of the world and in no sense could be considered a stable market. The present quotation of between $34 and $35 an ounce in Switzerland would of course be decreased by the cost of transportation of gold to that country and the various service charges involved.
I believe that at the present time the fixed price of gold is really a stabilizing influence in the industry. We all admit it would be much better for the industry if the price were raised, but the raising of the price of gold would simply mean that the United States would be willing to give more United States goods and services for an ounce of gold.


Donald Methuen Fleming: Or dollars.


George Prudham: Or dollars. I contend that is a decision that rests with the United States. All producing countries would favour an increase in the price of gold, but in the final analysis it is a decision that the United States will have to make.


Donald Methuen Fleming: I am not at all unmindful of what the minister has called the stabilizing effect of the assured market for gold production in the United States. Undoubtedly it has been a supporting and guaranteeing factor of considerable importance to the gold mining industry that there has always been that assured market at the price of $35 U.S. per ounce. Whatever has been said in times past about freeing the market has never been put forward by anyone, as far as I am aware, with any thought of losing the benefit of the assured market and assured price in the United States.
13, 1956	4987
Emergency Gold Mining Assistance Act Mr. Prudham:	The hon. member for
Spadina advocated that last night.


Donald Methuen Fleming: I am not sure that was involved in his advocacy of freedom in the marketing of gold. We have had extensive discussions in former sessions about permitting freedom in the marketing of gold, and a couple of years ago the government did move in the direction of permitting Canadian producers to market some of their production in the so-called free market. But I wish to say that I do not think anyone is proposing that we should lose the benefit of the assured market in the United States. We are mindful of the fact that it is a good thing to have an assured market for production when it is so important to this country that gold production be maintained.
As I understood him, the minister said that the government had taken some steps in the direction of seeking on the part of the United States government some increase in the price at which it is prepared to buy newly mined Canadian gold. Would the minister just confirm that understanding and indicate to the committee what steps have been taken in that regard? Is the Canadian government today urging upon the United States administration a policy of increasing above the prevailing $35 U.S. per ounce the price that the United States administration is prepared to pay for newly mined gold?


George Prudham: Mr. Chairman, that matter has been the subject of discussion on different occasions. I cannot tell when the last occasion was, but the matter has been discussed several times.


Mr. Michener:: Following up the question asked by my friend, I have a supplementary-question to ask. I think we should press the minister for a specific answer to that question which he has just been asked. We know that Britain, France, South Africa and the minister himself are interested in an increase in the-United States price of gold. The minister now tells us that he does not know when the. government last made an attempt to consider that matter by conference with or request to the United States and others who are necessary parties to this change in price. I think the house is entitled to know exactly what steps the government has taken in the last 10 years-during which time this price has been covered by international agreement *-to urge or request others to join in an increased price, and to know when the last, attempt was made.


George Prudham: Mr. Chairman, that is a fairly broad question. I cannot give that information in detail. I will say this, however. The
4988	HOUSE OF
Emergency Gold Mining Assistance Act last time President Eisenhower visited our capital I personally spoke to him about it.


Daniel Roland Michener: Perhaps the Minister of Finance could assist his colleague in this matter?


Mr. Harris:: I beg the hon. member's
pardon?


Daniel Roland Michener: I submit, Mr. Chairman, that the house is entitled to a better answer than we have had.


Donald Methuen Fleming: The Minister of Finance did not hear your question.


Daniel Roland Michener: The specific question was this. When was the last attempt made by this government to interest the necessary parties in an increase in the fixed price of gold by joint agreement?


Walter Edward Harris: Mr. Chairman, if I may do so, I should like to answer this question instead of my colleague the Minister of Mines and Technical Surveys. I am not aware of any action that has been taken by this government with respect to asking the United States government to increase the price of gold. The answer which was last made on this subject in the house was made by my predecessor about three years ago now. At that time he made it quite clear that he realized it would be in the interests of the gold mining industry and the gold producers of Canada that there should be a higher price for gold. But he also made it clear that that was a matter which rested solely in the hands of the United States government which purchased the gold and that he did not feel that we should interfere in what he at that time termed a domestic matter in the United States. That answer was made by him in the course of a certain amount of questioning by my friend the hon. member for Eglinton, and I think it was his policy until he left office. Certainly it has been mine since I entered into the office on July 1, 1954.


Daniel Roland Michener: Would the minister go a little bit further and indicate whether the government has considered the matter since then and whether it does not think that the time is ripe to bring this matter up again? After all, there are more countries involved than the United States, although everyone appreciates that their concurrence is necessary. I should think that very substantial allies would be found in a move in that direction, and what is the government thinking about that at the present time?


Walter Edward Harris: I think I have made my answer. Surely, everyone recognizes that a decision of the United States government to fix the price of the gold content of the United States
[Mr. Prudham.l

dollar is within the sole competence of the United States government. We have many friendly and close contacts with that government in many fields. This is one however in which, in so far as I am concerned, while a certain amount of this kind of discussion might be desirable, I do not think it is the kind of thing on which we ought to approach them formally when, as a matter of fact, congress fixes the price of gold and it would not be a matter of the administration making a decision. It would be a matter of the administration recommending to congress and congress taking the appropriate action to increase the gold content of the dollar. As I say, I think that is wholly a domestic matter, and that probably we would have a better advantage in our other transactions if we did not enter into that particular one at the moment.


Donald Methuen Fleming: Surely, the price the United States is prepared to pay for newly mined Canadian gold is not merely a United States domestic matter. Surely, it is a matter of interest to Canada as well as the United States. It is certainly a matter of interest to the United States, but I do not understand that it excludes the interests of this country where those interests of this country definitely lie with the gold mining industry in this regard. It seems to me there is some contradiction in the statements we have had here in regard to government policy.


Walter Edward Harris: No, there is not.


Donald Methuen Fleming: Let us clear that up then, because it is evident from the statement made by the Minister of Mines and Technical Surveys-


George Prudham: I will do that right now. My colleague has spoken about the fiscal policy of the government. This department has nothing to do with policy in so far as the holding of gold is concerned or negotiations with the United States in regard to the price of gold. The Department of Finance does that.


Donald Methuen Fleming: The minister spoke earlier about some discussion he had had with President Eisenhower when he was here last time, which was about a year ago. What was the substance of his discussion with the President? What did he ask of the President in relation to the price of gold?


George Prudham: He was non-committal.


Donald Methuen Fleming: Did the minister ask the President if he was prepared to recommend an increase in the price of gold? Was that the substance of the minister's request?


George Prudham: Yes; I asked if there was any likelihood of an increase, and he was very non-committal.


Donald Methuen Fleming: It is indicated by the Minister of Mines and Technical Surveys that he considers an increase in the price of newly mined Canadian gold would be in the interests of Canada and would maintain the gold mining industry. I think it has been made quite clear by the Minister of Finance that during the two years he has been minister, and prior to that time, the government was not prepared to make any representations to the United States administration in that regard. I think it is about time the Canadian government decided what its policy is.
What is the interest of Canada in this respect? The statement that this is a matter of purely United States domestic concern completely ignores the fact that this is a matter of very lively concern to the Canadian economy. I do not at all follow the remarks of the Minister of Finance, Mr. Chairman, when he says that the price the United States is prepared to pay for gold is established by congress, and for that reason the Canadian government should not make representations to the United States administration in that regard. Surely, that is a very far-fetched kind of theory, because many of the fields in which representations are being made, as we understand it, on the part of the Canadian government to the United States administration at Washington are fields in which action is required or action has been taken by the United States congress. Of course, action on the part of congress would be required to change the price that the United States is prepared to pay for gold, but surely that is no reason why representations ought not to be made by the Canadian government to the United States administration, if it is in the interests of this country to seek an increase in the price the United States government is prepared to pay for newly mined Canadian gold. It is perfectly obvious, Mr. Chairman, there is no likelihood of the administration at Washington making any recommendation to congress in this regard if the Canadian government is not prepared to support the interests of Canada and of the Canadian gold mining industry by making representations to the United States administration at Washington to the same effect.
I think it has been made quite clear here today that one minister considers Canada should seek on the part of the United States administration an increase in the price they are prepared to pay for newly mined Canadian gold. It is perfectly evident at the same time that the Minister of Finance, and I take
13, 1956	4989
Emergency Gold Mining Assistance Act it the rest of the government, concurs in a policy of remaining silent and ignoring this problem and doing nothing to lay the interests of Canada before the United States administration at Washington with suitable representations in that regard. If that is the lackadaisical kind of attitude the Canadian government is going to take we shall be obliged to go on with the kind of measure now before us-hand-to-mouth, stop-gap, emergency, palliative measures-and ignore the essence of the problem and the need for facing up to it and seeking a solution.
If the Canadian government does not see fit to make any kind of representations in this matter to the United States administration at Washington, our nearest neighbour, I suppose there is not much use expecting this government to make any representations in the interests of the Canadian economy at meetings of the board of governors of the international monetary fund.
We do know that the South African government is not labouring under any such apathy or inhibitions. The South African government, as one of the great gold producing countries of the world, has not hesitated to lay its case before the international monetary fund and to request action on the part of that fund to increase the price of newly mined gold; but the Canadian government apparently is content to remain apathetic, lackadaisical and silent. Well, Mr. Chairman, that policy is just not good enough. It is that policy evidently that is making it necessary to continue measures of the kind we have before us. Of course, the gold mining industry should not be permitted to suffer further in the face of the apathy and indifference of this government. We shall have to have measures of this kind as long as the government is going to shirk its duty and ignore its responsibility; but believe me, Mr. Chairman, this government is going to have to face the strongest kind of criticism of which the opposition is capable if the government is going to go on ignoring the problem and the need of finding a solution.
Why should the Canadian government be so indifferent or so proud that they will not even take this matter up with Washington? There is just one minister, and I give him credit for it, the Minister of Mines and Technical Surveys, who had the courage and the realistic appreciation of the plight of the Canadian gold producers, and with that the plight of their employees and the communities dependent upon those mines, to lay this problem even briefly before President Eisenhower when he was here and to ask the president what the United States administration might be prepared to do.
4990	HOUSE OF
Emergency Gold Mining Assistance Act
It is not to be wondered at that the President was non-committal when the Canadian government has not the good sense to back up that kind of approach by the Minister of Mines and Technical Surveys. I give the minister full credit for that approach. I just wish that among his 19 colleagues there were some who had realism and concern enough about the plight of this industry and the employees and communities that are dependent on it to support him and make some representations at Washington.


Mr. Herridge:: Mr. Chairman, last evening when I was speaking on second reading and dealing according to information I had received with the plight of some miners in northern Ontario who were laid off in certain mines and could not obtain employment in others because they were over 40 years of age, the minister asked me this question:
Do you actually know of instances where that has taken place?
At that time I did not have my correspondence on the desk and on checking it over I find I was given this information: I find that nine miners were laid off at Kirkland Lake Gold last November and were not able to obtain employment at any mine in the area because they were over age. Their seniority ranged from 12 to 25 years and none of them is eligible for a pension.
My point was, of course, that according to the information given to me these nine married Canadian miners with long service in the mining industry are not able to obtain employment because they are over 40 years of age and their places will likely be taken in the near future, as will the jobs they wish to obtain, by single immigrants who are being brought out to this country.


Mrs. Shipley:: Mr. Chairman, I would like to reply to this specific point raised by the hon. member for Kootenay West. In the first place these miners' places will not be taken by anyone. This was an unfortunate occurrence and the only one of which I have any knowledge in the whole Kirkland Larder gold camp. The ownership of the particular mine to which the hon. member referred changed hands and part of the new policy was to reduce the total number of employees, not to increase at all. These nine unfortunate miners were laid off.
I do not want the impression left that they were just over 40 years of age and therefore could not obtain employment in other mines. Inexperienced miners, those who have never worked in mines, are not taken on if they are over 40 years of age as a general rule, but experienced miners are taken on all the time if they are over 40 years of age. However,


there is a limit to the age at which other mines will employ even experienced miners and that is the circumstance in this case.


Mr. Hodgson:: Mr. Chairman, I would like to ask the minister a question. Why was the amount of subsidy on gold reduced in the 1949 formula and again in the 1955 formula when the cost of producing gold is still increasing?


Mr. Dumas:: Mr. Chairman-


The Chairman:: Order.


Armand Dumas: -I do not intend-


William Alfred Robinson: Order.


George Prudham: Mr. Chairman, the formula has been changed several times since the inception of the act in 1948. In the early years the mines were given an option of choosing a base year. These formulas are very complicated and I do not think it is advisable to go into them in detail. This last formula does not extend assistance to any mine whose costs are below $26.50 but it does apply to a large number of ounces; thus it gives greater assistance to the mine with high costs and especially a mine that has a large production of comparatively low grade ore. It is designed, as I say, to help the high cost mines and also to conserve our resources by encouraging the mining of lower-grade ores in many instances.
The mining associations-there are several -have all commended us for this last formula. They say it is fair; they would like to see more money made available, but they say it is very fair and possibly more fair than any formula that has heretofore ever been presented.


Clayton Wesley Hodgson: That would be the 1955
formula you are speaking of?


George Prudham: Yes. There has been no complaint from any mining company or from any mining association that I know of.


Armand Dumas: Mr. Chairman, I do not intend to take up more time of the committee than is necessary and I shall be brief in my remarks. However, I cannot allow this legislation to pass without saying a word on behalf of the gold miners, the ordinary working men, the businessmen and the small property owners of my constituency. The people of northwestern Quebec were not only pleased when the Emergency Gold Mining Assistance Act was enacted in 1948 and extended thereafter; they were greatly relieved because one of the principal industries of the district was able to continue its operations. They have been grateful to the government. Although they were convinced

that some form of assistance was forthcoming, they appreciate the fact that this legislation is passed at this time.
From what has been said during the course of this debate it is evident that hon. members on all sides of the house are satisfied that this legislation should be extended for another period of two years. The Emergency Gold Mining Assistance Act is evidence of the recognition by the government of the importance of the gold mining industry in the national economy. The welfare of the gold mining industry has always been regarded by the government and by parliament as of great importance. For this I wish to express my thanks for the fact that the government has come forward at this time with this legislation which is encouraging to industry and to residents of gold mining communities. We are all grateful for that.
When this legislation was enacted in 1948, and when it was extended and amended from time to time, there was little or no opposition. For this the residents of the gold mining communities are certainly grateful to all hon. members on all sides of this house. However, for the benefit and information of those who may have some doubt as to the wisdom of this legislation, I wish to repeat what I have said on numerous occasions when I have had the privilege of speaking on this matter.
It is true that there was no definite opposition to the measure, but from time to time hon. members have expressed the opinion that there have been some abuses in connection with this form of assistance and that it did not benefit the miners and communities dependent upon the industry as it should have done.
In 1947 the average annual wage of a miner working in a Canadian gold mine was $2,277; the corresponding figure for 1950 was $2,763, an increase of 21-3 per cent over 1947. In 1954 the average wage of a miner working in a Canadian gold mine was $3,400, an increase of 49 per cent over 1947. For the period for which figures are available from the dominion bureau of statistics, that is from 1948 to 1954 inclusive, we find that the total increase in wages and salaries paid by the gold producers was equivalent to more than 85 per cent of the total assistance paid by the Canadian government.
During that same period the gold mining industry paid over $40 million in federal, provincial and municipal taxes, which item alone represents 50 per cent of the total assistance received. During the same period the total amount of wages and salaries paid by the gold mining industry amounted to $443 million. The aggregate cost of supplies,
13, 1956	4991
Emergency Gold Mining Assistance Act plant and equipment, buildings and machinery in the same period amounted to $383 million. These figures are impressive and it is important to take them into consideration. While wages, supplies and freight are the principal items of cost in operating a mine, they are by no means the only factors which contribute to an increase in the cost of operation. In addition, account must be taken of improved health and welfare services, increased rates of workmen's compensation and many other items which total some quite substantial amounts.
We must be reminded that the gold mining industry is the only industry which has to absorb these increases in the cost of operation without being able to pass on to the consumer any portion of the increased costs. In order to give a striking example to hon. members of this house and to establish the extent to which operating expenses have increased in the gold mining industry during the last 15 years I should like to cite some figures taken from the annual report of an important gold mine in my own home town of Malartic.
During the year 1940 the gross revenue of this mine was $3,424,000, substantially the same as for 1955 when it amounted to $3,473,000. However, in 1940 the operating costs were $1,319,000 with a net profit of $1,568,000. In 1955, notwithstanding more efficient mechanical equipment and other economies, the costs soared to $2,527,000 while the net profit shrank to $261,000.
The price of gold has been kept down to the 1934 basis of $35 U. S. per ounce while the cost of production has gone away up. In view of this it must be realized that the industry has no alternative but to accept government assistance even if this assistance falls short of compensating for the rise in production costs.
Now, Mr. Chairman, I would like to say something regarding the dividends which are being paid out from time to time by Canadian gold mines. The remark was made the other day that in one year the dividends paid out by Canadian gold mines amounted to $18 million and that these gold mining companies received $16 million in subsidies from the government. I did not verify the amount of $18 million paid out in dividends by the Canadian gold mines during 1954, but I accept this figure. However, I wish to say this, in order to put the record straight. The gold mines that did not alter their dividend rates and those which are paying the bulk of this $18 million in dividends are those which are not in the receipt of assistance.
Whatever dividends are being paid these days by most of the gold mines are taken
4992	HOUSE OF
Emergency Gold Mining Assistance Act from surplus earned from other sources than their actual operations. Others are squeezing their dividends from accumulated surplus earned during the good years before the second world war. Many other gold mines are not paying any dividends at all. How long they will be able to continue to do that, we do not know. For how long they will be able to ask their shareholders to be patient, we do not know either. They certainly cannot tell their shareholders that this is a new way of operating a business.
From 1948 to 1954 inclusive, out of 27 Quebec gold mines which received assistance from the government, 15 never paid any dividends. Five others paid less than $500,000 each during those seven years. The six other remaining gold mines paid dividends on a reduced rate, and it is important to note that during that same period those six gold mines paid over $75,000 in increased wages alone, over and above what they received in assistance from the government.
The shareholders in the Canadian gold mining industry number many thousands and the great majority of them are small shareholders. We must keep that in mind. I will go so far as to say that the government, both in its role of tax collector and in its role of representative of the broader interests of all Canadians, has the responsibility to hang on to the gold mining industry, and hanging on to the gold mining industry means helping the shareholders, the employees, the small property owners, the farmers and the business people dependent on gold mining.
I also wish to remind the members of this house that the gold mining industry, important as it is, is only one branch of the metal mining industry of this country. This mining industry gives employment to some 130,000 men, who in turn are the supporters of more than 500,000 people. So, in trying to establish some comparison between the assistance allocated to the gold mines and that which is granted to other key industries, it would be only fair to keep those figures in mind.
An advance in the price of gold, I will admit, is the only permanent solution to the problem of the Canadian gold mines; but, as our country is not the largest producer or the largest seller of the precious metal, we cannot dictate a price and much less influence buyers by refusing to sell. We are faced with this problem, that the price of gold can be raised only by joint international action in which the initiative rests with our neighbours to the south, the United States of America.
The Canadian gold mining industry is passing through very difficult years, and the only final solution lies in a realistic valuation for gold in terms of the inflated United States


dollar. The argument that this would result in further inflation and would help the communist nations more than those of the free world is only wishful thinking.
Meanwhile we are all aware that the production and sale of gold are of great importance to the Canadian economy. As it is, and until there is an increase in the price of gold, we must agree that the government will have to continue its assistance to the gold mines of our country.


Herbert Wilfred Herridge: I wish to thank the lady
member for Timiskaming, apparently the unofficial parliamentary assistant to the minister, for kindly reading her well-prepared answer to my question. But I want to say that, when a member asks a question of the minister, I think he is entitled to a reply from the minister. I wish to say also that the hon. lady member did not deal very fully with the situation. There is much more to it than that. But we are going to leave that until the Minister of Labour's estimates come before the house.
Yesterday I asked the minister some other questions. Would he mind answering them now, not forgetting Mr. Ramsay?


George Prudham: My hon. friend asked me a number of questions yesterday on second reading. This morning I reviewed Hansard and made a note of those questions. The first question, I believe, related to a certain Mr. Ramsay, and I am going to ask my colleague the Minister of Labour to speak to that in a moment or two.
In regard to the employment of immigrants in the gold mines, my "unofficial parliamentary assistant" has dealt with that to some extent, in relation to the problem in that particular area. This morning I had my secretary call the department of immigration to find out how many new immigrants had come to Canada recently to work in the mining industry. These are the figures for the last ten years from January 1, 1946, to December 31, 1955, inclusive:
Nova Scotia	 60
New Brunswick	 19
Quebec	 467
Ontario	 1,349
Manitoba	 140
Saskatchewan	 66
Alberta	 435
British Columbia	 335
Yukon and Northwest Territories ....	18
2,889
That makes a total for the ten years of 2,889 people. That averages about 288 per year, and that is not a figure that should alarm anyone. That is for all mines. I believe that any immigrant who comes to this country and does an honest day's work,

whether it be in agriculture, forestry, in the factories or in the mines, is a real asset to this country.
Some time ago my hon. friend from Timis-kaming brought up the question of employment and labour conditions in mining areas and she had a word with my colleague the Minister of Citizenship and Immigration. He suggested that it would be a worth-while experiment to employ Indians in the mines. That matter was taken up with the secretary of one of the mining associations, and he relayed the suggestion to members of that association. I was very pleased indeed, on a recent trip to the gold mines of northwestern Ontario, to see quite a large number of Indians working in the mines along with the other people and doing a good job.
I do not think there is any cause for alarm about new people coming into the industry. They will help to rejuvenate the industry rather than to destroy it. I think two or three of my hon. friend's questions were related to the same subject. He spoke of the problem of over-age employees of a mine that has closed down having difficulty in finding new employment. That is common in the mining industry generally. It is true in the coal mines and all the way through. But I believe that the mechanization that is taking place in the mines is going to make it less likely that people over 40 years of age will, as my hon. friend has said, have extreme difficulty in finding new employment.
The old hard slugging type of labour in the mines is gradually being done away with and the efficient operation of the mines depends on skill, on men who have experience in operating machines. I am sure that if a mine found it necessary to hire additional personnel and had a choice between one man 40 or 50 years of age, with long experience and who was well qualified in a technical way, and another person without experience they would favour the man with experience. I believe that is the tendency so far as employement in the mines is concerned.
There is no doubt that the mining industry as a whole is suffering from the lack of skilled labour, and I do know that various individual mines and associations of mining companies are trying to recruit skilled employees from Great Britain and Europe. When my colleague, the Minister of Labour, speaks, I believe he will mention that fact and will also tell about the efforts of his department to place in steady employment those people who happen to have lost their jobs because of a shut-down.


Mr. Gregg:: Mr. Chairman, last night, as my colleague has said, the hon. member for
13, 1956	4993
Emergency Gold Mining Assistance Act Kootenay West asked the following question as found at page 4975 of Hansard:
Is Mr. William Ramsay, who has gone to Europe to recruit labour for the mining industry, still an employee of the federal Department of Labour?
Mr. William Ramsay has been an employee of the unemployment insurance commission and has been the manager of the office of that commission at Kirkland Lake. Mr. Ramsay has been working in very close association with the mining industry and knows very well the qualifications required so far as workers are concerned. It happens that he is now approaching or is at the age of superannuation. Because of his knowledge the Canadian mining association made special representations asking that Mr. Ramsay be granted permission to proceed overseas to recruit workers for the mines. I want to point out at this juncture that the most important part of that recruitment was not wholly or solely intended for the gold mining industry. The purpose of his trip was primarily to secure workers for the base metal mines.


Herbert Wilfred Herridge: At whose expense?


Milton Fowler Gregg: I am coming to that. Mr. Ramsay was granted leave of absence without pay for three months to so act and he has gone overseas. His remuneration and expenses are being taken care of by the mining association. Before he went overseas he discussed the whole question with the officials of the department of immigration in Ottawa, and in his work overseas he is working from and in close association with the offices of that department in the United Kingdom and in Europe. That is the story with respect to Mr. Ramsay.
My colleague has indicated the comparatively small number of workers who have come here from other countries to work as miners in Canada, and it was because of the great need that the mining association asked that this step be taken. I have looked over the other matters mentioned on page 4975 with regard to the conditions of labour, to which the hon. member for Kootenay West referred. I am inclined to think that the reports he has received are perhaps a little bit overdrawn. There are several safeguards. One is that organized labour is going to see to it that workers in the mines, whether they come from overseas or wherever they come from, are not going to be forced to accept unduly low wages for their work in the mines. Another safeguard is the eagle eye of the provincial departments of labour under whose jurisdiction these workers come. Finally, of course, there is the freedom of action that still exists for workers in Canada. If a worker in a mine finds that conditions are as bad as my hon. friend has had reported
4994	HOUSE OF
Emergency Gold Mining Assistance Act to him, there is nothing to forbid that worker from finding work elsewhere in Canada or in other mines in Canada. Therefore I should like to stress my feeling, that there is no justification for fear with regard to the dangers that the hon. member for Kootenay West foresees in bringing in a few more workers.


Herbert Wilfred Herridge: I thank the minister for his explanation. I do not foresee danger in bringing in immigrants as workers provided they are not going to be used in positions that could be filled by men such as I have described, particularly when they are older men with their homes and investments already established.
I want to ask the Minister of Mines and Technical Surveys another question. As the one responsible for administering this act, would he do what he could to bring about some arrangement with the companies seeking assistance under the act whereby any company receiving assistance will give consideration to the particular circumstances involved where a man may be laid off from one mine because it has closed down and because he is over age he cannot obtain employment in another mine? He has got his investment there as a Canadian citizen of long residence, has worked for a long time in the industry, and I think he should receive every consideration. Is the minister willing to go into that situation with the 'mining companies concerned to see that everything possible is done to protect these Canadian mine workers who are affected?


George Prudham: The purpose of the act is to keep these mines alive and to provide employment for miners and the dependent communities. Under the act we cannot wield a big stick. As my colleague has stated, labour relations come under the provincial governments. So far as this act is concerned, we only pay out assistance on the basis of the cost of production within the terms of the act.


Mr. Pickersgill:: Perhaps the hon. gentleman would allow me to say one word. Whenever any special representations are made to the department of immigration by any industry that there is a shortage of workers of a particular kind for that industry, we always go to the Department of Labour and find out if, according to their records, there are any people anywhere in Canada who would be available to do these things before we look for immigrants, and we intend to continue to do so. The reason I am speaking at all is to say that I have reminded any employer or group of employers who have come to see me in the last year from any industry that there are in Canada an increasing number of Indians who have got


to find employment other than their traditional employment, and I should like to express my gratification at the response I have had everywhere to that request, and from nowhere more than from the mining industry.


Herbert Wilfred Herridge: I am very glad to know it.


Daniel Roland Michener: Mr. Chairman,-


Mr. Barnett:: I wonder whether the hon. member for St. Paul's was intending to pursue a different line of questioning?


Daniel Roland Michener: Yes.


Thomas Speakman Barnett: I was very much interested in the question which was raised yesterday on second reading by my friend the hon. member for Kootenay West and also in some of the replies he received today from the ministers concerned. I think it is important -as I perhaps said the last time this matter was up for consideration-that this question of the standard of living and the working conditions that are going to apply under the circumstances where the public funds are being paid out should be of great concern to the members of this house. The Minister of Mines and Technical Surveys earlier made reference to some figures, and mentioned the number of immigrants who had been brought into the country to work in mines. He stated that was the total for all classifications of mines. However, I think it might perhaps be fair to say that the admittedly substandard or-and I think this was the word used by the Minister of Mines and Technical Surveys yesterday-lower wage rates and the admittedly somewhat poorer working conditions that apply in the gold mining industry when contrasted with those in the base metal mines have probably resulted in a large proportion of those immigrants who have come to work in mines ending up in the gold mining camps. This would be generally true in the mining industry as a whole.
I know-and I mention this because it verifies in part the claims that were made by the hon. member for Kootenay West last night-that in one of the gold mining camps in central British Columbia which I visited last summer-actually it was part of a holiday trip on the way home from the end of the session-that that particular matter was drawn to my attention in conversations I had while I was there. By way of explanation, I might say that this was in a gold mining camp in which I had lived for eight or nine years, and that I was talking to people whom I had known since 1933, and who had been continuously since that time-and probably prior to that time in some cases

engaged in one manner or another in the gold mining

industry. That was the comment I heard in that particular camp from a good many quarters, from people who were intimately familiar with all that had gone on in the period that had elapsed since I had left there. That comment was in effect that the mining operation was being flooded by recent immigrants to this country.
I think perhaps it is understandable that the experienced miners of British Columbia who have been in this country over a longer period of years may have gravitated to other mining camps engaged in other phases of the mining industry where wages and conditions may be somewhat better. I think it is an unfortunate situation-and one that should give us pause-to realize that there is a good deal of truth in what the hon. member for Kootenay West was suggesting last night, namely that these people who come as strangers to our land all too often seem to end up in the least desirable situations and occupations that are to be offered in this country. Some might argue that there is perhaps a certain rude justice in that situation and that they should be obliged to do a bit of the dirty work before they graduate into the more lucrative and desirable occupations. Nevertheless there is a tendency-and I have seen too many concrete examples of it here and there; and in this reference I may say I am not referring particularly to the gold mining industry-to exploit these people coming as newly landed immigrants to our shores.
I think it is certainly right that the hon. member for Kootenay West should have raised this particular question while we were considering a bill to extend the provisions of the Emergency Gold Mining Assistance Act. I think we all recognize that a great deal of what was said a short time ago about the situation of the gold mining industry, in the analysis that was given to us, is perfectly true. Anyone who has been associated with the industry in any way or who lived in a gold mining area back in the days of the early 30's recognizes the basic economics of the situation that exists today in relation to the fixed price of gold. But nevertheless, every time this question comes up, as far as I am concerned I feel that every emphasis should be given to the fact that, if we are going to allow this money to be spent from the consolidated revenue fund of Canada for the assistance of this industry, our primary concern should be a humanitarian one.
The place of gold in our economy is a subject that has already been discussed and I would not like to argue with some of the things that have been said both by hon. members from the government side of the house
13, 1956	4995
Emergency Gold Mining Assistance Act and by some of the hon. members of the official opposition who have an interest in and a knowledge of conditions in the industry. But certainly I feel that the hon. member for Kootenay West was fully justified in bringing the matter directly, in the form of questions, to the attention of the Minister of Mines and Technical Surveys and also in indicating that this question was one which should be of concern to other ministers such as the Minister of Citizenship and Immigration and the Minister of Labour.


Mr. Eyre:: Mr. Chairman, I hope you will not call me to order too often. I had intended to speak on the motion for second reading of this bill, but yesterday I was in committee from 10.30 o'clock in the morning until after ten o'clock in the evening and I did not get an opportunity to do so. Hence if I am a little bit out of order in speaking on the bill, I hope hon. members will let me go on.
Since the introduction of the Emergency Gold Mining Assistance Act in 1948 and since my election to this house in 1949 I have never taken part in any previous debates on this particular subject. At that time I felt that the house did not want too much repetition and that there were others who were probably more qualified to speak than was I. However, at this time I think probably I should say a few words because this may be the last opportunity that I shall have to speak on this legislation. I say that for several reasons. I might not be here at the next parliament-and the bill is to give an extension to 1958-maybe for political reasons and maybe for others. I should therefore like to get a few things on the record.
May I say this to the minister at this time. You and your department are doing a good job as far as the gold mining industry is concerned. I want it to be understood right now that any figures I quote and anything else I say are going to apply strictly to my constituency. I am not going into the situation in Canada as a whole. That matter has been very well covered by my colleague the hon. member for Villeneuve. I am not going to tell you what a fine town Timmins is. It has been there for a long time and it is one of the biggest gold mining towns in Canada. This can be verified by those in this house who have visited it. To those who have not done so, may I say that I hope they will come up there some time and look over our modern town. My constituency is predominantly a gold mining area, except for one asbestos mine over at Matheson which came into production a few years ago. In my opinion we have weathered the storm very well. We have not lost too much in
4996	HOUSE OF
Emergency Gold Mining Assistance Act production nor have we lost too much in population. We are not as well off as we were prior to 1948, but by and large the town of Timmins is in good shape and some of the mines are in pretty fair shape, too.
I want to say at this time that the exten-tion of this gold mining assistance act is welcome news to the mines in my community and to the people as a whole. Gold, as some of you know, was third in 1955 amongst the metals mined in the province of Ontario. The Porcupine mines shared in that to the extent of about 45 per cent of Ontario's whole production. You can see from that that gold mining is rather the major and basic industry in Timmins.
Yesterday or the day before there were figures put on the record, and I am not going to get into a controversy with anybody about figures. If I happen to quote figures and they happen to be out a little bit, that is to be understood. In his very fine presentation on behalf of the gold mines I noticed that the minister made a reference to four people being employed on the surface for every one employed underground in the mine. This reference appears on page 4916 of Hansard for June 11, 1956. I think what the minister had in mind was the local vicinity. I am asking that question because I think I have read somewhere, although I could not find it this morning, that for every man employed underground in a gold mine to take out a ton of ore, in the neighbourhood of nine people were supported in other industries and services on the surface. I am not trying to correct the minister in any way whatever, and I may need to be corrected on my own figures.
I noticed in yesterday's Hansard that the hon. member for Spadina spoke for a few minutes about the minting of gold coins. This question was brought up in the house two or three years ago and at that particular time I supported the minting of gold coins. I advocated that we should try it. I notice that you can now carry gold coins with you. In fact, I happened to see the first one in quite a few years the day before yesterday.
I believe it was the hon. member for Kootenay West who referred to immigrants who were brought in to work in the mines. I believe this question was well answered by the Minister of Labour. I have been asked several times why this was allowed, and why the department brought in these immigrants, and I did not know the answers. I understand the policy better now. So far as Mr. Ramsay is concerned, I have known him personally for over 40 years, and they could not have picked a better man to go over to select
(Mr. Eyre.]

help for the mining industry. It was also my understanding that this help was for the mining industry as a whole. I do not agree with the hon. member for Kootenay West that the immigrants live in bunkhouses and rooming houses. It has been my observation over the past few years that the men who have come into Porcupine from other countries to work in the mines, a few from England, Scotland, not so many from Ireland, and from Germany or Italy, have all made fine citizens and have bought homes. I think probably the hon. member had in mind the single men who come to that area. It is my understanding that they are bringing married men and their families as well.


Herbert Wilfred Herridge: I was informed that they were largely single men.


Karl Arliss Eyre: You spoke of that, but you did not speak about the married men.


Herbert Wilfred Herridge: I did not know anything about them.


Karl Arliss Eyre: I noticed that, according to the newspapers, a fellow in England wanted to come to Canada to work in the gold mines. He was talking to Mr. Ramsay and said he wanted to come. The next day he said, "I cannot go; my wife will not let me. What am I going to do?" Mr. Ramsay said, "You had better take your wife's advice and stay at home." I understand they are bringing married men over here.
Mention was made of the salaries. As I said before, I am going to deal with one mine and I am not going to put the name of the mine on the record. I did not get these figures from the mine but I got them from a source connected with the mining industry. These figures refer to one of our larger mines but they apply to most of the mines in my constituency. In the year 1947 the payroll was over $3 million. In 1954 the payroll was close to $4-5 million, and the average number of employees during all these years runs about the same. In fact, they have 105 more employees now than they had in 1947. Basing it on those figures for 1947 and 1954, I would say that in my opinion every man received a fairly good increase in wages. The figures refer to some members of the staff but do not include management. I am not going into the wage question and try to say what the wage should be.


Herbert Wilfred Herridge: What rate per hour are they getting now?


Karl Arliss Eyre: I cannot put that figure on the record at the moment because I do not happen to have it with me. If you base your calculation on 1,100 men and take a payroll of

$3J million and then take 1,100 men with a payroll of $4-5 million, you will be close. That is just about the way it runs all the way through.
I noticed also that according to yesterday's Hansard the hon. member for St. Paul's spoke. I must say that the hon. member for St. Paul's is quite qualified to speak about gold mines. I know of several with which he is connected in my constituency. The hon. member has dealt with the international monetary fund, and so on. I have no intention of getting involved in a debate on that subject but I will say, sir, that the hon. member for St. Paul's put some fine figures on the record which are general and apply in large part to the mines in my constituency.
The hon. member spoke about the average age of the miners. Having been connected with mining directly and indirectly for a number of years I have built up a substantial library on mining, especially gold mining. I have in my hand some figures covering the pre-war period and up to the end of 1954 as they apply to some of the mines in Porcupine. The average age prior to the war was 35-16 years. The average age in 1954 was 39-09 years. There may be something in what the hon. member for Kootenay West said, because I notice the highest average age in any one mine in 1954 was 41-2 years and the lowest average was 34 years. This, of course, refers to Porcupine only.
I have some further figures which can be verified. Porcupine, including all mines, employed 7,300 men in 1951. At the end of 1954 they employed 6,315 men. There has been a decrease as far as the number of employees is concerned in my constituency.
I must say the new formula that was put in last year is in my opinion the best formula we have had throughout the life of the Emergency Gold Mining Assistance Act. I would like to see more money available, but be that as it may, I hope the day will come before the act expires when we will not have to ask for any assistance for the gold mines.
Hindsight is so much easier than foresight, but if there had been a formula of this type in operation at the beginning it would have done away with a lot of our troubles. When I refer to our troubles I refer more or less to the controversy concerning wages and things of that nature. There were mines that were receiving a large amount of subsidy, and when you saw headlines in the papers that a mine had paid out two or three million dollars in dividends and received $1 million in subsidy, the reaction right off the bat was that the government was paying 50 per cent of the dividends and that is not a true picture at all.
13, 1956	4997
Emergency Gold Mining Assistance Act
With reference to the nine men or nine families that were supported by the man in the mine-that may include him also-I would like to leave a thought with you concerning what this means to other communities outside the immediate mining community. If we take 50 per cent of the number of people who are living off the production of a mine as representing those who do not live in the community, in my opinion it affects the prosperity of a great many other communities.
I hold in my hand figures concerning a particular mine. In 1951 this mine purchased $2,422,340 worth of supplies from outside the immediate community. I wish to put on the record the number of communities that benefited from those purchases. In the neighbourhood of 50 communities in Ontario, 14 in Quebec, and St. Boniface, Winnipeg, Port Alberni and Vancouver benefited. You can readily see, therefore, how the purchases of mining communities affect communities outside the mining area. In the good old days- and I mean when the price of gold was high and things were going along pretty well-one mine up there purchased outside supplies to the total value of $5,818,000.50. That is a lot of money to distribute in various communities located outside the mining area, and I notice that the figures for an 8-year period are about the same.
With reference to dividends, I do not know what some people consider a proper dividend to receive on money invested. I guess it is human nature to want to receive all that one can. I have here figures for the year 1951 concerning some mines in my constituency and I notice the yield has been greatly reduced since 1951. I shall not give the name of the mine, but the highest yield on the investment was 7-05 per cent. I find the lowest yield on the investment was 1 [DOT] 80 per cent. This particular mine employs a considerable number of men and at the moment I do not think it would pay any dividend, although of course I do not know.
When the new formula came in I thought it would probably adversely affect the cost of production of mines in my constituency, but I find that it has helped them. I would like to go into that matter for just a moment if I may be allowed the time, Mr. Chairman, and if the hon. members are willing to bear with me; but before I do so let me say a word concerning the number of ounces produced.
The figures I have are not right to the ounce. My constituency produced 110,114 ounces of gold in 1953, a decrease of roughly 17,000 ounces from 1948. In 1955 we produced nearly 84,485 ounces of gold, which was a decrease of approximately 8,796 ounces during the
4998	HOUSE OF
Emergency Gold Mining Assistance Act years in which the Emergency Gold Mining Assistance Act has been in effect. If you consider the figures for 1948 and 1953 it will be seen that the difference in production is not too great. Taking the 11 producing mines in my constituency-there was one I did not consider because there has been an amalgamation in the last two or three years and I could not separate it-four mines show an increase in production since 1948 while six show a decrease. The increase amounted to over 50,000 ounces while the decrease totalled 71,000 ounces, which left a net difference of approximately 20,000 ounces.
These mines are doing a fine job in trying to keep their costs down. Every man employed in the mines is trying to find ways and means of keeping costs down and inventing ways to do things more cheaply.
For just a moment I should like to deal with the question of secondary industries in northern Ontario as a whole and in my own constituency in particular. This matter has been referred to by the hon. member for Cape Breton South, the hon. member for Timiskaming and others, and it has been said that the government should do something to assist in the establishment of secondary industries. I should like to put on the record the fact that two years ago a survey was made in my constituency by most capable men under the direction of the Minister of Defence Production. A report was submitted, and I have hopes that something will be done in the near future.
In addition others have been looking into the possibilities of establishing secondary industries which would be beneficial to Canada as a whole. An association has been formed in northern Ontario to cover the area down to Sault St. Marie and Sudbury. The office is in North Bay and operations are carried on under the direction of the provincial government, which is paying $10,000 a year toward the cost of keeping up that office and employing an administrator, an investigator and so on.
The town of Timmins has an aggressive industrial commission which works in conjunction with the Porcupine chamber of commerce. In the past few months the town of Timmins employed a firm of experts in Montreal to come in and make a survey, working in conjunction with the local industrial commission, the commission set up in North Bay and the dominion government. I have hopes that something will be accomplished in the Porcupine area. If that should come about it would be of assistance also to the hon. member for Timiskaming. We have a few secondary industries, but they are small and are related more to the local scene.


Reference has been made to subsidies and assistance for the gold mines. I appreciate that, and I appreciate also how much it appears to be costing the taxpayers. However, actually I do not think it is costing the taxpayers anything and I shall try to prove my point. The figures I am going to give do not come from the Department of National Revenue or any department of government. In the last couple of years alone over 6,000 miners working in the mines in my constituency have paid nearly $2 million in income tax. I do not know what the other local people would have paid in the same period, but it would be a considerable sum. Then when we consider the industries which are supported by the gold mines we would find that the income tax there would be substantial. The amount received under the Emergency Gold Mining Assistance Act in my area in 1953 was a little over $3 million; in 1952 it was around $2 million, and in the years prior to that it was over $3 million.


The Deputy Chairman:: I am sorry to have to interrupt the hon. gentleman, but it is my duty to advise him that his time has expired.


Karl Arliss Eyre: Perhaps it is just as well that you are closing me off.


Daniel Roland Michener: Mr. Chairman, now that we have heard from the hon. member for Timmins there would seem to be support for the proposition we made to the minister that he should consider amending this bill and restoring the rates which were in effect a year ago. We heard from the hon. member for Ville-neuve, who knows a good deal about this industry, having had long experience as a surveyor, and I believe he agrees with us when we say that while changes in the formula might have to be made from time to time, the substantial reduction which took place last year, amounting to 44 per cent, should be eliminated. On the forecast of next year's payments it will be a reduction of 50 per cent in the course of two years. However, that appears to be the government's fixed intention.
In tribute to the gold mines I wish to put on record one or two facts from the report of the Ontario committee on gold mining, which was referred to last night. That is the committee under the chairmanship of Professor Knox which reported last year to the Ontario government. It collects much useful and up to date information about gold mining in Ontario.
One figure in which I think the committee will be interested is the increase in wages paid by gold mines. The average wage over and above the payment of this assistance has

increased 50 per cent, from about $2,200 to $3,200 a year. For the 10,600 gold miners in Ontario that is something like a $10 million increase in annual wages over the period during which this assistance has been paid, so one can see that the increase in wages paid in Ontario alone is more than the entire subsidy in all Canada in the same period. The entire subsidy is estimated to be $9,300,000. The increase in wages is something like $10,600,000 over the wages paid when the subsidy first came into force. This indicates that the gold mining industry is helping itself as well as receiving this emergency assistance which it needs from the government.
There is a very interesting table, too, on the composition of the men in the different gold mining camps of Ontario, and I commend it to those who have spoken about the age groups. It is an interesting fact that of the 10,988 gold miners who are tabulated and classified according to age at page 84 of this report 2-2 per cent were over 65 years of age, which I think bears out what has been said, that the mechanization of the mines makes it possible for men to carry on after their years of greatest physical vigour. Some 3-5 per cent were between the ages of 60 and 64. I understand that in the civil service a man is considered ineligible after 65, and in some places after 60, but here we have 3-5 per cent of the gold miners in Ontario between the ages of 60 and 65. The table is there for those who wish to see it, and I shall not take the time of the committee to read it. As I say, 64 per cent of the miners were under 44 years of age, but the fact that they are distributed over the entire working period indicates the stability of these communities and the social value of this measure, which will help to save these solid communities where men work throughout their entire working days.
Now I wish to ask one question in concluding my remarks on this section. The minister indicated that five gold mines closed during the past year when the reduced rates of assistance were in force. I should like to have the names of the five mines which found it necessary to close their operations.


George Prudham: There were two mines
closed in British Columbia. One was the Nickel Plate mine and the other the French mines of Kelowna Mines Hedley Limited. In Quebec there were the Powell Rouyn Gold Mines Limited and the New Senator-Rouyn Limited. There was also Young-Davidson Mines Limited in the Matachewan area of Ontario.
13, 1956	4999
Emergency Gold Mining Assistance Act


Daniel Roland Michener: Not the Matachewan Consolidated Mines?


George Prudham: No.


Donald Methuen Fleming: May I ask the minister whether any consideration has been given by the government to the revision of the scale? I am not thinking so much about the basis for the formula because, as has been indicated, there has been some reason to think that the formula as such is more satisfactory than the preceding formulae. Could it be made a little more generous?


George Prudham: We think this is working out quite satisfactorily. We do not think we would be justified in asking parliament to spend the taxpayers' money to assist mines whose costs are below $26.50 per ounce. Mines whose costs are above $26.50 per ounce are receiving in most cases as much as they did previously under the other formula.


Donald Methuen Fleming: How many mines now in operation is it estimated will not be in operation a year from now?


George Prudham: It is very difficult to answer that question, as my hon. friend knows, but our officials say there will possibly be two.


Donald Methuen Fleming: Two more casualties?


George Prudham: Two casualties, mainly because of the exhaustion of ore.


Donald Methuen Fleming: There was one other matter touched on last night on which nothing has been said yet. The Minister of Finance is not here, although he was here at the opening of the committee sitting this afternoon. There was a matter raised last night in regard to government purchases of gold for various reserve funds that the government maintains, whether in the Bank of Canada or in the exchange funds. Can we have some statement of government policy in this regard?


George Prudham: I believe the government reserves of gold are somewhere about $1 billion. My hon. friend from St. Paul's mentioned the fact that last year I suggested that he was willing to gamble the taxpayers' money. I think it is a matter of exercising good judgment as to how large a reserve the government should hold. If the United States were to take the advice of the hon. member for Spadina, abandon the fixed price for gold and throw the world on the free market again, I am a little doubtful whether it would be considered good business for the government to have as large a hoard as we have right now. On the other hand, if the United States government were to accept the advice of the hon. member for Eglinton and raise the price of gold the government
5000	HOUSE OF
Emergency Gold Mining Assistance Act would stand to profit. I think it is just a matter of exercising prudent judgment as to the level at which the government reserves of gold should be maintained. If the fixed price for gold should be abandoned by the United States and the price went down, I am sure my hon. friend would criticize the government for having such a large stock on hand and losing money. On the other hand, if they should raise the price I think he would say we should have had a larger hoard.


Donald Methuen Fleming: I am a little surprised at the minister's remarks. It does not sound to me as though he entertains much confidence in the future of gold. If he does not entertain much confidence in the future of gold, I think it is going to be a factor in qualifying the outlook for the gold mining industry in this country. I had hoped from what the minister said in his remarks yesterday that he did have a sense of confidence in the future of gold. It is an important industry in this country. If there is no future for gold, there is no future for the gold mining industry in this country.
It seems to me, as I endeavoured to say last night, that the Canadian government could do something quite useful for the outlook for this important industry by showing its confidence in the future of the commodity they are producing. Nobody is proposing any vast increase in the holdings. However, as I indicated last night, while there has been a slight increase in the government's holdings of gold in each of the last four years my information is that in 1956, that portion of it which has elapsed thus far, the government's total gold holding has decreased. That is not a very good advertisement. That does not suggest that the government has confidence in the future of this important Canadian commodity.
I think the minister's last remarks this afternoon are disappointing. Has the minister nothing to say as Minister of Mines and Technical Surveys to indicate his confidence in the future of this Canadian commodity, a commodity that is still being sought by every country in the world and which is a factor in the fiscal and trading policies of every country in the world, whatever its system of government, and that includes the totalitarian governments as well? Is the Canadian parliament now to be told that the government is lacking in faith in the future of gold and is timid about making purchases of gold for holding in reserves that the government keeps anyway? After all, it is only a question whether the government holds gold or United States dollars in that fund.


The minister conjures up the possibility of the United States government withdrawing from its policy of purchasing-


George Prudham: The hon. member for Spa-dina recommended that last night.


Donald Methuen Fleming: I do not think he recommended that last night at all. I think what the hon. member for Spadina recommended was that more leeway should be given to the Canadian mines to market their product, whether in the free market or in the United States. After all, some of us on this side had to press the government hard before the government embarked several years ago on the policy of permitting sales of gold in the free market, and we had to complain afterwards that the terms upon which the government was permitting those sales in the free market were very rigid. So rigid, in fact, and so stiff were the terms that they really nullified to a substantial degree whatever benefit the mines would have had from that limited right to sell their product on the free market.


George Prudham: Are you suggesting that
situation still obtains?


Donald Methuen Fleming: There was a good deal of criticism in regard to rigidity, and I think I was one of those who urged on the government that they should be much less rigid in the application of that policy, that they should remove some of the fetters that were still imposed upon the gold producers and let the producers enjoy as much benefit as they could from the still limited basis upon which they were entitled to enter the free market.
But let us come back to the point with which I was dealing. The minister conjures up the possibility that the United States might abandon its policy of purchasing newly mined gold at the price of $35 U. S. per ounce.


George Prudham: I did not suggest that.


Donald Methuen Fleming: The minister puts that before us and says that if the United States administration did so we would then be left holding a lot of gold and there would be criticism over our holding so much gold. If the Canadian government is going to hold itself aloof from all communication with the United States administration in this regard, then I suppose we are going to be operating in the dark. If the Canadian government would measure up to the responsibilities that I tried to describe earlier this afternoon it would not be very hard to learn what is United States policy in this regard or what are the possibilities of a departure from that policy.
I am sure there is no evidence that has come to the attention of any member of the government to suggest for one minute that the

United States administration is going to abandon or modify its policy of purchasing all newly mined gold offered at a fixed price of $35 U.S. per ounce. The modification we were urging that the Canadian government should seek was an upward adjustment in the price. I was glad to hear the hon. member for Villeneuve support this afternoon what we have been saying in that regard.
But it is all a question of what is good sense in relation to the total Canadian interest, and I think the Canadian government has an opportunity here to show its confidence in the future of this industry. It would have a good effect if the Canadian government, instead of contemplating a reduction in its holdings of gold as reserves, would say, "We have confidence in the future of this important Canadian commodity and we are going to increase rather than reduce our holdings of gold in our reserve fund".


Karl Arliss Eyre: I did not intend to suggest to the government for one minute that gold miners should be exempt from income tax or any other tax, because I know they want to pay their fair share. However, when the hon. member for Yukon was speaking yesterday with regard to a situation that exists in his particular constituency, his remarks gave me the thought of trading dollars. That was all. That is why I put that on the record. I should like to refer for a moment to our gold reserves. I am not going to say anything about the monetary fund because I do not know enough about it. I leave that to others who are much more capable than I am.
A few months ago a very responsible mining man made the statement at a public meeting that it looked as if the government was hoarding gold, not selling any to other countries but storing it, waiting for a higher price in order to profit from the production of the gold mines. I cannot speak for the government but I do not think any government would do anything like that. I have faith in gold. I think and hope that at some time in the near future it will come back and play its proper part in the Canadian economic sphere, and pay its own way. But I would suggest this. If the government does not export gold or sell any and if the price should go up, shall I say to $50 or $60 an ounce, the government would be making a considerable profit from the gold mines. If that should happen, consideration should be given to handing that profit back to those mines with a string attached, namely that a percentage of it would be given to the men who were employed in the mines at that time.
Secondary industry is one thing I wanted to mention. I spoke about it for a second and
Supply-National Revenue then I lost the trend of thought. As I said, I did not want to open up discussion of anything that was not relevant. However, there is one thing that is relevant to secondary industry, and that is the gas pipe line in northern Ontario, which is going to go right through my constituency. I believe this pipe line will have a big effect in attracting secondary industries into my constituency and into other constituencies in northern Ontario.
I do not want to put on the record any suggestion as to price, but it would appear to me that with a pipe line that is some 400 miles closer to the source of supply than, shall we say, cities like Toronto or Hamilton, we should enjoy a cheaper price for that fuel in my constituency. Time alone will tell whether or not we shall do so. If we enjoy a cheaper price, that fact will help us to compete, having regard to transportation problems, because we have to transport our products greater distances in order to reach a market.
That is about all I wish to say at this particular time. I hope those who are here when a similar bill comes before parliament in 1958-and I refer to members of all parties

will give it the good consideration that they have given it during the past seven years and will support it if the gold mines should need assistance.


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


Some hon. Members:: Now.


Mr. Maclnnis:: By leave.


George Prudham: the third reading of the bill.
Motion agreed to and bill read the third time and passed.

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



DEPARTMENT OF NATIONAL REVENUE

[Stage Direction]
285. General administration, $3,348,014.
Edward Turney Applewhaite: I am told that the resolution appears at page 52 of the estimates, the details commencing at page 381.


Mr. Monteith:: Mr. Chairman, the estimates of the Department of National Revenue have been before the estimates committee. There were some six meetings of that committee and some 136 pages of evidence were taken.

Supply-National Revenue I think it was a worth-while study of the department, but I do not think it was as complete as it might have been.
One thing we know, of course, is that the committee was not permitted to hear witnesses. It occurs to me that it would have been well worth while if we could have had appear before the committee representatives of the Canadian tax foundation. During the course of the sittings of the committee we discussed certain of the tax provisions and regulations, but we did not discuss the actual collection of taxes. If we could have had before us representatives of this foundation I think we could have had much more information put before us.
I do not propose to go into the details as set forth in the items other than to say this. I would bring to the attention of the committee one item which appears to be somewhat out of line. I shall be quite frank and say that, on requesting information throughout the sittings of the committee, we had very clear answers as to the expenditures involved. However, I should like to mention the fact that the total law costs in items 289 and 290 are up from $220,000 to $335,000. That is an increase of $115,000 or over 50 per cent. There was an explanation-


Mr. McCann:: Mr. Chairman, may I interrupt the hon. gentleman for a moment?


Jay Waldo Monteith: Yes.


James Joseph McCann: In discussing these estimates in former years we took them, as a rule, in two divisions. It is well known that the Department of National Revenue is made up of two divisions, one being customs and excise and the other taxation, each with its own deputy minister and its own administrative staff.
I agree entirely with what the hon. gentleman has said so far, but the item that has been called has to do with the general administration of customs and excise. In the interests of good order and in accordance with the former procedure, if we deal with customs and excise estimates first and then come to taxation I think we would probably get along much faster. The officials I have before me have to do with customs and excise. They probably know little with regard to the taxation division and probably would not attempt to give any answers with reference to it. If the hon. gentleman would just wait until we clear the other division and then make his remarks with reference to taxation, it would suit our convenience much better.


Jay Waldo Monteith: That is perfectly all right, Mr. Chairman. I would just say this in passing. I have not many remarks to make

concerning the customs and excise division other than that we had a full explanation from the officials of the department. It was evident that there had been a definite increase in the volume of business. As a consequence the staff has had to be enlarged.
I should, however, like to say this, and I think this comes into the over-all picture and probably could be mentioned at this time. I should like to point out my remarks as recorded at page 853 of the proceedings of the estimates committee. This was on Tuesday, May 29. These remarks are to be found at the end of the committee meeting, actually, but my remarks had to do with the over-all picture of the department, including the customs and excise division and the income tax division. These were my remarks:


Jay Waldo Monteith: I would just like to make an observation. I notice the estimates for 1952-53 for the whole department were $49,714,000-odd, whereas the actual expenditure was $47,313,000-odd dollars. In other words, the excess of estimates over expenditures was roughly $2,400,000. There was an excess of estimates over expenditure in 1953-54 of $1,200,000, and in 1954-55 of $1,700,000-odd. My only thought was that this worked out to an average of around 3 per cent, and I think Mr. Sim mentioned that figure in his evidence. It occurs to me that if we had an excess of estimates over actual expenditures in all government departments on total estimates of $4,500 million there would be an estimated surplus of something in the neighbourhood of $135 million. I am just wondering if that is close enough estimating. I know it is nice to have a cushion, but I am wondering if the taxpayer likes you to have a cushion to that degree. There would also probably be supplementary estimates.
I shall read what the minister said in discussing that:


Hon.   Mr. McCann@: We submit them, that is true. They are gone over by the treasury board and the Department of Finance and they consider them in their best judgment, but those are the amounts that are submitted.


Mrs. Fairclough:: Would it be fair to ask you how much of a cushion you had before the treasury board knocked it down?


Hon.   Mr. McCann@: In some years we have had them cut down as much as 10 per cent. It depends a good deal on the department. There are certain estimates put in covering undertakings that we decide should not be gone ahead with this year, and out it comes.
My only point there, Mr. Chairman, is that although I realize that this estimating is done some time before and it is difficult to project it into the future, I do not see why the estimates should be continually over the expenditures. As I understand the evidence that was presented to the committee, even in the customs and excise division each year they have had more expenses than they had originally expected but they still have a surplus. In other words they must be definitely estimating for a surplus which, in my opinion, is not fair to the Canadian taxpayer.

Now, sir, I think that is about all I have to say in these opening remarks, but I shall come back later when the income tax division is being considered.


Ellen Louks Fairclough: Mr. Chairman, during the discussion which took place in committee I brought up an item which I should like to place on the record now. In the first instance I had spoken about exemption from sales tax for church publications, and at that time the minister made this remark as reported at page 736 of the committee report:
Of course, this is a question of policy and, as you have already said, the matter was brought up when the finance estimates were up. Our estimates have to do entirely with administration. I can say that the matter has been given consideration, and when the bill is brought up this year I think you will see there is a change being made that in part at least will meet your request.
Now, Mr. Chairman, I wonder if the minister, since that date, has had anything further on this subject? I wonder whether the bill to which he referred is now on the order paper, and if not when we may expect it? In the same vein, I should like to ask him whether he has made any representations to the Minister of Finance, as he indicated he might do, with reference to the sales tax on chancel furniture.


James Joseph McCann: I have brought the matter to the minister's attention, and if any changes are made they will be made when the Excise Tax Act comes up as a result of the budget discussion.


Ellen Louks Fairclough: This year?


James Joseph McCann: This year.


[Stage Direction]
Item agreed to.
Customs and excise divisions-
Ports-
287.	Operation and maintenance, $24,616,357.
Mr. Green:: On item 287 I notice there is quite a large increase of over $809,000, and in the supplementary estimates there is a further amount of $100,000, making an increase of nearly $1 million. Can the minister explain the necessity for such an increase?


James Joseph McCann: This vote covers some 424 offices with a total staff of close to 6,531 persons, and shows a net increase over last year of $809,815 or 3-4 per cent. The objects under this vote which show an increase are principally salaries and wages, which increased by 4-6 per cent. Of this increase, $219,000 is for 75 new positions which have been provided to satisfy unforeseen demands for staff during the course of the next fiscal year. Incidentally, 20 of those positions have been filled up to February 29, 1956. The balance is to cover the salaries of 162 additional officers as well as the normal annual increases and some reclassifications.
Supply-National Revenue
Then in freight and express there is an increase of $5,000; publication of regulations, memoranda and annual report, $5,000; repairs and upkeep of buildings and works, $25,000; light, power and water charges, $2,000. If you break that down, the operation and maintenance vote shows a balance of appropriation not required-oh, that is something left over. That accounts for the principal increases.
The hon. member mentioned the supplementary estimates, vote 659, and that is for the continuation of construction of our facilities at Dorval and Malton.


Howard Charles Green: Why is it necessary to have such an increase in the personnel? I see that according to page 388 of the estimates book the number has gone up from 6,294 to 6,531 or an increase of about 240 employees.


James Joseph McCann: That is very easily explained. It is the result of the five-day week. We have to have a six days per week service in most places, and in some places seven days per week. In addition, there is the increase in the normal business of the country in imports and the like, and it takes more people and more officers; it takes more people because the ordinary people do five days' work and you have to provide for the extra days.


Mr. Fulton:: Does the minister's last statement mean that at most ordinary customs ports you can get things cleared on Saturday? That is not my impression.


James Joseph McCann: No, but at border points it is sometimes very necessary to supply that service for more than the normal five days.


Edmund Davie Fulton: That is true of the ordinary border crossing points and relates to vehicular traffic, but the bulk of the ordinary customs clearance that is usually done at one of the ports of entry, that is where large shipments would have to be cleared, is not done on Saturday. If I am correct, I cannot follow why the five day week would impose the necessity for this large increase in staff.


James Joseph McCann: It is not ordinarily done on Saturdays. There may be special circumstances, such as repair machinery or something like that which is imported, where an officer would have to go out and clear it. The vehicular traffic is much greater on the weekends than any other part of the week. Approximately 16 million vehicles came through border points in the whole of 1955, and in order to service them it takes more people longer hours.


Mr. Nowlan:: This question probably should have been raised on item 286 because it deals with the operation of the ports, but I should

Supply-National Revenue like to draw a relatively minor matter to the attention of the minister. It has to do with the operation of the train between Boston and Saint John. The Canadian Pacific Railway has changed the operating schedule of this train-and I admit immediately that I have not personally had any experience with this whatever-and I have been told by people who have come off that train recently about the bitter complaints made concerning the hour at which they are awakened in the morning for customs inspection when coming from Boston to Saint John. Apparently there is a difference from what has prevailed heretofore in the operation of the train.
People have suggested that they believe it would be a relatively easy matter, and whether or not that is so is for the minister to determine, for customs inspection to be made more efficiently and certainly to the better convenience of the large number of passengers coming from Boston to the maritime provinces. I am drawing it to the minister's attention. I know he will ask to have a report made, and possibly something can be done to improve the situation.


James Joseph McCann: Mr. Chairman, we will take note of that objection, look into the situation and try to improve it.


Howard Charles Green: Mr. Chairman, in the details on page 388 it shows that the vote for the last fiscal year was $23,806,542 but the actual amount spent or estimated to be spent was $23,153,000. That is a difference of about $650,000 between the vote of last year and what was actually spent. In addition to that gap of $650,000 we have an increase of about $810,000 in this year's vote. That makes a difference of about $1,400,000 between the amount spent last year and the amount it is estimated will be spent this year. That looks as though there must be some padding, or just what is the explanation for that difference? The minister dealt with an increase of approximately $809,000 but there is another $650,000 to be explained.


James Joseph McCann: Well, there are a couple of factors there, Mr. Chairman. It may well be that there have been delays in filling positions which we asked for; perhaps we cannot get the right type of people but we have to provide for them in the estimates. We have to provide for them because there is no other way of getting the money when you estimate in November of one year what you are going to need until a year from the next March. That is the way it is done; your fiscal year is the first of April to the end of March. You are estimating for about 18 months there. We base it on the average
[Mr. Nowlan.l
growth over the years and the number of people we will need. That takes up quite a lot in salaries.
In addition to that you have to make provision in your estimates for an increase in salaried positions for the period of the next 18 months, so all told it cannot be estimated to the dollar and nobody expects that. We do attempt, however, to estimate as accurately as possible based upon our experience in former years.


Howard Charles Green: Why would not the increase of $809,000 be added to what was actually spent in the last fiscal year rather than added to what you estimated for the last fiscal year?


James Joseph McCann: Well, Mr. Chairman, that gives the actual expenditure and, as a matter of fact, that is good policy because we have saved money on what we received; yet we have to go ahead and provide for the normal increases there will be in position and wages. That is the principal item of all our expenses. If you go over them you will find this whole department is entirely administrative. I think 89 per cent of all the money we ask for is to pay in wages. Our next largest expenditure is to provide facilities in different parts of the country. Now, out in your part of the country we have spent money down at the Pacific highway. At Coutts, Alberta, it cost us about $1 million on account of changed conditions.


Howard Charles Green: That is not under this vote.


James Joseph McCann: No, but I am referring to former years and the changes that have taken place because of changed conditions. As the result of the development of the oil field in northern Alberta trucks by the thousands come over United States highways, enter Alberta at Coutts and go up to Lethbridge, Calgary and on to Edmonton. That is a changed condition of transportation that has obtained over the years. That obtains not only in the case of freight transport but it obtains in passenger transport.
There are similar items at other places. Down at Lacolle in the province of Quebec we spent about $1 million for increased warehousing on account of the great traffic there from various states through Lacolle and Rouses Point and these other places leading into the city of Montreal. That obtains at Windsor, Fort Erie, Sarnia and at these places, Lacolle and Rouses Point; out in your country, at Coutts, Alberta and down the Pacific highway.
Last year I was down at the Pacific highway and I saw truckloads of cars going through there that had been exported by General Motors. They entered the United

States at Detroit, went clean across the country and came up north into British Columbia at the Pacific highway. We therefore have to have facilities to carry on that business, and it is increasing all the time.


Mr, Green:: That is all true and we are glad to see the development, but what I am criticizing is the method of estimating. Last year the department estimated it would require $23,806,542 or-


James Joseph McCann: Where is that, on page 388?


Howard Charles Green: Yes. The department spent
$650,000 less than that. In other words you overestimated last year by $650,000. You must have known that all these developments were taking place; they did not all happen overnight.


James Joseph McCann: But take the other item right above that, "Less amount recoverable from firms requiring special services, $500,000." No one could tell whether that was going to be $5,000 or half a million.


Howard Charles Green: But you estimated that you would need $24,306,542 and you only spent $23,153,000. This year you are estimating for $25,316,357, and I am just asking if it is not possible to get a little closer to the actual figures. It seems to me with a gap of $650,000 last year between what was voted and what was required the department may be quite a bit too high this year in the amount they are asking for. The Department of National Revenue of all departments should be able to estimate these figures accurately because this department has to raise the money.


James Joseph McCann: Well, Mr. Chairman, it
appears to me I am being criticized for saving money.


Howard Charles Green: No, you are being criticized for asking for more than you need.


James Joseph McCann: Well, I know, but that is
only $800,000 out of $25 million, and that is about as close estimating as you can do.


Howard Charles Green: But $800,000 is a lot of money.


James Joseph McCann: Certainly it is, but what is it relative to? It is relative to the total expenditure we are asking here of $24,616,357, or $25 million without the receipts we take in. So I think that is as about as close estimating as I would ask the department to do. It works out better to have your estimates such that they will cover your expenditures than to have supplementary estimates or have to find some way of getting more money to carry on. There is a principle that is endorsed by the treasury board of changed allotments. We do not have the money in our department to switch it from one vote to another.


Howard Charles Green: If the minister goes through the estimates of the other departments he 67509-317i
Supply-National Revenue will find some of them are estimating a good deal more closely than this. I might say that other departments have been subject to criticism on the same point, and I think it will be found to run through the estimates of all departments. We find for example that last year a department asked for $1 million for an item and spent only $750,000; they come back this year and ask for $1,125,000. To the opposition it looks as though some sort of padding is going on. The net result is to budget for more money than is actually required. If these figures were brought more nearly in line it might be possible to reduce taxation.


Mr. Cameron (Nanaimo):: Mr. Chairman, I do not know whether this is the right item to bring up what I have in mind. I have received representations from the Vancouver island turkey improvement association with regard to the tariffs on turkeys coming in from the United States. This is an ad valorem duty and they term it a fair weather friend, because the tariff is at its peak when it is least needed whereas the low rate operates when turkeys are overly abundant in the United States.
They present figures to point out that the expectation in the United States is to have an increase of about 6 per cent this year in the production of turkeys as compared with last year, which may well result in a surplus of turkeys in the United States. Because of low prices there the tariff on turkeys being imported will not be effective in protecting the Canadian producers.


James Joseph McCann: May I suggest that this matter be brought up when the Minister of Finance is dealing with his items. We simply administer these things; and while I will not say it does not make any difference to me what is the tariff rate, the fact is that I am supposed to put it into effect whether it is 5 per cent or 105 per cent.


[Stage Direction]
Item agreed to.
Customs and excise divisions-
Ports-
288.	Construction or acquisition of buildings, works, land and equipment, $1,119,500.
Howard Charles Green: Would the minister explain this item.


James Joseph McCann: The net increase in this vote over last year amounts to $249,350. The increase in this item is attributable to two factors, one of which is an increase of $167,500 over last year covering new construction of office buildings and temporary warehouses. The department intends to construct 11 office buildings and three warehouses at international boundary crossings at a cost of

Supply-National Revenue $332,500, as opposed to our program last year which called for the construction of three new office buildings and alterations to three existing office buildings at a total cost of $165,000.
The other factor is an increase of $218,350 over last year covering a revote for office buildings and housing where the sum of $225,500 was placed in the estimates this year as opposed to $7,150 last year. The difference is accounted for by the fact that extremely inclement weather conditions prevented contractors from completing several projects, one of which was at Snag Creek, Yukon Territory, where the contractor was unable to commence a contract in the sum of $100,000 due to early winter conditions, and as a result the entire project had to be delayed until this year, when actual construction was only in its early stages.
Another reason was the inability to close property purchases in time to permit construction at certain points, notably Carway, Alberta and Aldergrove, British Columbia As a result it was necessary to carry these projects over until this year. To offset these increases is a decrease of $100,000 in warehouse facilities at airports this year, and a decrease of $6,000 in our new construction of housing.
Major projects are referred to the Department of Public Works, and I have in mind that the Department of Public Works built warehouse facilities at Coutts, Alberta, .and Emerson, Manitoba, but they do not undertake the construction of houses for the staff. These houses may run from $10,000 to $15,000. Take the case at Snag Creek in the Yukon Territory. This is only a little town and living accommodation was necessary, and construction costs in the Yukon are two or three times as much as in other places.


Howard Charles Green: Does the Department of Public Works do all the construction work for the Department of National Revenue?


James Joseph McCann: That is just what I was trying to explain. They build any office buildings we may require but we have authority, either under the Public Works Act or from the treasury board, to construct buildings at border points in the way of temporary quarters or housing accommodation.


Howard Charles Green: Why should not that be done by the Department of Public Works, especially when Central Mortgage and Housing Corporation is under that department?


James Joseph McCann: They have expressed the opinion that they do not wish to take on these smaller jobs.


[Stage Direction]
Item agreed to.

Customs and excise divisions-
Ports-
659. Construction or acquisition of buildings, works, land and equipment-further amount required, $100,000.
Howard Charles Green: Is this for work at Dorval?


James Joseph McCann: Yes.


[Stage Direction]
Item agreed to.
Taxation division-
289.	General administration, $2,702,629.
Jay Waldo Monteith: The estimates committee
dealt in some detail with the estimates of this department, and as a consequence I do not intend to ask too many questions concerning the individual items. However, I would like to point out that the law costs under item 389 have increased from $80,000 to $165,000, and under item 390 from $140,000 to $170,000, a total increase from $220,000 to $335,000. The increase amounts to $115,000 or over 50 per cent. When we queried the minister in committee we were told that there were one or two special cases. This is quite a sizeable increase and possibly the minister could give us some more details.
I understand that these law costs are involved in different places across the country where the department has instigated proceedings. I am wondering how the representatives of the legal fraternity are chosen, if there is a preferred list from which the lawyers are picked. It appears to me that the thinking of the Department of National Revenue, taxation division, has changed considerably in the last number of years. When a taxpayer or his representative went to the district office he received every courtesy, which is still the case, but there seems to be a change of thinking. Now it is, how much can we get?
The taxpayer should pay his just tax- there is no complaint about that at all-but when there is any give or take, as there is upon occasions, I am quite sure he does not very often get the benefit of it. I am not suggesting that the department should assist the taxpayer in making out his tax return. We appreciate that that is not right. He is supposed to be given assistance and advice and that sort of thing, but the various district officers of the taxation department work on directives to quite a degree, I would say, from the head office. They must come from the head office. These are supposed to be interpretations of the Income Tax Act and rulings by the department.
There has been a tendency, in recent times at least, no doubt as the result of directives to the various district offices, as to how to interpret capital gains. As a result, in some instances we almost have the capital gains tax despite what the various ministers of

finance have said over the past few years to the effect that we do not have one and they are not in favour of it. When inquiry of the minister was made on this matter he maintained that all the departmental officials did was to follow the letter of the act.
In questioning the minister we came to the conclusion that possibly he would be in a position to offer advice to the Minister of Finance as to changing some of the provisions of the Income Tax Act. Several times we suggested to him that he take up this matter with the Minister of Finance. There were several instances in the evidence where he admitted there were inequities as regards the collection of taxes and perhaps as regards the actual rulings or the interpretations placed on them. If they need clarification, I think the Minister of National Revenue should advise the Minister of Finance that these items should be clarified.
If the departmental officials' rulings did not result in costing the taxpayers money, possibly nobody would complain, but I contend that some of the money that the taxpayer has to pay in his own defence is unnecessary. In an appeal board case the taxpayer puts up his $15. If he wins his appeal he is refunded his $15. In the meantime he has perhaps had legal and accounting advice costing him, we may say, hundreds of dollars, and I am given to understand he is not permitted to deduct those expenses in future years. The minister might correct me if I am wrong in that, but I think that evidence was given.
I had the feeling in the committee as we went through these various items and through the discussion periods that although many times we contended that the Department of National Revenue should advise the Department of Finance on certain corrections in the interpretation or in the actual wording of the act so the interpretations would be more just and equitable, there was a reluctance on the part of the department to so advise. In fact I almost felt as though it did not want them to be corrected. There seems to be an atmosphere-as a matter of fact it is the case-in the department that the taxpayer is actually guilty until he proves himself innocent. This is far from what we have always considered as ordinary British justice, in that it has always been felt that any person is innocent until proven guilty.
We mentioned in the committee a few instances of what we felt were inequities. We suggested to the minister that he bring these to the attention of the Minister of Finance. As one small item, I am given to understand that an actor who is working on salary and is on tour cannot deduct the expenses of his tour.
Supply-National Revenue The minister was intimating that he was allowed his expenses, that he got an increased salary because of the simple fact that he was not allowed to make deductions. However, he is paying tax on that increased amount. In other words he has to pay tax on what would be considered additional increment for travelling expenses.
There was another point that we brought to the attention of the minister, and it seems to be a question of a ruling. The departmental officials admitted that a party willing a farm to his son is allowed at present a fair market value, whereas if a farmer sells to his son the son cannot deduct depreciation of an amount greater than the residual value, one might say, in the father's hands. There is no doubt that this is penalizing the son. I understand that the minister has intimated that some adjustment has been or is being recommended to the Department of Finance, but the whole thing is so ridiculous that I think it is high time something was actually done.
I should like to say a few words on the iniquitous net worth system of collecting taxes, and it applies to all people, not only to farmers. First of all I should like to mention to the minister that I quite realize that he and his departmental officials have a very tough job and a very unenviable one. After all, collecting taxes is coming close to a man's pocket, and he does not like it. I realize that they meet circumstances which the average person in business possibly does not meet, because the taxpayer sometimes feels he does not get full value for his tax. However, I am not concerned, in speaking of net worth, with the treatment of a case after it has actually got into the chief assessor's hands in an income tax district office. As I say, one gets very courteous treatment from the officials. I realize that they will listen to reason when it can be shown where a previous statement made was not correct or had been misunderstood by an inspector who had made the original assessment, and that sort of thing is very frequently adjusted.
I am not so much concerned with the taxpayer who has had legal or accounting advice from the beginning of the case. If he has been advised by his lawyer or his accountant, then I think it is up to the lawyer or accountant to shoulder any responsibility. I am not concerned about that taxpayer, but I am concerned about the individual taxpayer who has not filed a return. Perhaps he should have filed the tax return, and perhaps he has never filed one. Very frequently many of them are not actually taxable. However, the taxation department inspector or some official in the district office who keeps files on all

Supply-National Revenue sorts of things, thinks that a certain resident of a community should be paying taxes. He probably gets a demand for a tax return for one, two or three years, and he files it. He is a farmer and he is entitled to file on the cash system. He does not appear to have to pay any tax on that basis. The cash system shows that he should not pay any tax. However, the department may have some further reason for thinking he should, so an inspector goes to visit the man. The inspector, failing sufficient documents and records covering the past few years, undoubtedly will undertake to make up a net worth statement. He asks questions as to the date of purchase of equipment, the farm and that sort of thing.
One of the purposes of the questions is to prepare a depreciation schedule so the farmer can actually be allowed proper depreciation when the time comes to prepare his net worth statement. However, I do not think sufficient questions are asked as to what possible disposals the farmer may have made of machinery or equipment, which disposals are capital gains and not taxable.
Then we come to living expenses. I do not know of any particular case myself but I have heard some pretty gruesome tales of things that have happened such as the inspector making a tour of the house and all that sort of thing without the owner's consent. But X do know that many personal questions are asked as to what the man has spent.
In this connection we have to remember that the inspector is dealing with somebody who has not had any previous experience with this sort of thing and no doubt he is frightened stiff because the inspector is there. First of all he should be put at his ease and should have things explained to him by the inspector. When the inspector is asking him what money he may have spent personally I think he should point out to the man the simple fact that the more he claims to have spent the more it is going to cost him taxwise. The average person does not understand that and I think that is a simple courtesy that should be extended. I do not believe it is done. From the evidence we receive I understand it is not.
A summary of the various living expenses is detailed, and let us not forget that it is probably all done very hurriedly. The inspector has not spent two, three or four days there. I imagine he has spent a morning, and then moves on to some other place in the afternoon. But the inspector may have covered a period of six years. He has asked these questions, has got a list of so-called living expenses, and the farmer is asked to sign it.

I am quite free to admit that I have known instances where, after the farmer has signed one of these statements as to his living expenses, the amount has been changed. If he can prove that he was wrong in his guess as to a certain item, that a certain medical bill was paid or something like that, that is quite all right. The department will change the amount. But at the same time there is no doubt that once the farmer has signed the statement there is something there that is used upon occasion.
I admit, as I say, that I have known cases where the assessment has been prepared and then changed after somebody has been able to prove something to the satisfaction of the department, but I have also known cases where the assessor has intimated to the taxpayer that he may have something there but if he changes it the department will change his living expenses so the amount of tax may well remain the same as in the initial assessment. To me that is absolutely wrong, and I think it should be stopped. I am not saying anything against these inspectors as individuals other than I do not think they know what they are dealing with. I do not think they know the problems of the farmer. I doubt if very many of them have ever lived on a farm. I do not think they realize how a farmer lives. He does not live as a city man does. He does not spend money on personal living expenses. He does not wear the same kind of clothes, because he does not have to in his particular occupation.
I believe these inspectors should have a better knowledge of the industry with which they are dealing when they set out to make up one of these net worth statements. My contention is that the average farmer, unless he is specializing in some particular cash crop or in poultry, beef cattle, fur farming, or something of that nature, does not do any more over his lifetime than pay off his mortgage. As a consequence I think there are a great number of farmers throughout the country who are being victimized, one might almost say. I believe that the average farmer, the average citizen, wishes to pay his tax just as much as any inspector might wish him to, and he wants to pay his just tax. Finally, Mr. Chairman, I should like to suggest that the department should readjust its thinking to a point where it will not believe that every taxpayer is guilty of evasion.


Mr. Thatcher:: Mr. Chairman, before this item passes I should like to appeal to the minister to clarify the government's position on capital gains. As he knows, this matter came before the estimates committee but I for one felt that the explanation still was not

clear enough. Hon. members know that in Canada we have never officially had a capital gains tax. We have not had such a tax because it has been felt that in a new, developing country every encouragement should be given to venture capital, and I think that is a sound attitude. If we had a capital gains tax today risk capital would probably be discouraged.
Several months ago the Minister of Finance made a public statement to the effect that the government's attitude toward a capital gains tax had not recently changed, but I cannot help wondering whether the officials of the department we are now discussing read that statement or are aware of it, because fears have been expressed recently in many quarters that without any new authority from parliament the department has been pursuing a policy which could alter completely the concept of taxable income in Canada. Recently, as was pointed out by the hon. member for Perth, there have been examples of the Department of National Revenue taxing gains or profits made on real estate transactions, and there have been examples where the department has taxed profits made in the stock market. I think there have been examples where the department has taxed profits made in the buying and selling of mortgages.
I think most Canadians and most members of parliament have considered up to now that this kind of profit was a legitimate capital gain, and they cannot understand why such gains should be taxed. The income tax laws in the past, unwisely I think, have given a good deal of leeway to the departmental officials to decide what is capital gain and what is income. Until recently I think the departmental officials have been fairly liberal in interpreting the law, but in the past few years they seem to be getting a little bit stiffer in their attitude, and I believe there is a very real fear in the country today that Canada may be getting a capital gains tax not by any act of parliament but through the interpretation given to the law by the taxation officials.
There are certain judicial decisions which have tended to increase those fears. Because our laws at the present time do not define capital gain and do not define income, the Canadian courts appear to have been extending the concept of business transactions subject to income tax.
Mr. Chairman, what I want to say is this. If we are to have a capital gains tax, then let parliament pass the law bringing it in. I do not think it should be brought in by any back-door method. I would call on the government this afternoon to give a clear-cut definition-by statute if necessary-as to what
Supply-National Revenue is capital gain and what is income. Then the people of Canada would know where they could go from there. In other words, I think the government should spell out precisely what are the definitions of these terms. I would appreciate it if either the Minister of National Revenue or the Minister of Finance would comment on that matter, and I wish they would do it this afternoon.


Mr. Zaplitny:: Mr. Chairman, first of all I want to express my agreement with what the hon. member for Perth had to say about the net worth statement, particularly as it referred to farmers. It has been my experience as well as his-and perhaps it has been that of others who have had something to do with assisting farmers in making their returns -that in many cases the farmers have been victimized by a lack of knowledge on the one hand of what is required and on the other hand by officials who were a bit too arbitrary in setting down in the net worth statement their own interpretation of the values on the farm.
There are two chief ways in which, in my opinion, the assessments are made higher than they should be in regard to net worth statements, namely the overvaluation of the buildings and equipment which are found on the farm at the end of a particular period, and the undervaluation of the equipment and, in some cases, buildings that were disposed of during the period in question. There is also the question of the cost of living. I think that is a real injustice which would warrant a fairly close look by the department, where inspectors take it upon themselves to decide what the farmer's cost of living is over the years.
I have examined personally a good many net worth statements in the last five or six years, and I can say that in almost every case they have materially overestimated the real cost of living of the average farmer. There are exceptional cases, of course, always. There may be some farmers who are in the habit through necessity, of spending a great deal more money than others; but on the average I have found the tendency to be to overestimate the farmer's cost of living. The difficulty arises here because no farmer-nor, I suspect, is any other person-in our country is in a position to go back five or six years and prove to the inspector or to the department what his actual personal expenditures were. People have become more or less conscious of the necessity of keeping records of their business transactions, whether it is on the farm or elsewhere, because they realize that is part and parcel of their income tax return. But no one has been in the habit of keeping a very close track of his personal

Supply-National Revenue expenditures. And when it comes to the point of the farmer's word against the word of the inspector, the department naturally will accept the word of their own officials. I think some real injustices have resulted with regard to these net worth statements on account of the factors I have mentioned, as was very well set out by the hon. member for Perth.
However, there is another angle with regard to this item that I wish to pursue at this time. It arises out of a question asked in this house by the hon. member for Winnipeg North Centre on April 9 of this year. The question will be found at page 2729 of Hansard. I shall read the question and the answer in order to set out the background clearly. On that occasion the hon. member asked a question of the Minister of National Revenue in these words:
Mr. Speaker, may I direct a question to the Minister of National Revenue. Will the minister re-examine the income tax files of the breweries of Manitoba to ascertain whether any of them claimed income tax deductibility for the contributions they made, as revealed in Winnipeg last week, to the Liberal, Conservative and Social Credit parties of Manitoba?
At that time the minister replied as follows:
1 can comply with the request of the hon. gentleman but I doubt very much whether I can give him information about other people's business.
Then as a supplementary question the hon. member for Winnipeg North Centre asked:
May I make it clear that I did not ask the minister to give publicity to information that is secret by law. I asked him if he would examine the files to ascertain for the benefit of the treasury whether or not such deductibility was claimed by the breweries of Manitoba. May I assume the minister will conduct such an examination?
The minister's reply was this:
Mr. Speaker, I understand the question and will take it into consideration.
No doubt the question is still under consideration and will be under consideration for some time to come. At this time I think it would be only fair to the minister and to the hon. member for Winnipeg North Centre to set out the background upon which his question was based. I think it is also necessary to point out certain things to the committee and to the minister because of the fact that ministers do not seem to be aware of the basis upon which these questions were asked. I find that on the same day I directed to the Minister of Justice a question in the following terms:
Mr.^ Speaker, may I direct a supplementary question to the Minister of Justice. Is the minister aware of any financial contributions made by the breweries to the party with which he is associated?
The reply I received was:
Mr. Speaker, the answer is no.

It was to me a rather astounding answer, because for a week or ten days prior to that time, we had been reading newspaper headlines and hearing over the radio about the rather astounding developments in Manitoba with regard to these contributions. Yet one of the ministers of the crown gives the answer that he was not aware of it.
In case the minister may think this has to do only with the situation in the province of Manitoba, may I refer to the statement made by the representative of the breweries in giving evidence before the committee of the Manitoba legislature on April 6, 1956. I shall not read it all. If the minister wishes me to do so I will send it across to him. In that statement you will find that the representative of the breweries stated that not only did the breweries of Manitoba make cash contributions to the political parties within the province of Manitoba but that they made them also to the federal political parties. That immediately, of course, involves the consideration of this parliament.
I think it is a perfectly fair question to ask whether the minister and his department have in fact carefully and scrupulously checked the income tax returns of these breweries-and the same, of course, applies to any other corporation which makes financial contributions to political parties-in order to make sure that they did not do this at the expense of the taxpayers of Canada. I personally suspect very much that not only are the breweries of this country and some of the other corporations using undue influence upon the political parties in this country, but that they are doing so at the expense of the public treasury. I believe that, in fact, they are claiming deductibility from income with respect to their income tax for moneys spent either in cash or perhaps to a greater extent in some of the huge advertising campaigns they put on in order to assist the political party of their choice, which expenditure is marked down as advertising from a business point of view but which is not really advertising at all but is propaganda in the pure sense of the word.
In case the minister or the committee is in doubt about what happened in Manitoba, may I refer them to some of the newspaper headlines. For example, the Winnipeg Free Press of April 4,	1956, carried this headline,
"Breweries Bare Gifts to Three Parties; All But C.C.F. Shared $28,075 since 1945". May I point out that this $28,000 was raised to about $30,000 later, and that refers only to contributions made to political parties within the province of Manitoba. The figures with respect to contributions made in the larger field to the federal parties were not revealed,

because the evidence was given before a committee which had to do with liquor profits in the province of Manitoba.
May I just comment that the thing that struck me when I read this headline was the reference to "gifts" to the three political parties. I think that was a rather unfortunate use of the word "gifts", because I do not consider these moneys as gifts at all, and I am sure the political parties concerned did not either. They could be more correctly described as cash advances to the political parties concerned, and particularly the Liberal party because the next headline is in the following terms:	"Liberals Got Lion's Share
of Donations". It was revealed to the committee that they got 59 per cent or $16,400 of the total.
These financial contributions to political parties are made for a purpose. None of us is so naive as to think for a moment that this is done out of the goodness of heart of the breweries or any other corporations because they have so much money they do not know what to do with it, and so they decide to give some of it to the political parties. The fact that none of it was asked for or given to the C.C.F. indicates it is being done for the purpose of promoting the political parties of their choice. Incidentally, I mentioned the two major political parties, the Liberals and the Conservatives, but there was a small amount for the Social Credit party, about $500. Considering that they have not been in power in Manitoba or Ottawa, I suppose you could put that down as unearned income.
I would say this, that the breweries involved broke no law when they made financial contributions to the political parties of their choice. They are permitted to do so under the elections act, provided there is no evidence to show that they either asked for or were promised any economic considerations for the moneys they turned over to these parties. But there is a moral side to it. There is a moral law which is even more important, and that is to what extent are these breweries, such as the ones in Manitoba which deal directly with the government and were instrumental in influencing the government to set a price for beer which resulted in four breweries making a profit of over $18 million-


James Joseph McCann: This has nothing to do with a discussion of the administration of the taxation division. I can make a statement in 10 words that will clear up this point. It is to the effect that political contributions are not a deductible expense of doing business for any organization in this country.


Frederick Samuel Zaplitny: The statement may be in 10 words or it may take 10 hours, but so far as I 67509-318
Supply-National Revenue am concerned that is not the question. The point I am getting at is that these breweries are making these contributions to the political parties of this country, and in my opinion there is a danger that they are padding their expenses with regard to income in order to hide that money which is going out in the form of contributions.
The minister says it is not deductible. We have attempted on several occasions to find out from the minister whether any attempt has been made, without asking for the names of the corporations or the breweries concerned, by these corporations to claim deductibility. The minister has refused to answer. Apparently on April 9 the minister was not as sure as he claims to be today, because then he said he would take the matter under consideration. If he were going to take it under consideration on April 9 of this year, it would indicate he had not given it any consideration before that time. I think that statement by the Minister of National Revenue on April 9 was an admission that the department and the minister had not given proper consideration to that situation, but had in fact neglected the public treasury by leaving the door open to these breweries to make political contributions to these three political parties, for the purpose of influencing these parties.
Now, I hope that in the future what the minister has just stated will be strictly adhered to and carried out. I hope the minister can assure the house that no corporation, or any other business for that matter, will have the privilege of using their income for the purpose of making cash contributions or paying for huge advertisements which are, in fact, propaganda and not business advertisements, and then deducting that amount from their income in order to reduce their taxable assessment and reduce the amount of taxes which should go to the public treasury.
I want to make it quite clear that I do not think it is moral or right that the huge corporations of this country should make large amounts of money available to the political parties. I do not think it is a good thing for democracy that the political parties of this country should be influenced by the huge monopolies in this country. At the same time, it is adding insult to injury when you realize it is possible for those corporations to do that and deduct the amount from their income and thus make the public treasury pay for the propaganda which they are putting out in favour of the parties of their choice.
Item stands.
Progress reported.

Business of the House
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Walter Edward Harris: We shall continue with these estimates tomorrow and then take labour, and then national health and welfare.


Thomas Speakman Barnett: May I ask the Minister of Finance to repeat what he said? Did he say the estimates of the Department of Labour?


Walter Edward Harris: National revenue, labour, and national health and welfare.


Thomas Speakman Barnett: The reason I raise the question is that I understood the labour estimates were going before the estimates committee.


Walter Edward Harris: They have been, and they have been returned.


Ellen Louks Fairclough: Is the minister aware that the estimates committee is sitting on labour estimates tomorrow morning?


Walter Edward Harris: Yes, Mr. Speaker, that has been fully understood among the parties, that the labour estimates we would consider would not include the unemployment insurance commission.


Ellen Louks Fairclough: I do not know how you are going to stop it.


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

Question

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

Mr. Dufresne: 1.	Is Mr. Jean Roger Durant, of Loretteville, Quebec, an employee of the Department of Agriculture?
2.	If so, has the department authorized his acceptance of the position of secretary treasurer of the town of Loretteville, Quebec?
3.	Is the department aware that the said Jean Roger Durant is the owner of a firm known as Durant Import and Export Registered?
Answer by: Mr. McCubbin, Parliamentary
Assistant, for the Minister of Agriculture:
1.	Mr. Jean Roger Durand, Loretteville, Que., is an employee of the Department of Agriculture.
2.	Mr. Durand's acceptance of the position of secretary treasurer of the town of Loretteville, Que., was authorized by treasury board minute 350483 of March 25, 1948, which directed exemption from order in council P.C. 71/751 of March 29, 1939, as amended, respecting outside employment by government employees. Mr. Durand's duties
in this capacity are carried on in the evenings and require approximately 7i hours per week.
3.	The firm of Durand Import and Export Registered was registered by Jean Roger Durand at the Quebec superior court on September 10, 1954, and cancelled at that court on July 14, 1955. On the same date the firm was registered in the name of Julienne Bastien Durand, wife of Jean Roger Durand.
[The following items were passed in committee of supply]:



DEPARTMENT OF NATIONAL REVENUE

[Stage Direction]
Customs and excise divisions-
285.	General administration, $3,348,014.
286.	Inspection, investigation and audit services. $3,548,580.
Ports-
287.	Operation and maintenance, $24,616,357.
288.	Construction or acquisition of buildings, works, land and equipment, $1,119,500.
Customs and excise divisions-
Ports-
659. Construction or acquisition of buildings, works, land and equipment-further amount required, $100,000.
6750!) -318i
[Stage Direction]


Thursday, June 14, 1956