1956-08-09

[Stage Direction]
On the orders of the day:
Hon. W. Earl Rowe (Acting Leader of the Opposition):: Mr. Speaker, in view of the alarming revelations expressed by two of Canada's outstanding military authorities, that is by General Macklin at the 25th annual Couchiching conference yesterday, and by General Guy Simonds in a recent interview, does the Prime Minister not believe it would have been advisable for the government to have accepted the recommendations made by the Leader of the Opposition to set up a parliamentary committee to hear these and other authorities who are repeatedly charging his government with dangerous errors, waste, extravagance and misdirected efforts in its defence policy?


Right Hon. L. S. St. Laurent (Prime Minister):: That is a matter of opinion. I am not suggesting that the opinions expressed by the opposition were not sincere and intended to be beneficial, but I hope that hon. members will consider that we exercised our best judgment on that suggestion, and we did not think that kind of controversy would be of benefit to the cause of preserving peace in the world.


William Earl Rowe: A supplementary question: I should like to ask the Prime Minister if he does not consider the statements made yesterday to be most alarming to the Canadian people and something on which we should have a report from the government?


Louis Stephen St-Laurent: I think they were intended to be alarming by those who made them, but I do not think they have created the alarm in the public mind that was intended.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Mr. J. H. Blackmore (Lethbridge):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue, notice of which I have not previously sent him. In
view of the minister's statement on July 27 giving the cost of salaries in the Lethbridge income tax office as $15,620 for 1951 and $17,060 for 1952, has the minister in reading the Holberton letter, a copy of which I put into his hands on August 7, noted that Mr. Holberton positively states that the staff in the Lethbridge office during 1951 and 1952 consisted of only one man and a stenographer? Will the minister tell the house how his informant arrived at the impressive salary costs which the minister gave the house on July 27 in relation to the upkeep of the Lethbridge income tax office, namely $15,620 and $17,060?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, I did receive a letter from the gentleman mentioned and also a copy of that letter from the hon. member for Lethbridge. I see no reason why the matter should promote any controversy at all. I prefer to take the statements of my officials rather than those of an ex-employee of some five or six years ago who has made some contradiction with reference to the accuracy of the reported costs of that particular office. The matter of costs is not at issue; the matter at issue is whether or not the course we have taken of closing the office at Lethbridge is in the best interests not only of the department from an economic point of view but of the taxpayers of southern Alberta, whom we feel will get much better service by dealing with the Calgary office rather than with a suboffice at Lethbridge at which there are but three employees who were not in position to give the type of service we want to give.


John Horne Blackmore: No one can express facts any better than the minister has in his recent statement, but that is exactly what we are concerned about. I am asking whether the minister's statement which he gave to the house on July 27 was accurate, and that is also an equally important matter.


James Joseph McCann: To the best of my knowledge the statement is accurate to a nickel. I prefer to take the statement of my officials rather than that of someone who is more or less disgruntled and who was an employee five years ago.


John Horne Blackmore: May I ask the minister if he is certain he can rely on the men who prepared the statement given to him?

Inquiries of the Ministry


James Joseph McCann: I have relied on them for years. I would not have anybody in the Lethbridge office on whom I could not rely.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to address a question to the right hon. Prime Minister. In view of the news report over the Canadian Broadcasting Corporation this morning that the United Kingdom is reducing her NATO forces in Europe due to the Suez canal crisis by perhaps as much as a division, can the Prime Minister tell the house what effect this will have on Canada's military commitments to NATO?


Louis Stephen St-Laurent: The news report over the radio may be accurate, but we have not yet received any official information from the United Kingdom that they do intend to reduce their forces in Europe. We prefer to wait until we get official information before we attempt to assess what effect it may have on the forces of the North Atlantic alliance.


Wallace Bickford (Wally) Nesbitt: May I ask a supplementary question. Does the Prime Minister not consider that this proposed reduction in NATO's forces is a serious threat to NATO's present military effectiveness?


Louis Stephen St-Laurent: I am convinced that the authorities of the United Kingdom would not wish to do anything that would create a serious threat to the continued existence of the North Atlantic Treaty Organization.



CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
William Earl Rowe: Mr. Speaker, in view of the radio report yesterday with reference to a commission from the Department of Citizenship and Immigration now travelling in Europe, would the minister indicate the personnel and objectives of this commission?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: Mr. Speaker, I did not hear the radio report. Apparently I do not listen as assiduously as some other hon. members. I shall try to find out what it is about and answer later.



BRUCE COUNTY, ONT.    INQUIRY AS TO REQUEST BY PROVINCE FOR ASSISTANCE TO VICTIMS OF TORNADOES

[Stage Direction]
On the orders of the day:
Mr. A. E. Robinson (Bruce):: Mr. Speaker, further to a question which I asked on July 25 concerning damage by tornado in Bruce county, may I direct a question to the Minister of Finance. Has the minister been asked for federal financial aid to assist tornado victims in Bruce county and, if so, would he care to tell the house what, if any, conclusion has been arrived at?


Hon. W. E. Harris (Minister of Finance):: I received a letter from the clerk of the municipal corporation of the county of Bruce and have been corresponding with him, but no conclusion has been reached.


Andrew Ernest Robinson: Owing to the fact that the Ontario provincial government has promised assistance to these victims, will the minister give sympathetic consideration to matching the provincial aid?


Walter Edward Harris: I am giving consideration to all the factors involved.

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



DEPARTMENT OF TRADE AND COMMERCE

[Stage Direction]
General administration-
415. Departmental administration, $628,021.
The Chairman:: Hon. members will find
this vote on page 67 of the blue book and the details commencing on page 507.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Chairman, some three or four weeks ago I spoke at some length about the Canadian trade position, and I do not intend at this time to repeat what I said on that occasion.
Very briefly, our trade is thriving. Exports are at remarkably high levels. Imports continue to pour in to meet the demands generated by our rapid development and prosperity which cannot be satisfied within Canada. As I said before, the resulting deficit on current account is a sign not of weakness but of strength, since it results primarily from developments which strengthen the economic fabric of the country and which will in the future increase exports and reduce imports.
On this occasion I should like to discuss not the figures of trade but the efforts which Canada has made and has participated in

Supply-Trade and Commerce
to maintain our markets abroad and to provide new opportunities for greater trade.
First, a word about the Canadian foreign trade service. During the past year a new office was opened in Salisbury, Southern Rhodesia, bringing to 54 the number of our trade offices located at strategic centres abroad, which compares with a total of 31 only ten years ago. Our files show that in 1955 the 112 trade commissioners who manned these posts played a direct part in bringing to Canada more than $100 million worth of new business. Periodic conferences of trade commissioners are held, such as the recent one held in Ottawa of our officers stationed in Latin America, at which representatives of Canadian industry were present and participated in a valuable exchange of views.
The foreign trade service carries out a continuous review of world markets to determine where our trade interests would benefit through having a resident trade commissioner. This year consideration is being given to the opening of new trade offices in Hamburg, Colombo, Los Angeles and Teheran. To meet the service's growing personnel needs we are seeking to recruit men of the highest caliber, men who are interested in serving Canada in what, to my mind, is one of the most interesting and rewarding careers of government service.
As I indicated a year ago when the decision was made to bring the Canadian international trade fair to an end, greater emphasis is being placed on participation in overseas trade fairs. We are doing everything possible to bring Canadian goods to the attention of the buyer in his own country.
In the course of the current year the Department of Trade and Commerce has prepared major exhibits for ten international trade fairs abroad. The fairs at Utrecht, Osaka, Milan, Brussels and Hanover have already taken place. Later this year we shall be exhibiting at the fairs in Lausanne, Manchester, London, Paris and Bogota. Smaller exhibits were arranged at a nutrition fair in Havana and a food show in Los Angeles, and we shall assist our footwear manufacturers at an industry show in Chicago in October.
In addition to participation at these international fairs and industry shows, we have continued to operate our Canadian showroom in Rockefeller Centre in New York. This "sales laboratory on Fifth avenue" as it has been termed, is enabling some of our manufacturers to test and enter the valuable New York market with their products.
I turn now to Canada's part in trade negotiations, in other words to the efforts being
made to improve the opportunities for trade upon which Canadian prosperity so largely depends. Canada is the fourth largest trading nation and her share of world trade has increased. Our present economic well-being and our continued expansion depends on high levels of trade.
It is for these reasons that Canada has continued to play a leading part in the constructive work of international co-operation under the general agreement on tariffs and trade. As a result of the four rounds of world tariff negotiations held under GATT, tariff levels have been significantly reduced over a very wide area of world trade. We have enjoyed a degree of world tariff security and stability never known before. Canada has taken part in each of the tariff conferences held under GATT, and we have obtained tariff concessions of value to our exporters in every region of Canada and affecting all our major exports in almost every important market.
The United States is by far the largest market for Canadian exports. I am happy to say that our exports to the United States increased by $142 million in the first six months of 1956 in comparison with the first six months of 1955. At present over one-half of our exports to the United States enter that country free of duty. This includes many of our major exports. Of the dutiable goods, over two-thirds now enter at United States rates of duty equivalent to about 10 per cent ad valorem or less. Many of our products enter the United States at tariff levels which had been reduced prior to this year to one-half or less of the levels prevailing before GATT, and to less than one-quarter of the rates in effect in the 1930's.
Here are some examples of Canadian exports on which the United States tariff has been significantly reduced over the years: the United States tariff on apples which was 25 cents a bushel in the 1930's has been reduced to 124 cents a bushel; the United States tariff on birch plywood which was 50 per cent in the 1930's has been progressively reduced to 15 per cent; the duty on a wide range of electrical goods has been reduced from 35 per cent in 1930 to less than 15 per cent; the duty on aluminum was 4 cents a pound in 1930 and will be reduced to 1J cents a pound in the near future; on a wide range of iron and steel manufactures the United States tariff has been cut from 45 per cent before GATT to 19 per cent in the most recent negotiations; on synthetic rubber the duty before GATT was 20 per cent and will shortly be reduced to 84 per cent; the duty on a large variety of chemicals has been reduced in GATT negotiations from 25 per cent to 104 per cent.

Supply-Trade and Commerce
In our relations with the United States we are, of course, most vitally concerned not only with the tariff levels affecting our goods but even more with the direction of United States tariff and trade policies generally. Without wishing in any way to minimize the threats created by United States restrictive action, it is of interest to note that only in two cases has the United States actually withdrawn concessions negotiated with Canada under GATT. Since 1948, of the 57 investigations completed by the United States tariff commission to determine whether imports were causing injury to United States producers, only seven resulted in action by the United States President to increase the tariff, and of these only one case affected Canadian trade. With reference to United States import restrictions upon certain agricultural products, there have been no new developments to report in the past year. We are extremely gratified that the President has recently given approval to the customs simplification act which has been under consideration for a long time. While this act does not go as far as we had originally hoped, it promises to be a real step ahead in the solution of some of our customs valuation difficulties in the United States.
The government has likewise continued at all times to promote the expansion of trade with the United Kingdom in both directions. In so far as the tariff is concerned, Canadian goods enter the United Kingdom either free of duty or at low preferential rates. Similarly, we provide preferential tariff treatment for most United Kingdom exports to Canada. Over the past few years United Kingdom import restrictions have also been considerably relaxed, and most basic foodstuffs and industrial materials, including about 80 per cent of our current exports to the United Kingdom, are now free of all import controls.
One of the most significant features of our trade with the United Kingdom was the sharp rise of Canadian exports to that country. Our exports rose by $116 million above the levels of 1954 to reach a record level of $769 million last year. We are fully aware that the United Kingdom market will be opened up to our goods in direct measure to the success achieved by the United Kingdom in sales to Canada and other countries. In this connection I am happy to note that in the first six months of this year United Kingdom exports to Canada have increased by 30 per cent to record levels and that this appears to be a continuing trend.
Our exports to our commonwealth partners other than the United Kingdom increased in 1955 by $42 million. This increase, which

is being maintained this year, was made possible by extensive relaxations in import restrictions which have taken place in commonwealth countries in recent years. Last month the Australian government announced a tightening up of import restrictions to protect its balance of payments. I am pleased to be able to inform the house that this intensification is apparently not intended to apply to products imported from Canada. We are hopeful, therefore, that we will fully maintain our markets in Australia.
In South Africa further relaxations of import restrictions, particularly on manufactured goods, were introduced to take effect this year. For the last two and a half years these controls have been non-discriminatory. In New Zealand about 150 products or groups of products may now be imported without restriction from Canada. Among these are such products as agricultural machinery, tobacco, textiles, paper products, metal products and a considerable variety of manufactured goods. In the new federation of Rhodesia and Nyasaland 500 additional items were removed from import restrictions early this year. These products may now be imported freely from Canada. Hon. members will recall that last month I announced in the house that further products had been removed from import restriction in the British West Indies.
Our sales to European markets have constantly risen in proportion with our growing total export trade, and Europe has retained her traditional position as our third largest trading area, taking about 9 per cent of our exports, the same proportion as pre-war. Last year our exports to Europe rose by $40 million over 1954 to a total of $390 million. In the first five months of this year Canadian exports to Europe increased again by $54 million.
It has been most gratifying to see the significant progress that has been made in the United Kingdom, in other commonwealth countries and in Europe in the dismantling of import restrictions originally imposed for balance of payments reasons. The United Kingdom and other countries that had found it necessary to impose dollar restrictions themselves recognize that their export industries must become fully competitive in world markets. Any other course would breed high costs and inefficiency, and would multiply rather than resolve their basic economic problems.
I now wish to refer briefly to the government's trade agreement program in recent years. Canada now maintains most favoured nation trade relations with almost every country in the world, either through separate trade

treaties or through our participation in GATT. We have paid particular attention to establishing a sound basis for the development of trade with the countries of Latin America. We now have most favoured nations relations with every country in that area.
The trend of our exports to Latin American countries has, however, been disappointing in some respects. The statistical totals are well below the peak level which was achieved in 1952. There were exceptional circumstances, however, such as the high level of wheat sales and the aftermath of the Korean war which accounted for that peak, and it is not too difficult to see why our exports have fallen since then. From a longer point of view, our exports to Latin America are running at a rate which is ten times the level pre-war, say of 1938.
In 1954 Canada concluded a trade agreement with Japan, a country which had become our third largest market. As a result of this agreement Japan removed all discriminatory restrictions on the importation of wheat, barley, flax seed, wood pulp and certain other Canadian products. Our trade with Japan has continued at high levels and is directly contributing to the prosperity of many Canadian industries.
The trade agreements negotiated with Spain and Portugal in 1954 have placed our relations with those countries on a more assured basis and have created, for the first time since the war, continuing opportunities to sell Canadian salt fish in those traditional areas.
On February 29 of this year I announced the conclusion of a trade agreement between Canada and the Soviet union designed to provide a new and important market for Canadian wheat, and which may also create new opportunities for the export of other Canadian products.
To summarize, Mr. Chairman, we are pursuing an active and successful export promotion policy designed to strengthen the Canadian economy and to create favourable conditions for continued growth in the future. We wish to live in a world where Canada has fair and equal access to world markets, where the countries who need our goods can buy from us freely and we in turn can buy from whatever markets are in the best position to supply our import requirements. This, we believe, is the only kind of a trading world that makes sense in the long run for any country dependent on trade, and this is the only kind of trading world in which Canada can fully develop her resources and her industries on a sound competitive basis. Canada's interests can best be served through continued policies of multilateral trade.
Supply-Trade and Commerce


Mr. Fleming:: Mr. Chairman, the Department of Trade and Commerce this year asks approval of estimates totalling $24,226,785, which is an increase of $4,859,715 over last year's approved estimates of $19,367,000. As compared with this last figure of approved estimates for the fiscal year 1955-56 the actual expenditures of this department in the fiscal year ended last March 31 were $17,653,459, indicating that the house voted 9 per cent more than the department found it necessary to spend. The increase in this year's estimates over last year's actual expenditure is therefore $6,573,326, or 37 per cent more than the department found it necessary to expend last year.
There are two items in particular in this year's estimates which have been enlarged; they are item No. 423, for the Brussels exhibition, and item No. 429 for the census.
It is usual on this first item to have a general policy debate, and because trade and commerce covers such a wide range of governmental activity and policy usually the debate has ranged widely. This year I think without loss of any profitable discussion the debate can perhaps be somewhat abridged by reason of some recent debates which have been held in this house. I refer in particular to four debates.
The first was the debate on April 18 on the resolution to ratify the trade agreement with Russia. The second was on July 9 and 10 on our Conservative amendment to the supply motion, which amendment set forth our national development policy. That debate embraced our views on trade quite extensively. The third debate was that of August 1, during the review of the estimates of the Department of External Affairs when, as reported at page 6811 of Hansard, we had the opportunity to renew the plea of this party that the government call a commonwealth conference on trade and economic questions. The fourth debate was on August 6 on the resolution to approve the international wheat agreement, during which the whole subject of wheat marketing was extensively debated.
The importance of trade to the world and to Canada has been emphasized by all that has happened since a year ago, when the house debated the estimates of this same department. We are aware that Russia has turned from the cold war to an economic struggle for world mastery. Mr. Khrushchev is reported as having stated to some Americans visiting Russia last autumn:
We value trade least for economic reasons, and most for political purposes.
While Canada has always valued trade for economic purposes, we cannot close our eyes

Supply-Trade and Commerce to the importance that trade holds in a political sense in the kind of world in which we live. We are therefore glad that in 1955 a new record was established in the value of world trade, and that Canada retained fourth place among the trading nations of the world in terms of value, ranking after only the United States, the United Kingdom and the Federal Republic of Germany. On a per capita basis in 1955 Canada ranked second only to New Zealand among the trading countries of the world.
I have a few remarks to make on the subject of total trade. The annual report of the department indicates on page 15 that Canada's total commodity exports in 1955 rose from $3,947 million in 1954 to $4,351 million, an increase of 10-2 per cent. The increase in imports, however, is much more striking, these having risen from $4,093 million in 1954 to $4,712 million in 1955, an increase of 15-1 per cent. In 1955 for the third successive year Canada incurred what is called nowadays a deficit balance on commodity trade. The excess of Canadian purchases over Canadian sales last year was $360 million.
The figures for the first six months of 1956 are perhaps even more striking. Due to the increase in our exports of wheat our total exports rose from $2,063 million in the first six months of 1955 to $2,304 million in the same period of 1956, an increase of 14 per cent. Again our imports have risen in a much more significant degree, from the 1955 total for the first six months of $2,209 million to $2,831 million for the first six months of 1956, an increase of approximately 30 per cent. With this substantial increase in imports has come a remarkable increase in our total trade deficit. During these six months Canada purchased abroad $537,500,000 more than she sold abroad. This is a record total commodity trade deficit.
I have a word to say about the direction of Canada's trade. We have drawn attention repeatedly in the past to the concentration of Canada's trade in one channel. This has been described as placing Canada's trading eggs in one basket, namely the United States. We have drawn attention to the peril of increasing this concentration in one channel, as it makes Canada's external trade position very vulnerable to changes in the trading policies of our friendly neighbour to the south. On page 16 of the annual report of the department for 1955 hon. members can see the figures on trade with certain countries. Our exports to the United States occupy the following percentages of our total exports:
1953	
59	per	cent1954	
60	per	cent1955	
60	per	cent


Our imports from the United States were the following percentages of our totals:
1953		 73 5 per cent
1954		 72'3 per cent
1955		 73 3 per cent
In brief, two-thirds of all our external trade, both export and import, is done in the one channel. I suggest to hon. members that, whilst we all warmly value our friendly relations with the United States, this concentration of Canada's trade in one channel does make Canada's trade position extremely vulnerable.
This same trading relationship with the United States is characterized by a tremendous imbalance. Our trading deficit with that country, by which we express the excess of our imports from that country over our exports to her, amounted in 1954 to $594 million. That figure had increased in 1955 to no less than $840 million, an increase of 41-4 per cent from the year before.
The government applauds this tremendous excess of Canada's imports from the United States over our sales to the United States. The government takes satisfaction in this import balance. Indeed, the minister said this morning that our deficit on current account is a sign not of weakness but of strength. We do not take the same easygoing view of this tremendous excess of Canada's imports over her sales particularly to the United States.
It is to be remembered that this huge trading deficit is paid for by Canada today by importing United States capital. We welcome United States capital in this country, but it should be here for some other purpose than simply to pay for the deficit in our current account. We are mortgaging our patrimony to pay for this huge excess of imports over exports, and many of those imported commodities could with wise policies be produced in Canada by Canadian workmen.
The daily bulletin of the dominion bureau of statistics of July 6 points out that "the unusually large capital inflows into Canada have served to finance the import balances". We should like to see those capital inflows serving some more lasting and beneficial purpose than simply paying for a deficit on our current account.
The Financial Times is quoted in a Reuters dispatch of June 22 from London as saying of our present trading deficit:
That must be a record for any country not in the midst of a devaluation crisis. It means that some 25 per cent of Canadian expenditure abroad is not being met out of current income.
Let it not be pretended that this fact is something pointing to strength in Canada's

trading position. Let us examine the trend of 1956. The trend I have spoken of has continued into 1956, not only unabated but actually on the increase. The figures for the six months' period are not available in complete form, but the figures on imports from the United States for the first five months of this year show that our imports from that country were $1,765 million, up 31 per cent from the figure of $1,349 million a year ago. Because our imports from the United States increased very much more than our exports to the United States, the import balance on our commodity trade with the United States rose from $352,800,000 in the first five months of 1955 to $625 million in the first five months of 1956.
That is a record import balance in our trade with the United States. We have been averaging this year a record deficit in our trade with the United States of $125 million a month, and if that continues throughout the whole of the calendar year 1956-and there is no reason to doubt under present conditions that it will-Canada's trading deficit with the United States in the year 1956 will amount to $1,500 million, a figure far exceeding anything that has occurred in past history.
The government does not see any cause for alarm in this tremendous trading deficit. Apparently it sees only reason for satisfaction.
I do not need to repeat what we said in the debate in the house on July 9 and 10 concerning the nature of our trade with countries abroad. We drew attention then to the desirability of processing more of Canada's natural resources here in Canada.
On this matter of direction of trade let me remind the minister and the house that our trade with Latin America, which should be a large potential market for Canada's exports, is declining. It declined to $162 million in 1955 from $188 million in 1954 and $199 million in 1953. We are purchasing very much more from Latin America than we are selling to her. Indeed, in 1955 we purchased twice as much from Latin America as we sold to those countries. Why is our trade with Latin America not rising? The minister made a tour of Latin America some three years ago and came home bringing optimistic reports. Members will recall the report he made in this house, everything pointing to an increase in our trade with that important area of the world. All that has happened since that time has been a steady, unbroken decline in our exports to Latin America.
This morning the minister spoke of the increase last year by one in our trading
Supply-Trade and Commerce posts abroad. The appointment of a Canadian trade commissioner in Salisbury, Southern Rhodesia I am sure will be welcomed by the house. Those of us who had the privilege of visiting Salisbury after the commonwealth parliamentary conference in Africa two years ago could not fail to be impressed by the vigour of the growth of that area and the desirability and opportunity of extending Canadian trade there.
Mr. Ken MacTaggart, in a series of articles written in the Toronto Telegram recently following a very extensive tour of Africa, drew attention particularly to the trade opportunities that await Canada in Nigeria, and I bring that to the attention of the minister. Mr. MacTaggart reported statements made by bankers and businessmen in Nigeria, pointing out that Canada is not grasping the opportunities that await her there for extending her trade in that growing part of the world, on which the benefit of self-government is shortly to be conferred.
The minister had something to say this morning about our trade with Japan. Several years ago the house gave unanimous approval to the new trading agreement with Japan. However, the figures on our trade with that country for 1955 show a decline in our exports to $91 million and a substantial increase in our purchases from Japan to $36-7 million. We still have a substantial surplus in our trade with Japan, an export surplus of $54-3 million last year. That is substantially reduced from other years. Next to the United Kingdom, Japan is the best market for Canadian wheat, but every now and again there come disturbing reports from that quarter of the world. In yesterday morning's press there appeared a report from Montreal, from which I read this opening paragraph:
The entire foreign trade policy of Japan is to use "every possible device and bargaining position to promote exports and, at the same time, restrict imports to essentials", according to a report just released by three members of the Canadian primary textile industry who last fall made the first visit by a group from a Canadian industry to its counterpart in Japan.
W. M. Berry, D. S. MacKay and K. C. Mills have produced a 75,000-word, illustrated, indexed book with 31 appendices that is a thorough study of Japanese business as related to the textile trade.
I am sure all hon. members are aware of the fears of the Canadian textile trade, already suffering severely from imports of textiles. This is a situation, of course, that will need to be watched.
As to our trade with the United Kingdom, I shall not take the time to reargue, but I simply now reassert our demand and our urgent request that the government call a commonwealth conference on trade and economic questions. We dealt with this in the

Supply-Trade and Commerce debate on external affairs last week. The Leader of the Opposition made the request before the Prime Minister left for London to attend the commonwealth prime ministers' conference. It is our earnest view, and we shall continue to urge it.
I have just a few words to say on GATT and the terms of the new agreement announced in the house on June 7. The negotiations for this new agreement were commenced in January, and it represents the fourth general round of multilateral tariff negotiations under GATT. Twenty-two countries negotiated concessions, covering $2J billion worth of trade, or about 3 per cent of the total of world trade of $77 billion, using 1954 figures. Canada negotiated new agreements with the United States and 12 other countries in Europe and Latin America. Canada, however, did not negotiate directly with the United Kingdom or Japan.
The minister has spoken about the prospects of increased trade with the United States. There is no doubt that the recent negotiations will tend to accentuate the concentration of our trade with the United States. Of the $300 million of Canadian exports on which Canada received concessions from other countries, $200 million were exports to the United States. Canada gave concessions on $180 million worth of imports from other countries, of which $80 million were imports from the United States.
It is well to bear in mind, sir, that the United States tariff cuts in favour of our goods will be spread over a three-year period, 5 per cent of the reduction taking effect in each year, the first on June 30, 1956, the second on June 30, 1957 and the third on June 30, 1958 under the provisions of the United States 1955 trade agreements extension act. On the other hand, Canada's tariff reductions will be put into effect in their entirety in one step. The Minister of Finance made a statement to the house, as found at page 4793 of Hansard, when the agreements were announced in the house on June 7, and we assume there should be some statement made in the house concerning the carrying into force of the reductions that Canada has undertaken to make.
But, sir, while we have supported the principle of multilateral trade extension through agreements in this post-war period, we do draw attention to this, that the effect of this fourth extension of the GATT agreements is going to be an acceleration of the tendency to concentrate our external trade in the one channel, namely the channel with the United States. We do not like to see multilateral trade negotiations giving mere lip service to the idea of multilateral trade

and becoming increasingly a contribution to an expansion of bilateral trade simply with one country, where we already have to a dangerous degree concentrated our trade.
The final matter I wish to deal with in these opening remarks relates to crown corporations. There are nine crown corporations that are responsible to the minister in his capacity as Minister of Trade and Commerce, apart from those that were referred to in the debate on the estimates of the Department of Defence Production a month ago. One crown corporation has been added recently to the list of corporations that are responsible to the Minister of Trade and Commerce. It is Northern Ontario Pipe Line Crown Corporation. The bill that established this corporation was given royal assent on June 7. There is, of course, no power to reopen the debate on that thorny measure, but there is the right on the part of the house to know fully what has happened since June 7 and to compare what has been done with the promises, representations and undertakings given to the house by the government in the course of the passage of that bill through the house.
The house is aware that on June 8 the corporation was established and five directors were appointed, and subsequently a general manager. It will not be forgotten that two facts stood out in the government's submission of that bill to the house. The first was the government's claim of urgency; that extraordinary measures, to put it mildly, had to be taken both in connection with the passage of the bill through the house and in the relationships with the corporation in order to complete the construction of the pipe line from the Alberta-Saskatchewan boundary to the vicinity of Winnipeg this year.
The second fact that was outstanding in the government's case in that debate was that the whole reason for favouring Trans-Canada Pipe Lines as the chosen instrument of the government for building the pipe line was that it had the organization, the contracts and, above all, an option on the 34-inch pipe necessary to construct the pipe line. On those representations by the government the majority in this house acted, and a cted ruthlessly.
But we now find since June 7 that Trans-Canada Pipe Lines Limited had an option not on 575 miles of 34-inch pipe required to build this line from the Alberta border to the vicinity of Winnipeg, but on only about 25 per cent of the 34-inch pipe required for that purpose. I therefore say-and I base my remarks upon the record; I shall give hon. members who wish it the page references for what I say-that the house was

misled by the representations and statements made by the government. The house was led by the statements of the Minister of Trade and Commerce, the Prime Minister and the Minister of Finance to believe that Trans-Canada Pipe Lines had available all the 34-inch pipe that would be required to build this leg across the prairies.


Clarence Decatur Howe: May I ask the
hon. member a question?


Donald Methuen Fleming: Yes.


Clarence Decatur Howe: Is he aware that the contracts for pipe and for steel plate for pipe were tabled in the house well before the bill passed? 1 do not suppose my hon. friend took the trouble to examine them, but there was nothing concealed.


Donald Methuen Fleming: The minister can say what he likes about the tabling of the contracts. The contracts, you will remember, were not incorporated in the legislation. The fact is that there were government statements made, -statements which appear in the record, many of them-on which no other interpretation could be put than that the government was saying to the house that the corporation had all the pipe required to build this prairie leg. I can give all the page references in Hansard; I have them all.
Finally, I draw attention to what was said in the house on August 3 when, after a report emanating from a source that was ascribed to Mr. Frank J. Simington of Edmonton that the pipe line now could not be completed to Brandon this year, there was a curious kind of denial, attributed to Mr. Low of Trans-Canada Pipe Lines. He said the report was "not officially true". Not officially true! What kind of a denial is that? It seems to suggest that he was saying that he could not deny that the statement was true in fact, but that he was not making any official admission at this stage to that effect. It reminds one of the kind of denials we heard earlier in the session during the course of the pipe-line debate.
The minister has taunted the official opposition in this house with our concern when we have asked questions since June 7 about what was being done in relation to the pipe line. I will tell the minister our concern. The position we took during the debate has not changed, but our concern is and will continue to be to hold the government to the promises and undertakings they gave to the house and on which the majority in the house acted in the course of that debate. I give warning now to the government and the minister that we do not propose to stand by and be silent and allow any departure from
Supply-Trade and Commerce those promises. This must be the concern of any opposition in a free parliament.
There are many matters on which we shall have occasion to ask questions when we reach the detailed stage of the discussion. These are the remarks I offer to the house in this introductory and general part of the debate on these items.
As I have said, we attach the highest importance to Canada's trade. We are glad that on the staff of this department there are such competent men at all levels. I have taken occasion in the past, and I do so again now, to pay tribute to the deputy minister of the department, the senior officials and the representatives abroad. This is a well manned department with some very competent men in it. When the minister speaks this morning of his purpose to recruit men of the highest calibre to serve in the trade positions abroad, I should simply like to add to what I said last year on this point, that having met in the field and at their posts a number of Canada's trade commissioners abroad, I have found them without exception to be worthy representatives of Canada of whom this house can well be proud.


Mr. Nicholson:: Mr. Chairman, I should like to associate myself with the concluding remarks made by the hon. member for Eglin-ton. The minister is extremely fortunate in having on his staff so many competent personnel. May I express the hope that he will be able to give some consideration to revising upward his salary schedules. Recently I read that he has lost another valuable person to the private grain trade in Winnipeg. I believe that men who give up remunerative careers deserve a great deal of credit. I think it must be rather disturbing for those who stay behind when some of their colleagues step out at salaries which are probably double what more competent men are receiving at headquarters. This statement should include the people with the trade commissioner service abroad.
I should like to make special mention of Dr. Charles Wilson who was in Rome when I was there a couple of years ago; I believe he is now in Denmark. I should also like to mention Mr. Bruce MacDonald, who was in Bonn at the time. These men are performing outstanding service for Canada. Dr. Wilson took my wife, my daughter and myself out to see an Italian farm about 25 miles from Rome. We appreciated the fact that he was able to act as interpreter. He had acquired quite a good talking knowledge of the Italian language. We were extremely proud of the high regard in which a man

Supply-Trade and Commerce like Dr. Wilson and his family were held by the people of Italy. The trade commissioners in all the centres were especially courteous and most anxious to have Canadians meet some of the people who were interested in Canadian trade.
I am going to divide my remarks into three compartments. In the first place, I should like the minister to find during the next year a little bit more time in which to become familiar with the bureau of statistics, particularly with the work being done in connection with farm income and farm costs. On February 9 the minister made an extremely unfortunate comment off the cuff which I am sure has caused him some embarrassment. No doubt he told the truth when he referred to the farmer out west who was driving a deluxe car, had his granaries filled with grain, had all his debts paid and was really in a very comfortable position. I know that out of 200,000 farmers in western Canada, such a farmer could be found. However, the minister's own department presents an entirely different picture.
When the interprovincial farm union council were here a short time ago they presented a brief which indicated that in Canada as a whole, only 53-1 per cent of all the farmers had the good fortune to own a motor car in 1951. When you can obtain possession of a fairly good car for a $25 down payment, it indicates that there is something wrong when 46 per cent of the farmers in Canada are not able to own a car.
Then somebody said, "Oh, but a great many farmers have trucks". Again the bureau comes up with the information that only 31-6 per cent of them have trucks. If you assume that no farmer had both a truck and a car, you would still find that you had about 16 per cent of the farmers in the country who had neither a truck nor a car. Of course a great many farmers have both a truck and a car.
I think the minister should really take time off to have a look at the position of agriculture. I know his department has not had available the money with which to do in the field of statistics the sort of job that has been done in Washington. However, I think the minister should get an appropriation so the bureau of statistics can do a careful study in each of the ten provinces in Canada in order to establish whether or not the farmers are getting a fair share of the national income. In the United States, where they have the facilities available, they come up with the information that the per capita farm income is $866 per year, and that the off-farm return is $1,922. In other words,

those who are on the farm are getting less than half as much as those who have left the farm.
If a similar study were done in Canada I am sure we would have an even more disturbing picture. But of course when the census is taken each year, those who go out to get information from farmers are not permitted to ask too many questions about the financial position of their neighbours. However, I am sure the farmers in all parts of Canada would now be willing to co-operate with the bureau of statistics and give complete information with regard to their debts, their assets, their off-farm earnings and the general position of agriculture. I therefore hope that before another year passes the minister will issue instructions to the bureau that they proceed immediately to make a careful study of the farm income in all parts of the country.
In the second place, I want to make some reference to wheat. I realize that we have had a fair amount of time this year in which to discuss wheat.


Mr. Philpoll:: You said it.


Alexander Malcolm Nicholson: But we still have not solved the problem, and every time an opportunity is presented members who come from wheat-producing areas will be obliged to have something to say. In the first place, I want to emphasize again that we want the minister to continue the operations of the Canadian wheat board. In spite of the criticism we have had made from time to time with regard to what the minister has done or has not done, members of all political parties and the vast majority of the farmers in western Canada are most grateful to the minister for his efforts in maintaining the wheat board.
I think it is fairly clear that if there had not been a wheat board last year there would have been a terrific slump in wheat prices. In May a year ago the Manitoba Co-Operator printed an extremely interesting chart giving wheat prices over a period extending back to 1905. I am going to select just a few of the years in between in order to bring to the attention of the house the problems which the farmers were up against year after year. In 1908-09, for example, the low price was 96 cents and the high price was $1.35. I am leaving off the fractions. Then in 191314 the low was 78 cents and the high was $1.16. In 1914-15 when we were at war and the farmers were going all out for production, there was a spread between 94 cents and $1.64, the next year between 88 cents and $1.61 and the next year between $1.54 and $3.00.
You do not require much of an imagination to realize how difficult it is for people who

are working long hours on the farm to know whether they should sell today, tomorrow, next month or in two months' time. Then when the wheat price got away up to the $3 mark and it appeared as though it might go up to $5 or $10, the government stepped in and put on a ceiling. The farmers were not permitted to take advantage of the boom which other sectors of the economy enjoyed.
Then after the war, when my neighbour the hon. member for Acadia had finished the job of making the world safe for democracy and came back to make his living at farming, he bought his machinery at high prices; and in 1920-21 there was a range in the price of wheat from $1.57 to $2.85. You could not avoid selling at low prices. When you threshed you were obliged to deliver some of your grain in order to pay your bills, as you were not in a position to wait until later on. Next year the spread was from 91 cents to $1.55. Then even during the depression years, when we were down to low figures in 1932-33, we find the low was 39 cents and the high was 94 cents; 1936-37 the low was 94 cents and the high was $1.55; in 1942-43, the low was 88 cents and the high was $1.12.
I think the farmers of Canada never want to go back to a situation where profiteers and speculators are in the business of buying and selling wheat and other foodstuffs and forcing prices down or up to make fortunes without making any useful contribution. I hope, therefore, the minister will not yield to the requests that are coming from very limited quarters, from selfish quarters, to do away with the wheat board and get back to the open market again.
I think the minister will also have to give a new look at a problem which was discussed at some considerable length earlier this session, namely the bank loans provided last year. They are not going to fill the bill. I am not going to embark on a discussion of that matter, but I think the minister will have to accept the fact that having a supply of wheat in Canada is a national asset. We cannot expect a handful of people to carry that asset year after year and be prepared to hold it until some future time. A step has been taken this year toward having the taxpayers as a whole carry part of the costs in connection with carrying grain.
There are immediate expenses that every farmer must meet. He must pay his taxes, his fuel bill and his implement repairs. There is a big crop that is going to be harvested in the next few weeks, and I think the government of Canada must take steps to see that those who have seeded their crop this year in good faith will be able to get 67509-462 J
Supply-Trade and Commerce enough cash advanced on grain properly stored on their farms to enable them to meet their current obligations. I think the minister must not lose sight of the fact that nearly every country in the world is doing something to help her farmers. About 96 per cent of the world's wheat is handled by organizations such as the Canadian wheat board. The Canadian wheat board is handling the farmers' product and, as I have indicated before, the farmers are anxious that the wheat board should continue to handle it. I think the wheat board cannot be expected to meet the competition which is being provided in some countries.
In the Economic Annalist for June there is an interesting section on what is being done in some of the other countries. I am not going to deal at any great length with it, but it is written by G. J. Dobson. The section on France points out again that France is subsidizing grain production by about $130 million. The total allocation for agriculture m France is $214 million. Then there are figures for Italy. I feel that the figures for Great Britain should be examined very carefully, because while our exports to Great Britain are continuing at a very high level, the farmers of Canada cannot be expected to meet the sort of competition that is provided.
I find that the British subsidies in terms of dollars for this last year were $1-1 million for cattle; $14-3 million for sheep; $133 million for pigs; $52 million for eggs; $102 million for cereals; $103 million for milk. Then we have additional subsidies for such things as fertilizers, $40 million; lime subsidy $28 million; plowing grants, $14 million; drainage and water supply, $7-6 million; improvement of livestock rearing land, $3-9 million, marginal production assistance, $4-8 million; T.B. attested herds scheme, $29-7 million; ' livestock breeding grants, $300,000; calf subsidy, $22- 4 million; hill sheep and hill cattle, $10-9 million. There are still further subsidies for bread of $113-4 million; milk in schools, $2-8 million; national milk scheme, $87-1 million. It is not going to be possible for the Canadian farmer to meet this sort of competition when everything they buy is manufactured in a highly protected market, and when they are expected to sell in competition with these subsidies. I hope the minister will have a look at the problems with which the wheat growers are confronted at the moment, where the grain that is going to be harvested in the next few weeks is not going to be sold for a long time and expenses must be met.
My last section is on the trade situation. The hon. member for Eglinton has put on

Supply-Trade and Commerce the record quite a number of figures which I was going to use, so I shall not repeat them. But I should like to draw to the minister's attention one of the articles by James S. Duncan, which appeared in the Gazette of May 7, regarding the British-Canadian trade situation. Mr. Duncan reports that the conference he attended reached a unanimous conclusion on two points; first, that a substantial expansion of Canadian imports from Britain is absolutely essential in the interests of both countries; and second, that there are practical possibilities of bringing about this expansion if vigorous measures are taken in both countries. In other words, if there is a real attempt in both countries something can be done. I do not think we can continue selling to our best customer if we are going to buy one dollar's worth for every two dollar's worth we sell to that customer. I do not think we can increase our purchases from the United States and decrease our sales there, and at the same time cut down our purchases from Britain and increase our sales there.
Before I conclude I want to say a last word about new fields of trade. I am thinking of Russia, the iron curtain countries and China.
I am very glad the minister has yielded to our demands and has started trading with Russia and the iron curtain countries. Had it not been for our wheat sales to Russia and to the iron curtain countries the minister would be in a great deal more hot water this year than he is. As a result of those large exports the year-end picture is a good deal brighter than many of us expected earlier. But the minister must now give consideration to trading with China. I am sorry that the resolution appearing on the order paper in the name of the hon. member for Vancouver South was not reached earlier in the year. It reads:
That in the opinion of this house, the government should consider the advisability of recognizing the present government of China, and taking all other steps to promote trade between Canada and Asia.
We must not lose sight of the fact that there are people in those countries who are potential customers of Canada. There really are no limits to the trade which could be developed, and I think it is disturbing to find that although we have substantial trade figures with so many countries of the world, China does not appear in this list. I find here, for example, that our sales to the U.S.S.R. for the last five months ending with May were over $9 million, but we have only bought about $400,000 worth; our sales to Poland run over $13 million, and we have bought from Poland about $500,000 worth during this period. I think the minister

must establish trade commissioner service in this vast area of the world, where there are six hundred million people.
The hon. member for Vancouver South, in an article which appeared in the Vancouver Sun sometime ago, pointed out the fact that it is plain hypocrisy to pretend that Chiang Kai-shek's little group of refugees hiding behind the United States fleet on the island of Formosa is China; and because the recognition of China is bound up with the larger question of war and peace in all Asia we should be exploring the possibilities-


Mr. Patterson:: You are on external affairs now.


Alexander Malcolm Nicholson: I am going to refer to the resolution which the hon. member for Vancouver South had on the order paper.


Elmore Philpott: You are doing fine, but don't take too long.


Alexander Malcolm Nicholson: The hon. member for Vancouver South was denied the privilege of bringing a very important subject before parliament. I have recently seen an article which appeared in the Colonist regarding the activities of Mr. W. A. Scott of Victoria, who spent some 21 years in the Chinese maritime customs service. He has been active in creating an interest in the unlimited possibilities which exist in that country.


An hon. Member:: Carried.


Alexander Malcolm Nicholson: I am nearly through. I think the minister must face up to the fact that we cannot continue to sell the large surpluses of Canadian goods which are available in the markets we previously had, because they are diminishing; but there are unlimited markets available in this new area.


Mr. Quelch:: Mr. Chairman, first of all I want to say a few words regarding the general economy, and then I shall confine my remarks mainly to the question of the marketing of farm products.


An hon. Member:: Make it brief.


Victor Quelch: Someone says, "Make it brief". I have been very brief in the last few weeks.


John Horne Blackmore: Open up and give them the whole story.


Victor Quelch: A number of members of the government have stressed the high level of production, employment and income in this country and the fact that there has been a steady expansion of trade. I do not intend to question that for one moment, but I do point out that there are a number of very undesirable features behind that situation.
Internally we have a high level of production, employment and income which is being

Supply-Trade and Commerce
bolstered by a very large volume of consumer credit. Charge accounts, instalment buying and personal loans amount to over $2-2 billion, and there is an additional half a billion dollars for consumer housing. That figure is approaching $3 billion, which is of course a danger signal in times of prosperity.
We have the Bank of Canada attempting to do something about it by restricting credit. If the Bank of Canada does succeed all it will mean is that there will be a slight recession, a recession which in the graph of debt will merely be a dip because as soon as the first sign of recession appears they will have to let loose again and consumer credit will continue to climb. Whatever action they follow it will only be a small dip in the graph of rising debt.
I suppose the situation could go on for a long time. I do not know when you finally have to call a halt to an expansion of debt, but the time does come; and when it arrives I should imagine the Liberal party will consider it time for them to slip out of office and let the Conservatives perhaps take the rap as was done in the thirties.
We find an interesting situation regarding agriculture now. I was speaking to the general sales manager of one of the largest implement companies and he told me there had been quite an improvement in agriculture this year. He said, "Our sales are going up once more" but he indicated that "We are now financing our own sales, and we are doing it on an 8 per cent note." Until now the farmers, chiefly through the farm improvement loans plan, have been able to finance their purchases; but apparently they have used it to capacity and are now having to buy farm machinery on time from machine companies at 8 per cent. I do not criticize the companies for charging 8 per cent, because most people who have to use credit facilities are paying very much more than 8 per cent. We find that many people in order to buy the goods they desire have to pay anywhere up to 26 per cent, and then when they cannot pay back their loans on the instalment plan they become involved in even worse transactions. In the banking and commerce committee we heard of some cases where people are being charged as much as 75 per cent a year. When we find people involved in situations like that I say it is time to call a halt on transactions of that nature.
In the external field the situation is not altogether desirable. Last year we had an adverse balance of trade with the United States of around $1 billion; an adverse balance of trade of $661 million and $369 million on invisibles. This was made up by using our surpluses with other countries
amounting to $365 million and foreign investment in this country, mainly from the United States.
In other words we were meeting the deficit on current account out of capital. I remember that when I was a boy I was always warned that it is a very bad practice to live off capital. I was advised that one should live on current income. Today we are living to a very large extent on capital in so far as our foreign transactions are concerned, and we are living on borrowed money in so far as our internal transactions are concerned. When a high level of productivity is bolstered by actions of that kind I say it is not a very desirable situation, and there are danger signals that will have to be recognized.
It may be met in part by reducing imports from the United States and expanding our exports; that would be the logical way to meet the situation. Of course, however, it takes two parties to make that possible. It could also be met by a reduction in the expenditures made by Canadians when they travel abroad and an increase in the expenditures of people from the United States when they come to this country; but you cannot blame the Americans for not spending more in Canada when they find that the price level of the things they want to buy is considerably higher than it is in their own country.
One way to surmount that difficulty would be for the government to eliminate the sales tax and bring our prices down to a point where they might be more competitive with the prices in other countries. I recall that in the banking and commerce committee the governor of the Bank of Canada said it might be a good idea to eliminate the sales tax so far as exports are concerned in order to make our prices more competitive.
I want to return to the question of farm products. I agree wholeheartedly with the hon. member for Mackenzie that in spite of the difficulties the farmers have experienced in the past year a vast majority of them are still solidly behind the wheat board as a marketing agency for wheat, and they do give credit to the minister for having maintained that organization in spite of a great deal of criticism that has been made of it by various organizations from time to time. I would say that rather than criticizing the wheat board, the farmers criticize the government for a failure to expand markets, storage facilities and credit facilities in order to take care of a succession of large crops.
The minister has said the situation is due largely to the fact that we have had a number of large crops in' the country. No one would

Supply-Trade and Commerce dispute that, but the point is this. In view of the fact that we are having these large crops surely it is necessary to extend our facilities for handling them both in the form of expanded sales, expanded storage facilities and expanded credit facilities. I agree with the hon. member for Mackenzie that the present system of making loans is not satisfactory. I think if we are going to continue to have large crops arid if we are going to continue to have to store quite a bit of grain on the farms, there will have to be a system of advances on grain in storage on the farm, but that is not the point I want to stress at this time.
When I was out west a few days ago I found there was a considerable improvement in the situation. A very large volume of wheat has moved off the farms. Many of the farmers have their granaries pretty well down so they are able to handle the new crop when it comes in. The point is, however, that another large crop is in sight. Every indication is given that there will be another heavy crop this year; and although we have been able to move quite a bit of wheat off the farms the elevators at country points are congested. This year we are going to have just as much congestion as we had last year. Officials of the wheat board suggested it might be even greater. In view of this situation what is the government going to do about it?
When the Canadian Pacific railway was before the committee it suggested that there should be additional terminal storage. If the grain companies are not going to build it, if the government is not going to build it, then how does the government expect the farmer to get his wheat into a position where he can get payment on it? He cannot get any payment on it on the farm; the only way he can get payment is to deliver it. If we are not going to increase our terminal storage facilities it will not be possible to move a greater amount of wheat from country points to terminals. Therefore I suggest to the miinster that he do everything in his power at this time to encourage the farmer to look after the situation himself.
Unfortunately he has done just the opposite. Last year the farmers at country points, realizing the difficult situation, took action to help clear away the congestion. They built off-site storage. That was done right across western Canada. I know of a large number of communities where the farmers realizing the elevators were going to be full and they would not be able to get their wheat to town, decided to build large buildings such as curling or skating rinks. Those were built in the villages and licensed and rented to the


grain companies. Now what do we find? We find that the board of grain commissioners are going to refuse to license any off-site storage.
I take it that the real power behind that decision is the government. So far the excuses given for refusing to license off-site storage have been very poor indeed, not even excuses. What were the reasons given? They say the grain has to be accessible. What was the situation in many country points? There are many elevators with annexes that have no augers, and the grain must be moved by truck. If it is easy to move grain from an elevator annex by truck, it would be just as easy to move grain from another building a few yards away, because in most places these buildings for off-site storage were in close proximity to the elevators.
The second point raised was the danger of spoilage. Why should the wheat board or the government be concerned about spoilage? If there is spoilage the government does not lose, the wheat board does not lose; it is the grain company that would lose, because once having taken delivery of the grain they must deliver grain of that quality to the wheat board. If the grain companies are prepared to take the risk apparently they do so because they do not consider there is much danger of spoilage. Why does the government refuse to license this off-site storage?
I think the reason is quite plain. This year we passed legislation under which the government will pay the storage charges on a carryover of wheat in excess of 178 million bushels at the end of the crop year. They apparently do not want to incur storage charges on any more than they can help. That is the only conclusion one can come to. The minister shakes his head, but if that is not the reason then I suggest that the minister change his attitude on this question of off-site storage and recognize that the farmers by providing off-site storage are trying to help themselves. It ill behooves the government to put obstacles in the way of the farmers handling their own affairs.
There is another point which the farm organizations have stressed, and I refer to the brief of the interprovincial farm union. They have presented two excellent briefs to the government this year. At the bottom of page 13 we find this statement:
A much more aggressive sales policy by the government and the Canadian wheat board, by substantially increasing sales staff, by acceptance of currencies of other countries which in turn can be used to pay for imports from those countries, by barter deals wherever possible, and by credit transactions wherever these are necessary.
I know that on a number of occasions the minister has opposed the acceptance of foreign

currency. Both he and the governor of the Bank of Canada have denied that United Kingdom purchases are down because of a lack of sterling. However, we have had statements by the high commissioner for the United Kingdom and by the Prime Minister of Great Britain to the effect that a lack of dollars has made it impossible to buy more from Canada. The governor of the Bank of Canada rather shrugged off that statement by saying they had reasons for making statements of that kind.
Perhaps the Minister of Trade and Commerce feels the same way. However, I should like to call on a witness whom I am sure the Minister of Trade and Commerce will agree is a man who knows what he is talking about; I refer to James S. Duncan, chairman of the dollar-sterling council, a well-known industrialist of this country. I think the minister will agree that a man of his calibre would have a pretty good idea of what he is talking about. Let me quote a few words from what he said as reported in the Farmer's Advocate and Canadian Countryman of March 24, 1956. In a brief submitted to the royal commission on Canada's economic prospects Mr. Duncan is reported to have said:
Unless Canadians awake to the necessity of preserving and strengthening their historical and traditional markets with the United Kingdom and the sterling area by increasing imports from them, the outlook for the long-term sale of some of our primary products is not at all bright.
And then again;
Basically, the reason our exports to the United Kingdom have not grown is that Britain's ability to purchase from us has been limited by her dollar shortage. Since the end of the war, Britain has been unable to earn a sufficient amount of dollars, directly or indirectly, to pay for imports from dollar countries up to the limit of her domestic demand. Therefore she has applied various import prohibitions, quotas and other restrictions on dollar imports in order to maintain external solvency. While many of these restrictions, especially on primary products, have been removed as the sterling-dollar situation has improved, we are very far, even ten years after the war, from having free access to the British market or other sterling markets.
It is important to recognize that British restrictions on imports from Canada have arisen from the limitations on Britain's dollar resources and not from any desire to discriminate against Canadian goods.
Then he goes on to point that there is a large volume of British goods that we would be glad to have in this country. So there would be no difficulty in buying British goods for the purpose of balancing our trade.
I know that on former occasions the minister has tried to make us believe that if we did take sterling from Britain we would not be able to spend it or buy goods for export, but I have given a number of examples to show the fallacy of that argument.
Supply-Trade and Commerce I have had my personal experience and the experience of some of my neighbours who had sterling balances and who used them for the purpose of exporting livestock to this country. Not only was the use of this sterling allowed but it was encouraged. These people get a premium for exporting their livestock to a dollar country. There is no difficulty involved at all. These people are encouraged to ship livestock to dollar countries.
However, the minister said just the other day that he did not know of any country that would buy wheat or any other farm produce with its own currency. Of course the obvious answer to that is that the United States, with other countries, has been making that possible to a very large extent. According to the Globe and Mail the figure stands now at around $4 billion, and apparently congress has now sanctioned another one and a half billion dollars worth of surplus goods being sold in that way.
Many people criticize the large scale of United States investment in this country. The United States has a large favourable balance of trade with Canada, and has made it possible for Canada to balance payments by investment in this country. They realize that under the form of international financing that we do at the present time, the only way we can continue to buy from the United States is by their investing in this country. Otherwise we would go steadily further and further into debt, and no doubt would have to put restrictions on our imports from the United States.
But what is the situation with regard to Canada and Britain? We also have a favourable balance of trade with Britain in the same way that the United States has a favourable balance of trade with Canada. Their investment makes it possible for Canada to go on importing from the United States, but do we make it possible for Britain to expand her purchases from us by our investment in that country? On the contrary, we have a favourable balance of trade, almost two to one, with Britain and we demand that they pay us in dollars. It is the same old story. We are sticking to a triangular pattern of trade. We want Britain to pay us in dollars so we can pay the dollars to the United States.
I do not see why it should be the responsibility of Britain to make up Canada's adverse balance of trade with the United States. Mr. Ilsley time and time again in this house said that under our present pattern of trade it is absolutely essential that we use our favourable balance of trade with Britain to balance our adverse balance of trade with the United States. What is the consequence? The consequence has been that Britain has

Supply-Trade and Commerce curtailed her imports from this country in the same way as we would have had to curtail our imports from the United States if they had not made a large investment in this country.
The minister has from time to time ridiculed the idea that you have to try to plan trade on a bilateral basis. He has said you cannot do it. Let me call a witness on that question, a man of whom I know he has a very high appreciation. Former deputy minister M. W. Mackenzie said on October 9, 1947, as quoted in Foreign Trade:
Now that the multilateral system of payments has suffered a serious breakdown for the second time, or perhaps one should say for the third time in the last generation, Canada and all other countries that are engaged heavily in international trade are facing a difficult stage in their affairs. The balance of trade between pairs of countries-that is, the bilateral balance-has become a matter of first importance and will remain so until the mechanism of the multilateral system has once more been placed in good order.
One cannot say it has been placed in good order if last year we had an adverse balance of trade with the United States of about $1 billion and a favourable balance of trade of about two to one as between us and Great Britain. I feel that the best way to give Britain the assurance that it is our intention to balance trade with her would be to take sterling in payment for our surplus and use that sterling for the purpose of buying goods from Britain. Mr. Duncan says that there is a large volume of goods in Britain that Canadians would like to buy. So there is no difficulty with regard to supply.
The minister says there would be no difference between doing that and accepting dollars. That would be true provided those dollars were spent in Britain, but the big difference is that when we take dollars we do not intend to spend all those dollars in Britain; we intend to use a large percentage of them for the purpose of paying our adverse balance of trade with the United States. If we took sterling under the pledge that that sterling would be left in Britain and spent on goods, it would be giving Britain the assurance that in the future we intended to balance our trade with that country.
There are many members of this house in the Conservative and C.C.F. parties who criticize the undesirable situation in regard to trade, but what they do not appreciate is that we laid down the pattern for this very kind of trade in 1945 when we passed the Bretton Woods agreement. The Bretton Woods agreement made this system inevitable. Let me quote what I had to say when that measure was before the house, but first of all let me say this. We opposed the Bretton Woods agreement because we said it violated

the fundamental principle of international trade, which is that international trade should be the exchange of goods between nations on the basis of mutual advantage.
Under the Bretton Woods agreement we give the creditor nation the right to demand payment in its own currency, without any obligation whatsoever to accept goods in payment. That in itself, I claim, is a violation of the fundamental principle. So I summed up at the end of the consideration of the Bretton Woods agreement in the banking and commerce committee as follows:
What we want in the act mainly is a provision that a debtor nation in order to pay for its imports shall be recognized as paying for them when they establish a credit within their country in favour of a creditor nation and that that credit can be used to buy anything purchased within that country. Then if the creditor nation is not willing to accept goods from a nation with which it has a credit if it desires to trade on a multilateral basis it may trade the credit established on that basis for the credit of another country on a multilateral basis. So I say if the great industrialized nations are really sincere in this matter they should have shown it at this time and been willing to have an article to that effect put in the Bretton Woods agreement.
Then I went on to point out that as a result of the Breton Woods agreement two things were bound to happen. Either the nations, to protect their balance of payments, would have to curtail imports-and that is exactly what has happened insofar as Britain is concerned-or, on the other hand, the nations would have to borrow or have large-scale foreign investment in their country to balance their payments. In that regard I had this to say:
The situation that will face a debtor nation will be this. They will either have to cut down their standard of living to the very minimum, cut off imports, which will be contrary to the purpose of the fund, because the purpose is supposed to be to expand trade, and if a nation as a result of this is forced to cut down imports and reduce its standard of living to the minimum it would be directly contrary to the purpose of the fund. Instead of the fund helping to bring about an expansion of trade it will be helping to develop economic nationalism, the very thing it is supposed to prevent.
I do charge that under this act that is exactly what will happen. The intensification of economic nationalism once the fund has been exhausted. It has been said that there are several alternatives; the only alternative will be that the creditor nation will offer the debtor nation loans. And what happens when it makes loans? It takes securities, it takes securities on its resources, it takes securities on its capital assets; and a creditor nation instead of being willing to accept the payment in goods will demand payment in capital. By supporting this we are supporting the most vicious form of imperialism you can have; true, not imperialism by the force of arms, but imperialism by monetary penetration.
Only this session I heard a member of the Conservative party accusing the United States of monetary imperialism, the very

thing that I had prophesied was bound to happen under this agreement. On the one hand, Britain has to curtail imports to protect its balance of payments; on the other hand, Canada has to have a tremendous volume of foreign capital investment in this country in order to protect its balance of payments.
I would say this, and I am not opposing foreign investment for one minute. I think that with the element of time it is necessary to have a certain amount of foreign investment in this country, but the danger will be when, as a result of that foreign investment, we have expanded our ability to produce. Will the United States then be willing to take an expanded amount of export from us in order to make it possible for us to balance our trade with them? If that is done, then the investment in this country will be fully justified.
I wish to point out again that the United States are playing their part in making the Bretton Woods agreement work by making investment in a country with which they have a favourable balance, but Canada is not doing that. We have a large favourable balance of trade with Britain, but instead of doing the same as the United States and making investments in that country, we are insisting upon payment in dollars and thereby forcing Britain to curtail her imports from this country. It is the agriculturist of this country who suffers as a consequence.


Clarence Decatur Howe: I should like to say a few words about the proposal that we should attempt to balance trade with every country. The reasons for buying a particular commodity from a particular country are not related wholly to the balance of trade. For instance, we buy great quantities of petroleum from Venezuela. We do not do that to balance trade, because the trade is greatly in favour of Venezuela; we do it because it is the cheapest market in which to buy petroleum to serve the eastern seaboard of Canada.
We could go a long way toward balancing our trade with the United Kingdom. We produce most of the world's nickel. We could sell all that nickel to the United States if we wanted to, and get dollars for it, and let England do the best she can to get nickel. We sell nickel to England because England needs nickel. It adds to the adverse balance; nevertheless it is a pattern of trade which a situation demands. The reason we have a tremendous trade with the United States is that it is an attractive market and one of the few free markets in the world. With the exception of a few South American countries, it is the only country where anyone can buy and sell freely. The United States has a
Supply-Trade and Commerce pattern of production that suits our requirements as far as certain products are concerned, and we have a pattern of production that suits the United States for many of their semi-fabricated materials.
I think it is a great mistake to indicate that the balancing of trade between countries is the paramount feature of trade. There are many other factors that have to be considered. It is true that we could say to an exporter: "We know you can get a higher price in the United States but we have to balance our trade with some other country and we want you to ship your goods to that country even at a lower price". I do not think that would be too popular even with my hon. friend. Prices have a good deal to do with direction of trading.
It seems to me that the world is operating at the present time on a trade pattern that is working, and for Canada to say that we did not believe in all this nonsense and therefore we are going to balance our trade with every country in the world would, I think, put this country in the position of being the most disrupting influence in the world if we set out to follow that pattern.
I make these few remarks because I think something should be said about the theory held by my hon. friend that the great principle should be for Canada to balance its trade with every country in the world.


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, despite the rosy picture the minister has presented of the general level of prosperity in this country I still think, and I am sure many other members do, that there are certain storm clouds on the economic horizon. I suppose the largest one is our very large unfavourable trade balance with the United States, but the particular storm warning cloud I should like to deal with for a few moments has to do with a question raised in the house on Thursday, July 12 last. On that occasion the hon. member for Ontario put the following question to the Minister of Trade and Commerce, as found at page 5887 of Hansard:
Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Has the minister received communications from the united automobile workers' union contending that the increasing number of United States-made motor vehicles and parts being imported into Canada is becoming a threat to the livelihood of workers in Canada's automotive and parts industries? If so, what action does the government intend to take to meet the situation?
To which question the minister made the following reply:
Mr. Speaker, ... I have received a number of postcards from individual members of the united automobile workers' union in connection with the importation into Canada of motor vehicles and parts from the United States. The matter is being looked into.

Supply-Trade and Commerce
I was very pleased to hear the minister say on that occasion that he was considering the question, because it is a matter not only of great importance to the hon. member for Ontario but to a great many other hon. members, including myself. As hon. members know, the automobile industry is not located in one place such as Oakville, Oshawa or Windsor, the big centres of the industry. Many hon. members may be inclined to think that is so, but many of the smaller industrial cities throughout Ontario, Quebec and elsewhere have plants which supply the gigantic automobile industry with parts.
During the last month or so I have received a large number of representations on cards which have been sent to me by individual members of the united automobile workers' union, and I am sure the minister has probably received a number himself. They set out their case very well on these cards and I should like to read one of them into the record. I shall pick one at random. It reads as follows:
The increasing number of U.S.-made motor vehicles and parts imported into Canada is becoming a threat to the livelihood of workers in Canada's automotive and parts industries. Not so many years ago, because of British commonwealth trade preferences, Canada exported a substantial part of its auto production. Today the trend is the opposite. Last year 27,392 passenger cars valued at $58,886,000 were imported from the United States compared to 3,154 imported cars in 1950. A great many of these cars were formerly made by Canadian workers from Canadian parts.
At the same time, Mr. Chairman, I also received a great number of cards from members of the same union, I believe, who are employed by the Massey-Harris-Ferguson Company. I am not going to read the whole card but the cogent part reads as follows:
Thousands of farm implement workers have been laid off since the beginning of the year and it is anticipated that by the middle of summer the farm implement industry will be almost shut down for an indefinite period. In a world crying for food and implements, this condition is outrageous. I urge you to immediately place this problem before the federal government and parliament with a view to alleviating the economic condition of the industry, providing jobs for laid-off farm implement workers-
Here is the part that is cogent to this discussion.
-and seeking the necessary revisions in our trade policy to allow Canada to manufacture and export implements to all nations requiring them.
In this regard, Mr. Chairman, I have heard certain other comments. I see it is almost one o'clock. I can conclude my remarks in about three minutes if I may carry on.


The Deputy Chairman:: Is that agreed?


Some hon. Members:: Agreed.


Wallace Bickford (Wally) Nesbitt: I have heard comments particularly with regard to the automobile industry. They may be rumours and they may not, but I certainly think if the minister has not heard them they should be brought to his attention. One report or story brought to my attention is that the General Motors Corporation apparently is building a huge plant in the United States which will employ the principles of automation. The story has been told me by a number of people employed in the automobile parts industry, and it is said that when the plant is completed General Motors Corporation of Canada may discontinue the manufacture of Buicks, Olds-mobiles and I believe even the larger Pon-tiacs in Canada.
I hope this is not the case, but if it is it will cause a most serious dislocation not only of the automobile industry and the people directly employed in it but also of the parts industry. It will affect all sorts of large towns and small cities throughout Canada that have feeder plants for the automobile industry. I certainly hope the minister will look into the situation most seriously, because if this is going to be the case, and it may arise within a year or two, a very serious dislocation of our whole industrial set-up will take place.
I should like to make one further reference to the representations of the united automobile workers which I have put on the record. The whole business of importing such a large number of cars from the United States that no doubt could be made in Canada is certainly one very serious factor in our adverse trade balance with the United States. If the minister can find some way through consultation to encourage the General Motors Corporation and the other automobile companies to manufacture in Canada a large number of the cars that are being imported from the United States it would certainly be a big improvement, because I understand that Buicks, Oldsmobiles and so on imported from the United States are widely sold in this country and no doubt make up a very large percentage of our high importation figure.
That is all I have to say on the matter. The minister, as he indicated earlier, has promised to look into the situation. I hope he does so before the warning storm clouds break into a full-blown thunderstorm on our industrial scene.


Edward Turney Applewhaite: Shall the item
carry?


Clarence Decatur Howe: Perhaps I might say one word, Mr. Chairman. There is nothing in the fears of my hon. friend. General Motors are talking about expansion in Canada

rather than contracting in Canada. I had three or four days' discussion with the president of General Motors of the United States a while ago. I know he feels that in Canada there is a growing market, and that General Motors of Canada will increase in importance from year to year rather than the reverse.


William Alfred Robinson: Shall the item carry?


Some hon. Members:: Carried.


An hon. Member:: One o'clock.


Wallace Bickford (Wally) Nesbitt: May I make just a brief comment. I am glad to hear the minister's comments. The only thing that concerns me is that possibly the minister may have slightly misunderstood what I was saying with particular reference to discontinuing the manufacture of certain lines in Canada. I referred to the fact that apparently a large plant involving the principle of automation was being put up in the United States, and that it might make it more profitable for the General Motors company to discontinue the manufacture of some of the more expensive types of their middle-priced cars in Canada and make them in the United States. Can the minister tell us anything about that particular angle?


Clarence Decatur Howe: Yes. I am assured by the management that they intend to increase their production here rather than otherwise. In other words they do not propose to abandon any production line they have operating here at the present time.


Some hon. Members:: Carried.


Donald Methuen Fleming: It is not carried.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Supply-Trade and Commerce the other countries are increasing their trade with China. Even some Canadian firms are entering through the back door. I understand that Massey-Harris-Ferguson has a manufacturing plant in Britain and in West Germany, and they are exporting machinery to China at this time.
I rise to speak very briefly on this question because it is of major concern to the people of British Columbia. We believe this offers an immense opportunity for marketing our lumber and our related lumber products; our paper; some of the cheaper grades of fish; machinery; all types of building supplies; fertilizer and some fruit. At one time we did ship a certain amount of fruit to China. This is recognized in British Columbia by people generally. Business leaders have expressed their opinion; labour has expressed its opinion and I have heard a great deal of support for developing trade with China amongst people from all groups throughout British Columbia. All these people recognize the opportunity that is provided in this market for supplying the needs of the Chinese people, and at the same time finding a very necessary market for many of our products.
In that connection I wish to read a resolution adopted by the mine and mill workers' union which is operating in the plants of the Consolidated Mining and Smelting Company. The resolution adopted by the membership reads:
-UC1MS Iieer world trade mdispensabIe requisite to the maintenance" stability of full employment Whereas the new C.M. & S. Co. Ltd. fertilizer !f Klmberley has ceased production
les?PthanythdUe t0 lack °f saIes markets, after less than three years of operation
Whereas many of our members have been laid
ffTh*rafreSUi °! thls fertilizer plant shut-down. Therefore be it resolved that the Canadian eovtrT<teewith°aUVerything " Us power t0 increase
Chfna fr all countries of the world, especially
the VIewP°int of a practically unlimited fertilizer market.
[Stage Direction]

and
Mr. Herridge:: I intend to take up very little of the time of the house, Mr. Chairman, so I shall say that I express support for the general remarks made by the hon. member for Mackenzie this morning with respect to trade policies and particularly the remarks he made concerning the necessity for developing trade with China. We in this group think we are very backward in developing this market, particularly while we need markets for our primary, industrial and agricultural products. Here we have, as the hon. member mentioned, a potential market of 600 million people, a vast market which offers tremendous opportunities for development to our mutual advantage. While we hesitate to step into this field, Britain and 67509-463J
There is a splendid opportunity. China is a tremendous country with a starved soil; an immense country with a hungry people.' We have the capacity to produce some of the best fertilizer in the world and, I might say for the information of hon. members, some of the cheapest fertilizer in the world produced by Consolidated Mining and Smelting Company. This offers a tremendous opportunity for the sale of this fertilizer which we have the power, the skills and the plants to produce.


Clarence Decatur Howe: If my hon. friend will permit me a word, he doubtless knows that great quantities of fertilizer are being bought by China from Trail. They bought large quantities last year and again this year.

Supply-Trade and Commerce


Herbert Wilfred Herridge: I know that, Mr. Chairman, but there is a great opportunity for the expansion of this market which would result from broader trade relations. Therefore we in this group do think the time is ripe to recognize China and do something toward the development of this potential market. In the first instance we could send a trade delegation to find out their needs and what we could supply, and so on.
We have to face realities in the present world. While we are squabbling over markets in other parts of the world and suffering from very severe competition, we believe that here is a natural market for a tremendous amount of Canada's products, and particularly those of British Columbia. We in this group feel that if this possibility is explored we can develop an enormous market to the mutual advantage of both the Canadian and Chinese peoples.


Mr. Cardiff:: I should like to bring to the attention of the minister a condition that has existed in our part of the country for quite a number of years. I refer to the feed grain that comes from the west. We are not satisfied with the grade that is coming down. There is a lot of dirt and stuff that comes with it that should never leave the head of the lakes. It is difficult to get a grade from the elevators.
The other day I heard of a case in which a chap ordered a load of No. 1 feed. The feed was delivered by a trucker, along with two tickets, a weight ticket and a grade ticket. There is no reason why that should happen; it should be all on the one ticket. In any event he asked the trucker what the grade was, but the trucker would not tell him until after the load was dumped into his granary. Then he took a look at the feed and asked what grade it was. The trucker said it was No. 2, and the chap said he had ordered No. 1 so the trucker could load it and take it away. The trucker told him to communicate with the dealer, and if the dealer gave him instructions to take it away he would come back and get it. He came back and got it the next day. There is a great deal of dissatisfaction in not being able to tell what grade you are buying, and that should not be the case.
This grain is bought by grade in the west, and the farmer only gets paid according to the grade he delivers. When we get it down here it is mixed up with a lot of trash. We are getting fed up. If we were short of grain it would be a different story, but here you have thousands of bushels of grain in the elevators and we have to put up with that sort of feed which comes down. It should never leave the head of the lakes; it should
[Mi Howe (Port Arthur).]
be burned. I wonder if there is not something the minister could do.


Clarence Decatur Howe: The board of grain commissioners has no authority over the grain after it leaves Fort William. The grain is shipped from Fort William under a government certificate, and I have every reason to believe that at that stage the certificate is correct. What happens to it after it leaves Fort William is beyond our control and must be beyond our control until we get legislation from the Ontario government. I think that is the difficulty.


Mr. Green:: There is one point on which I should like to have a comment from the minister, and that has to do with the export of iron ore from British Columbia, principally to Japan. This has been discussed on other occasions, and that trade is continuing. I have a press dispatch which appeared in the Gazette of Monday, August 6, 1956, pointing out that two new iron ore deposits had been located on Vancouver island by Canadian Collieries (Dunsmuir) Limited, and that the ore produced there by at least one of these new mines would be going to Japan. There have been other contracts which for our province were very large, because we have comparatively small deposits of iron ore. For example, there is a contract with Quatsino Copper-Gold Mines Limited for the sale of 1,380,000 tons to Japan.
This has been going on steadily since about 1948. One reason the people on the west coast are so concerned about it is the comparative shortage of ore in our own province, and also because we do not have a steel industry. As the province is developing very rapidly the market for steel is steadily increasing, as the minister knows, and there is real concern that this export may result in the establishment of the steel industry being long delayed or even becoming impossible.
The Vancouver Province has run several editorials on the subject and on July 3, 1956, under the heading "Exporting More of Our Iron Ore" it had this to say:
The fact remains that the Japanese find it good business to buy hundreds of thousands of tons of our iron ore, ship it across the Pacific and make it into steel. We could, conceivably, buy our own iron ore back in the shape of steel and pay many times what we receive for it.
The question began to loom as far back as 1948, when U.S. interests purchased 50,000 tons of B.C. iron ore. Since then, ore exports have increased steadily.
If we continue to export our best iron ore (some of it grades 57-6 per cent iron) we will steadily diminish the prospects of ever establishing a real steel industry of our own.
It may be, of course, that there will never be an economic base for making steel here. But when people across the Pacific ocean find it practical to

Supply-Trade and Commerce
buy our iron ore, and when we are obliged to freight our steel across the continent (and go without it when there is a bad shortage) it would seem to be a good idea to find out just where we stand in this respect.
Just a few days ago the minister's own department carried an article on the subject in the publication called Foreign Trade of August 4, 1956. It is entitled "Canada's Steel Imports-Their Regional Significance". The article sets out:
Canada consistently imports well over a million tons a year of steel rolling mill products, aside from such secondary products as pipe, wire and stampings.
Although well over half of these imports are destined for Ontario alone, other Canadian provinces and regions are relatively more dependent
upon foreign supplies than Ontario. Thus the province of British Columbia, which only accounts for about 10 per cent of total Canadian steel imports, actually receives over half of all its steel requirements from foreign sources. The maritime provinces, on the other hand, because of the large integrated steel industry in Nova Scotia, are the least dependent upon foreign sources of supply. Their recent experience is that only a little more than 15 per cent of total consumption is met by foreign suppliers.
Two tables are then set out showing the consumption of steel rolling mill products by regions and the annual averages for the 4-year period from 1951 to 1954. The two tables are as follows:



TABLE I

[Stage Direction]
(in thousands of net tons)
Region	British Columbia	Prairies	Ontario	Quebec	Atlantic	TotalApparent consumption of mill products...	. 199	229	2,210	983	177	3,798Imports of mill products	. 107	58	616	301	28	1,110Per cent, imports of consumption	. 54	25	28	31	16	29

[Stage Direction]
(market figures in thousands of net tons)
Type-Region	British Columbia	Prairies	Ontario	Quebec	Atlantic	TotalStructural- Total consumption	
Per cent foreign	36-1 70-1	247-9 57-7	218-8 54-7	33-8 39-6	583-1 59-0Plate and skelp- Total consumption	
Per cent foreign	21-5 54-7	305-3 37-2	117-5 54-9	21-3 17-0	492-3 43-4Rail and track material- Total consumption	
Per cent foreign	60-9 11	191-0 2-7	71-1 1-8	37-0 7-3	368-8 4-9Bars and rods- Total consumption	
Per cent foreign	63-8 3-9	621-9 12-7	325-1 9-5	33-5 5-7	1,098-0 11-4Hot rolled sheets- Total consumption	
Per cent foreign	23-6 61-4	299-9 57-6	84-9 75-8	6-1 71-3	437-0 62-9Cold rolled sheets- Total consumption	
Per cent foreign	5-1 17-1	238-3 27-0	60-9 23-0	3-0 21-5	310-6 25-9Other sheet- Total consumption	
Per cent foreign	17-5 15-1	218-8 5-4	87-6 7-2	6-3 21-7	376-6 7-4
Supply-Trade and Commerce
This shows very clearly the position with regard to the places from which steel comes to British Columbia. I have also stressed the need for local manufacture if that can be arranged by any means whatever.
The provincial premier last month, I believe, asked the federal government to impose some sort of restriction on the export of iron ore from British Columbia. He is in the position that where an iron mine, a mineral claim, is crown-granted, the province can do nothing about the export from that particular property. I believe the province has placed a reserve on iron ore property which is not crown-granted. These mines which are exporting the raw iron ore all have crown-granted claims.
I suggest that the minister has the power to deal with this situation under an act known as the Export and Import Permits Act which was assented to on March 3, 1954. The minister and I had a little quarrel about this in the course of a debate about a month ago. I said he could use the act and he said he could not.
Clarence Decatur Howe: What clause
would you suggest I use?


Howard Charles Green: I am referring to section 3, which reads as follows:
The governor in council may establish a list of goods, to be called an export control list, including therein any article the export of which he deems it necessary to control for any of the following purposes-
Then it lists three purposes. I believe the powers the minister would require are contained in clause (c), which reads as follows:
(c) to ensure that there is an adequate supply and distribution of such article in Canada for defence or other needs.
I submit that the words "or other needs" would cover this situation, and that certainly it is very doubtful whether there will be an adequate supply of iron ore in British Columbia if this export is to continue indefinitely.
The minister has exercised powers under that act on different occasions. For example, there was an amended export control list issued on June 28, 1956. It made an amendment to the nickel group, providing power to require permits for the export of nickel. Under this amendment the new item is described as follows:
Nickel, as follows:
(a) ores, concentrates, (including primary residues) and matter . . .
Then there are further details added. This can be found in the Canada Gazette of July 11, 1956. The following note appears at the foot of this particular item:
(Export permit is required to all destinations, including the United States.)

To come back to the original export control list, I find that it was set up in 1954 after the passing of the act from which I have just read. Under group 6 entitled "Ferrous and non-ferrous metals, non-metallic minerals and other products" are listed cobalt ores, columbium ores, copper and copper base alloys as ores, molybdenum ores, nickel as ores and tantalum ores. It seems to me that with these different ores being listed in the export control list something could be done about the export of iron ore from British Columbia. It is a very worrisome situation. If we could be sure that the export would not prejudice the establishment of a steel industry there, there would be far less worry; but as it is, one can only feel that with this continuous drain on our iron ore resources it will make it just that much more difficult to establish a steel industry on the west coast.


Clarence Decatur Howe: We have examined the powers under the act and have had legal opinion to the effect that, except for strategic reasons, which do not apply in the case of iron ore, or to ensure that there is adequate supply and distribution of such articles in Canada for defence or other needs, it is doubtful that we could forbid the export on the grounds of needing iron ore years hence. It is not needed for any local need at the moment, because it is not being used. Our legal opinion is that the clause cannot be applied in the case of British Columbia, much as we would like to. We endeavour to work with the provinces, as in general anything that is good for a province is good for Canada as a whole and we try to meet the wishes of the provinces in all these matters as far as we can. Nevertheless there would be difficulty about applying a restriction such as this to one section of Canada. As my hon. friend knows, we have become important exporters of iron ore within the last two years, and even if we had the power to refuse to allow export from one coast and encourage it from another coast, it would be difficult. The point is that we have been advised that parliament has not given me the authority to apply this act to stop the export of iron ore.


Howard Charles Green: Is the minister of the opinion that such power should be asked for or that there is need for some power of that kind? I am afraid that the province is faced with an impossible position when it tries to do anything about this export at the provincial level. Evidently the restriction or control could come only under the dominion because of the powers of the dominion in respect to trade. It looks as though we have reached an impasse as far as actually dealing with the situation is concerned.

Would the minister consider that there is need for an amendment to the act if he does not feel that he has the power to do this under the act as it is at the present time? I would think that the wording of the present act is wide enough to meet the situation, but would the minister be in favour of having an amendment to make it clear that he could do something about this situation?


Clarence Decatur Howe: My hon. friend is not suggesting that the province could not stop the export if it saw fit to do so?


Howard Charles Green: I said it cannot stop the export when it comes from crown-granted mineral claims.


Clarence Decatur Howe: I suggest that if they put a high enough tax on the iron ore extracted from the soil of the province they could stop export very quickly.


Howard Charles Green: That really does not answer my question. I asked whether the minister considered it would be wise to have a provision in the dominion law which would give the dominion power to deal with the situation.


Clarence Decatur Howe: No, I think it would be dangerous for the federal government to make a restriction applying to one section of the country and not to other sections. I think the federal government could hardly pass an act of general application, which all our acts must be, and restrict its application to one province. I think the provinces would feel rather seriously about it. If the province feels so strongly about this, as we are led to believe they do, they could put on a tax or adopt any other means open to the province and stop this export much more effectively than it could be done here.


Mr. Barnett:: Do I understand from the statement the minister has just made that the government of British Columbia has made an official request to the federal government for an export ban on iron ore from British Columbia?


Clarence Decatur Howe: The minister of lands and forests wrote me about a month or so ago and asked that this government take steps to stop the export of iron ore from British Columbia.


Thomas Speakman Barnett: Perhaps I might comment that that is a different attitude from the attitude of the government of British Columbia toward the export of water. However, that is by the way. In making that statement did the government of British Columbia furnish any information in regard to the proportion of the known iron ore resources
Supply-Trade and Commerce of British Columbia within the crown-granted mineral claims to which the hon. member for Vancouver-Quadra has referred?
Perhaps I might just explain to the minister that I have some interest in this matter because the exporting mines are in my constituency, and some of my constituents are dependent upon their operation for a livelihood. While I might be agreeable in the over-all interests of the defence of Canada to a restriction, nevertheless I think we would want to feel satisfied that these operations were making serious inroads into the iron ore producing potential of British Columbia. I was wondering whether in making this request the government of British Columbia had given some indication as to the seriousness or otherwise of the present or projected mining activities in respect to the iron ore reserves on Vancouver island.


Clarence Decatur Howe: The letter to which I referred contained no reference to the size of the reserves. My experience indicates to me that if the reserves are being depleted by the present mining operations it is most unlikely that anyone would build a steel plant based on those reserves. A steel plant would need to have 50 or 75 years' supply of iron ore assured before it could start.
However, this is a matter for the province of British Columbia. Japan is a large customer of Canada, chiefly for wheat, barley and dissolving pulp, and they are concerned about being cut off from this source of iron ore in British Columbia. As a federal government we think it would be unwise indeed for this government to take a step which would bring that about. If the province feels it is necessary, that can be done by the province. The suggestion that it is impossible to stop the export of iron ore from British Columbia just has no basis in fact. It can be done. It cannot be done by just passing a law that there is to be no export, but they can put a tax on the mining of iron ore sufficient to discourage any export from any source.


Thomas Speakman Barnett: I should like to ask the
minister his opinion of the relative importance in our over-all trading picture with Japan of iron ore exports. Earlier he referred to the fact that we made a trading agreement with Japan, and I was wondering what the relative position of the iron ore exports is in the trading picture with Japan at the present time.


Clarence Decatur Howe: If Canada were
to put on a discriminatory provision against Japan and not against every country it would,

Supply-Trade and Commerce of course, be a violation of the agreement. It would be very dangerous indeed for the federal government to do so, since it would be directed against one country and not against other countries.


Mr. Cameron (Nanaimo):: I do not want
to hold up the committee too long, but I should like to spend a few minutes reinforcing the plea that I believe was made here earlier with regard to trade with China. I think this is a very important question that Canada should be considering at the present time, particularly in view of the fact that there are fairly reliable reports that there are Canadian corporations which are now trading with communist China but, because of our official position with regard to trade into that area, are doing so through subsidiaries in other parts of the world, where the trading relationships with China are more lenient than they are here.
I think it is fairly well known, too, that there is a more or less shall I say semiclandestine trade going on with communist China through Hong Kong. I would suggest that, since that is the case, it would be well that our trading relations with China were put on a realistic and rational basis. We should remember that it is, after all, an area containing nearly one-third of the population of the globe and that its importance commercially and industrially is bound to increase very rapidly in the near future.
Perhaps we should have learned our lesson with regard to what can be done by people who by rather savage totalitarian methods begin to pull themselves up by their bootstraps. The illusion that was widespread for many years that the Soviet union was a backward country which was not making an economic success of its experiment should, I think, have exploded any idea that the Chinese will not be able to follow in the same course. It seems to me that now is the time we should be starting to build our trade relationships with that extremely important sector of the human race.
I understand, of course, the difficulties that lie in the way of any formal advances to the communist government of China, since Canada has not recognized that government. I might say that I think the necessity of seeking and developing trade relationships with the existing government of China reinforces the plea that has been made many times in this house for a speedy acceptance of reality and fact by recognition of that government. So I would ask the minister if he would perhaps be able to investigate the possibilities of trade with that area, if he and his staff have not at the present time

the relevant data, and estimate iri that way the possible value to Canada of trading across the Pacific ocean.
We who live on the Pacific coast are very conscious of the fact that we are a Pacific nation as well as an Atlantic nation, a fact that sometimes escapes the attention of people living in other parts of Canada. The Pacific coast of Canada has traditionally had connections with the Orient, and we seek to have them reopened again as they were in the past with this new rising regime in China which, however unpalatable it may be to us, nevertheless bids fair to do again in China among an even larger population' what the Russian revolution did among the Russian people. I should like the minister to turn some of his staff on to a study of this question with regard to trade possibilities.


Clarence Decatur Howe: I should like to ask the minister a question with regard to the feed grain situation in southern Ontario.


Clarence Decatur Howe: I would suggest to my hon. friend that he defer this question until we get to the item in the estimates dealing with the board of grain commissioners.


Mr. Hamilton (York West):: It is quite apparent from the introductory statement by the minister that he has no intention of flogging his own estimates as was done last night. I almost wonder whether he went home and cut his speech in half, because he certainly shortened it up to a great extent.


An hon. Member:: I hope you follow his example.


John Borden Hamilton: At the same time I think we all wish to get through this item as quickly as we can.


Some hon. Members:: Hear, hear.


John Borden Hamilton: That is one way we can get applause from the other side, anyway. My remarks will be just as brief as possible. It seems to me that this is a very important department, dealing with a subject that is causing great concern. There is one aspect of it that should be dealt with and one that is especially important in a constituency such as mine; that is, the changing complexion of the Canadian scene and the fact that we are becoming from coast to coast-certainly concentrating on becoming-an industrial nation. So I have very few apologies to make for taking ten minutes here this afternoon, when I remember that we probably spent about two months discussing agriculture, wheat and box cars.

Indications of the situation dealing with the over-all picture were reflected very well in a page of the Financial Times last year giving the major business indicators. That showed that from 1952 onward we seemed to be on a downhill road, in so far as the possibility of balancing our exports and imports was concerned. What impressed me most was the fact that in the items that go toward the total of exports we find a list that goes like this: wheat, wheat flour, planks and boards, woodpulp, newsprint, aluminum, and then a very small item, farm machinery.
In the imports we find manufactured cotton, primary iron and steel, non-farm machinery, automobiles and parts, electrical apparatus, and items of that kind.
So we have a situation where the flow of trade outward is concentrated very definitely in the field of non-manufactured goods, that is, natural products; and the flow inward is a fairly constant flow of manufactured products. This presents a very serious problem at this time, because the labour force of the country is becoming more and more concentrated in the industrial field. I notice that in the same publication it is stated that the total over-all number of persons employed in 1955 was 5,154,000. Of that total there were about 874,000 in agriculture. It points up the very serious problem that faces our industrial community.
This has not been overlooked by the editorial writers of our newspapers. I have before me an editorial that appeared in the Globe and Mail of July 1 of last year. It is a fairly lengthy editorial, but I shall only read a few words. At that time we were concerned with the question of emergency in the defence production debate, and the paper had this to say:
Yet it seems to this newspaper that Canada's economic emergency is quite as serious as the defence emergency parliament has been talking about: indeed, more so. Regarding the one, it may be said that there is no international conflict going on anywhere in the world, and that there has been a pronounced slackening of tension between the two great opposing blocs. Regarding the other, it may be said that Canada has now slipped to fourth place as a world trader, with Western Germany taking third place . . .
Further on it has this to say:
Let parliament deal with the defence emergency now before it. But the other emergency has a greater claim to its attention; and in the long run, is a defence emergency itself. No nation can be strong in the military sense unless it is strong in the economic one. Until Canada is populated as other nations are, industrialized as they are, fending in world markets as they are, its position is insecure. To assure its future, it must plan much more boldly, grow much more rapidly, than it is doing now-than it has ever done.
The situation in connection with industrial trade is one that leaves the layman very
Supply-Trade and Commerce much up in the air. He has reference to various publications, but the list of headlines goes something like this: "GATT Canada's Best Bet Says Importers' Counsel." Then the next one is, "Attack on GATT Charges 'Sabotage' of Ontario Industry." Then the next one: "Canada Leads ICC Move to Support Freer Trade." The next one reads, "Imports Swell Cheese Surplus." The final one I have reads: "Help Japan, U. S. Asks Free World." Then there is this subheading: "But Clamps Curbs on Import of Japan Textiles."
It appears that notwithstanding these ventures into international trade diplomacy we still have a situation where other people are giving us advice and we seem to be taking but it does not appear to be doing us much good. Our most serious problem arises in respect of our trade situation with the United States. Here is a Canadian Press dispatch that appeared in the Ottawa Journal of August 4. It reads in part as follows:
Imports have risen even faster, hoisting the value of incoming goods to a new record and creating a trade deficit of $537,500,000 for the six months.
Further on it says:
The six-month trade deficit was created in dealings with the United States. The balance in favour of the United States was a record $751,600,000 compared with $420,400,000 in the first half of 1955.
If these agreements that we are entering into are supposed to be helping us, surely the situation confronting us with respect to the United States is one which we should look at very aggressively. Let us not get any idea that everybody appears to play under the same rules in connection with these trade agreements. Here is an article from the Financial Post of December 10, 1955, with respect to the United States situation. It reads in part as follows:
This "how-pure-we-are" yarn about United States tariffs can only be performed by concealing a whole maze of hidden strings and off-stage performers, such as the valuation procedures of U.S. customs, the operations of the tariff commission, the peril points, the escape clauses, the GATT waivers, the agricultural quotas, and the "national security" provisions. The other part of the trick is to make the audience accept a set of completely meaningless statistics. The quickness of the figures deceives the mind. This is where the skill of the performer really counts.
Under the heading, "How to Avoid Competition" it goes on to say:
The dominating characteristic of the United States tariff is that it does exclude most of the goods which might compete with U.S. industry. It bears relatively lightly-apart from quotas and embargoes and appeals to the U.S. tariff commission-on raw materials which the United States wants. It bears so heavily on manufactured goods that very few of them cross at all. Therefore they don't show up in the average rates of duty collected.

Supply-Trade and Commerce
The dominating characteristic of the Canadian tariff, by contrast, is that it does not exclude manufactured goods which compete with Canadian industry. It charges them a certain rate of duty; but the duty is still low enough that they do come in in very large quantity.
Here is an indication that whatever the agreements are that we have entered into, we cannot hope by the present system to solve the over-all trade deficit problem. It would appear to me, sir, that when I used the expression "downhill ride" it was a very fair term. It seems to me that we are getting by and balancing our position by an inflow of capital investment for which we are duly grateful, but the day of reckoning must soon arrive and whether or not it affects us certainly at some time it is going to affect succeeding generations of Canadians.


An hon. Member:: Time.


John Borden Hamilton: I think my timekeeper over there has beaten me to the punch, but I shall try to sum up in two or three minutes. We have had the benefit of reading the minister's report, but to me it is a report that is drawn up in the same general manner as the communiques we now read on the results of commonwealth conferences. It really does not tell us too much. In my opinion what we are going to have to know is what methods are used by the trade department to arrive at their figures when they say to us that they have promoted $100 million of trade during the past year. I think we are entitled to know what sales steps are taken by the same people in selling their services. I know we have the picture of the trade counsellor who is in town and the businessman having the opportunity of being there and meeting him, but it seems to me what is going to be required is a most extensive and aggressive expansion of the trade facilities of the department for businessmen who are interested in getting into the United States market. I note that at page 21 of the minister's report he says:
Three senior officers of the department examined the operations of the trade commissioner service in four leading market centres in the United States. As a result of this study, recommendations have been made to strengthen the service in that vital market.
I think what we need from the minister is not a statement that a survey has been made and that steps have been taken, but we should know what steps are being taken, how soon others will be taken and how many people are involved. As a second point, and I shall only mention it in passing because I am informed that this may not be the place to deal with it, I think we would like to know what trade steps are behind the communique issued by the commonwealth conference, is


there anything which indicates that some progress may be made along the lines of obtaining complete convertibility of sterling at some time in the foreseeable future.
There is also a reference to the intelligence service of the commodities section, but we would like answers to these questions. What are they doing? What information is getting to us on the question of the standard of living in various countries in advance of the time when their products are reaching our shores? I think we want to go one step further. We should be able to know what steps they are taking to ensure in advance that unfair trade practices are not being used and are not going to be used. I specifically refer to that because we had an example last year where a product had entered Canada, had been sold and the damage had been done. Then we had to turn back and see whether there was some means of cutting off the supply. At that time the product had already been sold in large quantities in the Canadian market.
Another point is this. What steps are being taken in advance to ensure that the Department of National Revenue is informed as to the countries where subsidies of one kind or another are being used so it is in a position to assess its duties and values on an up to date picture to show, shall I use the term, an unfair competitive situation which may result from conditions in that other country?


James Joseph McCann: There is a complete service.


John Borden Hamilton: The minister says there is a complete service and I believe him. What we should like to know is this. Instead of having this bland assertion in a report, we should like to know what is being done along that line. Are we sure we are covering that particular point?
There is a further item that I might mention, namely the use of the Canadian Standards Association. It is used, and has been used in the past, to determine what is considered to be a satisfactory standard from the point of view of safety. At the same time there have been allowed through the customs articles which do not meet the standards set by that association. It seems to me there must be a liaison job required there. I do not think it can be answered by the department simply saying, "That is a provincial responsibility and we are not going to interfere". As well, I think we should like to know how the department has assessed the efficacy of exhibitions as used by the department. We should like to know what value we are getting for our money. What actual amount of trade have their statisticians traced to these exhibitions? We should like to know that so we can see that the best use is being made of them.

Supply-Trade and Commerce
Finally, I say that unless we are prepared to go along with a situation which involves a continual drain of natural resources from this country in return for highly competitive manufactured goods, we must start to bargain from strength with the United States. It seems to me that should not be too tough a job. The article in the Financial Post mentions that they have their set-up designed to ensure that they get the flow of natural products which they really need. If we have those things, surely we can suggest to them a system whereby our own manufacturers will be in a position to meet them on fair ground.
When I talk about the expansion of the service in the United States, I simply say this. Any one who has had any business experience and has had to go to Washington in order to ensure that goods get in there will know that help is definitely required. I must say that for my part, when I was there I received the best of help. But at the same time that help should be available in as many cities as possible in the United States.


Herbert Wilfred Herridge: I shall detain the committee for just a moment. With respect to the question of the right of the province to prevent the export of iron ore, I wish to bring to the attention of the committee the fact that the government of British Columbia for many years have prevented the export of raw logs that come from crown lands in that province.


Mr. Diefenbaker:: I should like to ask the
minister one question, and then I intend to make a suggestion based on a request from tens of thousands of Hungarians across Canada. Would he say what trade agreements have been entered into with Hungary during the past year and whether or not there are at present any being contemplated? What was the subject matter of those agreements, if there were any?


Clarence Decatur Howe: At the moment, Mr. Chairman, we have no trade agreement with Hungary, but that country has indicated that it wishes a trade agreement. An appointment is being arranged. It will be within the next two or three months, when a delegation will come from Hungary to Canada for the purpose of negotiating for a trade agreement. We have given credit to Hungary. I think we gave credit for 100,000 tons of wheat, and Hungary has drawn on that credit only to the extent of about 20,000 tons.


John George Diefenbaker: Mr. Chairman, I wish to thank the minister for that explanation. I now wish to bring to his attention a state of affairs which is of interest particularly to the people of Hungarian origin in Canada, and also to those of other origins who have
relatives behind iron curtain countries. There are about 100,000 Hungarians in this country who are pressed very strongly by their relatives and friends behind the iron curtain for assistance by way of food parcels, clothing and the like. Food parcels can be sent to Hungary through various dealers and agencies generally operating under the aegis or protection of the Hungarian government.
There is a great difference in the handling of these parcels. If they are sent by private persons directly or through dealers who deal particularly in commodities that the peoples of the country might require, you find that the duty that has to be paid on those parcels upon arriving in Hungary is from 60 per cent to 75 per cent, thus making the parcel being sent almost useless to the receiver. With the added transportation costs it is prohibitively expensive to the sender. The obvious purpose of this policy of maintaining so high a tariff and such stringent regulations is to force Canadians to send the assistance through trustees of the Hungarian government, who enjoy a nearly monopolistic privilege in this business. Instead of sending the actual parcel to Hungary, they only ask for payment of a certain pre-fixed tariff price, for which a certain amount of food will be handed out to the receiver of the parcel in Hungary from the state-owned store. There is no duty to be paid on these sendings, but the prices of the goods are exorbitantly high.
One of these agencies operating in Canada has set forth the contents of its sample parcels. One at $12 consists of one pound of coffee, half a pound of tea, two pounds of rice, and one bottle of liquor. Another at $20 consists of two pounds of cocoa, one pound of coffee, one pound of tea, and three boxes of sardines.


Clarence Decatur Howe: In order that I may have an idea of the relative prices, will the hon. member tell me the value of the liquor?


John George Diefenbaker: I could not hear what my hon. friend said.


Clarence Decatur Howe: What I asked was this. In order that I may be able to judge the other prices, will my hon. friend tell me the value of the bottle of liquor?


John George Diefenbaker: I am going to come to that. That is where the joker is in this matter. I know nothing of that subject and am obliged to speak from second-hand information only. I am in the same position as the minister. As I was saying, the $20 parcel consists of two pounds of cocoa, one pound of coffee, one pound of tea and three boxes of sardines. Then there is a third one

Supply-Trade and Commerce which consists of two pounds of coffee, one pound of cocoa, and two pounds of sugar. That is $15.
What is actually happening is this. The Hungarian government has barter arrangements with certain countries and is receiving the materials which they incorporate over there into these parcels and thereby they are securing for themselves a large amount of Canadian dollars.
As I said a moment ago, there are 100,000 people of Hungarian origin in Canada, and the average amount they send under the present parcel scheme is from $500,000 to $1 million a year, thus making it possible for the Hungarian government, by operating on the emotional reactions of these people, to secure Canadian dollars. The Hungarians in Canada and their organizations have protested both privately and publicly against the discrimination and what they call ruthless extortion introduced by the Hungarian authorities in connection with the parcel traffic, but they have not been able to secure any results. The government at the time had negotiated the Canadian-Polish trade agreement, or at least had entered into trading relationship and removed many of the difficulties that Canadians of Polish origin had suffered theretofor at the hands of the Polish government. The same thing applied in Czechoslovakia.
The people of Hungarian origin ask this. When the next trading arrangements are made with Hungary, permission should be granted as part of the exchange arrangement for Canadians to send parcels containing basic food products such as flour, sugar, fats, bacon, rice, meats and fish, and in that way be of assistance to their people behind the iron curtain who are today in a condition of starvation. At the same time we could secure the consent of the Hungarian government to remove the present unjust regulations. These people in their hearts want to assist. My hon. friend asked me what was the price of the liquor in one parcel. I do not know, but it is something the people do not want-


James Joseph McCann: Is it Canadian liquor?


John George Diefenbaker: I do not think they
designated it. I am not sure of that. But the fact remains that these people who are desirous of being of assistance to their friends and relatives are being mulcted to an unfair degree, and this is at the same time, assisting the Hungarian government to secure between $500,000 and $1 million in Canadian dollars.
If when the next trade arrangements are being considered the minister would make representations on this problem in a manner

similar to those that were made and which caused the removal of the injustice in Czechoslovakia and also Poland, the minister might earn the appreciation of 100,000 good Canadians of Hungarian origin, who have stood against communism and who want to stand against it. They do not want to be placed in the position of being subject to extortion by the Hungarian government.


Clarence Decatur Howe: Our trade negotiators will do what they can when any new negotiations come along. The situation in negotiating present day agreements is somewhat different from the old agreements that were negotiated with Poland and Czechoslovakia, which were what we call agreements on commerce and navigation. They differ from the most favoured nation agreements which we are making today. We met the same problem in negotiating with the Russians. All we were able to get them to say was that whatever the duty was it would be non-discriminatory. In other words it would be the same against Canada as against any other country, and that is all we can really insist upon. My hon. friend would not want Canada to agree with Hungary that we would charge only a certain duty on Hungarian shipments.


John George Diefenbaker: It is not exactly the point, a difference or discrimination in the tariff. It is a system being used whereby extortion is being practised by the communist Hungarian government against Canadians desirous of helping their friends and relatives behind the iron curtain. All I am asking on behalf of these people is that when any negotiations to correct this situation which, on the face of it, is unfair, unjust and constitutes a method on the part of the Hungarian government of securing Canadian dollars by surreptitious means.


Clarence Decatur Howe: All I can say is
that we will do our best. I understand the problem, but I would not want to raise the hopes of our citizens of Hungarian origin too high. It will not be through lack of effort if we do not succeed.


John Horne Blackmore: Before this item carries I should like to ask the minister if this is the item, or is it some other item of his estimates, under which a person can ask what provision the minister is making, if any, to cushion the effect of the very serious increase in the price of steel which has been announced in the last few days. The minister knows that when the price of steel was advanced $5 per ton back in April, 1946, the impact upon the price structure of Canada made by that increase and the consequent increase in the wages of the steel workers

who asked for their share of that $5, cut the value of the Canadian dollar practically in half.
The minister is very familiar with all that. He knows that ill-advised and foolish people all over the country are calling that horrible thing inflation. It was not inflation. The rise in price was not the result of too much money in circulation in the country for the available goods; it was not the result of any shortage of goods; it was the result of definite price manipulation. If the Steel Company of Canada raised its price $5 per ton, that had nothing to do with money at all; it was a manipulation of price upward, and every commodity in Canada which was made of that steel had to increase in price because of the increased costs, regardless of a scarcity of goods or a surplus of goods. The wage increase for the steel workers resulted in wage increases all across the board in Canada, not one but two or three. The result has been that today our prices are very high compared with what they were in 1946.
If that rise of $5 per ton in the price of steel in 1946 produced this almost calamitous effect on the price structure of Canada, what is likely to be the effect of an increase in the price of steel of $6 or $7? Has the minister given any thought to this matter? Are the people of Canada and the Canadian government to be absolutely helpless in the face of a move of this kind? Would he ssey, if he were doing it over again, that nothing could have been done to cushion the effect of that $5 increase in the price of steel back in 1946? Could not subsidies have been paid by the government to the steel company so that people using steel would be able to get their steel at the same price they were able to get it before the increase of $5 per ton?
I just wanted to ask the minister if he had given this matter any thought. It would come under his department, certainly, and I wondered if he had any suggestions as to what we are going to do. Are we, within the next 10 years, going to have another cut in the value of the Canadian dollar by 50 per cent as a result of the present contemplated increase in the price of steel? I do not wish to go into this matter if this is not the right place, but I should like to know what the minister thinks about the matter or whether I am being alarmed unduly.


Clarence Decatur Howe: We could have a little discussion about the chicken and the egg here. I always thought the wage increase came first and the price changes were consequential upon that wage adjustment. However, my hon. friend knows that this government has no legislative powers to regulate
Supply-Trade and Commerce prices. In order to do that we would need to get emergency powers. Having tried to get emergency powers from this parliament once, I am not trying any more. I am afraid I cannot do anything about it.


John Horne Blackmore: The minister means, then, that the Canadian economy and the Canadian people are helpless to prevent this horrible thing which is approaching us and which anybody with any vision at all can see is approaching?
The minister spoke as though it might have been a wage increase which caused the rise in the price of steel back in 1946. I am afraid his very fine memory has failed him in that respect. He knows very well that the steel companies asked for the privilege of increasing the price of steel $5 a ton in February, 1946. The request was granted in April of 1946. Then the steel workers struck for their share of the $5 a ton increase. The minister can very well remember the long meetings we had in the industrial relations committee in which the steel workers presented their case. They continued to strike and hold parades until they finally got the increase after 82 days of idleness. Then other workers demanded comparable increases all across Canada. Thus the costs of production of every commodity ultimately forced up prices. Can the minister give us any more hope as regards the present increase of steel price or is he now advising us that we might just as well look out for economic disasters of almost any kind?


Edward Turney Applewhaite: Shall the resolution carry?


John Horne Blackmore: Mr. Chairman, has the minister nothing further to say?


Clarence Decatur Howe: I am sorry. We are well aware of the cost of steel as well as the key commodities which regulate the cost of living and the government is doing all it can chiefly through fiscal measures at the moment to hold inflation in check, but to apply price controls as a federal responsibility would mean legislation from this parliament and I doubt very much if we could get the legislation approved. I think my hon. friend would vote for it but I doubt if many other hon. members would.


John Horne Blackmore: The minister has used that word "inflation" again. He knows that within the last six weeks there has been an increase in the price of a loaf of bread, yet no one even in a nightmare could imagine that this is because there is a shortage of bread or that there is too much money for the amount of bread that is in Canada. It is absolute nonsense to call that an inflationary
7300	HOUSE OF
Supply-Trade and Commerce rise. It is very much the same as the increase in prices which came about as a result of increased steel prices in 1946. If we are going to allow ourselves to be fooled into thinking that such rises in prices are the result of inflation and then the Bank of Canada and the Department of Finance assume it is the result of inflation and apply measures calculated to control inflation we are heading for plenty of trouble-real trouble!


Clarence Decatur Howe: My hon. friend is taking a slight advantage of me. He is an economist and I am just a run-of-the-mill engineer. I do not understand these matters so I cannot contribute very much to the discussion.


Alexander Malcolm Nicholson: Mr. Chairman, the hon. member for Lethbridge has raised a subject in which I am interested but I do not think it is in order at this point.


John Horne Blackmore: It is in order because we are discussing the estimates of the Department of Trade and Commerce.


Alexander Malcolm Nicholson: Unless we are going to discuss the question of price controls I do not see how it can be in order under this item.
Mr. Pallet!: Mr. Chairman, I was interested in reading the reports before I came down to the house concerning this department, and in listening to the speeches after I came here that are always presented by the Minister of Trade and Commerce in an optimistic tone. And I see no reason why they should not have been; after all-


John Horne Blackmore: I am sorry, I did not hear what the hon. member said.
Mr. Pallet!: I said that the Minister of Trade and Commerce always gives his report in a very optimistic tone and I see no reason why he would not because after all this country is endowed with the greatest natural resources in the world. We have the native ability of the people of this country to develop those resources and therefore there is no reason why such reports should not be optimistic. In the development of a country such as ours there seems to be an acknowledgment by the minister that we occasionally need government assistance. When things are going well it is because of government assistance and when things are not going well he says it is because of the lack of effort on the part of private individuals.
There is room in the development of a country such as this for certain government participation and I think that participation and leadership in particular has been rather lacking recently despite the kudos some hon. 

members opposite seem to seek for themselves. I refer generally to the standard of living of the average Canadian.
Much has been said concerning this subject. And then we look at the standard of living of our neighbours to the south who have not the per capita national resources we have and we observe the great difference in our standard of living as compared with theirs and this is passed off as being the price of sovereignty. This passing off in these terms is just a little too simple. That is not the real reason for the difference at all. It is because proper encouragement has not been given in the development within this country. The reason that encouragement has not been given-


An hon. Member:: Where have you been for the last 20 years-resting?
Mr. Pallet!: -is because the government knows that as people attain certain living standards throughout the country it leads them to a type of thinking that is not in keeping with the thinking of hon. members who form the government. There has been a deliberate hold-up by them designed to meet their own political ends.
As one looks at the broad picture over the last few years one becomes aware that this situation has existed for many years. During the time in which this party has been in power this has been a carefully calculated plan and the responsibility, of course, is that of this government. There is no excuse whatsoever for the rapidly widening difference between the standard of living in this country, albeit it is high, and the standard which obtains in the United States.
I think this is a matter with which the Minister of Trade and Commerce should concern himself.
Today, as an example, the Minister of Trade and Commerce said that the adverse balance of trade is nothing; it is just a slight thing in the consideration of foreign trade. Any two-year-old knows that you buy as cheaply as you can and sell as dearly as you can on foreign markets. That is so fundamental that it is ridiculous for the minister to mention it here. Any two-year-old child also knows that you cannot continue to have an adverse balance of trade with any country for any length of time without encountering serious consequences at home. The minister might at least respect our intelligence to the extent that he would admit this and give us some assurance that he is taking some steps to do something about it. He does not have to do this by government control. Our system of government in Canada has always provided that where leadership is given in certain directions by government,

industry is only too happy to operate without control. That leadership by government is certainly one of the things that has been lacking in this country.
A man may have a reputation but the people of this country are not interested in a reputation; they are interested in what is being done now and what is going to be done in the future. I suggest that the minister should make some effort to provide aggressive leadership in this direction.


An hon. Member:: Carried.


Mr. Pallell:: The only thing that will be carried in the future will be the hon. gentlemen sitting opposite, who will be carried out of this house by the votes of the people of Canada.


Mr. Dickey:: Speak for yourself.
Mr. Pallet!: The minister said something about the chicken and the egg in reply to a question. I suggest that our situation concerning the trade balance with the United States is somewhat like that of the farmer in relation to his neighbour.
The farmer owned a cow and was selling milk to his neighbour. One day his neighbour asked if he would sell him more milk. The farmer replied that he did not have another cow. The neighbour said he would provide him with a cow and in return would take a piece of the farmer's land. This process continued until finally the farmer had a herd of cows and his neighbour owned all the land on which the cows stood. The neighbour was soon buying all the milk so he controlled the price. That is the situation we are being led into. If you want a simple analogy, there it is.


An hon. Member:: It is simple all right.
Mr. Pallet!: It has to be simple for you people across the way to understand it.


Mr. Lesage:: We cannot expect anything else from you.
Mr. Pallet!: You know, it is remarkable that when difficulties arise with the government across the way they always bring up a bogey to get the people's minds off the government's troubles. The bogey they are bringing up now is inflation in order to get the people's minds off what is happening in the house. To do that they spread this bogey of inflation. That is the present bogey.
They pay lip service to this by starting to restrict credit. Industry cannot develop without money; Canadian industry cannot develop without money. Many Canadian industries are young and are just getting on their feet. I suggest most seriously that the Minister of Trade and Commerce as one of the senior
Supply-Trade and Commerce members of the cabinet, as one of the members who formulates government policy, encourage a second look at this. I am pleased to see that the Minister of Finance is now consulting with the Minister of Trade and Commerce on this matter. I did not expect that there would be such an immediate reaction. I suggest that there be a serious second look taken at this restriction of money for Canadians generally and in particular for Canadian industry.
Canadian industry must develop if this country is to be strong industrially and it must develop with Canadian money. That cannot be done if you cut it off. You can say as much as you like that this has nothing to do with you, that the government does not dictate the money policies of this country, but there is no one who will believe you. We know and you know that with a nod from the government the banks follow suit.


An hon. Member:: It is the other way around.


John Cameron Pallett: I suggest that serious consideration be given to lifting the restrictions on credit which have had such a serious effect upon the development of manufacturing and other commercial enterprises in this country.


Mr. Dinsdale:: Mr. Chairman, last Thursday in the city of Brandon after waiting patiently for some five years a very important project finally got under way. The same afternoon rather disconcerting news came out of the east which threatened to dampen the enthusiasm that had been created as a result of the commencement of the installation of the gas pipe lines which would be used to supply natural gas to the city of Brandon. I think there is misunderstanding as to just what is the situation in relation to the continuation of this important $2 million project in my home city and I think the Minister of Trade and Commerce is the only man who can give the final word on the matter. That is my reason for bringing it up briefly this afternoon.
The report came from the Toronto office of Trans-Canada to the effect that gas would not be available this fall and as a result Mr. Frank J. Simington, manager of the Plains-Western Gas and Electric Company Limited, which company has the franchise to supply gas to the city of Brandon, inserted a half page advertisement in the Brandon Daily Sun of August 3 reading as follows:
Brandon Natural Gas Delivery Delayed
Thursday, August 2nd
Trans-Canada Pipelines Ltd. today at 2.00 p.m. informed your gas company that natural gas would not be available for delivery to Brandon or points east until the summer of 1957.
Because of this disappointing news it will now be necessary to delay your applications for service

Supply-Trade and Commerce
lines. Information regarding the servicing of new homes with temporary fuel until natural gas becomes available, will be announced later.
We sincerely regret having to make this announcement which is due to Trans-Canada's inability to deliver natural gas to the area this fall. The construction of the distribution system will continue uninterrupted.
This subject was raised briefly in the house last Friday morning when the Minister ol Trade and Commerce replied, as reported on page 6920 of Hansard, as follows:
No authorized representative has made any statement to anyone that gas will not be delivered in western Canada this year.
Notwithstanding that fact the company laying the lines in the city of Brandon have taken this drastic action. Apparently there is misunderstanding somewhere. When Mr. Simington was confronted with what appeared to be a contradiction he replied as follows:
Contacted by the Sun early this morning after Trans-Canada officials had declined to confirm the Brandon report of six months' delay, Mr. Simington said: "If Mr. Lowe were to say that he would guarantee natural gas would be available at Brandon in 1956, I would be most happy to publicly apologize. Until he says that, I shall wait to be shown."
That is the situation as it stands. There are quite a few people affected by this, because they have been planning on putting in gas this fall. I am wondering if we cannot get some official word which would clear up this matter.


Clarence Decatur Howe: I do not know anything about the Brandon situation other than what I have been told by the hon. member. He told us there was no hurry about getting the pipe line started, no hurry about building the line or any danger in their being unable to build it this year. The relations between Trans-Canada and the city of Brandon are private matters. Trans-Canada Pipe Lines is a private corporation and I assume that the company owning the distributing system in Brandon is a private corporation. I suggest that it might be very helpful to both companies if my hon. friend would just leave it alone.


Walter Gilbert Dinsdale: That is not the kind of reply I had anticipated but it is the reply I might have expected in this case. As I said in my opening remarks, we have been waiting patiently for gas for five years and have never made any attempt to delay the gas line and as far as-


Some hon. Members:: Oh, oh.


Walter Gilbert Dinsdale: -building gas lines is concerned, Soviet Russia builds them too. There is a right way of doing things and a wrong way of doing things. That is the only attitude we have taken in this house. We want natural gas in the city of Brandon.
[Mr. Dinsdale.!


Donald Methuen Fleming: Mr. Chairman, if hon. members have concluded raising the points they wish to raise there are several matters I should like to bring up on this first item in regard to our trade relations with the United States and about which I should like to have some comment by the minister. The first concerns the customs simplification bill recently passed by both houses of congress and which I believe has been signed by President Eisenhower. As I understand it, in terms of 1954 trade the legislation covers about $1-4 billion worth of imports from all countries, representing about 15 per cent of all imports into the United States in the year 1954. Of the remainder about half of all imports into the United States, enter the country duty-free; the balance is taxable at specific rates of duty, and the new formula applies only to the ad valorem rates. Would the minister clarify the situation?
I personally have not seen the text of the bill, but this is a matter of leading importance to Canadian exporters. There have been high hopes held out to them ever since this matter was first discussed at the GATT conference. We all know what a difficulty the so-called jungle of administrative red tape in the United States in relation to customs administration has presented to Canadian exporters. Would the minister make a statement on this and indicate what help now the Canadian exporters can expect to have as a result of the enactment of this measure by congress?


Clarence Decatur Howe: The effect of the bill will be to eliminate the use of "foreign value" and to make "export value" the prime basis for levying ad valorem duties. In other words, duty will be levied on the price at which the goods are freely sold by foreign manufacturers for export to wholesalers in the United States. For practical purposes, this is the optimum valuation hoped for by exporters. In other words, under this arrangement the exporter in Canada fixes the value upon which duty would be based, instead of the customs valuator in the United States who used to fix an arbitrary value which we call the "foreign value".


Donald Methuen Fleming: Is it clear that it applies only on the ad valorem rates?


Clarence Decatur Howe: That is right.


Donald Methuen Fleming: Can the minister assess the value of this measure in general? It has been a matter of discussion now for some years. The minister has had a report on the measure. How far will the measure go to satisfy the objectives of Canadian exporters and, I believe, of the Canadian government in the negotiations on this subject?


Clarence Decatur Howe: The bill would have satisfied Canadian exporters-it gave them everything we have been asking for in that regard-but unfortunately a rider was applied in the Senate which takes away some of the sunshine.
The Senate version contains a clause which directs the treasury department to publish a list of imported articles, not by country, the values of which would be reduced more than 5 per cent if appraised under the new "export value" procedure. These articles will continue to be valued on the old basis of "foreign value" and will not receive the benefit of the new valuation procedure.
It is difficult to determine which of our exports would not receive the benefit of the new procedure if the Senate amendment remained in the bill. It did remain in the bill. We shall be following the matter closely. That is the situation. We do not know the effect of that Senate rider which provides that the "export value" shall be not more than five per cent less than the "foreign value". It will take time to appraise the working out of that rider in practice.


Donald Methuen Fleming: I shall not pursue that further. It is obviously a matter for a report next year after there has been some experience of working under the new law.
The second point in relation to trade with the United States concerns oil exports to the United States. It will be recalled that in the 1955 session my leader drew attention to reports that efforts were made by the United States government to apply indirect limitations on importations into the United States of oil from Canada. By way of indicating that the matter is apparently by no means dead in the United States, I should like to read two paragraphs from a recent issue of the Journal of Commerce, a United States publication:
Thirty-one American senators have asked defence mobilization director Arthur S. Flemming-
No relation.
-to force oil importers to restrict their imports to the 1954 ratio of imports to domestic production. For the past year, Mr. Flemming has tried to make oil importers comply with the "1954 formula" on a voluntary basis, and Mr. Flemming has recently complained that "no evidence is available to us that oil imports have been, or are being, restricted within the limits determined to be necessary in the interest of national defence".
The importance for Canada of the letter signed by 15 republicans and 16 democrats, representing close to one-third of the membership in the Senate, is that the group also hinted that "exemption of Canadian and Venezuelan oil and all oil into the west coast was circumvention of the intent of the 1955 trade agreements act, which calls for government intervention when imports threaten national security". Pressure may be building up for the application for compulsory restrictions on oil imports into the United States which will directly
Supply-Trade and Commerce
affect the Canadian oil industry. This may not happen, but it is something to watch.
I wonder whether the minister would comment on this subject and on the outlook, because it is a matter obviously of very high importance to Canada in general as well as for the Canadian oil industry.


Clarence Decatur Howe: Our defence is that to suggest that limitation of exports of Canadian oil into the United States would contribute to the defence of the United States is rather far-fetched. So far that has been accepted by the state department and by the government of the United States, and I believe that the fallacy of any other argument is so obvious that it will continue to be accepted. In the previous limitation, Canada and Venezuela were exempted from the provisions of the restriction. I sincerely believe that Canada will continue to be exempted.


Donald Methuen Fleming: I am glad to hear that statement from the minister.
A third matter in relation to the United States concerns these periodical meetings of Canadian ministers with members of the cabinet in Washington. I understand that these meetings, when they were first undertaken, were to be held at fairly regular intervals but, unless there have been some held in more recent times that I am not aware of, the last one was held a very considerable time ago. Would the minister tell the committee what plans have been made for resumption of these conferences and what items are to appear on the agenda?


Clarence Decatur Howe: The last meeting was held, I believe, last October. The original intention was to hold meetings every six months, but, like other meetings of this kind, it is well not to have them unless they are needed. We call them, or the United States calls them, when there are particular problems to discuss.
An outgrowth of the last meeting held with the ministers was that arrangements were made for meetings between the officials of the United States and the officials of Canada having to do with the marketing of wheat and other grains. Those meetings are held every six weeks and they are most helpful in working out solutions to common problems. I dare say we have never let as long as a year go by without having a top-level meeting, and I dare say we shall arrange one this fall, but with one thing and another we all get very busy, and it takes a good deal of time to arrange a meeting of this kind.


Donald Methuen Fleming: Has the Canadian government been compiling its contribution to the agenda for the next meeting? If so, can the minister tell us what those items will be?

Supply-Trade and Commerce


Clarence Decatur Howe: There is no formal agenda prepared long in advance. We have an ad hoc agenda, but there is no great formality associated with these meetings. They usually last one evening and one day and they are carried on with considerable informality.


Donald Methuen Fleming: My next question naturally arises out of the GATT conference and it also has some relation to a report to which I drew the attention of the house some time ago. It is a report that came out of Canberra in a Reuters dispatch last January, indicating that the new Australian minister of trade, Hon. John McEwen, had expressed some strong views on the old preferential tariff treatment within the British commonwealth in the light of the United States policy on disposal of farm surpluses. I should like to ask the minister if he would state the policy of the government in relation to the commonwealth trade preferences.


Clarence Decatur Howe: I might say that Mr. McEwen will be with us here in Ottawa tomorrow and we will know more about his views at that time. I believe he has been expressing his views in London and Washington. In general we support the viewpoint of Australia, although we are not unhappy with our relations with the United Kingdom in that regard. We all agree that the surplus disposal procedures of the United States are very harmful to all of us and we each protest separately, but I rather think that Mr. McEwen's views go somewhat deeper than that. I will know more about them after we have our discussions tomorrow.


Donald Methuen Fleming: With regard to what remains of the commonwealth trade preferences, will the minister state the position of the government? We are aware of what GATT has done in trenching upon these preferences up to a point, but what in general is the policy of the government with regard to the system as it remains?


Clarence Decatur Howe: I should like to make it clear that GATT has not encroached on the empire agreements. GATT agreements contain an exception in favour of the empire agreements, but in carrying out negotiations it is often helpful to have the commonwealth agreements amended. England itself has asked us to amend items so that they could work out a trade arrangement with the United States or with some other country. There have been some amendments but I would not say that it has been a watering down. Canada is quite happy with the commonwealth agreements. We are adjusted to them. We think they are helpful

towards balancing our trade and we have no desire for any alteration. Australia, on the other hand, feels that the commonwealth agreements are working very much in favour of the United Kingdom and against the interests of Australia. That is a separate argument in which Canada is not taking part.


Donald Methuen Fleming: The next matter is one I had expected the member for Waterloo North to raise. I think it is proper at this time that the minister should be asked for and should give some statement to the house in the light of the representations that have been made to him in relation to rubber footwear. This is a subject, I am sure, that has been before the minister frequently. I do not need to remind the house of the problem involved in the decline in Canadian production of canvas footwear and waterproof footwear and the tremendous expansion in imports of these products from countries abroad where the standard of living and consequently the cost of production are very much lower than in Canada. What has the minister to say on this subject?


Clarence Decatur Howe: I think it would not be helpful for me to express an opinion just now. The Minister of Finance, the Minister of Labour and I are meeting the industry in an attempt to work out something, and I think that to make an announcement of our views at the moment would harm the negotiations. If my hon. friend would let that stand until later I think perhaps we would be more likely to get a reasonable solution. But I will admit at once that in the present situation the industry is very unhappy. Imports, particularly of tennis shoes and shoes of that kind, are seriously interfering with Canadian production. The interference with waterproof shoes is not serious at the moment although it could be in the future. We are examining the position in the hope that we can give the industry some help.


Donald Methuen Fleming: I do not wish to press the point if there is some likelihood of a solution being earnestly sought. The minister asked that it be left until later. Does he mean this session?


Clarence Decatur Howe: There is no hope of that. The situation will not change when the house adjourns and I hope the house will not wait that long. However, certain approaches are being made which I think might be interfered with by any statement I might make.


Donald Methuen Fleming: Is the solution one likely to involve the necessity for legislative action on the part of parliament?


Clarence Decatur Howe: No.


Donald Methuen Fleming: The last matter I should like to raise is in regard to the Northern Ontario Pipe Line Crown Corporation. There are some questions of a specific nature that I should like to ask the minister. In the regulations promulgated in the Canada Gazette of June 27, containing order in council P.C. 1956-858 of June 7 last, the last of the clauses of bylaw No. 1 of the corporation reads as follows:
The president shall submit to the board for approval prior to submission to the minister proposed budgets of operating and capital expenditures for the next ensuing financial year of the corporation.
I ask the minister if that budget has been submitted to him yet.


Clarence Decatur Howe: I am told it has been before the board but it has not reached me yet. It will be submitted to council for approval as soon as it reaches me and the Minister of Finance.


Donald Methuen Fleming: When it reaches the minister and is approved by him as required by the bylaw, will it be made public?


Clarence Decatur Howe: No. The operating budget of every crown corporation is required to be submitted to council by the minister responsible and with the approval of the Minister of Finance. That is routine, but those operating budgets are not made public.


Donald Methuen Fleming: The bylaw requires a budget of proposed capital expenditure as well. Is there any thought of making it public as to the capital expenditure in the budget?


Clarence Decatur Howe: We do not usually. There is nothing to conceal about the capital expenditure but these cabinet documents are not usually made public.


Donald Methuen Fleming: I cannot ask for it right now because it is not in the minister's hands, but I think it will be necessary for parliament to see it when this house first sits after the budget has been received by the minister and approved by him.
The next question I have is as to financial transactions between the two corporations, namely, Northern Ontario Pipe Line Crown Corporation and Trans-Canada Pipe Lines Limited. What contracts have been signed by the crown company or by the government with either the crown company or Trans-Canada Pipe Lines since the bill was given royal assent on June 7?
Supply-Trade and Commerce


Clarence Decatur Howe: The only contracts are the mortgage indenture and the transfer of bonds with respect to payments made. I am told there has only been one payment made, the $6,775,000 advanced to the borrower on June 18, 1956. That answer has been given twice in the house.


Donald Methuen Fleming: Is there another advance in contemplation?


Clarence Decatur Howe: It has not been applied for yet. I think it should be due shortly after the first of the month.


Donald Methuen Fleming: Is it expected there will be any further contracts signed between the two corporations?


Clarence Decatur Howe: No, the act specifies the relationship between the two. My hon. friend is looking into the future. Eventually there will be the lease of the Northern Ontario section when it is completed.


Donald Methuen Fleming: I was not thinking about that at this stage.


Clarence Decatur Howe: I anticipate there will be repayment of the advances and discharge of the mortgage some time this autumn, but that of course is provided for in the legislation.


Donald Methuen Fleming: I take it that the government is not a party to any contract that has been signed nor, I take it, is it likely to become a party in any of the contracts between the two corporations.


Clarence Decatur Howe: No.


[Stage Direction]
Item agreed to.
Exhibitions-
422. Exhibitions generally $535,888.
John George Diefenbaker: I should like to ask
whether any consideration has been given during the past year to restoring the trade fair that was abandoned. I refer to the trade fair for the commonwealth and other parts of the world which took place for several years in the city of Toronto and which was so beneficial in bringing together trade representatives from all parts of the world. On the basis of the experience of the last year, is the government giving any consideration to reinstituting once more that fair to the end that there will be made available to all parts of the world representations of Canada's industrial production, thereby encouraging a greater measure of trade with this country?


Clarence Decatur Howe: Mr. Chairman, the answer is no. We are giving no consideration to reopening the trade fair. The trade fair served an extremely important

Supply-Trade and Commerce purpose after the war in that it was a means of opening up the Canadian market to suppliers whose relations with Canada had been interrupted by the war. During the trade fair a good many British firms were able to re-establish themselves in this market. The same is true with respect to producers in other countries. However, the fair was becoming less and less useful in that regard and the exhibits were changing from business exhibits to prestige exhibits. There was too much of that sort of thing creeping in. We felt that better service could be obtained by taking our goods abroad and using foreign exhibitions to sell Canadian goods. We still believe that procedure is much more useful in the present phase. For instance, in Lausanne each year there is one building set aside for one particular country. This year that country is Canada. We have an excellent exhibit at Lausanne this year. I may say that Canadian manufacturers are giving us plenty of support with respect to that exhibit. We have had very good results in the trade fairs on the continent, particularly with Canadian furs. We have sold not only Canadian furs but Canadian fur garments. We have been most successful in doing that. Really I think it surprised our fashion establishments to find out what can be done simply by providing means of bringing our fashions into European markets. We think that is the proper way to spend the exhibition vote. The purpose is to carry on with that particular policy.


[Stage Direction]
Item agreed to.
423. Canadian participation in the Brussels universal and international exhibition 1958, $750,000.
Donald Methuen Fleming: In view of the importance of the Brussels exhibition, and the substantial increase in the item appropriated for Canada's participation in it, I should like to ask the minister if he would make a statement in relation to the exhibition. May I also suggest that it might be appropriate to call item 705 of the supplementary estimates along with this one. It relates to the same subject. I have a question to ask on it. Item 705 is as follows:
705. Canadian participation in the Brussels Universal and International Exhibition 1958-further amount required to authorize payment, notwithstanding the Civil Service Act, of an honorarium to Mr. J. J. Olson, $1.


Clarence Decatur Howe: Yes. I should be glad to have them considered together. The fair in Belgium is a world fair. It is not a trade fair in any sense. It is a world exhibition. We regard it as an extremely important matter for Canada to be well represented at the fair. We are constructing a Canadian building there at a cost of $1


Donald Methuen Fleming: Why not give us the highlights of the essay instead of the whole essay?


Clarence Decatur Howe: The government placed the responsibility of planning, organizing and administering Canada's participation upon the Canadian government exhibition commission. To assist and guide the director of the commission, the government appointed an interdepartmental advisory committee of senior civil servants.
Under the authority of this interdepartmental advisory committee an architectural advisory committee was established to guide the preparation of plans for the Canadian pavilion. The committee consists of two representatives appointed by the Royal Architectural Institute of Canada; the chief architect and liaison architect, Department of Public Works; the consulting architect of the commission; the chief designer of the commission; the superintendent of exhibits and, as chairman, the director of the commission.
Early in 1955 tentative arrangements were made with the exhibition authorities of Belgium for the Canadian site. This site, with minor adjustments, was confirmed in October. The Canadian site is located on one of the highest elevations in the exhibition area. Preliminary plans, were developed and finally approved by the cabinet on March 1, 1956. Because of the world-wide shortage in structural steel, the plans and specifications for the steel structure were completed and tenders called for from Belgium. Belgian steel was selected because at the conclusion of the exhibition the pavilion has to be dismantled and the steel salvaged in Belgium.
I think that is fairly well the thought. The work at present is that of getting on with the construction of the building and working

with the provinces to work out provincial exhibitions. On that point may I say that recently a meeting of the representatives of the provinces, appointed by the provincial premiers, was held in Ottawa. At this meeting the plans of the pavilion and the plans for presenting the Canadian Story were reviewed. While the government of Canada assumes the responsibility for the cost and is not asking for contributions from the provinces in the form of rent for space, it was considered advisable to secure the views and suggestions of the provinces with respect to the proposed plans. I am pleased to state that at this meeting the officials responsible for Canada's participation received wholehearted support from the representatives at the meeting, as well as an expressed willingness to assist in every possible way.
My hon. friend has referred to the item in the supplementary estimates for Mr. Olson. Mr. Olson is an officer of the Department of Public Works. It was not possible for the Department of Public Works to assign him full time to the job, but an arrangement was made with him to prepare specifications for the building in his own time. It was important to have Mr. Olson do it because the Department of Public Works will supervise the construction of the building. We wanted specifications which met with the standards of the Department of Public Works. Under a vote in the supplementaries he is supposed to be granted an honorarium of $500 for his work outside of the line of duty in preparing the specifications for this building.


[Stage Direction]
Item agreed to.
Dominion bureau of statistics-
427. Administration, $177,729.
John George Diefenbaker: In this connection, I should like to ask the minister whether or not there is an annual report of the dominion bureau of statistics published in the French language? I communicated with the distribution branch and there may have been a mistake in the information I received, but I was advised that such was not the case. Would the minister say what the situation is?


Clarence Decatur Howe: I am told there is no report in the French language. I presume it is because the report is practically all statistical in form and numbers read the same in both languages; that is the only reason I can think of. I am told there never has been a report of the bureau of statistics in the French language.


John George Diefenbaker: I should like to ask the
minister one other question and it is this. I notice that throughout the report there are
Supply-Trade and Commerce references describing the bureau of statistics as the "dominion bureau of statistics". I have before me the annual report, and it is so described. I have a copy of a letter to His Excellency, as signed by the minister himself, which refers to the dominion statistician, and the report is of the dominion statistician. All of this is quite proper and is in accordance with the statute.
Can the minister give the house any information as to why it is that the building occupied by this body, the dominion bureau of statistics, has had the word "dominion" removed from it? Was that a decision of the government or was that the action only of the Department of Public Works? It is a very strange thing that the plaque in the front of this building, a building performing a function important to this country, contains a description that is improper, incorrect, and completely unjustified under the statute setting up this bureau.


Clarence Decatur Howe: No, Mr. Chairman, I do not know whether it was an economy move on the part of the Department of Public Works. As a matter of fact, I think my hon. friend is wrong and that the statute provides for a dominion statistician but I doubt if it provides for the dominion bureau of statistics. I am getting that checked.


John George Diefenbaker: Oh yes, it does. I have not the statute here, but I can send out for it. The statute describes this bureau as the dominion bureau of statistics. I am glad to have the explanation of the minister, that on the plaque identifying this building the word is omitted for economy purposes. How much would it have cost to have indented, if that is the proper expression, the word, "dominion" on the brass plate in addition to the words "bureau of statistics"? I have heard all kinds of explanations for the removal of the word "dominion", but I think in this case the Minister of Trade and Commerce has achieved the ultimate in the matter. Cost is the reason why the word "dominion" does not appear on the plaques in front of the bureau of statistics building.
I commend the minister for the novelty of his explanation. Certainly it has nothing much more than novelty to commend it to me. I think it only proper to add that it is a strange thing that up to the present moment that explanation, the most grotesque of all, should be advanced for a significant course of action being followed by this government in so many ways of outlawing by action rather than by parliament the use of the expression "dominion". I will say no more at this time.


Clarence Decatur Howe: I am sure my hon. friend, in discussing the parliament buildings, always refers to them as the
7308	HOUSE OF
Supply-Trade and Commerce dominion parliament buildings. I am sure he would, he is so anxious to get in the word, but I have never seen any sign which says these are the dominion parliament buildings.


John George Diefenbaker: No, and there is no statute which says that is the name, but there is a statute which says it is t'he dominion bureau of statistics.


John Horne Blackmore: I should like to associate myself with the hon. member for Prince Albert. It is simply a reflection on the government of Canada that it has gone forward and dropped "dominion", dropped the "Rule Britannia" song for the navy, et cetera, and all without consulting this parliament.


Clarence Decatur Howe: I noticed my hon. friend dropped the word "dominion". He said "government of Canada", and surely he ought to be consistent and say the government of the Dominion of Canada. I might say we dropped nothing so far as the sign on the bureau of statistics is concerned because the word was never there.


John Horne Blackmore: I will say the dominion government of Canada, in order to be consistent.


John Borden Hamilton: I should like to think that the minister's concern about economy in the operation of this branch under his department might be extended to allow some of the companies carrying on business in this country the same opportunity to economize. I think it is about time someone drew to the attention of the government the fact this department is plaguing business enterprises from one end of the country to the other with the number of forms it requires to be filled out now to cover your corporation tax, whether it be only federal or federal and provincial; whether it covers as well your security transfer tax or whether it is merely an information return. We have now a series of questionnaires which *come out almost daily asking questions of these companies. If the minister is so concerned about economy I suggest he might take a look at one of these questionnaires I have before me. It would take a Philadelphia lawyer to fill it out. It is three pages long, and this time they are attempting to get a few statistics about the operation of trucks.
The little pamphlet in question is to be carried around by the truck driver. At ten o'clock and three o'clock in the afternoon you can see him stopping his truck, running around to the rear and looking at the cargo and estimating the weight of his truck load at that particular time. At the same time he has to make a notation each time he fills the gas tank during this period showing how 

many gallons of gas he uses. He has to indicate daily how many miles are travelled by the truck and the total tonnage of the material that is transported. He has to give a few additional statistics. I say to the minister, how ridiculous can we get? How much more trouble are you going to cause businessmen in carrying out their business? I can see the truck driver who is carrying this pamphlet stopping his truck and making a mental calculation every time an item in this little book has to be filled in. I strongly suggest that if we are going to economize anywhere we might take steps now to economize a little on the effort that is required by our companies in keeping up with this department.


Clarence Decatur Howe: Mr. Chairman, I think my hon. friend is right. I do not like to expand the work of the bureau but the fact remains that we have no statistics on trucking. The board of transport commissioners requested us to provide statistics and the 10 provinces have all asked us to do so. We reluctantly added to our staff with that in view.
All the pressure that comes to me about the bureau is for more statistics. I presume they must be valuable to business and government or we would not be pressed to have them. If a government agency and all the provinces say that they need the statistics it usually becomes the job of the bureau with my approval to undertake to gather the statistics. That is the position of the statistics on trucking.
If my hon. friend thinks we can get along without them I will put his views forward to the various interested agencies.


John Borden Hamilton: Mr. Chairman, in closing, I would like to say this. I am sure the minister is well aware of the number of forms that need completion. It seems to me a very useful job might be undertaken by this particular department if it considered how much time and effort are consumed in the completion of these reports. The minister might give some leadership in connection with the matter I have raised. It seems to me that most of the information required by the department is very different from the survey I spoke about which involves the source of capital, and questions relating to the number of shares held by foreign shareholders and the number of shares outstanding.
If the government was looking at the situation from the standpoint of economy and considered the number of tax returns which must come in each fiscal year, if the bureau wanted to co-operate and economize they

could arrange for a perforated slip to be put at the bottom of that form. If it was for information such as a return to a provincial corporation's branch the slip could be torn off and turned in. Information concerning special items such as the ownership of shares, capital and where the money comes from could be put on at the same time. Once a year upon completion of the tax return the information could be given to the dominion bureau of statistics and they could compile it for their financial returns.


Clarence Decatur Howe: Mr. Chairman, I might say that when I came to the Department of Trade and Commerce I was under the impression that the bureau had too many types of reports and a committee was set up to reduce the number of investigations and reports that the bureau was making. One provision that I insisted on at the time was that, if a report could not be ready within six months of securing the data that the report was not very valuable in any case.
I do not remember the figures but there was a very substantial reduction effected by the committee in the number of reports and an improvement was made in getting the reports out more promptly after their due date. I am sorry to say that recently the department has been slipping somewhat owing to the fact that we have not been able to get the staff we require for the work. We hope to improve that situation and you will notice that we have a little larger budget this year. The objective is always to get out the minimum requirement needed to carry on the business of Canada and to get it out promptly.


Mr. White (Middlesex East):: Mr. Chairman, I was rather surprised to hear the questions asked by the hon. member for York West regarding the trucking industry and I was equally surprised to hear the minister reply that 10 provinces had requested the information. It seems to me the provinces know more about the trucking industry than does anybody else because they licence the trucks. It seems rather strange to me that the 10 provinces should suddenly request that information. What is the federal government going to do with the information when they get it?


Clarence Decatur Howe: Give it to the provinces.


Donald Methuen Fleming: And to the public.


Harry Oliver White: Is there a penalty attached if the truck-owner or driver does not comply with this request for information?
Supply-Trade and Commerce


Clarence Decatur Howe: I would think not, probably. I do not think the individual truck drivers would fill out these forms. I think they will be filled out by the trucking companies. If a large trucking company refuses to comply with a request from the dominion bureau of statistics the owner may hear from them. I imagine he would because there is the Statistics Act in existence in this country which provides certain penalties.


Harry Oliver White: That is exactly what I am coming to. The minister says there is the act and if the form is sent out and the man does not comply by filling it out he will hear about it pretty soon. I can confirm this and I know what I am talking about because I have been a victim of this sort of thing.


Clarence Decatur Howe: One should always comply with the law.


Mr. While (Middlesex Easi):: Yes. A form came to me as a processor and packer. Having had a crop failure that year I did not fill it out. Pretty soon I received a letter, and then another, and finally a registered letter. I informed the writer to come to my office in the parliament buildings to discuss the matter and I have not heard about it since.


Donald Methuen Fleming: Mr. Chairman, I simply wish to clarify one point. In relation to these reports requested from the truckers I think the minister ought to make it clear that this is a particular survey and it is not intended that this should be a continuing form of return required to be made by those operating trucks.


Clarence Decatur Howe: Yes, that is the case.


Mr. Bell:: I want to ask a few brief questions regarding the availability of some figures I have not been able to obtain. The first set of figures concerns our wheat shipments to Poland. In this case it may just be necessary for the minister to say why the figures are not available. I do not care whether or not I receive the figures now but I would like to know why they are not available. I am interested in the figure for the total amount of wheat in bushels rather than the total amount of wheat expressed in dollars. I would also like to know the places where the wheat was bought from the wheat board; that is, whether the quantities were shipped through Prince Rupert or Vancouver, and so forth. I would also like to know the cost of the wheat to the Manitoba Northern Sales, the amount of export credit insurance payable by the shipper, the amount of interest paid or payable to the federal government for these moneys that have been advanced, and
7310	HOUSE OF
Supply-Trade and Commerce then I also want to know the dates of the shipments, and the names of the ships.
If the minister does not have this answer readily available perhaps he will tell me why the information is not available, and if I might expect it at some future date.


Clarence Decatur Howe: This is a case
which is sub judice. My hon. friend is trying to help out some of his lawyer friends. Such facts as are available are published by the dominion bureau of statistics. My hon. friend is well aware of that. This is a private row and he had better let the boys do the best they can and I will do the same.


Thomas Miller Bell: That is all right. I just wanted to know why the information is not available.
I want to ask again this year if it is still not possible to obtain monthly figures of the exports of Canadian goods through Canadian ports and United States ports? Those have never been made available on a monthly basis in the same way that the imports are made available and I would like to know why it is not possible without too much extra effort to obtain monthly figures for exports similar to those which we obtain for imports.
I might say we are vitally concerned with these figures and in this way we would have a comparison by the month. Without these figures we will be unable to ascertain what progress is being made to eliminate the sad injustice which is in existence in Canadian ports.


Clarence Decatur Howe: Mr. Chairman, I presume the reason is that the United States figures come from authorities in that country.
I understand it is a matter of delay in receiving the United States figures and I do not know of any other reason. Of course, at the year-end my hon. friend has no trouble in obtaining them because all those reports are published by the bureau of statistics. It seems to be a matter of delay in getting the information to the United States authorities which prevents the monthly statements coming out.


Thomas Miller Bell: That may be true. The department compiles records of imports coming into Canada through Canadian and United States ports and I presume that in one case the figures would be United States and in the other they would be our own, or would they both be United States figures?


Clarence Decatur Howe: We have complete figures with regard to imports, this would be Canadian information.


Thomas Miller Bell: When those are available, why cannot they be obtained for exports?


Clarence Decatur Howe: Our customs
authorities are not interested in exports. The customs department gets no percentage out of exports. The customs are interested in imports but not in exports.


Thomas Miller Bell: I realize that, but I suggest that it would not be much trouble. Surely there is some kind of check on goods going out of this country. If you can compile them on a yearly basis it should not be too much trouble to compile them on a monthly basis.


Clarence Decatur Howe: I have no one here really to advise me on that problem but I shall look into it. If it is possible to improve the situation I shall be glad to do it.


[Stage Direction]
Item agreed to.
429. Census, including a contribution as detailed in the estimates, the expenditure for which not to exceed the amount shown unless otherwise approved by treasury board, $4,710,429.
Donald Methuen Fleming: Mr. Chairman, I think the committee would be interested to have a report from the minister with reference to the census, particularly as there has been a large increase in the appropriation this year for that purpose.


Clarence Decatur Howe: The census has been completed except for the compilation of the figures, and I understand it went off very smoothly and successfully. We hope to have the figures all complete by early next year, but some will be complete before the end of this year. The census was carried on from coast to coast and we were able to effect some economies as my hon. friend will note if he compares the expenditures. We were able to save about $200,000 of last year's appropriation. For instance, the statistics had always been taken down by pens supplied by the government at a cost of $3.59 each, and this year we did it with pencils at a cost of 29 cents each. Also we were able to use less expensive stationery and varitype printing instead of the usual type. There has been a great deal of progress in cutting down the cost of the census work which of course is a gain for the future.


Donald Methuen Fleming: May I ask if it is intended to turn out as many volumes containing extensive analyses as were turned out recently in connection with the decennial census?


Clarence Decatur Howe: This is a skeleton census and the information obtained is skeleton in character.


Donald Methuen Fleming: How many volumes will there be?


Clarence Decatur Howe: One.


Mr. Knight:: 
Clarence Decatur Howe: The census is taken on punch cards and the registration is by age groups. I suppose the highest age group on the card is 90 to 100, and whether it would be wise to add another age group to cover those 100 to 110 years of age would have to be considered. I saw where someone died the other day who was 110 years of age. I am getting on myself but I think I can get along with the present card.


Robert Ross (Roy) Knight: Then I take it that what I have asserted is in fact true. Is there any record of people in Canada who have reached the ripe age of 100 years?


Clarence Decatur Howe: I am sure the dicennial census will show that. This is a skeleton census which does not go into detail.


Harry Oliver White: I should like to ask about the number of questions asked agricultural producers as compared with those asked other people.


Clarence Decatur Howe: The five-year census was originally an agricultural census which was mandatory in the prairie provinces. We extended that census to all the provinces. The answer to my hon. friend's question is that the agricultural census is a complete census whereas the census of everything else is a skeleton census.


Harry Oliver White: It seems to me that when you ask farmers 75 questions and receive such a small part of the national income you are leading them to believe you are going to do something about it. I know very well that the government has no intention of doing anything, but it just seemed to me to be out of proportion to ask these people 75 questions when the ordinary householder is asked only seven.
Mr. Pallet!: Am I correct in understanding that the census figures will be ready for distribution before December 31, 1956?
Supply-Trade and Commerce


Clarence Decatur Howe: Certain figures are essential to certain provinces and we have to get them out before the end of the year. I know in Manitoba they have a problem and they are anxious to get some figures. The complete census information will not be out until some time next spring.


John George Diefenbaker: Will the census as it applies to the prairie provinces be used in connection with the redistribution next year in the western provinces?


Clarence Decatur Howe: It is a statutory provision; the constitution provides that in Manitoba, Saskatchewan and Alberta there must be an agricultural census taken every five years. The census was taken to meet the constitutional requirement as far as those three provinces were concerned, but it is less detailed in the rest of Canada.


John George Diefenbaker: Is it the intention that it will be used for the purposes of redistribution in the prairie provinces next year?


Clarence Decatur Howe: We give the statistics to the provinces as we are required by law to do and what they do with them is up to them.


[Stage Direction]
Item agreed to.
Board of grain commissioners (Canada Grain Act) -
430. Administration, $149,780.
Mr. Argue:: I believe the minister asked that we discuss any items dealing with grain under this item. I want to protest the move that has been made to refuse to license any further off-site storage. The practice that has been followed during the past year of licensing, for the storage of grain, buildings away from the elevator site, provided that they came up to certain standards, is one of the best policies that has yet been devised for storing and handling surplus grain.
Many communities have constructed large buildings of the Quonsett type that could be used at a future date as rinks in their respective communities, and this action has had a great many advantages. It has provided a building that will have a great value to the community over the years, whether as a building for the storage of grain or as a building to provide recreational facilities when we enter a period of no congestion.
Moreover, the provision of additional facilities by this means for the storage of grain has allowed farmers to market their grain and to obtain the initial payment when their grain has been marketed. We in this group for many years have advocated the payment of farm storage and the payment of cash advances, and the government has refused

Supply-Trade and Commerce both. But when the government did two things, allowed off-site storage in the form of rinks to be licensed for the storing of grain and provided that the federal treasury would pay the storage costs for wheat in excess of 178 million bushels, it went a substantial way to providing both storage payments for the community and advance payments for the farmer. This has been a method by which communities themselves are able to obtain part of the payments made for storage.
I can see no good reason at all why rinks will no longer be licensed for the storage of grain. There have been two arguments against the policy. One is that they say that the buildings have to come up to standard. Of course, no matter where a building is located, it can be built to any standard that the builders may desire. Some of these buildings in the form of rinks, I am convinced, are the very best storage that has yet been provided for large quantities of grain, and I am sure that the grain in these buildings will come out in many instances in better condition than grain in the so-called annexes built alongside the railway site.
The second argument is that the grain is not readily available. Of course, that argument will not stand up, because these storage facilities are within a very short distance of the elevator that has leased them, and it is just a matter of putting the grain in the truck and taking perhaps two minutes to drive the truck from the storage building into the elevator and dump the grain. So the grain is just as readily available as though it were in the so-called permanent annex.
There is no difficulty in putting the grain into the storage facilities. I was at a marketing point in western Canada a few weeks ago -Drinkwater, Saskatchewan-and I noted that they had built there a modest-sized rink in which they were storing 80,000 bushels of grain. According to the farmers who built the rink and according to the elevator agent, the wheat board and the board of grain commissioners had informed them that it was one of the best buildings that had yet been constructed for the purpose of storing grain. It cost the elevator company nothing to put the grain in, because the farmers drove into the elevator, had their loads weighed and dumped, and had the empty truck weighed. Then the spout was opened and the grain loaded back into the trucks. The farmers drove across the street and themselves unloaded the grain into the very large rink building that they themselves had built.
I hope that the government will reconsider this policy. There is only one possible reason

I can think of for discontinuance at this time, the only one that I should think has any logic to it at all, and that is that it may have been decided to discontinue further licensing of such buildings until the size of the new crop is known. If that is the case, I have no objection. I shall have no objection if the policy is reversed, should we harvest the very large crop that is now in evidence in western Canada.
So I should like to ask the minister whether or not the government will reconsider its policy in this connection within the next month or two when we find out the size of the crop and, if so, whether or not grain in such buildings will be entitled to the regular storage payments.	*


Clarence Decatur Howe: The government adopted the policy of off-site storage on the recommendation of the wheat board and the board of grain commissioners. In view of the congestion on the prairies, it seemed the right thing to do. The government reconsidered the matter, on the recommendation of the wheat board and the board of grain commissioners that the time had come to issue no new licences for off-site storage. The reasonableness of the position has more or less been confirmed by the fact that we had 35 million bushels less wheat in storage at the end of the last crop year than we had at the end of the previous crop year; and also in view of the fact that there was very much more empty storage on the prairies this year than a year ago, there does not seem to be any reason to encourage new construction to house wheat when there seems to be plenty of space available to do the job. If the wheat board and the board of grain commissioners change their minds and suggest that we need more offsite storage, I daresay that the government will consider it, but at the moment we have no intention of altering the decision which was announced some time ago.


Hazen Robert Argue: With regard to the extra storage space that is available, I think the minister knows that the storage that is available is only at certain points and that there are hundreds and hundreds of marketing points in western Canada where there is little storage available and where the provision of such additional facilities would be valuable. I shall be quite content to end this discussion, as far as I am concerned, if the minister will say that he will take another look at the situation in October, after harvest, to see whether or not there may be some real need for reversing the policy.


Clarence Decatur Howe: I will say that 1 shall do so if I am asked to do so by the wheat board or the board of grain commissioners.


John George Diefenbaker: There is one other question in connection with this. I know of two or three rinks that are being used for storage purposes. Are the towns that operate or own these rinks receiving anything in respect of storage? The other day I was reading of one in my former constituency of Lake Centre where there was a very large storage in the rink, and it was said that the return that was being received for storage payments would be sufficient in a matter of two or three years, if continued, to pay for the actual cost of the rink. Is that storage being paid officially or is it a local matter whereby payment is being made?


Clarence Decatur Howe: I expect some day to get trophies from both the curling associations and the skating rink associations of the prairies. I believe more rinks have been built to store grain in the past three years than have been built in the prairies ever since the first settler arrived. The storage is paid under an arrangement with one of the line elevator companies, which is responsible to the wheat board and has authority to move that grain into offsite storage, which is the rink, and pay the owner of the rink a fee out of his receipt for storage which is supposed to be onsite storage. It is a legalized arrangement, but the offsite storage arrangement is made between the line elevator company and the owners of the offsite storage.


John George Diefenbaker: That rather answers the question that my hon. friend raised, that sometimes the objection to the licensing of rinks is that the rinks are not up to standard.


Clarence Decatur Howe: That is right.


John George Diefenbaker: The fact that by an indirect means there is achieved that which he suggests might be done directly and which I support would indicate that there should be a reconsideration of this problem in the event that again this fall as the result of a large crop tremendous amounts of wheat will have to be stored on the farms. If this arrangement can be operated in certain areas by this indirect means, I see no reason why it should not be considered as a direct means of storage. It would mean that during the period from May until the end of the crop year on the 31st of July a very considerable amount of wheat could be stored in that manner and made available whenever the necessary transport could be secured at the several marketing places.


Hazen Robert Argue: The minister has said that he is probably entitled to trophies from the curling and skating rink associations of western Canada for the fact that there have been so many rinks built in the last three
7313
Supply-Trade and Commerce years. Perhaps that is a good suggestion but I think there should be a rider to it that the minister will continue the policy so that there will not be any discrimination as between communities.
The minister said one thing that I do not think he intended to say, namely, that these arrangements are made between line elevator companies and community associations. I think the minister knows that the wheat pool organizations as well as the line elevator companies, all elevator companies, have been prepared to consider such arrangements. In some communities in my constituency the line elevators have leased the premises and at other points the pool elevators have done so. I think that generally speaking the arrangement is approximately the same. The elevator company gets 10J cents per bushel per year and the local rink association gets 6 cents of the 10J.


Clarence Decatur Howe: I should amend the term "line elevator" to "line of elevators". I apologize to that extent.


Mr. Howe (Wellington-Huron):: I should like to ask the question now that I wanted to ask on the first item with regard to storage in eastern Ontario and eastern Canada. I refer particularly to southern Ontario. Because of the cold and late spring this year the farmers found that they had to feed their stock for a longer period of time than usual. The winter stored grain in the elevators in southern Ontario apparently had been depleted and the farmers had to pay the entire rail freight on their grain from the west. That put the price up almost to a prohibitive figure.
I am wondering whether some steps should be taken to move more grain into southern Ontario during the period when navigation is open so that the same situation will not prevail next spring. It could prevail because on account of the late, cold spring not as much acreage of grain was sown in southern Ontario as in other years. There is every indication that next spring there will be another shortage of feed and more feed will be required.
A question was asked the other day by the hon. member for Mackenzie in the same connection arising out of a telegram sent to the minister with regard to the scarcity of feed grain even at the present time in southern Ontario and the trouble some of the merchants are having in obtaining feed grain, probably as a result of the shortage of box cars and other things. They are having trouble continually in getting sufficient feed grain from the elevators. Can the minister give any indication as to what the department can do with respect to moving more feed grain into eastern storage in the fall?

Supply-Trade and Commerce


Clarence Decatur Howe: The department has nothing to do with feed grain in Ontario.
I have tried to make that clear. We have no authority to do anything. We have gone a long way to make it possible for dealers or whoever wishes coarse grains in Ontario to buy them. We have arranged an agency basis so that the buyer can take the grain, make a deposit on it and adjust the price as of any date he wishes. That is quite a concession. But the grain will always be available at Fort William. If arrangements can be made to have the grain available at the bay ports we will do so but the grain there moves into export and it is very hard, especially in the season of open navigation, to make it available to buyers. Certainly users in Ontario have been forewarned as to their requirements and if they do not take care of them some time between now and the close of navigation I hope they will not blame me for their failure to do so. We just have nothing to do with the distribution of grain in Ontario.


Mr. Caslleden:: There is one other feature of the storage problem that in my opinion requires attention and that is the matter of terminal storage. Canada's capacity to produce grain is going up every year and the figures for the long term average have to be revised every year; 1956 appears to be another year when we are going to have a big crop.


Clarence Decatur Howe: If my hon. friend reads the bible he knows about the seven fat years and the seven lean years, so let us not get the averages too far out of line.


George Hugh Castleden: No, but if we are going to have fat years and prepare for the lean years we will have to have somewhere to store the grain.


Hazen Robert Argue: As far as the farmers are concerned they are all lean.


George Hugh Castleden: At any rate, the experience of the farmer in the past few years has been that he has found himself in very difficult circumstances through being unable to deliver his grain. The minister knows the difficulty the farmers had last year with regard to cash advances and farm storage, and the loss of grain on the prairies has been a most regrettable thing. When you find wheat piled up in large piles in the fields and exposed to the weather you know that losses are almost inevitable.
We have a problem with respect to terminal storage for grain. Surely the best place to put the grain is in the terminals where it is available for export. Canada's terminal storage has not increased with Canada's ability to produce. Because of the fact of sales

being lower than they were three years ago and the continuation of large crops the storage problem is one of increasing difficulty.
Then there is the matter of box cars. When the railway companies haul grain in their box cars to the terminals they find all too often that there is no space in which to dump the grain and the latest move, which is causing a great deal of concern among western growers, is that the railway companies are now applying to the board of transport commissioners for permission to charge demurrage on cars that are left for any more than 48 hours at terminal points. This means an additional and rather heavy expense which will fall directly on the backs of the producers who are already facing difficult times with increasing costs and decreasing returns.
I suggest to the minister, the wheat board and the board of grain commissioners that it is time that Canada took a look at the terminal storage problem and made provision for the storage of our surplus grain. As a national problem surely the weight of it should not be borne entirely by the farmer. It is surely not good business to leave grain stored in box cars and have demurrage charged that will have to be paid by the farmer. I suggest to the minister that a continuation of the present condition of lack of space at terminal elevators to unload box cars is going to lead to the producers having to pay heavy demurrage charges, and they are going to feel very badly about it and resentful that action has not been taken to take care of this surplus commodity. As to the "seven fat years", we are enjoying that period as far as production is concerned, but they certainly have not brought a great deal of increased well-being to the producer. His problems today are increasing. His costs are increasing. With a declining income, this is a serious problem. I hope that the board of grain commissioners will advocate the construction of more elevator space. Already the government is in the elevator storage business. I believe they rent elevator storage space at the present time. I believe the leases for them are due to expire this year. I hope this suggestion will be looked upon with some favour. I refer to the suggestion that the government consider the building of more storage space in order to do away with the vexing problem which is increasing year by year.


Hazen Robert Argue: There is a question I should like to ask the minister about the personnel of the board of grain commissioners. I believe there soon will be a vacancy on the board if there is not technically a vacancy now. When the minister is considering appointing a person to fill that vacancy, I wonder

whether he will not discuss with the farm organizations-I refer to both the farmers union and the grain organizations-the question of a person that would be satisfactory to both. I know it is the minister's prerogative to appoint to the board anyone he cares to appoint. But I think it would be better and would lead to easier administration if the minister would discuss with the main farm organizations the question of the person to be appointed. I do not really feel that there would be any difficulty in coming to an agreement and recommending a given person. I do not think such a move would lead to any controversy.


Clarence Decatur Howe: The vacancy has not occurred as yet. When it occurs, we shall be glad to keep my hon. friend's views in mind. We usually get the views of the interested grain co-operatives. That has been the case on every occasion, I believe. We get names from each of them and we pick out the man we think is best qualified to do the job. We shall doubtless do that again. The only appointment I have heard was announced in the agriculture committee. My hon. friend appointed a new chairman for the board. That is causing me some embarrassment. However, I will not embarrass him now by suggesting a man for the board.


Hazen Robert Argue: When I was appointing a new member of the board, I did not realize that it would cause any embarrassment. As to the information that I had when I was making my so-called appointment, I consider that I obtained it on the highest authority and it was not told to me in confidence. Had it been in confidence, I would have said nothing about it.


[Stage Direction]
Item agreed to.
Atomic energy control board-
49. Administration expenses of the atomic energy control board, $41,160.
Howard Charles Green: Mr. Chairman, these next three items have to do with the national research council. There is very little that we have to say about them.


William Alfred Robinson: This is item 49.


Howard Charles Green: I beg your pardon?


William Alfred Robinson: I thought the hon. member referred to the national research council.


John Horace Dickey: It is item 49, atomic energy control board.


Howard Charles Green: Item 49, atomic energy?


William Alfred Robinson: Yes.


Howard Charles Green: Mr. Chairman, these items on atomic energy do not require a great deal
Supply-Atomic Energy of discussion in view of the fact that a special committee of the house has been dealing during the present session with the activities of the government in the fields of research and of atomic energy. I had asked for the setting up of such a committee on several occasions; last session, again this session and also, I think, in 1954. As hon. members know, this committee was set up during the present session. I think it would have been wiser to have the committee deal exclusively either with the national research council and other problems of research or with atomic energy. As the minister will recall, we had some disagreement about that point at the time the motion setting up the committee was under debate. I pointed out then that last year he himself had suggested that there should be separate committees. In the actual working out of matters, that suggestion has proved to be right. This committee has not been able to cover either field adequately and, as a matter of fact, has not yet made a report. There were some hearings during which we heard from officers of the research council. Then there was one trip to the national research council premises. On the atomic energy side we heard from Mr. Bennett an extremely interesting report, and the committee had a trip to Chalk River. But in my opinion the work of that committee was not as effective as it. could have been if we had been dealing only with one subject. I suggest that in future years it would be wise to give any such committee only one of these two extremely important fields to cover.
In the atomic energy field we were all again greatly impressed by what we saw at Chalk River. This was my third trip to Chalk River. I have always believed that the spirit there was a model for any activity in Canada. I have never encountered a higher morale than is to be found there. Certainly magnificent leadership has been given by the men who were responsible for setting up that project and for directing it in the intervening years. It would be a good thing if a great many more Canadians could go there and see just what is being done.
Today I should like the minister to tell us what he expects to be the expense for this atomic energy program, say, for the next five years. The government estimates ahead just what these expenditures will be. When the minister replies, I would ask him to give us those figures. The costs seem to have a way of going up higher than the estimates. For example, we had the case of the new reactor known as the NRU reactor which originally was to cost $30 million- I think that is the correct figure-and which

Supply-Atomic Energy we now find will cost something over $50 million. I think Mr. Bennett told us it would be $52 million or $53 million. I suppose it is difficult to estimate accurately just what the-e costs will be but they seem to get higher as the years go by.
Then, there are three different points in connection with this whole program on which I should like to have an expression from the minister. The first is this. We are now moving into the field of producing power by means of atomic energy. We are about to build a small power reactor in conjunction with Ontario hydro and Canadian General Electric. There will be more of this work done as time goes on. We realize that plans are being laid for the expansion of work of that kind. I am still concerned as to whether the government is determined to spread out these reactors in such a way that they will be of benefit primarily to those parts of the country which are short of other types of power.
This first reactor is to be part of the Ontario hydro electric system. While I realize that Ontario is faced with a possible shortage of power I hope the emphasis is not going to be placed upon providing power by atomic energy for the larger centres of Canada. It seems to me there is not enough drive in the direction of getting this type of power into areas like Saskatchewan, Nova Scotia and other parts of Canada where there is not as much other power potential. The tendency seems to be to follow the principle, "he that hath, to him shall be given". This could mean so much in the development of the parts of Canada which are handicapped if the government deliberately adopts a policy that will help them first.
The next point on which I would ask the minister to comment has to do with the production of heavy water. He and I had a little disagreement about that earlier in the session over the question of whether the atomic energy plant at Chalk river used any heavy water produced at Trail. I am not going to go into that further today. The evidence we got in committee made it quite clear that at least some of Canada's heavy water did come from Trail. What I am worried about is this. The plant at Trail was owned by the United States atomic energy commission. This year that production ceased and Canada is no longer producing any heavy water. We are now buying our heavy water from the United States atomic energy plant at Savannah, Georgia, which is the only plant on the North American continent producing this commodity.


The Canadian atomic energy program depends entirely on heavy water. We have gone into that field as distinguished from the use of graphite. Canadian research on atomic power plants is centred on the use of heavy water both as a moderator to control atomic reaction and to keep the reactor cool. We pioneered this field and Canada is the leading nation in the use of heavy water for the production of atomic energy. All the reactors at Chalk River use heavy water and the new power reactor will do the same. The reactor we supply to India will be of the same type. We hope eventually to get into the business of exporting power reactors, all of which will be heavy water reactors. Unless there is some change in government policy the only heavy water available will come from Savannah, Georgia.
I think Canada could be taking steps to get into this business again herself. We have had this experience at Trail and there must be many scientists and engineers who are capable of operating a plant of that kind. It does seem strange that we are just dropping out of that picture. The demands for heavy water in Canada will be extensive. We were told by Mr. Bennett that the NRU reactor would require 66 tons, I think it was, of heavy water. In an economic forecast of the role of nuclear power in Canada made by Dr. Davis of the economics branch of the minister's department and Dr. W. B. Lewis, I find at page 15 some very interesting statements with regard to heavy water. They say this:
The situation with regard to heavy water is something else again. Here, the necessary tonnages may he many times that of the nation's present production capacity.
I realize the production at Trail was comparatively small.
What could, in time, become a sizeable segment of Canada's chemical industry may, therefore, have to be created in order to cater for this large and rapidly expanding demand for this unique material.
Phased in five-year intervals, the cumulative material needs of a recycled natural uranium system might be expected to run somewhat as in table V.
Then, in table V they set out the requirements of heavy water as follows:
Year	Short Tons
1961	 100- 200
1966	 200-1,000
1971	  600-1,700
1976	 2,000-3,300
1981	  4,000-7,000
Then, this forecast goes on as follows: Converted into money terms, these investments take on new meaning. Production of natural uranium for domestic consumption, apparently, would have to run into tens of millions of dollars a year. Even if new methods are discovered for the manufacture of heavy water which will reduce

its unit price appreciably, outlays in this direction might reach an annual level of $40 million to $50 million, 25 years from now. And outstripping these expenditures would be the outlays on generating plants and machinery and equipment. These capital investments might reach into the $100 million a year category by 1980.
Then, they show the prospective investment in millions for heavy water, and those figures are as follows:
Investment for Heavy Water in
Year	millions
1961		 6 0- 12
1966	 12-0- 60
1971	 36 0-102
1976	 120 0-198
1981	  240-0-420
This table is based on a cost of $30 per pound for heavy water. I suggest to the minister that in view of the fact Canada has specialized in this heavy water field and has had such success, and in view of the fact that we have trained men, we should make every effort to produce heavy water.
The third and final point on which I would ask a report is with respect to uranium. I would ask the minister to bring us up to date on that situation. From press reports it appears that Atomic Energy of Canada Limited will be contracting for $1,250 million worth of uranium. That is to say, it has entered into or will be entering into contracts that will aggregate that value when this uranium has all been delivered. That figure is taken from a press dispatch of July 23, 1956. It is, of course, a very large sum and Mr. Bennett was quoted as saying in June that uranium would likely be Canada's top metal in value in future years and he prophesied an approximate production of $300 million per year.
I gained the impression from Mr. Bennett's evidence that once these contracts had been filled there was likely to be quite a drop in the demand for uranium and I think it was based partially on the fact that there would not be such large requirements on the part of the United States for defence purposes. If that is so, it seems to me the effect might well be to discourage prospecting for uranium and its production.
This atomic energy field is opening up so rapidly that I think its importance will be a great deal more vast than any of us realize at the present time and by 1962 the demand for uranium may be a great deal higher than we even dream of now.


Clarence Decatur Howe: It may be a great deal lower, as well.


Howard Charles Green: It may be a great deal lower; that is right. The minister is not often a pessimist.


Mr. Mclvor:: He never is.
Supply-Atomic Energy


Clarence Decatur Howe: The hon. member was speculating on one side of the question and I was simply speculating on the other, just to show the two sides. I am not taking a position.


Howard Charles Green: I am just wondering about this whole situation.


Clarence Decatur Howe: Has my hon. friend ever gone on the dotted line for $1,250 million?


Howard Charles Green: No, and I never expect to. I would like the minister to clear up that point because I gained the impression in the committee that Mr. Bennett was a little doubtful about what we were going to do with our uranium after 1962.


Clarence Decatur Howe: I am glad he was not positive because we have nothing in the form of a guarantee.


Howard Charles Green: I am not saying that he is right or wrong and I have a great deal of respect for Mr. Bennett and his judgment. I have watched his career with interest for a long time.


Clarence Decatur Howe: Sometimes it is wise to say you do not know.


Howard Charles Green: I would like the minister to clear up that situation and also to tell us just what will happen to the mining companies that have not been able to get in on these contracts and will not be able to sell the uranium they produce. Is there any provision made for companies of that type? I do not see how this business can be kept going ahead, and yet remain in the hands of a comparatively few companies which have contracts, unless there is some other plan in mind. Perhaps the minister could deal with these points when he replies.


Clarence Decatur Howe: Mr. Chairman, I will try to cover the ground that has been outlined by my hon. friend. I believe he wanted a forecast of the cash requirements for Atomic Energy of Canada Limited. To March 31, 1961 it adds up to $115 million. Do you want it year by year?


Howard Charles Green: Yes, please.


Clarence Decatur Howe: That is the net. Perhaps I had better give it in round figures. It is $35,817,000 for 1956-57; let us call it $36 million for that period. For 1957-58 it is $30 million; for 1958-59 it is $20 million; for 1959-60 it is $13 million; for 1960-61 it is $15 million; or a total of $115 million. That is the net cash requirement and I should add that it is after certain earnings. It is the estimated net cash requirement.

Supply-Atomic Energy


Howard Charles Green: That is assuming there would be larger revenues than at the present time?


Clarence Decatur Howe: Yes, it is the estimated cash drain on the treasury of Canada. For example, these atomic piles do certain commercial work for which they get paid and they sell certain plutonium for which they get paid. We expect the cost to the government of Canada to be as I have outlined it.
Concerning the question about the distribution of generating equipment, it is not the purpose of the government or Atomic Energy of Canada Limited to change the constitutional position of the federal government as regards generating power in various parts of Canada. We have taken responsibility for experimental work at Atomic Energy and we regard it as the duty of the government to keep Canada in the front ranks of progress as far as the development of power from atomic energy is concerned. It was never our intention that the government of Canada would build plants in various parts of the dominion.
The plant now under construction is being built in Ontario because it was possible to make arrangements there which we could not make elsewhere in Canada. The province of Nova Scotia was anxious to have the plant located in that province and the private power company offered certain arrangements there.
It being a small system the difficulty was that we had to give a guarantee; first, as to when the power could be put on the line; second, what the power would cost; and third, I think we had to give a guarantee that the plant would be operating for a certain number of years. We were unable at that stage to give those guarantees. We do not know too much about power generated from atomic energy nor does anybody else.
Ontario said they would pay for the cost of the installation other than the atomic pile part; they would operate the pile and pay for the power and use the power. They required no guarantee as to the future of the development.
This power from the original plant is not going to be cheap power. The plant is too small to be an economical unit and, as I say, it is an experimental plant. The purpose is to test out the process and to gain a great deal of information that would be required for a commercial plant. The reason it is being built in Ontario is that we were able to make much better financial arrangements in that province than we could by building elsewhere.
The work of the power development is under the direction of a group made up of representatives of practically every power 
authority in Canada, whether public or private, and the decisions are taken with the advice of that group. The purpose is to make information available in every part of Canada. We stand ready to give advice on design and scientific work that may help any project, but it is not our intention to build such projects, and push them out into various parts of Canada. We simply act as consultants for whoever wants to go into the business of building atomic power plants.
The second question had to do with heavy water. There is nothing mysterious about heavy water; it is not even classified. There are two or three processes for making it which are well known. Anyone can build a heavy water plant if he wishes to do so. We have a favourable arrangement for the purchase of heavy water. We have always bought it from the United States atomic energy commission. The United States atomic energy commission owned the plant at Trail and we may have received some of that water from Trail, but we never bought it direct. When the atomic energy commission decided that it no longer had use for the Trail plant the commission offered the equipment to us. We tried to make an arrangement with Trail for a price for the product competitive with what we were paying, but were not able to do so. Had we made an arrangement with Trail we would have been paying 25 per cent more for our heavy water than we are paying now under our present arrangement. The price we are paying now is $28 per pound.
In any case the Trail people were not keen to make an arrangement with us, at least they showed no real desire to do so. I had lunch with them once or twice and discussed the matter. However, we decided we would purchase our heavy water in the cheapest market. When you are dealing with a commodity worth $28 a pound, and you need a lot of it, a little difference in the price per pound can go a long way toward $1 million.
In any event I see no particular reason for Canada producing heavy water. If we were not buying it in the United States we might be able to buy it somewhere else. They make it in Norway and in other parts of the world: I do not know whether or not they are about to produce it in New Zealand.


Howard Charles Green: I understand the New Zealand plant has been closed.


Clarence Decatur Howe: Perhaps, because the costs were too high.


Howard Charles Green: Is the minister sure it is being made in Norway?


Clarence Decatur Howe: Yes. The New Zealand project was dropped when they

found they could buy heavy water at $28 a pound. I do not mind going into any business if we must, as a government, but I did not see any reason why this government should go into the heavy water business.


Howard Charles Green: Is it not rather risky to have only one plant on the continent producing heavy water?


Clarence Decatur Howe: Perhaps it is, but the demand for heavy water does not spring up overnight. Even if the plant were damaged it would not take very long to put it back into condition. There is nothing mysterious about heavy water, it is just a commodity the same as anything else.
As to uranium, we have made arrangements with the atomic energy commission of the United States which seem to be quite satisfactory to the mining industry of this country. We have certain contracts with the mining industry which to a large extent have been underwritten by the atomic energy commission of the United States. Those contracts extend to 1962 and provide for the complete write-off of capital expenditures at the mines in the period up to 1962.
The hon. member asks what happens to the mines at the end of 1962. They would have their mine plants all paid for and probably some profit in their pockets. They would be in a position to strike out on their own and we hope they will be able to do so at that time. Through arrangements being completed with the United Kingdom we probably will be able to extend the demand beyond that date to some extent. Certain arrangements have been made with mines which have been late getting into the business which may provide some extension of the present contract. This is a fluctuating situation and involves a terrific amount of money. I would rather not discuss the details at this time. I understand that a good deal of this information was given in the committee and appears in the committee records. I think it would be better if my hon. friend would check that information without asking me to extend myself further.


Howard Charles Green: I do not think any evidence was given as to what would happen after 1962.


Clarence Decatur Howe: My hon. friend and I need not worry very much. I am simply saying that all the capital cost of the mining plants will be written off by then.


Howard Charles Green: Just those that have contracts?


Clarence Decatur Howe: Everybody has a contract who is in a position to get into production before the deadline. Perhaps there will be youngsters coming along and
Supply-Atomic Energy they may have to do the best they can. But as I say, the underwritten commitments to the mines total well over $1 billion. I think Canada has done pretty well toward getting her uranium mining industry established.


Mr. Brooks:: Mr. Chairman, I concur entirely with what the hon. member for Vancouver-Quadra said with regard to the operations at Chalk River. I have had the opportunity to visit there a number of times and have always been impressed with the energy and interest which is being shown there. I was quite interested in the remarks of the minister in connection with the plant near Chalk River for the production of power. I understand that the objective is to provide thermonuclear power plants in different parts of Canada. On page 26 of the evidence given by Mr. Bennett, president of Atomic Energy of Canada Limited, he gave the following as one of the objectives:
To contribute to the development of economic nuclear power in order that nuclear power may be available for use in Canada in those regions where conventional methods of developing power are no longer economic.
That would seem to indicate that the intention would be to develop power by this means in parts of Canada where power could not be produced economically as hydroelectric power or from coal. Certainly they have more power in Ontario than is available in other parts of Canada; they have more than they have in Saskatchewan, more than they have in the maritime provinces and more than they have in the north country. I had rather hoped that that was the idea, to establish reactors in different parts of Canada like the maritime provinces.


Clarence Decatur Howe: My hon. friend overlooked the words "to contribute".


Alfred Johnson Brooks: If this power is to be developed in Ontario it certainly will not contribute to the development of power in other parts of Canada. I will admit that the experimental work being done in Ontario is a contribution to the development of power in other parts of Canada provided reactors are established there, but it will not be if they are not established in other parts of Canada. As a matter of fact, we all know that Canada, in order to assist in developing power in India, for instance, where it is difficult to develop either hydroelectric power or thermal power, is contributing to a reactor in India for this very purpose.


Clarence Decatur Howe: No. I should like to correct that statement immediately. It is not a reactor for thermal power; it is a reactor similar to the NRY reactor at Chalk River.

Supply-National Research Council It is designed purely for experimental purposes and is quite a different kind of reactor from the one my hon. friend is talking about.


Alfred Johnson Brooks: What we are doing is initiating perhaps one of the first steps for the development of nuclear power in India. As I said a moment ago, I was a little disappointed to hear the minister make the statement that it was not intended to produce or construct reactors in other parts of Canada. He mentioned the fact that it was not cheap power at the present time. We all know that, but we were told when we were at Chalk River that there were great possibilities of its becoming cheap power.
I might ask the minister or the government why they should expend all these millions of dollars for the purpose of investigating the development of nuclear power in Canada if we did not expect at some time to utilize it. I do not think the use of nuclear power is very far away, even here in Canada. I should like to quote from an article I read in an English newspaper not so long ago. It states:
At Calder Hall in Cumberland, it was announced by the atomic energy authority, the first uranium furnace of the nuclear power station had started working.
The actual time was 7:15 p.m., and the actual date May 22.
The pile was charged with slugs of uranium. The control rods were drawn out. A needle began to move on a dial. A red sign lit up-"pile operating". Calder Hall was getting ready for business.
Next the heat transfer system has to be tested. Soon after, the turbines will begin to hum.
Again, the following appeared in the Montreal Star in July. The heading is "Great Atomic Power Plant is Year Ahead of Schedule". It states:
Dounreay plant, the world's most advanced "breeder" station, will produce large amounts of power for the electricity grid.
Because of simplified engineering processes it is now almost certain to be ready by the early part of 1958.
That shows that England-and I might add the United States and other parts of the world-is fast going ahead with the development of atomic power for electrical purposes. I am not going to labour that point any further except to say that I was disappointed with the statement of the minister. Some of the other questions that I intended to ask have already been asked by he hon. member for Vancouver-Quadra, and so I shall take no more of the committee's time.


[Stage Direction]
Item agreed to.
National research council-
282. Salaries and other expenses, $15,470,139.
Howard Charles Green: As I mentioned before, when I thought we were dealing with this item instead of the atomic energy item, the committee did go into the work of the national
[Mr. Howe (Port Arthur) .1
research council to some degree but did not make a thorough investigation. We were very much impressed to hear again what is being done by these scientists and engineers. They are making a great contribution to the national life and, I think, deserve the support of the people from coast to coast.
I am not going to go into any details in connection with these votes, other than to bring up one question; that has to do with the numbers of scientists and engineers now available in Canada and who will be available in the years that lie ahead. This question, of course, has been brought to the fore by reports of the great strides made in Russia in the training of engineers and scientists. I do not know whether or not those reports are exaggerated, but in any event they have caused a good deal of concern in the United States and also in Canada. I notice that the very first paragraph of the annual report of the president of the national research council deals with scientific manpower. It reads as follows:
When the National Research Council was founded in 1916, its first move was to survey Canada's resources of scientific manpower. This survey revealed some serious deficiencies. The council immediately undertook two remedial steps:	a
system of scholarships in the natural sciences and of grants-in-aid of university research, and a system of associate committees on a nation-wide basis. Both programs were so successful that they still form an important part of the council's activities.
I am wondering whether the minister thinks the program now being carried out by the national research council is adequate to meet the present-day needs for scientific manpower? This question will also be of interest to the Minister of Labour, but I should like to have the minister's comment on that point. The officers of the research council gave me the impression that they thought the reports from Russia were exaggerated and that Canada's position in this field is not too bad, but I should like to have some assurance from the minister. An ordinary civilian or member of parliament is not in a position to know.
Evidently Russia, the nation with which the free nations are competing, is making some sort of a drive to produce very large numbers of engineers and scientists. Of course, it is difficult for us with our different system of living to do that. We cannot say to this young man that he must be an engineer and to that young man that he must be a scientist. We do not believe in that sort of thing. We have to use persuasive methods. However, I should like to know from the minister whether or not he is. satisfied with the present situation and, if he is not, whether there are any steps

he can suggest that should be taken in order that Canada may train larger numbers of scientists and engineers than she is at the present time.


Clarence Decatur Howe: Well, the question is a very difficult one. In a vote where you could use X amount of money, as much as you like, you ask if the $3 J million that we spend at the present time on grants and scholarships is enough. I think that the research council has contributed greatly to bringing up the standard of educational facilities in this country in order to produce as many engineers as we have produced. I believe there are about 50,000 to 55,000 engineers and scientists in the country today and we expect that number to double by about 1965. The present output of the universities will produce about that many by 1965.
I presume as the engineering population of our universities steps up the size of the grant should probably expand. I doubt if the shortage of engineers and scientists in Canada is as acute as it is in some other countries. We are short, certainly. Every engineer and every scientist is certain to have his services in great demand, but I would not say that we could stand a 50 per cent increase in the number of scientists and engineers right away and feel we would not have a surplus. That is only my own estimate after talking with people who seem to have a good deal of information on the subject.
But I think that the national research council is studying the situation carefully year by year. The grants are being stepped up, and I think it is the consensus of university people that a good deal of judgment has been used in working out the system that we have today.


[Stage Direction]
Item agreed to.
At six o'clock the committee took recess.
[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.

[Stage Direction]
Privy council office-
323. General administration, $405,184.
John George Diefenbaker: Mr. Chairman, there are one or two rather controversial matters on which I wish to direct questions to the Prime Minister under the first item in connection with the privy council. As I remember the situation in the past, this item allows the house to ask the Prime Minister certain 67509-465J
Supply-Privy Council questions which he alone can answer. I start with one arising out of his answer today on the orders of the day to a question asked by the Acting Leader of the Opposition with regard to certain opinions expressed yesterday by Canadian ex-officers of high rank, namely General Simonds and General Macklin. In answer to the question asked today the Prime Minister used these rather unusual words. He was referring to the statements which they had made, one by General Macklin to the effect that our link with the United States imperils our defence and the other by General Simonds that of the 20,000 members of the armed forces recruited for Korea, some 7,000 deserted, information which had never been given before in this house. The Prime Minister said this:
I think-
Referring to these statements.
-they were intended to be alarming by those who made them, but I do not think they have created the alarm in the public mind that was intended.
I found it difficult to understand that answer today from the Prime Minister who usually gives a reasonably comprehensive answer to any question asked. One naturally asks oneself the question as to why the Prime Minister should have left so sinister an inference with regard to the words used by these officers who not so long ago held a very high rank in the Canadian armed forces and who must then have been regarded by the Prime Minister and the government as worthy of the utmost respect and of the responsibility which was theirs. I simply ask the Prime Minister to elucidate what he meant this morning in that regard. Whatever they may have said at the moment, it is difficult to understand how officers who held responsibilities which all of us regard as of the first magnitude, representing as they do our survival, should have it ascribed to them that they intended to alarm or to create alarm in the public mind.	One
naturally asks oneself a simple question and it is this. If they enjoyed the confidence of the government in the positions they held, what has happened recently which made it necessary for the Prime Minister to leave the inference which was clear and patent from his words, namely that what they were saying was not worthy of credibility, that it had an unworthy purpose in mind, and that it was designed to create alarm but had not been successful. If the Prime Minister did not mean that, that is a different matter. But those are the words, and they are strikingly significant words having regard to the

Supply-Privy Council fact that those two officers enjoyed so high a position of authority under this government for so long.


Louis Stephen St-Laurent: Mr. Chairman, I have not before me the exact words of the question that was put to me by the hon. gentleman who was Acting Leader of the Opposition, but he had spoken of the alarm caused by such statements; and in using the words he used or a paraphrase of them, I said that I thought they had intended to alarm the public. There was nothing sinister in that statement. I think they have both for some time been trying to create in the public mind the impression that I found in some of the excerpts I read of the statements, namely that, because we had not resorted to compulsory military service in this country since the last war, we were not taking proper measures for the right kind of defence for this country. I do not think they were saying anything they did not believe it proper for them to say. I think they were saying it for the purpose of trying to induce the public to take perhaps a more serious view of what each of us should be doing to ward off the dangers they foresee.
I have not seen the text of their statements. I have seen the excerpts that were published in the newspapers. I thought I sensed some sort of contradiction in the statement attributed to General Macklin when he said that we were still preparing for the war before the last war, whilst in another part he was saying that there was altogether too much emphasis being put upon the preparations being made to prevent war in which nuclear weapons would be used. There were certainly no nuclear weapons that were threatening or that were looked upon as having to be warded off in the war before the last war.
Not only in this country but in many other countries I think there is some rivalry between the different branches of the armed forces as to which service can be the most important and the most effective. We have heard divergent views expressed in this house. It is not so very long ago that the military critic for the official opposition was reproaching the government for not attributing a larger portion of its appropriations to the strengthening of the air force. There are opinions that I think are honestly held by all these officers in high positions as to what would be the best way to provide for the effective defence of the country.
Of course they would not be worthy of our confidence if they did not recommend everything they felt would be useful as measures of defence. But everything cannot be done. Since these two distinguished officers who
[Mr. Diefenbaker.l
formerly served with the army have retired, they have been speaking on many occasions of their dissatisfaction with the manner in which the defence forces of the country are being organized and provided for. I think they feel that they should alarm the public about that matter. There was nothing more sinister than that intended in my answer to the question in which I endeavoured to use the language that the question contained.


Mr. Enfield:: Mr. Chairman, there is something that I feel must absolutely be said while we are discussing this particular point. I want to take just a minute, but I am quite upset about it. I was going to raise this matter on the orders of the day or as a question of privilege tomorrow but the opportunity to deal with it has arisen right now. In tonight's Citizen there is a heading which reads as follows:
Thousands Were Recruited from Jails for Korean
Fight, General Discloses
Then the report states this:
The Toronto Star quoted him-
That is General Macklin.
-as saying that because of inadequate army forces "10,000 criminals and useless men" were taken from prisons "after they had committed every crime starting with murder and working up."
If the general said that, I as a veteran of the service myself feel that I must say this. I say that is the grossest insult to the armed forces who served in the Korean war. I think some 20,000 to 25,000 were recruited. That means that the general is saying that nearly 50 per cent of those boys who served in Korea were criminals. If that is the type of irresponsible statement upon which we have to answer questions put up by opposition members in this house, I think we are certainly wasting the time of this chamber.


William Alfred Robinson: Order. I was somewhat apprehensive when the hon. member for Prince Albert raised this question as I felt that it was not a proper one to raise under a privy council item. I am confirmed in that opinion by what has just transpired. It seems to me that this is a matter which could more appropriately and more relevantly be discussed under the estimates of the Department of National Defence. Under this item dealing with the privy council office I am afraid it could not be answered.
I may say that I did not interrupt the hon. member for Prince Albert or the Prime Minister because I understood the hon. member was asking the Prime Minister to explain an answer which he had given earlier today. I do not think we should embark on a further

discussion of this question, which is really one of national defence, under the privy council office.


Mr. Churchill:: Surely the responsibility of the Prime Minister enters into a discussion of the estimates of the privy council. In this instance, as I understand it, the hon. member for Prince Albert was simply asking the Prime Minister, in view of his general responsibility, for some clarification of his statement earlier today with regard to a very important matter. In the course of the Prime Minister's remarks I think he did an injustice to General Macklin through a misunderstanding of the report. I, like the Prime Minister, have not seen the text of General Macklin's statement. As I read the newspaper article and the earlier articles by General Macklin appearing in other journals I thought that General Macklin's criticism did not contain a misconception, as the Prime Minister suggested.
I understood the Prime Minister to say that General Macklin on the one hand was saying we were preparing for the war before the last war and, at the same time, General Macklin was commenting upon the development and use of thermonuclear weapons, which is obviously making preparation for the next war. What I gathered from the article was that General Macklin was speaking about the army not being prepared for the war before the last war, and instanced from that that, in the 10 years that have elapsed since the conclusion of the second world war, the army has not been brought up to modern standards with regard to mobility and with regard to air transport.
I see nothing there to indicate that there is any discrepancy in General Macklin's statement. Thermonuclear war has to be prepared for, and at the same time the army has to be prepared for action under thermonuclear conditions. But if thermonuclear weapons are not used the army must be prepared to use conventional weapons according to modern practice, and without mobility it is an army of pre-1939 vintage. I judge that is what General Macklin was aiming at.


Howard Charles Green: There is one question I should like to place before the Prime Minister and that has to do with the fact that he still has one minister handling the portfolios of veterans affairs and post office. This condition has continued since November 8, 1955; in other words, for over nine months. I should like to register a protest against the failure of the Prime Minister to have a minister for each of those portfolios.
In the first place, the Department of Veterans Affairs has to do very directly with
Supply-Privy Council between 250,000 and 300,000 veterans and their dependents in Canada. It is impossible to get an exact figure because there is some duplication. In other words, a man may be getting benefits under Veterans Land Act and may also be getting a pension. But there are at least a quarter of a million Canadians very directly concerned with what is done by the Department of Veterans Affairs. In addition to that, according to the figures given in the estimates book, there are nearly 14,000 employees in that department. It is a very important department having to do with a lot of questions which affect people very directly. I cannot urge too strongly upon the Prime Minister that there should at all times be a minister whose sole responsibility it will be to look after that particular department.
Then, the same is true of the post office department. There are about 25,000 employees in that department. There again problems arise affecting people very directly. I can see no reason why one minister should have been called upon to perform these double duties for nine months. I am not criticizing the minister at all. I think it was unfair to him, as it would have been to any other minister, to expect him to fulfil all the obligations entailed in directing these two departments. I hope that the Prime Minister will take steps right away to see that there is a minister in charge of each of these departments. It has been a strange situation that throughout the whole session one minister would be asked to continue in charge of these two departments. I suggest to you, Mr. Chairman, that this situation should be ended without any further delay. May I have an explanation from the Prime Minister as to why that situation has been allowed to continue?


Louis Stephen St-Laurent: It has been and still is a temporary situation.


Daniel (Dan) McIvor: I must say, Mr. Chairman, I have never received more answers to my letters during my 21 years than I have from the Minister of Veterans Affairs. I thank him for it.


Mr. Hamilton (Notre Dame de Grace):: Just for a moment I should like to suggest to the Prime Minister that he give consideration to the addition of another member to his cabinet, a minister in charge of responsibility in the field of provincial affairs and provincial relations. I am not going to explore this subject at great length, but the reason for the suggestion is that the federal government's relations with the provinces have expanded greatly during the past few years. They are being carried on by various members within the cabinet, all of whom have some small area

Supply-Privy Council of responsibility in this field. It seems to me that the co-ordination of these efforts and the establishment of a focal point to which the provinces could go when they wish to talk to the federal government would be of great advantage to both these levels of government.
I suggest to the Prime Minister that the situation is one parallel to the field of foreign affairs where, for quite a few years, the Prime Minister carried both his own portfolio and that of Secretary of State for External Affairs. In the last few years it was seen fit to divest the Prime Minister of this responsibility. While when he had the burden he acquitted himself quite well in that field, I do think that the opportunity to have somebody who specialized in that field and was free to travel when necessary and to acquaint himself more intimately with these problems has been of advantage in this particular field.
Now, the cases are not exactly parallel but they are very close to being parallel. I point out one further fact in case some one should suggest the establishment of this position would be an invasion of provincial rights. I fail to see that it would be any more of an invasion of provincial rights to have someone charged with the federal government's liaison with the provincial authorities than it is an invasion of the rights of other countries to have a secretary of state for external affairs.
Knowing the Prime Minister's wide background and his personal acquaintance with this subject I will not labour that point any further but while I am on my feet I would like to ask the Prime Minister one question and it is this. How extensive is the newspaper clipping service which is operated in the office of the privy council? It is my understanding that it occupies about two people on a full-time basis; and before I present my other question I wonder if the Prime Minister would care to give us at least some idea of the extent of this operation?


Louis Stephen St-Laurent: I am told, Mr. Chairman, that there are seven people in the clipping office.


William McLean Hamilton: That is more extensive than I had anticipated.


George Hugh Castleden: You are really getting clipped, eh?


William McLean Hamilton: Mr. Chairman, I wonder if the Prime Minister would inform us what use is made of this material and to what extent it is available for reference purposes by hon. members of the house?


Louis Stephen St-Laurent: Mr. Chairman, I do not think there has ever been any application from hon. members of the

house but if there were they would be very sympathetically considered. I see perhaps less than 5 per cent of the clippings that are filed. Almost daily four or five clippings are brought to my attention. I just put my initials on the sheet after I have perused it and send it back and then when there is any requirement for consultation I ask for the clippings of editorial comments on a specific subject and the clippings are gathered together and brought back to me. If at any time the hon. gentleman wants clippings that he would find it more convenient to obtain from us than elsewhere, if he will just let us know I hope we will be able to accommodate him.


Mr. Fulton:: Mr. Chairman, I wonder if we could hear from the Prime Minister now a somewhat more detailed report of the conference which he attended in London last month? We were interested and pleased, and to some extent concerned, to know that the Prime Minister had conversations with the prime minister of India, as I understand it, outside the scope of the full conference itself. While the conference itself has been dealt with to a very limited extent in the communique tabled in the house we would, I know, appreciate it if the Prime Minister could enlighten us on the scope of the conversations with the prime minister of India and what conclusions, if any, or what mutual agreements were arrived at on that occasion.


Louis Stephen St-Laurent: Mr. Chairman, there were no mutual agreements arrived at on that occasion and these conversations, as the hon. gentleman would appreciate, are of a confidential character that I would not like to discuss publicly.


Edmund Davie Fulton: Well, surely the Prime Minister can tell us the area which they covered. I am not asking him for a verbatim report; but what were the subjects of mutual concern which caused the Prime Minister of India and the Prime Minister of Canada to get together? Surely, the Prime Minister could take the committee into his confidence to that extent.


Louis Stephen St-Laurent: There were no problems of mutual concern to our respective countries that caused us to get together. I accepted an invitation from the prime minister of India to lunch with him and was accompanied on that occasion by the Secretary of State for External Affairs. We discussed some of the matters that had already been discussed in the plenary conference but we made no agreements and we endeavoured to be as frank as possible with each other in respect of our views concerning the international problems that we were discussing in the general conference.


Edmund Davie Fulton: If there were no areas of mutual agreement were there some of mutual disagreement? If so, what efforts were made in this sphere of international or commonwealth relations to explore such questions as the situation in the Middle East and Cyprus and to determine what were the views of the respective countries and what could be done in the way of reconciling them, these matters which are of such vital concern, not only to this country in particular but to the commonwealth in general?


Louis Stephen St-Laurent: Mr. Chairman, I would not care to disclose the nature of these confidential conversations which the Secretary of State for External Affairs and I had with Mr. Nehru and Mrs. Pandit on that occasion.


John Borden Hamilton: Mr. Chairman, I intended to ask a question somewhat along the same line. I have before me the text of a commonwealth conference communique and as the Prime Minister has said the most recent one has been tabled in the house. Very little is disclosed in these communiques as to what importance these conferences now hold for this country and for the commonwealth. I am not going to inquire of the Prime Minister what was said at the conferences. I might say that the communiques really do not tell us anything.


Edmund Davie Fulton: Hear, hear.


John Borden Hamilton: Certainly they do not indicate either areas of agreement or disagreement. What I would like to ask the Prime Minister is this. What purpose is now being-


Mr. Richardson:: Achieved.


John Borden Hamilton: Achieved; yes, that is a very good word which was supplied to me by the hon. member for St. Lawrence-St. George and it is true that he is a corporation counsel.
What purpose is now being achieved by these conferences and what may we expect to achieve through them in the future if this same course of conduct is followed? It seems to me, sir, that it is vitally important to us to know what we can expect from this type of meeting in the future.


Louis Stephen St-Laurent: Well, Mr. Chairman, I think that we can expect to have the good relations with the other members of the commonwealth that we have enjoyed during the whole period in which I have been attending those meetings. I can assure the hon. gentleman that I felt it was of real value to have personal contact and conversations with the two prime ministers I had not
Supply-Privy Council met before, the prime minister of South Africa and the prime minister of Ceylon; and also to have conversations in his capacity as prime minister with Mr. Mohammed Ali, whom I had met before in another capacity but who is now the prime minister of Pakistan.
We realized that from different parts of the world we saw the world's problems from different angles and it was, I think, of real value to have the opportunity of this personal appraisal of the viewpoint and difficulties of each of the other prime ministers. The communique is a responsibility of all of us and nothing goes into it that is not acceptable to every one of those who are there. That is perhaps why there is so little of much importance that is disclosed because some of the things that several would wish to have included in the communique would not be acceptable to others. We did put out this time, as on other occasions, a communique to which no one of those present would have any objection.


John Borden Hamilton: Does the Prime Minister feel that within the terms of reference-I think I can properly use that expression-under which these conferences are held they perform a useful function for Canada as a member of the commonwealth in connection with defence and in connection with our trading position within the commonwealth, and does he feel that these conferences have assisted the commonwealth as a group in connection with its possible common defence throughout the world and its trading position throughout the world? If those questions cannot be answered in the affirmative it seems to me that we are beginning to waste our time with conferences such as this.


Louis Stephen St-Laurent: I have
never felt that time was wasted. While there are no specific agreements reached I have always felt that the time was well spent and did serve to keep us as close as possible together. On this occasion there were no specific arrangements made about defence but there was a lot of information exchanged about the position in which each country found itself in relation to defence and its contribution to the maintenance of peace and stability in the world.


Edmund Davie Fulton: Surely the Prime Minister must admit that no one here can deceive himself or be deceived as to the obvious nature of the fact that in such a situation as has developed in connection with the Suez other nations of the commonwealth, notably Australia and New Zealand, have made statements in support of the position taken by the

Supply-Privy Council United Kingdom in that dispute which are at marked variance with the very cautious reluctance of this government to commit itself one way or another in connection with that situation. I should like to know what is the purpose of these conferences and what goes on there. For instance, is any consultative machinery set up which would result in a common stand, or if there be not a common stand, which would result in a clear statement of a divergent stand on such a matter as the Suez incident?


Louis Stephen St-Laurent: The Suez incident had not arisen at the time of that conference.


Edmund Davie Fulton: I am aware of that; I am as able to calculate dates as is the right hon. gentleman. What I am pointing out is that after the Suez incident arose other countries of the commonwealth appeared to have been able to take a definite position in support of the position taken by the United Kingdom. Is there better consultation between those countries and the United Kingdom? Are they better informed than we? Were these matters discussed? Were the things which led to a different approach discussed at the conference or did the conference concern itself with generalities and not with specific problems or specific approaches to the world situation? We are not to be content with vague generalities forever. This commonwealth means something or it does not. If we carry on with the policy of drift as we appear to be doing then it will not be very long before the commonwealth means nothing and will in the future be in danger of disintegration, and the attitude of the government of Canada will have contributed more than anything to that disintegration if it does take place.


Donald Methuen Fleming: Was any record, either ver-oatim or in gist form, kept of the proceedings of the conference? I appreciate it would be confidential in view of what the Prime Minister has said. I recall for instance some previous conferences, particularly the famous conference of 1921. At that time I think a verbatim record was kept of the discussions which led eventually to the denunciation of the British-Japanese alliance. Is such a record kept of these conferences, and in particular was such a record kept of this conference for posterity?


Louis Stephen St-Laurent: There was no verbatim record kept but Sir Norman Brook kept a record and was busy writing practically all the time the discussions were going on.


John George Diefenbaker: No one has the information the Prime Minister has on this question and I am asking as a matter of information what is the background which dictates to other members of the commonwealth the acceptance of a family of nations joined together, either as self-governing nations or as republics? What is the philosophy that brings a republic into the commonwealth? Is there any joint responsibility for defence in so far as a republic is concerned? What is this new concept which is so difficult for us to understand, who knew the commonwealth as it used to be, made up of nations joined together, equal in status but not in function? What has the change been that brings in bodies that have no relationship or responsibility to the other members of the commonwealth? What is that basis? If the Prime Minister could enlighten us it would be most helpful because that is one of the most difficult anachronisms for those of us who have never heard it explained. Certainly political scientists cannot explain it and the only one who possibly could explain it is one who had taken part in the achievement of that new concept.


Louis Stephen St-Laurent: I took no part in the achievement of that new concept. It emerged before I commenced attending these conferences. It may be very difficult to explain but it is a relationship that exists and which we all feel is productive of beneficial results for those who are members of the commonwealth.


John George Diefenbaker: Could the Prime Minister give us the number of orders in council passed last year as well as the number of treasury orders passed during that period of time?


Mr.   Si. Laureni@Quebec East: That information was supplied quite recently. I assume what the hon. member refers to are the orders submitted to the Governor General for his signature, and when he refers to treasury orders he means the minutes of treasury board which come to the cabinet for approval several at a time with the order of approval then being submitted to His Excellency for approval. I am informed that the Minister of Citizenship and Immigration gave the number to the committee during the discussion of the Indian Act. It was on that occasion put on Hansard, but I can secure the exact number. The orders in council are numbered consecutively.


John George Diefenbaker: If they were given, I did not notice them.


Mr.   Si. Laureni@Quebec East: I would have to ascertain the number of minutes of the treasury board.


Wallace Bickford (Wally) Nesbitt: There is just a brief question I should like to ask the Prime Minister. Some time ago, as I recall it, it was reported in one or two of the Ottawa newspapers that the Prime Minister was going to divest himself of the direct responsibility for the federal district commission. I should like to ask the Prime Minister at this time whether he is considering divesting himself of this direct responsibility and passing it on to some other minister of the cabinet such as the Minister of Public Works?


Louis Stephen St-Laurent: That matter has been under consideration, and no decision has been reached.


Wallace Bickford (Wally) Nesbitt: In view of the fact that the committee has been sitting for some time, and the federal district commission has handed in a report, and these estimates were obviously prepared some time in advance, does the Prime Minister intend to modify the estimates in view of the report of the commission?


Louis Stephen St-Laurent: No, the estimates do not require to be modified at this time.


[Stage Direction]
Item agreed to.
333. To authorize payment of the ninth instalment to a special account in the consolidated revenue fund, known as the national capital fund, established under vote 809, Appropriation Act No. 4, 1947-48, $2,500,000.
John George Diefenbaker: Would the Prime Minister give a general picture as to what is being contemplated for next year in connection with developments of the federal district commission in Ottawa. What are the general plans, and what will be the amount of expenditure expected?


Mr.   Si. Laurenl@Quebec East: For this fiscal year, there is no change being suggested in the estimates, which were prepared some time ago. For the next fiscal year, we shall have to consider whether or not we shall adopt the recommendation of the committee that, instead of there being statutory grants for administration, there be a budget for the administration of the commission submitted to parliament each year.
The hon. gentleman knows that there has been a statutory grant of $300,000 and then supplementary votes. The committee has recommended that there be a yearly capital grant as there has been in the past but that for the current administration of the commission it should have to prepare and submit to parliament for approval a budget for all its current expenditures. The amount that will be recommended in the next budget will
Supply-Privy Council depend upon the consideration, and the decision after that consideration, that is given to these recommendations of the committee.
As for the capital expenditure, that will depend to some extent upon the availability of supplies and manpower. There are some of these things that are not so urgent that they should not have to give way to some other private or public enterprises that might put a strain on the supplies of material and manpower.
The hon. gentleman has no doubt read the report and has probably read some, if not all, of the thousand pages of printed evidence that was given before that committee. I have read the report and I have read some portions of the evidence, but it will take some considerable time to come to a conclusion as to the projects that are most urgent.
There is one, of course, that is always under consideration and always proceeding, and that has to do with the reorganization of the railway situation in the heart of the city. That proceeds as rapidly as the negotiation with the railways brings about results.
Another that will be undertaken at a very early date is the Queensway, which wil] occupy the roadbed of the cross-town railway and about which a proposal has been submitted to the city of Ottawa and accepted after negotiations between the government of the province of Ontario, the federal government and the city authorities. That is regarded as one of the urgent projects to be got under way.
There are some of lesser magnitude, such as the work going on for the approaches to the interprovincial bridge. Consideration will have to be given to the replacement of that bridge in due course.
Another matter which was one that occupied the attention of the committee was the pollution of the Ottawa river, about which the Ontario government has set up a commission. Of course, that is a provincial and municipal project but it will probably be carried out in a manner that will be fitted into the general capital plan. It may very well be that, to fit it into the general capital plan, it will be desirable for the commission to make some contribution to the over-all cost of the project.
Another recommendation which will receive very careful consideration is that the act be revised, that it be called the national capital act, and that the commission itself be called the national capital commission. That is a recommendation which appeals to me personally at first blush; but it will be given serious consideration.

Supply-Transport
There is a recommendation that there should be more active efforts made to coordinate the plans of the commission, of the provincial authorities and of the municipal authorities, not only of Ottawa and Hull but of the surrounding district. There certainly is room for co-operative and conformable action by the three levels of government. I hope that it will be possible to have that co-operation.
Within the last couple of hours, I received two letters from Her Worship the Mayor, one accepting the proposal for the exchange of properties which would make Green island available for the construction of a city hall and which will assure to the future capital that the old city hall site will not be built upon. The other has to do with the tentative agreement reached at the meetings between our Minister of Public Works, the Ontario minister of highways, and the city authorities, about the manner in which the project of the Queensway can be proceeded with and the cost distributed between the three interested organizations. So there seems already to have been an improvement, not perhaps in the desire for collaboration and co-operation, but in achieving collaboration and co-operation.


John George Diefenbaker: Mr. Chairman, the description that the Prime Minister has given of the Ottawa to be is one that I know will meet with the support of Canadians everywhere, a capital plan making this, the capital of Canada, a city in keeping with the aspirations of the Canadian people. All of us, regardless of what part of Canada we come from, are joined in agreement that what is being done is in accordance with Canada's potential greatness and will bring joy to generations yet to come.


Mr. Campbell:: Can the Prime Minister tell us whether the planning committee intends to maintain the cobblestone drive from the west gate up the hill for the next hundred years or whether something can be done to cover them up?


Louis Stephen St-Laurent: I am sure those cobblestones will not last for a hundred years.


[Stage Direction]
Item agreed to.

[Stage Direction]
Marine services-
440.	Marine services administration, including agencies, $670,240.
Howard Charles Green: Mr. Chairman, before this item is dealt with may I bring to the minister's attention the fact that on Saturday last, as reported at page 7040 of Hansard and as also found at page 2 of the English translations

for that day, the hon. member for Chicoutimi asked the minister this question:
In conclusion, I would ask the minister whether it would be possible lor him to table in this house a copy of the contract between the Canadian national authorities and the U.S. controlled Hilton company, concerning the operation of the new hotel which is going up in Montreal.
The minister apparently overlooked that question.


Mr. Marler:: I did not overlook it at all. I ignored it.


Howard Charles Green: The hon. member asked me to bring that up and ask the minister whether there would be any objection to tabling the contract.


George Carlyle Marler: The question was brought up last year and I dealt with the matter then. I explained to the house that it was not the custom of the railway company to table contracts that it had made and that that has been the invariable practice. The whole subject was discussed in the standing committee on railways and shipping owned by the government, as the hon. gentleman knows.


Howard Charles Green: With respect to item 440, would the minister explain to the committee just what part his department plays in this search and rescue service?


George Carlyle Marler: Mr. Chairman, on re-reading in yesterday's Hansard what I said last night I think perhaps I may have given a wrong impression in some of the comments that I made after the hon. gentleman's first question. The impression that I wished to give was that the responsibility for the co-ordination of search and rescue activities was the primary responsibility of the Department of National Defence. The responsibility for providing the vessels that would take part in search and rescue operations would, I think, fall on the Department of Transport primarily-


Howard Charles Green: For which?


George Carlyle Marler: For the provision of vessels in connection with the search and rescue operations, because I think the department unquestionably has more of those vessels than any of the other departments of government. But I should like to correct any misapprehension that my remarks may have caused last night that the whole responsibility rested on the Department of National Defence. Their responsibility is that of coordination of the activities but it is not a sole and exclusive responsibility.


Howard Charles Green: Suppose there is a wreck on the west coast. Who has the authority to order out the ships belonging to the Department of Transport?


George Carlyle Marler: I am informed, as I think my remarks indicated, that the responsibility rests on the air force, the Department of National Defence, for communicating with the various agencies concerned and apprising them of the circumstances and determining whether or not they are in a position to be able to afford assistance.


Howard Charles Green: Does the air force have the authority to order a vessel belonging to the Department of Transport to go to the scene of the wreck or must that go from the air force to the Department of Transport and then from the Department of Transport to the master of the vessel in question?


George Carlyle Marler: My information is that the request would be conveyed directly to the master of the vessel and not to the department itself. The hon. gentleman has used the word "order". I think perhaps if he changed it to say "request" that would be more appropriate language to use. I do not think it is the intention or the practice that the search and rescue organization should order other departments, even including the navy, but I am sure the hon. gentleman will realize that we are really merely bandying words if we talk about an order or a request whenever the vessels are available.


Thomas Speakman Barnett: I take it that when the minister suggests that government vessels commence a search or rescue operation on the initiative of the search and rescue co-ordination centre he is referring to the general departmental vessels of his department and also other departments such as the Department of Fisheries. However, I believe that that situation-and I should like to know whether my understanding is correct-would not apply to the boats at the lifeboat stations on the west coast of Vancouver island. Is it not true that those lifeboat stations have the authority to undertake a search or rescue operation on their own initiative without reference necessarily to the search and rescue co-ordination centre?


George Carlyle Marler: My information is that there are only a few of the stations to which the hon. gentleman refers, two, I believe, and that they may act on their own authority or they may act on the request of the search and rescue organization.


Thomas Speakman Barnett: As the minister well knows, there are many people who think that two are not enough. However, I will not pursue that question further.


[Stage Direction]
Item agreed to.
Supply-Transport Marine service steamers-
441.	Administration, operation and maintenance, $7,393,793.
Howard Charles Green: There is quite a large increase in this vote, Mr. Chairman. It is over $325,000. In the details at page 545 we find that there is an increase in "professional and special services" of over $90,000, and in "repairs and upkeep of equipment" of $120,000 and in "charter of vessels for northern transportation", of $75,000. Will the minister explain those increases.


George Carlyle Marler: Mr. Chairman, the main reason for the increase is a transfer to this particular subitem of an expenditure which was provided for otherwise in previous budgets. I am referring particularly to the stevedoring costs in connection with northern transportation which are set out for the first time as "professional and special services". They account for an addition to this item of some $90,000.


Howard Charles Green: What about the other increases?


George Carlyle Marler: I am informed that the item with regard to northern transportation is attributable to an increase in that particular activity and in the volume of material and freight that is carried northward on the supply mission during the summer.


Howard Charles Green: What policy is followed by the government in chartering these vessels for trips to the north? Perhaps the minister could tell us how many ships were chartered this year. I presume that charters have already been arranged for the current year?


George Carlyle Marler: Yes; they have.


William Alfred Robinson: Is item 441 carried?


Howard Charles Green: No, Mr. Chairman; it is not.


George Carlyle Marler: I shall try to answer the question, Mr. Chairman. The answer to the hon. gentleman's question is that we have called for tenders and we have actually chartered two vessels, one an ordinary dry cargo vessel and the other a tanker.


Howard Charles Green: To what extent are these tenders advertised?


George Carlyle Marler: My deputy minister informs me that it is through the Shipping Federation of Canada, first of all; the Dominion Marine Association, and by direct inquiry addressed to the shipping interests which we believe would be interested in it.


Howard Charles Green: Would that be in Montreal, Halifax and Saint John; all through eastern Canada?


George Carlyle Marler: Generally speaking, in eastern
Canada.

Supply-Transport


Howard Charles Green: I presume those ships all sail from the east coast?


George Carlyle Marler: They all sail from either Montreal or Quebec.


Howard Charles Green: What companies own the ships that have been chartered this year?


George Carlyle Marler: It is Federal Commerce and Navigation in respect of the dry cargo vessel and Gayport Shipping Company in respect of the tanker.


[Stage Direction]
Item agreed to.
442.	Construction or acquisition of vessels and equipment, $5,309,500.
Thomas Miller Bell: Would the minister like to take this opportunity to reply to my few remarks on icebreaking? The three new icebreakers are listed under this item. It would be a good opportunity to have my reply. As an hon. gentleman has just said, would the minister like to break the ice at this point?


George Carlyle Marler: If the hon. gentleman is saying it for himself, I shall not give an affirmative answer to that question. Mr. Chairman, what I should like to say on the subject of icebreaking is simply this. As hon. members know, we had the misfortune to lose the Lady Grey not in the winter just past but in the winter before last. That loss has naturally thrust a considerable burden on the remaining icebreakers. We have endeavoured to meet the situation first of all by providing for the construction of an additional icebreaker to replace the Lady Grey. It is at present under construction at Levis, Quebec. We hope it will be available for service in the coming winter.
We have recently called for tenders for the building of a further icebreaker of what I might describe as intermediate size. I hope it will be possible before too long to award the contract for the construction of that vessel. As my deputy minister points out, that vessel would be assigned principally to service in Newfoundland and in the gulf of St. Lawrence.
We also have in mind the construction of a larger icebreaker of the same general class as the D'Iberville. I hope it will be possible to call for tenders for the construction of that vessel some time later this year.
I do not know whether the hon. gentleman has any specific questions with regard to icebreaking. I may tell him that we are in receipt of a large number of requests to which it is quite impossible for us to accede, having regard to the dimensions of the icebreaker fleet at the present time. When these new icebreakers are in service we hope to be able to do more than we are doing at the present time.
[Mr. Marler.)
Another most important factor in connection with icebreakers, of course, is the use to which they are put during the summer months for carrying out the northern supply mission to the many points in the north which can be served only by ships accompanied by an icebreaker or by icebreakers themselves.


Thomas Miller Bell: The minister has more or less explained away the reasons why we must have three new icebreakers in the estimates this year or plans for three new icebreakers.


George Carlyle Marler: No; plans for two.


Thomas Miller Bell: Yes, but there are three icebreakers.


George Carlyle Marler: Yes; the item includes expenditures on three. As I say, one we hope will be in service shortly; the second has been the subject of a tender call already; and the third we hope will be the subject of calls later this year.


Thomas Miller Bell: I realize that it is probably difficult to make a definite statement about this icebreaking matter generally; but frankly, I may say it is increasing now to a stage where they have the St. Lawrence open for a period that extends at least a full month into the close of the season and they have an early opening of about that same period. As I have said before on many occasions- and I am not going into the history of it-we are worried about the plans for the future in the St. Lawrence. The other night I mentioned the new icebreakers that are available. The old excuse of flooding in the St. Lawrence does not mean anything to me now, because the flooding has always been there. If one icebreaker could look after that condition formerly, surely it has not increased to the extent that more icebreakers would be necessary. A great many of these vessels are icebreakers and other types of ships; in other words, they combine two duties. I say that it is a back-door method to continue icebreaking early in the St. Lawrence. We had trouble last February, I believe, with respect to the early opening of the St. Lawrence. Vessels were damaged and pilots made statements that the season was being pushed to an extent that was alarming. Frankly, we are worried about it in Saint John and I think they must be in Halifax, as it affects the future of our ports.
Two or three times I have asked questions regarding the additional costs or for an estimate of the cost of these icebreaking operations. It should be possible to estimate the length of time that these vessels are on duty. It should be possible to give the payroll and other additional expenses. I think

that we are entitled to a statement regarding the future plans. Here we are subsidizing the icebreaking and increasing the length of the season in the St. Lawrence, while at the same time we are spending money on the harbours at Saint John and Halifax. These two expenditures are definitely in conflict. We only have the winter business and the season has been decreased now to an extent where our longshoremen, as I said the other night, cannot even get 24 weeks of work in order to qualify for unemployment insurance. I should like the minister to say if the department has examined this icebreaking matter. Helicopters are used, I understand, to survey the weak spots in the ice and see where it is possible to break a channel. The modern vessels have reinforced plates and each year the season for our ports grows shorter. We are worried about our future, and I feel it is going to be an increasing worry and burden. The department must tell us just what is going on, and what their plans are about icebreaking.


George Carlyle Marler: I would hope I could disabuse the mind of the hon. gentleman who has just spoken, Mr. Chairman, as to the icebreaking activity in that portion of the St. Lawrence between Quebec and Montreal. It is not a matter of subterfuge. We have endeavoured to ameliorate the conditions of flooding below Montreal. The activity of the icebreakers has materially cut down that flooding in the last few years, and our purpose in carrying out icebreaking is not to make possible the use of the port of Montreal at an earlier date than common sense dictates. The prime purpose of carrying out the operation is to relieve conditions that would otherwise result in flooding.
The hon. gentleman seems to be concerned about the possibility of icebreakers being used in the St. Lawrence to the disadvantage of the port of Saint John. I think that is the substance of the comments he has just made. The difficulty, Mr. Chairman, is that we are not faced with a request for additional icebreaking only in the upper St. Lawrence. We are faced with a request for icebreaking from places on the Gulf of St. Lawrence and down in the province of New Brunswick. They have asked us to do something to make their ports available during the winter months. I do not know whether the hon. gentleman wants me to say we propose, because of the representations that he has made, to turn a deaf ear to the representations of other ports in New Brunswick, and refuse to provide icebreakers for them so that the port of Saint John will enjoy an exclusive advantage over the others. I do not think that is in his mind.
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I fully understand that he wishes to promote the interests of Saint John and that I think is quite natural. Unfortunately, or perhaps fortunately, it is not possible for us to administer an icebreaking program designed to favour one port in particular. We have to meet this flooding condition that arises below Montreal. I believe we will have to expand our activities in the Gulf of St. Lawrence where there are important developments which will need facilities open to a much greater extent than at present. I think the same applies to ports in New Brunswick which, in my perhaps uninformed opinion, have made out a pretty good case for interest on our part in facilitating a greater use during the winter months of what seemed to me quite natural and suitable facilities.
The hon. gentleman, either on Saturday or today, has spoken about the comments of a pilot who attributed a collision which took place in the lower St. Lawrence to the fact that navigation was opening too early. The collision occurred in the lower St. Lawrence at a point, as I remember, somewhat above Quebec. I should like to tell the hon. gentleman that a most thorough inquiry was made into the circumstances of that particular incident and the pilot was not regarded as being excused by the conditions to which he referred. In fact, as I understand the circumstances, the pilot referred to was suspended as a consequence of that particular accident.


Thomas Miller Bell: I will leave this item now, but I do want to say for the record that the money of the taxpayers of Canada is being used to provide icebreakers which in turn are opening the port of Montreal and other ports on the St. Lawrence early to the detriment of the business of eastern Canadian ports. I realize that there are some other explanations for the use of icebreakers. As I say, it may be a back door method, but in the very near future I can see that we will not have any business in eastern Canadian ports and that with modern methods the expenses of the department will be greatly increased because the St. Lawrence will be open all winter long.


George Carlyle Marler: I do not want to provoke a discussion, but I would hesitate to peer into the future as far as the hon. gentleman and predict the time when the St. Lawrence is going to be open all year round for navigation between Quebec and Montreal. He has more confidence in the economic possibilities of that than I have. While I fully appreciate that he may wish to take a particular attitude with regard to the port of Saint John it is

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quite impossible for me, as Minister of Transport, to accept the position that I am going to discourage operations in the St. Lawrence regarding flood conditions that we are attempting to correct, and say that this is done so that the hon. member for Saint John-Albert will have a port that will be more useful under the circumstances.
I am surprised that he should talk about that just at the time when the port has had a record-breaking year in the transportation of grain. I find it strange in the face of conditions which are record breaking that the hon. gentleman should have so little optimism as to the future of his own port.


Thomas Miller Bell: We did have a good winter in both Halifax and Saint John, but it was mainly due to the grain shipments going through. The general cargo picture is not very much better. The point I am trying to make, and the minister hedges around it, is that the money of the Canadian taxpayers is being used to provide icebreakers, which in turn are allowing the St. Lawrence to open earlier and private vessels are thus enabled to move up to the St. Lawrence ports above Quebec and Montreal, and in that way we are losing out in the competitive battle. It is not free competition any more.


Thomas Speakman Barnett: When the minister was speaking on March 16 in opening the discussion of the estimates of his department he made a statement on page 2212 of Hansard to this effect. In referring to new vessel construction, he said that all new vessels will, if large enough be provided with helicopter decks that can be used as bases for helicopter operations in the event of emergency. A little before that, on the same page, he mentioned that amongst the vessels to be completed this year was a marine agency vessel for Victoria. I should like to ask the minister whether this marine agency vessel for Victoria will be equipped with an emergency helicopter deck?
While I am on my feet-


George Carlyle Marler: Perhaps I can answer that one before the hon. member gets another one off his chest. Mr. Chairman, with regard to the Victoria agency vessel, the plans of the vessel were too far advanced to make changes in order to permit helicopter operations from that particular vessel. In the case of the agency vessel which was to be built for the Prince Rupert agency, it is the intention to provide for helicopter accommodation.


Thomas Speakman Barnett: My only further question in the same connection is this. In view of the fact that it is not going to be possible to have helicopter accommodation for that vessel, are

any special plans being developed for carrying rescue equipment on that vessel?
The minister may recall that when speaking earlier in the session I pointed out that so far as my observation went departmental vessels on the coast did not carry such rescue equipment. I am wondering whether this vessel is being designed and equipped so that it may be more adequately prepared to deal with emergencies at sea than are some of the older vessels?


George Carlyle Marler: Mr. Chairman, the anwser to the hon. gentleman's question is that neither of the vessels to which I refer, the Victoria agency vessel nor the Prince Rupert agency vessel, will have special rescue or salvage equipment. I am not sure whether I said it last night but I would like to confirm this evening that we are giving consideration to the possibility of designing a vessel which would be suitable for agency purposes and which would also be more suitable than the present agency vessels for operations of that kind.


[Stage Direction]
Item agreed to.
Aids to navigation-
443.	Administration, operation and maintenance, $4,948,613.
Howard Charles Green: Mr. Chairman, in the particulars of this item on page 549 I find that there was a vote of $355,000 odd for lighthouse keepers' assistants. That is an increase of about $60,000 over last year. Could the minister tell us the reason for that increase and could he also tell the committee in what way these assistant lighthouse keepers are chosen?


George Carlyle Marler: Mr. Chairman, my note with regard to the lightkeepers' assistants which represents an item of $355,621, or an increase of $57,131, is explained by the fact that in 1951 the department assumed the sole responsibility for the payment of assistants to light-keepers, classes 1 to 5. A further amendment in 1952 revised the rates as follows. Where one assistant only is employed payment may not exceed $1,800 per annum. Where two assistants are authorized payment may not exceed $1,800 per annum for the first assistant and $1,620 per annum for the second assistant, except at Prince Rupert and Victoria where the rate has been set at $2,100 per annum for both assistants.
When you take the details of the requirement-perhaps I might spare the committee the details-you arrive at an over-all requirement of $459,960 less an anticipated short fall in expenditure-our experience in previous years is that not all lights require a full year's employment for assistants-in the amount of $104,339, so that the net requirement is $355,621.

With regard to the other question, Mr. Chairman, I think in a general way that we endeavour when there are vacancies in lights or positions in the more settled and attractive points to provide opportunities for advancement to those who are at the remote stations so that there is some prospect for people in remote stations to move back to conditions that are probably more agreeable and certainly more attractive than being in some remote place where conditions are perhaps somewhat lonely and desolate. I think that covers the situation in a general way and if the hon. gentleman has any further questions I will certainly try to answer them.


Howard Charles Green: What I was wondering is this. These assistant lighthouse keepers apparently are not considered as civil servants because earlier in the item there are shown quite large numbers of lightkeepers of different classes. There are no lightkeepers' assistants in that list and they are shown in the supplementary list. I take it from this that they are not engaged as regular employees of the department; at least, they cannot become permanent civil servants. Is that correct? If so, why is there not some permanence to this position of assistant lighthouse keeper?
The minister has pointed out that a lighthouse keeper who is serving at a remote point would be given the opportunity to take a position at a less remote and more agreeable centre and I think that is a very wise policy. Does the same policy apply to the assistant lighthouse keepers? That is, do they get any advantage at all or are they merely hired as temporary employees?
I have heard that they are hired by the lighthouse keeper; in other words, that the man keeping a light hires his own assistant. I did run across one case in which that appeared to have been done. There may be good reasons for a policy of that kind, but perhaps the minister would explain what is the actual policy followed by the department with regard to these assistant lighthouse keepers.


George Carlyle Marler: Mr. Chairman, I might say that it is somewhat like choosing a wife. One chooses a wife with compatibility as one of the qualifications. The same thing applies to the selection of lighthouse keepers' assistants.


An hon. Member:: Well, compatibility is a factor.


George Carlyle Marler: My hon. friend would realize, of course, how undesirable it would be if the assistant of the lighthouse keeper was incompatible with the keeper himself and, as my deputy minister has just pointed out, these men have to board together. I am sure the hon. member will realize that whatever
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merits there might be in making this a civil service appointment the difficulty posed by incompatibility is not one that can be covered by the usual tests.
As the hon. gentleman has indicated the appointment is in effect made by the light-keeper. He chooses the man who is to be his assistant, and while I admit there is not the permanency of a civil service appointment we are trying to see what we can do to keep these men in permanent employment although it is not always possible.


Howard Charles Green: Suppose, for example, that the lightkeeper and his assistant fall out? That happened in the case to which I referred. I suppose the poor assistant lightkeeper just gets kicked off the island. In the case I am referring to the assistant was taken to the boat and told to go. Is there not some way in which the assistant whose only fault is that the lighthouse keeper does not like him can be given a chance to get work at another lighthouse, or is he just out of luck?


George Carlyle Marler: We are trying in a few places to provide separate accommodation so the compatability of the two may not be put to too severe a test. I take it that there are instances where the only solution is to put the assistant in a boat and say goodbye to him.


Howard Charles Green: Has any attempt been made by the department to work out a scheme whereby the department would assume some responsibility for these men? It seems to me that where a man is hired and is working at a lighthouse he must be a pretty reliable sort of man. Should there not be some provision made in the case of a lighthouse keeper and his assistant falling out whereby the assistant would have an opportunity to take a job with the department in some other locality?


George Carlyle Marler: I understand that when incidents like that occur the marine agency do endeavour to find other employment for the assistant. I should like to say to the hon. gentleman that I agree with much of what he has said as to the desirability of assuring as much permanence as is possible to these assistants. I understand that the departmental officials have a plan under consideration by which something can be done to improve the position of these assistants.


Andrew Ernest Robinson: There is one problem in Kincardine which has not been solved yet to my satisfaction. An occasion arose whereby it was necessary to appoint a lighthouse keeper and I understand that arrangements were made to transfer a man from another lighthouse to Kincardine. Answers which were made to questions I put on the

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order paper lead me to believe that these transfers are not always above board. As of yet no appointment has been made to Kincardine and I wonder if the minister can give me any information as to just what is the situation at the present time.
There are several veterans in Kincardine, some of whom are receiving pensions, and any of these men could handle this situation. I think that would be better than to bring in somebody from outside who would have only a part-time job and have to look for another one in the off-season. Does the minister expect to make this appointment shortly?


George Carlyle Marler: I understand that the hon. member would like to see some local person appointed to this position whereas these appointments are made by the civil service commission after a promotional competition. I will admit that a promotional competition may not always produce the best results and certainly may not always satisfy the hon. gentleman, but it seems to me that it is the fairest method we can adopt where you have a lighthouse in a settled community which would offer attractions to others to come in from a remote point and undertake a period of service. I think we must recognize that that system has merit, even though it may not always be acceptable to the local member.


Andrew Ernest Robinson: The answers to my questions brought out the fact that new appointments have been made by the civil service commission to locations where any person who wanted to be a lighthouse keeper would be willing to stay there for the rest of his life. I am just wondering if that is always followed out all through the service. I am inclined to think probably it is not. If I am wrong I should like to be shown where I am wrong.


[Stage Direction]
Item agreed to.
444.	Construction or acquisition of buildings, works, land and equipment, $1,816,560.
Howard Charles Green: This item is exactly the same as the vote last year right down to the dollar. The details on page 550 indicate that the actual expenditures for the last fiscal year were $200,000 lower. Why should that $200,000 extra be asked for this year?


George Carlyle Marler: The reason the vote is identical with that of last year is that the expenditures which are being provided for amount to $1,897,230 and it is estimated that there will be a short fall of approximately $80,670. So we actually arrive at the amount of the vote last year. I think it is expected to fully expend the amount of this vote, and it might be noted that there is a supplementary item, No. 708, for the same purpose.


Wallace Bickford (Wally) Nesbitt: I should like to refer to a situation which has been in existence at some time at a place called Bright's Grove not far from Sarnia. For the information of hon. members who may not know this area, Bright's Grove is quite a popular summer resort for people from the United States and southern Ontario, and there are a great many pleasure boats and small craft in the area. Lake Huron can get exceedingly rough at times and when small boats are caught in a storm in this area the only place they can run to is Perch creek at Bright's Grove. However, there are no marker buoys or harbour works of any kind at this point. I should like to quote briefly from the Sarnia Observer of Tuesday, July 3, as follows:
Perch creek at Bright's Grove which has been under discussion for many years as a haven for pleasure craft saved many lives during Sunday's storm.
Pleasure craft caught on the lake sought shelter of the creek and managed to make the entrance but with extreme difficulty.
Many narrow escapes were reported by boat operators. Joseph Partridge of 10 Cedar crescent, Sarnia who in company with his wife and two sons was making the return trip from Blue Point was caught in the storm. He knew the area well but with no buoy or marker he overshot the Perch creek opening and had to take shelter behind a groyne.
Apparently this area has become increasingly important as a refuge in case of storms on lake Huron and apparently there is not even a marker at the entrance. The minister might pass on this information to the department to be looked into.


George Carlyle Marler: I shall be glad to do that.


[Stage Direction]
Item agreed to.
445.	Nautical services-administration, operation and maintenance, including grants and contributions as detailed in the estimates; rewards for saving life from vessels in distress; subsidies to salvage companies, and the payment of expenses, including excepted expenses, incurred in respect of Canadian distressed seamen as defined in section 306 of the Canada Shipping Act, $542,330.
Howard Charles Green: In the details on page 551 we find the sum of $2,000 for vocational training of merchant seamen. Is that small amount the remainder to help the merchant seamen who lost their jobs when the Canadian ships were sold or transferred to British or foreign registry, or what is the purpose of that vote?


George Carlyle Marler: According to my notes, this particular amount of $2,000 is expected to be the completion of a commitment that was undertaken in September 1949, as the hon. gentleman said, for the training of Canadian merchant seamen. It is really rehabilitation, and perhaps "vocational training" is a rather broad expression. There are, of course, other items included in that.


Howard Charles Green: How much was spent last year, and how many men are now being helped?


George Carlyle Marler: In 1954-55 the actual expenditure was $2,385. The forecast expenditure for 1955-56 was $1,500, and my understanding is that we expect to spend $2,000 in the current year. Unfortunately I have not the information as to the number of persons concerned.


Howard Charles Green: There have been further ships going off Canadian registry during the past year. Are the men from those ships eligible for assistance of this kind?


George Carlyle Marler: As a matter of fact, I know the hon. gentleman is interested in the ships on Canadian registry, but I understand there is no change in the situation which is reflected in this particular item. Perhaps I might suggest that this question of ships be dealt with when we get to the estimates of the maritime commission.


Howard Charles Green: I notice that this vote includes $150,000 by way of subsidies for salvage companies in Quebec and British Columbia. Can the minister tell us to what companies that money is paid, and in what amounts?


George Carlyle Marler: The situation is that there is in the contemplated expenditures of the current year an amount of $75,000 for Foundation Maritime Limited, the object being to ensure that sufficiently efficient plants are maintained to render prompt and effective aid to vessels in distress on the St. Lawrence river and on the east coast. Formerly there was a similar expenditure to Pacific Salvage Limited in Vancouver, but that contract expired last month and has not been renewed.


Howard Charles Green: Then all this money is to be paid on the east coast?


George Carlyle Marler: My deputy points out that
part of the money will not be used, in view of the fact that we are not renewing the west coast contracts to which I just referred.


Howard Charles Green: Why should there be a subsidy in the St. Lawrence and not on the west' coast?


George Carlyle Marler: Formerly it was designed to encourage the creation of facilities on the west coast. Now there are facilities-not only this one company but other companies-and consequently it was not achieving the purposes for which it was originally intended. In the case of the east coast, I do not think the contract has yet expired. The situation on the two coasts is very different. On the west coast, as the hon. gentleman knows, there are a number of organizations and a
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number of facilities of a kind to provide salvage, whereas on the east coast we are not nearly so fortunately placed, and in fact there is nothing apart from this Foundation Maritime organization.


Thomas Speakman Barnett: I notice in the details of the estimates on page 551 that last year provision was made for a chief registrar of shipping. Apparently that position has been abolished, for there is no such item this year. Can the minister explain why that change has been made?


George Carlyle Marler: My understanding is that the same duties are now being performed by another employee included in the vote. It is merely a rearrangement of duties. That explains why there is no specific detail for the chief registrar of shipping.


Thomas Speakman Barnett: I wanted to ask the minister why the small grant made last year for the Port Alberni seamen's institute has been discontinued this year. Has he any information about that?


George Carlyle Marler: I should like to tell the hon. gentleman that the amount to which he referred was $200. I am told that there is an annual review of these grants, and a few of them have been dropped because it was thought that the purpose for which they were made was not being served.


Thomas Speakman Barnett: I have not had recent correspondence on this subject, but it has always been my impression that the seamen's institute in Port Alberni has done good work for many years, and I hope that it does not mean that that work is falling down.
A little further down in the details there is an item for subsidies for salvage companies.


George Carlyle Marler: That is the one we just discussed.


Thomas Speakman Barnett: I could not quite follow the question. Do I understand that no subsidy is being paid to a salvage company in British Columbia?


George Carlyle Marler: The hon. member is correct.


Thomas Speakman Barnett: Even though it is listed in the estimates?


George Carlyle Marler: The reason is that at the time the estimates were prepared the contract was still in force and no decision had then been taken as to whether or not the contract would be renewed. Since the preparation of the estimates, the matter has been given further consideration, and it was decided not to renew the contract.


[Stage Direction]
Item agreed to.
[Stage Direction]
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447. Steamship inspection service, including the carrying out of the provisions of the conventions lor the safety of life at sea and load lines, and contributions as detailed in the estimates, $739,710.
Howard Charles Green: This is the steamship inspection service, and I would ask the minister to explain just what control his department exercises over other government ships in order to see that they comply with the various laws and regulations. This question arises -because last winter-it may have been in the fall but I think it was last winter-one of the vessels of the Department of Public Works, the Hilunga, was sent on a voyage for which she was not built and in the course of the voyage she foundered. Fortunately there were no lives lost, but I think the Department of Public Works incurred damages amounting to almost the value of the vessel itself. I put a question on the order paper asking to what extent the ships owned by the different departments were registered, and the return that was brought down showed that some departments register their vessels and others do not. For example, the Department of National Defence and the defence research board do not. The answer of the Department of Transport was:
1.	No. Registration is at the discretion of the department concerned.
2.	A record is kept of registered ships only.
3.	All Department of Transport ships are registered, except a few small scows, landing craft specially designed for northern waters and motor launches.
The Royal Canadian Mounted Police answered that they register none of their vessels. The Department of Public Works register all but some dredges and scows. Apparently there is no set rule that a government vessel must be registered. I would ask the minister why this practice is followed. It does seem to me that there should be more control of government vessels and that they should comply with all the laws that have to be obeyed by others. Apparently that is not the case and there is a discretion allowed to the departments to carry on as they see fit.


George Carlyle Marler: I was hoping to lay my hands on a note I had on the subject, but my understanding is that the provisions of the Canada Shipping Act do not make it mandatory that all government vessels be registered. That is a statutory provision. It is not a question of policy but it is a matter of the Canada Shipping Act. I should like to say to the hon. gentleman, however, that with the exception of the ships belonging to the R.C.M.P., as to which discussions are currently being carried on, the other vessels

belonging to the various government departments have been registered or are in the process of carrying out the formalities for registration.
The significance of that is that when vessels are registered they are then subject to the same kind of inspection to which ordinary commercial vessels are subject. I do not think it is necessary to enlighten the hon. gentleman on that score because I think he is quite familiar with the extent of the steamship inspection. I hope I have cleared up any doubt in his mind as to the situation. Where there is registration there is inspection, where there is no registration there is no inspection, but so far as government vessels are concerned, with the exception of the vessels operated by the R.C.M.P., as to which discussions are going on currently, the others are registered or in process of being registered.


Howard Charles Green: That has now been adopted as a general policy, that all government vessels must be registered?


George Carlyle Marler: I would not like to accept the interpretation of the hon. gentleman. I would merely say it is a fact that it is being done but I do not think I should declare that it is a matter of policy.


Howard Charles Green: Why do the R.C.M.P. vessels not register and be subject to similar inspection?


George Carlyle Marler: I think I made it clear that discussions were going on with them as to the registration of their vessels. By that I do not mean to imply that they will agree to register but I do say that the matter is under discussion with them. I am not in a position to speak for them because I think the Minister of Justice should deal with that point on his estimates.


[Stage Direction]
Item agreed to.
River St. Lawrence ship channel service-
449.	Administration, operation and maintenance, $953,254.
Howard Charles Green: This has to do with the dredging of the St. Lawrence and according to a press dispatch in May of this year there has been some talk of a four-year dredging program on the St. Lawrence. Could the minister give us the details of that plan. The dispatch says:
Transport minister Marler announced today that work will start this spring on a four year dredging program to widen and deepen the St. Lawrence ship channel from Montreal to below Quebec city. He said the work is being undertaken on the recommendation of the St. Lawrence ship channel committee appointed in 1954 to study navigation along the 113 mile channel.

Can the minister give us the details of that program?


George Carlyle Marler: Might I suggest that perhaps we should adopt item 449 and take item 450 which deals with contract dredging.


[Stage Direction]
Item agreed to.
450.	Contract dredging, including acquisition of land for ship channel improvement, $3,544,200.
George Carlyle Marler: Mr. Chairman, I should like to tell the committee that last year a small departmental committee considered the whole question of dredging on the St. Lawrence and that the principal purpose of this item is to provide for improvements to the ship channel which are required in order to reduce the hazards to ocean going shipping which plies the St. Lawrence between Quebec and Montreal. The work which it is proposed to carry out consists of the further widening of curves and critical sections of the dredged channel between Quebec and Montreal as recommended in a detailed and very complete report which this committee of officials prepared and completed earlier this year.
In addition to the rather broad description I have just given, the work contemplates the completion of dredging in certain areas under the 1952 contract which could not be accomplished in 1955. That is a relatively small item. In addition there is the cost of expropriating Boat island which is six miles below Sorel just above lake St. Peter in order to straighten the channel to a minimum 800 feet and improve the run of ice which jams here. Then there is quite a long list of proposed dredging projects which are to be carried out under contract in 1956 as recommended by the committee. Unless the hon. gentleman would like to have the details, perhaps I might not burden the committee with them.
I should like to say that the experience of the department has been that it is good business to call for a four-year contract to carry out a long term program rather than to do it piecemeal from year to year. The contract was awarded after tenders had been called for publicly and the successful tenderer was the lowest tenderer. The practice is, I think, good, sound common sense. I think that is the way in which we can best spend our money in carrying out the dredging.
I should like to point out to the committee that the increased use of the St. Lawrence which is expected to result from the opening of the seaway is one of the main reasons which prompt us to continue this work of improving the channel which, as the hon. gentleman knows, is probably something like 150 miles in length. It has been progressively widened over the years with, I think,
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very satisfactory results so far as St. Lawrence navigation is concerned.


Howard Charles Green: What will the total cost be?


George Carlyle Marler: I have not in my book here the exact figure, but the total amount of the contract slightly exceeds $13 million. I think it is $13,250,000 or thereabouts.


Howard Charles Green: That is for the four-year program?


George Carlyle Marler: For the four-year program. The expected expenditures this year amount to a little over $3J million.


[Stage Direction]
Item agreed to.
Railway and steamship services-
451.	Repairs and expenses in connection with the operation and maintenance of official railway cars under the jurisdiction of the department, $56,240.
Andrew Ernest Robinson: Mr. Chairman, I wish to compliment the minister on the way in which he has answered our questions. That is one of the reasons why we like to assist him as much as possible. I should like to get some information from him. It is in connection with the rumoured curtailment of service up in Bruce. I might read this copy of a letter which has been sent to our postal clerks on the railways between Kincardine, Palmerston and Southampton. It reads as follows:
Plans of the Canadian National Railways call for removal from service of a number of passenger trains effective 30th September, 1956. This will necessitate considerable changes in the railway mail service in this district.
Plans have not yet been finalized but it now appears practically certain the railway mail clerk positions at Southampton, Kincardine and Goderich headquarters will be abolished.
You are, of course, vitally interested and I am therefore, passing this information along to you at this time.
It is anticipated that no postal car will operate in the Palmerston and Southampton branch, (also Kincardine and Goderich lines), and the only postal car operations between London and Palmerston will be in Trs. 168 and 169-29.
That letter is signed by J. A. Flaherty, district director, London. I may say that the hon. member for Huron, who is not able to be here tonight, is also very much interested in this prospective change. I am happy to see that the hon. member for Grey-Bruce has recently come into the house. I think probably he will be interested as well, because it affects part of his district. I should like to say that on August 3 the minister answered a question of mine. My question, as reported at 6923 of Hansard, was as follows:
I have one more question, Mr. Speaker. I would like to ask the minister if he thinks it is wise to curtail train service into Bruce county at

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this stage when it is expected by all economists in Canada that the population of this country is going to increase very greatly.
The minister answered as follows:
Mr. Speaker, I could not answer the question in general terms in which it was put. I think every case must be considered on its own merits.
At the present time I should be very glad if the minister could give us an idea as to what merits we have up there in Bruce in not wanting this train service cut off. As I think it has been suggested previously in this house, we are increasing in population and in industrial production up there. I should therefore like to know the minister's views on what we may expect up in that part of the country.


George Carlyle Marler: Mr. Chairman, I am sorry that I am not in any better position to reply to his question than I was the other day when the hon. gentleman first brought the matter up in the house. I may say that I communicated his observations to the Canadian National Railways but I have not yet received a reply to the inquiry which I addressed to them. In the second place, I am not in a position to express any opinion with regard to the service to which he has referred. I will say this, however: I think that all railway companies would hesitate to give up services that are profitable. I have merely inferred from the questions that have been put that if a reduction in service is being contemplated or is being put into effect, it is because the service as at present rendered is not proving to be profitable.
I would share the hon. gentleman's regret if it is found to be necessary to curtail service over the lines to which he has referred. I should like, first of all, to point out that this is a decision of the management of the railway, not of the Department of Transport; and I think it is guided by the factors of public interest, its responsibilities to the community it serves and also the general consideration of what its effect is on the accounts of the railway company.


Andrew Ernest Robinson: Did the minister say that it is a decision of the transport commission?


George Carlyle Marler: No. I said that the decision to reduce such service, if such a decision has been taken, was that of the management of Canadian National Railways. I do not want to appear to be too apologetic for the fact that I do not know every detail of the Canadian National Railways administration, but I should like the hon. member to understand that the reason for my unfamiliarity with the matter is that it is a C.N.R. decision and not one by the Department of Transport.


Andrew Ernest Robinson: I realize that the minister is doing a good job and a big job, and we would not expect him to know all these things. But after the questions that were asked the other day, I would think he might have familiarized himself with what has happened. If I may be allowed to tell the minister what has happened, I shall do so. The C.N.R. has notified the postal department that these trains are going to be cut off. I think it would be wise for the minister to familiarize himself with the situation and look into it, because he is at the helm.


William McLean Hamilton: Mr. Chairman, this item is one that deals with the private railway cars owned by the government. I think it would be interesting to have a little bit of information from the minister at this point. How many cars are there actually in operation at the present time, including the governor general's, those used by the board of transport commissioners and those used by the cabinet ministers? Concurrently with that answer, could the minister give us any comparative mileage travelled by those cars, for instance, this year, the year under examination, in comparison with that in previous years so that we may see what use is being made of them?


George Carlyle Marler: Mr. Chairman, I must say at once that we do not keep a record of the mileage of the cars. So far as I am concerned myself, in the last 12 months I think altogether I have travelled between 50,000 and 60,000 miles. I do not want to suggest that I have travelled all of that mileage by rail. If I had done so, I would be on the railroad 365 days of the year. However, I have travelled very extensively by rail. All I can say is that I think these cars serve a very useful purpose. I think perhaps hon. members may imagine that when one gets into a railroad car, the first thing one does is to sit down, relax and enjoy the greatest of luxury therein wherever one happens to be going. Unfortunately, it has not been my experience to be able to use for those purposes the official car which is at my disposal. So far as I am concerned, I have found that it was merely a sort of extension of my office. It had the great advantage of privacy. I could read confidential documents and lay out plans. I could accomplish a lot of uninterrupted reading that I can assure hon. gentlemen opposite is very difficult to accomplish in one's office.
At all events, if I could reply more directly to the hon. gentleman's question, this vote includes five cars, two of which are at the disposal of His Excellency; one for the Prime Minister; one for the Minister of Transport

and one for general use. There has been no change in the situation while I have been minister. I think that the number has remained the same for some considerable time. I should like to add one further word of explanation in connection with the cars and that is that the railway companies move these cars without any charge whatever to the government so that it is not a matter of paying a substantial sum each time a cabinet minister uses an official car to go from one point to another.


William McLean Hamilton: Just to deal very briefly with the minister's observation, I must say that I sympathize with him in so far as the value of being at ease and being able to work while travelling on a railway is concerned. Some of us poor, ordinary commoners who do not have the benefit of private railway cars, find we can operate quite successfully in a bedroom or compartment.


Mr. Sinclair:: Oh, oh, bragging.


George Carlyle Marler: That is not an admission I would care to make.


William McLean Hamilton: I am
afraid, Mr. Chairman, that is the level to which the government will sink in order to find something to misinterpret in one's remarks. I find I was not operating at a very high level.


George Carlyle Marler: It shows the directions of the hon. gentleman's thoughts, anyway.


William McLean Hamilton: I do
not know of what value it is to have a private dining room or how much assistance that is in the minister's reading. I do not know how much the chef assists him in his work or the car steward. I would point out to him that there are many businessmen across this country who do manage to do business quite successfully in the usual type of accommodation which is provided by the railways.


James Sinclair: The heads of railways who are in the transport business have private cars.


William McLean Hamilton: think the president of the Canadian National and the president of the Canadian Pacific do have their own private railway car.


James Sinclair: And each vice-president.


William McLean Hamilton: Certainly, I would be quite happy to see the Prime Minister have a car on occasion but I am not aware that each director of the C.P.R. has a car.
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James Sinclair: Each vice-president and every divisional superintendent across the country has cars.


William McLean Hamilton: I am
not arguing with that. If we extend that argument indefinitely, we are going to find the government arguing that a deputy minister should have a private railway car. The point I am making-


John Horace Dickey: The point you are making is pure jealousy.


James Sinclair: He wants a bigger field of operation.


William McLean Hamilton: The
point I am making is this. In the past several years the trend in business has been away from the rails to the air. In line with that trend, and I cannot argue against it, the government has seen fit to provide itself with air transport under the direction of the Department of Transport. I might at some point have occasion to examine whether all those planes now operated by the department are necessary. At this point I do say that I question the value of their having those planes and, having added that large expenditure in that field, not seen fit in any respect to contract these other expenditures. I understand the minister stated a few minutes ago that we are still operating the same number of private cars as we have for a great many years in the past. I suggest that is a typical example of piling one expenditure on top of another without proper attention to the elimination of some of these expenditures as they become unnecessary.
Now, some of the uses of these cars are most interesting. A few weeks ago I drew the attention of the house to a trip which the minister had made to Montreal to address a political meeting.


George Carlyle Marler: I should like the hon. gentleman, if he is going to talk about that, to confine himself to the facts as they were set forth in the house. The hon. gentleman knows full well, and I told the house at the time, that I went to Montreal not for the primary purpose of attending a political meeting but for the purpose of doing business for my department. It is true, and I admitted at the time, that I had spoken at a political meeting during my visit there.
I think the hon. gentleman, if he ever comes to be minister-


James Sinclair: God forbid.


George Carlyle Marler: -will find it exceedingly difficult to find what part of him is personal and what part of him is minister. All I can tell the hon. gentleman is that since I have been

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minister a very small part of me seems to be personal. When I go to Montreal I have very little opportunity of attending to personal matters, and even less time to attend to political matters. I do not want to interrupt the hon. gentleman but I should like him to stick to the facts and not to say that I went to Montreal to address a political meeting. Let him tell the whole story.


John Borden Hamilton: think in fairness to myself that Hansard will show that I was interrupted in the middle of a sentence. It is quite true the minister went to Montreal to address a political meeting and he went by his private car. When he was queried on that, he pointed out he had also done government business at the same time. Those are the facts which the minister has just set before us, and those are the facts which, had he not interrupted me, I would have mentioned.


Mr. Crestohl:: But you put the cart before the horse.


An hon. Member:: He gave you a lift to the station, and that was the main mistake.


William McLean Hamilton: If we
are going to get through these estimates I suggest the members on the government benches confine themselves to intelligent remarks.
Having made a reference to that, I go ahead and point out one other trip which was made during the month of April which I think is indicative of an improper use or, if not improper, at least more use than is necessary being made of these cars. We find that on April 28 two of these cars left Ottawa and went to Quebec. I can well understand, Mr. Chairman-I should say I can understand, but not very well- that when the minister's argument is applied he may have wanted to work on his way to Quebec. But why run two cars down, one because the Minister of Transport wanted to go and the other because the Minister of Northern Affairs wanted to go.
The other question which arises in my mind is this. This was a Saturday and I am wondering what important government business was taking place on Saturday or Saturday night in Quebec city that required the presence of both the Minister of Transport and the Minister of Northern Affairs. I do not know. I do know that Saturday night, April 28, there was a great Liberal rally as the provincial Liberal party of Quebec kicked off their campaign. I do know that both the Minister of Transport and the Minister of Northern Affairs were prominently displayed at that rally. If they want to go down to

Quebec and get their brains kicked out in a provincial election, as subsequently happened, that is their business. But I suggest they should not be using government transportation, government private cars, for that particular purpose. I just point out that of course there is no doubt as to when they returned. The car of the Minister of Transport came back on April 28 and that of the Minister of Northern Affairs on April 29, which would indicate to me that they left Ottawa on the Saturday and returned either late Saturday night or Sunday and this rather limits the amount of government business they could have accomplished.
It is within this framework that I rise to ask the Minister of Transport to give every consideration to reducing his expenditures in this field of ultimate luxury. I wonder if any of the ministers of the crown has even bothered to find out what sort of alternative transportation is available on the trains? Let them try once or twice, as some of us do, the very fine accommodation which is available on the ordinary trains including drawing rooms, bedrooms and compartments where they can be by themselves and do their work and by which means the taxpayers of this country will be saved a fairly substantial amount of money.
I hope that the minister will explain to us what necessity there was for these two private cars to go to Quebec on a Saturday and come back on a Sunday and perhaps he would indicate whether or not there was any connection between that trip and their attendance at the opening of the political rally of their party in Quebec.


Edward Turney Applewhaite: Shall the item carry?


George Carlyle Marler: Mr. Chairman, I am sorry; but I realize it would be very easy for me to allow this item to carry and leave unanswered on the record the remarks which my hon. friend has just made. Last year his interests turned very largely on the use of government aircraft for the transport of ministers of the crown. After having shown this extraordinary interest last year in the use of government aircraft for the transport of ministers of the crown the hon. member believes it is quite in order to use such aircraft for the transport of ministers of the crown but that it does not appear to be in order to use official cars for that purpose.
I think the hon. member would really like to have the best of both worlds. He wants to criticize members of the government when they travel by air and he likewise likes to criticize them when they travel in these railway cars.

All I can say, Mr. Chairman, so far as I am concerned, is that in using one of these official cars I am following the tradition and the practice that has been followed by a large number of my predecessors. I would like to be able to travel just as my hon. friend does and not be bothered with other people but unfortunately that is not possible. I found that when I was a member of the legislature of Quebec I was lucky if I got past the first page of a newspaper when travelling because everybody who had a bill in the legislature thought I should know what it contained. All I can tell the hon. gentleman is that the situation is no different although I have changed the scene of my activities.
The hon. member appears to find fault with the fact that these cars are available for use by ministers of the crown. He does not seem to be aware of the fact that private cars or business cars, as one might call them, are available not only to the presidents and vicepresidents but are available also to divisional superintendents of both railways. I have not heard him criticize that fact at any time, from which I must infer that he considers it is ail right for a divisional superintendent to have a private car but it is not proper for a minister of the crown to use such a car to carry on government business. Well, Mr. Chairman, I cannot subscribe to that idea because I do not think it conforms to common sense or the realities of the situation.
The hon. gentleman has shown the greatest of interest in my movements. A few moments ago we heard his comments about a trip I made to Montreal. If one will look at Hansard one will find that when I told him what was the purpose of my business in Montreal he went on to ask how it came about that on the same day I did this I actually had a vote in the house. Frankly, Mr. Chairman, I have been accustomed in the face of the most bitter political opponents to having what I said as a fact accepted and not questioned to find out whether or not what I had said was true. Not only did the hon. gentleman question in the house the comment I made but he took the trouble to telephone my personal staff to find out about my movements.


Mr. Hosking:: Sneak.


George Carlyle Marler: I am of the opinion that this is carrying curiosity to a point which exceeds ordinary limits.


John Horace Dickey: You are a little snooper.


George Carlyle Marler: The hon. gentleman is interested in the fact that there were two cars used on this occasion. My recollection of the situation is that my colleague, the Minister of Northern Affairs and National Resources, went on an early morning train
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Transport
which was impossible for me to do because, unfortunately, I had to give up my Saturday-morning to deal with C.N.R. business in Montreal, which I may remind the hon. gentleman is not my home, and I can assure him I prefer to spend my Saturdays at home. I was not able to do so. I spent the morning in Montreal and went to Quebec by the afternoon train. I came home on the evening train and returned in time to spend half of the weekend with my family; but, Mr. Chairman, I make no apology for that because I think that is part of my job. I feel that having a car at my disposal enables me to accomplish more work than I would otherwise accomplish.
The hon. member, I think, will readily realize how difficult it would be to travel with documents spread out on adjoining chairs and I am sure he also appreciates how undesirable it would be to spread documents beside other passengers in the train where they could be read.


Clarence Decatur Howe: Mr. Chairman, I would like to make a few remarks further to what the hon. member for Bruce has said about the curtailment of the railroad service up through the peninsula and the counties of Wellington, Huron and Grey.
About three years ago an application was made by the railway to the board of transport commissioners to curtail the service through that part of the country. Representations were made by all the surrounding municipalities and no curtailment was made at that time.
The present situation is this. We hear rumours of curtailment. Today the hon. member for Bruce, the hon. member for Huron and I went over to the board of transport commissioners and talked to them. They said they had no word concerning any curtailment that was going to take place and they had not been advised concerning any lessening of the service on that branch line. We then went over to the postal department and learned that this department had been informed that on September 30 the time card is going to be changed and the service will be curtailed by the railroads on that line.
We are now wondering exactly what is going on. After all, if that service is going to be curtailed the people who will be affected by it should know the facts. Is this a case of slipping something in by the back door? The part of Ontario to which I have referred is going to be developed. If transportation facilities are curtailed the people there will not have the benefit of the rail lines and they will lose the advantage of the new industries that may very well be attracted to

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locate there. I feel something is going on here that the people of the district should know about.
They have not been told if the rail service is to be curtailed. We understand that the railroads may curtail service to a certain extent without letting the people know about it, but this service concerns a lot of people. They helped to build up the business on this branch line and maintain it through the year. If we are going to have main lines we must have feeder lines. I sometimes think if the railroads would take some of these teams that go around the country to try to find ways of bringing about economies and sent them up through these districts to find ways of promoting railroad traffic everything would be much better.


Henry Alfred Hosking: I spoke on this item four years ago along with the former hon. member for Bruce, Donald Blue; the former hon. member for Perth, James Corry; and the former hon. member for Wellington North, Arnold Darroch. We approached the minister on this same issue and after our representations and private presentations these lines were not closed up. I think it should appear on the record that members from this district four years ago prevented this line from being closed.


Howard Charles Green: Surely the suggestion is not that these decisions are being made on a political basis?


Edward Turney Applewhaite: The item before us deals with official railroad cars and I think it is up to me at this moment to point out to the committee that we are dealing with estimates of the Department of Transport not of the Canadian National Railways. I looked through the items to see if I could help hon. members by finding one under which such matters could be discussed and that item would appear to be No. 494 dealing with the board of transport commissioners. I may be wrong in assuming that the curtailment of services is something which might be referred to the transport commissioners. I must insist that the matter of curtailment of services be deferred until item 494.


[Stage Direction]
Item agreed to.
Hudson Bay railway-
452. To provide for the difference between the expenditures for operation and maintenance, and revenue accruing from operation during the year ending March 31, 1957, not exceeding, $150,000.
Walter Gilbert Dinsdale: I am glad to see that the deficit in regard to the operation of the Hudson Bay railway is moving in the right direction as this item indicates there is a decrease of $275,000 over the previous year. I do not have to emphasize the importance

of this seaport in the heart of this continent to the provinces of Manitoba, Saskatchewan, Alberta and British Columbia and the Northwest Territories. One of the great handicaps to the development of this particular region is the discriminatory differential in freight rates and my reason for making any observations on this item is to stress once again the importance and significance of the operation of the railroad and the seaport to our prairie economy. I understand that the saving on grain moving through Churchill amounts to 15 to 25 cents per bushel. I should like the minister to comment upon the reason for this decrease in the deficit. I assume it is because of the increased tonnage moving out of the port since the grain elevator facilities were extended.
The minister will recall that last year I made a recommendation concerning tourist excursions and the minister was kind enough to supply me with detailed information of these excursions operated by the C.N.R. I am glad to note that two excursions are now being run in place of one, but I suggest that there is still a wide demand for this particular type of holiday if the services and facilities are made available. There is a large waiting list, particularly of Americans, who are anxious to make this trip to the bay.
I could quote figures on this situation, but I shall not take the time of the committee to do so. It is important to the continued success of the operation of the railroad that we stimulate as far as possible a two-way flow of trade. The outward flow has been increasing at a quite rapid rate since the end of the war. For example, in 1946 there were 3 million bushels of wheat moved through the port while last year there were over 13 million bushels. That is an excellent increase but there is difficulty in connection with the inflow of imports from Europe. While this does not come directly under the jurisdiction of the minister I hope he will use his influence to have our trade commissioners point out the advantages of supplying the midwestern Canadian market through this port.


George Carlyle Marler: The reason for the reduced deficit is the satisfactory improvement in the amount of tonnage carried on the railroad. In 1955-56 the revenue tonnage amounted to 578,000 tons as opposed to 458,000 tons in the preceding year. As the hon. gentleman has pointed out, the great difficulty is that the volume of import freight is very small. Of those figures I have just given approximately 2,000 tons in round figures of import freight were handled in each of those two years. As the hon. members will appreciate, that is a very small fraction of the whole.

It is the consumers in western Canada who will have to create a demand for shipments into Churchill rather than shipments out of that port. The hon. gentleman comes from that part of the world and perhaps he can do some missionary work which would help to bridge the distance between 2,000 tons and 578,000 tons.


Mr. Bryce:: Last year when the minister's estimates on the Hudson Bay railway were up I asked if a survey had been made of the territory north of Gypsumville. At that time perhaps I was to blame for misleading the minister a little by referring to Hodgson instead of Gypsumville. This time I intend to be more specific and make sure that I do not mislead the minister in any way.
On May 17, 1948 I first raised the question of a cut-off through the interlake country to the Hudson Bay railway and at that time the Honourable Mr. Chevrier said he would bring the matter before the officers of Canadian National Railways. I know discussions have taken place as to the advisability of the railroad being extended 190 miles north to Wekusko, which is at mile 81 on the Hudson Bay railway. In that 190 miles of proposed railroad there is only one bridge that would really cost money, and that would be at Grand Rapids. In 1948 it was estimated at $1 million, but at today's prices it would cost more.


George Carlyle Marler: What do you mean by $1 million?


William Scottie Bryce: The bridge would cost that. In passing may I say that Grand Rapids is a prospective power site with a drop of some 80 feet there.
In building this 190 miles extension from Gypsumville to Wekusko there would be a saving of 250 miles, as we ship our grain at the present time to Port Churchill.
In 1948 when I talked to the then minister of transport about it I pointed out that it would be an advantage to defence by having a quicker route to Port Churchill. Also there would be a great saving to farmers and shippers sending their produce to Port Churchill. There is a lot of timber in that country and a lot of agricultural land and with a railroad going through it, it could be developed.
With a shorter haul to Port Churchill many benefits could come from that. I have already mentioned national defence-it is a more direct and quicker way to the large military establishment in the north.
If cattle prices should change and we again ship cattle to Britain instead of the United States, then it would mean a lot to the
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livestock getting to the port as quickly as possible. It has been estimated that the livestock would be 18 to 20 hours less on the road, which would be a big benefit. Shipping by refrigerator cars would be a saving too, because they would not need to be iced as often as going the roundabout way.
Business from Winnipeg would be increased, and it would be possible that the boats would not come in empty but would come loaded with goods and have the grain for the return trip.
While we have ice conditions to contend with and the port is only open 100 days of the year, I feel that in the near future that 100 days is going to be extended to a longer season through the invention of radar and different aids to shipping that they never had in the old days.
This short cut would benefit Manitoba in general-it would open up new country along the railroad and it would also provide work and wages while the line was being built.
One could speak 40 minutes on this proposed route, going into the details and savings that could be achieved, but I want to leave it at that and ask that the minister give some consideration to it, and he can tell the house later whether it would appeal to him or not. When the minister brought in his estimates in March, I had a 40-minute speech ready, and the delays in his estimates have saved him from that. I have condensed it a little further every time his estimates have come up, and now he is only getting the cream of it.


George Carlyle Marler: I admire the hon. gentleman's forbearance.


William Scottie Bryce: Perhaps if I lived in the east I would look at this in a different light, but being a Manitoban I want to see the benefits of this extension come to Manitoba. But I know from my dealings with the minister in the past that he will look at this from a Canadian point of view.
I am sending over a map of Manitoba to show the minister where the route would go and how it would save haulage miles. I would at this time appeal to the minister to have the officers of his department give some consideration to building this short cut to Churchill.


George Carlyle Marler: I would just like to tell the
hon. member that the matter was considered in 1952. At that time the cost was found to be very substantial, with an annual loss in prospect of very close to $1 million. I do not know what the situation would be in 1956 but I shall be very glad to draw the

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hon. gentleman's remarks to the attention of the Canadian National Railways and see what their reaction is.


Walter Gilbert Dinsdale: The minister suggested that we might do some missionary work on behalf of the port situation at Fort Churchill. There is an excellent book that has been published by the Hudson Bay Route Association, and I am going to take the liberty of sending him a copy. He can read it on one of those railway journeys we were talking about a few moments ago.


George Carlyle Marler: It just shows that there is never a dull moment.


[Stage Direction]
Item agreed to.
Howard Charles Green: I wonder whether items 459 to 462 inclusive could be allowed to stand?


George Carlyle Marler: That will be quite agreeable to me.


Edward Turney Applewhaite: Is it agreed that items 459, 460, 461 and 462 stand?


Some hon. Members:: Agreed.
464.	To provide towards the cost of surveys of Newfoundland railway properties entrusted to the Canadian National Railway Company, $17,500.


Howard Charles Green: This is the item to provide for the cost of surveys of Newfoundland Railway properties, $17,500. Can the minister give us a report on the progress that is being made on these surveys and the possibilities of a program being undertaken eventually to change the Newfoundland Railway to a standard gauge railway?


George Carlyle Marler: In respect to the first part of the hon. gentleman's question, the item of $17,500 is intended to cover the expenditures which the railway must incur in order to establish the lines of various properties which are under its control in Newfoundland, physical surveys in order to determine boundary lines.
With regard to the question of conversion from narrow gauge to standard gauge, I talked to Mr. Gordon about the matter casually, but the cost always appeared to be staggering.


Howard Charles Green: What is it?


George Carlyle Marler: I think it is somewhere in the neighbourhood of $50 million. My deputy minister points out that he thinks the current estimate is more than that. I think I should tell the hon. gentleman that it is a very substantial sum, and I think it is unlikely from the viewpoint of economics that it would be considered feasible at this time. The railway has spent a great deal of money on new equipment for the narrow gauge, and that, of course, would be completely

wasted. That is a fact that will have to be taken into account. I assume that the question must have been considered after the union of Newfoundland with Canada because I do not believe these very large expenditures would have been made if it had been considered economic to make the change that the hon. member mentioned.


[Stage Direction]
Item agreed to.
465.	Degaussing and strengthening for armament, sea-going merchant ships of Canadian registry of 1,000 gross tons and over, $300,000.
Howard Charles Green: I believe that this item covers coastal vessels. Could the minister tell us whether that program is nearing completion and how long it will take to finish it?


George Carlyle Marler: I do not think there is any prospect of this item disappearing. The expenditures last year were estimated to be $290,000. The later figure at the close of the year is $191,503. This expenditure for degaussing and strengthening is applicable to new ships and as new ships are being built the money is being spent. Perhaps we will find there are some ships being built after all.


[Stage Direction]
Item agreed to.
466.	Maritime Freight Rates Act-for the payment to the railway companies operating in the select territory designated by the act, during the fiscal year 1956-57, of the difference occurring on account of the application of the act, between the tariff tolls and normal tolls under approved tariffs (estimated and certified to the Minister of Transport by the Canadian National Railway company and approved by auditors of the said company respecting the eastern lines of the Canadian National Railways and in the case of the other railways by the board of transport commissioners for Canada) on all traffic moved during the calendar year 1956 (chap. 174, R.S.), $11,500,000.
Thomas Miller Bell: This item with respect to the Maritime Freight Rates Act involves an amount of $11,500,000, and I feel that I should remark briefly on it. A great deal has been said in recent days with respect to freight rate problems in Canada. We had a discussion in the house recently of the various problems that are now coming to the fore with regard to transportation in this large country of ours. Suggestions have been made that a regulatory body would be the answer to our freight rate difficulties. Others have suggested that a new national transportation policy is necessary. I remember reading last year that Mr. Donald Gordon, the president of Canadian National Railways, had suggested in an address in New York city that a complete new look was needed with respect to our freight rate structure in Canada. At present we have the problem of the board of transport commissioners now considering a permanent increase after granting an interim

increase a few months ago. Rather than try to talk in a rambling way about the problems facing the maritimes with respect to their position in the freight rate structure I should like to read part of an editorial from the Fredericton Daily Gleaner of Wednesday, August 8, which just arrived today. I think two paragraphs will be enough to explain the problem that we now have down in the maritimes. The editorial reads as follows:
As far as the Atlantic area is concerned, the freight rate structure is badly out of joint. These four provinces, at the end of the rail lines are wholly dependent on the railways both for buying and marketing products. We require many goods from central Canada, and due to the dense population and heavy purchasing power of Quebec and Ontario, these provinces are our best market outlets.
But the cost of taking our goods to central Canada is almost prohibitive. A series of freight rate increases has hit at the long-haul shipper unfairly. These are horizontal increases, applied by a uniform percentage.
I would ask that the next sentences be noted particularly because they explain our difficulty very clearly.
If a long-haul shipper who pays $20 and a short-haul shipper who pays $10 both have their freight rates increased by, say 50 per cent, the $20-shipper now pays $30 and the $10-shipper $15. The difference between what they pay is now $15 instead of $10.
This merely illustrates the increasing disparity with which the maritimes have found themselves faced as a result of the increases that have taken place since we came under the statutory provisions of the Maritime Freight Rates Act of 1927. A few days ago the Atlantic premiers met in Fredericton to consider their difficulties. The conference has been referred to here in the house. They examined their problems and tried to get united action with respect to some of the difficulties they saw in our future, and the No. 1 problem was freight rates. They put it in that priority for the future.
The maritime transportation commission has also said it is our No. 1 problem. At this late hour this evening I simply want to say that when the board of transport commissioners is considering these increases they must give more attention to our problems than to
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those of any other area in Canada. Our problems with respect to freight rates go to the root of our difficulties, economic, geographic and financial, and I seriously suggest that the time has now come when we have to review these provisions that were a help to us and afforded us some consideration many years ago. We have now been put in a very serious competitive position with the central Canadian market on which we in the Atlantic provinces are now so dependent in so many ways.


[Stage Direction]
Item agreed to.
William Alfred Robinson: Item 468.


Howard Charles Green: I notice it is past ten o'clock.


Walter Edward Harris: Before we call it past ten o'clock, may I say that I quite understand the desire of the hon. member to stand certain items. I think that would be desirable and necessary under the circumstances but there must be a lot of others that could be carried without debate if we ran through them. Those that they want to stand until tomorrow can be allowed to stand.


Howard Charles Green: I think we will get ahead just as fast if we stop now.


Edward Turney Applewhaite: For my own satisfaction, item 467 is carried and item 468 is called.
Progress reported.
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow we shall take the second readings of the tax agreement bills which are in my name but which will be taken by the Minister of National Revenue because it is he who is particularly concerned with them. I should have pointed that out the other evening when I moved first reading. We shall then take the estimates of transport, labour, legislation and justice.


[Stage Direction]
It being one minute after eleven o'clock the house adjourned, without question put, pursuant to standing order.
67509-466J
Questions

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

Mr. Michener: 1.	In the last fiscal year, what percentage of each province's total revenues was represented by the subsidies, grants and payments made by Canada to the province?
2.	What were the respective revenues and payments?
Answer by: Hon. W. E. Harris (Minister of Finance):


PROVINCIAL GROSS REVENUES AND FEDERAL SUBSIDIES, GRANTS AND PAYMENTS, FISCAL YEAR 1953-54 (S'000)
[Stage Direction]
-	Nfld.	P.E.I.	N.S.	N.B.	Que.	Ont.	Man.	Sask.	Alta.	B.C.	Total1. Gross general revenue	36,822	8,707	56,243	57,035	333,429	408,011	68,907	109,267	199,730	202,428	1,480,579Federal subsidies, grants and payments-	11,825	3,631	19,497	16,178	134,448	25,039	25,254	29,803	43,516	309,191(b) Share of income tax on power	utilities	161	30	279	283	2,120	1,097	569	43	1,396	853	6,831(c) Statutory subsidies	6,369	657	2,057	1,679	3,300	3,641	1,755	2,041	2,127	1,281	24,907Subtotal (a)-(c)	18,355	4,318	21,837	18,140	5,420	139,186	27,363	27,338	33,326	45,650	340,929Grants in aid and shared cost contribution	977	112	1,034	2,691	1,501	1,978	3,936	3,505	15,734(e) Health and social welfare	1,950	337	2,718	3,014	17,554	12,832	3,133	3,359	3,430	4,716	53,043(f) Education	81	52	324	210	973	1,517	263	221	380	282	4,303(g) Natural resources and primary in-	dustries	3	43	92	784	657	576	152	106	218	1,085	3,7166	4	25	28	85	117	2655	167	30	202
Subtotal (d)-(i)		3,017	544	3,138	5,047	19,184	17,783	5,074	5,692	8,049	9,735	77,263
2. Total of federal subsidies, grants and											
payments	21,372	4,862	24,971	23,187	24,604	156,969	32,437	33,030	41,375	55,385	418,1923. Percentage 2 of 1	58-0	55-8	44-4	40-7	7-4	38-5	471	30-2	20-8	27-4	28-2
Note:
Provincial revenues have been ad justed to include all federal payments listed.	...
Their customary procedure is to include direct payments such as tax rentals, subsidies and shared taxes, as revenue but to onset against expenditure moneys received from grants in aid and shared cost contributions.
Provincial detail for 1954-55 will not be available before about August 15, 1956.
Source: Financial statistics of provincial governments 1953-revenue and expenditure D.B.S.

Questions
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Questions

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Question No. 569
Mr. Winch:: 1.	How many dependents over 21 years of age of Chinese Canadians have been admitted to Canada since 1950?
2.	How many such dependents have been admitted to Canada after reaching their 25th birthday?
3.	How many orders in council in connection with such admissions were issued after such dependents had passed their 25th birthday?
4.	Since 1950, have any regulations been passed under the Immigration Act with respect to the entry into Canada of dependents over 21 years of age, and if so, what is the policy governing the admission of such dependents?
5.	Does the Department of Citizenship and Immigration still accept applications for dependents over 21 years of age?
Answer by: Hon. J. W. Pickersgill (Minister
of Citizenship and Immigration):
1.	Statistics not available. However, from December 31, 1950, to June 30, 1956, 88 orders in council were passed providing for the admission of 3,126 dependents 21 years of age and over, of Chinese Canadians.
2.	Statistics not available. However, from December 31, 1950, to June 30, 1956, 78 orders in council were passed providing for the admission of 375 dependents 25 years of age and over, of Chinese Canadians.
3.	See answer to No. 2.
4.	No, assuming that this question refers to dependents of Canadian citizens of Chinese origin from the continent of Asia. However, order in council P.C. 1956-785 of May 24, 1956, authorized the admission of certain dependents and others of Chinese origin under section 20 of the amended immigration regulations, depending on citizenship and country of residence.
5.	Not for residents of China or other parts of Asia.
[The following items were passed in committee of supply]:


DEPARTMENT OP TRADE AND COMMERCE
[Stage Direction]
General administration-
415.	Departmental administration, $628,021.
416.	Commodities services, including fees as detailed in the estimates, the expenditure for these not to exceed the amounts shown unless otherwise approved by treasury board, $699,490.
Trade commissioner service-
417.	Administration and operation, $2,832,458.
418.	Acquisition or improvement of buildings, land, equipment and furnishings, $150,000.
419.	Trade information, $287,908.
420.	Economics branch, $240,315.
421.	International trade relations branch, including a fee of $6,300 to the international customs tariffs bureau, $145,900.
Exhibitions-
422.	Exhibitions generally, $535,888.
423.	Canadian participation in the Brussels universal and international exhibition 1958, $750,000. Standards branch-
424.	Administration, including the standards laboratory and administration of the Precious Metals Marking Act, $220,829.
425.	Electricity and gas inspection services, $782,515.
426.	Weights and measures inspection services, $841,276.
Dominion bureau of statistics-
427.	Administration, $177,729.
428.	Statistics, including contributions as detailed in the estimates, the expenditure for these not to exceed the amounts shown unless otherwise approved by treasury board, $5,529,351.
429.	Census, including a contribution as detailed in the estimates, the expenditure for which not to exceed the amount shown unless otherwise approved by treasury board, $4,710,429.
Board of grain commissioners (Canada Grain Act) -
430.	Administration, $149,780.
431.	Inspection and weighing of grain, and related services, $3,621,974.
Canadian government elevators-
432.	Operation and maintenance, $1,271,806.
433.	Construction or acquisition of buildings, works, land and equipment, $400,750.
Special-
434.	International economic and technical cooperation branch, including the administration of the Colombo plan and of certain United Nations co-operation plans, $190,116.
Exhibitions-
705. Canadian participation in the Brussels Universal and International Exhibition 1958-further amount required to authorize payment, notwithstanding the Civil Service Act, of an honorarium to Mr. J. J. Olson, $1.
Atomic energy control board-
49.	Administration expenses of the atomic energy control board, $41,160.
50.	Grants for researches and investigations with respect to atomic energy, $300,000.
Atomic Energy of Canada Limited (research
program) -
51.	Current operation and maintenance, including expendable research equipment, $13,743,370.
52.	Construction or acquisition of buildings, works, land and equipment and to authorize Central Mortgage and Housing Corporation to undertake construction of works at Deep River for Atomic Energy of Canada Limited, $8,713,685.
Loans, investments and advances-
Atomic Energy of Canada Limited-
524. to provide for advances to Atomic Energy of Canada Limited in such amounts and on such terms and conditions (including the delivery to Her Majesty, in satisfaction of the advances, of obligations or shares of the company) as the governor in council may approve, to finance the construction of a new reactor (NRU) and auxiliary buildings at Chalk River project, works to provide services in connection therewith, to construct or acquire buildings and equipment for the commercial products division in Ottawa and other locations, and housing and other works to be constructed at Deep River and to authorize Central Mortgage and Housing Corporation to undertake construction of the said housing and other works at Deep River for Atomic Energy of Canada Limited, $9,479,464.

525. To provide for working capital advances to Atomic Energy of Canada Limited, subject to such terms and conditions as the governor in council may approve, $3,880,000.
Atomic Energy of Canada Limited (research program) -
603.	Current operation and maintenance, including expendable research equipment-further amount required, $200,000.
604.	Construction	or	acquisition	of	buildings,works, land and	equipment and	to	authorizeCentral Mortgage	and	Housing Corporation to
undertake construction of works at Deep River for Atomic Energy of Canada Limited-further amount required, $502,600.
National research council-
282.	Salaries and other expenses, $15,470,139.
283.	Construction	or	acquisition	of	buildings,
works, land and equipment, $2,817,890.
284.	To authorize the establishment in the consolidated revenue fund of a special account to be known as the Sir Frederick Banting fund account, to which shall be credited the balance of the amount remaining in the Sir Frederick Banting fund (comprised of private donations and originally established by order in council P.C. 4260 of the 27th day of August, 1940) as at the 31st day of March, 1956 (estimated at $954,550) and to authorize payment out of the account during the current and subsequent fiscal years for or in respect of projects relating to the advancement of the natural sciences that are recommended by the president of the national research council and approved in accordance with regulations of the governor in council; and to approve the expenditures made from the Sir Frederick Banting fund subsequent to the fiscal year that ended on the 31st day of March, 1945, and prior to the current fiscal year amounting in the aggregate to $101,700, $1.

[Stage Direction]
Privy council office-
328.	General administration, $405,184.
Prime minister's residence-
329.	Maintenance and operation, $25,000.
Federal district commission-
330.	To provide a supplement to the sum of $300,000 granted by chap. 112, R.S., for construction, improvements and operation of the parks, parkway system and other works under the control of the federal district commission, $142,071.
331.	To authorize the federal district commission to expend for construction, improvements and operation of works under its control, revenues accrued or accruing to the commission from the rental of properties under its control and from other sources, $1.
332.	To provide for maintenance and improvement of grounds adjoining government buildings at Ottawa, and for expenses of the national capital planning committee, $531,728.
333.	To authorize payment of the ninth instalment to a special account in the consolidated revenue fund, known as the national capital fund, established under vote 809, Appropriation Act No. 4, 1947-48, $2,500,000.
163.	Office of the secretary to the governor
general, $183,480.
164.	To authorize and provide for the reimbursement to the lieutenant-governors of the provinces of Canada of the costs of travelling and hospitality incurred in the exercise of their duties up to a maximum per annum for each as follows:	(a)
where the population of the province at the last decennial census did not exceed 500,000, $5,000;
Supply-Items Passed
where the population of the province at the last decennial census exceeded 500,000, $5,000 plus $1,000 per each 100,000 or fraction of 100,000 of population over 500,000, but not exceeding $12,000 in any case, $86,000.

[Stage Direction]
Marine services-
440.	Marine services administration, including agencies, $670,240.
Marine service steamers-
441.	Administration, operation and maintenance, $7,393,793.
442.	Construction or acquisition of vessels and equipment, $5,309,500.
Aids to navigation-
443.	Administration, operation and maintenance, $4,948,613.
444.	Construction or acquisition of buildings, works, land and equipment, $1,816,560.
445.	Nautical services-administration, operation and maintenance, including grants and contributions as detailed in the estimates; rewards for saving life from vessels in distress; subsidies to salvage companies, and the payment of expenses, including excepted expenses, incurred in respect of Canadian distressed seamen as defined in section 306 of the Canada Shipping Act, $542,330.
446.	Pilotage service-administration, operation and maintenance, including authority for temporary recoverable advances not exceeding $20,000, $626,736.
447.	Steamship inspection service, including the carrying out of the provisions of the conventions for the safety of life at sea and load lines, and contributions as detailed in the estimates, $739,710.
448.	Marine reporting service, $133,235.
River St. Lawrence ship channel service-
449.	Administration, operation and maintenance, $953,254.
450.	Contract dredging, including acquisition of land for ship channel improvement, $3,544,200.
Railway and steamship services-
451.	Repairs and expenses in connection with the operation and maintenance of official railway cars under the jurisdiction of the department, $56,240.
Hudson Bay railway-
452.	To provide for the difference between the expenditures for operation and maintenance, and revenue accruing from operation during the year ending March 31, 1957, not exceeding, $150,000.
453.	Construction or acquisition of buildings, works, land and equipment, $382,000.
454.	Prince Edward Island car ferry and terminals -to provide for the payment during the fiscal year 1956-57 to the Canadian National Railway Company (hereinafter called the national company) upon applications approved by the Minister of Transport made from time to time by the national company to the Minister of Finance and to be applied by the national company in payment of the deficit (certified by the auditors of the national company) in the operation of the Prince Edward Island car ferry and terminals arising in the calendar year 1956, $1,501,000.
455.	Reconditioning and refit of ferry vessel Scotia II for the Prince Edward Island car ferry service, $50,000.
Strait of Canso-
456.	Transportation improvements and facilities, $1,012,500.
457.	Causeway maintenance, $10,000.
458.	Enlargement of dock and terminal facilities at North Sydney, Nova Scotia, $261,300.
463.	Construction or acquisition of vessels for Newfoundland coastal services, $793,750.
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Supply-Items Passed
464.	To provide towards the cost of surveys of Newfoundland railway properties entrusted to the Canadian National Railway Company, $17,500.
465.	Degaussing and strengthening for armament, sea-going merchant ships of Canadian registry of 1,000 gross tons and over, $300,000.
466.	Maritime Freight Rates Act-for the payment to the railway companies operating in the select territory designated by the act, during the fiscal year 1956-57, of the difference occurring on account of the application of the act, between the tariff tolls and normal tolls under approved tariffs (estimated and certified to the Minister of Transport by the Canadian National Railway company and approved by auditors of the said company respecting the eastern lines of the Canadian
National Railways and in the case of the other railways by the board of transport commissioners for Canada) on all traffic moved during the calendar year 1956 (chap. 174, R.S.), $11,500,000.
467.	Canadian National (West Indies) Steamships, Limited-to provide for the payment from time to time to the Canadian National (West Indies) Steamships, Limited (hereinafter called the company) of the amount of the deficit occurring during the year ending December 31, 1956, in the operations of the company and the vessels under the control of the company, as certified by the auditors of the company, and upon applications made by the company to the Minister of Finance and approved by the Minister of Transport, not exceeding, $200,000.
[Stage Direction]
Friday, August 10, 1956

[Stage Direction]
On the orders of the day:
William Earl Rowe: Mr. Speaker, in view of the alarming revelations expressed by two of Canada's outstanding military authorities, that is by General Macklin at the 25th annual Couchiching conference yesterday, and by General Guy Simonds in a recent interview, does the Prime Minister not believe it would have been advisable for the government to have accepted the recommendations made by the Leader of the Opposition to set up a parliamentary committee to hear these and other authorities who are repeatedly charging his government with dangerous errors, waste, extravagance and misdirected efforts in its defence policy?


Louis Stephen St-Laurent: That is a matter of opinion. I am not suggesting that the opinions expressed by the opposition were not sincere and intended to be beneficial, but I hope that hon. members will consider that we exercised our best judgment on that suggestion, and we did not think that kind of controversy would be of benefit to the cause of preserving peace in the world.


William Earl Rowe: A supplementary question: I should like to ask the Prime Minister if he does not consider the statements made yesterday to be most alarming to the Canadian people and something on which we should have a report from the government?


Louis Stephen St-Laurent: I think they were intended to be alarming by those who made them, but I do not think they have created the alarm in the public mind that was intended.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
John Horne Blackmore: Mr. Speaker, I should like to direct a question to the Minister of National Revenue, notice of which I have not previously sent him. In
view of the minister's statement on July 27 giving the cost of salaries in the Lethbridge income tax office as $15,620 for 1951 and $17,060 for 1952, has the minister in reading the Holberton letter, a copy of which I put into his hands on August 7, noted that Mr. Holberton positively states that the staff in the Lethbridge office during 1951 and 1952 consisted of only one man and a stenographer? Will the minister tell the house how his informant arrived at the impressive salary costs which the minister gave the house on July 27 in relation to the upkeep of the Lethbridge income tax office, namely $15,620 and $17,060?


James Joseph McCann: Mr. Speaker, I did receive a letter from the gentleman mentioned and also a copy of that letter from the hon. member for Lethbridge. I see no reason why the matter should promote any controversy at all. I prefer to take the statements of my officials rather than those of an ex-employee of some five or six years ago who has made some contradiction with reference to the accuracy of the reported costs of that particular office. The matter of costs is not at issue; the matter at issue is whether or not the course we have taken of closing the office at Lethbridge is in the best interests not only of the department from an economic point of view but of the taxpayers of southern Alberta, whom we feel will get much better service by dealing with the Calgary office rather than with a suboffice at Lethbridge at which there are but three employees who were not in position to give the type of service we want to give.


John Horne Blackmore: No one can express facts any better than the minister has in his recent statement, but that is exactly what we are concerned about. I am asking whether the minister's statement which he gave to the house on July 27 was accurate, and that is also an equally important matter.


James Joseph McCann: To the best of my knowledge the statement is accurate to a nickel. I prefer to take the statement of my officials rather than that of someone who is more or less disgruntled and who was an employee five years ago.


John Horne Blackmore: May I ask the minister if he is certain he can rely on the men who prepared the statement given to him?

Inquiries of the Ministry


James Joseph McCann: I have relied on them for years. I would not have anybody in the Lethbridge office on whom I could not rely.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I should like to address a question to the right hon. Prime Minister. In view of the news report over the Canadian Broadcasting Corporation this morning that the United Kingdom is reducing her NATO forces in Europe due to the Suez canal crisis by perhaps as much as a division, can the Prime Minister tell the house what effect this will have on Canada's military commitments to NATO?


Louis Stephen St-Laurent: The news report over the radio may be accurate, but we have not yet received any official information from the United Kingdom that they do intend to reduce their forces in Europe. We prefer to wait until we get official information before we attempt to assess what effect it may have on the forces of the North Atlantic alliance.


Wallace Bickford (Wally) Nesbitt: May I ask a supplementary question. Does the Prime Minister not consider that this proposed reduction in NATO's forces is a serious threat to NATO's present military effectiveness?


Louis Stephen St-Laurent: I am convinced that the authorities of the United Kingdom would not wish to do anything that would create a serious threat to the continued existence of the North Atlantic Treaty Organization.


CITIZENSHIP AND IMMIGRATION
[Stage Direction]
On the orders of the day:
William Earl Rowe: Mr. Speaker, in view of the radio report yesterday with reference to a commission from the Department of Citizenship and Immigration now travelling in Europe, would the minister indicate the personnel and objectives of this commission?


John Whitney Pickersgill: Mr. Speaker, I did not hear the radio report. Apparently I do not listen as assiduously as some other hon. members. I shall try to find out what it is about and answer later.


BRUCE COUNTY, ONT.    INQUIRY AS TO REQUEST BY PROVINCE FOR ASSISTANCE TO VICTIMS OF TORNADOES
[Stage Direction]
On the orders of the day:
Andrew Ernest Robinson: Mr. Speaker, further to a question which I asked on July 25 concerning damage by tornado in Bruce county, may I direct a question to the Minister of Finance. Has the minister been asked for federal financial aid to assist tornado victims in Bruce county and, if so, would he care to tell the house what, if any, conclusion has been arrived at?


Walter Edward Harris: I received a letter from the clerk of the municipal corporation of the county of Bruce and have been corresponding with him, but no conclusion has been reached.


Andrew Ernest Robinson: Owing to the fact that the Ontario provincial government has promised assistance to these victims, will the minister give sympathetic consideration to matching the provincial aid?


Walter Edward Harris: I am giving consideration to all the factors involved.

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


DEPARTMENT OF TRADE AND COMMERCE
[Stage Direction]
General administration-
415. Departmental administration, $628,021.
William Alfred Robinson: Hon. members will find
this vote on page 67 of the blue book and the details commencing on page 507.


Clarence Decatur Howe: Mr. Chairman, some three or four weeks ago I spoke at some length about the Canadian trade position, and I do not intend at this time to repeat what I said on that occasion.
Very briefly, our trade is thriving. Exports are at remarkably high levels. Imports continue to pour in to meet the demands generated by our rapid development and prosperity which cannot be satisfied within Canada. As I said before, the resulting deficit on current account is a sign not of weakness but of strength, since it results primarily from developments which strengthen the economic fabric of the country and which will in the future increase exports and reduce imports.
On this occasion I should like to discuss not the figures of trade but the efforts which Canada has made and has participated in

Supply-Trade and Commerce
to maintain our markets abroad and to provide new opportunities for greater trade.
First, a word about the Canadian foreign trade service. During the past year a new office was opened in Salisbury, Southern Rhodesia, bringing to 54 the number of our trade offices located at strategic centres abroad, which compares with a total of 31 only ten years ago. Our files show that in 1955 the 112 trade commissioners who manned these posts played a direct part in bringing to Canada more than $100 million worth of new business. Periodic conferences of trade commissioners are held, such as the recent one held in Ottawa of our officers stationed in Latin America, at which representatives of Canadian industry were present and participated in a valuable exchange of views.
The foreign trade service carries out a continuous review of world markets to determine where our trade interests would benefit through having a resident trade commissioner. This year consideration is being given to the opening of new trade offices in Hamburg, Colombo, Los Angeles and Teheran. To meet the service's growing personnel needs we are seeking to recruit men of the highest caliber, men who are interested in serving Canada in what, to my mind, is one of the most interesting and rewarding careers of government service.
As I indicated a year ago when the decision was made to bring the Canadian international trade fair to an end, greater emphasis is being placed on participation in overseas trade fairs. We are doing everything possible to bring Canadian goods to the attention of the buyer in his own country.
In the course of the current year the Department of Trade and Commerce has prepared major exhibits for ten international trade fairs abroad. The fairs at Utrecht, Osaka, Milan, Brussels and Hanover have already taken place. Later this year we shall be exhibiting at the fairs in Lausanne, Manchester, London, Paris and Bogota. Smaller exhibits were arranged at a nutrition fair in Havana and a food show in Los Angeles, and we shall assist our footwear manufacturers at an industry show in Chicago in October.
In addition to participation at these international fairs and industry shows, we have continued to operate our Canadian showroom in Rockefeller Centre in New York. This "sales laboratory on Fifth avenue" as it has been termed, is enabling some of our manufacturers to test and enter the valuable New York market with their products.
I turn now to Canada's part in trade negotiations, in other words to the efforts being
made to improve the opportunities for trade upon which Canadian prosperity so largely depends. Canada is the fourth largest trading nation and her share of world trade has increased. Our present economic well-being and our continued expansion depends on high levels of trade.
It is for these reasons that Canada has continued to play a leading part in the constructive work of international co-operation under the general agreement on tariffs and trade. As a result of the four rounds of world tariff negotiations held under GATT, tariff levels have been significantly reduced over a very wide area of world trade. We have enjoyed a degree of world tariff security and stability never known before. Canada has taken part in each of the tariff conferences held under GATT, and we have obtained tariff concessions of value to our exporters in every region of Canada and affecting all our major exports in almost every important market.
The United States is by far the largest market for Canadian exports. I am happy to say that our exports to the United States increased by $142 million in the first six months of 1956 in comparison with the first six months of 1955. At present over one-half of our exports to the United States enter that country free of duty. This includes many of our major exports. Of the dutiable goods, over two-thirds now enter at United States rates of duty equivalent to about 10 per cent ad valorem or less. Many of our products enter the United States at tariff levels which had been reduced prior to this year to one-half or less of the levels prevailing before GATT, and to less than one-quarter of the rates in effect in the 1930's.
Here are some examples of Canadian exports on which the United States tariff has been significantly reduced over the years: the United States tariff on apples which was 25 cents a bushel in the 1930's has been reduced to 124 cents a bushel; the United States tariff on birch plywood which was 50 per cent in the 1930's has been progressively reduced to 15 per cent; the duty on a wide range of electrical goods has been reduced from 35 per cent in 1930 to less than 15 per cent; the duty on aluminum was 4 cents a pound in 1930 and will be reduced to 1J cents a pound in the near future; on a wide range of iron and steel manufactures the United States tariff has been cut from 45 per cent before GATT to 19 per cent in the most recent negotiations; on synthetic rubber the duty before GATT was 20 per cent and will shortly be reduced to 84 per cent; the duty on a large variety of chemicals has been reduced in GATT negotiations from 25 per cent to 104 per cent.

Supply-Trade and Commerce
In our relations with the United States we are, of course, most vitally concerned not only with the tariff levels affecting our goods but even more with the direction of United States tariff and trade policies generally. Without wishing in any way to minimize the threats created by United States restrictive action, it is of interest to note that only in two cases has the United States actually withdrawn concessions negotiated with Canada under GATT. Since 1948, of the 57 investigations completed by the United States tariff commission to determine whether imports were causing injury to United States producers, only seven resulted in action by the United States President to increase the tariff, and of these only one case affected Canadian trade. With reference to United States import restrictions upon certain agricultural products, there have been no new developments to report in the past year. We are extremely gratified that the President has recently given approval to the customs simplification act which has been under consideration for a long time. While this act does not go as far as we had originally hoped, it promises to be a real step ahead in the solution of some of our customs valuation difficulties in the United States.
The government has likewise continued at all times to promote the expansion of trade with the United Kingdom in both directions. In so far as the tariff is concerned, Canadian goods enter the United Kingdom either free of duty or at low preferential rates. Similarly, we provide preferential tariff treatment for most United Kingdom exports to Canada. Over the past few years United Kingdom import restrictions have also been considerably relaxed, and most basic foodstuffs and industrial materials, including about 80 per cent of our current exports to the United Kingdom, are now free of all import controls.
One of the most significant features of our trade with the United Kingdom was the sharp rise of Canadian exports to that country. Our exports rose by $116 million above the levels of 1954 to reach a record level of $769 million last year. We are fully aware that the United Kingdom market will be opened up to our goods in direct measure to the success achieved by the United Kingdom in sales to Canada and other countries. In this connection I am happy to note that in the first six months of this year United Kingdom exports to Canada have increased by 30 per cent to record levels and that this appears to be a continuing trend.
Our exports to our commonwealth partners other than the United Kingdom increased in 1955 by $42 million. This increase, which

is being maintained this year, was made possible by extensive relaxations in import restrictions which have taken place in commonwealth countries in recent years. Last month the Australian government announced a tightening up of import restrictions to protect its balance of payments. I am pleased to be able to inform the house that this intensification is apparently not intended to apply to products imported from Canada. We are hopeful, therefore, that we will fully maintain our markets in Australia.
In South Africa further relaxations of import restrictions, particularly on manufactured goods, were introduced to take effect this year. For the last two and a half years these controls have been non-discriminatory. In New Zealand about 150 products or groups of products may now be imported without restriction from Canada. Among these are such products as agricultural machinery, tobacco, textiles, paper products, metal products and a considerable variety of manufactured goods. In the new federation of Rhodesia and Nyasaland 500 additional items were removed from import restrictions early this year. These products may now be imported freely from Canada. Hon. members will recall that last month I announced in the house that further products had been removed from import restriction in the British West Indies.
Our sales to European markets have constantly risen in proportion with our growing total export trade, and Europe has retained her traditional position as our third largest trading area, taking about 9 per cent of our exports, the same proportion as pre-war. Last year our exports to Europe rose by $40 million over 1954 to a total of $390 million. In the first five months of this year Canadian exports to Europe increased again by $54 million.
It has been most gratifying to see the significant progress that has been made in the United Kingdom, in other commonwealth countries and in Europe in the dismantling of import restrictions originally imposed for balance of payments reasons. The United Kingdom and other countries that had found it necessary to impose dollar restrictions themselves recognize that their export industries must become fully competitive in world markets. Any other course would breed high costs and inefficiency, and would multiply rather than resolve their basic economic problems.
I now wish to refer briefly to the government's trade agreement program in recent years. Canada now maintains most favoured nation trade relations with almost every country in the world, either through separate trade

treaties or through our participation in GATT. We have paid particular attention to establishing a sound basis for the development of trade with the countries of Latin America. We now have most favoured nations relations with every country in that area.
The trend of our exports to Latin American countries has, however, been disappointing in some respects. The statistical totals are well below the peak level which was achieved in 1952. There were exceptional circumstances, however, such as the high level of wheat sales and the aftermath of the Korean war which accounted for that peak, and it is not too difficult to see why our exports have fallen since then. From a longer point of view, our exports to Latin America are running at a rate which is ten times the level pre-war, say of 1938.
In 1954 Canada concluded a trade agreement with Japan, a country which had become our third largest market. As a result of this agreement Japan removed all discriminatory restrictions on the importation of wheat, barley, flax seed, wood pulp and certain other Canadian products. Our trade with Japan has continued at high levels and is directly contributing to the prosperity of many Canadian industries.
The trade agreements negotiated with Spain and Portugal in 1954 have placed our relations with those countries on a more assured basis and have created, for the first time since the war, continuing opportunities to sell Canadian salt fish in those traditional areas.
On February 29 of this year I announced the conclusion of a trade agreement between Canada and the Soviet union designed to provide a new and important market for Canadian wheat, and which may also create new opportunities for the export of other Canadian products.
To summarize, Mr. Chairman, we are pursuing an active and successful export promotion policy designed to strengthen the Canadian economy and to create favourable conditions for continued growth in the future. We wish to live in a world where Canada has fair and equal access to world markets, where the countries who need our goods can buy from us freely and we in turn can buy from whatever markets are in the best position to supply our import requirements. This, we believe, is the only kind of a trading world that makes sense in the long run for any country dependent on trade, and this is the only kind of trading world in which Canada can fully develop her resources and her industries on a sound competitive basis. Canada's interests can best be served through continued policies of multilateral trade.
Supply-Trade and Commerce


Donald Methuen Fleming: Mr. Chairman, the Department of Trade and Commerce this year asks approval of estimates totalling $24,226,785, which is an increase of $4,859,715 over last year's approved estimates of $19,367,000. As compared with this last figure of approved estimates for the fiscal year 1955-56 the actual expenditures of this department in the fiscal year ended last March 31 were $17,653,459, indicating that the house voted 9 per cent more than the department found it necessary to spend. The increase in this year's estimates over last year's actual expenditure is therefore $6,573,326, or 37 per cent more than the department found it necessary to expend last year.
There are two items in particular in this year's estimates which have been enlarged; they are item No. 423, for the Brussels exhibition, and item No. 429 for the census.
It is usual on this first item to have a general policy debate, and because trade and commerce covers such a wide range of governmental activity and policy usually the debate has ranged widely. This year I think without loss of any profitable discussion the debate can perhaps be somewhat abridged by reason of some recent debates which have been held in this house. I refer in particular to four debates.
The first was the debate on April 18 on the resolution to ratify the trade agreement with Russia. The second was on July 9 and 10 on our Conservative amendment to the supply motion, which amendment set forth our national development policy. That debate embraced our views on trade quite extensively. The third debate was that of August 1, during the review of the estimates of the Department of External Affairs when, as reported at page 6811 of Hansard, we had the opportunity to renew the plea of this party that the government call a commonwealth conference on trade and economic questions. The fourth debate was on August 6 on the resolution to approve the international wheat agreement, during which the whole subject of wheat marketing was extensively debated.
The importance of trade to the world and to Canada has been emphasized by all that has happened since a year ago, when the house debated the estimates of this same department. We are aware that Russia has turned from the cold war to an economic struggle for world mastery. Mr. Khrushchev is reported as having stated to some Americans visiting Russia last autumn:
We value trade least for economic reasons, and most for political purposes.
While Canada has always valued trade for economic purposes, we cannot close our eyes

Supply-Trade and Commerce to the importance that trade holds in a political sense in the kind of world in which we live. We are therefore glad that in 1955 a new record was established in the value of world trade, and that Canada retained fourth place among the trading nations of the world in terms of value, ranking after only the United States, the United Kingdom and the Federal Republic of Germany. On a per capita basis in 1955 Canada ranked second only to New Zealand among the trading countries of the world.
I have a few remarks to make on the subject of total trade. The annual report of the department indicates on page 15 that Canada's total commodity exports in 1955 rose from $3,947 million in 1954 to $4,351 million, an increase of 10-2 per cent. The increase in imports, however, is much more striking, these having risen from $4,093 million in 1954 to $4,712 million in 1955, an increase of 15-1 per cent. In 1955 for the third successive year Canada incurred what is called nowadays a deficit balance on commodity trade. The excess of Canadian purchases over Canadian sales last year was $360 million.
The figures for the first six months of 1956 are perhaps even more striking. Due to the increase in our exports of wheat our total exports rose from $2,063 million in the first six months of 1955 to $2,304 million in the same period of 1956, an increase of 14 per cent. Again our imports have risen in a much more significant degree, from the 1955 total for the first six months of $2,209 million to $2,831 million for the first six months of 1956, an increase of approximately 30 per cent. With this substantial increase in imports has come a remarkable increase in our total trade deficit. During these six months Canada purchased abroad $537,500,000 more than she sold abroad. This is a record total commodity trade deficit.
I have a word to say about the direction of Canada's trade. We have drawn attention repeatedly in the past to the concentration of Canada's trade in one channel. This has been described as placing Canada's trading eggs in one basket, namely the United States. We have drawn attention to the peril of increasing this concentration in one channel, as it makes Canada's external trade position very vulnerable to changes in the trading policies of our friendly neighbour to the south. On page 16 of the annual report of the department for 1955 hon. members can see the figures on trade with certain countries. Our exports to the United States occupy the following percentages of our total exports:
1953	
59	per	cent1954	
60	per	cent1955	
60	per	cent


Our imports from the United States were the following percentages of our totals:
1953		 73 5 per cent
1954		 72'3 per cent
1955		 73 3 per cent
In brief, two-thirds of all our external trade, both export and import, is done in the one channel. I suggest to hon. members that, whilst we all warmly value our friendly relations with the United States, this concentration of Canada's trade in one channel does make Canada's trade position extremely vulnerable.
This same trading relationship with the United States is characterized by a tremendous imbalance. Our trading deficit with that country, by which we express the excess of our imports from that country over our exports to her, amounted in 1954 to $594 million. That figure had increased in 1955 to no less than $840 million, an increase of 41-4 per cent from the year before.
The government applauds this tremendous excess of Canada's imports from the United States over our sales to the United States. The government takes satisfaction in this import balance. Indeed, the minister said this morning that our deficit on current account is a sign not of weakness but of strength. We do not take the same easygoing view of this tremendous excess of Canada's imports over her sales particularly to the United States.
It is to be remembered that this huge trading deficit is paid for by Canada today by importing United States capital. We welcome United States capital in this country, but it should be here for some other purpose than simply to pay for the deficit in our current account. We are mortgaging our patrimony to pay for this huge excess of imports over exports, and many of those imported commodities could with wise policies be produced in Canada by Canadian workmen.
The daily bulletin of the dominion bureau of statistics of July 6 points out that "the unusually large capital inflows into Canada have served to finance the import balances". We should like to see those capital inflows serving some more lasting and beneficial purpose than simply paying for a deficit on our current account.
The Financial Times is quoted in a Reuters dispatch of June 22 from London as saying of our present trading deficit:
That must be a record for any country not in the midst of a devaluation crisis. It means that some 25 per cent of Canadian expenditure abroad is not being met out of current income.
Let it not be pretended that this fact is something pointing to strength in Canada's

trading position. Let us examine the trend of 1956. The trend I have spoken of has continued into 1956, not only unabated but actually on the increase. The figures for the six months' period are not available in complete form, but the figures on imports from the United States for the first five months of this year show that our imports from that country were $1,765 million, up 31 per cent from the figure of $1,349 million a year ago. Because our imports from the United States increased very much more than our exports to the United States, the import balance on our commodity trade with the United States rose from $352,800,000 in the first five months of 1955 to $625 million in the first five months of 1956.
That is a record import balance in our trade with the United States. We have been averaging this year a record deficit in our trade with the United States of $125 million a month, and if that continues throughout the whole of the calendar year 1956-and there is no reason to doubt under present conditions that it will-Canada's trading deficit with the United States in the year 1956 will amount to $1,500 million, a figure far exceeding anything that has occurred in past history.
The government does not see any cause for alarm in this tremendous trading deficit. Apparently it sees only reason for satisfaction.
I do not need to repeat what we said in the debate in the house on July 9 and 10 concerning the nature of our trade with countries abroad. We drew attention then to the desirability of processing more of Canada's natural resources here in Canada.
On this matter of direction of trade let me remind the minister and the house that our trade with Latin America, which should be a large potential market for Canada's exports, is declining. It declined to $162 million in 1955 from $188 million in 1954 and $199 million in 1953. We are purchasing very much more from Latin America than we are selling to her. Indeed, in 1955 we purchased twice as much from Latin America as we sold to those countries. Why is our trade with Latin America not rising? The minister made a tour of Latin America some three years ago and came home bringing optimistic reports. Members will recall the report he made in this house, everything pointing to an increase in our trade with that important area of the world. All that has happened since that time has been a steady, unbroken decline in our exports to Latin America.
This morning the minister spoke of the increase last year by one in our trading
Supply-Trade and Commerce posts abroad. The appointment of a Canadian trade commissioner in Salisbury, Southern Rhodesia I am sure will be welcomed by the house. Those of us who had the privilege of visiting Salisbury after the commonwealth parliamentary conference in Africa two years ago could not fail to be impressed by the vigour of the growth of that area and the desirability and opportunity of extending Canadian trade there.
Mr. Ken MacTaggart, in a series of articles written in the Toronto Telegram recently following a very extensive tour of Africa, drew attention particularly to the trade opportunities that await Canada in Nigeria, and I bring that to the attention of the minister. Mr. MacTaggart reported statements made by bankers and businessmen in Nigeria, pointing out that Canada is not grasping the opportunities that await her there for extending her trade in that growing part of the world, on which the benefit of self-government is shortly to be conferred.
The minister had something to say this morning about our trade with Japan. Several years ago the house gave unanimous approval to the new trading agreement with Japan. However, the figures on our trade with that country for 1955 show a decline in our exports to $91 million and a substantial increase in our purchases from Japan to $36-7 million. We still have a substantial surplus in our trade with Japan, an export surplus of $54-3 million last year. That is substantially reduced from other years. Next to the United Kingdom, Japan is the best market for Canadian wheat, but every now and again there come disturbing reports from that quarter of the world. In yesterday morning's press there appeared a report from Montreal, from which I read this opening paragraph:
The entire foreign trade policy of Japan is to use "every possible device and bargaining position to promote exports and, at the same time, restrict imports to essentials", according to a report just released by three members of the Canadian primary textile industry who last fall made the first visit by a group from a Canadian industry to its counterpart in Japan.
W. M. Berry, D. S. MacKay and K. C. Mills have produced a 75,000-word, illustrated, indexed book with 31 appendices that is a thorough study of Japanese business as related to the textile trade.
I am sure all hon. members are aware of the fears of the Canadian textile trade, already suffering severely from imports of textiles. This is a situation, of course, that will need to be watched.
As to our trade with the United Kingdom, I shall not take the time to reargue, but I simply now reassert our demand and our urgent request that the government call a commonwealth conference on trade and economic questions. We dealt with this in the

Supply-Trade and Commerce debate on external affairs last week. The Leader of the Opposition made the request before the Prime Minister left for London to attend the commonwealth prime ministers' conference. It is our earnest view, and we shall continue to urge it.
I have just a few words to say on GATT and the terms of the new agreement announced in the house on June 7. The negotiations for this new agreement were commenced in January, and it represents the fourth general round of multilateral tariff negotiations under GATT. Twenty-two countries negotiated concessions, covering $2J billion worth of trade, or about 3 per cent of the total of world trade of $77 billion, using 1954 figures. Canada negotiated new agreements with the United States and 12 other countries in Europe and Latin America. Canada, however, did not negotiate directly with the United Kingdom or Japan.
The minister has spoken about the prospects of increased trade with the United States. There is no doubt that the recent negotiations will tend to accentuate the concentration of our trade with the United States. Of the $300 million of Canadian exports on which Canada received concessions from other countries, $200 million were exports to the United States. Canada gave concessions on $180 million worth of imports from other countries, of which $80 million were imports from the United States.
It is well to bear in mind, sir, that the United States tariff cuts in favour of our goods will be spread over a three-year period, 5 per cent of the reduction taking effect in each year, the first on June 30, 1956, the second on June 30, 1957 and the third on June 30, 1958 under the provisions of the United States 1955 trade agreements extension act. On the other hand, Canada's tariff reductions will be put into effect in their entirety in one step. The Minister of Finance made a statement to the house, as found at page 4793 of Hansard, when the agreements were announced in the house on June 7, and we assume there should be some statement made in the house concerning the carrying into force of the reductions that Canada has undertaken to make.
But, sir, while we have supported the principle of multilateral trade extension through agreements in this post-war period, we do draw attention to this, that the effect of this fourth extension of the GATT agreements is going to be an acceleration of the tendency to concentrate our external trade in the one channel, namely the channel with the United States. We do not like to see multilateral trade negotiations giving mere lip service to the idea of multilateral trade

and becoming increasingly a contribution to an expansion of bilateral trade simply with one country, where we already have to a dangerous degree concentrated our trade.
The final matter I wish to deal with in these opening remarks relates to crown corporations. There are nine crown corporations that are responsible to the minister in his capacity as Minister of Trade and Commerce, apart from those that were referred to in the debate on the estimates of the Department of Defence Production a month ago. One crown corporation has been added recently to the list of corporations that are responsible to the Minister of Trade and Commerce. It is Northern Ontario Pipe Line Crown Corporation. The bill that established this corporation was given royal assent on June 7. There is, of course, no power to reopen the debate on that thorny measure, but there is the right on the part of the house to know fully what has happened since June 7 and to compare what has been done with the promises, representations and undertakings given to the house by the government in the course of the passage of that bill through the house.
The house is aware that on June 8 the corporation was established and five directors were appointed, and subsequently a general manager. It will not be forgotten that two facts stood out in the government's submission of that bill to the house. The first was the government's claim of urgency; that extraordinary measures, to put it mildly, had to be taken both in connection with the passage of the bill through the house and in the relationships with the corporation in order to complete the construction of the pipe line from the Alberta-Saskatchewan boundary to the vicinity of Winnipeg this year.
The second fact that was outstanding in the government's case in that debate was that the whole reason for favouring Trans-Canada Pipe Lines as the chosen instrument of the government for building the pipe line was that it had the organization, the contracts and, above all, an option on the 34-inch pipe necessary to construct the pipe line. On those representations by the government the majority in this house acted, and a cted ruthlessly.
But we now find since June 7 that Trans-Canada Pipe Lines Limited had an option not on 575 miles of 34-inch pipe required to build this line from the Alberta border to the vicinity of Winnipeg, but on only about 25 per cent of the 34-inch pipe required for that purpose. I therefore say-and I base my remarks upon the record; I shall give hon. members who wish it the page references for what I say-that the house was

misled by the representations and statements made by the government. The house was led by the statements of the Minister of Trade and Commerce, the Prime Minister and the Minister of Finance to believe that Trans-Canada Pipe Lines had available all the 34-inch pipe that would be required to build this leg across the prairies.


Clarence Decatur Howe: May I ask the
hon. member a question?


Donald Methuen Fleming: Yes.


Clarence Decatur Howe: Is he aware that the contracts for pipe and for steel plate for pipe were tabled in the house well before the bill passed? 1 do not suppose my hon. friend took the trouble to examine them, but there was nothing concealed.


Donald Methuen Fleming: The minister can say what he likes about the tabling of the contracts. The contracts, you will remember, were not incorporated in the legislation. The fact is that there were government statements made, -statements which appear in the record, many of them-on which no other interpretation could be put than that the government was saying to the house that the corporation had all the pipe required to build this prairie leg. I can give all the page references in Hansard; I have them all.
Finally, I draw attention to what was said in the house on August 3 when, after a report emanating from a source that was ascribed to Mr. Frank J. Simington of Edmonton that the pipe line now could not be completed to Brandon this year, there was a curious kind of denial, attributed to Mr. Low of Trans-Canada Pipe Lines. He said the report was "not officially true". Not officially true! What kind of a denial is that? It seems to suggest that he was saying that he could not deny that the statement was true in fact, but that he was not making any official admission at this stage to that effect. It reminds one of the kind of denials we heard earlier in the session during the course of the pipe-line debate.
The minister has taunted the official opposition in this house with our concern when we have asked questions since June 7 about what was being done in relation to the pipe line. I will tell the minister our concern. The position we took during the debate has not changed, but our concern is and will continue to be to hold the government to the promises and undertakings they gave to the house and on which the majority in the house acted in the course of that debate. I give warning now to the government and the minister that we do not propose to stand by and be silent and allow any departure from
Supply-Trade and Commerce those promises. This must be the concern of any opposition in a free parliament.
There are many matters on which we shall have occasion to ask questions when we reach the detailed stage of the discussion. These are the remarks I offer to the house in this introductory and general part of the debate on these items.
As I have said, we attach the highest importance to Canada's trade. We are glad that on the staff of this department there are such competent men at all levels. I have taken occasion in the past, and I do so again now, to pay tribute to the deputy minister of the department, the senior officials and the representatives abroad. This is a well manned department with some very competent men in it. When the minister speaks this morning of his purpose to recruit men of the highest calibre to serve in the trade positions abroad, I should simply like to add to what I said last year on this point, that having met in the field and at their posts a number of Canada's trade commissioners abroad, I have found them without exception to be worthy representatives of Canada of whom this house can well be proud.


Alexander Malcolm Nicholson: Mr. Chairman, I should like to associate myself with the concluding remarks made by the hon. member for Eglin-ton. The minister is extremely fortunate in having on his staff so many competent personnel. May I express the hope that he will be able to give some consideration to revising upward his salary schedules. Recently I read that he has lost another valuable person to the private grain trade in Winnipeg. I believe that men who give up remunerative careers deserve a great deal of credit. I think it must be rather disturbing for those who stay behind when some of their colleagues step out at salaries which are probably double what more competent men are receiving at headquarters. This statement should include the people with the trade commissioner service abroad.
I should like to make special mention of Dr. Charles Wilson who was in Rome when I was there a couple of years ago; I believe he is now in Denmark. I should also like to mention Mr. Bruce MacDonald, who was in Bonn at the time. These men are performing outstanding service for Canada. Dr. Wilson took my wife, my daughter and myself out to see an Italian farm about 25 miles from Rome. We appreciated the fact that he was able to act as interpreter. He had acquired quite a good talking knowledge of the Italian language. We were extremely proud of the high regard in which a man

Supply-Trade and Commerce like Dr. Wilson and his family were held by the people of Italy. The trade commissioners in all the centres were especially courteous and most anxious to have Canadians meet some of the people who were interested in Canadian trade.
I am going to divide my remarks into three compartments. In the first place, I should like the minister to find during the next year a little bit more time in which to become familiar with the bureau of statistics, particularly with the work being done in connection with farm income and farm costs. On February 9 the minister made an extremely unfortunate comment off the cuff which I am sure has caused him some embarrassment. No doubt he told the truth when he referred to the farmer out west who was driving a deluxe car, had his granaries filled with grain, had all his debts paid and was really in a very comfortable position. I know that out of 200,000 farmers in western Canada, such a farmer could be found. However, the minister's own department presents an entirely different picture.
When the interprovincial farm union council were here a short time ago they presented a brief which indicated that in Canada as a whole, only 53-1 per cent of all the farmers had the good fortune to own a motor car in 1951. When you can obtain possession of a fairly good car for a $25 down payment, it indicates that there is something wrong when 46 per cent of the farmers in Canada are not able to own a car.
Then somebody said, "Oh, but a great many farmers have trucks". Again the bureau comes up with the information that only 31-6 per cent of them have trucks. If you assume that no farmer had both a truck and a car, you would still find that you had about 16 per cent of the farmers in the country who had neither a truck nor a car. Of course a great many farmers have both a truck and a car.
I think the minister should really take time off to have a look at the position of agriculture. I know his department has not had available the money with which to do in the field of statistics the sort of job that has been done in Washington. However, I think the minister should get an appropriation so the bureau of statistics can do a careful study in each of the ten provinces in Canada in order to establish whether or not the farmers are getting a fair share of the national income. In the United States, where they have the facilities available, they come up with the information that the per capita farm income is $866 per year, and that the off-farm return is $1,922. In other words,

those who are on the farm are getting less than half as much as those who have left the farm.
If a similar study were done in Canada I am sure we would have an even more disturbing picture. But of course when the census is taken each year, those who go out to get information from farmers are not permitted to ask too many questions about the financial position of their neighbours. However, I am sure the farmers in all parts of Canada would now be willing to co-operate with the bureau of statistics and give complete information with regard to their debts, their assets, their off-farm earnings and the general position of agriculture. I therefore hope that before another year passes the minister will issue instructions to the bureau that they proceed immediately to make a careful study of the farm income in all parts of the country.
In the second place, I want to make some reference to wheat. I realize that we have had a fair amount of time this year in which to discuss wheat.


Elmore Philpott: You said it.


Alexander Malcolm Nicholson: But we still have not solved the problem, and every time an opportunity is presented members who come from wheat-producing areas will be obliged to have something to say. In the first place, I want to emphasize again that we want the minister to continue the operations of the Canadian wheat board. In spite of the criticism we have had made from time to time with regard to what the minister has done or has not done, members of all political parties and the vast majority of the farmers in western Canada are most grateful to the minister for his efforts in maintaining the wheat board.
I think it is fairly clear that if there had not been a wheat board last year there would have been a terrific slump in wheat prices. In May a year ago the Manitoba Co-Operator printed an extremely interesting chart giving wheat prices over a period extending back to 1905. I am going to select just a few of the years in between in order to bring to the attention of the house the problems which the farmers were up against year after year. In 1908-09, for example, the low price was 96 cents and the high price was $1.35. I am leaving off the fractions. Then in 191314 the low was 78 cents and the high was $1.16. In 1914-15 when we were at war and the farmers were going all out for production, there was a spread between 94 cents and $1.64, the next year between 88 cents and $1.61 and the next year between $1.54 and $3.00.
You do not require much of an imagination to realize how difficult it is for people who

are working long hours on the farm to know whether they should sell today, tomorrow, next month or in two months' time. Then when the wheat price got away up to the $3 mark and it appeared as though it might go up to $5 or $10, the government stepped in and put on a ceiling. The farmers were not permitted to take advantage of the boom which other sectors of the economy enjoyed.
Then after the war, when my neighbour the hon. member for Acadia had finished the job of making the world safe for democracy and came back to make his living at farming, he bought his machinery at high prices; and in 1920-21 there was a range in the price of wheat from $1.57 to $2.85. You could not avoid selling at low prices. When you threshed you were obliged to deliver some of your grain in order to pay your bills, as you were not in a position to wait until later on. Next year the spread was from 91 cents to $1.55. Then even during the depression years, when we were down to low figures in 1932-33, we find the low was 39 cents and the high was 94 cents; 1936-37 the low was 94 cents and the high was $1.55; in 1942-43, the low was 88 cents and the high was $1.12.
I think the farmers of Canada never want to go back to a situation where profiteers and speculators are in the business of buying and selling wheat and other foodstuffs and forcing prices down or up to make fortunes without making any useful contribution. I hope, therefore, the minister will not yield to the requests that are coming from very limited quarters, from selfish quarters, to do away with the wheat board and get back to the open market again.
I think the minister will also have to give a new look at a problem which was discussed at some considerable length earlier this session, namely the bank loans provided last year. They are not going to fill the bill. I am not going to embark on a discussion of that matter, but I think the minister will have to accept the fact that having a supply of wheat in Canada is a national asset. We cannot expect a handful of people to carry that asset year after year and be prepared to hold it until some future time. A step has been taken this year toward having the taxpayers as a whole carry part of the costs in connection with carrying grain.
There are immediate expenses that every farmer must meet. He must pay his taxes, his fuel bill and his implement repairs. There is a big crop that is going to be harvested in the next few weeks, and I think the government of Canada must take steps to see that those who have seeded their crop this year in good faith will be able to get 67509-462 J
Supply-Trade and Commerce enough cash advanced on grain properly stored on their farms to enable them to meet their current obligations. I think the minister must not lose sight of the fact that nearly every country in the world is doing something to help her farmers. About 96 per cent of the world's wheat is handled by organizations such as the Canadian wheat board. The Canadian wheat board is handling the farmers' product and, as I have indicated before, the farmers are anxious that the wheat board should continue to handle it. I think the wheat board cannot be expected to meet the competition which is being provided in some countries.
In the Economic Annalist for June there is an interesting section on what is being done in some of the other countries. I am not going to deal at any great length with it, but it is written by G. J. Dobson. The section on France points out again that France is subsidizing grain production by about $130 million. The total allocation for agriculture m France is $214 million. Then there are figures for Italy. I feel that the figures for Great Britain should be examined very carefully, because while our exports to Great Britain are continuing at a very high level, the farmers of Canada cannot be expected to meet the sort of competition that is provided.
I find that the British subsidies in terms of dollars for this last year were $1-1 million for cattle; $14-3 million for sheep; $133 million for pigs; $52 million for eggs; $102 million for cereals; $103 million for milk. Then we have additional subsidies for such things as fertilizers, $40 million; lime subsidy $28 million; plowing grants, $14 million; drainage and water supply, $7-6 million; improvement of livestock rearing land, $3-9 million, marginal production assistance, $4-8 million; T.B. attested herds scheme, $29-7 million; ' livestock breeding grants, $300,000; calf subsidy, $22- 4 million; hill sheep and hill cattle, $10-9 million. There are still further subsidies for bread of $113-4 million; milk in schools, $2-8 million; national milk scheme, $87-1 million. It is not going to be possible for the Canadian farmer to meet this sort of competition when everything they buy is manufactured in a highly protected market, and when they are expected to sell in competition with these subsidies. I hope the minister will have a look at the problems with which the wheat growers are confronted at the moment, where the grain that is going to be harvested in the next few weeks is not going to be sold for a long time and expenses must be met.
My last section is on the trade situation. The hon. member for Eglinton has put on

Supply-Trade and Commerce the record quite a number of figures which I was going to use, so I shall not repeat them. But I should like to draw to the minister's attention one of the articles by James S. Duncan, which appeared in the Gazette of May 7, regarding the British-Canadian trade situation. Mr. Duncan reports that the conference he attended reached a unanimous conclusion on two points; first, that a substantial expansion of Canadian imports from Britain is absolutely essential in the interests of both countries; and second, that there are practical possibilities of bringing about this expansion if vigorous measures are taken in both countries. In other words, if there is a real attempt in both countries something can be done. I do not think we can continue selling to our best customer if we are going to buy one dollar's worth for every two dollar's worth we sell to that customer. I do not think we can increase our purchases from the United States and decrease our sales there, and at the same time cut down our purchases from Britain and increase our sales there.
Before I conclude I want to say a last word about new fields of trade. I am thinking of Russia, the iron curtain countries and China.
I am very glad the minister has yielded to our demands and has started trading with Russia and the iron curtain countries. Had it not been for our wheat sales to Russia and to the iron curtain countries the minister would be in a great deal more hot water this year than he is. As a result of those large exports the year-end picture is a good deal brighter than many of us expected earlier. But the minister must now give consideration to trading with China. I am sorry that the resolution appearing on the order paper in the name of the hon. member for Vancouver South was not reached earlier in the year. It reads:
That in the opinion of this house, the government should consider the advisability of recognizing the present government of China, and taking all other steps to promote trade between Canada and Asia.
We must not lose sight of the fact that there are people in those countries who are potential customers of Canada. There really are no limits to the trade which could be developed, and I think it is disturbing to find that although we have substantial trade figures with so many countries of the world, China does not appear in this list. I find here, for example, that our sales to the U.S.S.R. for the last five months ending with May were over $9 million, but we have only bought about $400,000 worth; our sales to Poland run over $13 million, and we have bought from Poland about $500,000 worth during this period. I think the minister

must establish trade commissioner service in this vast area of the world, where there are six hundred million people.
The hon. member for Vancouver South, in an article which appeared in the Vancouver Sun sometime ago, pointed out the fact that it is plain hypocrisy to pretend that Chiang Kai-shek's little group of refugees hiding behind the United States fleet on the island of Formosa is China; and because the recognition of China is bound up with the larger question of war and peace in all Asia we should be exploring the possibilities-


Alexander Bell Patterson: You are on external affairs now.


Alexander Malcolm Nicholson: I am going to refer to the resolution which the hon. member for Vancouver South had on the order paper.


Elmore Philpott: You are doing fine, but don't take too long.


Alexander Malcolm Nicholson: The hon. member for Vancouver South was denied the privilege of bringing a very important subject before parliament. I have recently seen an article which appeared in the Colonist regarding the activities of Mr. W. A. Scott of Victoria, who spent some 21 years in the Chinese maritime customs service. He has been active in creating an interest in the unlimited possibilities which exist in that country.


An hon. Member:: Carried.


Alexander Malcolm Nicholson: I am nearly through. I think the minister must face up to the fact that we cannot continue to sell the large surpluses of Canadian goods which are available in the markets we previously had, because they are diminishing; but there are unlimited markets available in this new area.


Victor Quelch: Mr. Chairman, first of all I want to say a few words regarding the general economy, and then I shall confine my remarks mainly to the question of the marketing of farm products.


An hon. Member:: Make it brief.


Victor Quelch: Someone says, "Make it brief". I have been very brief in the last few weeks.


John Horne Blackmore: Open up and give them the whole story.


Victor Quelch: A number of members of the government have stressed the high level of production, employment and income in this country and the fact that there has been a steady expansion of trade. I do not intend to question that for one moment, but I do point out that there are a number of very undesirable features behind that situation.
Internally we have a high level of production, employment and income which is being

Supply-Trade and Commerce
bolstered by a very large volume of consumer credit. Charge accounts, instalment buying and personal loans amount to over $2-2 billion, and there is an additional half a billion dollars for consumer housing. That figure is approaching $3 billion, which is of course a danger signal in times of prosperity.
We have the Bank of Canada attempting to do something about it by restricting credit. If the Bank of Canada does succeed all it will mean is that there will be a slight recession, a recession which in the graph of debt will merely be a dip because as soon as the first sign of recession appears they will have to let loose again and consumer credit will continue to climb. Whatever action they follow it will only be a small dip in the graph of rising debt.
I suppose the situation could go on for a long time. I do not know when you finally have to call a halt to an expansion of debt, but the time does come; and when it arrives I should imagine the Liberal party will consider it time for them to slip out of office and let the Conservatives perhaps take the rap as was done in the thirties.
We find an interesting situation regarding agriculture now. I was speaking to the general sales manager of one of the largest implement companies and he told me there had been quite an improvement in agriculture this year. He said, "Our sales are going up once more" but he indicated that "We are now financing our own sales, and we are doing it on an 8 per cent note." Until now the farmers, chiefly through the farm improvement loans plan, have been able to finance their purchases; but apparently they have used it to capacity and are now having to buy farm machinery on time from machine companies at 8 per cent. I do not criticize the companies for charging 8 per cent, because most people who have to use credit facilities are paying very much more than 8 per cent. We find that many people in order to buy the goods they desire have to pay anywhere up to 26 per cent, and then when they cannot pay back their loans on the instalment plan they become involved in even worse transactions. In the banking and commerce committee we heard of some cases where people are being charged as much as 75 per cent a year. When we find people involved in situations like that I say it is time to call a halt on transactions of that nature.
In the external field the situation is not altogether desirable. Last year we had an adverse balance of trade with the United States of around $1 billion; an adverse balance of trade of $661 million and $369 million on invisibles. This was made up by using our surpluses with other countries
amounting to $365 million and foreign investment in this country, mainly from the United States.
In other words we were meeting the deficit on current account out of capital. I remember that when I was a boy I was always warned that it is a very bad practice to live off capital. I was advised that one should live on current income. Today we are living to a very large extent on capital in so far as our foreign transactions are concerned, and we are living on borrowed money in so far as our internal transactions are concerned. When a high level of productivity is bolstered by actions of that kind I say it is not a very desirable situation, and there are danger signals that will have to be recognized.
It may be met in part by reducing imports from the United States and expanding our exports; that would be the logical way to meet the situation. Of course, however, it takes two parties to make that possible. It could also be met by a reduction in the expenditures made by Canadians when they travel abroad and an increase in the expenditures of people from the United States when they come to this country; but you cannot blame the Americans for not spending more in Canada when they find that the price level of the things they want to buy is considerably higher than it is in their own country.
One way to surmount that difficulty would be for the government to eliminate the sales tax and bring our prices down to a point where they might be more competitive with the prices in other countries. I recall that in the banking and commerce committee the governor of the Bank of Canada said it might be a good idea to eliminate the sales tax so far as exports are concerned in order to make our prices more competitive.
I want to return to the question of farm products. I agree wholeheartedly with the hon. member for Mackenzie that in spite of the difficulties the farmers have experienced in the past year a vast majority of them are still solidly behind the wheat board as a marketing agency for wheat, and they do give credit to the minister for having maintained that organization in spite of a great deal of criticism that has been made of it by various organizations from time to time. I would say that rather than criticizing the wheat board, the farmers criticize the government for a failure to expand markets, storage facilities and credit facilities in order to take care of a succession of large crops.
The minister has said the situation is due largely to the fact that we have had a number of large crops in' the country. No one would

Supply-Trade and Commerce dispute that, but the point is this. In view of the fact that we are having these large crops surely it is necessary to extend our facilities for handling them both in the form of expanded sales, expanded storage facilities and expanded credit facilities. I agree with the hon. member for Mackenzie that the present system of making loans is not satisfactory. I think if we are going to continue to have large crops arid if we are going to continue to have to store quite a bit of grain on the farms, there will have to be a system of advances on grain in storage on the farm, but that is not the point I want to stress at this time.
When I was out west a few days ago I found there was a considerable improvement in the situation. A very large volume of wheat has moved off the farms. Many of the farmers have their granaries pretty well down so they are able to handle the new crop when it comes in. The point is, however, that another large crop is in sight. Every indication is given that there will be another heavy crop this year; and although we have been able to move quite a bit of wheat off the farms the elevators at country points are congested. This year we are going to have just as much congestion as we had last year. Officials of the wheat board suggested it might be even greater. In view of this situation what is the government going to do about it?
When the Canadian Pacific railway was before the committee it suggested that there should be additional terminal storage. If the grain companies are not going to build it, if the government is not going to build it, then how does the government expect the farmer to get his wheat into a position where he can get payment on it? He cannot get any payment on it on the farm; the only way he can get payment is to deliver it. If we are not going to increase our terminal storage facilities it will not be possible to move a greater amount of wheat from country points to terminals. Therefore I suggest to the miinster that he do everything in his power at this time to encourage the farmer to look after the situation himself.
Unfortunately he has done just the opposite. Last year the farmers at country points, realizing the difficult situation, took action to help clear away the congestion. They built off-site storage. That was done right across western Canada. I know of a large number of communities where the farmers realizing the elevators were going to be full and they would not be able to get their wheat to town, decided to build large buildings such as curling or skating rinks. Those were built in the villages and licensed and rented to the


grain companies. Now what do we find? We find that the board of grain commissioners are going to refuse to license any off-site storage.
I take it that the real power behind that decision is the government. So far the excuses given for refusing to license off-site storage have been very poor indeed, not even excuses. What were the reasons given? They say the grain has to be accessible. What was the situation in many country points? There are many elevators with annexes that have no augers, and the grain must be moved by truck. If it is easy to move grain from an elevator annex by truck, it would be just as easy to move grain from another building a few yards away, because in most places these buildings for off-site storage were in close proximity to the elevators.
The second point raised was the danger of spoilage. Why should the wheat board or the government be concerned about spoilage? If there is spoilage the government does not lose, the wheat board does not lose; it is the grain company that would lose, because once having taken delivery of the grain they must deliver grain of that quality to the wheat board. If the grain companies are prepared to take the risk apparently they do so because they do not consider there is much danger of spoilage. Why does the government refuse to license this off-site storage?
I think the reason is quite plain. This year we passed legislation under which the government will pay the storage charges on a carryover of wheat in excess of 178 million bushels at the end of the crop year. They apparently do not want to incur storage charges on any more than they can help. That is the only conclusion one can come to. The minister shakes his head, but if that is not the reason then I suggest that the minister change his attitude on this question of off-site storage and recognize that the farmers by providing off-site storage are trying to help themselves. It ill behooves the government to put obstacles in the way of the farmers handling their own affairs.
There is another point which the farm organizations have stressed, and I refer to the brief of the interprovincial farm union. They have presented two excellent briefs to the government this year. At the bottom of page 13 we find this statement:
A much more aggressive sales policy by the government and the Canadian wheat board, by substantially increasing sales staff, by acceptance of currencies of other countries which in turn can be used to pay for imports from those countries, by barter deals wherever possible, and by credit transactions wherever these are necessary.
I know that on a number of occasions the minister has opposed the acceptance of foreign

currency. Both he and the governor of the Bank of Canada have denied that United Kingdom purchases are down because of a lack of sterling. However, we have had statements by the high commissioner for the United Kingdom and by the Prime Minister of Great Britain to the effect that a lack of dollars has made it impossible to buy more from Canada. The governor of the Bank of Canada rather shrugged off that statement by saying they had reasons for making statements of that kind.
Perhaps the Minister of Trade and Commerce feels the same way. However, I should like to call on a witness whom I am sure the Minister of Trade and Commerce will agree is a man who knows what he is talking about; I refer to James S. Duncan, chairman of the dollar-sterling council, a well-known industrialist of this country. I think the minister will agree that a man of his calibre would have a pretty good idea of what he is talking about. Let me quote a few words from what he said as reported in the Farmer's Advocate and Canadian Countryman of March 24, 1956. In a brief submitted to the royal commission on Canada's economic prospects Mr. Duncan is reported to have said:
Unless Canadians awake to the necessity of preserving and strengthening their historical and traditional markets with the United Kingdom and the sterling area by increasing imports from them, the outlook for the long-term sale of some of our primary products is not at all bright.
And then again;
Basically, the reason our exports to the United Kingdom have not grown is that Britain's ability to purchase from us has been limited by her dollar shortage. Since the end of the war, Britain has been unable to earn a sufficient amount of dollars, directly or indirectly, to pay for imports from dollar countries up to the limit of her domestic demand. Therefore she has applied various import prohibitions, quotas and other restrictions on dollar imports in order to maintain external solvency. While many of these restrictions, especially on primary products, have been removed as the sterling-dollar situation has improved, we are very far, even ten years after the war, from having free access to the British market or other sterling markets.
It is important to recognize that British restrictions on imports from Canada have arisen from the limitations on Britain's dollar resources and not from any desire to discriminate against Canadian goods.
Then he goes on to point that there is a large volume of British goods that we would be glad to have in this country. So there would be no difficulty in buying British goods for the purpose of balancing our trade.
I know that on former occasions the minister has tried to make us believe that if we did take sterling from Britain we would not be able to spend it or buy goods for export, but I have given a number of examples to show the fallacy of that argument.
Supply-Trade and Commerce I have had my personal experience and the experience of some of my neighbours who had sterling balances and who used them for the purpose of exporting livestock to this country. Not only was the use of this sterling allowed but it was encouraged. These people get a premium for exporting their livestock to a dollar country. There is no difficulty involved at all. These people are encouraged to ship livestock to dollar countries.
However, the minister said just the other day that he did not know of any country that would buy wheat or any other farm produce with its own currency. Of course the obvious answer to that is that the United States, with other countries, has been making that possible to a very large extent. According to the Globe and Mail the figure stands now at around $4 billion, and apparently congress has now sanctioned another one and a half billion dollars worth of surplus goods being sold in that way.
Many people criticize the large scale of United States investment in this country. The United States has a large favourable balance of trade with Canada, and has made it possible for Canada to balance payments by investment in this country. They realize that under the form of international financing that we do at the present time, the only way we can continue to buy from the United States is by their investing in this country. Otherwise we would go steadily further and further into debt, and no doubt would have to put restrictions on our imports from the United States.
But what is the situation with regard to Canada and Britain? We also have a favourable balance of trade with Britain in the same way that the United States has a favourable balance of trade with Canada. Their investment makes it possible for Canada to go on importing from the United States, but do we make it possible for Britain to expand her purchases from us by our investment in that country? On the contrary, we have a favourable balance of trade, almost two to one, with Britain and we demand that they pay us in dollars. It is the same old story. We are sticking to a triangular pattern of trade. We want Britain to pay us in dollars so we can pay the dollars to the United States.
I do not see why it should be the responsibility of Britain to make up Canada's adverse balance of trade with the United States. Mr. Ilsley time and time again in this house said that under our present pattern of trade it is absolutely essential that we use our favourable balance of trade with Britain to balance our adverse balance of trade with the United States. What is the consequence? The consequence has been that Britain has

Supply-Trade and Commerce curtailed her imports from this country in the same way as we would have had to curtail our imports from the United States if they had not made a large investment in this country.
The minister has from time to time ridiculed the idea that you have to try to plan trade on a bilateral basis. He has said you cannot do it. Let me call a witness on that question, a man of whom I know he has a very high appreciation. Former deputy minister M. W. Mackenzie said on October 9, 1947, as quoted in Foreign Trade:
Now that the multilateral system of payments has suffered a serious breakdown for the second time, or perhaps one should say for the third time in the last generation, Canada and all other countries that are engaged heavily in international trade are facing a difficult stage in their affairs. The balance of trade between pairs of countries-that is, the bilateral balance-has become a matter of first importance and will remain so until the mechanism of the multilateral system has once more been placed in good order.
One cannot say it has been placed in good order if last year we had an adverse balance of trade with the United States of about $1 billion and a favourable balance of trade of about two to one as between us and Great Britain. I feel that the best way to give Britain the assurance that it is our intention to balance trade with her would be to take sterling in payment for our surplus and use that sterling for the purpose of buying goods from Britain. Mr. Duncan says that there is a large volume of goods in Britain that Canadians would like to buy. So there is no difficulty with regard to supply.
The minister says there would be no difference between doing that and accepting dollars. That would be true provided those dollars were spent in Britain, but the big difference is that when we take dollars we do not intend to spend all those dollars in Britain; we intend to use a large percentage of them for the purpose of paying our adverse balance of trade with the United States. If we took sterling under the pledge that that sterling would be left in Britain and spent on goods, it would be giving Britain the assurance that in the future we intended to balance our trade with that country.
There are many members of this house in the Conservative and C.C.F. parties who criticize the undesirable situation in regard to trade, but what they do not appreciate is that we laid down the pattern for this very kind of trade in 1945 when we passed the Bretton Woods agreement. The Bretton Woods agreement made this system inevitable. Let me quote what I had to say when that measure was before the house, but first of all let me say this. We opposed the Bretton Woods agreement because we said it violated

the fundamental principle of international trade, which is that international trade should be the exchange of goods between nations on the basis of mutual advantage.
Under the Bretton Woods agreement we give the creditor nation the right to demand payment in its own currency, without any obligation whatsoever to accept goods in payment. That in itself, I claim, is a violation of the fundamental principle. So I summed up at the end of the consideration of the Bretton Woods agreement in the banking and commerce committee as follows:
What we want in the act mainly is a provision that a debtor nation in order to pay for its imports shall be recognized as paying for them when they establish a credit within their country in favour of a creditor nation and that that credit can be used to buy anything purchased within that country. Then if the creditor nation is not willing to accept goods from a nation with which it has a credit if it desires to trade on a multilateral basis it may trade the credit established on that basis for the credit of another country on a multilateral basis. So I say if the great industrialized nations are really sincere in this matter they should have shown it at this time and been willing to have an article to that effect put in the Bretton Woods agreement.
Then I went on to point out that as a result of the Breton Woods agreement two things were bound to happen. Either the nations, to protect their balance of payments, would have to curtail imports-and that is exactly what has happened insofar as Britain is concerned-or, on the other hand, the nations would have to borrow or have large-scale foreign investment in their country to balance their payments. In that regard I had this to say:
The situation that will face a debtor nation will be this. They will either have to cut down their standard of living to the very minimum, cut off imports, which will be contrary to the purpose of the fund, because the purpose is supposed to be to expand trade, and if a nation as a result of this is forced to cut down imports and reduce its standard of living to the minimum it would be directly contrary to the purpose of the fund. Instead of the fund helping to bring about an expansion of trade it will be helping to develop economic nationalism, the very thing it is supposed to prevent.
I do charge that under this act that is exactly what will happen. The intensification of economic nationalism once the fund has been exhausted. It has been said that there are several alternatives; the only alternative will be that the creditor nation will offer the debtor nation loans. And what happens when it makes loans? It takes securities, it takes securities on its resources, it takes securities on its capital assets; and a creditor nation instead of being willing to accept the payment in goods will demand payment in capital. By supporting this we are supporting the most vicious form of imperialism you can have; true, not imperialism by the force of arms, but imperialism by monetary penetration.
Only this session I heard a member of the Conservative party accusing the United States of monetary imperialism, the very

thing that I had prophesied was bound to happen under this agreement. On the one hand, Britain has to curtail imports to protect its balance of payments; on the other hand, Canada has to have a tremendous volume of foreign capital investment in this country in order to protect its balance of payments.
I would say this, and I am not opposing foreign investment for one minute. I think that with the element of time it is necessary to have a certain amount of foreign investment in this country, but the danger will be when, as a result of that foreign investment, we have expanded our ability to produce. Will the United States then be willing to take an expanded amount of export from us in order to make it possible for us to balance our trade with them? If that is done, then the investment in this country will be fully justified.
I wish to point out again that the United States are playing their part in making the Bretton Woods agreement work by making investment in a country with which they have a favourable balance, but Canada is not doing that. We have a large favourable balance of trade with Britain, but instead of doing the same as the United States and making investments in that country, we are insisting upon payment in dollars and thereby forcing Britain to curtail her imports from this country. It is the agriculturist of this country who suffers as a consequence.


Clarence Decatur Howe: I should like to say a few words about the proposal that we should attempt to balance trade with every country. The reasons for buying a particular commodity from a particular country are not related wholly to the balance of trade. For instance, we buy great quantities of petroleum from Venezuela. We do not do that to balance trade, because the trade is greatly in favour of Venezuela; we do it because it is the cheapest market in which to buy petroleum to serve the eastern seaboard of Canada.
We could go a long way toward balancing our trade with the United Kingdom. We produce most of the world's nickel. We could sell all that nickel to the United States if we wanted to, and get dollars for it, and let England do the best she can to get nickel. We sell nickel to England because England needs nickel. It adds to the adverse balance; nevertheless it is a pattern of trade which a situation demands. The reason we have a tremendous trade with the United States is that it is an attractive market and one of the few free markets in the world. With the exception of a few South American countries, it is the only country where anyone can buy and sell freely. The United States has a
Supply-Trade and Commerce pattern of production that suits our requirements as far as certain products are concerned, and we have a pattern of production that suits the United States for many of their semi-fabricated materials.
I think it is a great mistake to indicate that the balancing of trade between countries is the paramount feature of trade. There are many other factors that have to be considered. It is true that we could say to an exporter: "We know you can get a higher price in the United States but we have to balance our trade with some other country and we want you to ship your goods to that country even at a lower price". I do not think that would be too popular even with my hon. friend. Prices have a good deal to do with direction of trading.
It seems to me that the world is operating at the present time on a trade pattern that is working, and for Canada to say that we did not believe in all this nonsense and therefore we are going to balance our trade with every country in the world would, I think, put this country in the position of being the most disrupting influence in the world if we set out to follow that pattern.
I make these few remarks because I think something should be said about the theory held by my hon. friend that the great principle should be for Canada to balance its trade with every country in the world.


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, despite the rosy picture the minister has presented of the general level of prosperity in this country I still think, and I am sure many other members do, that there are certain storm clouds on the economic horizon. I suppose the largest one is our very large unfavourable trade balance with the United States, but the particular storm warning cloud I should like to deal with for a few moments has to do with a question raised in the house on Thursday, July 12 last. On that occasion the hon. member for Ontario put the following question to the Minister of Trade and Commerce, as found at page 5887 of Hansard:
Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Has the minister received communications from the united automobile workers' union contending that the increasing number of United States-made motor vehicles and parts being imported into Canada is becoming a threat to the livelihood of workers in Canada's automotive and parts industries? If so, what action does the government intend to take to meet the situation?
To which question the minister made the following reply:
Mr. Speaker, ... I have received a number of postcards from individual members of the united automobile workers' union in connection with the importation into Canada of motor vehicles and parts from the United States. The matter is being looked into.

Supply-Trade and Commerce
I was very pleased to hear the minister say on that occasion that he was considering the question, because it is a matter not only of great importance to the hon. member for Ontario but to a great many other hon. members, including myself. As hon. members know, the automobile industry is not located in one place such as Oakville, Oshawa or Windsor, the big centres of the industry. Many hon. members may be inclined to think that is so, but many of the smaller industrial cities throughout Ontario, Quebec and elsewhere have plants which supply the gigantic automobile industry with parts.
During the last month or so I have received a large number of representations on cards which have been sent to me by individual members of the united automobile workers' union, and I am sure the minister has probably received a number himself. They set out their case very well on these cards and I should like to read one of them into the record. I shall pick one at random. It reads as follows:
The increasing number of U.S.-made motor vehicles and parts imported into Canada is becoming a threat to the livelihood of workers in Canada's automotive and parts industries. Not so many years ago, because of British commonwealth trade preferences, Canada exported a substantial part of its auto production. Today the trend is the opposite. Last year 27,392 passenger cars valued at $58,886,000 were imported from the United States compared to 3,154 imported cars in 1950. A great many of these cars were formerly made by Canadian workers from Canadian parts.
At the same time, Mr. Chairman, I also received a great number of cards from members of the same union, I believe, who are employed by the Massey-Harris-Ferguson Company. I am not going to read the whole card but the cogent part reads as follows:
Thousands of farm implement workers have been laid off since the beginning of the year and it is anticipated that by the middle of summer the farm implement industry will be almost shut down for an indefinite period. In a world crying for food and implements, this condition is outrageous. I urge you to immediately place this problem before the federal government and parliament with a view to alleviating the economic condition of the industry, providing jobs for laid-off farm implement workers-
Here is the part that is cogent to this discussion.
-and seeking the necessary revisions in our trade policy to allow Canada to manufacture and export implements to all nations requiring them.
In this regard, Mr. Chairman, I have heard certain other comments. I see it is almost one o'clock. I can conclude my remarks in about three minutes if I may carry on.


Edward Turney Applewhaite: Is that agreed?


Some hon. Members:: Agreed.


Wallace Bickford (Wally) Nesbitt: I have heard comments particularly with regard to the automobile industry. They may be rumours and they may not, but I certainly think if the minister has not heard them they should be brought to his attention. One report or story brought to my attention is that the General Motors Corporation apparently is building a huge plant in the United States which will employ the principles of automation. The story has been told me by a number of people employed in the automobile parts industry, and it is said that when the plant is completed General Motors Corporation of Canada may discontinue the manufacture of Buicks, Olds-mobiles and I believe even the larger Pon-tiacs in Canada.
I hope this is not the case, but if it is it will cause a most serious dislocation not only of the automobile industry and the people directly employed in it but also of the parts industry. It will affect all sorts of large towns and small cities throughout Canada that have feeder plants for the automobile industry. I certainly hope the minister will look into the situation most seriously, because if this is going to be the case, and it may arise within a year or two, a very serious dislocation of our whole industrial set-up will take place.
I should like to make one further reference to the representations of the united automobile workers which I have put on the record. The whole business of importing such a large number of cars from the United States that no doubt could be made in Canada is certainly one very serious factor in our adverse trade balance with the United States. If the minister can find some way through consultation to encourage the General Motors Corporation and the other automobile companies to manufacture in Canada a large number of the cars that are being imported from the United States it would certainly be a big improvement, because I understand that Buicks, Oldsmobiles and so on imported from the United States are widely sold in this country and no doubt make up a very large percentage of our high importation figure.
That is all I have to say on the matter. The minister, as he indicated earlier, has promised to look into the situation. I hope he does so before the warning storm clouds break into a full-blown thunderstorm on our industrial scene.


Edward Turney Applewhaite: Shall the item
carry?


Clarence Decatur Howe: Perhaps I might say one word, Mr. Chairman. There is nothing in the fears of my hon. friend. General Motors are talking about expansion in Canada

rather than contracting in Canada. I had three or four days' discussion with the president of General Motors of the United States a while ago. I know he feels that in Canada there is a growing market, and that General Motors of Canada will increase in importance from year to year rather than the reverse.


William Alfred Robinson: Shall the item carry?


Some hon. Members:: Carried.


An hon. Member:: One o'clock.


Wallace Bickford (Wally) Nesbitt: May I make just a brief comment. I am glad to hear the minister's comments. The only thing that concerns me is that possibly the minister may have slightly misunderstood what I was saying with particular reference to discontinuing the manufacture of certain lines in Canada. I referred to the fact that apparently a large plant involving the principle of automation was being put up in the United States, and that it might make it more profitable for the General Motors company to discontinue the manufacture of some of the more expensive types of their middle-priced cars in Canada and make them in the United States. Can the minister tell us anything about that particular angle?


Clarence Decatur Howe: Yes. I am assured by the management that they intend to increase their production here rather than otherwise. In other words they do not propose to abandon any production line they have operating here at the present time.


Some hon. Members:: Carried.


Donald Methuen Fleming: It is not carried.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Supply-Trade and Commerce the other countries are increasing their trade with China. Even some Canadian firms are entering through the back door. I understand that Massey-Harris-Ferguson has a manufacturing plant in Britain and in West Germany, and they are exporting machinery to China at this time.
I rise to speak very briefly on this question because it is of major concern to the people of British Columbia. We believe this offers an immense opportunity for marketing our lumber and our related lumber products; our paper; some of the cheaper grades of fish; machinery; all types of building supplies; fertilizer and some fruit. At one time we did ship a certain amount of fruit to China. This is recognized in British Columbia by people generally. Business leaders have expressed their opinion; labour has expressed its opinion and I have heard a great deal of support for developing trade with China amongst people from all groups throughout British Columbia. All these people recognize the opportunity that is provided in this market for supplying the needs of the Chinese people, and at the same time finding a very necessary market for many of our products.
In that connection I wish to read a resolution adopted by the mine and mill workers' union which is operating in the plants of the Consolidated Mining and Smelting Company. The resolution adopted by the membership reads:
-UC1MS Iieer world trade mdispensabIe requisite to the maintenance" stability of full employment Whereas the new C.M. & S. Co. Ltd. fertilizer !f Klmberley has ceased production
les?PthanythdUe t0 lack °f saIes markets, after less than three years of operation
Whereas many of our members have been laid
ffTh*rafreSUi °! thls fertilizer plant shut-down. Therefore be it resolved that the Canadian eovtrT<teewith°aUVerything " Us power t0 increase
Chfna fr all countries of the world, especially
the VIewP°int of a practically unlimited fertilizer market.
[Stage Direction]

and
Herbert Wilfred Herridge: I intend to take up very little of the time of the house, Mr. Chairman, so I shall say that I express support for the general remarks made by the hon. member for Mackenzie this morning with respect to trade policies and particularly the remarks he made concerning the necessity for developing trade with China. We in this group think we are very backward in developing this market, particularly while we need markets for our primary, industrial and agricultural products. Here we have, as the hon. member mentioned, a potential market of 600 million people, a vast market which offers tremendous opportunities for development to our mutual advantage. While we hesitate to step into this field, Britain and 67509-463J
There is a splendid opportunity. China is a tremendous country with a starved soil; an immense country with a hungry people.' We have the capacity to produce some of the best fertilizer in the world and, I might say for the information of hon. members, some of the cheapest fertilizer in the world produced by Consolidated Mining and Smelting Company. This offers a tremendous opportunity for the sale of this fertilizer which we have the power, the skills and the plants to produce.


Clarence Decatur Howe: If my hon. friend will permit me a word, he doubtless knows that great quantities of fertilizer are being bought by China from Trail. They bought large quantities last year and again this year.

Supply-Trade and Commerce


Herbert Wilfred Herridge: I know that, Mr. Chairman, but there is a great opportunity for the expansion of this market which would result from broader trade relations. Therefore we in this group do think the time is ripe to recognize China and do something toward the development of this potential market. In the first instance we could send a trade delegation to find out their needs and what we could supply, and so on.
We have to face realities in the present world. While we are squabbling over markets in other parts of the world and suffering from very severe competition, we believe that here is a natural market for a tremendous amount of Canada's products, and particularly those of British Columbia. We in this group feel that if this possibility is explored we can develop an enormous market to the mutual advantage of both the Canadian and Chinese peoples.


Lewis Elston Cardiff: I should like to bring to the attention of the minister a condition that has existed in our part of the country for quite a number of years. I refer to the feed grain that comes from the west. We are not satisfied with the grade that is coming down. There is a lot of dirt and stuff that comes with it that should never leave the head of the lakes. It is difficult to get a grade from the elevators.
The other day I heard of a case in which a chap ordered a load of No. 1 feed. The feed was delivered by a trucker, along with two tickets, a weight ticket and a grade ticket. There is no reason why that should happen; it should be all on the one ticket. In any event he asked the trucker what the grade was, but the trucker would not tell him until after the load was dumped into his granary. Then he took a look at the feed and asked what grade it was. The trucker said it was No. 2, and the chap said he had ordered No. 1 so the trucker could load it and take it away. The trucker told him to communicate with the dealer, and if the dealer gave him instructions to take it away he would come back and get it. He came back and got it the next day. There is a great deal of dissatisfaction in not being able to tell what grade you are buying, and that should not be the case.
This grain is bought by grade in the west, and the farmer only gets paid according to the grade he delivers. When we get it down here it is mixed up with a lot of trash. We are getting fed up. If we were short of grain it would be a different story, but here you have thousands of bushels of grain in the elevators and we have to put up with that sort of feed which comes down. It should never leave the head of the lakes; it should
[Mi Howe (Port Arthur).]
be burned. I wonder if there is not something the minister could do.


Clarence Decatur Howe: The board of grain commissioners has no authority over the grain after it leaves Fort William. The grain is shipped from Fort William under a government certificate, and I have every reason to believe that at that stage the certificate is correct. What happens to it after it leaves Fort William is beyond our control and must be beyond our control until we get legislation from the Ontario government. I think that is the difficulty.


Howard Charles Green: There is one point on which I should like to have a comment from the minister, and that has to do with the export of iron ore from British Columbia, principally to Japan. This has been discussed on other occasions, and that trade is continuing. I have a press dispatch which appeared in the Gazette of Monday, August 6, 1956, pointing out that two new iron ore deposits had been located on Vancouver island by Canadian Collieries (Dunsmuir) Limited, and that the ore produced there by at least one of these new mines would be going to Japan. There have been other contracts which for our province were very large, because we have comparatively small deposits of iron ore. For example, there is a contract with Quatsino Copper-Gold Mines Limited for the sale of
1,380,000	tons to Japan.
This has been going on steadily since about 1948. One reason the people on the west coast are so concerned about it is the comparative shortage of ore in our own province, and also because we do not have a steel industry. As the province is developing very rapidly the market for steel is steadily increasing, as the minister knows, and there is real concern that this export may result in the establishment of the steel industry being long delayed or even becoming impossible.
The Vancouver Province has run several editorials on the subject and on July 3, 1956, under the heading "Exporting More of Our Iron Ore" it had this to say:
The fact remains that the Japanese find it good business to buy hundreds of thousands of tons of our iron ore, ship it across the Pacific and make it into steel. We could, conceivably, buy our own iron ore back in the shape of steel and pay many times what we receive for it.
The question began to loom as far back as 1948, when U.S. interests purchased 50,000 tons of B.C. iron ore. Since then, ore exports have increased steadily.
If we continue to export our best iron ore (some of it grades 57-6 per cent iron) we will steadily diminish the prospects of ever establishing a real steel industry of our own.
It may be, of course, that there will never be an economic base for making steel here. But when people across the Pacific ocean find it practical to

Supply-Trade and Commerce
buy our iron ore, and when we are obliged to freight our steel across the continent (and go without it when there is a bad shortage) it would seem to be a good idea to find out just where we stand in this respect.
Just a few days ago the minister's own department carried an article on the subject in the publication called Foreign Trade of August 4, 1956. It is entitled "Canada's Steel Imports-Their Regional Significance". The article sets out:
Canada consistently imports well over a million tons a year of steel rolling mill products, aside from such secondary products as pipe, wire and stampings.
Although well over half of these imports are destined for Ontario alone, other Canadian provinces and regions are relatively more dependent
upon foreign supplies than Ontario. Thus the province of British Columbia, which only accounts for about 10 per cent of total Canadian steel imports, actually receives over half of all its steel requirements from foreign sources. The maritime provinces, on the other hand, because of the large integrated steel industry in Nova Scotia, are the least dependent upon foreign sources of supply. Their recent experience is that only a little more than 15 per cent of total consumption is met by foreign suppliers.
Two tables are then set out showing the consumption of steel rolling mill products by regions and the annual averages for the 4-year period from 1951 to 1954. The two tables are as follows:


TABLE I
[Stage Direction]
(in thousands of net tons)
Region	British Columbia	Prairies	Ontario	Quebec	Atlantic	TotalApparent consumption of mill products...	. 199	229	2,210	983	177	3,798Imports of mill products	. 107	58	616	301	28	1,110Per cent, imports of consumption	. 54	25	28	31	16	29

[Stage Direction]
(market figures in thousands of net tons)
Type-Region	British Columbia	Prairies	Ontario	Quebec	Atlantic	TotalStructural- Total consumption	
Per cent foreign	36-1 70-1	247-9 57-7	218-8 54-7	33-8 39-6	583-1 59-0Plate and skelp- Total consumption	
Per cent foreign	21-5 54-7	305-3 37-2	117-5 54-9	21-3 17-0	492-3 43-4Rail and track material- Total consumption	
Per cent foreign	60-9 11	191-0 2-7	71-1 1-8	37-0 7-3	368-8 4-9Bars and rods- Total consumption	
Per cent foreign	63-8 3-9	621-9 12-7	325-1 9-5	33-5 5-7	1,098-0 11-4Hot rolled sheets- Total consumption	
Per cent foreign	23-6 61-4	299-9 57-6	84-9 75-8	6-1 71-3	437-0 62-9Cold rolled sheets- Total consumption	
Per cent foreign	5-1 17-1	238-3 27-0	60-9 23-0	3-0 21-5	310-6 25-9Other sheet- Total consumption	
Per cent foreign	17-5 15-1	218-8 5-4	87-6 7-2	6-3 21-7	376-6 7-4
Supply-Trade and Commerce
This shows very clearly the position with regard to the places from which steel comes to British Columbia. I have also stressed the need for local manufacture if that can be arranged by any means whatever.
The provincial premier last month, I believe, asked the federal government to impose some sort of restriction on the export of iron ore from British Columbia. He is in the position that where an iron mine, a mineral claim, is crown-granted, the province can do nothing about the export from that particular property. I believe the province has placed a reserve on iron ore property which is not crown-granted. These mines which are exporting the raw iron ore all have crown-granted claims.
I suggest that the minister has the power to deal with this situation under an act known as the Export and Import Permits Act which was assented to on March 3, 1954. The minister and I had a little quarrel about this in the course of a debate about a month ago. I said he could use the act and he said he could not.
Clarence Decatur Howe: What clause
would you suggest I use?


Howard Charles Green: I am referring to section 3, which reads as follows:
The governor in council may establish a list of goods, to be called an export control list, including therein any article the export of which he deems it necessary to control for any of the following purposes-
Then it lists three purposes. I believe the powers the minister would require are contained in clause (c), which reads as follows:
(c) to ensure that there is an adequate supply and distribution of such article in Canada for defence or other needs.
I submit that the words "or other needs" would cover this situation, and that certainly it is very doubtful whether there will be an adequate supply of iron ore in British Columbia if this export is to continue indefinitely.
The minister has exercised powers under that act on different occasions. For example, there was an amended export control list issued on June 28, 1956. It made an amendment to the nickel group, providing power to require permits for the export of nickel. Under this amendment the new item is described as follows:
Nickel, as follows:
(a) ores, concentrates, (including primary residues) and matter . . .
Then there are further details added. This can be found in the Canada Gazette of July 11, 1956. The following note appears at the foot of this particular item:
(Export permit is required to all destinations, including the United States.)

To come back to the original export control list, I find that it was set up in 1954 after the passing of the act from which I have just read. Under group 6 entitled "Ferrous and non-ferrous metals, non-metallic minerals and other products" are listed cobalt ores, columbium ores, copper and copper base alloys as ores, molybdenum ores, nickel as ores and tantalum ores. It seems to me that with these different ores being listed in the export control list something could be done about the export of iron ore from British Columbia. It is a very worrisome situation. If we could be sure that the export would not prejudice the establishment of a steel industry there, there would be far less worry; but as it is, one can only feel that with this continuous drain on our iron ore resources it will make it just that much more difficult to establish a steel industry on the west coast.


Clarence Decatur Howe: We have examined the powers under the act and have had legal opinion to the effect that, except for strategic reasons, which do not apply in the case of iron ore, or to ensure that there is adequate supply and distribution of such articles in Canada for defence or other needs, it is doubtful that we could forbid the export on the grounds of needing iron ore years hence. It is not needed for any local need at the moment, because it is not being used. Our legal opinion is that the clause cannot be applied in the case of British Columbia, much as we would like to. We endeavour to work with the provinces, as in general anything that is good for a province is good for Canada as a whole and we try to meet the wishes of the provinces in all these matters as far as we can. Nevertheless there would be difficulty about applying a restriction such as this to one section of Canada. As my hon. friend knows, we have become important exporters of iron ore within the last two years, and even if we had the power to refuse to allow export from one coast and encourage it from another coast, it would be difficult. The point is that we have been advised that parliament has not given me the authority to apply this act to stop the export of iron ore.


Howard Charles Green: Is the minister of the opinion that such power should be asked for or that there is need for some power of that kind? I am afraid that the province is faced with an impossible position when it tries to do anything about this export at the provincial level. Evidently the restriction or control could come only under the dominion because of the powers of the dominion in respect to trade. It looks as though we have reached an impasse as far as actually dealing with the situation is concerned.

Would the minister consider that there is need for an amendment to the act if he does not feel that he has the power to do this under the act as it is at the present time? I would think that the wording of the present act is wide enough to meet the situation, but would the minister be in favour of having an amendment to make it clear that he could do something about this situation?


Clarence Decatur Howe: My hon. friend is not suggesting that the province could not stop the export if it saw fit to do so?


Howard Charles Green: I said it cannot stop the export when it comes from crown-granted mineral claims.


Clarence Decatur Howe: I suggest that if they put a high enough tax on the iron ore extracted from the soil of the province they could stop export very quickly.


Howard Charles Green: That really does not answer my question. I asked whether the minister considered it would be wise to have a provision in the dominion law which would give the dominion power to deal with the situation.


Clarence Decatur Howe: No, I think it would be dangerous for the federal government to make a restriction applying to one section of the country and not to other sections. I think the federal government could hardly pass an act of general application, which all our acts must be, and restrict its application to one province. I think the provinces would feel rather seriously about it. If the province feels so strongly about this, as we are led to believe they do, they could put on a tax or adopt any other means open to the province and stop this export much more effectively than it could be done here.


Thomas Speakman Barnett: Do I understand from the statement the minister has just made that the government of British Columbia has made an official request to the federal government for an export ban on iron ore from British Columbia?


Clarence Decatur Howe: The minister of lands and forests wrote me about a month or so ago and asked that this government take steps to stop the export of iron ore from British Columbia.


Thomas Speakman Barnett: Perhaps I might comment that that is a different attitude from the attitude of the government of British Columbia toward the export of water. However, that is by the way. In making that statement did the government of British Columbia furnish any information in regard to the proportion of the known iron ore resources
Supply-Trade and Commerce of British Columbia within the crown-granted mineral claims to which the hon. member for Vancouver-Quadra has referred?
Perhaps I might just explain to the minister that I have some interest in this matter because the exporting mines are in my constituency, and some of my constituents are dependent upon their operation for a livelihood. While I might be agreeable in the over-all interests of the defence of Canada to a restriction, nevertheless I think we would want to feel satisfied that these operations were making serious inroads into the iron ore producing potential of British Columbia. I was wondering whether in making this request the government of British Columbia had given some indication as to the seriousness or otherwise of the present or projected mining activities in respect to the iron ore reserves on Vancouver island.


Clarence Decatur Howe: The letter to which I referred contained no reference to the size of the reserves. My experience indicates to me that if the reserves are being depleted by the present mining operations it is most unlikely that anyone would build a steel plant based on those reserves. A steel plant would need to have 50 or 75 years' supply of iron ore assured before it could start.
However, this is a matter for the province of British Columbia. Japan is a large customer of Canada, chiefly for wheat, barley and dissolving pulp, and they are concerned about being cut off from this source of iron ore in British Columbia. As a federal government we think it would be unwise indeed for this government to take a step which would bring that about. If the province feels it is necessary, that can be done by the province. The suggestion that it is impossible to stop the export of iron ore from British Columbia just has no basis in fact. It can be done. It cannot be done by just passing a law that there is to be no export, but they can put a tax on the mining of iron ore sufficient to discourage any export from any source.


Thomas Speakman Barnett: I should like to ask the
minister his opinion of the relative importance in our over-all trading picture with Japan of iron ore exports. Earlier he referred to the fact that we made a trading agreement with Japan, and I was wondering what the relative position of the iron ore exports is in the trading picture with Japan at the present time.


Clarence Decatur Howe: If Canada were
to put on a discriminatory provision against Japan and not against every country it would,

Supply-Trade and Commerce of course, be a violation of the agreement. It would be very dangerous indeed for the federal government to do so, since it would be directed against one country and not against other countries.


Colin Cameron: I do not want
to hold up the committee too long, but I should like to spend a few minutes reinforcing the plea that I believe was made here earlier with regard to trade with China. I think this is a very important question that Canada should be considering at the present time, particularly in view of the fact that there are fairly reliable reports that there are Canadian corporations which are now trading with communist China but, because of our official position with regard to trade into that area, are doing so through subsidiaries in other parts of the world, where the trading relationships with China are more lenient than they are here.
I think it is fairly well known, too, that there is a more or less shall I say semiclandestine trade going on with communist China through Hong Kong. I would suggest that, since that is the case, it would be well that our trading relations with China were put on a realistic and rational basis. We should remember that it is, after all, an area containing nearly one-third of the population of the globe and that its importance commercially and industrially is bound to increase very rapidly in the near future.
Perhaps we should have learned our lesson with regard to what can be done by people who by rather savage totalitarian methods begin to pull themselves up by their bootstraps. The illusion that was widespread for many years that the Soviet union was a backward country which was not making an economic success of its experiment should, I think, have exploded any idea that the Chinese will not be able to follow in the same course. It seems to me that now is the time we should be starting to build our trade relationships with that extremely important sector of the human race.
I understand, of course, the difficulties that lie in the way of any formal advances to the communist government of China, since Canada has not recognized that government. I might say that I think the necessity of seeking and developing trade relationships with the existing government of China reinforces the plea that has been made many times in this house for a speedy acceptance of reality and fact by recognition of that government. So I would ask the minister if he would perhaps be able to investigate the possibilities of trade with that area, if he and his staff have not at the present time

the relevant data, and estimate iri that way the possible value to Canada of trading across the Pacific ocean.
We who live on the Pacific coast are very conscious of the fact that we are a Pacific nation as well as an Atlantic nation, a fact that sometimes escapes the attention of people living in other parts of Canada. The Pacific coast of Canada has traditionally had connections with the Orient, and we seek to have them reopened again as they were in the past with this new rising regime in China which, however unpalatable it may be to us, nevertheless bids fair to do again in China among an even larger population' what the Russian revolution did among the Russian people. I should like the minister to turn some of his staff on to a study of this question with regard to trade possibilities.


Clarence Decatur Howe: I should like to ask the minister a question with regard to the feed grain situation in southern Ontario.


Clarence Decatur Howe: I would suggest to my hon. friend that he defer this question until we get to the item in the estimates dealing with the board of grain commissioners.


John Borden Hamilton: It is quite apparent from the introductory statement by the minister that he has no intention of flogging his own estimates as was done last night. I almost wonder whether he went home and cut his speech in half, because he certainly shortened it up to a great extent.


An hon. Member:: I hope you follow his example.


John Borden Hamilton: At the same time I think we all wish to get through this item as quickly as we can.


Some hon. Members:: Hear, hear.


John Borden Hamilton: That is one way we can get applause from the other side, anyway. My remarks will be just as brief as possible. It seems to me that this is a very important department, dealing with a subject that is causing great concern. There is one aspect of it that should be dealt with and one that is especially important in a constituency such as mine; that is, the changing complexion of the Canadian scene and the fact that we are becoming from coast to coast-certainly concentrating on becoming-an industrial nation. So I have very few apologies to make for taking ten minutes here this afternoon, when I remember that we probably spent about two months discussing agriculture, wheat and box cars.

Indications of the situation dealing with the over-all picture were reflected very well in a page of the Financial Times last year giving the major business indicators. That showed that from 1952 onward we seemed to be on a downhill road, in so far as the possibility of balancing our exports and imports was concerned. What impressed me most was the fact that in the items that go toward the total of exports we find a list that goes like this: wheat, wheat flour, planks and boards, woodpulp, newsprint, aluminum, and then a very small item, farm machinery.
In the imports we find manufactured cotton, primary iron and steel, non-farm machinery, automobiles and parts, electrical apparatus, and items of that kind.
So we have a situation where the flow of trade outward is concentrated very definitely in the field of non-manufactured goods, that is, natural products; and the flow inward is a fairly constant flow of manufactured products. This presents a very serious problem at this time, because the labour force of the country is becoming more and more concentrated in the industrial field. I notice that in the same publication it is stated that the total over-all number of persons employed in 1955 was 5,154,000. Of that total there were about 874,000 in agriculture. It points up the very serious problem that faces our industrial community.
This has not been overlooked by the editorial writers of our newspapers. I have before me an editorial that appeared in the Globe and Mail of July 1 of last year. It is a fairly lengthy editorial, but I shall only read a few words. At that time we were concerned with the question of emergency in the defence production debate, and the paper had this to say:
Yet it seems to this newspaper that Canada's economic emergency is quite as serious as the defence emergency parliament has been talking about: indeed, more so. Regarding the one, it may be said that there is no international conflict going on anywhere in the world, and that there has been a pronounced slackening of tension between the two great opposing blocs. Regarding the other, it may be said that Canada has now slipped to fourth place as a world trader, with Western Germany taking third place . . .
Further on it has this to say:
Let parliament deal with the defence emergency now before it. But the other emergency has a greater claim to its attention; and in the long run, is a defence emergency itself. No nation can be strong in the military sense unless it is strong in the economic one. Until Canada is populated as other nations are, industrialized as they are, fending in world markets as they are, its position is insecure. To assure its future, it must plan much more boldly, grow much more rapidly, than it is doing now-than it has ever done.
The situation in connection with industrial trade is one that leaves the layman very
Supply-Trade and Commerce much up in the air. He has reference to various publications, but the list of headlines goes something like this: "GATT Canada's Best Bet Says Importers' Counsel." Then the next one is, "Attack on GATT Charges 'Sabotage' of Ontario Industry." Then the next one: "Canada Leads ICC Move to Support Freer Trade." The next one reads, "Imports Swell Cheese Surplus." The final one I have reads: "Help Japan, U. S. Asks Free World." Then there is this subheading: "But Clamps Curbs on Import of Japan Textiles."
It appears that notwithstanding these ventures into international trade diplomacy we still have a situation where other people are giving us advice and we seem to be taking but it does not appear to be doing us much good. Our most serious problem arises in respect of our trade situation with the United States. Here is a Canadian Press dispatch that appeared in the Ottawa Journal of August 4. It reads in part as follows:
Imports have risen even faster, hoisting the value of incoming goods to a new record and creating a trade deficit of $537,500,000 for the six months.
Further on it says:
The six-month trade deficit was created in dealings with the United States. The balance in favour of the United States was a record $751,600,000 compared with $420,400,000 in the first half of 1955.
If these agreements that we are entering into are supposed to be helping us, surely the situation confronting us with respect to the United States is one which we should look at very aggressively. Let us not get any idea that everybody appears to play under the same rules in connection with these trade agreements. Here is an article from the Financial Post of December 10, 1955, with respect to the United States situation. It reads in part as follows:
This "how-pure-we-are" yarn about United States tariffs can only be performed by concealing a whole maze of hidden strings and off-stage performers, such as the valuation procedures of U.S. customs, the operations of the tariff commission, the peril points, the escape clauses, the GATT waivers, the agricultural quotas, and the "national security" provisions. The other part of the trick is to make the audience accept a set of completely meaningless statistics. The quickness of the figures deceives the mind. This is where the skill of the performer really counts.
Under the heading, "How to Avoid Competition" it goes on to say:
The dominating characteristic of the United States tariff is that it does exclude most of the goods which might compete with U.S. industry. It bears relatively lightly-apart from quotas and embargoes and appeals to the U.S. tariff commission-on raw materials which the United States wants. It bears so heavily on manufactured goods that very few of them cross at all. Therefore they don't show up in the average rates of duty collected.

Supply-Trade and Commerce
The dominating characteristic of the Canadian tariff, by contrast, is that it does not exclude manufactured goods which compete with Canadian industry. It charges them a certain rate of duty; but the duty is still low enough that they do come in in very large quantity.
Here is an indication that whatever the agreements are that we have entered into, we cannot hope by the present system to solve the over-all trade deficit problem. It would appear to me, sir, that when I used the expression "downhill ride" it was a very fair term. It seems to me that we are getting by and balancing our position by an inflow of capital investment for which we are duly grateful, but the day of reckoning must soon arrive and whether or not it affects us certainly at some time it is going to affect succeeding generations of Canadians.


An hon. Member:: Time.


John Borden Hamilton: I think my timekeeper over there has beaten me to the punch, but I shall try to sum up in two or three minutes. We have had the benefit of reading the minister's report, but to me it is a report that is drawn up in the same general manner as the communiques we now read on the results of commonwealth conferences. It really does not tell us too much. In my opinion what we are going to have to know is what methods are used by the trade department to arrive at their figures when they say to us that they have promoted $100 million of trade during the past year. I think we are entitled to know what sales steps are taken by the same people in selling their services. I know we have the picture of the trade counsellor who is in town and the businessman having the opportunity of being there and meeting him, but it seems to me what is going to be required is a most extensive and aggressive expansion of the trade facilities of the department for businessmen who are interested in getting into the United States market. I note that at page 21 of the minister's report he says:
Three senior officers of the department examined the operations of the trade commissioner service in four leading market centres in the United States. As a result of this study, recommendations have been made to strengthen the service in that vital market.
I think what we need from the minister is not a statement that a survey has been made and that steps have been taken, but we should know what steps are being taken, how soon others will be taken and how many people are involved. As a second point, and I shall only mention it in passing because I am informed that this may not be the place to deal with it, I think we would like to know what trade steps are behind the communique issued by the commonwealth conference, is


there anything which indicates that some progress may be made along the lines of obtaining complete convertibility of sterling at some time in the foreseeable future.
There is also a reference to the intelligence service of the commodities section, but we would like answers to these questions. What are they doing? What information is getting to us on the question of the standard of living in various countries in advance of the time when their products are reaching our shores? I think we want to go one step further. We should be able to know what steps they are taking to ensure in advance that unfair trade practices are not being used and are not going to be used. I specifically refer to that because we had an example last year where a product had entered Canada, had been sold and the damage had been done. Then we had to turn back and see whether there was some means of cutting off the supply. At that time the product had already been sold in large quantities in the Canadian market.
Another point is this. What steps are being taken in advance to ensure that the Department of National Revenue is informed as to the countries where subsidies of one kind or another are being used so it is in a position to assess its duties and values on an up to date picture to show, shall I use the term, an unfair competitive situation which may result from conditions in that other country?


James Joseph McCann: There is a complete service.


John Borden Hamilton: The minister says there is a complete service and I believe him. What we should like to know is this. Instead of having this bland assertion in a report, we should like to know what is being done along that line. Are we sure we are covering that particular point?
There is a further item that I might mention, namely the use of the Canadian Standards Association. It is used, and has been used in the past, to determine what is considered to be a satisfactory standard from the point of view of safety. At the same time there have been allowed through the customs articles which do not meet the standards set by that association. It seems to me there must be a liaison job required there. I do not think it can be answered by the department simply saying, "That is a provincial responsibility and we are not going to interfere". As well, I think we should like to know how the department has assessed the efficacy of exhibitions as used by the department. We should like to know what value we are getting for our money. What actual amount of trade have their statisticians traced to these exhibitions? We should like to know that so we can see that the best use is being made of them.

Supply-Trade and Commerce
Finally, I say that unless we are prepared to go along with a situation which involves a continual drain of natural resources from this country in return for highly competitive manufactured goods, we must start to bargain from strength with the United States. It seems to me that should not be too tough a job. The article in the Financial Post mentions that they have their set-up designed to ensure that they get the flow of natural products which they really need. If we have those things, surely we can suggest to them a system whereby our own manufacturers will be in a position to meet them on fair ground.
When I talk about the expansion of the service in the United States, I simply say this. Any one who has had any business experience and has had to go to Washington in order to ensure that goods get in there will know that help is definitely required. I must say that for my part, when I was there I received the best of help. But at the same time that help should be available in as many cities as possible in the United States.


Herbert Wilfred Herridge: I shall detain the committee for just a moment. With respect to the question of the right of the province to prevent the export of iron ore, I wish to bring to the attention of the committee the fact that the government of British Columbia for many years have prevented the export of raw logs that come from crown lands in that province.


John George Diefenbaker: I should like to ask the
minister one question, and then I intend to make a suggestion based on a request from tens of thousands of Hungarians across Canada. Would he say what trade agreements have been entered into with Hungary during the past year and whether or not there are at present any being contemplated? What was the subject matter of those agreements, if there were any?


Clarence Decatur Howe: At the moment, Mr. Chairman, we have no trade agreement with Hungary, but that country has indicated that it wishes a trade agreement. An appointment is being arranged. It will be within the next two or three months, when a delegation will come from Hungary to Canada for the purpose of negotiating for a trade agreement. We have given credit to Hungary. I think we gave credit for 100,000 tons of wheat, and Hungary has drawn on that credit only to the extent of about 20,000 tons.


John George Diefenbaker: Mr. Chairman, I wish to thank the minister for that explanation. I now wish to bring to his attention a state of affairs which is of interest particularly to the people of Hungarian origin in Canada, and also to those of other origins who have
relatives behind iron curtain countries. There are about 100,000 Hungarians in this country who are pressed very strongly by their relatives and friends behind the iron curtain for assistance by way of food parcels, clothing and the like. Food parcels can be sent to Hungary through various dealers and agencies generally operating under the aegis or protection of the Hungarian government.
There is a great difference in the handling of these parcels. If they are sent by private persons directly or through dealers who deal particularly in commodities that the peoples of the country might require, you find that the duty that has to be paid on those parcels upon arriving in Hungary is from 60 per cent to 75 per cent, thus making the parcel being sent almost useless to the receiver. With the added transportation costs it is prohibitively expensive to the sender. The obvious purpose of this policy of maintaining so high a tariff and such stringent regulations is to force Canadians to send the assistance through trustees of the Hungarian government, who enjoy a nearly monopolistic privilege in this business. Instead of sending the actual parcel to Hungary, they only ask for payment of a certain pre-fixed tariff price, for which a certain amount of food will be handed out to the receiver of the parcel in Hungary from the state-owned store. There is no duty to be paid on these sendings, but the prices of the goods are exorbitantly high.
One of these agencies operating in Canada has set forth the contents of its sample parcels. One at $12 consists of one pound of coffee, half a pound of tea, two pounds of rice, and one bottle of liquor. Another at $20 consists of two pounds of cocoa, one pound of coffee, one pound of tea, and three boxes of sardines.


Clarence Decatur Howe: In order that I may have an idea of the relative prices, will the hon. member tell me the value of the liquor?


John George Diefenbaker: I could not hear what my hon. friend said.


Clarence Decatur Howe: What I asked was this. In order that I may be able to judge the other prices, will my hon. friend tell me the value of the bottle of liquor?


John George Diefenbaker: I am going to come to that. That is where the joker is in this matter. I know nothing of that subject and am obliged to speak from second-hand information only. I am in the same position as the minister. As I was saying, the $20 parcel consists of two pounds of cocoa, one pound of coffee, one pound of tea and three boxes of sardines. Then there is a third one

Supply-Trade and Commerce which consists of two pounds of coffee, one pound of cocoa, and two pounds of sugar. That is $15.
What is actually happening is this. The Hungarian government has barter arrangements with certain countries and is receiving the materials which they incorporate over there into these parcels and thereby they are securing for themselves a large amount of Canadian dollars.
As I said a moment ago, there are 100,000 people of Hungarian origin in Canada, and the average amount they send under the present parcel scheme is from $500,000 to $1 million a year, thus making it possible for the Hungarian government, by operating on the emotional reactions of these people, to secure Canadian dollars. The Hungarians in Canada and their organizations have protested both privately and publicly against the discrimination and what they call ruthless extortion introduced by the Hungarian authorities in connection with the parcel traffic, but they have not been able to secure any results. The government at the time had negotiated the Canadian-Polish trade agreement, or at least had entered into trading relationship and removed many of the difficulties that Canadians of Polish origin had suffered theretofor at the hands of the Polish government. The same thing applied in Czechoslovakia.
The people of Hungarian origin ask this. When the next trading arrangements are made with Hungary, permission should be granted as part of the exchange arrangement for Canadians to send parcels containing basic food products such as flour, sugar, fats, bacon, rice, meats and fish, and in that way be of assistance to their people behind the iron curtain who are today in a condition of starvation. At the same time we could secure the consent of the Hungarian government to remove the present unjust regulations. These people in their hearts want to assist. My hon. friend asked me what was the price of the liquor in one parcel. I do not know, but it is something the people do not want-


James Joseph McCann: Is it Canadian liquor?


John George Diefenbaker: I do not think they
designated it. I am not sure of that. But the fact remains that these people who are desirous of being of assistance to their friends and relatives are being mulcted to an unfair degree, and this is at the same time, assisting the Hungarian government to secure between $500,000 and $1 million in Canadian dollars.
If when the next trade arrangements are being considered the minister would make representations on this problem in a manner

similar to those that were made and which caused the removal of the injustice in Czechoslovakia and also Poland, the minister might earn the appreciation of 100,000 good Canadians of Hungarian origin, who have stood against communism and who want to stand against it. They do not want to be placed in the position of being subject to extortion by the Hungarian government.


Clarence Decatur Howe: Our trade negotiators will do what they can when any new negotiations come along. The situation in negotiating present day agreements is somewhat different from the old agreements that were negotiated with Poland and Czechoslovakia, which were what we call agreements on commerce and navigation. They differ from the most favoured nation agreements which we are making today. We met the same problem in negotiating with the Russians. All we were able to get them to say was that whatever the duty was it would be non-discriminatory. In other words it would be the same against Canada as against any other country, and that is all we can really insist upon. My hon. friend would not want Canada to agree with Hungary that we would charge only a certain duty on Hungarian shipments.


John George Diefenbaker: It is not exactly the point, a difference or discrimination in the tariff. It is a system being used whereby extortion is being practised by the communist Hungarian government against Canadians desirous of helping their friends and relatives behind the iron curtain. All I am asking on behalf of these people is that when any negotiations to correct this situation which, on the face of it, is unfair, unjust and constitutes a method on the part of the Hungarian government of securing Canadian dollars by surreptitious means.


Clarence Decatur Howe: All I can say is
that we will do our best. I understand the problem, but I would not want to raise the hopes of our citizens of Hungarian origin too high. It will not be through lack of effort if we do not succeed.


John Horne Blackmore: Before this item carries I should like to ask the minister if this is the item, or is it some other item of his estimates, under which a person can ask what provision the minister is making, if any, to cushion the effect of the very serious increase in the price of steel which has been announced in the last few days. The minister knows that when the price of steel was advanced $5 per ton back in April, 1946, the impact upon the price structure of Canada made by that increase and the consequent increase in the wages of the steel workers

who asked for their share of that $5, cut the value of the Canadian dollar practically in half.
The minister is very familiar with all that. He knows that ill-advised and foolish people all over the country are calling that horrible thing inflation. It was not inflation. The rise in price was not the result of too much money in circulation in the country for the available goods; it was not the result of any shortage of goods; it was the result of definite price manipulation. If the Steel Company of Canada raised its price $5 per ton, that had nothing to do with money at all; it was a manipulation of price upward, and every commodity in Canada which was made of that steel had to increase in price because of the increased costs, regardless of a scarcity of goods or a surplus of goods. The wage increase for the steel workers resulted in wage increases all across the board in Canada, not one but two or three. The result has been that today our prices are very high compared with what they were in 1946.
If that rise of $5 per ton in the price of steel in 1946 produced this almost calamitous effect on the price structure of Canada, what is likely to be the effect of an increase in the price of steel of $6 or $7? Has the minister given any thought to this matter? Are the people of Canada and the Canadian government to be absolutely helpless in the face of a move of this kind? Would he ssey, if he were doing it over again, that nothing could have been done to cushion the effect of that $5 increase in the price of steel back in 1946? Could not subsidies have been paid by the government to the steel company so that people using steel would be able to get their steel at the same price they were able to get it before the increase of $5 per ton?
I just wanted to ask the minister if he had given this matter any thought. It would come under his department, certainly, and I wondered if he had any suggestions as to what we are going to do. Are we, within the next 10 years, going to have another cut in the value of the Canadian dollar by 50 per cent as a result of the present contemplated increase in the price of steel? I do not wish to go into this matter if this is not the right place, but I should like to know what the minister thinks about the matter or whether I am being alarmed unduly.


Clarence Decatur Howe: We could have a little discussion about the chicken and the egg here. I always thought the wage increase came first and the price changes were consequential upon that wage adjustment. However, my hon. friend knows that this government has no legislative powers to regulate
Supply-Trade and Commerce prices. In order to do that we would need to get emergency powers. Having tried to get emergency powers from this parliament once, I am not trying any more. I am afraid I cannot do anything about it.


John Horne Blackmore: The minister means, then, that the Canadian economy and the Canadian people are helpless to prevent this horrible thing which is approaching us and which anybody with any vision at all can see is approaching?
The minister spoke as though it might have been a wage increase which caused the rise in the price of steel back in 1946. I am afraid his very fine memory has failed him in that respect. He knows very well that the steel companies asked for the privilege of increasing the price of steel $5 a ton in February, 1946. The request was granted in April of 1946. Then the steel workers struck for their share of the $5 a ton increase. The minister can very well remember the long meetings we had in the industrial relations committee in which the steel workers presented their case. They continued to strike and hold parades until they finally got the increase after 82 days of idleness. Then other workers demanded comparable increases all across Canada. Thus the costs of production of every commodity ultimately forced up prices. Can the minister give us any more hope as regards the present increase of steel price or is he now advising us that we might just as well look out for economic disasters of almost any kind?


Edward Turney Applewhaite: Shall the resolution carry?


John Horne Blackmore: Mr. Chairman, has the minister nothing further to say?


Clarence Decatur Howe: I am sorry. We are well aware of the cost of steel as well as the key commodities which regulate the cost of living and the government is doing all it can chiefly through fiscal measures at the moment to hold inflation in check, but to apply price controls as a federal responsibility would mean legislation from this parliament and I doubt very much if we could get the legislation approved. I think my hon. friend would vote for it but I doubt if many other hon. members would.


John Horne Blackmore: The minister has used that word "inflation" again. He knows that within the last six weeks there has been an increase in the price of a loaf of bread, yet no one even in a nightmare could imagine that this is because there is a shortage of bread or that there is too much money for the amount of bread that is in Canada. It is absolute nonsense to call that an inflationary
7300	HOUSE OF
Supply-Trade and Commerce rise. It is very much the same as the increase in prices which came about as a result of increased steel prices in 1946. If we are going to allow ourselves to be fooled into thinking that such rises in prices are the result of inflation and then the Bank of Canada and the Department of Finance assume it is the result of inflation and apply measures calculated to control inflation we are heading for plenty of trouble-real trouble!


Clarence Decatur Howe: My hon. friend is taking a slight advantage of me. He is an economist and I am just a run-of-the-mill engineer. I do not understand these matters so I cannot contribute very much to the discussion.


Alexander Malcolm Nicholson: Mr. Chairman, the hon. member for Lethbridge has raised a subject in which I am interested but I do not think it is in order at this point.


John Horne Blackmore: It is in order because we are discussing the estimates of the Department of Trade and Commerce.


Alexander Malcolm Nicholson: Unless we are going to discuss the question of price controls I do not see how it can be in order under this item.
Mr. Pallet!: Mr. Chairman, I was interested in reading the reports before I came down to the house concerning this department, and in listening to the speeches after I came here that are always presented by the Minister of Trade and Commerce in an optimistic tone. And I see no reason why they should not have been; after all-


John Horne Blackmore: I am sorry, I did not hear what the hon. member said.
Mr. Pallet!: I said that the Minister of Trade and Commerce always gives his report in a very optimistic tone and I see no reason why he would not because after all this country is endowed with the greatest natural resources in the world. We have the native ability of the people of this country to develop those resources and therefore there is no reason why such reports should not be optimistic. In the development of a country such as ours there seems to be an acknowledgment by the minister that we occasionally need government assistance. When things are going well it is because of government assistance and when things are not going well he says it is because of the lack of effort on the part of private individuals.
There is room in the development of a country such as this for certain government participation and I think that participation and leadership in particular has been rather lacking recently despite the kudos some hon. 

members opposite seem to seek for themselves. I refer generally to the standard of living of the average Canadian.
Much has been said concerning this subject. And then we look at the standard of living of our neighbours to the south who have not the per capita national resources we have and we observe the great difference in our standard of living as compared with theirs and this is passed off as being the price of sovereignty. This passing off in these terms is just a little too simple. That is not the real reason for the difference at all. It is because proper encouragement has not been given in the development within this country. The reason that encouragement has not been given-


An hon. Member:: Where have you been for the last 20 years-resting?
Mr. Pallet!: -is because the government knows that as people attain certain living standards throughout the country it leads them to a type of thinking that is not in keeping with the thinking of hon. members who form the government. There has been a deliberate hold-up by them designed to meet their own political ends.
As one looks at the broad picture over the last few years one becomes aware that this situation has existed for many years. During the time in which this party has been in power this has been a carefully calculated plan and the responsibility, of course, is that of this government. There is no excuse whatsoever for the rapidly widening difference between the standard of living in this country, albeit it is high, and the standard which obtains in the United States.
I think this is a matter with which the Minister of Trade and Commerce should concern himself.
Today, as an example, the Minister of Trade and Commerce said that the adverse balance of trade is nothing; it is just a slight thing in the consideration of foreign trade. Any two-year-old knows that you buy as cheaply as you can and sell as dearly as you can on foreign markets. That is so fundamental that it is ridiculous for the minister to mention it here. Any two-year-old child also knows that you cannot continue to have an adverse balance of trade with any country for any length of time without encountering serious consequences at home. The minister might at least respect our intelligence to the extent that he would admit this and give us some assurance that he is taking some steps to do something about it. He does not have to do this by government control. Our system of government in Canada has always provided that where leadership is given in certain directions by government,

industry is only too happy to operate without control. That leadership by government is certainly one of the things that has been lacking in this country.
A man may have a reputation but the people of this country are not interested in a reputation; they are interested in what is being done now and what is going to be done in the future. I suggest that the minister should make some effort to provide aggressive leadership in this direction.


An hon. Member:: Carried.


John Cameron Pallett: The only thing that will be carried in the future will be the hon. gentlemen sitting opposite, who will be carried out of this house by the votes of the people of Canada.


John Horace Dickey: Speak for yourself.
Mr. Pallet!: The minister said something about the chicken and the egg in reply to a question. I suggest that our situation concerning the trade balance with the United States is somewhat like that of the farmer in relation to his neighbour.
The farmer owned a cow and was selling milk to his neighbour. One day his neighbour asked if he would sell him more milk. The farmer replied that he did not have another cow. The neighbour said he would provide him with a cow and in return would take a piece of the farmer's land. This process continued until finally the farmer had a herd of cows and his neighbour owned all the land on which the cows stood. The neighbour was soon buying all the milk so he controlled the price. That is the situation we are being led into. If you want a simple analogy, there it is.


An hon. Member:: It is simple all right.
Mr. Pallet!: It has to be simple for you people across the way to understand it.


Jean Lesage: We cannot expect anything else from you.
Mr. Pallet!: You know, it is remarkable that when difficulties arise with the government across the way they always bring up a bogey to get the people's minds off the government's troubles. The bogey they are bringing up now is inflation in order to get the people's minds off what is happening in the house. To do that they spread this bogey of inflation. That is the present bogey.
They pay lip service to this by starting to restrict credit. Industry cannot develop without money; Canadian industry cannot develop without money. Many Canadian industries are young and are just getting on their feet. I suggest most seriously that the Minister of Trade and Commerce as one of the senior
Supply-Trade and Commerce members of the cabinet, as one of the members who formulates government policy, encourage a second look at this. I am pleased to see that the Minister of Finance is now consulting with the Minister of Trade and Commerce on this matter. I did not expect that there would be such an immediate reaction. I suggest that there be a serious second look taken at this restriction of money for Canadians generally and in particular for Canadian industry.
Canadian industry must develop if this country is to be strong industrially and it must develop with Canadian money. That cannot be done if you cut it off. You can say as much as you like that this has nothing to do with you, that the government does not dictate the money policies of this country, but there is no one who will believe you. We know and you know that with a nod from the government the banks follow suit.


An hon. Member:: It is the other way around.


John Cameron Pallett: I suggest that serious consideration be given to lifting the restrictions on credit which have had such a serious effect upon the development of manufacturing and other commercial enterprises in this country.


Walter Gilbert Dinsdale: Mr. Chairman, last Thursday in the city of Brandon after waiting patiently for some five years a very important project finally got under way. The same afternoon rather disconcerting news came out of the east which threatened to dampen the enthusiasm that had been created as a result of the commencement of the installation of the gas pipe lines which would be used to supply natural gas to the city of Brandon. I think there is misunderstanding as to just what is the situation in relation to the continuation of this important $2 million project in my home city and I think the Minister of Trade and Commerce is the only man who can give the final word on the matter. That is my reason for bringing it up briefly this afternoon.
The report came from the Toronto office of Trans-Canada to the effect that gas would not be available this fall and as a result Mr. Frank J. Simington, manager of the Plains-Western Gas and Electric Company Limited, which company has the franchise to supply gas to the city of Brandon, inserted a half page advertisement in the Brandon Daily Sun of August 3 reading as follows:
Brandon Natural Gas Delivery Delayed
Thursday, August 2nd
Trans-Canada Pipelines Ltd. today at 2.00 p.m. informed your gas company that natural gas would not be available for delivery to Brandon or points east until the summer of 1957.
Because of this disappointing news it will now be necessary to delay your applications for service

Supply-Trade and Commerce
lines. Information regarding the servicing of new homes with temporary fuel until natural gas becomes available, will be announced later.
We sincerely regret having to make this announcement which is due to Trans-Canada's inability to deliver natural gas to the area this fall. The construction of the distribution system will continue uninterrupted.
This subject was raised briefly in the house last Friday morning when the Minister ol Trade and Commerce replied, as reported on page 6920 of Hansard, as follows:
No authorized representative has made any statement to anyone that gas will not be delivered in western Canada this year.
Notwithstanding that fact the company laying the lines in the city of Brandon have taken this drastic action. Apparently there is misunderstanding somewhere. When Mr. Simington was confronted with what appeared to be a contradiction he replied as follows:
Contacted by the Sun early this morning after Trans-Canada officials had declined to confirm the Brandon report of six months' delay, Mr. Simington said: "If Mr. Lowe were to say that he would guarantee natural gas would be available at Brandon in 1956, I would be most happy to publicly apologize. Until he says that, I shall wait to be shown."
That is the situation as it stands. There are quite a few people affected by this, because they have been planning on putting in gas this fall. I am wondering if we cannot get some official word which would clear up this matter.


Clarence Decatur Howe: I do not know anything about the Brandon situation other than what I have been told by the hon. member. He told us there was no hurry about getting the pipe line started, no hurry about building the line or any danger in their being unable to build it this year. The relations between Trans-Canada and the city of Brandon are private matters. Trans-Canada Pipe Lines is a private corporation and I assume that the company owning the distributing system in Brandon is a private corporation. I suggest that it might be very helpful to both companies if my hon. friend would just leave it alone.


Walter Gilbert Dinsdale: That is not the kind of reply I had anticipated but it is the reply I might have expected in this case. As I said in my opening remarks, we have been waiting patiently for gas for five years and have never made any attempt to delay the gas line and as far as-


Some hon. Members:: Oh, oh.


Walter Gilbert Dinsdale: -building gas lines is concerned, Soviet Russia builds them too. There is a right way of doing things and a wrong way of doing things. That is the only attitude we have taken in this house. We want natural gas in the city of Brandon.
[Mr. Dinsdale.!


Donald Methuen Fleming: Mr. Chairman, if hon. members have concluded raising the points they wish to raise there are several matters I should like to bring up on this first item in regard to our trade relations with the United States and about which I should like to have some comment by the minister. The first concerns the customs simplification bill recently passed by both houses of congress and which I believe has been signed by President Eisenhower. As I understand it, in terms of 1954 trade the legislation covers about $1-4 billion worth of imports from all countries, representing about 15 per cent of all imports into the United States in the year 1954. Of the remainder about half of all imports into the United States, enter the country duty-free; the balance is taxable at specific rates of duty, and the new formula applies only to the ad valorem rates. Would the minister clarify the situation?
I personally have not seen the text of the bill, but this is a matter of leading importance to Canadian exporters. There have been high hopes held out to them ever since this matter was first discussed at the GATT conference. We all know what a difficulty the so-called jungle of administrative red tape in the United States in relation to customs administration has presented to Canadian exporters. Would the minister make a statement on this and indicate what help now the Canadian exporters can expect to have as a result of the enactment of this measure by congress?


Clarence Decatur Howe: The effect of the bill will be to eliminate the use of "foreign value" and to make "export value" the prime basis for levying ad valorem duties. In other words, duty will be levied on the price at which the goods are freely sold by foreign manufacturers for export to wholesalers in the United States. For practical purposes, this is the optimum valuation hoped for by exporters. In other words, under this arrangement the exporter in Canada fixes the value upon which duty would be based, instead of the customs valuator in the United States who used to fix an arbitrary value which we call the "foreign value".


Donald Methuen Fleming: Is it clear that it applies only on the ad valorem rates?


Clarence Decatur Howe: That is right.


Donald Methuen Fleming: Can the minister assess the value of this measure in general? It has been a matter of discussion now for some years. The minister has had a report on the measure. How far will the measure go to satisfy the objectives of Canadian exporters and, I believe, of the Canadian government in the negotiations on this subject?


Clarence Decatur Howe: The bill would have satisfied Canadian exporters-it gave them everything we have been asking for in that regard-but unfortunately a rider was applied in the Senate which takes away some of the sunshine.
The Senate version contains a clause which directs the treasury department to publish a list of imported articles, not by country, the values of which would be reduced more than 5 per cent if appraised under the new "export value" procedure. These articles will continue to be valued on the old basis of "foreign value" and will not receive the benefit of the new valuation procedure.
It is difficult to determine which of our exports would not receive the benefit of the new procedure if the Senate amendment remained in the bill. It did remain in the bill. We shall be following the matter closely. That is the situation. We do not know the effect of that Senate rider which provides that the "export value" shall be not more than five per cent less than the "foreign value". It will take time to appraise the working out of that rider in practice.


Donald Methuen Fleming: I shall not pursue that further. It is obviously a matter for a report next year after there has been some experience of working under the new law.
The second point in relation to trade with the United States concerns oil exports to the United States. It will be recalled that in the 1955 session my leader drew attention to reports that efforts were made by the United States government to apply indirect limitations on importations into the United States of oil from Canada. By way of indicating that the matter is apparently by no means dead in the United States, I should like to read two paragraphs from a recent issue of the Journal of Commerce, a United States publication:
Thirty-one American senators have asked defence mobilization director Arthur S. Flemming-
No relation.
-to force oil importers to restrict their imports to the 1954 ratio of imports to domestic production. For the past year, Mr. Flemming has tried to make oil importers comply with the "1954 formula" on a voluntary basis, and Mr. Flemming has recently complained that "no evidence is available to us that oil imports have been, or are being, restricted within the limits determined to be necessary in the interest of national defence".
The importance for Canada of the letter signed by 15 republicans and 16 democrats, representing close to one-third of the membership in the Senate, is that the group also hinted that "exemption of Canadian and Venezuelan oil and all oil into the west coast was circumvention of the intent of the 1955 trade agreements act, which calls for government intervention when imports threaten national security". Pressure may be building up for the application for compulsory restrictions on oil imports into the United States which will directly
Supply-Trade and Commerce
affect the Canadian oil industry. This may not happen, but it is something to watch.
I wonder whether the minister would comment on this subject and on the outlook, because it is a matter obviously of very high importance to Canada in general as well as for the Canadian oil industry.


Clarence Decatur Howe: Our defence is that to suggest that limitation of exports of Canadian oil into the United States would contribute to the defence of the United States is rather far-fetched. So far that has been accepted by the state department and by the government of the United States, and I believe that the fallacy of any other argument is so obvious that it will continue to be accepted. In the previous limitation, Canada and Venezuela were exempted from the provisions of the restriction. I sincerely believe that Canada will continue to be exempted.


Donald Methuen Fleming: I am glad to hear that statement from the minister.
A third matter in relation to the United States concerns these periodical meetings of Canadian ministers with members of the cabinet in Washington. I understand that these meetings, when they were first undertaken, were to be held at fairly regular intervals but, unless there have been some held in more recent times that I am not aware of, the last one was held a very considerable time ago. Would the minister tell the committee what plans have been made for resumption of these conferences and what items are to appear on the agenda?


Clarence Decatur Howe: The last meeting was held, I believe, last October. The original intention was to hold meetings every six months, but, like other meetings of this kind, it is well not to have them unless they are needed. We call them, or the United States calls them, when there are particular problems to discuss.
An outgrowth of the last meeting held with the ministers was that arrangements were made for meetings between the officials of the United States and the officials of Canada having to do with the marketing of wheat and other grains. Those meetings are held every six weeks and they are most helpful in working out solutions to common problems. I dare say we have never let as long as a year go by without having a top-level meeting, and I dare say we shall arrange one this fall, but with one thing and another we all get very busy, and it takes a good deal of time to arrange a meeting of this kind.


Donald Methuen Fleming: Has the Canadian government been compiling its contribution to the agenda for the next meeting? If so, can the minister tell us what those items will be?

Supply-Trade and Commerce


Clarence Decatur Howe: There is no formal agenda prepared long in advance. We have an ad hoc agenda, but there is no great formality associated with these meetings. They usually last one evening and one day and they are carried on with considerable informality.


Donald Methuen Fleming: My next question naturally arises out of the GATT conference and it also has some relation to a report to which I drew the attention of the house some time ago. It is a report that came out of Canberra in a Reuters dispatch last January, indicating that the new Australian minister of trade, Hon. John McEwen, had expressed some strong views on the old preferential tariff treatment within the British commonwealth in the light of the United States policy on disposal of farm surpluses. I should like to ask the minister if he would state the policy of the government in relation to the commonwealth trade preferences.


Clarence Decatur Howe: I might say that Mr. McEwen will be with us here in Ottawa tomorrow and we will know more about his views at that time. I believe he has been expressing his views in London and Washington. In general we support the viewpoint of Australia, although we are not unhappy with our relations with the United Kingdom in that regard. We all agree that the surplus disposal procedures of the United States are very harmful to all of us and we each protest separately, but I rather think that Mr. McEwen's views go somewhat deeper than that. I will know more about them after we have our discussions tomorrow.


Donald Methuen Fleming: With regard to what remains of the commonwealth trade preferences, will the minister state the position of the government? We are aware of what GATT has done in trenching upon these preferences up to a point, but what in general is the policy of the government with regard to the system as it remains?


Clarence Decatur Howe: I should like to make it clear that GATT has not encroached on the empire agreements. GATT agreements contain an exception in favour of the empire agreements, but in carrying out negotiations it is often helpful to have the commonwealth agreements amended. England itself has asked us to amend items so that they could work out a trade arrangement with the United States or with some other country. There have been some amendments but I would not say that it has been a watering down. Canada is quite happy with the commonwealth agreements. We are adjusted to them. We think they are helpful

towards balancing our trade and we have no desire for any alteration. Australia, on the other hand, feels that the commonwealth agreements are working very much in favour of the United Kingdom and against the interests of Australia. That is a separate argument in which Canada is not taking part.


Donald Methuen Fleming: The next matter is one I had expected the member for Waterloo North to raise. I think it is proper at this time that the minister should be asked for and should give some statement to the house in the light of the representations that have been made to him in relation to rubber footwear. This is a subject, I am sure, that has been before the minister frequently. I do not need to remind the house of the problem involved in the decline in Canadian production of canvas footwear and waterproof footwear and the tremendous expansion in imports of these products from countries abroad where the standard of living and consequently the cost of production are very much lower than in Canada. What has the minister to say on this subject?


Clarence Decatur Howe: I think it would not be helpful for me to express an opinion just now. The Minister of Finance, the Minister of Labour and I are meeting the industry in an attempt to work out something, and I think that to make an announcement of our views at the moment would harm the negotiations. If my hon. friend would let that stand until later I think perhaps we would be more likely to get a reasonable solution. But I will admit at once that in the present situation the industry is very unhappy. Imports, particularly of tennis shoes and shoes of that kind, are seriously interfering with Canadian production. The interference with waterproof shoes is not serious at the moment although it could be in the future. We are examining the position in the hope that we can give the industry some help.


Donald Methuen Fleming: I do not wish to press the point if there is some likelihood of a solution being earnestly sought. The minister asked that it be left until later. Does he mean this session?


Clarence Decatur Howe: There is no hope of that. The situation will not change when the house adjourns and I hope the house will not wait that long. However, certain approaches are being made which I think might be interfered with by any statement I might make.


Donald Methuen Fleming: Is the solution one likely to involve the necessity for legislative action on the part of parliament?


Clarence Decatur Howe: No.


Donald Methuen Fleming: The last matter I should like to raise is in regard to the Northern Ontario Pipe Line Crown Corporation. There are some questions of a specific nature that I should like to ask the minister. In the regulations promulgated in the Canada Gazette of June 27, containing order in council P.C. 1956-858 of June 7 last, the last of the clauses of bylaw No. 1 of the corporation reads as follows:
The president shall submit to the board for approval prior to submission to the minister proposed budgets of operating and capital expenditures for the next ensuing financial year of the corporation.
I ask the minister if that budget has been submitted to him yet.


Clarence Decatur Howe: I am told it has been before the board but it has not reached me yet. It will be submitted to council for approval as soon as it reaches me and the Minister of Finance.


Donald Methuen Fleming: When it reaches the minister and is approved by him as required by the bylaw, will it be made public?


Clarence Decatur Howe: No. The operating budget of every crown corporation is required to be submitted to council by the minister responsible and with the approval of the Minister of Finance. That is routine, but those operating budgets are not made public.


Donald Methuen Fleming: The bylaw requires a budget of proposed capital expenditure as well. Is there any thought of making it public as to the capital expenditure in the budget?


Clarence Decatur Howe: We do not usually. There is nothing to conceal about the capital expenditure but these cabinet documents are not usually made public.


Donald Methuen Fleming: I cannot ask for it right now because it is not in the minister's hands, but I think it will be necessary for parliament to see it when this house first sits after the budget has been received by the minister and approved by him.
The next question I have is as to financial transactions between the two corporations, namely, Northern Ontario Pipe Line Crown Corporation and Trans-Canada Pipe Lines Limited. What contracts have been signed by the crown company or by the government with either the crown company or Trans-Canada Pipe Lines since the bill was given royal assent on June 7?
Supply-Trade and Commerce


Clarence Decatur Howe: The only contracts are the mortgage indenture and the transfer of bonds with respect to payments made. I am told there has only been one payment made, the $6,775,000 advanced to the borrower on June 18, 1956. That answer has been given twice in the house.


Donald Methuen Fleming: Is there another advance in contemplation?


Clarence Decatur Howe: It has not been applied for yet. I think it should be due shortly after the first of the month.


Donald Methuen Fleming: Is it expected there will be any further contracts signed between the two corporations?


Clarence Decatur Howe: No, the act specifies the relationship between the two. My hon. friend is looking into the future. Eventually there will be the lease of the Northern Ontario section when it is completed.


Donald Methuen Fleming: I was not thinking about that at this stage.


Clarence Decatur Howe: I anticipate there will be repayment of the advances and discharge of the mortgage some time this autumn, but that of course is provided for in the legislation.


Donald Methuen Fleming: I take it that the government is not a party to any contract that has been signed nor, I take it, is it likely to become a party in any of the contracts between the two corporations.


Clarence Decatur Howe: No.


[Stage Direction]
Item agreed to.
Exhibitions-
422. Exhibitions generally $535,888.
John George Diefenbaker: I should like to ask
whether any consideration has been given during the past year to restoring the trade fair that was abandoned. I refer to the trade fair for the commonwealth and other parts of the world which took place for several years in the city of Toronto and which was so beneficial in bringing together trade representatives from all parts of the world. On the basis of the experience of the last year, is the government giving any consideration to reinstituting once more that fair to the end that there will be made available to all parts of the world representations of Canada's industrial production, thereby encouraging a greater measure of trade with this country?


Clarence Decatur Howe: Mr. Chairman, the answer is no. We are giving no consideration to reopening the trade fair. The trade fair served an extremely important

Supply-Trade and Commerce purpose after the war in that it was a means of opening up the Canadian market to suppliers whose relations with Canada had been interrupted by the war. During the trade fair a good many British firms were able to re-establish themselves in this market. The same is true with respect to producers in other countries. However, the fair was becoming less and less useful in that regard and the exhibits were changing from business exhibits to prestige exhibits. There was too much of that sort of thing creeping in. We felt that better service could be obtained by taking our goods abroad and using foreign exhibitions to sell Canadian goods. We still believe that procedure is much more useful in the present phase. For instance, in Lausanne each year there is one building set aside for one particular country. This year that country is Canada. We have an excellent exhibit at Lausanne this year. I may say that Canadian manufacturers are giving us plenty of support with respect to that exhibit. We have had very good results in the trade fairs on the continent, particularly with Canadian furs. We have sold not only Canadian furs but Canadian fur garments. We have been most successful in doing that. Really I think it surprised our fashion establishments to find out what can be done simply by providing means of bringing our fashions into European markets. We think that is the proper way to spend the exhibition vote. The purpose is to carry on with that particular policy.


[Stage Direction]
Item agreed to.
423. Canadian participation in the Brussels universal and international exhibition 1958, $750,000.
Donald Methuen Fleming: In view of the importance of the Brussels exhibition, and the substantial increase in the item appropriated for Canada's participation in it, I should like to ask the minister if he would make a statement in relation to the exhibition. May I also suggest that it might be appropriate to call item 705 of the supplementary estimates along with this one. It relates to the same subject. I have a question to ask on it. Item 705 is as follows:
705. Canadian participation in the Brussels Universal and International Exhibition 1958-further amount required to authorize payment, notwithstanding the Civil Service Act, of an honorarium to Mr. J. J. Olson, $1.


Clarence Decatur Howe: Yes. I should be glad to have them considered together. The fair in Belgium is a world fair. It is not a trade fair in any sense. It is a world exhibition. We regard it as an extremely important matter for Canada to be well represented at the fair. We are constructing a Canadian building there at a cost of $1


Donald Methuen Fleming: Why not give us the highlights of the essay instead of the whole essay?


Clarence Decatur Howe: The government placed the responsibility of planning, organizing and administering Canada's participation upon the Canadian government exhibition commission. To assist and guide the director of the commission, the government appointed an interdepartmental advisory committee of senior civil servants.
Under the authority of this interdepartmental advisory committee an architectural advisory committee was established to guide the preparation of plans for the Canadian pavilion. The committee consists of two representatives appointed by the Royal Architectural Institute of Canada; the chief architect and liaison architect, Department of Public Works; the consulting architect of the commission; the chief designer of the commission; the superintendent of exhibits and, as chairman, the director of the commission.
Early in 1955 tentative arrangements were made with the exhibition authorities of Belgium for the Canadian site. This site, with minor adjustments, was confirmed in October. The Canadian site is located on one of the highest elevations in the exhibition area. Preliminary plans, were developed and finally approved by the cabinet on March 1, 1956. Because of the world-wide shortage in structural steel, the plans and specifications for the steel structure were completed and tenders called for from Belgium. Belgian steel was selected because at the conclusion of the exhibition the pavilion has to be dismantled and the steel salvaged in Belgium.
I think that is fairly well the thought. The work at present is that of getting on with the construction of the building and working

with the provinces to work out provincial exhibitions. On that point may I say that recently a meeting of the representatives of the provinces, appointed by the provincial premiers, was held in Ottawa. At this meeting the plans of the pavilion and the plans for presenting the Canadian Story were reviewed. While the government of Canada assumes the responsibility for the cost and is not asking for contributions from the provinces in the form of rent for space, it was considered advisable to secure the views and suggestions of the provinces with respect to the proposed plans. I am pleased to state that at this meeting the officials responsible for Canada's participation received wholehearted support from the representatives at the meeting, as well as an expressed willingness to assist in every possible way.
My hon. friend has referred to the item in the supplementary estimates for Mr. Olson. Mr. Olson is an officer of the Department of Public Works. It was not possible for the Department of Public Works to assign him full time to the job, but an arrangement was made with him to prepare specifications for the building in his own time. It was important to have Mr. Olson do it because the Department of Public Works will supervise the construction of the building. We wanted specifications which met with the standards of the Department of Public Works. Under a vote in the supplementaries he is supposed to be granted an honorarium of $500 for his work outside of the line of duty in preparing the specifications for this building.


[Stage Direction]
Item agreed to.
Dominion bureau of statistics-
427. Administration, $177,729.
John George Diefenbaker: In this connection, I should like to ask the minister whether or not there is an annual report of the dominion bureau of statistics published in the French language? I communicated with the distribution branch and there may have been a mistake in the information I received, but I was advised that such was not the case. Would the minister say what the situation is?


Clarence Decatur Howe: I am told there is no report in the French language. I presume it is because the report is practically all statistical in form and numbers read the same in both languages; that is the only reason I can think of. I am told there never has been a report of the bureau of statistics in the French language.


John George Diefenbaker: I should like to ask the
minister one other question and it is this. I notice that throughout the report there are
Supply-Trade and Commerce references describing the bureau of statistics as the "dominion bureau of statistics". I have before me the annual report, and it is so described. I have a copy of a letter to His Excellency, as signed by the minister himself, which refers to the dominion statistician, and the report is of the dominion statistician. All of this is quite proper and is in accordance with the statute.
Can the minister give the house any information as to why it is that the building occupied by this body, the dominion bureau of statistics, has had the word "dominion" removed from it? Was that a decision of the government or was that the action only of the Department of Public Works? It is a very strange thing that the plaque in the front of this building, a building performing a function important to this country, contains a description that is improper, incorrect, and completely unjustified under the statute setting up this bureau.


Clarence Decatur Howe: No, Mr. Chairman, I do not know whether it was an economy move on the part of the Department of Public Works. As a matter of fact, I think my hon. friend is wrong and that the statute provides for a dominion statistician but I doubt if it provides for the dominion bureau of statistics. I am getting that checked.


John George Diefenbaker: Oh yes, it does. I have not the statute here, but I can send out for it. The statute describes this bureau as the dominion bureau of statistics. I am glad to have the explanation of the minister, that on the plaque identifying this building the word is omitted for economy purposes. How much would it have cost to have indented, if that is the proper expression, the word, "dominion" on the brass plate in addition to the words "bureau of statistics"? I have heard all kinds of explanations for the removal of the word "dominion", but I think in this case the Minister of Trade and Commerce has achieved the ultimate in the matter. Cost is the reason why the word "dominion" does not appear on the plaques in front of the bureau of statistics building.
I commend the minister for the novelty of his explanation. Certainly it has nothing much more than novelty to commend it to me. I think it only proper to add that it is a strange thing that up to the present moment that explanation, the most grotesque of all, should be advanced for a significant course of action being followed by this government in so many ways of outlawing by action rather than by parliament the use of the expression "dominion". I will say no more at this time.


Clarence Decatur Howe: I am sure my hon. friend, in discussing the parliament buildings, always refers to them as the
7308	HOUSE OF
Supply-Trade and Commerce dominion parliament buildings. I am sure he would, he is so anxious to get in the word, but I have never seen any sign which says these are the dominion parliament buildings.


John George Diefenbaker: No, and there is no statute which says that is the name, but there is a statute which says it is t'he dominion bureau of statistics.


John Horne Blackmore: I should like to associate myself with the hon. member for Prince Albert. It is simply a reflection on the government of Canada that it has gone forward and dropped "dominion", dropped the "Rule Britannia" song for the navy, et cetera, and all without consulting this parliament.


Clarence Decatur Howe: I noticed my hon. friend dropped the word "dominion". He said "government of Canada", and surely he ought to be consistent and say the government of the Dominion of Canada. I might say we dropped nothing so far as the sign on the bureau of statistics is concerned because the word was never there.


John Horne Blackmore: I will say the dominion government of Canada, in order to be consistent.


John Borden Hamilton: I should like to think that the minister's concern about economy in the operation of this branch under his department might be extended to allow some of the companies carrying on business in this country the same opportunity to economize. I think it is about time someone drew to the attention of the government the fact this department is plaguing business enterprises from one end of the country to the other with the number of forms it requires to be filled out now to cover your corporation tax, whether it be only federal or federal and provincial; whether it covers as well your security transfer tax or whether it is merely an information return. We have now a series of questionnaires which *come out almost daily asking questions of these companies. If the minister is so concerned about economy I suggest he might take a look at one of these questionnaires I have before me. It would take a Philadelphia lawyer to fill it out. It is three pages long, and this time they are attempting to get a few statistics about the operation of trucks.
The little pamphlet in question is to be carried around by the truck driver. At ten o'clock and three o'clock in the afternoon you can see him stopping his truck, running around to the rear and looking at the cargo and estimating the weight of his truck load at that particular time. At the same time he has to make a notation each time he fills the gas tank during this period showing how 

many gallons of gas he uses. He has to indicate daily how many miles are travelled by the truck and the total tonnage of the material that is transported. He has to give a few additional statistics. I say to the minister, how ridiculous can we get? How much more trouble are you going to cause businessmen in carrying out their business? I can see the truck driver who is carrying this pamphlet stopping his truck and making a mental calculation every time an item in this little book has to be filled in. I strongly suggest that if we are going to economize anywhere we might take steps now to economize a little on the effort that is required by our companies in keeping up with this department.


Clarence Decatur Howe: Mr. Chairman, I think my hon. friend is right. I do not like to expand the work of the bureau but the fact remains that we have no statistics on trucking. The board of transport commissioners requested us to provide statistics and the 10 provinces have all asked us to do so. We reluctantly added to our staff with that in view.
All the pressure that comes to me about the bureau is for more statistics. I presume they must be valuable to business and government or we would not be pressed to have them. If a government agency and all the provinces say that they need the statistics it usually becomes the job of the bureau with my approval to undertake to gather the statistics. That is the position of the statistics on trucking.
If my hon. friend thinks we can get along without them I will put his views forward to the various interested agencies.


John Borden Hamilton: Mr. Chairman, in closing, I would like to say this. I am sure the minister is well aware of the number of forms that need completion. It seems to me a very useful job might be undertaken by this particular department if it considered how much time and effort are consumed in the completion of these reports. The minister might give some leadership in connection with the matter I have raised. It seems to me that most of the information required by the department is very different from the survey I spoke about which involves the source of capital, and questions relating to the number of shares held by foreign shareholders and the number of shares outstanding.
If the government was looking at the situation from the standpoint of economy and considered the number of tax returns which must come in each fiscal year, if the bureau wanted to co-operate and economize they

could arrange for a perforated slip to be put at the bottom of that form. If it was for information such as a return to a provincial corporation's branch the slip could be torn off and turned in. Information concerning special items such as the ownership of shares, capital and where the money comes from could be put on at the same time. Once a year upon completion of the tax return the information could be given to the dominion bureau of statistics and they could compile it for their financial returns.


Clarence Decatur Howe: Mr. Chairman, I might say that when I came to the Department of Trade and Commerce I was under the impression that the bureau had too many types of reports and a committee was set up to reduce the number of investigations and reports that the bureau was making. One provision that I insisted on at the time was that, if a report could not be ready within six months of securing the data that the report was not very valuable in any case.
I do not remember the figures but there was a very substantial reduction effected by the committee in the number of reports and an improvement was made in getting the reports out more promptly after their due date. I am sorry to say that recently the department has been slipping somewhat owing to the fact that we have not been able to get the staff we require for the work. We hope to improve that situation and you will notice that we have a little larger budget this year. The objective is always to get out the minimum requirement needed to carry on the business of Canada and to get it out promptly.


Harry Oliver White: Mr. Chairman, I was rather surprised to hear the questions asked by the hon. member for York West regarding the trucking industry and I was equally surprised to hear the minister reply that 10 provinces had requested the information. It seems to me the provinces know more about the trucking industry than does anybody else because they licence the trucks. It seems rather strange to me that the 10 provinces should suddenly request that information. What is the federal government going to do with the information when they get it?


Clarence Decatur Howe: Give it to the provinces.


Donald Methuen Fleming: And to the public.


Harry Oliver White: Is there a penalty attached if the truck-owner or driver does not comply with this request for information?
Supply-Trade and Commerce


Clarence Decatur Howe: I would think not, probably. I do not think the individual truck drivers would fill out these forms. I think they will be filled out by the trucking companies. If a large trucking company refuses to comply with a request from the dominion bureau of statistics the owner may hear from them. I imagine he would because there is the Statistics Act in existence in this country which provides certain penalties.


Harry Oliver White: That is exactly what I am coming to. The minister says there is the act and if the form is sent out and the man does not comply by filling it out he will hear about it pretty soon. I can confirm this and I know what I am talking about because I have been a victim of this sort of thing.


Clarence Decatur Howe: One should always comply with the law.


George Stanley White: Yes. A form came to me as a processor and packer. Having had a crop failure that year I did not fill it out. Pretty soon I received a letter, and then another, and finally a registered letter. I informed the writer to come to my office in the parliament buildings to discuss the matter and I have not heard about it since.


Donald Methuen Fleming: Mr. Chairman, I simply wish to clarify one point. In relation to these reports requested from the truckers I think the minister ought to make it clear that this is a particular survey and it is not intended that this should be a continuing form of return required to be made by those operating trucks.


Clarence Decatur Howe: Yes, that is the case.


Thomas Miller Bell: I want to ask a few brief questions regarding the availability of some figures I have not been able to obtain. The first set of figures concerns our wheat shipments to Poland. In this case it may just be necessary for the minister to say why the figures are not available. I do not care whether or not I receive the figures now but I would like to know why they are not available. I am interested in the figure for the total amount of wheat in bushels rather than the total amount of wheat expressed in dollars. I would also like to know the places where the wheat was bought from the wheat board; that is, whether the quantities were shipped through Prince Rupert or Vancouver, and so forth. I would also like to know the cost of the wheat to the Manitoba Northern Sales, the amount of export credit insurance payable by the shipper, the amount of interest paid or payable to the federal government for these moneys that have been advanced, and
7310	HOUSE OF
Supply-Trade and Commerce then I also want to know the dates of the shipments, and the names of the ships.
If the minister does not have this answer readily available perhaps he will tell me why the information is not available, and if I might expect it at some future date.


Clarence Decatur Howe: This is a case
which is sub judice. My hon. friend is trying to help out some of his lawyer friends. Such facts as are available are published by the dominion bureau of statistics. My hon. friend is well aware of that. This is a private row and he had better let the boys do the best they can and I will do the same.


Thomas Miller Bell: That is all right. I just wanted to know why the information is not available.
I want to ask again this year if it is still not possible to obtain monthly figures of the exports of Canadian goods through Canadian ports and United States ports? Those have never been made available on a monthly basis in the same way that the imports are made available and I would like to know why it is not possible without too much extra effort to obtain monthly figures for exports similar to those which we obtain for imports.
I might say we are vitally concerned with these figures and in this way we would have a comparison by the month. Without these figures we will be unable to ascertain what progress is being made to eliminate the sad injustice which is in existence in Canadian ports.


Clarence Decatur Howe: Mr. Chairman, I presume the reason is that the United States figures come from authorities in that country.
I understand it is a matter of delay in receiving the United States figures and I do not know of any other reason. Of course, at the year-end my hon. friend has no trouble in obtaining them because all those reports are published by the bureau of statistics. It seems to be a matter of delay in getting the information to the United States authorities which prevents the monthly statements coming out.


Thomas Miller Bell: That may be true. The department compiles records of imports coming into Canada through Canadian and United States ports and I presume that in one case the figures would be United States and in the other they would be our own, or would they both be United States figures?


Clarence Decatur Howe: We have complete figures with regard to imports, this would be Canadian information.


Thomas Miller Bell: When those are available, why cannot they be obtained for exports?


Clarence Decatur Howe: Our customs
authorities are not interested in exports. The customs department gets no percentage out of exports. The customs are interested in imports but not in exports.


Thomas Miller Bell: I realize that, but I suggest that it would not be much trouble. Surely there is some kind of check on goods going out of this country. If you can compile them on a yearly basis it should not be too much trouble to compile them on a monthly basis.


Clarence Decatur Howe: I have no one here really to advise me on that problem but I shall look into it. If it is possible to improve the situation I shall be glad to do it.


[Stage Direction]
Item agreed to.
429. Census, including a contribution as detailed in the estimates, the expenditure for which not to exceed the amount shown unless otherwise approved by treasury board, $4,710,429.
Donald Methuen Fleming: Mr. Chairman, I think the committee would be interested to have a report from the minister with reference to the census, particularly as there has been a large increase in the appropriation this year for that purpose.


Clarence Decatur Howe: The census has been completed except for the compilation of the figures, and I understand it went off very smoothly and successfully. We hope to have the figures all complete by early next year, but some will be complete before the end of this year. The census was carried on from coast to coast and we were able to effect some economies as my hon. friend will note if he compares the expenditures. We were able to save about $200,000 of last year's appropriation. For instance, the statistics had always been taken down by pens supplied by the government at a cost of $3.59 each, and this year we did it with pencils at a cost of 29 cents each. Also we were able to use less expensive stationery and varitype printing instead of the usual type. There has been a great deal of progress in cutting down the cost of the census work which of course is a gain for the future.


Donald Methuen Fleming: May I ask if it is intended to turn out as many volumes containing extensive analyses as were turned out recently in connection with the decennial census?


Clarence Decatur Howe: This is a skeleton census and the information obtained is skeleton in character.


Donald Methuen Fleming: How many volumes will there be?


Clarence Decatur Howe: One.


Robert Ross (Roy) Knight: 
Clarence Decatur Howe: The census is taken on punch cards and the registration is by age groups. I suppose the highest age group on the card is 90 to 100, and whether it would be wise to add another age group to cover those 100 to 110 years of age would have to be considered. I saw where someone died the other day who was 110 years of age. I am getting on myself but I think I can get along with the present card.


Robert Ross (Roy) Knight: Then I take it that what I have asserted is in fact true. Is there any record of people in Canada who have reached the ripe age of 100 years?


Clarence Decatur Howe: I am sure the dicennial census will show that. This is a skeleton census which does not go into detail.


Harry Oliver White: I should like to ask about the number of questions asked agricultural producers as compared with those asked other people.


Clarence Decatur Howe: The five-year census was originally an agricultural census which was mandatory in the prairie provinces. We extended that census to all the provinces. The answer to my hon. friend's question is that the agricultural census is a complete census whereas the census of everything else is a skeleton census.


Harry Oliver White: It seems to me that when you ask farmers 75 questions and receive such a small part of the national income you are leading them to believe you are going to do something about it. I know very well that the government has no intention of doing anything, but it just seemed to me to be out of proportion to ask these people 75 questions when the ordinary householder is asked only seven.
Mr. Pallet!: Am I correct in understanding that the census figures will be ready for distribution before December 31, 1956?
Supply-Trade and Commerce


Clarence Decatur Howe: Certain figures are essential to certain provinces and we have to get them out before the end of the year. I know in Manitoba they have a problem and they are anxious to get some figures. The complete census information will not be out until some time next spring.


John George Diefenbaker: Will the census as it applies to the prairie provinces be used in connection with the redistribution next year in the western provinces?


Clarence Decatur Howe: It is a statutory provision; the constitution provides that in Manitoba, Saskatchewan and Alberta there must be an agricultural census taken every five years. The census was taken to meet the constitutional requirement as far as those three provinces were concerned, but it is less detailed in the rest of Canada.


John George Diefenbaker: Is it the intention that it will be used for the purposes of redistribution in the prairie provinces next year?


Clarence Decatur Howe: We give the statistics to the provinces as we are required by law to do and what they do with them is up to them.


[Stage Direction]
Item agreed to.
Board of grain commissioners (Canada Grain Act) -
430. Administration, $149,780.
Hazen Robert Argue: I believe the minister asked that we discuss any items dealing with grain under this item. I want to protest the move that has been made to refuse to license any further off-site storage. The practice that has been followed during the past year of licensing, for the storage of grain, buildings away from the elevator site, provided that they came up to certain standards, is one of the best policies that has yet been devised for storing and handling surplus grain.
Many communities have constructed large buildings of the Quonsett type that could be used at a future date as rinks in their respective communities, and this action has had a great many advantages. It has provided a building that will have a great value to the community over the years, whether as a building for the storage of grain or as a building to provide recreational facilities when we enter a period of no congestion.
Moreover, the provision of additional facilities by this means for the storage of grain has allowed farmers to market their grain and to obtain the initial payment when their grain has been marketed. We in this group for many years have advocated the payment of farm storage and the payment of cash advances, and the government has refused

Supply-Trade and Commerce both. But when the government did two things, allowed off-site storage in the form of rinks to be licensed for the storing of grain and provided that the federal treasury would pay the storage costs for wheat in excess of 178 million bushels, it went a substantial way to providing both storage payments for the community and advance payments for the farmer. This has been a method by which communities themselves are able to obtain part of the payments made for storage.
I can see no good reason at all why rinks will no longer be licensed for the storage of grain. There have been two arguments against the policy. One is that they say that the buildings have to come up to standard. Of course, no matter where a building is located, it can be built to any standard that the builders may desire. Some of these buildings in the form of rinks, I am convinced, are the very best storage that has yet been provided for large quantities of grain, and I am sure that the grain in these buildings will come out in many instances in better condition than grain in the so-called annexes built alongside the railway site.
The second argument is that the grain is not readily available. Of course, that argument will not stand up, because these storage facilities are within a very short distance of the elevator that has leased them, and it is just a matter of putting the grain in the truck and taking perhaps two minutes to drive the truck from the storage building into the elevator and dump the grain. So the grain is just as readily available as though it were in the so-called permanent annex.
There is no difficulty in putting the grain into the storage facilities. I was at a marketing point in western Canada a few weeks ago -Drinkwater, Saskatchewan-and I noted that they had built there a modest-sized rink in which they were storing 80,000 bushels of grain. According to the farmers who built the rink and according to the elevator agent, the wheat board and the board of grain commissioners had informed them that it was one of the best buildings that had yet been constructed for the purpose of storing grain. It cost the elevator company nothing to put the grain in, because the farmers drove into the elevator, had their loads weighed and dumped, and had the empty truck weighed. Then the spout was opened and the grain loaded back into the trucks. The farmers drove across the street and themselves unloaded the grain into the very large rink building that they themselves had built.
I hope that the government will reconsider this policy. There is only one possible reason

I can think of for discontinuance at this time, the only one that I should think has any logic to it at all, and that is that it may have been decided to discontinue further licensing of such buildings until the size of the new crop is known. If that is the case, I have no objection. I shall have no objection if the policy is reversed, should we harvest the very large crop that is now in evidence in western Canada.
So I should like to ask the minister whether or not the government will reconsider its policy in this connection within the next month or two when we find out the size of the crop and, if so, whether or not grain in such buildings will be entitled to the regular storage payments.	*


Clarence Decatur Howe: The government adopted the policy of off-site storage on the recommendation of the wheat board and the board of grain commissioners. In view of the congestion on the prairies, it seemed the right thing to do. The government reconsidered the matter, on the recommendation of the wheat board and the board of grain commissioners that the time had come to issue no new licences for off-site storage. The reasonableness of the position has more or less been confirmed by the fact that we had 35 million bushels less wheat in storage at the end of the last crop year than we had at the end of the previous crop year; and also in view of the fact that there was very much more empty storage on the prairies this year than a year ago, there does not seem to be any reason to encourage new construction to house wheat when there seems to be plenty of space available to do the job. If the wheat board and the board of grain commissioners change their minds and suggest that we need more offsite storage, I daresay that the government will consider it, but at the moment we have no intention of altering the decision which was announced some time ago.


Hazen Robert Argue: With regard to the extra storage space that is available, I think the minister knows that the storage that is available is only at certain points and that there are hundreds and hundreds of marketing points in western Canada where there is little storage available and where the provision of such additional facilities would be valuable. I shall be quite content to end this discussion, as far as I am concerned, if the minister will say that he will take another look at the situation in October, after harvest, to see whether or not there may be some real need for reversing the policy.


Clarence Decatur Howe: I will say that 1 shall do so if I am asked to do so by the wheat board or the board of grain commissioners.


John George Diefenbaker: There is one other question in connection with this. I know of two or three rinks that are being used for storage purposes. Are the towns that operate or own these rinks receiving anything in respect of storage? The other day I was reading of one in my former constituency of Lake Centre where there was a very large storage in the rink, and it was said that the return that was being received for storage payments would be sufficient in a matter of two or three years, if continued, to pay for the actual cost of the rink. Is that storage being paid officially or is it a local matter whereby payment is being made?


Clarence Decatur Howe: I expect some day to get trophies from both the curling associations and the skating rink associations of the prairies. I believe more rinks have been built to store grain in the past three years than have been built in the prairies ever since the first settler arrived. The storage is paid under an arrangement with one of the line elevator companies, which is responsible to the wheat board and has authority to move that grain into offsite storage, which is the rink, and pay the owner of the rink a fee out of his receipt for storage which is supposed to be onsite storage. It is a legalized arrangement, but the offsite storage arrangement is made between the line elevator company and the owners of the offsite storage.


John George Diefenbaker: That rather answers the question that my hon. friend raised, that sometimes the objection to the licensing of rinks is that the rinks are not up to standard.


Clarence Decatur Howe: That is right.


John George Diefenbaker: The fact that by an indirect means there is achieved that which he suggests might be done directly and which I support would indicate that there should be a reconsideration of this problem in the event that again this fall as the result of a large crop tremendous amounts of wheat will have to be stored on the farms. If this arrangement can be operated in certain areas by this indirect means, I see no reason why it should not be considered as a direct means of storage. It would mean that during the period from May until the end of the crop year on the 31st of July a very considerable amount of wheat could be stored in that manner and made available whenever the necessary transport could be secured at the several marketing places.


Hazen Robert Argue: The minister has said that he is probably entitled to trophies from the curling and skating rink associations of western Canada for the fact that there have been so many rinks built in the last three
7313
Supply-Trade and Commerce years. Perhaps that is a good suggestion but I think there should be a rider to it that the minister will continue the policy so that there will not be any discrimination as between communities.
The minister said one thing that I do not think he intended to say, namely, that these arrangements are made between line elevator companies and community associations. I think the minister knows that the wheat pool organizations as well as the line elevator companies, all elevator companies, have been prepared to consider such arrangements. In some communities in my constituency the line elevators have leased the premises and at other points the pool elevators have done so. I think that generally speaking the arrangement is approximately the same. The elevator company gets 10J cents per bushel per year and the local rink association gets 6 cents of the 10J.


Clarence Decatur Howe: I should amend the term "line elevator" to "line of elevators". I apologize to that extent.


William Marvin Howe: I should like to ask the question now that I wanted to ask on the first item with regard to storage in eastern Ontario and eastern Canada. I refer particularly to southern Ontario. Because of the cold and late spring this year the farmers found that they had to feed their stock for a longer period of time than usual. The winter stored grain in the elevators in southern Ontario apparently had been depleted and the farmers had to pay the entire rail freight on their grain from the west. That put the price up almost to a prohibitive figure.
I am wondering whether some steps should be taken to move more grain into southern Ontario during the period when navigation is open so that the same situation will not prevail next spring. It could prevail because on account of the late, cold spring not as much acreage of grain was sown in southern Ontario as in other years. There is every indication that next spring there will be another shortage of feed and more feed will be required.
A question was asked the other day by the hon. member for Mackenzie in the same connection arising out of a telegram sent to the minister with regard to the scarcity of feed grain even at the present time in southern Ontario and the trouble some of the merchants are having in obtaining feed grain, probably as a result of the shortage of box cars and other things. They are having trouble continually in getting sufficient feed grain from the elevators. Can the minister give any indication as to what the department can do with respect to moving more feed grain into eastern storage in the fall?

Supply-Trade and Commerce


Clarence Decatur Howe: The department has nothing to do with feed grain in Ontario.
I have tried to make that clear. We have no authority to do anything. We have gone a long way to make it possible for dealers or whoever wishes coarse grains in Ontario to buy them. We have arranged an agency basis so that the buyer can take the grain, make a deposit on it and adjust the price as of any date he wishes. That is quite a concession. But the grain will always be available at Fort William. If arrangements can be made to have the grain available at the bay ports we will do so but the grain there moves into export and it is very hard, especially in the season of open navigation, to make it available to buyers. Certainly users in Ontario have been forewarned as to their requirements and if they do not take care of them some time between now and the close of navigation I hope they will not blame me for their failure to do so. We just have nothing to do with the distribution of grain in Ontario.


George Hugh Castleden: There is one other feature of the storage problem that in my opinion requires attention and that is the matter of terminal storage. Canada's capacity to produce grain is going up every year and the figures for the long term average have to be revised every year; 1956 appears to be another year when we are going to have a big crop.


Clarence Decatur Howe: If my hon. friend reads the bible he knows about the seven fat years and the seven lean years, so let us not get the averages too far out of line.


George Hugh Castleden: No, but if we are going to have fat years and prepare for the lean years we will have to have somewhere to store the grain.


Hazen Robert Argue: As far as the farmers are concerned they are all lean.


George Hugh Castleden: At any rate, the experience of the farmer in the past few years has been that he has found himself in very difficult circumstances through being unable to deliver his grain. The minister knows the difficulty the farmers had last year with regard to cash advances and farm storage, and the loss of grain on the prairies has been a most regrettable thing. When you find wheat piled up in large piles in the fields and exposed to the weather you know that losses are almost inevitable.
We have a problem with respect to terminal storage for grain. Surely the best place to put the grain is in the terminals where it is available for export. Canada's terminal storage has not increased with Canada's ability to produce. Because of the fact of sales

being lower than they were three years ago and the continuation of large crops the storage problem is one of increasing difficulty.
Then there is the matter of box cars. When the railway companies haul grain in their box cars to the terminals they find all too often that there is no space in which to dump the grain and the latest move, which is causing a great deal of concern among western growers, is that the railway companies are now applying to the board of transport commissioners for permission to charge demurrage on cars that are left for any more than 48 hours at terminal points. This means an additional and rather heavy expense which will fall directly on the backs of the producers who are already facing difficult times with increasing costs and decreasing returns.
I suggest to the minister, the wheat board and the board of grain commissioners that it is time that Canada took a look at the terminal storage problem and made provision for the storage of our surplus grain. As a national problem surely the weight of it should not be borne entirely by the farmer. It is surely not good business to leave grain stored in box cars and have demurrage charged that will have to be paid by the farmer. I suggest to the minister that a continuation of the present condition of lack of space at terminal elevators to unload box cars is going to lead to the producers having to pay heavy demurrage charges, and they are going to feel very badly about it and resentful that action has not been taken to take care of this surplus commodity. As to the "seven fat years", we are enjoying that period as far as production is concerned, but they certainly have not brought a great deal of increased well-being to the producer. His problems today are increasing. His costs are increasing. With a declining income, this is a serious problem. I hope that the board of grain commissioners will advocate the construction of more elevator space. Already the government is in the elevator storage business. I believe they rent elevator storage space at the present time. I believe the leases for them are due to expire this year. I hope this suggestion will be looked upon with some favour. I refer to the suggestion that the government consider the building of more storage space in order to do away with the vexing problem which is increasing year by year.


Hazen Robert Argue: There is a question I should like to ask the minister about the personnel of the board of grain commissioners. I believe there soon will be a vacancy on the board if there is not technically a vacancy now. When the minister is considering appointing a person to fill that vacancy, I wonder

whether he will not discuss with the farm organizations-I refer to both the farmers union and the grain organizations-the question of a person that would be satisfactory to both. I know it is the minister's prerogative to appoint to the board anyone he cares to appoint. But I think it would be better and would lead to easier administration if the minister would discuss with the main farm organizations the question of the person to be appointed. I do not really feel that there would be any difficulty in coming to an agreement and recommending a given person. I do not think such a move would lead to any controversy.


Clarence Decatur Howe: The vacancy has not occurred as yet. When it occurs, we shall be glad to keep my hon. friend's views in mind. We usually get the views of the interested grain co-operatives. That has been the case on every occasion, I believe. We get names from each of them and we pick out the man we think is best qualified to do the job. We shall doubtless do that again. The only appointment I have heard was announced in the agriculture committee. My hon. friend appointed a new chairman for the board. That is causing me some embarrassment. However, I will not embarrass him now by suggesting a man for the board.


Hazen Robert Argue: When I was appointing a new member of the board, I did not realize that it would cause any embarrassment. As to the information that I had when I was making my so-called appointment, I consider that I obtained it on the highest authority and it was not told to me in confidence. Had it been in confidence, I would have said nothing about it.


[Stage Direction]
Item agreed to.
Atomic energy control board-
49. Administration expenses of the atomic energy control board, $41,160.
Howard Charles Green: Mr. Chairman, these next three items have to do with the national research council. There is very little that we have to say about them.


William Alfred Robinson: This is item 49.


Howard Charles Green: I beg your pardon?


William Alfred Robinson: I thought the hon. member referred to the national research council.


John Horace Dickey: It is item 49, atomic energy control board.


Howard Charles Green: Item 49, atomic energy?


William Alfred Robinson: Yes.


Howard Charles Green: Mr. Chairman, these items on atomic energy do not require a great deal
Supply-Atomic Energy of discussion in view of the fact that a special committee of the house has been dealing during the present session with the activities of the government in the fields of research and of atomic energy. I had asked for the setting up of such a committee on several occasions; last session, again this session and also, I think, in 1954. As hon. members know, this committee was set up during the present session. I think it would have been wiser to have the committee deal exclusively either with the national research council and other problems of research or with atomic energy. As the minister will recall, we had some disagreement about that point at the time the motion setting up the committee was under debate. I pointed out then that last year he himself had suggested that there should be separate committees. In the actual working out of matters, that suggestion has proved to be right. This committee has not been able to cover either field adequately and, as a matter of fact, has not yet made a report. There were some hearings during which we heard from officers of the research council. Then there was one trip to the national research council premises. On the atomic energy side we heard from Mr. Bennett an extremely interesting report, and the committee had a trip to Chalk River. But in my opinion the work of that committee was not as effective as it. could have been if we had been dealing only with one subject. I suggest that in future years it would be wise to give any such committee only one of these two extremely important fields to cover.
In the atomic energy field we were all again greatly impressed by what we saw at Chalk River. This was my third trip to Chalk River. I have always believed that the spirit there was a model for any activity in Canada. I have never encountered a higher morale than is to be found there. Certainly magnificent leadership has been given by the men who were responsible for setting up that project and for directing it in the intervening years. It would be a good thing if a great many more Canadians could go there and see just what is being done.
Today I should like the minister to tell us what he expects to be the expense for this atomic energy program, say, for the next five years. The government estimates ahead just what these expenditures will be. When the minister replies, I would ask him to give us those figures. The costs seem to have a way of going up higher than the estimates. For example, we had the case of the new reactor known as the NRU reactor which originally was to cost $30 million- I think that is the correct figure-and which

Supply-Atomic Energy we now find will cost something over $50 million. I think Mr. Bennett told us it would be $52 million or $53 million. I suppose it is difficult to estimate accurately just what the-e costs will be but they seem to get higher as the years go by.
Then, there are three different points in connection with this whole program on which I should like to have an expression from the minister. The first is this. We are now moving into the field of producing power by means of atomic energy. We are about to build a small power reactor in conjunction with Ontario hydro and Canadian General Electric. There will be more of this work done as time goes on. We realize that plans are being laid for the expansion of work of that kind. I am still concerned as to whether the government is determined to spread out these reactors in such a way that they will be of benefit primarily to those parts of the country which are short of other types of power.
This first reactor is to be part of the Ontario hydro electric system. While I realize that Ontario is faced with a possible shortage of power I hope the emphasis is not going to be placed upon providing power by atomic energy for the larger centres of Canada. It seems to me there is not enough drive in the direction of getting this type of power into areas like Saskatchewan, Nova Scotia and other parts of Canada where there is not as much other power potential. The tendency seems to be to follow the principle, "he that hath, to him shall be given". This could mean so much in the development of the parts of Canada which are handicapped if the government deliberately adopts a policy that will help them first.
The next point on which I would ask the minister to comment has to do with the production of heavy water. He and I had a little disagreement about that earlier in the session over the question of whether the atomic energy plant at Chalk river used any heavy water produced at Trail. I am not going to go into that further today. The evidence we got in committee made it quite clear that at least some of Canada's heavy water did come from Trail. What I am worried about is this. The plant at Trail was owned by the United States atomic energy commission. This year that production ceased and Canada is no longer producing any heavy water. We are now buying our heavy water from the United States atomic energy plant at Savannah, Georgia, which is the only plant on the North American continent producing this commodity.


The Canadian atomic energy program depends entirely on heavy water. We have gone into that field as distinguished from the use of graphite. Canadian research on atomic power plants is centred on the use of heavy water both as a moderator to control atomic reaction and to keep the reactor cool. We pioneered this field and Canada is the leading nation in the use of heavy water for the production of atomic energy. All the reactors at Chalk River use heavy water and the new power reactor will do the same. The reactor we supply to India will be of the same type. We hope eventually to get into the business of exporting power reactors, all of which will be heavy water reactors. Unless there is some change in government policy the only heavy water available will come from Savannah, Georgia.
I think Canada could be taking steps to get into this business again herself. We have had this experience at Trail and there must be many scientists and engineers who are capable of operating a plant of that kind. It does seem strange that we are just dropping out of that picture. The demands for heavy water in Canada will be extensive. We were told by Mr. Bennett that the NRU reactor would require 66 tons, I think it was, of heavy water. In an economic forecast of the role of nuclear power in Canada made by Dr. Davis of the economics branch of the minister's department and Dr. W. B. Lewis, I find at page 15 some very interesting statements with regard to heavy water. They say this:
The situation with regard to heavy water is something else again. Here, the necessary tonnages may he many times that of the nation's present production capacity.
I realize the production at Trail was comparatively small.
What could, in time, become a sizeable segment of Canada's chemical industry may, therefore, have to be created in order to cater for this large and rapidly expanding demand for this unique material.
Phased in five-year intervals, the cumulative material needs of a recycled natural uranium system might be expected to run somewhat as in table V.
Then, in table V they set out the requirements of heavy water as follows:
Year	Short Tons
1961	 100- 200
1966	 200-1,000
1971	  600-1,700
1976	 2,000-3,300
1981	  4,000-7,000
Then, this forecast goes on as follows: Converted into money terms, these investments take on new meaning. Production of natural uranium for domestic consumption, apparently, would have to run into tens of millions of dollars a year. Even if new methods are discovered for the manufacture of heavy water which will reduce

its unit price appreciably, outlays in this direction might reach an annual level of $40 million to $50 million, 25 years from now. And outstripping these expenditures would be the outlays on generating plants and machinery and equipment. These capital investments might reach into the $100 million a year category by 1980.
Then, they show the prospective investment in millions for heavy water, and those figures are as follows:
Investment for Heavy Water in
Year	millions
1961		 6 0- 12
1966	 12-0- 60
1971	 36 0-102
1976	 120 0-198
1981	  240-0-420
This table is based on a cost of $30 per pound for heavy water. I suggest to the minister that in view of the fact Canada has specialized in this heavy water field and has had such success, and in view of the fact that we have trained men, we should make every effort to produce heavy water.
The third and final point on which I would ask a report is with respect to uranium. I would ask the minister to bring us up to date on that situation. From press reports it appears that Atomic Energy of Canada Limited will be contracting for $1,250 million worth of uranium. That is to say, it has entered into or will be entering into contracts that will aggregate that value when this uranium has all been delivered. That figure is taken from a press dispatch of July 23, 1956. It is, of course, a very large sum and Mr. Bennett was quoted as saying in June that uranium would likely be Canada's top metal in value in future years and he prophesied an approximate production of $300 million per year.
I gained the impression from Mr. Bennett's evidence that once these contracts had been filled there was likely to be quite a drop in the demand for uranium and I think it was based partially on the fact that there would not be such large requirements on the part of the United States for defence purposes. If that is so, it seems to me the effect might well be to discourage prospecting for uranium and its production.
This atomic energy field is opening up so rapidly that I think its importance will be a great deal more vast than any of us realize at the present time and by 1962 the demand for uranium may be a great deal higher than we even dream of now.


Clarence Decatur Howe: It may be a great deal lower, as well.


Howard Charles Green: It may be a great deal lower; that is right. The minister is not often a pessimist.


Daniel (Dan) McIvor: He never is.
Supply-Atomic Energy


Clarence Decatur Howe: The hon. member was speculating on one side of the question and I was simply speculating on the other, just to show the two sides. I am not taking a position.


Howard Charles Green: I am just wondering about this whole situation.


Clarence Decatur Howe: Has my hon. friend ever gone on the dotted line for $1,250 million?


Howard Charles Green: No, and I never expect to. I would like the minister to clear up that point because I gained the impression in the committee that Mr. Bennett was a little doubtful about what we were going to do with our uranium after 1962.


Clarence Decatur Howe: I am glad he was not positive because we have nothing in the form of a guarantee.


Howard Charles Green: I am not saying that he is right or wrong and I have a great deal of respect for Mr. Bennett and his judgment. I have watched his career with interest for a long time.


Clarence Decatur Howe: Sometimes it is wise to say you do not know.


Howard Charles Green: I would like the minister to clear up that situation and also to tell us just what will happen to the mining companies that have not been able to get in on these contracts and will not be able to sell the uranium they produce. Is there any provision made for companies of that type? I do not see how this business can be kept going ahead, and yet remain in the hands of a comparatively few companies which have contracts, unless there is some other plan in mind. Perhaps the minister could deal with these points when he replies.


Clarence Decatur Howe: Mr. Chairman, I will try to cover the ground that has been outlined by my hon. friend. I believe he wanted a forecast of the cash requirements for Atomic Energy of Canada Limited. To March 31, 1961 it adds up to $115 million. Do you want it year by year?


Howard Charles Green: Yes, please.


Clarence Decatur Howe: That is the net. Perhaps I had better give it in round figures. It is $35,817,000 for 1956-57; let us call it $36 million for that period. For 1957-58 it is $30 million; for 1958-59 it is $20 million; for 1959-60 it is $13 million; for 1960-61 it is $15 million; or a total of $115 million. That is the net cash requirement and I should add that it is after certain earnings. It is the estimated net cash requirement.

Supply-Atomic Energy


Howard Charles Green: That is assuming there would be larger revenues than at the present time?


Clarence Decatur Howe: Yes, it is the estimated cash drain on the treasury of Canada. For example, these atomic piles do certain commercial work for which they get paid and they sell certain plutonium for which they get paid. We expect the cost to the government of Canada to be as I have outlined it.
Concerning the question about the distribution of generating equipment, it is not the purpose of the government or Atomic Energy of Canada Limited to change the constitutional position of the federal government as regards generating power in various parts of Canada. We have taken responsibility for experimental work at Atomic Energy and we regard it as the duty of the government to keep Canada in the front ranks of progress as far as the development of power from atomic energy is concerned. It was never our intention that the government of Canada would build plants in various parts of the dominion.
The plant now under construction is being built in Ontario because it was possible to make arrangements there which we could not make elsewhere in Canada. The province of Nova Scotia was anxious to have the plant located in that province and the private power company offered certain arrangements there.
It being a small system the difficulty was that we had to give a guarantee; first, as to when the power could be put on the line; second, what the power would cost; and third, I think we had to give a guarantee that the plant would be operating for a certain number of years. We were unable at that stage to give those guarantees. We do not know too much about power generated from atomic energy nor does anybody else.
Ontario said they would pay for the cost of the installation other than the atomic pile part; they would operate the pile and pay for the power and use the power. They required no guarantee as to the future of the development.
This power from the original plant is not going to be cheap power. The plant is too small to be an economical unit and, as I say, it is an experimental plant. The purpose is to test out the process and to gain a great deal of information that would be required for a commercial plant. The reason it is being built in Ontario is that we were able to make much better financial arrangements in that province than we could by building elsewhere.
The work of the power development is under the direction of a group made up of representatives of practically every power 
authority in Canada, whether public or private, and the decisions are taken with the advice of that group. The purpose is to make information available in every part of Canada. We stand ready to give advice on design and scientific work that may help any project, but it is not our intention to build such projects, and push them out into various parts of Canada. We simply act as consultants for whoever wants to go into the business of building atomic power plants.
The second question had to do with heavy water. There is nothing mysterious about heavy water; it is not even classified. There are two or three processes for making it which are well known. Anyone can build a heavy water plant if he wishes to do so. We have a favourable arrangement for the purchase of heavy water. We have always bought it from the United States atomic energy commission. The United States atomic energy commission owned the plant at Trail and we may have received some of that water from Trail, but we never bought it direct. When the atomic energy commission decided that it no longer had use for the Trail plant the commission offered the equipment to us. We tried to make an arrangement with Trail for a price for the product competitive with what we were paying, but were not able to do so. Had we made an arrangement with Trail we would have been paying 25 per cent more for our heavy water than we are paying now under our present arrangement. The price we are paying now is $28 per pound.
In any case the Trail people were not keen to make an arrangement with us, at least they showed no real desire to do so. I had lunch with them once or twice and discussed the matter. However, we decided we would purchase our heavy water in the cheapest market. When you are dealing with a commodity worth $28 a pound, and you need a lot of it, a little difference in the price per pound can go a long way toward $1 million.
In any event I see no particular reason for Canada producing heavy water. If we were not buying it in the United States we might be able to buy it somewhere else. They make it in Norway and in other parts of the world: I do not know whether or not they are about to produce it in New Zealand.


Howard Charles Green: I understand the New Zealand plant has been closed.


Clarence Decatur Howe: Perhaps, because the costs were too high.


Howard Charles Green: Is the minister sure it is being made in Norway?


Clarence Decatur Howe: Yes. The New Zealand project was dropped when they

found they could buy heavy water at $28 a pound. I do not mind going into any business if we must, as a government, but I did not see any reason why this government should go into the heavy water business.


Howard Charles Green: Is it not rather risky to have only one plant on the continent producing heavy water?


Clarence Decatur Howe: Perhaps it is, but the demand for heavy water does not spring up overnight. Even if the plant were damaged it would not take very long to put it back into condition. There is nothing mysterious about heavy water, it is just a commodity the same as anything else.
As to uranium, we have made arrangements with the atomic energy commission of the United States which seem to be quite satisfactory to the mining industry of this country. We have certain contracts with the mining industry which to a large extent have been underwritten by the atomic energy commission of the United States. Those contracts extend to 1962 and provide for the complete write-off of capital expenditures at the mines in the period up to 1962.
The hon. member asks what happens to the mines at the end of 1962. They would have their mine plants all paid for and probably some profit in their pockets. They would be in a position to strike out on their own and we hope they will be able to do so at that time. Through arrangements being completed with the United Kingdom we probably will be able to extend the demand beyond that date to some extent. Certain arrangements have been made with mines which have been late getting into the business which may provide some extension of the present contract. This is a fluctuating situation and involves a terrific amount of money. I would rather not discuss the details at this time. I understand that a good deal of this information was given in the committee and appears in the committee records. I think it would be better if my hon. friend would check that information without asking me to extend myself further.


Howard Charles Green: I do not think any evidence was given as to what would happen after 1962.


Clarence Decatur Howe: My hon. friend and I need not worry very much. I am simply saying that all the capital cost of the mining plants will be written off by then.


Howard Charles Green: Just those that have contracts?


Clarence Decatur Howe: Everybody has a contract who is in a position to get into production before the deadline. Perhaps there will be youngsters coming along and
Supply-Atomic Energy they may have to do the best they can. But as I say, the underwritten commitments to the mines total well over $1 billion. I think Canada has done pretty well toward getting her uranium mining industry established.


Alfred Johnson Brooks: Mr. Chairman, I concur entirely with what the hon. member for Vancouver-Quadra said with regard to the operations at Chalk River. I have had the opportunity to visit there a number of times and have always been impressed with the energy and interest which is being shown there. I was quite interested in the remarks of the minister in connection with the plant near Chalk River for the production of power. I understand that the objective is to provide thermonuclear power plants in different parts of Canada. On page 26 of the evidence given by Mr. Bennett, president of Atomic Energy of Canada Limited, he gave the following as one of the objectives:
To contribute to the development of economic nuclear power in order that nuclear power may be available for use in Canada in those regions where conventional methods of developing power are no longer economic.
That would seem to indicate that the intention would be to develop power by this means in parts of Canada where power could not be produced economically as hydroelectric power or from coal. Certainly they have more power in Ontario than is available in other parts of Canada; they have more than they have in Saskatchewan, more than they have in the maritime provinces and more than they have in the north country. I had rather hoped that that was the idea, to establish reactors in different parts of Canada like the maritime provinces.


Clarence Decatur Howe: My hon. friend overlooked the words "to contribute".


Alfred Johnson Brooks: If this power is to be developed in Ontario it certainly will not contribute to the development of power in other parts of Canada. I will admit that the experimental work being done in Ontario is a contribution to the development of power in other parts of Canada provided reactors are established there, but it will not be if they are not established in other parts of Canada. As a matter of fact, we all know that Canada, in order to assist in developing power in India, for instance, where it is difficult to develop either hydroelectric power or thermal power, is contributing to a reactor in India for this very purpose.


Clarence Decatur Howe: No. I should like to correct that statement immediately. It is not a reactor for thermal power; it is a reactor similar to the NRY reactor at Chalk River.

Supply-National Research Council It is designed purely for experimental purposes and is quite a different kind of reactor from the one my hon. friend is talking about.


Alfred Johnson Brooks: What we are doing is initiating perhaps one of the first steps for the development of nuclear power in India. As I said a moment ago, I was a little disappointed to hear the minister make the statement that it was not intended to produce or construct reactors in other parts of Canada. He mentioned the fact that it was not cheap power at the present time. We all know that, but we were told when we were at Chalk River that there were great possibilities of its becoming cheap power.
I might ask the minister or the government why they should expend all these millions of dollars for the purpose of investigating the development of nuclear power in Canada if we did not expect at some time to utilize it. I do not think the use of nuclear power is very far away, even here in Canada. I should like to quote from an article I read in an English newspaper not so long ago. It states:
At Calder Hall in Cumberland, it was announced by the atomic energy authority, the first uranium furnace of the nuclear power station had started working.
The actual time was 7:15 p.m., and the actual date May 22.
The pile was charged with slugs of uranium. The control rods were drawn out. A needle began to move on a dial. A red sign lit up-"pile operating". Calder Hall was getting ready for business.
Next the heat transfer system has to be tested. Soon after, the turbines will begin to hum.
Again, the following appeared in the Montreal Star in July. The heading is "Great Atomic Power Plant is Year Ahead of Schedule". It states:
Dounreay plant, the world's most advanced "breeder" station, will produce large amounts of power for the electricity grid.
Because of simplified engineering processes it is now almost certain to be ready by the early part of 1958.
That shows that England-and I might add the United States and other parts of the world-is fast going ahead with the development of atomic power for electrical purposes. I am not going to labour that point any further except to say that I was disappointed with the statement of the minister. Some of the other questions that I intended to ask have already been asked by he hon. member for Vancouver-Quadra, and so I shall take no more of the committee's time.


[Stage Direction]
Item agreed to.
National research council-
282. Salaries and other expenses, $15,470,139.
Howard Charles Green: As I mentioned before, when I thought we were dealing with this item instead of the atomic energy item, the committee did go into the work of the national
[Mr. Howe (Port Arthur) .1
research council to some degree but did not make a thorough investigation. We were very much impressed to hear again what is being done by these scientists and engineers. They are making a great contribution to the national life and, I think, deserve the support of the people from coast to coast.
I am not going to go into any details in connection with these votes, other than to bring up one question; that has to do with the numbers of scientists and engineers now available in Canada and who will be available in the years that lie ahead. This question, of course, has been brought to the fore by reports of the great strides made in Russia in the training of engineers and scientists. I do not know whether or not those reports are exaggerated, but in any event they have caused a good deal of concern in the United States and also in Canada. I notice that the very first paragraph of the annual report of the president of the national research council deals with scientific manpower. It reads as follows:
When the National Research Council was founded in 1916, its first move was to survey Canada's resources of scientific manpower. This survey revealed some serious deficiencies. The council immediately undertook two remedial steps:	a
system of scholarships in the natural sciences and of grants-in-aid of university research, and a system of associate committees on a nation-wide basis. Both programs were so successful that they still form an important part of the council's activities.
I am wondering whether the minister thinks the program now being carried out by the national research council is adequate to meet the present-day needs for scientific manpower? This question will also be of interest to the Minister of Labour, but I should like to have the minister's comment on that point. The officers of the research council gave me the impression that they thought the reports from Russia were exaggerated and that Canada's position in this field is not too bad, but I should like to have some assurance from the minister. An ordinary civilian or member of parliament is not in a position to know.
Evidently Russia, the nation with which the free nations are competing, is making some sort of a drive to produce very large numbers of engineers and scientists. Of course, it is difficult for us with our different system of living to do that. We cannot say to this young man that he must be an engineer and to that young man that he must be a scientist. We do not believe in that sort of thing. We have to use persuasive methods. However, I should like to know from the minister whether or not he is. satisfied with the present situation and, if he is not, whether there are any steps

he can suggest that should be taken in order that Canada may train larger numbers of scientists and engineers than she is at the present time.


Clarence Decatur Howe: Well, the question is a very difficult one. In a vote where you could use X amount of money, as much as you like, you ask if the $3 J million that we spend at the present time on grants and scholarships is enough. I think that the research council has contributed greatly to bringing up the standard of educational facilities in this country in order to produce as many engineers as we have produced. I believe there are about 50,000 to 55,000 engineers and scientists in the country today and we expect that number to double by about 1965. The present output of the universities will produce about that many by 1965.
I presume as the engineering population of our universities steps up the size of the grant should probably expand. I doubt if the shortage of engineers and scientists in Canada is as acute as it is in some other countries. We are short, certainly. Every engineer and every scientist is certain to have his services in great demand, but I would not say that we could stand a 50 per cent increase in the number of scientists and engineers right away and feel we would not have a surplus. That is only my own estimate after talking with people who seem to have a good deal of information on the subject.
But I think that the national research council is studying the situation carefully year by year. The grants are being stepped up, and I think it is the consensus of university people that a good deal of judgment has been used in working out the system that we have today.


[Stage Direction]
Item agreed to.
At six o'clock the committee took recess.
[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.

[Stage Direction]
Privy council office-
323. General administration, $405,184.
John George Diefenbaker: Mr. Chairman, there are one or two rather controversial matters on which I wish to direct questions to the Prime Minister under the first item in connection with the privy council. As I remember the situation in the past, this item allows the house to ask the Prime Minister certain 67509-465J
Supply-Privy Council questions which he alone can answer. I start with one arising out of his answer today on the orders of the day to a question asked by the Acting Leader of the Opposition with regard to certain opinions expressed yesterday by Canadian ex-officers of high rank, namely General Simonds and General Macklin. In answer to the question asked today the Prime Minister used these rather unusual words. He was referring to the statements which they had made, one by General Macklin to the effect that our link with the United States imperils our defence and the other by General Simonds that of the 20,000 members of the armed forces recruited for Korea, some 7,000 deserted, information which had never been given before in this house. The Prime Minister said this:
I think-
Referring to these statements.
-they were intended to be alarming by those who made them, but I do not think they have created the alarm in the public mind that was intended.
I found it difficult to understand that answer today from the Prime Minister who usually gives a reasonably comprehensive answer to any question asked. One naturally asks oneself the question as to why the Prime Minister should have left so sinister an inference with regard to the words used by these officers who not so long ago held a very high rank in the Canadian armed forces and who must then have been regarded by the Prime Minister and the government as worthy of the utmost respect and of the responsibility which was theirs. I simply ask the Prime Minister to elucidate what he meant this morning in that regard. Whatever they may have said at the moment, it is difficult to understand how officers who held responsibilities which all of us regard as of the first magnitude, representing as they do our survival, should have it ascribed to them that they intended to alarm or to create alarm in the public mind.	One
naturally asks oneself a simple question and it is this. If they enjoyed the confidence of the government in the positions they held, what has happened recently which made it necessary for the Prime Minister to leave the inference which was clear and patent from his words, namely that what they were saying was not worthy of credibility, that it had an unworthy purpose in mind, and that it was designed to create alarm but had not been successful. If the Prime Minister did not mean that, that is a different matter. But those are the words, and they are strikingly significant words having regard to the

Supply-Privy Council fact that those two officers enjoyed so high a position of authority under this government for so long.


Louis Stephen St-Laurent: Mr. Chairman, I have not before me the exact words of the question that was put to me by the hon. gentleman who was Acting Leader of the Opposition, but he had spoken of the alarm caused by such statements; and in using the words he used or a paraphrase of them, I said that I thought they had intended to alarm the public. There was nothing sinister in that statement. I think they have both for some time been trying to create in the public mind the impression that I found in some of the excerpts I read of the statements, namely that, because we had not resorted to compulsory military service in this country since the last war, we were not taking proper measures for the right kind of defence for this country. I do not think they were saying anything they did not believe it proper for them to say. I think they were saying it for the purpose of trying to induce the public to take perhaps a more serious view of what each of us should be doing to ward off the dangers they foresee.
I have not seen the text of their statements. I have seen the excerpts that were published in the newspapers. I thought I sensed some sort of contradiction in the statement attributed to General Macklin when he said that we were still preparing for the war before the last war, whilst in another part he was saying that there was altogether too much emphasis being put upon the preparations being made to prevent war in which nuclear weapons would be used. There were certainly no nuclear weapons that were threatening or that were looked upon as having to be warded off in the war before the last war.
Not only in this country but in many other countries I think there is some rivalry between the different branches of the armed forces as to which service can be the most important and the most effective. We have heard divergent views expressed in this house. It is not so very long ago that the military critic for the official opposition was reproaching the government for not attributing a larger portion of its appropriations to the strengthening of the air force. There are opinions that I think are honestly held by all these officers in high positions as to what would be the best way to provide for the effective defence of the country.
Of course they would not be worthy of our confidence if they did not recommend everything they felt would be useful as measures of defence. But everything cannot be done. Since these two distinguished officers who
[Mr. Diefenbaker.l
formerly served with the army have retired, they have been speaking on many occasions of their dissatisfaction with the manner in which the defence forces of the country are being organized and provided for. I think they feel that they should alarm the public about that matter. There was nothing more sinister than that intended in my answer to the question in which I endeavoured to use the language that the question contained.


Frank A. Enfield: Mr. Chairman, there is something that I feel must absolutely be said while we are discussing this particular point. I want to take just a minute, but I am quite upset about it. I was going to raise this matter on the orders of the day or as a question of privilege tomorrow but the opportunity to deal with it has arisen right now. In tonight's Citizen there is a heading which reads as follows:
Thousands Were Recruited from Jails for Korean
Fight, General Discloses
Then the report states this:
The Toronto Star quoted him-
That is General Macklin.
-as saying that because of inadequate army forces "10,000 criminals and useless men" were taken from prisons "after they had committed every crime starting with murder and working up."
If the general said that, I as a veteran of the service myself feel that I must say this. I say that is the grossest insult to the armed forces who served in the Korean war. I think some 20,000 to 25,000 were recruited. That means that the general is saying that nearly 50 per cent of those boys who served in Korea were criminals. If that is the type of irresponsible statement upon which we have to answer questions put up by opposition members in this house, I think we are certainly wasting the time of this chamber.


William Alfred Robinson: Order. I was somewhat apprehensive when the hon. member for Prince Albert raised this question as I felt that it was not a proper one to raise under a privy council item. I am confirmed in that opinion by what has just transpired. It seems to me that this is a matter which could more appropriately and more relevantly be discussed under the estimates of the Department of National Defence. Under this item dealing with the privy council office I am afraid it could not be answered.
I may say that I did not interrupt the hon. member for Prince Albert or the Prime Minister because I understood the hon. member was asking the Prime Minister to explain an answer which he had given earlier today. I do not think we should embark on a further

discussion of this question, which is really one of national defence, under the privy council office.


Gordon Minto Churchill: Surely the responsibility of the Prime Minister enters into a discussion of the estimates of the privy council. In this instance, as I understand it, the hon. member for Prince Albert was simply asking the Prime Minister, in view of his general responsibility, for some clarification of his statement earlier today with regard to a very important matter. In the course of the Prime Minister's remarks I think he did an injustice to General Macklin through a misunderstanding of the report. I, like the Prime Minister, have not seen the text of General Macklin's statement. As I read the newspaper article and the earlier articles by General Macklin appearing in other journals I thought that General Macklin's criticism did not contain a misconception, as the Prime Minister suggested.
I understood the Prime Minister to say that General Macklin on the one hand was saying we were preparing for the war before the last war and, at the same time, General Macklin was commenting upon the development and use of thermonuclear weapons, which is obviously making preparation for the next war. What I gathered from the article was that General Macklin was speaking about the army not being prepared for the war before the last war, and instanced from that that, in the 10 years that have elapsed since the conclusion of the second world war, the army has not been brought up to modern standards with regard to mobility and with regard to air transport.
I see nothing there to indicate that there is any discrepancy in General Macklin's statement. Thermonuclear war has to be prepared for, and at the same time the army has to be prepared for action under thermonuclear conditions. But if thermonuclear weapons are not used the army must be prepared to use conventional weapons according to modern practice, and without mobility it is an army of pre-1939 vintage. I judge that is what General Macklin was aiming at.


Howard Charles Green: There is one question I should like to place before the Prime Minister and that has to do with the fact that he still has one minister handling the portfolios of veterans affairs and post office. This condition has continued since November 8, 1955; in other words, for over nine months. I should like to register a protest against the failure of the Prime Minister to have a minister for each of those portfolios.
In the first place, the Department of Veterans Affairs has to do very directly with
Supply-Privy Council between 250,000 and 300,000 veterans and their dependents in Canada. It is impossible to get an exact figure because there is some duplication. In other words, a man may be getting benefits under Veterans Land Act and may also be getting a pension. But there are at least a quarter of a million Canadians very directly concerned with what is done by the Department of Veterans Affairs. In addition to that, according to the figures given in the estimates book, there are nearly 14,000 employees in that department. It is a very important department having to do with a lot of questions which affect people very directly. I cannot urge too strongly upon the Prime Minister that there should at all times be a minister whose sole responsibility it will be to look after that particular department.
Then, the same is true of the post office department. There are about 25,000 employees in that department. There again problems arise affecting people very directly. I can see no reason why one minister should have been called upon to perform these double duties for nine months. I am not criticizing the minister at all. I think it was unfair to him, as it would have been to any other minister, to expect him to fulfil all the obligations entailed in directing these two departments. I hope that the Prime Minister will take steps right away to see that there is a minister in charge of each of these departments. It has been a strange situation that throughout the whole session one minister would be asked to continue in charge of these two departments. I suggest to you, Mr. Chairman, that this situation should be ended without any further delay. May I have an explanation from the Prime Minister as to why that situation has been allowed to continue?


Louis Stephen St-Laurent: It has been and still is a temporary situation.


Daniel (Dan) McIvor: I must say, Mr. Chairman, I have never received more answers to my letters during my 21 years than I have from the Minister of Veterans Affairs. I thank him for it.


William McLean Hamilton: Just for a moment I should like to suggest to the Prime Minister that he give consideration to the addition of another member to his cabinet, a minister in charge of responsibility in the field of provincial affairs and provincial relations. I am not going to explore this subject at great length, but the reason for the suggestion is that the federal government's relations with the provinces have expanded greatly during the past few years. They are being carried on by various members within the cabinet, all of whom have some small area

Supply-Privy Council of responsibility in this field. It seems to me that the co-ordination of these efforts and the establishment of a focal point to which the provinces could go when they wish to talk to the federal government would be of great advantage to both these levels of government.
I suggest to the Prime Minister that the situation is one parallel to the field of foreign affairs where, for quite a few years, the Prime Minister carried both his own portfolio and that of Secretary of State for External Affairs. In the last few years it was seen fit to divest the Prime Minister of this responsibility. While when he had the burden he acquitted himself quite well in that field, I do think that the opportunity to have somebody who specialized in that field and was free to travel when necessary and to acquaint himself more intimately with these problems has been of advantage in this particular field.
Now, the cases are not exactly parallel but they are very close to being parallel. I point out one further fact in case some one should suggest the establishment of this position would be an invasion of provincial rights. I fail to see that it would be any more of an invasion of provincial rights to have someone charged with the federal government's liaison with the provincial authorities than it is an invasion of the rights of other countries to have a secretary of state for external affairs.
Knowing the Prime Minister's wide background and his personal acquaintance with this subject I will not labour that point any further but while I am on my feet I would like to ask the Prime Minister one question and it is this. How extensive is the newspaper clipping service which is operated in the office of the privy council? It is my understanding that it occupies about two people on a full-time basis; and before I present my other question I wonder if the Prime Minister would care to give us at least some idea of the extent of this operation?


Louis Stephen St-Laurent: I am told, Mr. Chairman, that there are seven people in the clipping office.


William McLean Hamilton: That is more extensive than I had anticipated.


George Hugh Castleden: You are really getting clipped, eh?


William McLean Hamilton: Mr. Chairman, I wonder if the Prime Minister would inform us what use is made of this material and to what extent it is available for reference purposes by hon. members of the house?


Louis Stephen St-Laurent: Mr. Chairman, I do not think there has ever been any application from hon. members of the

house but if there were they would be very sympathetically considered. I see perhaps less than 5 per cent of the clippings that are filed. Almost daily four or five clippings are brought to my attention. I just put my initials on the sheet after I have perused it and send it back and then when there is any requirement for consultation I ask for the clippings of editorial comments on a specific subject and the clippings are gathered together and brought back to me. If at any time the hon. gentleman wants clippings that he would find it more convenient to obtain from us than elsewhere, if he will just let us know I hope we will be able to accommodate him.


Edmund Davie Fulton: Mr. Chairman, I wonder if we could hear from the Prime Minister now a somewhat more detailed report of the conference which he attended in London last month? We were interested and pleased, and to some extent concerned, to know that the Prime Minister had conversations with the prime minister of India, as I understand it, outside the scope of the full conference itself. While the conference itself has been dealt with to a very limited extent in the communique tabled in the house we would, I know, appreciate it if the Prime Minister could enlighten us on the scope of the conversations with the prime minister of India and what conclusions, if any, or what mutual agreements were arrived at on that occasion.


Louis Stephen St-Laurent: Mr. Chairman, there were no mutual agreements arrived at on that occasion and these conversations, as the hon. gentleman would appreciate, are of a confidential character that I would not like to discuss publicly.


Edmund Davie Fulton: Well, surely the Prime Minister can tell us the area which they covered. I am not asking him for a verbatim report; but what were the subjects of mutual concern which caused the Prime Minister of India and the Prime Minister of Canada to get together? Surely, the Prime Minister could take the committee into his confidence to that extent.


Louis Stephen St-Laurent: There were no problems of mutual concern to our respective countries that caused us to get together. I accepted an invitation from the prime minister of India to lunch with him and was accompanied on that occasion by the Secretary of State for External Affairs. We discussed some of the matters that had already been discussed in the plenary conference but we made no agreements and we endeavoured to be as frank as possible with each other in respect of our views concerning the international problems that we were discussing in the general conference.


Edmund Davie Fulton: If there were no areas of mutual agreement were there some of mutual disagreement? If so, what efforts were made in this sphere of international or commonwealth relations to explore such questions as the situation in the Middle East and Cyprus and to determine what were the views of the respective countries and what could be done in the way of reconciling them, these matters which are of such vital concern, not only to this country in particular but to the commonwealth in general?


Louis Stephen St-Laurent: Mr. Chairman, I would not care to disclose the nature of these confidential conversations which the Secretary of State for External Affairs and I had with Mr. Nehru and Mrs. Pandit on that occasion.


John Borden Hamilton: Mr. Chairman, I intended to ask a question somewhat along the same line. I have before me the text of a commonwealth conference communique and as the Prime Minister has said the most recent one has been tabled in the house. Very little is disclosed in these communiques as to what importance these conferences now hold for this country and for the commonwealth. I am not going to inquire of the Prime Minister what was said at the conferences. I might say that the communiques really do not tell us anything.


Edmund Davie Fulton: Hear, hear.


John Borden Hamilton: Certainly they do not indicate either areas of agreement or disagreement. What I would like to ask the Prime Minister is this. What purpose is now being-


Claude Sartoris Richardson: Achieved.


John Borden Hamilton: Achieved; yes, that is a very good word which was supplied to me by the hon. member for St. Lawrence-St. George and it is true that he is a corporation counsel.
What purpose is now being achieved by these conferences and what may we expect to achieve through them in the future if this same course of conduct is followed? It seems to me, sir, that it is vitally important to us to know what we can expect from this type of meeting in the future.


Louis Stephen St-Laurent: Well, Mr. Chairman, I think that we can expect to have the good relations with the other members of the commonwealth that we have enjoyed during the whole period in which I have been attending those meetings. I can assure the hon. gentleman that I felt it was of real value to have personal contact and conversations with the two prime ministers I had not
Supply-Privy Council met before, the prime minister of South Africa and the prime minister of Ceylon; and also to have conversations in his capacity as prime minister with Mr. Mohammed Ali, whom I had met before in another capacity but who is now the prime minister of Pakistan.
We realized that from different parts of the world we saw the world's problems from different angles and it was, I think, of real value to have the opportunity of this personal appraisal of the viewpoint and difficulties of each of the other prime ministers. The communique is a responsibility of all of us and nothing goes into it that is not acceptable to every one of those who are there. That is perhaps why there is so little of much importance that is disclosed because some of the things that several would wish to have included in the communique would not be acceptable to others. We did put out this time, as on other occasions, a communique to which no one of those present would have any objection.


John Borden Hamilton: Does the Prime Minister feel that within the terms of reference-I think I can properly use that expression-under which these conferences are held they perform a useful function for Canada as a member of the commonwealth in connection with defence and in connection with our trading position within the commonwealth, and does he feel that these conferences have assisted the commonwealth as a group in connection with its possible common defence throughout the world and its trading position throughout the world? If those questions cannot be answered in the affirmative it seems to me that we are beginning to waste our time with conferences such as this.


Louis Stephen St-Laurent: I have
never felt that time was wasted. While there are no specific agreements reached I have always felt that the time was well spent and did serve to keep us as close as possible together. On this occasion there were no specific arrangements made about defence but there was a lot of information exchanged about the position in which each country found itself in relation to defence and its contribution to the maintenance of peace and stability in the world.


Edmund Davie Fulton: Surely the Prime Minister must admit that no one here can deceive himself or be deceived as to the obvious nature of the fact that in such a situation as has developed in connection with the Suez other nations of the commonwealth, notably Australia and New Zealand, have made statements in support of the position taken by the

Supply-Privy Council United Kingdom in that dispute which are at marked variance with the very cautious reluctance of this government to commit itself one way or another in connection with that situation. I should like to know what is the purpose of these conferences and what goes on there. For instance, is any consultative machinery set up which would result in a common stand, or if there be not a common stand, which would result in a clear statement of a divergent stand on such a matter as the Suez incident?


Louis Stephen St-Laurent: The Suez incident had not arisen at the time of that conference.


Edmund Davie Fulton: I am aware of that; I am as able to calculate dates as is the right hon. gentleman. What I am pointing out is that after the Suez incident arose other countries of the commonwealth appeared to have been able to take a definite position in support of the position taken by the United Kingdom. Is there better consultation between those countries and the United Kingdom? Are they better informed than we? Were these matters discussed? Were the things which led to a different approach discussed at the conference or did the conference concern itself with generalities and not with specific problems or specific approaches to the world situation? We are not to be content with vague generalities forever. This commonwealth means something or it does not. If we carry on with the policy of drift as we appear to be doing then it will not be very long before the commonwealth means nothing and will in the future be in danger of disintegration, and the attitude of the government of Canada will have contributed more than anything to that disintegration if it does take place.


Donald Methuen Fleming: Was any record, either ver-oatim or in gist form, kept of the proceedings of the conference? I appreciate it would be confidential in view of what the Prime Minister has said. I recall for instance some previous conferences, particularly the famous conference of 1921. At that time I think a verbatim record was kept of the discussions which led eventually to the denunciation of the British-Japanese alliance. Is such a record kept of these conferences, and in particular was such a record kept of this conference for posterity?


Louis Stephen St-Laurent: There was no verbatim record kept but Sir Norman Brook kept a record and was busy writing practically all the time the discussions were going on.


John George Diefenbaker: No one has the information the Prime Minister has on this question and I am asking as a matter of information what is the background which dictates to other members of the commonwealth the acceptance of a family of nations joined together, either as self-governing nations or as republics? What is the philosophy that brings a republic into the commonwealth? Is there any joint responsibility for defence in so far as a republic is concerned? What is this new concept which is so difficult for us to understand, who knew the commonwealth as it used to be, made up of nations joined together, equal in status but not in function? What has the change been that brings in bodies that have no relationship or responsibility to the other members of the commonwealth? What is that basis? If the Prime Minister could enlighten us it would be most helpful because that is one of the most difficult anachronisms for those of us who have never heard it explained. Certainly political scientists cannot explain it and the only one who possibly could explain it is one who had taken part in the achievement of that new concept.


Louis Stephen St-Laurent: I took no part in the achievement of that new concept. It emerged before I commenced attending these conferences. It may be very difficult to explain but it is a relationship that exists and which we all feel is productive of beneficial results for those who are members of the commonwealth.


John George Diefenbaker: Could the Prime Minister give us the number of orders in council passed last year as well as the number of treasury orders passed during that period of time?


Mr.   Si. Laureni@Quebec East: That information was supplied quite recently. I assume what the hon. member refers to are the orders submitted to the Governor General for his signature, and when he refers to treasury orders he means the minutes of treasury board which come to the cabinet for approval several at a time with the order of approval then being submitted to His Excellency for approval. I am informed that the Minister of Citizenship and Immigration gave the number to the committee during the discussion of the Indian Act. It was on that occasion put on Hansard, but I can secure the exact number. The orders in council are numbered consecutively.


John George Diefenbaker: If they were given, I did not notice them.


Mr.   Si. Laureni@Quebec East: I would have to ascertain the number of minutes of the treasury board.


Wallace Bickford (Wally) Nesbitt: There is just a brief question I should like to ask the Prime Minister. Some time ago, as I recall it, it was reported in one or two of the Ottawa newspapers that the Prime Minister was going to divest himself of the direct responsibility for the federal district commission. I should like to ask the Prime Minister at this time whether he is considering divesting himself of this direct responsibility and passing it on to some other minister of the cabinet such as the Minister of Public Works?


Louis Stephen St-Laurent: That matter has been under consideration, and no decision has been reached.


Wallace Bickford (Wally) Nesbitt: In view of the fact that the committee has been sitting for some time, and the federal district commission has handed in a report, and these estimates were obviously prepared some time in advance, does the Prime Minister intend to modify the estimates in view of the report of the commission?


Louis Stephen St-Laurent: No, the estimates do not require to be modified at this time.


[Stage Direction]
Item agreed to.
333. To authorize payment of the ninth instalment to a special account in the consolidated revenue fund, known as the national capital fund, established under vote 809, Appropriation Act No. 4, 1947-48, $2,500,000.
John George Diefenbaker: Would the Prime Minister give a general picture as to what is being contemplated for next year in connection with developments of the federal district commission in Ottawa. What are the general plans, and what will be the amount of expenditure expected?


Mr.   Si. Laurenl@Quebec East: For this fiscal year, there is no change being suggested in the estimates, which were prepared some time ago. For the next fiscal year, we shall have to consider whether or not we shall adopt the recommendation of the committee that, instead of there being statutory grants for administration, there be a budget for the administration of the commission submitted to parliament each year.
The hon. gentleman knows that there has been a statutory grant of $300,000 and then supplementary votes. The committee has recommended that there be a yearly capital grant as there has been in the past but that for the current administration of the commission it should have to prepare and submit to parliament for approval a budget for all its current expenditures. The amount that will be recommended in the next budget will
Supply-Privy Council depend upon the consideration, and the decision after that consideration, that is given to these recommendations of the committee.
As for the capital expenditure, that will depend to some extent upon the availability of supplies and manpower. There are some of these things that are not so urgent that they should not have to give way to some other private or public enterprises that might put a strain on the supplies of material and manpower.
The hon. gentleman has no doubt read the report and has probably read some, if not all, of the thousand pages of printed evidence that was given before that committee. I have read the report and I have read some portions of the evidence, but it will take some considerable time to come to a conclusion as to the projects that are most urgent.
There is one, of course, that is always under consideration and always proceeding, and that has to do with the reorganization of the railway situation in the heart of the city. That proceeds as rapidly as the negotiation with the railways brings about results.
Another that will be undertaken at a very early date is the Queensway, which wil] occupy the roadbed of the cross-town railway and about which a proposal has been submitted to the city of Ottawa and accepted after negotiations between the government of the province of Ontario, the federal government and the city authorities. That is regarded as one of the urgent projects to be got under way.
There are some of lesser magnitude, such as the work going on for the approaches to the interprovincial bridge. Consideration will have to be given to the replacement of that bridge in due course.
Another matter which was one that occupied the attention of the committee was the pollution of the Ottawa river, about which the Ontario government has set up a commission. Of course, that is a provincial and municipal project but it will probably be carried out in a manner that will be fitted into the general capital plan. It may very well be that, to fit it into the general capital plan, it will be desirable for the commission to make some contribution to the over-all cost of the project.
Another recommendation which will receive very careful consideration is that the act be revised, that it be called the national capital act, and that the commission itself be called the national capital commission. That is a recommendation which appeals to me personally at first blush; but it will be given serious consideration.

Supply-Transport
There is a recommendation that there should be more active efforts made to coordinate the plans of the commission, of the provincial authorities and of the municipal authorities, not only of Ottawa and Hull but of the surrounding district. There certainly is room for co-operative and conformable action by the three levels of government. I hope that it will be possible to have that co-operation.
Within the last couple of hours, I received two letters from Her Worship the Mayor, one accepting the proposal for the exchange of properties which would make Green island available for the construction of a city hall and which will assure to the future capital that the old city hall site will not be built upon. The other has to do with the tentative agreement reached at the meetings between our Minister of Public Works, the Ontario minister of highways, and the city authorities, about the manner in which the project of the Queensway can be proceeded with and the cost distributed between the three interested organizations. So there seems already to have been an improvement, not perhaps in the desire for collaboration and co-operation, but in achieving collaboration and co-operation.


John George Diefenbaker: Mr. Chairman, the description that the Prime Minister has given of the Ottawa to be is one that I know will meet with the support of Canadians everywhere, a capital plan making this, the capital of Canada, a city in keeping with the aspirations of the Canadian people. All of us, regardless of what part of Canada we come from, are joined in agreement that what is being done is in accordance with Canada's potential greatness and will bring joy to generations yet to come.


Alexander Maxwell (Max) Campbell: Can the Prime Minister tell us whether the planning committee intends to maintain the cobblestone drive from the west gate up the hill for the next hundred years or whether something can be done to cover them up?


Louis Stephen St-Laurent: I am sure those cobblestones will not last for a hundred years.


[Stage Direction]
Item agreed to.

[Stage Direction]
Marine services-
440.	Marine services administration, including agencies, $670,240.
Howard Charles Green: Mr. Chairman, before this item is dealt with may I bring to the minister's attention the fact that on Saturday last, as reported at page 7040 of Hansard and as also found at page 2 of the English translations

for that day, the hon. member for Chicoutimi asked the minister this question:
In conclusion, I would ask the minister whether it would be possible lor him to table in this house a copy of the contract between the Canadian national authorities and the U.S. controlled Hilton company, concerning the operation of the new hotel which is going up in Montreal.
The minister apparently overlooked that question.


George Carlyle Marler: I did not overlook it at all. I ignored it.


Howard Charles Green: The hon. member asked me to bring that up and ask the minister whether there would be any objection to tabling the contract.


George Carlyle Marler: The question was brought up last year and I dealt with the matter then. I explained to the house that it was not the custom of the railway company to table contracts that it had made and that that has been the invariable practice. The whole subject was discussed in the standing committee on railways and shipping owned by the government, as the hon. gentleman knows.


Howard Charles Green: With respect to item 440, would the minister explain to the committee just what part his department plays in this search and rescue service?


George Carlyle Marler: Mr. Chairman, on re-reading in yesterday's Hansard what I said last night I think perhaps I may have given a wrong impression in some of the comments that I made after the hon. gentleman's first question. The impression that I wished to give was that the responsibility for the co-ordination of search and rescue activities was the primary responsibility of the Department of National Defence. The responsibility for providing the vessels that would take part in search and rescue operations would, I think, fall on the Department of Transport primarily-


Howard Charles Green: For which?


George Carlyle Marler: For the provision of vessels in connection with the search and rescue operations, because I think the department unquestionably has more of those vessels than any of the other departments of government. But I should like to correct any misapprehension that my remarks may have caused last night that the whole responsibility rested on the Department of National Defence. Their responsibility is that of coordination of the activities but it is not a sole and exclusive responsibility.


Howard Charles Green: Suppose there is a wreck on the west coast. Who has the authority to order out the ships belonging to the Department of Transport?


George Carlyle Marler: I am informed, as I think my remarks indicated, that the responsibility rests on the air force, the Department of National Defence, for communicating with the various agencies concerned and apprising them of the circumstances and determining whether or not they are in a position to be able to afford assistance.


Howard Charles Green: Does the air force have the authority to order a vessel belonging to the Department of Transport to go to the scene of the wreck or must that go from the air force to the Department of Transport and then from the Department of Transport to the master of the vessel in question?


George Carlyle Marler: My information is that the request would be conveyed directly to the master of the vessel and not to the department itself. The hon. gentleman has used the word "order". I think perhaps if he changed it to say "request" that would be more appropriate language to use. I do not think it is the intention or the practice that the search and rescue organization should order other departments, even including the navy, but I am sure the hon. gentleman will realize that we are really merely bandying words if we talk about an order or a request whenever the vessels are available.


Thomas Speakman Barnett: I take it that when the minister suggests that government vessels commence a search or rescue operation on the initiative of the search and rescue co-ordination centre he is referring to the general departmental vessels of his department and also other departments such as the Department of Fisheries. However, I believe that that situation-and I should like to know whether my understanding is correct-would not apply to the boats at the lifeboat stations on the west coast of Vancouver island. Is it not true that those lifeboat stations have the authority to undertake a search or rescue operation on their own initiative without reference necessarily to the search and rescue co-ordination centre?


George Carlyle Marler: My information is that there are only a few of the stations to which the hon. gentleman refers, two, I believe, and that they may act on their own authority or they may act on the request of the search and rescue organization.


Thomas Speakman Barnett: As the minister well knows, there are many people who think that two are not enough. However, I will not pursue that question further.


[Stage Direction]
Item agreed to.
Supply-Transport Marine service steamers-
441.	Administration, operation and maintenance, $7,393,793.
Howard Charles Green: There is quite a large increase in this vote, Mr. Chairman. It is over $325,000. In the details at page 545 we find that there is an increase in "professional and special services" of over $90,000, and in "repairs and upkeep of equipment" of $120,000 and in "charter of vessels for northern transportation", of $75,000. Will the minister explain those increases.


George Carlyle Marler: Mr. Chairman, the main reason for the increase is a transfer to this particular subitem of an expenditure which was provided for otherwise in previous budgets. I am referring particularly to the stevedoring costs in connection with northern transportation which are set out for the first time as "professional and special services". They account for an addition to this item of some $90,000.


Howard Charles Green: What about the other increases?


George Carlyle Marler: I am informed that the item with regard to northern transportation is attributable to an increase in that particular activity and in the volume of material and freight that is carried northward on the supply mission during the summer.


Howard Charles Green: What policy is followed by the government in chartering these vessels for trips to the north? Perhaps the minister could tell us how many ships were chartered this year. I presume that charters have already been arranged for the current year?


George Carlyle Marler: Yes; they have.


William Alfred Robinson: Is item 441 carried?


Howard Charles Green: No, Mr. Chairman; it is not.


George Carlyle Marler: I shall try to answer the question, Mr. Chairman. The answer to the hon. gentleman's question is that we have called for tenders and we have actually chartered two vessels, one an ordinary dry cargo vessel and the other a tanker.


Howard Charles Green: To what extent are these tenders advertised?


George Carlyle Marler: My deputy minister informs me that it is through the Shipping Federation of Canada, first of all; the Dominion Marine Association, and by direct inquiry addressed to the shipping interests which we believe would be interested in it.


Howard Charles Green: Would that be in Montreal, Halifax and Saint John; all through eastern Canada?


George Carlyle Marler: Generally speaking, in eastern
Canada.

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Howard Charles Green: I presume those ships all sail from the east coast?


George Carlyle Marler: They all sail from either Montreal or Quebec.


Howard Charles Green: What companies own the ships that have been chartered this year?


George Carlyle Marler: It is Federal Commerce and Navigation in respect of the dry cargo vessel and Gayport Shipping Company in respect of the tanker.


[Stage Direction]
Item agreed to.
442.	Construction or acquisition of vessels and equipment, $5,309,500.
Thomas Miller Bell: Would the minister like to take this opportunity to reply to my few remarks on icebreaking? The three new icebreakers are listed under this item. It would be a good opportunity to have my reply. As an hon. gentleman has just said, would the minister like to break the ice at this point?


George Carlyle Marler: If the hon. gentleman is saying it for himself, I shall not give an affirmative answer to that question. Mr. Chairman, what I should like to say on the subject of icebreaking is simply this. As hon. members know, we had the misfortune to lose the Lady Grey not in the winter just past but in the winter before last. That loss has naturally thrust a considerable burden on the remaining icebreakers. We have endeavoured to meet the situation first of all by providing for the construction of an additional icebreaker to replace the Lady Grey. It is at present under construction at Levis, Quebec. We hope it will be available for service in the coming winter.
We have recently called for tenders for the building of a further icebreaker of what I might describe as intermediate size. I hope it will be possible before too long to award the contract for the construction of that vessel. As my deputy minister points out, that vessel would be assigned principally to service in Newfoundland and in the gulf of St. Lawrence.
We also have in mind the construction of a larger icebreaker of the same general class as the D'Iberville. I hope it will be possible to call for tenders for the construction of that vessel some time later this year.
I do not know whether the hon. gentleman has any specific questions with regard to icebreaking. I may tell him that we are in receipt of a large number of requests to which it is quite impossible for us to accede, having regard to the dimensions of the icebreaker fleet at the present time. When these new icebreakers are in service we hope to be able to do more than we are doing at the present time.
[Mr. Marler.)
Another most important factor in connection with icebreakers, of course, is the use to which they are put during the summer months for carrying out the northern supply mission to the many points in the north which can be served only by ships accompanied by an icebreaker or by icebreakers themselves.


Thomas Miller Bell: The minister has more or less explained away the reasons why we must have three new icebreakers in the estimates this year or plans for three new icebreakers.


George Carlyle Marler: No; plans for two.


Thomas Miller Bell: Yes, but there are three icebreakers.


George Carlyle Marler: Yes; the item includes expenditures on three. As I say, one we hope will be in service shortly; the second has been the subject of a tender call already; and the third we hope will be the subject of calls later this year.


Thomas Miller Bell: I realize that it is probably difficult to make a definite statement about this icebreaking matter generally; but frankly, I may say it is increasing now to a stage where they have the St. Lawrence open for a period that extends at least a full month into the close of the season and they have an early opening of about that same period. As I have said before on many occasions- and I am not going into the history of it-we are worried about the plans for the future in the St. Lawrence. The other night I mentioned the new icebreakers that are available. The old excuse of flooding in the St. Lawrence does not mean anything to me now, because the flooding has always been there. If one icebreaker could look after that condition formerly, surely it has not increased to the extent that more icebreakers would be necessary. A great many of these vessels are icebreakers and other types of ships; in other words, they combine two duties. I say that it is a back-door method to continue icebreaking early in the St. Lawrence. We had trouble last February, I believe, with respect to the early opening of the St. Lawrence. Vessels were damaged and pilots made statements that the season was being pushed to an extent that was alarming. Frankly, we are worried about it in Saint John and I think they must be in Halifax, as it affects the future of our ports.
Two or three times I have asked questions regarding the additional costs or for an estimate of the cost of these icebreaking operations. It should be possible to estimate the length of time that these vessels are on duty. It should be possible to give the payroll and other additional expenses. I think

that we are entitled to a statement regarding the future plans. Here we are subsidizing the icebreaking and increasing the length of the season in the St. Lawrence, while at the same time we are spending money on the harbours at Saint John and Halifax. These two expenditures are definitely in conflict. We only have the winter business and the season has been decreased now to an extent where our longshoremen, as I said the other night, cannot even get 24 weeks of work in order to qualify for unemployment insurance. I should like the minister to say if the department has examined this icebreaking matter. Helicopters are used, I understand, to survey the weak spots in the ice and see where it is possible to break a channel. The modern vessels have reinforced plates and each year the season for our ports grows shorter. We are worried about our future, and I feel it is going to be an increasing worry and burden. The department must tell us just what is going on, and what their plans are about icebreaking.


George Carlyle Marler: I would hope I could disabuse the mind of the hon. gentleman who has just spoken, Mr. Chairman, as to the icebreaking activity in that portion of the St. Lawrence between Quebec and Montreal. It is not a matter of subterfuge. We have endeavoured to ameliorate the conditions of flooding below Montreal. The activity of the icebreakers has materially cut down that flooding in the last few years, and our purpose in carrying out icebreaking is not to make possible the use of the port of Montreal at an earlier date than common sense dictates. The prime purpose of carrying out the operation is to relieve conditions that would otherwise result in flooding.
The hon. gentleman seems to be concerned about the possibility of icebreakers being used in the St. Lawrence to the disadvantage of the port of Saint John. I think that is the substance of the comments he has just made. The difficulty, Mr. Chairman, is that we are not faced with a request for additional icebreaking only in the upper St. Lawrence. We are faced with a request for icebreaking from places on the Gulf of St. Lawrence and down in the province of New Brunswick. They have asked us to do something to make their ports available during the winter months. I do not know whether the hon. gentleman wants me to say we propose, because of the representations that he has made, to turn a deaf ear to the representations of other ports in New Brunswick, and refuse to provide icebreakers for them so that the port of Saint John will enjoy an exclusive advantage over the others. I do not think that is in his mind.
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I fully understand that he wishes to promote the interests of Saint John and that I think is quite natural. Unfortunately, or perhaps fortunately, it is not possible for us to administer an icebreaking program designed to favour one port in particular. We have to meet this flooding condition that arises below Montreal. I believe we will have to expand our activities in the Gulf of St. Lawrence where there are important developments which will need facilities open to a much greater extent than at present. I think the same applies to ports in New Brunswick which, in my perhaps uninformed opinion, have made out a pretty good case for interest on our part in facilitating a greater use during the winter months of what seemed to me quite natural and suitable facilities.
The hon. gentleman, either on Saturday or today, has spoken about the comments of a pilot who attributed a collision which took place in the lower St. Lawrence to the fact that navigation was opening too early. The collision occurred in the lower St. Lawrence at a point, as I remember, somewhat above Quebec. I should like to tell the hon. gentleman that a most thorough inquiry was made into the circumstances of that particular incident and the pilot was not regarded as being excused by the conditions to which he referred. In fact, as I understand the circumstances, the pilot referred to was suspended as a consequence of that particular accident.


Thomas Miller Bell: I will leave this item now, but I do want to say for the record that the money of the taxpayers of Canada is being used to provide icebreakers which in turn are opening the port of Montreal and other ports on the St. Lawrence early to the detriment of the business of eastern Canadian ports. I realize that there are some other explanations for the use of icebreakers. As I say, it may be a back door method, but in the very near future I can see that we will not have any business in eastern Canadian ports and that with modern methods the expenses of the department will be greatly increased because the St. Lawrence will be open all winter long.


George Carlyle Marler: I do not want to provoke a discussion, but I would hesitate to peer into the future as far as the hon. gentleman and predict the time when the St. Lawrence is going to be open all year round for navigation between Quebec and Montreal. He has more confidence in the economic possibilities of that than I have. While I fully appreciate that he may wish to take a particular attitude with regard to the port of Saint John it is

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quite impossible for me, as Minister of Transport, to accept the position that I am going to discourage operations in the St. Lawrence regarding flood conditions that we are attempting to correct, and say that this is done so that the hon. member for Saint John-Albert will have a port that will be more useful under the circumstances.
I am surprised that he should talk about that just at the time when the port has had a record-breaking year in the transportation of grain. I find it strange in the face of conditions which are record breaking that the hon. gentleman should have so little optimism as to the future of his own port.


Thomas Miller Bell: We did have a good winter in both Halifax and Saint John, but it was mainly due to the grain shipments going through. The general cargo picture is not very much better. The point I am trying to make, and the minister hedges around it, is that the money of the Canadian taxpayers is being used to provide icebreakers, which in turn are allowing the St. Lawrence to open earlier and private vessels are thus enabled to move up to the St. Lawrence ports above Quebec and Montreal, and in that way we are losing out in the competitive battle. It is not free competition any more.


Thomas Speakman Barnett: When the minister was speaking on March 16 in opening the discussion of the estimates of his department he made a statement on page 2212 of Hansard to this effect. In referring to new vessel construction, he said that all new vessels will, if large enough be provided with helicopter decks that can be used as bases for helicopter operations in the event of emergency. A little before that, on the same page, he mentioned that amongst the vessels to be completed this year was a marine agency vessel for Victoria. I should like to ask the minister whether this marine agency vessel for Victoria will be equipped with an emergency helicopter deck?
While I am on my feet-


George Carlyle Marler: Perhaps I can answer that one before the hon. member gets another one off his chest. Mr. Chairman, with regard to the Victoria agency vessel, the plans of the vessel were too far advanced to make changes in order to permit helicopter operations from that particular vessel. In the case of the agency vessel which was to be built for the Prince Rupert agency, it is the intention to provide for helicopter accommodation.


Thomas Speakman Barnett: My only further question in the same connection is this. In view of the fact that it is not going to be possible to have helicopter accommodation for that vessel, are

any special plans being developed for carrying rescue equipment on that vessel?
The minister may recall that when speaking earlier in the session I pointed out that so far as my observation went departmental vessels on the coast did not carry such rescue equipment. I am wondering whether this vessel is being designed and equipped so that it may be more adequately prepared to deal with emergencies at sea than are some of the older vessels?


George Carlyle Marler: Mr. Chairman, the anwser to the hon. gentleman's question is that neither of the vessels to which I refer, the Victoria agency vessel nor the Prince Rupert agency vessel, will have special rescue or salvage equipment. I am not sure whether I said it last night but I would like to confirm this evening that we are giving consideration to the possibility of designing a vessel which would be suitable for agency purposes and which would also be more suitable than the present agency vessels for operations of that kind.


[Stage Direction]
Item agreed to.
Aids to navigation-
443.	Administration, operation and maintenance, $4,948,613.
Howard Charles Green: Mr. Chairman, in the particulars of this item on page 549 I find that there was a vote of $355,000 odd for lighthouse keepers' assistants. That is an increase of about $60,000 over last year. Could the minister tell us the reason for that increase and could he also tell the committee in what way these assistant lighthouse keepers are chosen?


George Carlyle Marler: Mr. Chairman, my note with regard to the lightkeepers' assistants which represents an item of $355,621, or an increase of $57,131, is explained by the fact that in 1951 the department assumed the sole responsibility for the payment of assistants to light-keepers, classes 1 to 5. A further amendment in 1952 revised the rates as follows. Where one assistant only is employed payment may not exceed $1,800 per annum. Where two assistants are authorized payment may not exceed $1,800 per annum for the first assistant and $1,620 per annum for the second assistant, except at Prince Rupert and Victoria where the rate has been set at $2,100 per annum for both assistants.
When you take the details of the requirement-perhaps I might spare the committee the details-you arrive at an over-all requirement of $459,960 less an anticipated short fall in expenditure-our experience in previous years is that not all lights require a full year's employment for assistants-in the amount of $104,339, so that the net requirement is $355,621.

With regard to the other question, Mr. Chairman, I think in a general way that we endeavour when there are vacancies in lights or positions in the more settled and attractive points to provide opportunities for advancement to those who are at the remote stations so that there is some prospect for people in remote stations to move back to conditions that are probably more agreeable and certainly more attractive than being in some remote place where conditions are perhaps somewhat lonely and desolate. I think that covers the situation in a general way and if the hon. gentleman has any further questions I will certainly try to answer them.


Howard Charles Green: What I was wondering is this. These assistant lighthouse keepers apparently are not considered as civil servants because earlier in the item there are shown quite large numbers of lightkeepers of different classes. There are no lightkeepers' assistants in that list and they are shown in the supplementary list. I take it from this that they are not engaged as regular employees of the department; at least, they cannot become permanent civil servants. Is that correct? If so, why is there not some permanence to this position of assistant lighthouse keeper?
The minister has pointed out that a lighthouse keeper who is serving at a remote point would be given the opportunity to take a position at a less remote and more agreeable centre and I think that is a very wise policy. Does the same policy apply to the assistant lighthouse keepers? That is, do they get any advantage at all or are they merely hired as temporary employees?
I have heard that they are hired by the lighthouse keeper; in other words, that the man keeping a light hires his own assistant. I did run across one case in which that appeared to have been done. There may be good reasons for a policy of that kind, but perhaps the minister would explain what is the actual policy followed by the department with regard to these assistant lighthouse keepers.


George Carlyle Marler: Mr. Chairman, I might say that it is somewhat like choosing a wife. One chooses a wife with compatibility as one of the qualifications. The same thing applies to the selection of lighthouse keepers' assistants.


An hon. Member:: Well, compatibility is a factor.


George Carlyle Marler: My hon. friend would realize, of course, how undesirable it would be if the assistant of the lighthouse keeper was incompatible with the keeper himself and, as my deputy minister has just pointed out, these men have to board together. I am sure the hon. member will realize that whatever
Supply-Transport
merits there might be in making this a civil service appointment the difficulty posed by incompatibility is not one that can be covered by the usual tests.
As the hon. gentleman has indicated the appointment is in effect made by the light-keeper. He chooses the man who is to be his assistant, and while I admit there is not the permanency of a civil service appointment we are trying to see what we can do to keep these men in permanent employment although it is not always possible.


Howard Charles Green: Suppose, for example, that the lightkeeper and his assistant fall out? That happened in the case to which I referred. I suppose the poor assistant lightkeeper just gets kicked off the island. In the case I am referring to the assistant was taken to the boat and told to go. Is there not some way in which the assistant whose only fault is that the lighthouse keeper does not like him can be given a chance to get work at another lighthouse, or is he just out of luck?


George Carlyle Marler: We are trying in a few places to provide separate accommodation so the compatability of the two may not be put to too severe a test. I take it that there are instances where the only solution is to put the assistant in a boat and say goodbye to him.


Howard Charles Green: Has any attempt been made by the department to work out a scheme whereby the department would assume some responsibility for these men? It seems to me that where a man is hired and is working at a lighthouse he must be a pretty reliable sort of man. Should there not be some provision made in the case of a lighthouse keeper and his assistant falling out whereby the assistant would have an opportunity to take a job with the department in some other locality?


George Carlyle Marler: I understand that when incidents like that occur the marine agency do endeavour to find other employment for the assistant. I should like to say to the hon. gentleman that I agree with much of what he has said as to the desirability of assuring as much permanence as is possible to these assistants. I understand that the departmental officials have a plan under consideration by which something can be done to improve the position of these assistants.


Andrew Ernest Robinson: There is one problem in Kincardine which has not been solved yet to my satisfaction. An occasion arose whereby it was necessary to appoint a lighthouse keeper and I understand that arrangements were made to transfer a man from another lighthouse to Kincardine. Answers which were made to questions I put on the

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order paper lead me to believe that these transfers are not always above board. As of yet no appointment has been made to Kincardine and I wonder if the minister can give me any information as to just what is the situation at the present time.
There are several veterans in Kincardine, some of whom are receiving pensions, and any of these men could handle this situation. I think that would be better than to bring in somebody from outside who would have only a part-time job and have to look for another one in the off-season. Does the minister expect to make this appointment shortly?


George Carlyle Marler: I understand that the hon. member would like to see some local person appointed to this position whereas these appointments are made by the civil service commission after a promotional competition. I will admit that a promotional competition may not always produce the best results and certainly may not always satisfy the hon. gentleman, but it seems to me that it is the fairest method we can adopt where you have a lighthouse in a settled community which would offer attractions to others to come in from a remote point and undertake a period of service. I think we must recognize that that system has merit, even though it may not always be acceptable to the local member.


Andrew Ernest Robinson: The answers to my questions brought out the fact that new appointments have been made by the civil service commission to locations where any person who wanted to be a lighthouse keeper would be willing to stay there for the rest of his life. I am just wondering if that is always followed out all through the service. I am inclined to think probably it is not. If I am wrong I should like to be shown where I am wrong.


[Stage Direction]
Item agreed to.
444.	Construction or acquisition of buildings, works, land and equipment, $1,816,560.
Howard Charles Green: This item is exactly the same as the vote last year right down to the dollar. The details on page 550 indicate that the actual expenditures for the last fiscal year were $200,000 lower. Why should that $200,000 extra be asked for this year?


George Carlyle Marler: The reason the vote is identical with that of last year is that the expenditures which are being provided for amount to $1,897,230 and it is estimated that there will be a short fall of approximately $80,670. So we actually arrive at the amount of the vote last year. I think it is expected to fully expend the amount of this vote, and it might be noted that there is a supplementary item, No. 708, for the same purpose.


Wallace Bickford (Wally) Nesbitt: I should like to refer to a situation which has been in existence at some time at a place called Bright's Grove not far from Sarnia. For the information of hon. members who may not know this area, Bright's Grove is quite a popular summer resort for people from the United States and southern Ontario, and there are a great many pleasure boats and small craft in the area. Lake Huron can get exceedingly rough at times and when small boats are caught in a storm in this area the only place they can run to is Perch creek at Bright's Grove. However, there are no marker buoys or harbour works of any kind at this point. I should like to quote briefly from the Sarnia Observer of Tuesday, July 3, as follows:
Perch creek at Bright's Grove which has been under discussion for many years as a haven for pleasure craft saved many lives during Sunday's storm.
Pleasure craft caught on the lake sought shelter of the creek and managed to make the entrance but with extreme difficulty.
Many narrow escapes were reported by boat operators. Joseph Partridge of 10 Cedar crescent, Sarnia who in company with his wife and two sons was making the return trip from Blue Point was caught in the storm. He knew the area well but with no buoy or marker he overshot the Perch creek opening and had to take shelter behind a groyne.
Apparently this area has become increasingly important as a refuge in case of storms on lake Huron and apparently there is not even a marker at the entrance. The minister might pass on this information to the department to be looked into.


George Carlyle Marler: I shall be glad to do that.


[Stage Direction]
Item agreed to.
445.	Nautical services-administration, operation and maintenance, including grants and contributions as detailed in the estimates; rewards for saving life from vessels in distress; subsidies to salvage companies, and the payment of expenses, including excepted expenses, incurred in respect of Canadian distressed seamen as defined in section 306 of the Canada Shipping Act, $542,330.
Howard Charles Green: In the details on page 551 we find the sum of $2,000 for vocational training of merchant seamen. Is that small amount the remainder to help the merchant seamen who lost their jobs when the Canadian ships were sold or transferred to British or foreign registry, or what is the purpose of that vote?


George Carlyle Marler: According to my notes, this particular amount of $2,000 is expected to be the completion of a commitment that was undertaken in September 1949, as the hon. gentleman said, for the training of Canadian merchant seamen. It is really rehabilitation, and perhaps "vocational training" is a rather broad expression. There are, of course, other items included in that.


Howard Charles Green: How much was spent last year, and how many men are now being helped?


George Carlyle Marler: In 1954-55 the actual expenditure was $2,385. The forecast expenditure for 1955-56 was $1,500, and my understanding is that we expect to spend $2,000 in the current year. Unfortunately I have not the information as to the number of persons concerned.


Howard Charles Green: There have been further ships going off Canadian registry during the past year. Are the men from those ships eligible for assistance of this kind?


George Carlyle Marler: As a matter of fact, I know the hon. gentleman is interested in the ships on Canadian registry, but I understand there is no change in the situation which is reflected in this particular item. Perhaps I might suggest that this question of ships be dealt with when we get to the estimates of the maritime commission.


Howard Charles Green: I notice that this vote includes $150,000 by way of subsidies for salvage companies in Quebec and British Columbia. Can the minister tell us to what companies that money is paid, and in what amounts?


George Carlyle Marler: The situation is that there is in the contemplated expenditures of the current year an amount of $75,000 for Foundation Maritime Limited, the object being to ensure that sufficiently efficient plants are maintained to render prompt and effective aid to vessels in distress on the St. Lawrence river and on the east coast. Formerly there was a similar expenditure to Pacific Salvage Limited in Vancouver, but that contract expired last month and has not been renewed.


Howard Charles Green: Then all this money is to be paid on the east coast?


George Carlyle Marler: My deputy points out that
part of the money will not be used, in view of the fact that we are not renewing the west coast contracts to which I just referred.


Howard Charles Green: Why should there be a subsidy in the St. Lawrence and not on the west' coast?


George Carlyle Marler: Formerly it was designed to encourage the creation of facilities on the west coast. Now there are facilities-not only this one company but other companies-and consequently it was not achieving the purposes for which it was originally intended. In the case of the east coast, I do not think the contract has yet expired. The situation on the two coasts is very different. On the west coast, as the hon. gentleman knows, there are a number of organizations and a
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number of facilities of a kind to provide salvage, whereas on the east coast we are not nearly so fortunately placed, and in fact there is nothing apart from this Foundation Maritime organization.


Thomas Speakman Barnett: I notice in the details of the estimates on page 551 that last year provision was made for a chief registrar of shipping. Apparently that position has been abolished, for there is no such item this year. Can the minister explain why that change has been made?


George Carlyle Marler: My understanding is that the same duties are now being performed by another employee included in the vote. It is merely a rearrangement of duties. That explains why there is no specific detail for the chief registrar of shipping.


Thomas Speakman Barnett: I wanted to ask the minister why the small grant made last year for the Port Alberni seamen's institute has been discontinued this year. Has he any information about that?


George Carlyle Marler: I should like to tell the hon. gentleman that the amount to which he referred was $200. I am told that there is an annual review of these grants, and a few of them have been dropped because it was thought that the purpose for which they were made was not being served.


Thomas Speakman Barnett: I have not had recent correspondence on this subject, but it has always been my impression that the seamen's institute in Port Alberni has done good work for many years, and I hope that it does not mean that that work is falling down.
A little further down in the details there is an item for subsidies for salvage companies.


George Carlyle Marler: That is the one we just discussed.


Thomas Speakman Barnett: I could not quite follow the question. Do I understand that no subsidy is being paid to a salvage company in British Columbia?


George Carlyle Marler: The hon. member is correct.


Thomas Speakman Barnett: Even though it is listed in the estimates?


George Carlyle Marler: The reason is that at the time the estimates were prepared the contract was still in force and no decision had then been taken as to whether or not the contract would be renewed. Since the preparation of the estimates, the matter has been given further consideration, and it was decided not to renew the contract.


[Stage Direction]
Item agreed to.
[Stage Direction]
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447. Steamship inspection service, including the carrying out of the provisions of the conventions lor the safety of life at sea and load lines, and contributions as detailed in the estimates, $739,710.
Howard Charles Green: This is the steamship inspection service, and I would ask the minister to explain just what control his department exercises over other government ships in order to see that they comply with the various laws and regulations. This question arises -because last winter-it may have been in the fall but I think it was last winter-one of the vessels of the Department of Public Works, the Hilunga, was sent on a voyage for which she was not built and in the course of the voyage she foundered. Fortunately there were no lives lost, but I think the Department of Public Works incurred damages amounting to almost the value of the vessel itself. I put a question on the order paper asking to what extent the ships owned by the different departments were registered, and the return that was brought down showed that some departments register their vessels and others do not. For example, the Department of National Defence and the defence research board do not. The answer of the Department of Transport was:
1.	No. Registration is at the discretion of the department concerned.
2.	A record is kept of registered ships only.
3.	All Department of Transport ships are registered, except a few small scows, landing craft specially designed for northern waters and motor launches.
The Royal Canadian Mounted Police answered that they register none of their vessels. The Department of Public Works register all but some dredges and scows. Apparently there is no set rule that a government vessel must be registered. I would ask the minister why this practice is followed. It does seem to me that there should be more control of government vessels and that they should comply with all the laws that have to be obeyed by others. Apparently that is not the case and there is a discretion allowed to the departments to carry on as they see fit.


George Carlyle Marler: I was hoping to lay my hands on a note I had on the subject, but my understanding is that the provisions of the Canada Shipping Act do not make it mandatory that all government vessels be registered. That is a statutory provision. It is not a question of policy but it is a matter of the Canada Shipping Act. I should like to say to the hon. gentleman, however, that with the exception of the ships belonging to the R.C.M.P., as to which discussions are currently being carried on, the other vessels

belonging to the various government departments have been registered or are in the process of carrying out the formalities for registration.
The significance of that is that when vessels are registered they are then subject to the same kind of inspection to which ordinary commercial vessels are subject. I do not think it is necessary to enlighten the hon. gentleman on that score because I think he is quite familiar with the extent of the steamship inspection. I hope I have cleared up any doubt in his mind as to the situation. Where there is registration there is inspection, where there is no registration there is no inspection, but so far as government vessels are concerned, with the exception of the vessels operated by the R.C.M.P., as to which discussions are going on currently, the others are registered or in process of being registered.


Howard Charles Green: That has now been adopted as a general policy, that all government vessels must be registered?


George Carlyle Marler: I would not like to accept the interpretation of the hon. gentleman. I would merely say it is a fact that it is being done but I do not think I should declare that it is a matter of policy.


Howard Charles Green: Why do the R.C.M.P. vessels not register and be subject to similar inspection?


George Carlyle Marler: I think I made it clear that discussions were going on with them as to the registration of their vessels. By that I do not mean to imply that they will agree to register but I do say that the matter is under discussion with them. I am not in a position to speak for them because I think the Minister of Justice should deal with that point on his estimates.


[Stage Direction]
Item agreed to.
River St. Lawrence ship channel service-
449.	Administration, operation and maintenance, $953,254.
Howard Charles Green: This has to do with the dredging of the St. Lawrence and according to a press dispatch in May of this year there has been some talk of a four-year dredging program on the St. Lawrence. Could the minister give us the details of that plan. The dispatch says:
Transport minister Marler announced today that work will start this spring on a four year dredging program to widen and deepen the St. Lawrence ship channel from Montreal to below Quebec city. He said the work is being undertaken on the recommendation of the St. Lawrence ship channel committee appointed in 1954 to study navigation along the 113 mile channel.

Can the minister give us the details of that program?


George Carlyle Marler: Might I suggest that perhaps we should adopt item 449 and take item 450 which deals with contract dredging.


[Stage Direction]
Item agreed to.
450.	Contract dredging, including acquisition of land for ship channel improvement, $3,544,200.
George Carlyle Marler: Mr. Chairman, I should like to tell the committee that last year a small departmental committee considered the whole question of dredging on the St. Lawrence and that the principal purpose of this item is to provide for improvements to the ship channel which are required in order to reduce the hazards to ocean going shipping which plies the St. Lawrence between Quebec and Montreal. The work which it is proposed to carry out consists of the further widening of curves and critical sections of the dredged channel between Quebec and Montreal as recommended in a detailed and very complete report which this committee of officials prepared and completed earlier this year.
In addition to the rather broad description I have just given, the work contemplates the completion of dredging in certain areas under the 1952 contract which could not be accomplished in 1955. That is a relatively small item. In addition there is the cost of expropriating Boat island which is six miles below Sorel just above lake St. Peter in order to straighten the channel to a minimum 800 feet and improve the run of ice which jams here. Then there is quite a long list of proposed dredging projects which are to be carried out under contract in 1956 as recommended by the committee. Unless the hon. gentleman would like to have the details, perhaps I might not burden the committee with them.
I should like to say that the experience of the department has been that it is good business to call for a four-year contract to carry out a long term program rather than to do it piecemeal from year to year. The contract was awarded after tenders had been called for publicly and the successful tenderer was the lowest tenderer. The practice is, I think, good, sound common sense. I think that is the way in which we can best spend our money in carrying out the dredging.
I should like to point out to the committee that the increased use of the St. Lawrence which is expected to result from the opening of the seaway is one of the main reasons which prompt us to continue this work of improving the channel which, as the hon. gentleman knows, is probably something like 150 miles in length. It has been progressively widened over the years with, I think,
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very satisfactory results so far as St. Lawrence navigation is concerned.


Howard Charles Green: What will the total cost be?


George Carlyle Marler: I have not in my book here the exact figure, but the total amount of the contract slightly exceeds $13 million. I think it is $13,250,000 or thereabouts.


Howard Charles Green: That is for the four-year program?


George Carlyle Marler: For the four-year program. The expected expenditures this year amount to a little over $3J million.


[Stage Direction]
Item agreed to.
Railway and steamship services-
451.	Repairs and expenses in connection with the operation and maintenance of official railway cars under the jurisdiction of the department, $56,240.
Andrew Ernest Robinson: Mr. Chairman, I wish to compliment the minister on the way in which he has answered our questions. That is one of the reasons why we like to assist him as much as possible. I should like to get some information from him. It is in connection with the rumoured curtailment of service up in Bruce. I might read this copy of a letter which has been sent to our postal clerks on the railways between Kincardine, Palmerston and Southampton. It reads as follows:
Plans of the Canadian National Railways call for removal from service of a number of passenger trains effective 30th September, 1956. This will necessitate considerable changes in the railway mail service in this district.
Plans have not yet been finalized but it now appears practically certain the railway mail clerk positions at Southampton, Kincardine and Goderich headquarters will be abolished.
You are, of course, vitally interested and I am therefore, passing this information along to you at this time.
It is anticipated that no postal car will operate in the Palmerston and Southampton branch, (also Kincardine and Goderich lines), and the only postal car operations between London and Palmerston will be in Trs. 168 and 169-29.
That letter is signed by J. A. Flaherty, district director, London. I may say that the hon. member for Huron, who is not able to be here tonight, is also very much interested in this prospective change. I am happy to see that the hon. member for Grey-Bruce has recently come into the house. I think probably he will be interested as well, because it affects part of his district. I should like to say that on August 3 the minister answered a question of mine. My question, as reported at 6923 of Hansard, was as follows:
I have one more question, Mr. Speaker. I would like to ask the minister if he thinks it is wise to curtail train service into Bruce county at

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this stage when it is expected by all economists in Canada that the population of this country is going to increase very greatly.
The minister answered as follows:
Mr. Speaker, I could not answer the question in general terms in which it was put. I think every case must be considered on its own merits.
At the present time I should be very glad if the minister could give us an idea as to what merits we have up there in Bruce in not wanting this train service cut off. As I think it has been suggested previously in this house, we are increasing in population and in industrial production up there. I should therefore like to know the minister's views on what we may expect up in that part of the country.


George Carlyle Marler: Mr. Chairman, I am sorry that I am not in any better position to reply to his question than I was the other day when the hon. gentleman first brought the matter up in the house. I may say that I communicated his observations to the Canadian National Railways but I have not yet received a reply to the inquiry which I addressed to them. In the second place, I am not in a position to express any opinion with regard to the service to which he has referred. I will say this, however: I think that all railway companies would hesitate to give up services that are profitable. I have merely inferred from the questions that have been put that if a reduction in service is being contemplated or is being put into effect, it is because the service as at present rendered is not proving to be profitable.
I would share the hon. gentleman's regret if it is found to be necessary to curtail service over the lines to which he has referred. I should like, first of all, to point out that this is a decision of the management of the railway, not of the Department of Transport; and I think it is guided by the factors of public interest, its responsibilities to the community it serves and also the general consideration of what its effect is on the accounts of the railway company.


Andrew Ernest Robinson: Did the minister say that it is a decision of the transport commission?


George Carlyle Marler: No. I said that the decision to reduce such service, if such a decision has been taken, was that of the management of Canadian National Railways. I do not want to appear to be too apologetic for the fact that I do not know every detail of the Canadian National Railways administration, but I should like the hon. member to understand that the reason for my unfamiliarity with the matter is that it is a C.N.R. decision and not one by the Department of Transport.


Andrew Ernest Robinson: I realize that the minister is doing a good job and a big job, and we would not expect him to know all these things. But after the questions that were asked the other day, I would think he might have familiarized himself with what has happened. If I may be allowed to tell the minister what has happened, I shall do so. The C.N.R. has notified the postal department that these trains are going to be cut off. I think it would be wise for the minister to familiarize himself with the situation and look into it, because he is at the helm.


William McLean Hamilton: Mr. Chairman, this item is one that deals with the private railway cars owned by the government. I think it would be interesting to have a little bit of information from the minister at this point. How many cars are there actually in operation at the present time, including the governor general's, those used by the board of transport commissioners and those used by the cabinet ministers? Concurrently with that answer, could the minister give us any comparative mileage travelled by those cars, for instance, this year, the year under examination, in comparison with that in previous years so that we may see what use is being made of them?


George Carlyle Marler: Mr. Chairman, I must say at once that we do not keep a record of the mileage of the cars. So far as I am concerned myself, in the last 12 months I think altogether I have travelled between 50,000 and 60,000 miles. I do not want to suggest that I have travelled all of that mileage by rail. If I had done so, I would be on the railroad 365 days of the year. However, I have travelled very extensively by rail. All I can say is that I think these cars serve a very useful purpose. I think perhaps hon. members may imagine that when one gets into a railroad car, the first thing one does is to sit down, relax and enjoy the greatest of luxury therein wherever one happens to be going. Unfortunately, it has not been my experience to be able to use for those purposes the official car which is at my disposal. So far as I am concerned, I have found that it was merely a sort of extension of my office. It had the great advantage of privacy. I could read confidential documents and lay out plans. I could accomplish a lot of uninterrupted reading that I can assure hon. gentlemen opposite is very difficult to accomplish in one's office.
At all events, if I could reply more directly to the hon. gentleman's question, this vote includes five cars, two of which are at the disposal of His Excellency; one for the Prime Minister; one for the Minister of Transport

and one for general use. There has been no change in the situation while I have been minister. I think that the number has remained the same for some considerable time. I should like to add one further word of explanation in connection with the cars and that is that the railway companies move these cars without any charge whatever to the government so that it is not a matter of paying a substantial sum each time a cabinet minister uses an official car to go from one point to another.


William McLean Hamilton: Just to deal very briefly with the minister's observation, I must say that I sympathize with him in so far as the value of being at ease and being able to work while travelling on a railway is concerned. Some of us poor, ordinary commoners who do not have the benefit of private railway cars, find we can operate quite successfully in a bedroom or compartment.


James Sinclair: Oh, oh, bragging.


George Carlyle Marler: That is not an admission I would care to make.


William McLean Hamilton: I am
afraid, Mr. Chairman, that is the level to which the government will sink in order to find something to misinterpret in one's remarks. I find I was not operating at a very high level.


George Carlyle Marler: It shows the directions of the hon. gentleman's thoughts, anyway.


William McLean Hamilton: I do
not know of what value it is to have a private dining room or how much assistance that is in the minister's reading. I do not know how much the chef assists him in his work or the car steward. I would point out to him that there are many businessmen across this country who do manage to do business quite successfully in the usual type of accommodation which is provided by the railways.


James Sinclair: The heads of railways who are in the transport business have private cars.


William McLean Hamilton: think the president of the Canadian National and the president of the Canadian Pacific do have their own private railway car.


James Sinclair: And each vice-president.


William McLean Hamilton: Certainly, I would be quite happy to see the Prime Minister have a car on occasion but I am not aware that each director of the C.P.R. has a car.
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James Sinclair: Each vice-president and every divisional superintendent across the country has cars.


William McLean Hamilton: I am
not arguing with that. If we extend that argument indefinitely, we are going to find the government arguing that a deputy minister should have a private railway car. The point I am making-


John Horace Dickey: The point you are making is pure jealousy.


James Sinclair: He wants a bigger field of operation.


William McLean Hamilton: The
point I am making is this. In the past several years the trend in business has been away from the rails to the air. In line with that trend, and I cannot argue against it, the government has seen fit to provide itself with air transport under the direction of the Department of Transport. I might at some point have occasion to examine whether all those planes now operated by the department are necessary. At this point I do say that I question the value of their having those planes and, having added that large expenditure in that field, not seen fit in any respect to contract these other expenditures. I understand the minister stated a few minutes ago that we are still operating the same number of private cars as we have for a great many years in the past. I suggest that is a typical example of piling one expenditure on top of another without proper attention to the elimination of some of these expenditures as they become unnecessary.
Now, some of the uses of these cars are most interesting. A few weeks ago I drew the attention of the house to a trip which the minister had made to Montreal to address a political meeting.


George Carlyle Marler: I should like the hon. gentleman, if he is going to talk about that, to confine himself to the facts as they were set forth in the house. The hon. gentleman knows full well, and I told the house at the time, that I went to Montreal not for the primary purpose of attending a political meeting but for the purpose of doing business for my department. It is true, and I admitted at the time, that I had spoken at a political meeting during my visit there.
I think the hon. gentleman, if he ever comes to be minister-


James Sinclair: God forbid.


George Carlyle Marler: -will find it exceedingly difficult to find what part of him is personal and what part of him is minister. All I can tell the hon. gentleman is that since I have been

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minister a very small part of me seems to be personal. When I go to Montreal I have very little opportunity of attending to personal matters, and even less time to attend to political matters. I do not want to interrupt the hon. gentleman but I should like him to stick to the facts and not to say that I went to Montreal to address a political meeting. Let him tell the whole story.


John Borden Hamilton: think in fairness to myself that Hansard will show that I was interrupted in the middle of a sentence. It is quite true the minister went to Montreal to address a political meeting and he went by his private car. When he was queried on that, he pointed out he had also done government business at the same time. Those are the facts which the minister has just set before us, and those are the facts which, had he not interrupted me, I would have mentioned.


Leon David Crestohl: But you put the cart before the horse.


An hon. Member:: He gave you a lift to the station, and that was the main mistake.


William McLean Hamilton: If we
are going to get through these estimates I suggest the members on the government benches confine themselves to intelligent remarks.
Having made a reference to that, I go ahead and point out one other trip which was made during the month of April which I think is indicative of an improper use or, if not improper, at least more use than is necessary being made of these cars. We find that on April 28 two of these cars left Ottawa and went to Quebec. I can well understand, Mr. Chairman-I should say I can understand, but not very well- that when the minister's argument is applied he may have wanted to work on his way to Quebec. But why run two cars down, one because the Minister of Transport wanted to go and the other because the Minister of Northern Affairs wanted to go.
The other question which arises in my mind is this. This was a Saturday and I am wondering what important government business was taking place on Saturday or Saturday night in Quebec city that required the presence of both the Minister of Transport and the Minister of Northern Affairs. I do not know. I do know that Saturday night, April 28, there was a great Liberal rally as the provincial Liberal party of Quebec kicked off their campaign. I do know that both the Minister of Transport and the Minister of Northern Affairs were prominently displayed at that rally. If they want to go down to

Quebec and get their brains kicked out in a provincial election, as subsequently happened, that is their business. But I suggest they should not be using government transportation, government private cars, for that particular purpose. I just point out that of course there is no doubt as to when they returned. The car of the Minister of Transport came back on April 28 and that of the Minister of Northern Affairs on April 29, which would indicate to me that they left Ottawa on the Saturday and returned either late Saturday night or Sunday and this rather limits the amount of government business they could have accomplished.
It is within this framework that I rise to ask the Minister of Transport to give every consideration to reducing his expenditures in this field of ultimate luxury. I wonder if any of the ministers of the crown has even bothered to find out what sort of alternative transportation is available on the trains? Let them try once or twice, as some of us do, the very fine accommodation which is available on the ordinary trains including drawing rooms, bedrooms and compartments where they can be by themselves and do their work and by which means the taxpayers of this country will be saved a fairly substantial amount of money.
I hope that the minister will explain to us what necessity there was for these two private cars to go to Quebec on a Saturday and come back on a Sunday and perhaps he would indicate whether or not there was any connection between that trip and their attendance at the opening of the political rally of their party in Quebec.


Edward Turney Applewhaite: Shall the item carry?


George Carlyle Marler: Mr. Chairman, I am sorry; but I realize it would be very easy for me to allow this item to carry and leave unanswered on the record the remarks which my hon. friend has just made. Last year his interests turned very largely on the use of government aircraft for the transport of ministers of the crown. After having shown this extraordinary interest last year in the use of government aircraft for the transport of ministers of the crown the hon. member believes it is quite in order to use such aircraft for the transport of ministers of the crown but that it does not appear to be in order to use official cars for that purpose.
I think the hon. member would really like to have the best of both worlds. He wants to criticize members of the government when they travel by air and he likewise likes to criticize them when they travel in these railway cars.

All I can say, Mr. Chairman, so far as I am concerned, is that in using one of these official cars I am following the tradition and the practice that has been followed by a large number of my predecessors. I would like to be able to travel just as my hon. friend does and not be bothered with other people but unfortunately that is not possible. I found that when I was a member of the legislature of Quebec I was lucky if I got past the first page of a newspaper when travelling because everybody who had a bill in the legislature thought I should know what it contained. All I can tell the hon. gentleman is that the situation is no different although I have changed the scene of my activities.
The hon. member appears to find fault with the fact that these cars are available for use by ministers of the crown. He does not seem to be aware of the fact that private cars or business cars, as one might call them, are available not only to the presidents and vicepresidents but are available also to divisional superintendents of both railways. I have not heard him criticize that fact at any time, from which I must infer that he considers it is ail right for a divisional superintendent to have a private car but it is not proper for a minister of the crown to use such a car to carry on government business. Well, Mr. Chairman, I cannot subscribe to that idea because I do not think it conforms to common sense or the realities of the situation.
The hon. gentleman has shown the greatest of interest in my movements. A few moments ago we heard his comments about a trip I made to Montreal. If one will look at Hansard one will find that when I told him what was the purpose of my business in Montreal he went on to ask how it came about that on the same day I did this I actually had a vote in the house. Frankly, Mr. Chairman, I have been accustomed in the face of the most bitter political opponents to having what I said as a fact accepted and not questioned to find out whether or not what I had said was true. Not only did the hon. gentleman question in the house the comment I made but he took the trouble to telephone my personal staff to find out about my movements.


Henry Alfred Hosking: Sneak.


George Carlyle Marler: I am of the opinion that this is carrying curiosity to a point which exceeds ordinary limits.


John Horace Dickey: You are a little snooper.


George Carlyle Marler: The hon. gentleman is interested in the fact that there were two cars used on this occasion. My recollection of the situation is that my colleague, the Minister of Northern Affairs and National Resources, went on an early morning train
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which was impossible for me to do because, unfortunately, I had to give up my Saturday-morning to deal with C.N.R. business in Montreal, which I may remind the hon. gentleman is not my home, and I can assure him I prefer to spend my Saturdays at home. I was not able to do so. I spent the morning in Montreal and went to Quebec by the afternoon train. I came home on the evening train and returned in time to spend half of the weekend with my family; but, Mr. Chairman, I make no apology for that because I think that is part of my job. I feel that having a car at my disposal enables me to accomplish more work than I would otherwise accomplish.
The hon. member, I think, will readily realize how difficult it would be to travel with documents spread out on adjoining chairs and I am sure he also appreciates how undesirable it would be to spread documents beside other passengers in the train where they could be read.


Clarence Decatur Howe: Mr. Chairman, I would like to make a few remarks further to what the hon. member for Bruce has said about the curtailment of the railroad service up through the peninsula and the counties of Wellington, Huron and Grey.
About three years ago an application was made by the railway to the board of transport commissioners to curtail the service through that part of the country. Representations were made by all the surrounding municipalities and no curtailment was made at that time.
The present situation is this. We hear rumours of curtailment. Today the hon. member for Bruce, the hon. member for Huron and I went over to the board of transport commissioners and talked to them. They said they had no word concerning any curtailment that was going to take place and they had not been advised concerning any lessening of the service on that branch line. We then went over to the postal department and learned that this department had been informed that on September 30 the time card is going to be changed and the service will be curtailed by the railroads on that line.
We are now wondering exactly what is going on. After all, if that service is going to be curtailed the people who will be affected by it should know the facts. Is this a case of slipping something in by the back door? The part of Ontario to which I have referred is going to be developed. If transportation facilities are curtailed the people there will not have the benefit of the rail lines and they will lose the advantage of the new industries that may very well be attracted to

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locate there. I feel something is going on here that the people of the district should know about.
They have not been told if the rail service is to be curtailed. We understand that the railroads may curtail service to a certain extent without letting the people know about it, but this service concerns a lot of people. They helped to build up the business on this branch line and maintain it through the year. If we are going to have main lines we must have feeder lines. I sometimes think if the railroads would take some of these teams that go around the country to try to find ways of bringing about economies and sent them up through these districts to find ways of promoting railroad traffic everything would be much better.


Henry Alfred Hosking: I spoke on this item four years ago along with the former hon. member for Bruce, Donald Blue; the former hon. member for Perth, James Corry; and the former hon. member for Wellington North, Arnold Darroch. We approached the minister on this same issue and after our representations and private presentations these lines were not closed up. I think it should appear on the record that members from this district four years ago prevented this line from being closed.


Howard Charles Green: Surely the suggestion is not that these decisions are being made on a political basis?


Edward Turney Applewhaite: The item before us deals with official railroad cars and I think it is up to me at this moment to point out to the committee that we are dealing with estimates of the Department of Transport not of the Canadian National Railways. I looked through the items to see if I could help hon. members by finding one under which such matters could be discussed and that item would appear to be No. 494 dealing with the board of transport commissioners. I may be wrong in assuming that the curtailment of services is something which might be referred to the transport commissioners. I must insist that the matter of curtailment of services be deferred until item 494.


[Stage Direction]
Item agreed to.
Hudson Bay railway-
452. To provide for the difference between the expenditures for operation and maintenance, and revenue accruing from operation during the year ending March 31, 1957, not exceeding, $150,000.
Walter Gilbert Dinsdale: I am glad to see that the deficit in regard to the operation of the Hudson Bay railway is moving in the right direction as this item indicates there is a decrease of $275,000 over the previous year. I do not have to emphasize the importance

of this seaport in the heart of this continent to the provinces of Manitoba, Saskatchewan, Alberta and British Columbia and the Northwest Territories. One of the great handicaps to the development of this particular region is the discriminatory differential in freight rates and my reason for making any observations on this item is to stress once again the importance and significance of the operation of the railroad and the seaport to our prairie economy. I understand that the saving on grain moving through Churchill amounts to 15 to 25 cents per bushel. I should like the minister to comment upon the reason for this decrease in the deficit. I assume it is because of the increased tonnage moving out of the port since the grain elevator facilities were extended.
The minister will recall that last year I made a recommendation concerning tourist excursions and the minister was kind enough to supply me with detailed information of these excursions operated by the C.N.R. I am glad to note that two excursions are now being run in place of one, but I suggest that there is still a wide demand for this particular type of holiday if the services and facilities are made available. There is a large waiting list, particularly of Americans, who are anxious to make this trip to the bay.
I could quote figures on this situation, but I shall not take the time of the committee to do so. It is important to the continued success of the operation of the railroad that we stimulate as far as possible a two-way flow of trade. The outward flow has been increasing at a quite rapid rate since the end of the war. For example, in 1946 there were 3 million bushels of wheat moved through the port while last year there were over 13 million bushels. That is an excellent increase but there is difficulty in connection with the inflow of imports from Europe. While this does not come directly under the jurisdiction of the minister I hope he will use his influence to have our trade commissioners point out the advantages of supplying the midwestern Canadian market through this port.


George Carlyle Marler: The reason for the reduced deficit is the satisfactory improvement in the amount of tonnage carried on the railroad. In 1955-56 the revenue tonnage amounted to 578,000 tons as opposed to
458,000	tons in the preceding year. As the hon. gentleman has pointed out, the great difficulty is that the volume of import freight is very small. Of those figures I have just given approximately 2,000 tons in round figures of import freight were handled in each of those two years. As the hon. members will appreciate, that is a very small fraction of the whole.

It is the consumers in western Canada who will have to create a demand for shipments into Churchill rather than shipments out of that port. The hon. gentleman comes from that part of the world and perhaps he can do some missionary work which would help to bridge the distance between 2,000 tons and 578,000 tons.


William Scottie Bryce: Last year when the minister's estimates on the Hudson Bay railway were up I asked if a survey had been made of the territory north of Gypsumville. At that time perhaps I was to blame for misleading the minister a little by referring to Hodgson instead of Gypsumville. This time I intend to be more specific and make sure that I do not mislead the minister in any way.
On May 17, 1948 I first raised the question of a cut-off through the interlake country to the Hudson Bay railway and at that time the Honourable Mr. Chevrier said he would bring the matter before the officers of Canadian National Railways. I know discussions have taken place as to the advisability of the railroad being extended 190 miles north to Wekusko, which is at mile 81 on the Hudson Bay railway. In that 190 miles of proposed railroad there is only one bridge that would really cost money, and that would be at Grand Rapids. In 1948 it was estimated at $1 million, but at today's prices it would cost more.


George Carlyle Marler: What do you mean by $1 million?


William Scottie Bryce: The bridge would cost that. In passing may I say that Grand Rapids is a prospective power site with a drop of some 80 feet there.
In building this 190 miles extension from Gypsumville to Wekusko there would be a saving of 250 miles, as we ship our grain at the present time to Port Churchill.
In 1948 when I talked to the then minister of transport about it I pointed out that it would be an advantage to defence by having a quicker route to Port Churchill. Also there would be a great saving to farmers and shippers sending their produce to Port Churchill. There is a lot of timber in that country and a lot of agricultural land and with a railroad going through it, it could be developed.
With a shorter haul to Port Churchill many benefits could come from that. I have already mentioned national defence-it is a more direct and quicker way to the large military establishment in the north.
If cattle prices should change and we again ship cattle to Britain instead of the United States, then it would mean a lot to the
Supply-Transport
livestock getting to the port as quickly as possible. It has been estimated that the livestock would be 18 to 20 hours less on the road, which would be a big benefit. Shipping by refrigerator cars would be a saving too, because they would not need to be iced as often as going the roundabout way.
Business from Winnipeg would be increased, and it would be possible that the boats would not come in empty but would come loaded with goods and have the grain for the return trip.
While we have ice conditions to contend with and the port is only open 100 days of the year, I feel that in the near future that 100 days is going to be extended to a longer season through the invention of radar and different aids to shipping that they never had in the old days.
This short cut would benefit Manitoba in general-it would open up new country along the railroad and it would also provide work and wages while the line was being built.
One could speak 40 minutes on this proposed route, going into the details and savings that could be achieved, but I want to leave it at that and ask that the minister give some consideration to it, and he can tell the house later whether it would appeal to him or not. When the minister brought in his estimates in March, I had a 40-minute speech ready, and the delays in his estimates have saved him from that. I have condensed it a little further every time his estimates have come up, and now he is only getting the cream of it.


George Carlyle Marler: I admire the hon. gentleman's forbearance.


William Scottie Bryce: Perhaps if I lived in the east I would look at this in a different light, but being a Manitoban I want to see the benefits of this extension come to Manitoba. But I know from my dealings with the minister in the past that he will look at this from a Canadian point of view.
I am sending over a map of Manitoba to show the minister where the route would go and how it would save haulage miles. I would at this time appeal to the minister to have the officers of his department give some consideration to building this short cut to Churchill.


George Carlyle Marler: I would just like to tell the
hon. member that the matter was considered in 1952. At that time the cost was found to be very substantial, with an annual loss in prospect of very close to $1 million. I do not know what the situation would be in 1956 but I shall be very glad to draw the

Supply-Transport
hon. gentleman's remarks to the attention of the Canadian National Railways and see what their reaction is.


Walter Gilbert Dinsdale: The minister suggested that we might do some missionary work on behalf of the port situation at Fort Churchill. There is an excellent book that has been published by the Hudson Bay Route Association, and I am going to take the liberty of sending him a copy. He can read it on one of those railway journeys we were talking about a few moments ago.


George Carlyle Marler: It just shows that there is never a dull moment.


[Stage Direction]
Item agreed to.
Howard Charles Green: I wonder whether items 459 to 462 inclusive could be allowed to stand?


George Carlyle Marler: That will be quite agreeable to me.


Edward Turney Applewhaite: Is it agreed that items 459, 460, 461 and 462 stand?


Some hon. Members:: Agreed.
464.	To provide towards the cost of surveys of Newfoundland railway properties entrusted to the Canadian National Railway Company, $17,500.


Howard Charles Green: This is the item to provide for the cost of surveys of Newfoundland Railway properties, $17,500. Can the minister give us a report on the progress that is being made on these surveys and the possibilities of a program being undertaken eventually to change the Newfoundland Railway to a standard gauge railway?


George Carlyle Marler: In respect to the first part of the hon. gentleman's question, the item of $17,500 is intended to cover the expenditures which the railway must incur in order to establish the lines of various properties which are under its control in Newfoundland, physical surveys in order to determine boundary lines.
With regard to the question of conversion from narrow gauge to standard gauge, I talked to Mr. Gordon about the matter casually, but the cost always appeared to be staggering.


Howard Charles Green: What is it?


George Carlyle Marler: I think it is somewhere in the neighbourhood of $50 million. My deputy minister points out that he thinks the current estimate is more than that. I think I should tell the hon. gentleman that it is a very substantial sum, and I think it is unlikely from the viewpoint of economics that it would be considered feasible at this time. The railway has spent a great deal of money on new equipment for the narrow gauge, and that, of course, would be completely

wasted. That is a fact that will have to be taken into account. I assume that the question must have been considered after the union of Newfoundland with Canada because I do not believe these very large expenditures would have been made if it had been considered economic to make the change that the hon. member mentioned.


[Stage Direction]
Item agreed to.
465.	Degaussing and strengthening for armament, sea-going merchant ships of Canadian registry of 1,000 gross tons and over, $300,000.
Howard Charles Green: I believe that this item covers coastal vessels. Could the minister tell us whether that program is nearing completion and how long it will take to finish it?


George Carlyle Marler: I do not think there is any prospect of this item disappearing. The expenditures last year were estimated to be $290,000. The later figure at the close of the year is $191,503. This expenditure for degaussing and strengthening is applicable to new ships and as new ships are being built the money is being spent. Perhaps we will find there are some ships being built after all.


[Stage Direction]
Item agreed to.
466.	Maritime Freight Rates Act-for the payment to the railway companies operating in the select territory designated by the act, during the fiscal year 1956-57, of the difference occurring on account of the application of the act, between the tariff tolls and normal tolls under approved tariffs (estimated and certified to the Minister of Transport by the Canadian National Railway company and approved by auditors of the said company respecting the eastern lines of the Canadian National Railways and in the case of the other railways by the board of transport commissioners for Canada) on all traffic moved during the calendar year 1956 (chap. 174, R.S.), $11,500,000.
Thomas Miller Bell: This item with respect to the Maritime Freight Rates Act involves an amount of $11,500,000, and I feel that I should remark briefly on it. A great deal has been said in recent days with respect to freight rate problems in Canada. We had a discussion in the house recently of the various problems that are now coming to the fore with regard to transportation in this large country of ours. Suggestions have been made that a regulatory body would be the answer to our freight rate difficulties. Others have suggested that a new national transportation policy is necessary. I remember reading last year that Mr. Donald Gordon, the president of Canadian National Railways, had suggested in an address in New York city that a complete new look was needed with respect to our freight rate structure in Canada. At present we have the problem of the board of transport commissioners now considering a permanent increase after granting an interim

increase a few months ago. Rather than try to talk in a rambling way about the problems facing the maritimes with respect to their position in the freight rate structure I should like to read part of an editorial from the Fredericton Daily Gleaner of Wednesday, August 8, which just arrived today. I think two paragraphs will be enough to explain the problem that we now have down in the maritimes. The editorial reads as follows:
As far as the Atlantic area is concerned, the freight rate structure is badly out of joint. These four provinces, at the end of the rail lines are wholly dependent on the railways both for buying and marketing products. We require many goods from central Canada, and due to the dense population and heavy purchasing power of Quebec and Ontario, these provinces are our best market outlets.
But the cost of taking our goods to central Canada is almost prohibitive. A series of freight rate increases has hit at the long-haul shipper unfairly. These are horizontal increases, applied by a uniform percentage.
I would ask that the next sentences be noted particularly because they explain our difficulty very clearly.
If a long-haul shipper who pays $20 and a short-haul shipper who pays $10 both have their freight rates increased by, say 50 per cent, the $20-shipper now pays $30 and the $10-shipper $15. The difference between what they pay is now $15 instead of $10.
This merely illustrates the increasing disparity with which the maritimes have found themselves faced as a result of the increases that have taken place since we came under the statutory provisions of the Maritime Freight Rates Act of 1927. A few days ago the Atlantic premiers met in Fredericton to consider their difficulties. The conference has been referred to here in the house. They examined their problems and tried to get united action with respect to some of the difficulties they saw in our future, and the No. 1 problem was freight rates. They put it in that priority for the future.
The maritime transportation commission has also said it is our No. 1 problem. At this late hour this evening I simply want to say that when the board of transport commissioners is considering these increases they must give more attention to our problems than to
Supply-Transport
those of any other area in Canada. Our problems with respect to freight rates go to the root of our difficulties, economic, geographic and financial, and I seriously suggest that the time has now come when we have to review these provisions that were a help to us and afforded us some consideration many years ago. We have now been put in a very serious competitive position with the central Canadian market on which we in the Atlantic provinces are now so dependent in so many ways.


[Stage Direction]
Item agreed to.
William Alfred Robinson: Item 468.


Howard Charles Green: I notice it is past ten o'clock.


Walter Edward Harris: Before we call it past ten o'clock, may I say that I quite understand the desire of the hon. member to stand certain items. I think that would be desirable and necessary under the circumstances but there must be a lot of others that could be carried without debate if we ran through them. Those that they want to stand until tomorrow can be allowed to stand.


Howard Charles Green: I think we will get ahead just as fast if we stop now.


Edward Turney Applewhaite: For my own satisfaction, item 467 is carried and item 468 is called.
Progress reported.
Resolutions adopted in committee of supply this day reported and concurred in.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow we shall take the second readings of the tax agreement bills which are in my name but which will be taken by the Minister of National Revenue because it is he who is particularly concerned with them. I should have pointed that out the other evening when I moved first reading. We shall then take the estimates of transport, labour, legislation and justice.


[Stage Direction]
It being one minute after eleven o'clock the house adjourned, without question put, pursuant to standing order.
67509-466J
Questions

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

Mr. Michener: 1.	In the last fiscal year, what percentage of each province's total revenues was represented by the subsidies, grants and payments made by Canada to the province?
2.	What were the respective revenues and payments?
Answer by: Hon. W. E. Harris (Minister of Finance):


PROVINCIAL GROSS REVENUES AND FEDERAL SUBSIDIES, GRANTS AND PAYMENTS, FISCAL YEAR 1953-54 (S'000)
[Stage Direction]
-	Nfld.	P.E.I.	N.S.	N.B.	Que.	Ont.	Man.	Sask.	Alta.	B.C.	Total1. Gross general revenue	36,822	8,707	56,243	57,035	333,429	408,011	68,907	109,267	199,730	202,428	1,480,579Federal subsidies, grants and payments-	11,825	3,631	19,497	16,178	134,448	25,039	25,254	29,803	43,516	309,191(b) Share of income tax on power	utilities	161	30	279	283	2,120	1,097	569	43	1,396	853	6,831(c) Statutory subsidies	6,369	657	2,057	1,679	3,300	3,641	1,755	2,041	2,127	1,281	24,907Subtotal (a)-(c)	18,355	4,318	21,837	18,140	5,420	139,186	27,363	27,338	33,326	45,650	340,929Grants in aid and shared cost contribution	977	112	1,034	2,691	1,501	1,978	3,936	3,505	15,734(e) Health and social welfare	1,950	337	2,718	3,014	17,554	12,832	3,133	3,359	3,430	4,716	53,043(f) Education	81	52	324	210	973	1,517	263	221	380	282	4,303(g) Natural resources and primary in-	dustries	3	43	92	784	657	576	152	106	218	1,085	3,7166	4	25	28	85	117	2655	167	30	202
Subtotal (d)-(i)		3,017	544	3,138	5,047	19,184	17,783	5,074	5,692	8,049	9,735	77,263
2. Total of federal subsidies, grants and											
payments	21,372	4,862	24,971	23,187	24,604	156,969	32,437	33,030	41,375	55,385	418,1923. Percentage 2 of 1	58-0	55-8	44-4	40-7	7-4	38-5	471	30-2	20-8	27-4	28-2
Note:
Provincial revenues have been ad justed to include all federal payments listed.	...
Their customary procedure is to include direct payments such as tax rentals, subsidies and shared taxes, as revenue but to onset against expenditure moneys received from grants in aid and shared cost contributions.
Provincial detail for 1954-55 will not be available before about August 15, 1956.
Source: Financial statistics of provincial governments 1953-revenue and expenditure D.B.S.

Questions
[Stage Direction]
Questions

[Stage Direction]
Question No. 569
Harold Edward Winch: 1.	How many dependents over 21 years of age of Chinese Canadians have been admitted to Canada since 1950?
2.	How many such dependents have been admitted to Canada after reaching their 25th birthday?
3.	How many orders in council in connection with such admissions were issued after such dependents had passed their 25th birthday?
4.	Since 1950, have any regulations been passed under the Immigration Act with respect to the entry into Canada of dependents over 21 years of age, and if so, what is the policy governing the admission of such dependents?
5.	Does the Department of Citizenship and Immigration still accept applications for dependents over 21 years of age?
Answer by: Hon. J. W. Pickersgill (Minister
of Citizenship and Immigration):
1.	Statistics not available. However, from December 31, 1950, to June 30, 1956, 88 orders in council were passed providing for the admission of 3,126 dependents 21 years of age and over, of Chinese Canadians.
2.	Statistics not available. However, from December 31, 1950, to June 30, 1956, 78 orders in council were passed providing for the admission of 375 dependents 25 years of age and over, of Chinese Canadians.
3.	See answer to No. 2.
4.	No, assuming that this question refers to dependents of Canadian citizens of Chinese origin from the continent of Asia. However, order in council P.C. 1956-785 of May 24, 1956, authorized the admission of certain dependents and others of Chinese origin under section 20 of the amended immigration regulations, depending on citizenship and country of residence.
5.	Not for residents of China or other parts of Asia.
[The following items were passed in committee of supply]:


DEPARTMENT OP TRADE AND COMMERCE
[Stage Direction]
General administration-
415.	Departmental administration, $628,021.
416.	Commodities services, including fees as detailed in the estimates, the expenditure for these not to exceed the amounts shown unless otherwise approved by treasury board, $699,490.
Trade commissioner service-
417.	Administration and operation, $2,832,458.
418.	Acquisition or improvement of buildings, land, equipment and furnishings, $150,000.
419.	Trade information, $287,908.
420.	Economics branch, $240,315.
421.	International trade relations branch, including a fee of $6,300 to the international customs tariffs bureau, $145,900.
Exhibitions-
422.	Exhibitions generally, $535,888.
423.	Canadian participation in the Brussels universal and international exhibition 1958, $750,000. Standards branch-
424.	Administration, including the standards laboratory and administration of the Precious Metals Marking Act, $220,829.
425.	Electricity and gas inspection services, $782,515.
426.	Weights and measures inspection services, $841,276.
Dominion bureau of statistics-
427.	Administration, $177,729.
428.	Statistics, including contributions as detailed in the estimates, the expenditure for these not to exceed the amounts shown unless otherwise approved by treasury board, $5,529,351.
429.	Census, including a contribution as detailed in the estimates, the expenditure for which not to exceed the amount shown unless otherwise approved by treasury board, $4,710,429.
Board of grain commissioners (Canada Grain Act) -
430.	Administration, $149,780.
431.	Inspection and weighing of grain, and related services, $3,621,974.
Canadian government elevators-
432.	Operation and maintenance, $1,271,806.
433.	Construction or acquisition of buildings, works, land and equipment, $400,750.
Special-
434.	International economic and technical cooperation branch, including the administration of the Colombo plan and of certain United Nations co-operation plans, $190,116.
Exhibitions-
705. Canadian participation in the Brussels Universal and International Exhibition 1958-further amount required to authorize payment, notwithstanding the Civil Service Act, of an honorarium to Mr. J. J. Olson, $1.
Atomic energy control board-
49.	Administration expenses of the atomic energy control board, $41,160.
50.	Grants for researches and investigations with respect to atomic energy, $300,000.
Atomic Energy of Canada Limited (research
program) -
51.	Current operation and maintenance, including expendable research equipment, $13,743,370.
52.	Construction or acquisition of buildings, works, land and equipment and to authorize Central Mortgage and Housing Corporation to undertake construction of works at Deep River for Atomic Energy of Canada Limited, $8,713,685.
Loans, investments and advances-
Atomic Energy of Canada Limited-
524. to provide for advances to Atomic Energy of Canada Limited in such amounts and on such terms and conditions (including the delivery to Her Majesty, in satisfaction of the advances, of obligations or shares of the company) as the governor in council may approve, to finance the construction of a new reactor (NRU) and auxiliary buildings at Chalk River project, works to provide services in connection therewith, to construct or acquire buildings and equipment for the commercial products division in Ottawa and other locations, and housing and other works to be constructed at Deep River and to authorize Central Mortgage and Housing Corporation to undertake construction of the said housing and other works at Deep River for Atomic Energy of Canada Limited, $9,479,464.

525. To provide for working capital advances to Atomic Energy of Canada Limited, subject to such terms and conditions as the governor in council may approve, $3,880,000.
Atomic Energy of Canada Limited (research program) -
603.	Current operation and maintenance, including expendable research equipment-further amount required, $200,000.
604.	Construction	or	acquisition	of	buildings,works, land and	equipment and	to	authorizeCentral Mortgage	and	Housing Corporation to
undertake construction of works at Deep River for Atomic Energy of Canada Limited-further amount required, $502,600.
National research council-
282.	Salaries and other expenses, $15,470,139.
283.	Construction	or	acquisition	of	buildings,
works, land and equipment, $2,817,890.
284.	To authorize the establishment in the consolidated revenue fund of a special account to be known as the Sir Frederick Banting fund account, to which shall be credited the balance of the amount remaining in the Sir Frederick Banting fund (comprised of private donations and originally established by order in council P.C. 4260 of the 27th day of August, 1940) as at the 31st day of March, 1956 (estimated at $954,550) and to authorize payment out of the account during the current and subsequent fiscal years for or in respect of projects relating to the advancement of the natural sciences that are recommended by the president of the national research council and approved in accordance with regulations of the governor in council; and to approve the expenditures made from the Sir Frederick Banting fund subsequent to the fiscal year that ended on the 31st day of March, 1945, and prior to the current fiscal year amounting in the aggregate to $101,700, $1.

[Stage Direction]
Privy council office-
328.	General administration, $405,184.
Prime minister's residence-
329.	Maintenance and operation, $25,000.
Federal district commission-
330.	To provide a supplement to the sum of $300,000 granted by chap. 112, R.S., for construction, improvements and operation of the parks, parkway system and other works under the control of the federal district commission, $142,071.
331.	To authorize the federal district commission to expend for construction, improvements and operation of works under its control, revenues accrued or accruing to the commission from the rental of properties under its control and from other sources, $1.
332.	To provide for maintenance and improvement of grounds adjoining government buildings at Ottawa, and for expenses of the national capital planning committee, $531,728.
333.	To authorize payment of the ninth instalment to a special account in the consolidated revenue fund, known as the national capital fund, established under vote 809, Appropriation Act No. 4, 1947-48, $2,500,000.
163.	Office of the secretary to the governor
general, $183,480.
164.	To authorize and provide for the reimbursement to the lieutenant-governors of the provinces of Canada of the costs of travelling and hospitality incurred in the exercise of their duties up to a maximum per annum for each as follows:	(a)
where the population of the province at the last decennial census did not exceed 500,000, $5,000;
Supply-Items Passed
where the population of the province at the last decennial census exceeded 500,000, $5,000 plus $1,000 per each 100,000 or fraction of 100,000 of population over 500,000, but not exceeding $12,000 in any case, $86,000.

[Stage Direction]
Marine services-
440.	Marine services administration, including agencies, $670,240.
Marine service steamers-
441.	Administration, operation and maintenance, $7,393,793.
442.	Construction or acquisition of vessels and equipment, $5,309,500.
Aids to navigation-
443.	Administration, operation and maintenance, $4,948,613.
444.	Construction or acquisition of buildings, works, land and equipment, $1,816,560.
445.	Nautical services-administration, operation and maintenance, including grants and contributions as detailed in the estimates; rewards for saving life from vessels in distress; subsidies to salvage companies, and the payment of expenses, including excepted expenses, incurred in respect of Canadian distressed seamen as defined in section 306 of the Canada Shipping Act, $542,330.
446.	Pilotage service-administration, operation and maintenance, including authority for temporary recoverable advances not exceeding $20,000, $626,736.
447.	Steamship inspection service, including the carrying out of the provisions of the conventions for the safety of life at sea and load lines, and contributions as detailed in the estimates, $739,710.
448.	Marine reporting service, $133,235.
River St. Lawrence ship channel service-
449.	Administration, operation and maintenance, $953,254.
450.	Contract dredging, including acquisition of land for ship channel improvement, $3,544,200.
Railway and steamship services-
451.	Repairs and expenses in connection with the operation and maintenance of official railway cars under the jurisdiction of the department, $56,240.
Hudson Bay railway-
452.	To provide for the difference between the expenditures for operation and maintenance, and revenue accruing from operation during the year ending March 31, 1957, not exceeding, $150,000.
453.	Construction or acquisition of buildings, works, land and equipment, $382,000.
454.	Prince Edward Island car ferry and terminals -to provide for the payment during the fiscal year 1956-57 to the Canadian National Railway Company (hereinafter called the national company) upon applications approved by the Minister of Transport made from time to time by the national company to the Minister of Finance and to be applied by the national company in payment of the deficit (certified by the auditors of the national company) in the operation of the Prince Edward Island car ferry and terminals arising in the calendar year 1956, $1,501,000.
455.	Reconditioning and refit of ferry vessel Scotia II for the Prince Edward Island car ferry service, $50,000.
Strait of Canso-
456.	Transportation improvements and facilities, $1,012,500.
457.	Causeway maintenance, $10,000.
458.	Enlargement of dock and terminal facilities at North Sydney, Nova Scotia, $261,300.
463.	Construction or acquisition of vessels for Newfoundland coastal services, $793,750.
[Stage Direction]
Supply-Items Passed
464.	To provide towards the cost of surveys of Newfoundland railway properties entrusted to the Canadian National Railway Company, $17,500.
465.	Degaussing and strengthening for armament, sea-going merchant ships of Canadian registry of 1,000 gross tons and over, $300,000.
466.	Maritime Freight Rates Act-for the payment to the railway companies operating in the select territory designated by the act, during the fiscal year 1956-57, of the difference occurring on account of the application of the act, between the tariff tolls and normal tolls under approved tariffs (estimated and certified to the Minister of Transport by the Canadian National Railway company and approved by auditors of the said company respecting the eastern lines of the Canadian
National Railways and in the case of the other railways by the board of transport commissioners for Canada) on all traffic moved during the calendar year 1956 (chap. 174, R.S.), $11,500,000.
467.	Canadian National (West Indies) Steamships, Limited-to provide for the payment from time to time to the Canadian National (West Indies) Steamships, Limited (hereinafter called the company) of the amount of the deficit occurring during the year ending December 31, 1956, in the operations of the company and the vessels under the control of the company, as certified by the auditors of the company, and upon applications made by the company to the Minister of Finance and approved by the Minister of Transport, not exceeding, $200,000.
[Stage Direction]
Friday, August 10, 1956