1956-06-27

Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I rise on a question of privilege. Next Monday is the day set aside to honour the founding of our nation. It is a day which will be respected as a holiday in every city, town, village and other part of Canada. This house will be sitting for some time yet. No question of urgency arises which would necessitate sitting on such a day.
There are many hon. members who, as part of their duties as representatives of the people, will feel called upon to attend ceremonies in their own communities. For that reason I think it would be appropriate that we honour that day by adjourning when we adjourn on Friday until Tuesday next. I think this would be in keeping with the respect for the day marking the beginning of the history of a country which we all revere. I cannot imagine that on corresponding days in the United States or in other countries, where they respect the day set aside to mark the beginning of the nation, they would sit under these circumstances and deny to any of their members who have the opportunity to do so the right to participate in such celebrations as may take place.
It may well be that there are those who will not be able to attend the ceremonies in their own communities, but may I say to any of those who will not that there will be ceremonies here in Ottawa which will permit them to indicate their respect for the nation which is honoured on that day.


Mr. Sinclair:: Right here in this chamber.


Righi Hon. C. D. Howe (Acting Prime Minister):: Mr. Speaker, this matter, though not with reference to this particular day, has been discussed on several occasions, but it has been the feeling of the house that we can best honour our country on public holidays by attending to the country's business. Many hon. members are here at great distances from their homes. They are here to attend to the country's business. If a few hon. members find it necessary to be absent 67509-344
from the house and in their own constituencies I think if they are able to do that during a provincial election campaign they can perhaps be absent on Monday next.


George Alexander Drew: Mr. Speaker, I raised this question as one of honouring Canada as a nation. The contemptible suggestion that this would be a political idea in permitting members to go to their homes is utterly unworthy of the Acting Prime Minister.


Clarence Decatur Howe: Mr. Speaker, on a point of order, may I say that I made no such suggestion. The representation made by the hon. member is a gratuitous insult to me and he might very well withdraw. I mentioned that certain hon. members can be away without upsetting the business of the house. I again say that we can best honour our country by attending to our country's business which we are here to undertake.


George Alexander Drew: Mr. Speaker, I have nothing to withdraw. It is not an insult to this house to suggest that we should honour the day on which Canada was founded.


Mr. Speaker:: Order. May I submit that what has been submitted as a question of privilege was really a matter affecting the business of the house. The suggestion having been made that an adjournment take place on July 2 next, and a reply having been made by the Acting Prime Minister (Mr. Howe), I think the matter should be considered as closed.



COMMITTEES OF THE HOUSE


Mr. D. F. Brown (Essex West):: Mr. Speaker, I have the honour to present the second report of the special joint committee on capital and corporal punishment and lotteries. This report constitutes the committee's final report on the question of capital punishment only. The report being presented is in English. The French version will be presented later. No motion will be made for adoption of this report at this time.



RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Eighth report of standing committee on railways, canals and telegraph lines.-Mr. McCulloch (Pictou).
[Stage Direction]
Questions


Mr. Knowles: 1. Has the federal government completed its purchase of certain property or properties at Joyceville, Ontario, from Mr. Benjamin Franklin?
2.	If so, how many acres were purchased from Mr. Franklin, and what is the total price paid, or to be paid, for the same?
3.	What is the average price per acre of land in this area?
4.	Was the land purchased from Mr. Franklin clear of any encumbrances when negotiations for the purchase of the same were commenced? If not, on what date was the land cleared of all encumbrances so that a sale to the government could be registered?
5.	Did the government purchase or agree to purchase from Mr. Franklin anything other than the land in question, such as stock or equipment? If so, how much was paid, or is to be paid, for the same?
6.	To what purpose is (a) the land; (b) stock or other equipment, purchased from Mr. Franklin, to be put?
7.	What are the names of any lawyers who acted or participated in any negotiations leading up to or relating to the sale of this property to the government, (a) on the part of Mr. Franklin; (b) on the part of the government?


Hon. Roch Pinard (Secretary of State):: Mr. Speaker, I am glad to answer on behalf of the Minister of Justice (Mr. Garson) starred question No. 55. The first question is:
1. Has the federal government completed its purchase of certain property or properties at Joyceville, Ontario, from Mr. Benjamin Franklin?
The answer is yes. Question No. 2 is:
2.	If so, how many acres were purchased from Mr. Franklin, and what is the total price paid, or to be paid, for the same?
The answer is 450 acres more or less. The price paid was $123,000, which was based on valuation of buildings at $83,000 and land at $40,000. Question No. 3 reads:
3.	What is the average price per acre of land in this area?
The answer is this. No average price is ascertainable, since prices depend on location, condition of land, state of buildings and similar factors. Question No. 4 is:
4.	Was the land purchased from Mr. Franklin clear of any encumbrances when negotiations for the purchase of the same were commenced?
The answer to this first part of the question is no. The second part of the question reads as follows:
If not, on what date was the land cleared of all encumbrances so that a sale to the government could be registered?
The answer is: On June 11, 1956, the crown acquired title to the property free of all encumbrances except three small executions amounting in all to $1,261.32 in respect of

which sufficient money was placed in trust to protect the crown. Question No. 5 is:
5.	Did the government purchase or agree to purchase from Mr. Franklin anything other than the land in question, such as stock or equipment? If so, how much was paid, or is to be paid, for the same?
The answer to both these questions is no.
Then question No. 6 reads:
To what purpose is (a) the land; (b) stock or other equipment, purchased from Mr. Franklin, to be put?
The answer to both parts of this question is as follows: Both the land and the stock will be used as site and for the construction and operation of a new penitentiary.
Then question No. 7 reads:
What are the names of any lawyers who acted or participated in any negotiations leading up to or relating to the sale of this property to the government, (a) on the part of Mr. Franklin; (b) on the part of the government?
The answer is that the lawyers who acted on behalf of Mr. Franklin were Messrs. Arnoldi, Parry and Campbell of Toronto; and on behalf of the government Messrs. Gibson, Sands and Flanigan of Kingston.


TRANS-CANADA HIGHWAY ACT  FEDERAL- PROVINCIAL AGREEMENTS
Mr. McCulloch (Piciou): 1.	Are new federal-provincial agreements required pursuant to the amended Trans-Canada Highway Act which received royal assent on June 7, 1956?
2.	If so, with what provincial governments have agreements been concluded to date?
Mr. Bourgel, Parliamentary Assistant, for the Minister of Public Works: The answer to the first part of the question is yes; and as to the second part, agreements have been concluded with the provincial governments of Manitoba, New Brunswick, Saskatchewan, Prince Edward Island and Alberta. Nova Scotia has returned a signed agreement but with a revision in schedule "A", the detailed designation of the route of the trans-Canada highway in the province. British Columbia has submitted only a revised schedule "A". Before agreements can be signed with these provinces, further clarification of the schedules "A" is required.



QUESTIONS


Mr. Hamilton (York Wesi): 1.	What number of air crew were required to be recruited last year (1955) for the Royal Canadian Air Force to maintain the air strength necessary for present policy and commitments?
2.	What were the actual enlistments for air crew during 1955?
3.	How many applications for enlistment as air crew were received during 1955?

4.	How many of these were rejected and for what reasons, under the following headings: (a) physical disability; (b) failure to meet educational requirements; (c) other reasons?
5.	How many air crew passed their courses and qualified during the year 1955?
6.	How many qualified air crew were discharged from the service during 1955, and for what reasons:	(a) physical disability; (b) completion of term of service; (c) other reasons?
Mr. Hellyer, Parliamentary Assistant, for the Minister of National Defence:	Mr. Speaker, I should like to deal orally with question No. 407, concerning R.C.A.F. air crew. In the opinion of the air force, to give such detailed information in the same form year after year would enable unfriendly countries to make fairly accurate calculations to their own advantage, and this is not desirable. I did, however, have the information prepared in the form requested by the hon. member and it was offered to him on a confidential basis, but this offer was declined.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Nesbitt: 1.	Did Benjamin Goddard, of 1575 Sandwich street east. Windsor, Ontario, file a claim with the office of the custodian of enemy property, or with the war claims commission for the loss resulting from the death of his wife, her personal effects and other costs?
2.	Did the said Goddard discuss this claim or any other claim with the custodian's office?
3.	Did anyone on behalf of the government or the custodian's office or any other branch of government service represent to Goddard that the Canadian government would deal with his claim?
4.	Did the Secretary of State on or about November 9, 1945, advise the said Goddard that his claim was under active consideration and that he would later be advised as to the result?
5.	Did the war claims commission undertake to assist the said Goddard in establishing his admissible claims against the Canadian war claims fund?
6.	Did the said Goddard file statutory declarations of his intention to claim pecuniary loss resulting from the death of his wife together with an additional claim for the loss of her personal property?
7.	If the facts alleged by the claimant are established, what action will be taken?



MOTION FOR PAPERS


[Stage Direction]
Motion No. 84-Mr. Diefenbaker:
For a copy of any and all directives or instructions issued since the 1st day of January, 1955, by or under the authority of the Department of Citizenship and Immigration, in any way connected with immigration or citizenship.
Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: Before this motion is put, Mr. Speaker, I should like to say that
67509-344J
Inquiries of the Ministry I am quite prepared to make public any documents that in any way could be considered to be described by this motion which have been made public in any other way. There are about 275 such documents. But, of course, there are in addition to that a good many confidential instructions and directives to the staff which it is well understood are privileged and which would not be included in the return.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
George Alexander Drew: I wish to direct a question to the Minister of National Defence. In view of the representations which have been made to him on behalf of 424 squadron of the R.C.A.F. auxiliary, and in view of the outstanding record of that squadron during the time it has been training at the Mount Hope airport, will the minister postpone any decisions until an opportunity has been given to make representations to him and to the department in regard to that squadron, particularly in view of the outstanding safety record and the highly satisfactory surroundings of the Mount Hope airport and the fact that other squadrons come to that airport to do their firing practice, thus demonstrating the suitability of that airport for continued flying training?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, since I dealt with this matter yesterday in answer to the hon. member's question I have received some telegrams dated last evening and this morning in relation to this matter. It is not a question of postponing decision; the decision has been taken. But I certainly would be always open to receive representations from any persons who feel that they would care to make them.
So far as the attributes of this airport are concerned, to which the hon. member referred, these matters were all considered. One of the salient facts in this case, which I think I might now indicate, is that in order to operate and maintain this airport solely for the support of the local auxiliary so far as flying is concerned, the cost to the Royal Canadian Air Force is well over $1 million a year. The personnel of the auxiliary are very fine, competent people and they have done a good job. It is felt, however, that other R.C.A.F. activities could be engaged in by members of the personnel of this squadron which would certainly not cost anything like the sum I have mentioned. I am sure the Leader of the Opposition would agree with me that, all

Inquiries of the Ministry things considered, where we can save substantial sums of money we should do so.


George Alexander Drew: Mr. Speaker, as a supplementary question, will the minister not agree that if this is a good airport it would be better to add another squadron there and make wider use of the airport which, after all, is apparently being operated at the cost of just over the cost of a single modern fighter aircraft?


Ralph Osborne Campney: Well, I do not know that we should proceed with a debate on this matter at the moment. All the relevant factors were very seriously considered, and if any persons or groups produce new arguments and new reasons which override what has already been considered I would be always ready to listen to them, but I have not heard any such reasons yet.


George Alexander Drew: I have another supplementary question, Mr. Speaker. Will the minister tell the house whether the same practice was followed as was followed when there was a reorganization of the army, and whether there was consultation with the officers of this squadron to obtain their opinions and to hear the evidence before this decision was made?


Mr. Speaker:: May I suggest this is entirely irregular. I would submit that when the estimates of the Department of National Defence are before the committee of supply a matter of this kind could be dealt with.


George Alexander Drew: Mr. Speaker, I submit it is not irrelevant and I submit-


Some hon. Members:: Order.


Mr. Speaker:: Order. I did not say it was irrelevant; I said that at this period when questions are being asked it is not regular to debate a matter. This is the point I was stressing.


George Alexander Drew: Mr. Speaker, I am not debating; I was asking a question in regard to a decision which affects the immediate use of an airport. If there is to be a decision it has to be made before the estimates can be dealt with.


Some hon. Members:: Order.


Mr. Speaker:: Do I take it that the Leader of the Opposition does not accede to the remarks I have made?


Mr. Lennard:: No.


George Alexander Drew: Mr. Speaker, I am not going to raise any questions about the remarks. I do not agree with your estimate of the situation. I think it was a perfectly proper question, but I am going to leave the matter there because it is clear the minister has no intention of doing anything about it.


Mr. Speaker:: The hon. member for Hamilton South.


Mr. R. E. Reinke (Hamilton South):: My
question was primarily the same as that raised by the Leader of the Opposition, but I might point out I thought I was on my feet first.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day;
Mr. F. G. J. Hahn (New Westminster):: Mr. Speaker, I should like to direct a question to the Prime Minister. In his absence, perhaps the Acting Secretary of State for External Affairs would care to take this as notice. Will the minister indicate whether a reply has been given to Marshal Bulganin's letter of recent date respecting disarmament? If not, why not? If so, what is the text of the reply?


Hon. Paul Martin (Acting Secretary of State for External Affairs):: Mr. Speaker, I think I can deal with the question now. The letter to which my hon. friend directs the attention of the house was sent to the heads of six governments, including Canada.
The reply of Canada has been considered by the Prime Minister and will be given further consideration by him when he returns from the prime ministers' conference in London. In the meantime some aspects of this question will undoubtedly be discussed at the forthcoming meeting of the disarmament commission which takes place next Wednesday in New York at the United Nations.
[Later:!


REFERENCE TO STATEMENT BY MINISTER OF FISHERIES
[Stage Direction]
On the orders of the day:
Mr. George H. Hees (Broadview):: I should like to direct a question to the Acting Prime Minister. Was the Minister of Fisheries expressing the view of the government when he said in Kitchener last night, and I quote his words as reported by the Canadian Press: "No one can question the desire for peace of any Russian." Is that the view of the government?


Clarence Decatur Howe: Who was the speaker referred to? I have not seen the dispatch.


George Harris Hees: The Minister of Fisheries, speaking in Kitchener last night.


Clarence Decatur Howe: Perhaps the Minister of Fisheries will answer the question.


James Sinclair: I was not speaking in Kitchener last night; I was speaking in Kitchener yesterday noon. I did say that after my experience in Russia no one can question the desire for peace of the ordinary Russian people after having lost seven million soldiers in the war. I hope the hon. member also studied the remarks I made about him during my recent speaking tour.


George Harris Hees: No, Mr. Speaker, the Canadian Press did not report that. They reported the minister as referring not to the desire for peace of the ordinary Russian citizen but as saying "any Russian", and that includes the members of the Russian government, Khrushchev, Bulganin and all the rest.


SUGGESTED ISSUING OF AIR TRANSPORT PASSES TO MEMBERS
[Stage Direction]
On the orders of the day:
Mr. E. G. Hansell (Macleod):: Mr. Speaker, might I ask the Acting Prime Minister a question supplementary to what the Leader of the Opposition brought up at the commencement of the sitting. Has the government given any further consideration to the possibility of issuing air transportation passes to members, particularly those who come from the maritimes and British Columbia, so that they can make rush trips home occasionally? It takes all of a week to get to British Columbia and back by rail.


Clarence Decatur Howe: Mr. Speaker, the matter has
been discussed by the government. Certainly we could not issue passes to every member of the House of Commons to ride on Trans-Canada whenever he may wish. We would obviously be hauling plane loads of free travellers and I think that would be a little conspicuous. However, we will explore the situation to see whether any special provision for air travel can be made. Of course, the most satisfactory provision for everyone would be to expedite the work of the session and let hon. members get back home permanently.


INQUIRY AS TO POSITION WITH RESPECT TO QUOTAS
[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Can the
Inquiries of the Ministry minister say what progress has been made in raising delivery quotas in southwestern Saskatchewan where the Saskatchewan wheat pool has recently pointed out the quotas are still substantially below average? Will producers in this area have an opportunity to deliver a quantity of grain similar to that delivered in other areas?


Clarence Decatur Howe: Mr. Speaker, I have made several statements during the prolonged absence of my hon. friend from the House of Commons. As I have explained on several recent occasions delivery quotas are being raised in southwestern Saskatchewan, and in other areas where quotas are relatively low, just as quickly as possible. In raising delivery quotas the wheat board, however, has to take into account the grade and kind of grain for which there is an immediate requirement in forward positions. Every effort will be made to achieve equality of delivery opportunities throughout the west, but the wheat board cannot give an undertaking that all delivery quotas will be at the same level at the end of the crop year.
I cannot emphasize too strongly that the first responsibility of the wheat board must be to move saleable grain into forward positions.


Hazen Robert Argue: Mr. Speaker, I wonder if I might ask a supplementary question. Has any further consideration been given to extending delivery quotas beyond the end of the crop year at points where the quotas are under the 7-bushel quota or the regular quota at that time?


Clarence Decatur Howe: Mr. Speaker, that matter has been fully considered and the decision has been made that delivery quotas will end on July 31.


ALLEGED SHORTAGE OF BOX CARS ON C.P.R. BRANCH LINES
[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to ask a question arising indirectly out of the question just asked. What has been done since the last report the minister gave to the house, in answer to a question I asked, to assure a reasonable provision of cars for the delivery of wheat on C.P.R. lines? Has the minister received telegrams such as I have received even today complaining against the calamitous shortage on C.P.R. lines of cars, and what is being done to meet that situation?


Clarence Decatur Howe: Mr. Speaker, I can hardly believe that the car supply is seriously below

Inquiries of the Ministry requirements because the grain movement over the C.P.R. line is at record levels.


John George Diefenbaker: I meant to say C.P.R. branch lines.


Clarence Decatur Howe: I could not say about the branch lines. The tendency may be to direct cars to the competitive points. That is largely a matter lor the agents of the wheat pools and the trade as to the localities where the shipping instructions are directed. However, we are having a record movement. Never in my experience has grain moved forward within this country and into export as rapidly as it has been doing for the past two or three months. All I can say is that I think everyone concerned is doing his best to deal with the situation.


John George Diefenbaker: May I ask a supplementary question. Will the minister request the wheat board or the transport controller to do something to meet the situation on these C.P.R. branch lines, because it is serious? People are complaining and they are met with the usual answer that cars are not available on these lines. Will the minister do something?


Clarence Decatur Howe: I shall certainly do my best. I have been doing my best to bring the low quota points up to the standard of the other points. As I stated a week or two ago, alternate delivery points are being made available at high quota points that are accessible for delivery by truck from low quota points. We are doing everything we can to deal with the situation and I suggest that considerable progress is being made.


INQUIRY AS TO POSSIBLE CONTAMINATION
[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Rosefown-Biggar):: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare. Will he table the reports made to his department with regard to the cheese industry in this country during the past few years? Officials of the department have made alarming statements in public addresses regarding contamination. Will the minister table the reports made to his department by his officials, say for the last six years?


Paul Joseph James Martin: Mr. Speaker, I shall be very glad to look into the matter and see what can be done. In the meantime I wish the hon. member would let me have, either publicly or privately, details of the statements to which he refers.
fMr. Howe (Port Arthur).]


Major James William Coldwell: I refer to a statement made by Dr. Thatcher at a meeting, I believe in Montreal, and published in yesterday's Montreal Gazette.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I should like to direct a question to the Minister of Fisheries, notice of which was sent to his office yesterday. Is the minister aware of the reports that have been made about unwarranted destruction of salmon by the spraying of forests in New Brunswick and more particularly spraying at or near a salmon hatchery where a large number of young salmon were destroyed? If so, what action is being taken to prevent a repetition of such occurrences?


James Sinclair: Mr. Speaker, the hon. member gave me notice of his question in sufficient time to wire our scientists and to get a report. On Saturday, June 9, commercial planes spraying D.D.T. over the forests between the Northwest and Southwest Miramichi rivers crossed over the hatchery area of Miramichi hatchery. Definite oil slicks appeared on the pond and in the hatchery, and during the following week over 800,000 salmon and trout were destroyed. The fisheries scientists are well aware of the need for spruce bud-worm spraying and have tried to work out a program with the operators so that the hatchery areas will not be sprayed. The plans given to our scientists this spring showed that this hatchery area was not to be sprayed. This is the third such occurrence and this time we lost one-third of our hatchery stock and we are now examining the possibility of taking legal action against the firm concerned.
[Later:!
On the orders of the day:


Mr. A. J. Brooks (Royal):: Mr. Speaker, I was wondering whether I could ask the Minister of Fisheries a supplementary question with reference to the matter raised by the hon. member for Gloucester (Mr. Robichaud). From his answer I understood that action was being taken against the aeroplane company which was spraying for the budworm. I would assume that to mean legal action. From the press reports that I have seen, it was stated that there was no carelessness on the part of the aeroplanes but what happened was on account of the storms and floods. I should like to ask the minister if carelessness has been found on the part of this company and whether legal action is being taken because, after all, as I understand it, these companies

are the agents of the federal government and it would be a case of the federal government suing themselves.


James Sinclair: Mr. Speaker, all I said was that our officers were studying the possibility of taking action because this is the third time this thing has occurred. It is quite true that in one paper there was a report saying that it was because of rain conditions and flood conditions after spraying that this thing occurred. Unfortunately many of our salmon and trout died before the rainfall. There does not seem to be much question at all that, whether through accident or by negligence, the actual hatchery area was sprayed by D.D.T. and over 800,000 salmon and trout died.


Alfred Johnson Brooks: Was there not any representation that the damage was not as great as we had anticipated and that there was such a large quantity of these fish that it would not make very much difference?


James Sinclair: Mr. Speaker, most of the maritime members feel that we should have many more fish in the streams. The loss of one-third of our hatchery stock in one week is a very serious blow to our program of rehabilitation of the salmon and trout fisheries in that province.


Alfred Johnson Brooks: I was quoting from the press report.


James Sinclair: Press reports are not always reliable, as the hon. member for Broadview (Mr. Hees) has just pointed out.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. C. Van Horne (Resligouche-Madawaska):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Would the minister please comment on the progress of the building of the Bellefleur rifle range in Madawaska county and indicate when it is expected the work will start and when we may expect it to be completed?


Ralph Osborne Campney: Mr. Speaker, I thank the hon. member for having given me notice of his question. The plans and specifications for this range are completed and I understand that the Department of Defence Production propose to call for tenders very shortly. Barring any accident we hope the work will be proceeded with and completed expeditiously.
Inquiries of the Ministry CANCER



INQUIRY AS TO USE OF HOXSEY TREATMENT

[Stage Direction]
On the orders of the day:
Mr. C. E. Johnston (Bow River):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. Has the minister been advised that the Hoxsey cancer treatment is being advertised in Canada and that the department of health, education and welfare in Washington has advised United States citizens that this treatment is worthless? What action is the government taking to so advise Canadian citizens?


Paul Joseph James Martin: Mr. Speaker, I shall take my hon. friend's question as notice and give him my usual complete reply later.



STATEMENT RESPECTING MAINTENANCE OF FLOOR PRICE

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Gardiner (Minister of Agriculture):: Before the orders of the day are proceeded with, I should like to answer a question asked by the hon. member for Dufferin-Simcoe (Mr. Rowe) on June 22. In my absence he put the question to the Minister of Trade and Commerce and the minister said:
Since my hon. friend has directed the question to me, I shall answer it.
Then he went on to say:
I shall draw it to the attention of the Minister of Agriculture. I expect he will be back in his seat next week.
The Minister of Trade and Commerce has brought this matter to my attention.


George Alexander Drew: Now that you are back.


James Garfield Gardiner: Now that I am back, yes; and now that we are both back. The question was a follow-up on some questioning by different members that had been asked the previous two days. The first question itself is in these words:
In view of the uncertainty left in the minds of both producers and consumers of butter by the answers given the other day by the parliamentary assistant with regard to the sale of 25 million pounds of butter at 2 cents per pound less than the cost to the government, what security has the butter producer that the floor price of 58 cents per pound will be maintained throughout June, July and August, the months during which I understand the delivery of the 25 million pounds is to be made?
The security is that the agricultural prices support board of the Department of Agriculture offers 58 cents a pound basis Toronto and Montreal and 57 -cents a pound basis

Inquiries of the Ministry Vancouver on the markets right across Canada every day, and no one is required to sell grade A butter at less than 58 cents, so that the price is secured in that way. The second question continued:
If the floor price is 58 cents and the government only buys about one-third of what the dairy producer produces, then what assurance has the producer that the 56 cents, which is the price at which the government is selling butter into the trade-a greater amount at 56 cents than they are buying at 58 cents-with no particular quality distinction-
The position in relation to that is, as I will show in a minute by reading the order in council, that the quality distinction in respect of the butter that the agricultural prices support board is dealing with is that it is grade A butter, all of it, that is being dealt with. The matter of the 56 cents is, I think, dealt with in the answer to the third question which was:
-and also what assurance has the consumer whether the consumer price is to be based on the 58 cents the government is paying for the butter or the 56 cents at which it is selling a larger amount?
The fact is that both actions are based upon 58 cents. In the first place, the 58 cents is always available for fresh butter coming on the market, and in determining the 56 cents at which butter was sold to the trade it was estimated-as a matter of fact, it was actually figured-that butter could not be sold by the trade at much less than 58 cents if they were going to make the usual profits in selling that butter. The cost of switching it from bulk butter to prints and putting it on the market is sufficient to take up the greater part of the difference between the 56 cents and the 58 cents, so that the 58 cents pretty well governs no matter whether it is the consumer or the producer who is affected by it. Fresh butter is available at 58 cents per pound and 1955 butter may be available at slightly less. I continue with question four:
I might also ask the Minister of Trade and Commerce to have the minister or his assistant tell us whether it is a fact that 5 million pounds of this butter has been sold in western Canada at a further reduction to the trade of 2 cents additional, with no assurance to the consumer or the producer.
The fact is, as I understand the situation at the moment, that no such sale has actually been made, but I suppose it could be estimated that the order in council itself governs the price to the extent that in some places the price obtained by the individual might be less than the basic price over a certain area, and I think I should read the order in council to make that clear:
Whereas under authority of paragraph (b) of subsection (1) of section 9 of the Agricultural Prices Support Act, 1944, the agricultural prices


support board proposes to offer to purchase from May 1, 1956 to April 30, 1958, Canada first grade creamery butter-
Because we do not deal with any other, -and under authority of paragraph (a) of subsection (1) of section 9 of the said act proposes to prescribe the following prices therefor:
58 cents per pound basis delivery Halifax, Saint John, Montreal and Toronto,
57 cents per pound basis delivery Vancouver, all purchases to be subject to such terms and conditions as may be specified by the agricultural prices support board.
Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and under authority of paragraph (a) of section 2 of the Agricultural Prices Support Act, 1944, is pleased to designate and doth hereby designate as an agricultural product for the purposes of the said act, Canada first grade creamery butter . . .
With regard to this last question, I would point out that the places at which butter would be delivered at the floor price, Halifax, Saint John, Montreal, Toronto and Vancouver, are on the two sides of the prairie section of Canada. Butter goes west to Vancouver from Alberta and probably part of Saskatchewan. Butter goes east from Saskatchewan and Manitoba to the eastern market. Of course, the cost of moving butter from the prairies to either one of these markets is accounted for and it would be somewhere between 1 and 2 cents, and the butter will of course be sold under contracts, whether it is to the government or whoever it may be, at a lower price than it is sold at the two ends of Canada.
I would not be definite in saying that it is below the 57-cent price in certain sections of the west if the butter is coming east but it certainly would be lower than these set prices. I should like to point this out though, while I am dealing with the matter, and I suppose this is the question which is in the minds of some. The fact is that the 56-cent price at which the butter has been offered to the trade is 2 cents below the 58-cent price at which it was purchased last year. It is 1955 butter. In the first year that this plan was followed, two years ago, 2J cents a pound was the difference. Last year it was 2 cents a pound. Last year we permitted the trade to buy butter at 56 cents during all the time the plan was in operation and the plan was in operation down until September. This year we decided that, in the interests of the producer-and, we think, in the interests of the consumer too-it was preferable that the trade should take delivery of as much butter as possible as early as possible. So we made a definite arrangement with them that they would take 25 million pounds, a large part of it-about a third of it-by June 15; probably another one-third by July 15 and another one-third by August

15. The matter of the cost of carrying butter under this plan would not be as great to the agricultural prices support board as it was under the plans followed in the previous two years. That was the reason for entering into the arrangement which we have entered into for this year.
Then there was the additional fact that every time we talked about marketing butter anywhere outside of Canada during this last six months or eight months, someone in the house somewhere-usually on the opposition side-suggested that butter ought, as far as possible, to be sold in Canada at any lower price at which it was going to be sold. We therefore thought that the arrangement made was such that probably more of the butter which we may have for sale would be sold and consumed within Canada on this basis than on the other. So we are proceeding to have it done in that way because of that desire. I think the policy will work out to the benefit of both the producer and the consumer.


Mr. Rowe:: In view of the statement made by the Minister of Agriculture (Mr. Gardiner) may I ask him this question. He said that they are selling butter to the trade at 56 cents and are only buying one-third of what the producer produces during these three months. Is that not giving effect to reducing the price to the producer by at least 2 cents to 56 cents? If they can buy from you at 56 cents, what is to hinder them from buying from the producer at 56 cents, 2 cents below the floor price?


James Garfield Gardiner: No. We do not think so.


William Earl Rowe: You buy only one-third.


James Garfield Gardiner: Every day the price for that fresh butter is 58 cents.


William Earl Rowe: For how much?


James Garfield Gardiner: For whatever they offer.


William Earl Rowe: You took only one-third last year.


James Garfield Gardiner: If we took one-third last year it worked out that way. Some years it worked out less than that and some years more than that. One year we scarcely got any. The producer can always deliver his butter-that is grade "A" butter-to the board at 58 cents if no one offers 58 or more. He can sell it every day and every hour that the markets are open at that price.
On the other question-I just referred to it but perhaps I should have made it plainer- may I say this. As to the 56 cents, the price that the trade is going to charge for the butter will naturally be very close to the 58 cents-that is for the 1955 butter-because
Inquiries of the Ministry they have to convert solids into prints or forms of one kind and another in order to sell it to the retail trade. By the time they have done that, they cannot afford to sell the butter at less than about 58 cents. So an attempt is made to have all the butter that is going into the market at as close as possible to the 58 cents paid to the producer. We think it is working closely enough that there is not going to be any undue advantage to the trade over and above what one would naturally expect the trade to get in that kind of deal. When it is all worked out, I think you will find that neither the producer nor the consumer suffers by it. The quantity is only beneficial to us in the fact that the more the trade takes from us, the better we are pleased. We simply have to carry it over until the trade wants it again and pay the carrying charges. If the policy works out in the manner in which we hope it will work out we will save on carrying charges compared with previous years.



INQUIRY AS TO REPORTED IMPORTS FROM POLAND

[Stage Direction]
On the orders of the day:
Mr. J. Wilfrid Dufresne (Quebec Wesi):: should like to address a question to the Minister of Trade and Commerce. Now that the election in the province of Quebec is over, with the result we all know-


An hon. Member:: Question.


J.-Wilfrid Dufresne: -is the minister now in a position to answer the question that I put on the order paper 27 days ago with regard to eggs imported from communist Poland?


Clarence Decatur Howe: Mr. Speaker, I gave a verbal answer to a similar question. I dare say my hon. friend was at that time more concerned with the provincial election than he is now. Perhaps he was not here. I think if he will read Hansard he will find the answer.


J.-Wilfrid Dufresne: I do not think the minister is obliged to make any statement of that kind because he knows perfectly well, as I stated yesterday in my speech, that neither directly nor indirectly did I participate in the election campaign in the province of Quebec.


An hon. Member:: You were afraid.


J.-Wilfrid Dufresne: The Minister of Northern Affairs and National Resources (Mr. Lesage) says that I was afraid. May I say I was afraid that none of the votes would be left for the Liberal party.
5436	HOUSE OF
Columbia River-Power Development SUPPLY
The house resumed, from Tuesday, June 26, consideration of the motion of Mr. Harris for committee of supply.



CONFERENCE ON DEVELOPMENT OP


Mr. Speaker:: Order. May I ask hon.
members not to be too impetuous. When the deputy clerk was reading the order of the day, he had not concluded reading the order before several members were rising to leave the chamber.


Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, before I continue the remarks which I had commenced last evening, I should like to apologize to Your Honour for an inaccurate answer I gave to Your Honour when you asked me, after I moved the adjournment of the debate, whether a report from the standing committee on external affairs from which I had quoted had been reported to the house. I answered that it had. Unfortunately, that answer was wrong. Although the report in question has been distributed, the committee has not made a formal report to the house. I trust that no harm has been done. All of these reports from the standing committees are distributed at once and the members had the report. Furthermore, there have been quite extensive reports in the press of the statement by General McNaugh-ton which I quoted. As a matter of fact, I had intended to quote from a press dispatch -it would probably have been more in order-rather than from the committee's proceedings.


Mr. Speaker:: May I tell the hon. gentleman that I am always very sympathetic to those who admit they are wrong.


Howard Charles Green: I had pointed out last evening, Mr. Speaker, that a week from today the Minister of Northern Affairs and National Resources (Mr. Lesage) is to hold a conference with the premier of British Columbia in Victoria at which the problems arising out of the development of the Columbia river for power purposes and similar questions will be discussed. I had stressed the view of the official opposition that it is essential there should be the closest co-operation between the two governments on these questions, which I admit at once are difficult ones.
Then, I was going on to point out that there had been developments within the last few weeks which should be drawn to the attention of the house. They have to do primarily with the manner in which the dam and the power plant are to be constructed at Mica creek on the Big Bend of the Columbia river. I am quite sure that the minister will agree


with me when I say that the Mica creek development is the key to the development of the whole of the Columbia river in Canada. This view is held by the minister's own officials, the provincial government officials and by the United States. I have here a report made by Senator Richard L. Neuberger of Oregon, to the Senate committee on interior and insular affairs as a result of his investigation last fall. He had this to say:
But Mica is the key to the development of the Columbia river in Canada.
He also said, confirming the opinions of dominion and provincial authorities:
And Mica is ready for construction in the immediate future.
Both of those statements are accurate. I explained last night that General McNaughton had taken the position on June 14 that someone could go ahead right away and make final plans for the Mica creek project. The following day there was a press report of the reaction of the premier of British Columbia to that statement by General McNaughton. I am quoting from the Vancouver Sun of June 15, which states:
Asked to comment on a statement in Ottawa by General A. G. L. McNaughton, Chairman of the Canadian section of the International Joint Commission, that engineers have deemed such a project feasible, premier Bennett said:
"There has never been any doubt about the feasibility of this dam.'*
"The Social Credit government of B.C. has always been in favour of the Mica creek dam. We've said all along that it was feasible."
He also said:
The premier told a reporter he has made no definite plans as yet concerning construction of the power station.
Then, there is this further interesting paragraph in quotation marks:
"'If it hadn't been for the interference from Ottawa, we in B.C. would already have the dam under construction."
The next day, June 16-


Mr. Lesage:: You do not believe that.


Howard Charles Green: I am not saying what I believe at the moment. The following day a dispatch appeared in the Vancouver Province reporting that the B.C. Electric, which is the power company on the lower mainland of British Columbia, was seeking authority to build the Mica creek project at a cost of $247 million as estimated by General McNaughton. This was the first time that news had broken; it was something new in the picture. The dispatch contains two interesting paragraphs. The first one is this:
Before work can begin, there must be agreement between Ottawa and Victoria on the development at Mica, 80 miles north of Revelstoke.

That, of course, is an accurate statement of fact, that there must be agreement between the two governmental bodies. Then it went on:
An understanding also is important between Ottawa and Washington on downstream benefits on the stretches of the Columbia in American
territory.
That, too, is accurate, and those are the two vital factors to be remembered in this whole question. May I diverge for a moment to deal with this question of downstream benefits. As Your Honour knows, what is meant by downstream benefits is that the plant downstream which benefits by dams upstream and thereby can produce more power, should pay something for that situation. Canada has taken the position that payment must be in power rather than in money. The Prime Minister (Mr. St. Laurent), when he conferred with President Eisenhower in April of this year, apparently did briefly discuss this question of the Columbia river. Then, on May 23 the Minister of Northern Affairs and National Resources made the statement that these officials in the higher brackets in Canada and the United States would be conferring about the whole question.
While there is great urgency about settling this problem of downstream benefits, it is obvious that nothing much can be done until the fall. I do suggest to the minister in this connection that it would be well for him to have a top level official of the British Columbia government sit in with him or with whatever other Canadian federal minister participates in the talks, because British Columbia is the province most widely affected at the present time. I think it would further co-operation if an arrangement of that kind could be made.
The B.C. Electric statement was made on June 16. Then, on June 21 Premier Bennett made a statement dealing with the proposal that the B.C. Electric should develop this project. He made it quite clear that he was hoping to have United States interests build that dam. I think he obviously intended the power plant would be built by Canadians, whether by the B.C. Power Commission or by private Canadians, he did not say; but he did indicate that he thought the best way to build the dam would be to have it done by United States interests, and he puts up quite a reasonable argument in favour of that proposal.
The dispatch reads as follows:
If power is to be developed on the Columbia, said the premier, then the cost must be kept low.
And, he said, U.S. financing of the dam would mean that this cost would not be charged against the electricity generated at the dam site.
In effect, the 20 per cent "cream"-
7. 1958	5437
Columbia River-Power Development
He has in mind that the United States should pay in the nature of 20 per cent of the additional power produced for downstream benefits.
-from the extra generation on the U.S. side would come to B.C. at a next to nothing cost.
He believes, and evidently sincerely believes, that United States interests are willing to build that dam without asking for any return, other than the fact that they will get more water through their plants in times when the Columbia river is low. The premier thinks that Canada and British Columbia, of course, will save that much money and therefore the users of the power will get it that much cheaper. The following day he was reported as having amplified his statement as follows:
The premier reiterated that he felt the downstream benefits would make it worth while for the United States to finance construction of Mica dam through formation of Canadian companies.
Then he is quoted verbatim:
We want to make sure the dams are paid for by the downstream benefits, that we get all the power at the dams, and that we get a minimum of 20 per cent of the extra power created downstream on the American side.
There is no room for middlemen in this hydro electric. The most likely development will be by large users of power on both sides of the border.
Now, of course, when he suggests the figure of 20 per cent for downstream benefits, that undercuts the negotiations that the dominion might undertake with the United States government on this very question of payment for downstream benefits.
The premier of British Columbia has taken the same stand before. He took it in May, and then his minister, Mr. Sommers, made a similar statement in the British Columbia legislature in February. It would appear certain they are hoping that the Americans will build this dam free and that someone in Canada can then go in and build the power plant. There is some reason for his contention, because I quote again from Senator Neuberger's report to the United States senate committee. Senator Neuberger had this to say with regard to the Mica creek project:
A second specific proposal is the offer of the Puget Sound Utilities Council to finance the construction of Mica dam, also in return for a share of the downstream power benefits realized by Bonneville power administration as a result of the storage provided by the huge Mica reservoir. This proposal was explained to me in Seattle by Dr. Paul J. Raver, former Bonneville power administrator who now heads Seattle City Light and is chairman of the Puget Sound Utilities Council, and Mr. Jack D. Stevens, consulting engineer for the Council.
The Puget Sound Utilities Council is composed of the Seattle and Tacoma city light systems, public utility districts of Snohomish and Chelan counties, Washington, and the Puget Sound Power and Light Company. Together, these five
5438	HOUSE OF
Columbia River-Power Development utilities propose to finance construction of the Mica project at an estimated cost of $250 million. Ownership of the project would then be turned over to British Columbia, which could arrange for the installation of at-site power. Storage from the Mica reservoir would be released to increase prime power at Columbia river plants in the United States now in existence or under construction by 1,100,000 kilowatts.
There would be that great increase in production in the United States by reason of the Mica dam. I continue:
Of this increase, the members of the Puget Sound Utilities Council would receive from Bonneville power administration the amount of power necessary to amortize the council's costs of financing the Mica project-estimated at about 800,000 kilowatts. The remaining 300,000 kilowatts would be added to B.P.A.'s power pool.
Then, the senator went on:
This plan has been proposed to officials of the Canadian government, of the government of British Columbia, and of Bonneville power administration. Like the Kaiser proposal, it depends on agreement with all three of these governmental authorities.
Incidentally, I believe that if a scheme of that kind were adopted the United States federal treasury, directly or indirectly, would be helping to finance that Mica creek scheme. Frankly, I am a little doubtful of the Americans being willing to put up $250 million for nothing, without being pretty sure that they get adequate compensation in one way or another.
However, these facts I have mentioned indicate that today there is great urgency to get this problem settled as between the federal government and the government of British Columbia. I hope the minister has something to offer to the premier of British Columbia in this conference and I hope that today the minister will give us some indication of the policy of the dominion government on this question. There certainly has been no clear-cut statement from the dominion as yet as to what this government is prepared to do.
Mind you, Mr. Speaker, last year this government took a licensing power over installations on the Columbia river; in fact, it took a veto power so that any project brought forward by the province of British Columbia, or anyone else, can be vetoed here under the act of last year. The Vancouver Sun summed that up very neatly on June 15 when it said:
In bringing up this "completely firm proposal" by his engineers for Mica creek, General McNaughton provides a positive policy to set beside the negative, but vital, role played by Ottawa last year when it stopped the British Columbia government's plan to sell British Columbia water rights to United States industry at give-away prices.
It would be unfair for the federal government to sit back and exercise a veto and to


say, "Here, you cannot do this and you cannot do that" without making any suggestion. There is a responsibility on the Canadian government to make its position perfectly clear and then do what it can to help. For example, what is the policy of this government on the question of United States control or United States participation in the Mica creek project? That has never been made clear. Personally, I have never hesitated to take the position that I believe this project should be undertaken by Canadians and for Canadians, particularly because all the rest of the development on the river depends on what is done at Mica creek. The Mica creek project will set the pattern for the whole river, and at least a billion dollars will be involved when the over-all plan has been completed.
Then, is the dominion government willing to give any help with the financing? It seems to me that is the way in which the dominion government can step into this picture. I do not believe there would be one cent lost if the dominion government placed its moneyraising power behind the provincial government. The dominion can raise money at a cheaper rate than the provinces. We have now got to the position in this country where, in the case of public utilities of this type, the dominion I believe must help underwrite the financing. The same is true on the Saint John river in New Brunswick. On the Columbia the dominion government can very well help the province of British Columbia, with the result that that dam could be built at a lower rate, power would be cheaper, and Canadians could do the whole thing. I place that proposal before the government with all the earnestness of which I am capable. I asked the minister about it on March 20. At page 2298 of Hansard I said:
Is the government prepared to negotiate on the basis of a joint investment program?
The minister replied:
Mr. Speaker, I have no comment to add at this time.
I believe the time is here when the minister can say whether the dominion is willing to co-operate on this basis to help out, or on any other basis. Above all, co-operation between the two governments is vital. If they go on sniping at each other from the distance of 3,000 miles, as they have been doing now off and on for many months, the Columbia river will never be adequately developed as it would otherwise be, and the people of British Columbia and, in the long run, the people of Canada will be the sufferers.
This scheme is the largest potential scheme there has ever been in British Columbia. I pointed out to Your Honour that the total

Columbia River-Power Development
cost of the developments on the river alone would be at least a billion dollars. In addition, there will be as much more spent on transmission lines and on facilities for distributing the power. In the end, it may mean an increase in the population of British Columbia of a million or 2 million people. No one knows just exactly how much it would mean. The possibilities are staggering; it is the greatest thing that has ever appeared over the horizon in the west coast province.
Because of these facts I feel it has been wise today to take the time of the house to bring up this question at this particular stage. I hope that when the minister goes to Victoria next week he will do his part to bury the hatchet-not to try to bury it in the premier's skull but simply to bury the hatchet-and if that attitude is adopted the result will probably be that the two governments will be able to co-operate and get on with some reasonable plan for the development of this Mica creek project by Canadians and for Canadians.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, the hon. member for Vancouver-Quadra (Mr. Green) has made quite a comprehensive review of the Columbia basin development situation with particular reference to Mica creek. I do not intend to take the time of the house to repeat a great deal of what he has had to say but I do want to present to the house and particularly to the minister the point of view of this group on this very important question. Before doing that, Mr. Speaker, I might say that sitting here listening to the hon. member for Vancouver-Quadra I was thinking of 1915, 1916 and 1917 when we manned the trenches in France together and spent a good many wet nights and weeks in various trenches there fighting a common enemy and trying to achieve a common objective. I think we are doing that here today. I was thinking we belonged to a battalion that was in the habit of obtaining its objectives and I trust that is a good omen when we come to discuss this situation together; and more than that, Mr. Speaker, we are both very happy to know that one of our comrades whom we have not seen since 1919 is here to witness another attack on an objective that is of importance to the Canadian people by members of his old battalion.
This conference in Victoria between the premier of British Columbia and the Minister of Northern Affairs and National Resources (Mr. Lesage) concerning the development of the Columbia river is one of prime importance, as the hon. member for Vancouver-Quadra said, to the people of our province. I have been a resident of the Columbia river
basin for 50 years and I have fully appreciated the intense concern and interest that has been shown throughout the whole district. In fact, I think Senator Neuberger mentioned it in his report, the alertness of the whole population to what this development means to that area and to British Columbia as a whole. We do hope that this first conference between the minister and the premier of British Columbia is a definite step toward one of the greatest developments in hydro that will occur in Canada. As never before, public attention is focused on this forthcoming conference in British Columbia. I have had letters from newspaper people, from a good many people throughout my own constituency and from a great many points in southern British Columbia. While in some cases the letters are written mainly on other topics, during the last month there have been written to me many letters in which people have made some reference to this forthcoming conference and expressed the hope that something fruitful would result from it.
Both governments, the federal and provincial, have a great responsibility to the people of British Columbia and to the people of Canada in this matter. If this responsibility is to be met, we in this group maintain that three things are essential and I mention them so that the minister will be well informed as to the position of this group with respect to this great projected development.
The first thing we say is necessary is a spirit of co-operation between the government of Canada and the government of British Columbia. This thing is too big for party politics to enter. The future success of these developments will be determined by how big the personalities involved are on these occasions.
The second requirement for success in our opinion is the establishment for some type of Columbia basin authority either by the provincial government under the public power commission or as a result of the cooperation between the federal and provincial governments. If the entire water resources of the area are to be developed to the advantage of the people as a whole, in our opinion there will have to be some government authority, some control, some planning, some regulation and some logical approach to the development of the water resources in relation to the development of the forest resources, the mineral resources and the land resources.
When it comes to suggesting an authority such as the Tennessee valley authority or the great public developments on the Columbia river south of the line, I think the record
5440	HOUSE OF
Columbia River-Power Development clearly proves the great advantages of a planned development under public ownership or public control. I think anyone who has studied this question will admit the record proves that public control and planning provide certain things that are not possible under any other form of development.
First of all they provide for the scientific development of the water resources in question. They provide for low cost power such as we have demonstrated in the Tennessee valley development and in the United States public developments south of the line on the Columbia where we have the cheapest power on the North American continent. They also provide for a co-ordinated expansion of industry and agriculture, and to assist that expansion of industry a fair distribution of the power for industrial purposes and a fair and proper use of the available water for irrigation purposes. They also provide that water resources are developed to the public advantage without the waste that would occur through piecemeal development of a basin such as this. All these things, then, bring the consequent economic improvement and also the human welfare for millions that results from that improvement.
The third thing we in this group say is necessary-and I think we in this group are not alone in feeling this way; I am quite sure the great bulk of the people of British Columbia, and particularly in the southeastern portion of British Columbia, share our view-is that action should be taken as soon as possible to implement what has been a dream for 50 years on the part of some people. We feel this action is necessary if we are going to take advantage of these resources at a time when they will be urgently needed.
The development of the basin has been the subject of discussion for many years in the Kootenay country in a general way without information. There were men, X remember 45 or 50 years ago, who could look forward and see the great possibilities for the development of the hydro resources of the area. I suppose the first general consideration of the problem occurred at the time of the 1944 Columbia reference to this house and to congress in Washington. I think that reference came about because of the realization on the part of those who were in this government at that time that the great development south of the line would soon mean the necessity for the development of our resources north of the line.
I pay a tribute to the farsightedness of those who worked for that reference to this house and to congress in 1944. At that time there were some people who thought that


that was rather far-fetched, but the fact is that that reference was the first time that public attention was directed to the possibility of development in the basin. Since that time we have had twelve years of investigation, largely at the expense of the federal government. I think all Canadians who have been interested in this problem recognize the great contribution which General McNaugh-ton has made to this investigation. We recognize his concern over the problem and to make certain that Canadian interests are protected and his farsighted and continuous application to the many aspects of this development.
We appreciate also the interest the minister has shown and his attention to the many unusual aspects of this question. I know personally that the minister is intensely interested in this development and has given a great deal of his time to a study of the situation. He has taken an active part in the development of public policy in this respect.
I think some tribute should be paid to the engineering staff of the water resources branch of the minister's department, the Department of Public Works and the Department of Mines and Technical Surveys. There have been some excellent men who have worked behind the scenes at most modest salaries compared with what some of them could get in private industry because they are interested in the development of water resources for Canadians. When I think of these men working behind the scenes and doing a lot of most technical work and applying their minds to the problem over a period of twelve years, I am always reminded of two lines in Gray's "Elegy in a Country Churchyard" as follows:
Full many a flower is born to blush unseen,
And waste its sweetness on the desert air.
I feel that many of those men who worked behind the scenes do not get sufficient recognition. In some quarters there is a tendency to look upon civil servants as being people who are simply seeking security and who are anxious to earn a living with as little effort as possible. Civil servants as a group are human beings like us in this house and have the failings of human beings. I know of a good many civil servants of Canada whose contributions to the welfare of this country are unheard of, unsung and almost unknown. I think this is something that should be said because of the good work these people do.
The result of the reference and twelve years of investigation was climaxed I think by General McNaughton's announcement to the committee on external affairs recently

that Mica creek was a positive plan which could be proceeded with. That was the first definite announcement of any large-scale development in the area. It represents a positive approach. Last year the government had to take a negative approach to protect the water resources on behalf of the people of British Columbia and on behalf of the people of Canada, and I think rightly so. I supported them in that effort.
As the hon. member for Vancouver-Quadra (Mr. Green) has indicated, this announcement created a great deal of interest in British Columbia and has served to focus attention directly on the Mica creek dam which would be located geographically to act as a hub for the distribution of power over the whole southern half of British Columbia. This is a development which the general told us will cost about $274 million and will produce up to 1,100,000 kilowatts.
After twelve years of investigation we have sufficient information for the planning to commence and to unfold. This is the dawn of the day for which a good many people in our province have been longing. In the past the government did its duty by making the reference; the engineers and technicians have done their duty by producing the facts; the Creator provided the natural resources in abundance, and what happens from this time on will depend upon the capacity of this government and the government of British Columbia to meet their responsibilities to the people of this country.
The development of the water resources of the Columbia river basin in Canada should bring untold blessings to millions of people in days to come. From the point of view of this group it is the responsibility of the governments concerned to make sure that these natural resources will be utilized to the advantage of those millions of Canadians.
Some reference was made by the hon. member for Vancouver-Quadra to a statement from the minister prior to his leaving for Vancouver. I must say that I do not agree with that suggestion. I do not think it would be fair to ask the minister to make a statement in this house with respect to this question just before he is to meet the premier of British Columbia and carry on discussions and negotiations in Victoria. I can well understand his not being willing to do that at this particular time. I hope that in the days to come we shall have an announcement of government policy in clear terms. We in this group wish the minister every success in his trip to Victoria and in all he undertakes in connection with this great development which should be to the general advantage of the Canadian people.
27, 1956	5441
Columbia River-Power Development


Mr. J. A. Byrne (Kootenay East):: Mr. Speaker, I am pleased that the hon. member for Vancouver-Quadra (Mr. Green) has raised this most important question at a time when the minister is preparing to go to British Columbia to discuss the Columbia river basin development. I certainly do not agree with the statement that it was federal government interference which delayed the development of the Mica creek. Undoubtedly the Columbia valley reference delayed some of the undertakings which might have taken place and which would have been of tremendous benefit to the United States only. With that contention I can wholeheartedly agree.
It is quite obvious, as the hon. member has pointed out, that this long-range sniping is not going to get us anywhere. To me it is quite obvious that the sniping has been from the one direction, from the west to the east, since this debate was concluded last year and the international rivers bill brought into being.
If this matter were one entirely of economics I would be in complete agreement with the submission that nothing should be done to develop either the Kootenay or the Columbia valley until we have absolute engineering data to prove that the Columbia can be diverted economically and feasibly into the Fraser river. There are already many political developments, and when I say "political", I mean developments which show that any such diversion would affect many thousands of people. For that reason it would require provincial legislation which might be held up for many years. The federal Department of Fisheries has gone along with the premier of British Columbia in saying that there shall be no diversion of the Columbia river into the Fraser until absolute assurance has been given that no fisheries will be destroyed. For that reason I am quite sure it would be quite a number of years before an official decision would be made on the diversion of the Columbia into the Fraser.
On the other hand I think there will be perhaps less difficulty in determining the feasibility of the diversion of the Kootenay into the Columbia river. This, however, would dislocate a large number of people in East Kootenay, would cause a great deal of hardship and would put under water very large tracts of land that have become well known as great farming communities and tourist resorts. I think that the opinion of the people of East Kootenay, and perhaps of the entire southeastern portion of British Columbia, is that this diversion should be avoided if at all possible.
5442	HOUSE OF
Columbia River-Power Development I have a resolution here from the associated boards of trade and chambers of commerce of southeastern British Columbia which reads in part as follows:
Whereas the proposed diversion of international waters in the Columbia river system is inconsistent with the spirit and terms of the said reference, adversely affecting rapid and rational development plans and good international relations, and Whereas in the development of the hydro power resources of the watershed, the free interchange of surplus electric energy is a factor of great economic importance . . .
I do not agree with the chambers of commerce that the diversion of either the Kootenay or the Columbia entirely within Canada is, as they say, inconsistent with the spirit and terms of the said Columbia basin reference. That has become the opinion of some of the leading experts on water power in British Columbia, but in my opinion it just is not so. The reference is quite defined, and certainly the boundary waters treaty of 1909 is entirely consistent with the views held by the federal government.
However, we have seen newspaper reports indicating that the British Columbia Power Corporation is prepared to proceed with a dam at Mica creek, but in announcing that determination they make no reference whatsoever to diversion of the Kootenay river into the Columbia. It appears that it has been determined that the project would be economic without the diversion of the headwaters of the Kootenay river, and therefore that is unessential to the plan. It has also been pointed out that the Mica dam might be built by Canadian corporations or by Canadian governments without jeopardizing the plan for the diversion of the Columbia into the Fraser. The Mica dam would be essential in any case and the water would be diverted some miles below the dam.
I think we are entitled to consider these two basins as separate entities. That contention is put forward by the chambers of commerce, and in this connection I find myself in agreement with them to some extent. In this regard I should like to refer again to the resolution which has this to say:
Now therefore be it resolved by the associated boards of trade and chambers of commerce of southeastern British Columbia in executive session convened . . . that the policy respecting these important matters in international watershed development should be referred to and determined at the top policy level of the respective governments at the earliest possible date, thereby relieving the anxieties of the people of both countries, and the growing tension on international relations.
That, of course, does not have to do with the matter of separate entities but it does deal with the importance of having the matter discussed at a high level, and that is what 

been built in the Creston valley they have been overrun at least twice since 1935, causing untold damage.
There is another matter that it seems to me has been overlooked, or perhaps not overlooked but not given enough emphasis. That is the question of integrating the Pend d'Oreille system with the Kootenay system. The Pend d'Oreille system, of course, in the United States is used almost entirely for storage in the lower Columbia. The Pend d'Oreille river enters Canada near Waneta and flows through Canada about 14 miles. There is no storage whatever on the Pend d'Oreille in Canada. There is, however, 54 million acre feet annually stored on the Pend d'Oreille for the purposes I have previously stated.
Having regard to this situation, a power site was installed on the Pend d'Oreille by the West Kootenay Power Company at Waneta just before it enters the Columbia river. This dam cost between $30 million and $35 million and is making as much use as it can of the storage on the Pend d'Oreille in the United States. However, as I said earlier, that storage is released purely for the purpose of supplying a constant flow for the Bonneville and Grand Coulee power installations and so on down the line in the United States. For that reason the flow is extremely erratic. I believe it fluctuates between 4,000 cubic feet per second up to
36.000	cubic feet per second. Hence you can see that it is not possible to make the best use of that water. There are many days on which it flows over the spillway and is a complete waste.
The installations at Waneta at the present time can make use of 12,000 cubic feet per second, and of course there are times when they have available only 4,000 cubic feet per second. If the water from the Pend d'Oreille storage could be regulated to a mean flow, they could be provided with about
24.000	cubic feet per second, which would permit doubling the installation and doubling the output of that plant. One can realize that a plant that cost $35 million produces a fairly large amount of electricity. I believe it could produce somewhere near the amount that is already being produced in the lower Kootenay.
What would be required before this regulation of the flow from the Pend d'Oreille could be accomplished would be an integration of the West Kootenay Power Corporation system and the Bonneville Power corporation who I believe are responsible for the administration of the power that is produced at Grand Coulee. A power line joining these
27,	1956	5443
Columbia River-Power Development two systems would have the effect of integrating the entire system. Then the water releases from the Pend d'Oreille would be integrated with the water releases from the Kootenay and would maintain a constant flow. The turbines would be turning at all times. There would be no wastage of the stored water, and there would be available at certain periods of the year a flow of electricity to the south, while at other times of the year there would be a flow of electricity back into Canada. It simply means that until the energy and the flow of these systems have been integrated, there cannot be a complete and proper development of the Kootenay system.
I think the minister should keep that question in mind and to the forefront when he is discussing the whole matter with the premier of the province of British Columbia. If it is true that the diversion of the Columbia river into the Fraser river would be feasible only if it obtained the flood waters or the headwaters of the Kootenay, then I certainly would hesitate to recommend that we go ahead at this time with the development of the Kootenay. However, I do not think that is so. I also do not think the people of my riding would be too happy to go along with the idea of flooding this great area that has been built up. We realize the flooding that may come from the dam at Mica creek affects only about a dozen people at the most. That may be stretching the point a bit, but there is little habitation from Donald west to Golden and the Mica creek site. It is a large area that is uninhabited, and this flooding will cause little dislocation. We think this project should be developed separately and should be gone ahead with as soon as possible. On the other hand, I feel that the Kootenay river and the Pend d'Oreille basin integration can be proceeded with at once and give the very best return to the people of East and West Kootenay, to British Columbia and to Canada.


Mr. G. W. McLeod (Okanagan-Revelsloke):: Mr. Speaker, I should like to add a few words at this time to what has been said about the problem of power development. I am possibly more concerned with power development in the Columbia valley than any other member in the house, and I have possibly said the least about it. However, I have followed with interest the negotiations that have been taking place over the past six months, and I have felt that things were going along quite smoothly, something which I was glad to note.
First, I should like to say that I am in almost complete agreement with the hon. member for Kootenay East (Mr. Byrne) in saying that the Kootenay river system and
5444	HOUSE OF
Columbia River-Power Development the Columbia river system should be developed as separate entities. The main reason for my belief is that when we start interfering with the flow of rivers, especially international rivers, we are going to bring about extremely serious results.


James Allen (Jim) Byrne: Mr. Speaker, may I interrupt the hon. member. I did not catch whether he was disagreeing or agreeing with me.


George William McLeod: I was agreeing. For once I agree with you. The international complications that arise when we start interfering with the natural flow of rivers might have very serious consequences and delay the development of power that is so badly and urgently needed.
To me it was a source of pleasure to hear our Prime Minister announce in the house recently, after his return from Washington, that this matter had been discussed with the top level authorities there and that arrangements had been made for future conferences. I am very glad to know that our own Minister of Northern Affairs and National Resources will be in Victoria for a conference with the British Columbia government next week. I am sure that much good will come from that conference. Then we understand that in the fall there is to be another conference to deal with downstream benefits. Of course that is the crux of the whole problem of the development of power on these international streams. I wish the greatest amount of success to the minister in his meeting with the British Columbia officials in Victoria and at the conference to be held this fall.
Now, I have here the last issue of the Revelstoke Review, a newspaper which is greatly interested in the Mica creek dam which will use the water of the Columbia river for power purposes. There are some important headlines in this newspaper. One of the first is, "General McNaughton confirms feasibility of dam site." He is referring to the Mica creek dam, and I think many months ago most of us were well aware of the fact it was a feasible site. The only comment I would make is that the length of time it has taken to put this decision before the people has been unduly long and has delayed this project to some extent.
Then there is another headline which reads, "B.C. Electric plans Mica dam construction". Now, the British Columbia Electric, we understand, are deeply interested in the development of the Columbia by means of a dam at Mica creek. They are planning a dam that will be some 700 feet high and will be capable of developing 1 [DOT] 5 million horsepower, at a cost in the neighbourhood of $247 million. The power from that dam will be distributed chiefly to the lower mainland of British


Columbia over a power line 450 miles in length which will cost in the neighbourhood of $45 million or $50 million. You can see that there is a lot of money going to be tied up in this one project. However, there does not seem to be any question about the problem of financing in so far as British Columbia Electric are concerned. They claim that immediately the signal is definitely given to go ahead, they will be ready.
Before they can get that signal they have to clear five different hurdles. The first is the British Columbia government and compliance with the provisions of their water act; second, the federal government and compliance with the provisions of the International River Improvements Act; then the British Columbia public utilities commission; the United States government and the international joint commission. As I said earlier we hope, as a result of the conferences we understand are being arranged, these will present no serious obstacles.
Apparently the British Columbia Electric are prepared, immediately they receive the go ahead signal, to start exploratory engineering work which will take an estimated two years. Then a further eight years will be needed to complete the project. That is one plan that is being presented to the people of British Columbia through private enterprise, a local Canadian company. It might not be so "local" because it has ramifications from one end of Canada to the other, but it is a strictly Canadian company.
There is one other plan which I think might be worth mentioning at this time and which might command some attention from the people in this house. I have a lot of confidence, more so than possibly some other members who have spoken, in the government of British Columbia. The premier of that province has outlined a plan for the development at Mica creek. Under this plan the dam would be built by the United States with United States capital. Now, I do not want you all to get excited and say, "Here we are selling out to the Yankees". I do not think that is the idea. The United States would build this dam but the entire power developed at the dam site would be the sole property of British Columbia to do with as they saw fit. In return for control of the water flow on the Columbia river, which would result from the construction of the dam and which would allow a steadier development of power south of the border, the United States would pay the cost of the dam. In addition to that they would deliver to the British Columbia government, at the Canadian border, 20 per cent of the extra power which would be generated downstream as a result of this controlled flow.

I am not going to get into any arguments about the pros and cons of the various methods of developing the Columbia river. I am, and always will be, of course, a strong believer in private enterprise. As long as private enterprise is prepared to develop the river, I am certainly prepared to go along with them. We have these two plans; one where a Canadian company would develop it, and of course in that case the Canadian people, the users of the power generated at the dam, would have to pay for the cost of the dam. Then we have the plan of Premier Bennett whereby United States capital would build the dam, turn over the power to the people of British Columbia, and pay for the control of the river which that would give with 20 per cent of the extra power they would develop downstream. I say I am not entering into any argument on the pros and cons of these different methods at this time.
In closing, Mr. Chairman, I can only reiterate the hope that the forthcoming conference of the minister in Victoria will be successful and worthwhile. We hope that the serious problems connected with Columbia river development will be settled around the conference table.


Jean Lesage: Mr. Speaker, I wish to thank all hon. members who have spoken this afternoon on water problems, most of whose remarks have been directed to water problems connected with the Columbia river. I am thankful to them for the remarks they have made and the opinions they have expressed. I am sure that such remarks and opinions will be useful to me when I meet the premier of British Columbia in Victoria one week from today.
I have outlined on two occasions in the house the purpose of this meeting. The first occasion was March 20, and my statement can be found at page 2298 of Hansard for that date. Then on May 23 I made an announcement to the house, the text of which and the answers to questions concerning which by the hon. member for Vancouver-Quadra and the hon. member for Kamloops, can be found at page 4249 of Hansard for that date. I believe I should follow the advice of the hon. member for Kootenay West (Mr. Herridge). I wonder whether it would be wise for me to add any comments at this time just before I discuss these matters, which I have outlined in these statements, with the premier of British Columbia.
In the last few months the officials of the Vancouver office of the water resources branch of the department have been in very close touch with officers and officials of the British Columbia government on these very
Freight Rates
questions. Moreover, one of the assistant deputy ministers of the department went to Victoria last December, and he went again at the beginning of June. He has had discussions with the officials of the British Columbia government preparatory to my meeting next Wednesday. One must not forget-and this is one of the reasons I believe I should not add anything at this time-that after all the water resources of British Columbia are the property of the province, and that the initiative as to their use and their development rests with the authorities of that province.
Really, in the circumstances I do not believe it would be wise to say anything more before I have the opportunity of meeting Mr. Bennett. I can say, though, I am going to Victoria with an open mind and in a spirit of co-operation, I assure the hon. members who have spoken this afternoon. I myself hope the talks I shall have will be successful, and that they will help in the economic development of the province of British Columbia. That is my aim in going to Victoria.



FREIGHT RATES


Hazen Robert Argue: Mr. Speaker, I wish to change the subject. I presume the discussion is over on this particular matter. I rise at this time to protest the increase in freight rates that will take place on July 3 unless something is done about it.
We have had a great many increases in freight rates since the end of the war. We have had one freight rate increase after another, until the increases before this most recent order amounted to a total of some 98 per cent. I do not think a good case has been made for an increase in freight rates. If one examines the financial position of the Canadian Pacific Railway I do not think he will find that the Canadian Pacific Railway can prove it is unable, in its present financial position, to absorb out of profits the increase in wages that has recently been granted to the railway employees. The railway workers were given an increase of some 11 per cent, but the railway company, following the award allowing the workers that increase of 11 per cent in wages, applied for a 15 per cent increase in freight rates. It is obvious that the amount of money used by the railways to pay wages is only a part of their operating costs. If they are to get a 15 per cent increase in freight rates on a very substantial part of their revenue traffic they will be getting more than has been given to the railway workers.
In recent years the Canadian Pacific Railway has shown very little change in its gross

Freight Rates
earnings. But while its gross earnings have not varied appreciably, its net earnings have been increasing. That, of course, is a natural thing when one takes into account the fact that the railway companies have been increasing their efficiency in recent years. The railway companies have been following a modernization program. They have been dieselizing their lines; they have been laying off thousands of workers; they have made tremendous savings in their wage bills, so that while gross earnings of the Canadian Pacific Railway in 1955 were $448 million, somewhat less than the gross earnings of $457 million in 1952, their net earnings on railway operations had increased from $28 [DOT] 9 million to $37 [DOT] 3 million. I think the railway companies, because of the savings they have already made, are in a financial position to pay the increases in wages that have been granted without any increase in general freight rates.
A number of briefs have been presented to the board of transport commissioners objecting to any increase in freight rates. A brief was presented by the Canadian Federation of Agriculture and one by the Saskatchewan wheat pool. In those briefs they pointed out the position agriculture faces in relation to increased freight rates. The net income of the agricultural industry has been going down in recent years and they have said that an increase in freight rates will further reduce agricultural net income; that the farm industry, unlike any other industry, is unable to pass on its increased costs. Therefore the effect of an increase in freight rates will be a further decrease in the net income of the agricultural industry.
I agree with them when they ask that whatever increase in freight rates may be granted should not be applied to primary production of this country. One might extend that argument to primary production other than farm products, to forest products, perhaps, and certain other products. But as far as agriculture is concerned I certainly agree that the increase should not affect agricultural products.
As the cost of living goes up, as labour efficiency increases, I think the trade union movements are perfectly justified in asking for periodic increases in order that the labouring man can have his fair share of the increased productivity in this country. Labour has been able to increase its standard of living, though perhaps not as rapidly as it thinks it deserves, and for that I am glad. Industry has been able to add to its prices sufficient to cover any increased costs, sufficient to have a substantial profit, a growing profit; but in this same period of time the net income of the agricultural industry has been

on the decline. This increase will add further to the decline. In a table in its brief at page 13 the Canadian Federation of Agriculture points out that the net income of the agricultural industry, in terms of 1955 dollars, fell from $1,700 million in 1949 to $1,189 million in 1955.
The Canadian Pacific Railway is not content with the 7 per cent increase that it is about to be granted. It has asked for a 15 per cent increase. The Canadian Pacific Railway is not content with a 15 per cent increase only because the company has put on a very direct campaign to get rid of the Crowsnest pass rates on grain. It is admitted that if the Crowsnest pass rates were abolished, and if the railway companies applied the same rates to the movement of grain that they apply to other commodities of similar bulk, but not necessarily of a similar value, it would increase the revenue they get for moving a bushel of wheat from 12 cents to 36 cents. In other words, if the Canadian Pacific Railway were successful in its efforts to get rid of the Crowsnest pass agreement it would reduce the cost of wheat to the producer by 36 cents a bushel. I wish to warn the government that any move to get rid of the Crowsnest pass rates will be resisted by every farm organization in western Canada. The briefs that have been presented protesting the impending increase in freight rates will be very mild reading compared to the briefs that will be presented and the action that will be taken to protest any tampering with the Crowsnest pass rates.
I rise at this time to ask the government to disallow the impending 7 per cent award. I think the railway freight rates in this country are already too high and that if the railways can prove they need an increase-and I do not think they have proved it yet-any increased revenue they may need should be obtained by some other method. I suggest the government should look very carefully at the question of using subsidies as an alternative proposition. Of course there is already a good precedent for using subsidies with regard to the railways, because of the $7 million subsidy that is now paid annually to the railway companies for maintaining their lines in northern Ontario. I am suggesting it is most unfair that the agricultural industry be further depressed by allowing a 7 per cent increase in freight rates. Unless something is done about it, in all probability this will be followed by a further increase in freight rates, and this will depress the agricultural industry worse than at the present time.
Motion agreed to and the house went into committee, Mr. Applewhaite in the chair.

The estimates of the following departments were first taken up and entered for consideration:



DEPARTMENT OF DEFENCE PRODUCTION

[Stage Direction]
85. Departmental administration and payments to Canadian Commercial Corporation and other corporate agencies for services provided in connection with defence purchasing and production, $6,145,727.
DEPARTMENT OF MINES AND TECHNICAL SURVEYS Administration services-
209. Departmental administration, $510,190.

[Stage Direction]
407. Departmental administration, $244,775.
Proceedings reported.


Paul Joseph James Martin: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for contributions by Canada, to be paid out of the consolidated revenue fund, in respect of unemployment assistance costs in the provinces.
Motion agreed to and the house went into committee, Mr. Applewhaite in the chair.


Paul Joseph James Martin: Mr. Chairman, at the resolution stage of this particular bill it is my intention to speak but for a few moments, as I have indicated to those who are charged with expressing the points of view of the various groups in the house. This resolution, nevertheless, is an important one and asks authority to introduce a bill which will authorize the federal government to enter into agreements with the provinces of Canada to provide for contributions out of the federal treasury to be made for local unemployment assistance costs to those in need.
The details of this bill respecting unemployment assistance were worked out during the past year at a number of conferences with the provinces. There were at least, I think, six different conferences some of which, of course, were devoted to other matters but one of which was devoted exclusively to working out arrangements with the provinces, as a result of which we now have agreements with six provinces to share with them in the cost of assistance to needy individuals who may be characterized as unemployed employables or unemployed unemployables, that is persons who have been out of work or who are unable to work.
Unemployment Assistance
One of the clauses of the draft agreement provides that at the first session of parliament the government of Canada will seek authority to validate the agreements that have been signed with the six provinces which I shall enumerate, these provinces being Newfoundland, British Columbia, New Brunswick, Prince Edward Island, Saskatchewan and Manitoba. Other provinces are giving consideration to the matter and at least one other is very close to signature.
The legislation which will follow upon the approval of this resolution will accomplish the following. It will provide the necessary authority for the federal government, through the Minister of National Health and Welfare, to make agreements with the provinces for sharing unemployment assistance costs. Second, it will establish the basis of the federal contribution and will specify certain types of costs which may be included and certain costs which may not be included in the reimbursement claims submitted to the federal government. On all these matters, of course, the legislative provisions will conform with those set out in the agreements already signed with the six provinces, which were tabled in this house several months ago. Third, it will authorize these agreements to be given retroactive effect for a maximum period of one year, not back beyond a period of 12 months, so that in the case of those provinces with whom agreements have been finalized they will date back to July 1, 1955. Fourth, it will ratify and confirm any agreement already made prior to the passage of the bill itself; and finally it will authorize the federal share of unemployment assistance costs covered by the bill to be provided annually out of the consolidated revenue fund.
I am sure that when we get into the discussion of the bill, the discussion will perhaps take into consideration the proposals that were made by the federal government in 1945, and likewise recommendations that were made by a royal commission whose report was discussed at the dominion-provincial conference of 1941. I can only say that the provisions of the bill to be based upon this resolution will be found to go much further than the recommendations of the Rowell-Sirois commission, and further than the proposals made in 1945. These later proposals did not include unemployables, as does this measure, and the resolutions of 1945 did not cover special cases or local situations, as does this one. The proposals of 1945 did not cover the selfemployed, and particularly they did not cover, within a certain context, fishermen and farmers.
5448	HOUSE OF
Unemployment Assistance
Under the arrangement which this resolution and the bill to be based upon it envisage, which has already been endorsed by six provinces and is still under consideration by the others, I think I can say we will be able to write "finis" to the deadlock which has existed in this country for a decade or more on the subject of the responsibility of the several governmental jurisdictions for what we call residual assistance, and that henceforth there will be an assurance of organized assistance to persons in need in any part of Canada who cannot qualify for help under any of the existing social welfare measures such as unemployment insurance, supplementary benefits, old age assistance, disability pensions and so on. By this legislation we will eliminate the obstacle presented in the past by the fact that each jurisdiction has argued that responsibility belonged to another level of government. Now no excuse will exist for denying assistance to those in need in any province which has entered into an agreement with the federal government.
I believe this resolution constitutes a piece of important legislation which in its general context will win a wide measure of approval from most hon. members of this house and I am sure by those needy people in our country who have sometimes been made the victims, unwittingly perhaps, of governments which have sought to shift responsibility to other jurisdictions. I do not propose to say any more at this time in introducing this resolution. I am sure that as soon as we go into an examination of the bill we shall find there the greatest opportunity for fruitful discussion in respect of a measure which I think will win wide support.


Mrs. Fairclough:: Mr. Chairman, as the minister has said, he consulted with representatives of this and other groups in the house with a view to expediting the passage of this resolution today, and under the circumstances which he outlined to us we are quite willing to go along with that. Of course until we see the bill it is a little difficult for us to make any specific comments, but there are a few things that should be said.
The minister has made some remarks with reference to the shifting of responsibility or the failure of various levels of government to accept responsibility and the tendency to pass off responsibility to another level. It is true that even as far back as the tabling of the Rowell-Sirois report there were various opinions held by various groups as to who was responsible for what. As for myself, I have had very strong views on this matter and have expressed them on various occasions in this house.

The minister has listed the provinces which, up to the present time have signed agreements. Of course they do not follow any particular geographical or political pattern. There are notable omissions from the list of those provinces which have to date made agreements with the federal government. I might point out that among those which have not yet signed agreements are the two largest provinces in Canada. Therefore in the implementation of any legislation such as this there will be a very large hole. I see that the minister is smiling and I presume he expected me to say that, but it is true that there will be a large part of our population which will not be covered by this legislation.
Just what the legislation will offer to the provinces remains to be seen. I daresay that the legislation will be pretty well along the lines of the agreements which have been made. It will have to be if those agreements are to be validated. When the minister is replying will he say whether special legislation will have to be brought down this session, or whether this legislation is all that will be required to validate the agreements.


Paul Joseph James Martin: That is right.


Ellen Louks Fairclough: I would expect also that the statement made in this house by the Prime Minister on June 21, 1955, would likewise bear some relation to the legislation which is being brought down and to the agreements which have been made already.
I must admit that I have not studied those agreements, which is probably an oversight on my part, and perhaps the minister could indicate when they were tabled.


Paul Joseph James Martin: I forget the exact date, but about two and a half months ago.


Ellen Louks Fairclough: Since the start of this session?


Paul Joseph James Martin: Yes.


Ellen Louks Fairclough: In his remarks at that time the Prime Minister referred to the proposals which had been made and said that the provincial governments had committed themselves to study those proposals and give answers to the federal government. I think it would be extremely interesting to know just what are the answers of those four provinces which have not signed to date; that is Alberta, Nova Scotia, Quebec and Ontario.


Paul Joseph James Martin: The correspondence has been tabled as well.


Ellen Louks Fairclough: The minister indicated that from now on there will be no excuse for any province, and I take it for any municipality, to claim that any person suffering by reason of unemployment is not eligible

for assistance of one type or another. Referring back to my remarks of a few minutes ago with reference to the big hole left in this scheme, I should like to point out that the municipalities have always carried a great load in the administration of assistance to unemployables. When occasion demanded that they offer assistance to persons who were employable but who were unemployed by reason of circumstances beyond their control, then the municipality had a double load. It had its usual role of administrator and also the responsibility of giving relief to these people. This constituted a financial load over and above what could reasonably be expected of the municipality.
The province would say, "It is not our responsibility"; the federal government would say, "It is not our responsibility," and the municipality would fall into the chasm in between. That has been going on for a long time. I do not intend to dwell on it at any length. It is a fact. That is the situation that has existed. Whether the new legislation the minister proposes to bring down will solve that problem, even in the provinces in which it will operate, is a matter for experience to prove. When the minister said that heretofore there had been no recognition given to unemployables at the federal level-I believe those were his words-


Paul Joseph James Martin: Unemployed unemployables, people who are unemployed, in need, and who are thought not physically capable of working.


Ellen Louks Fairclough: Unemployables as opposed to unemployed employables.


Paul Joseph James Martin: That is right.


Ellen Louks Fairclough: The minister said that
heretofore none of the legislation at the federal level had included these persons. But if it is proposed to go along with the assumption set out in the Prime Minister's remarks of a year ago and establish a basic load, then in effect they are still not being assisted as such by the federal authorities. You simply establish a basic load or a basic count and say to the province that you allocate that much as its normal load with respect to caring for unemployables. You have a floor under the assistance, in other words, and only when the assistance given in a province goes above that basic level does the federal government enter into the scheme. I admit I am anticipating, but I would think that is a fair assumption taking into account the Prime Minister's remarks of a year ago.
If that is so, then we at the federal level are still not contributing to the provinces or the municipalities for unemployables. We are simply saying that we assume that 0-45, or
Unemployment Assistance whatever the percentage figure may be, of your population are normally unemployable, are normally under the jurisdiction of the province and the municipality for purposes of welfare assistance, and therefore we take no responsibility for that percentage of your population. When your load goes beyond that, then we step in.
If that is the case, then the minister's assumption that these people would now receive assistance from federal sources is not in my estimation quite accurate. It is true also that the new formula suggested or proposed a year ago more or less wipes out the stand taken by the Rowell-Sirois commission when they said in their report, in defining employability and eligibility for unemployment aid:
Our proposal is that a clear line should be drawn between employables and unemployables and that the dominion should assume responsibility for employables only.
By establishing a basic load you solve the problem of deciding who is employable and who is not employable. You merely set a norm and proceed from there. So, as all things change, opinion has changed in the last 10 or 15 years in so far as the administration of assistance for unemployed persons is concerned. I should point out, though, that there is one sentence in this report that may, it seems to me, be hard to overcome even today. With respect to any scheme where administration is at the municipal level they point out:
. . . hardship might easily result from the reluctance of local authorities to accept the ruling of a local representative of a dominion service.
It will be interesting to hear from the minister just how he proposes to secure equality of treatment for all persons across Canada. I might say further that unless the Minister of Labour, in his submission with reference to the amendment of section 45 (2) of the Unemployment Insurance Act which is still to come before the house, comes up with a really workable solution, then undoubtedly the load with respect to caring for these persons who are disqualified by reason of the failure of the Unemployment Insurance Act will fall on this fund. I cannot see that it could be otherwise. It is to be hoped that the Minister of Labour will have a workable solution because, quite apart from the consideration of whether the load should fall on the unemployment insurance fund or whether it should fall on this unemployment assistance fund, the fact still remains that people who are insured like to feel that they are standing on their own two feet, that they have earned the right to benefit, that they have paid for it, and

Unemployment Assistance they do not want to be recipients of municipal relief, which is what this assistance will amount to.
I have a number of other things I should like to say, but I think when we get the bill and have the minister's further explanation some of these points will be clarified. Therefore, in accordance with my undertaking to him that I would not take too long this afternoon on this matter, I think I shall leave any further remarks until we have seen the legislation.


Mr. Gillis:: Mr. Chairman, ordinarily I would wait for the bill to discuss this matter in detail, but there are some thoughts in my mind that I should like to leave with the minister before the bill is introduced. If what I have in mind is constructive there will still be time to change the legislation.
There are a few things that I think should be clarified. I have had a lot of inquiries asking why this measure was in the hands of the Minister of National Health and Welfare and not under the Department of Labour. The answer is, of course, that taking in unemployed people who cannot perform any work whatever makes it a welfare measure.


Paul Joseph James Martin: I may say I wondered, too.


Clarence Gillis: That is the answer. You are going to take in these handicapped people who cannot find employment and are unemployable. I should like to leave this caution with the minister. There can be the danger in this legislation that those who administer the Unemployment Insurance Act will tighten up their administration so much that they will dump a load of unemployed into the hands of the Minister of National Health and Welfare. There were over 200,000 people disqualified under section 45 (2) and other sections of the Unemployment Insurance Act last year. To dump that kind of a load on this legislation would put quite a strain on it. Therefore you are going to have a lot of consultation with the Minister of Labour.
The second point I should like to make by way of a caution to the very capable minister is that this legislation could overlap the Disabled Persons Act. You know, a lot of the provincial officials who will administer this legislation can cut corners. If you are taking in handicapped, who should perhaps be under the Disabled Persons Act, the short-cut would be to throw them in here. The minister will have to watch that very carefully.
The matter of assistance to the unemployed is not a new question. It is a very old one. As the minister very well stated, there can


be no more passing the buck. The responsibility is now fixed by legislation. The initiative must come from the province, and the federal government will match, 50-50, what the province spends. But the province must make the first move.
There are four provinces that are out or that have not signed agreements. In Nova Scotia their reason, in my judgment, is that they do not pay any unemployment assistance and that by signing the agreement they would be committing themselves to go into the field and take the initiative in setting up some kind of assistance to the unemployed.
The next point I should like to make is that this legislation, matched by the provinces, in my judgment is not altogether fair for the simple reason that the maritime provinces, for example, with the provincial incomes they have, are not able to spend the money necessary to relieve unemployment in those areas, whereas other provinces with greater provincial incomes can go ahead and spend, and have the amount matched by the federal government.
Another point I should like to make clear is that in the formula that was set up by the dominion-provincial agreements on this question, the qualification is set out for the rest of Canada, apart from Nova Scotia, as -45 per cent of the total population of the province. Worked out, that percentage equals so many people. You must have that many people unemployed before you can qualify for this matching relief. I take British Columbia, for example, with a population of approximately 1,300,000. That figure, worked out, means that British Columbia must have 5,850 unemployed before it can qualify; and that formula applies to the rest of Canada. A special arrangement was made for Nova Scotia because they have no unemployment assistance there. It is -30 per cent of the population which is approximately 750,000. That percentage would equal 2,250 people in the province who must be unemployed before they would qualify for any assistance. I thought I would put those two examples on the record because to the average person outside reading those percentages of -45 and -30 as applied to the total population, the formula does not make much sense. They would not understand the situation very well. However, it is a very simple formula once it is put in simple language.
To follow up the record of assistance I went all through this book I have in my hand. I may say that a great deal of study has been given to this matter of unemployment assistance. The book to which I refer is entitled "Dominion-Provincial Conference on Reconstruction, 1945-1946". The conference started

back in August, 1945, and concluded in May, 1946. But in April of 1946 the official proposals with regard to assistance to the unemployed read as follows, and this will be found at page 387 of the proceedings of April 29, 1946:
Unemployment Assistance
In addition to unemployment insurance, the dominion will set up a system of unemployment assistance under which it will pay benefits equal to 85 per cent of unemployment insurance benefits, to unemployed persons able and willing to work who are not entitled, or who have ceased to be entitled, to unemployment insurance benefits. This assistance will be limited to two years of continuous assistance, but a person will again become eligible for this assistance following an approved period of employment.
I think the present arrangement the minister is making is a very much better one than that final proposal to that dominion-provincial conference, because the question of a person running off regular unemployment insurance benefits has been taken care of to some extent by the seasonal benefits that have been established for three months, namely January, February and March. This arrangement at the present time, in my opinion, reflects the best thinking that was done all during this conference. I have read over these proceedings, particularly on that question, and that was the final solution.
As I said before, I think the arrangement now being made by the minister is a better one, but still it is not an ideal arrangement. I can envisage a great many complications, particularly in its administration, because this type of legislation goes back to the provinces for administration. The provinces have to take the initiative in spending the money. The federal government will then reimburse them to the extent of 50 per cent of what they spend. But in provinces like Nova Scotia and New Brunswick you are going to find the situation rather difficult. They will not be bothered very much in Prince Edward Island and I do not think they are bothered too much in Newfoundland at the present time, because I think your fishermen are self-employed. I see the Minister of Citizenship and Immigration looking at me. Your fishermen are selfemployed. Under this particular legislation they have not any protection at all.


Paul Joseph James Martin: Oh, yes.


Clarence Gillis: If they are self-employed?


Paul Joseph James Martin: This includes self-employed and any other individual, fisherman or farmer, who is in need and out of work. It includes fishermen and farmers as well.


Clarence Gillis: The qualification is "in need"; the qualification is "unemployed".
Unemployment Assistance


Paul Joseph James Martin: Unemployed, in need.


Clarence Gillis: That is where I think you are going to have difficulty. Remember your experience; and you have still to correct your disabled persons pension.


Paul Joseph James Martin: When we get into the bill I think we can deal with that matter.


Clarence Gillis: All right. I am just provoking your thoughts now so that you will be prepared.


Paul Joseph James Martin: No one can do it more nicely than the hon. member for Cape Breton South.


Clarence Gillis: The minister's heart and head are in the right place but unfortunately he cannot be in 10 different provinces advising the people who will interpret and apply this legislation. In fact, if the Minister of National Health and Welfare were sitting down with any of the boards in any of the provinces when they came to the question of deciding this matter under the Disabled Persons Act, there would not be any trouble. But he is not there.
As he knows, this is another piece of legislation that is going to be handled by the same people who are interpreting the Disabled Persons Act. Your difficulty is going to begin when you reach borderline cases. It is all right if it is a straight matter of unemployed and you are registered for employment and you are able-bodied. That matter will not be difficult. But you are going to find hundreds of people who are handicapped, borderline cases, and the difficulty is going to come in there as to whether they belong under the Disabled Persons Act or whether they fit into this legislation as unemployables.
In provinces like Nova Scotia, Prince Edward Island, Newfoundland and New Brunswick, provincial incomes are lower than those of Montreal, Toronto, maybe Vancouver and other cities. To maintain the services which they must maintain now, as in the field of education, with the limited income they have, a rather strict interpretation is going to be put on the qualification necessary to receive the benefits of this legislation. If the federal government were determining this matter, I would say that perhaps we would not have much difficulty. But when you have a province that is just going on a shoestring it is a different matter. There may be about 3,000 people unemployed, and they must take them and farm out $10, $12 or $15 a week to them. The amount of weekly benefit is going to have to be related to some extent to the unemployment insurance benefits. If there were 3,000 or 4,000 unemployed in a province, the provincial premier would have to decide whether he was going to spend $20,000,

Unemployment Assistance $50,000 or $100,000. He has to spend some money to get some back from Ottawa, but he is going to think it over very carefully. I think that is one of the reasons at least why Nova Scotia is out. They are being very careful to see they are not getting into something they are not able to handle financially.
Of course we will be in a better position to discuss this after we see the bill. However, as 1 said before there is no harm in pointing out some of the difficulties to the minister because the bill has not yet been introduced. We can point out some of the stumbling blocks we can see, particularly with respect to administration and with respect to provinces with low incomes. A concession was made in lowering the percentage of the population that have to be unemployed. There is still time for the minister to take another look at that bill and ascertain if there could not be some modifications made in it, particularly in connection with this matter of administration.
Before I resume my seat, Mr. Chairman, I want to say that so far as I am concerned I have always been of the opinion, and am still of the opinion, that the employable unemployed in this country are the responsibility of the federal government. I believe that in order to achieve equality in the matter of unemployment relief which is not covered by unemployment insurance, and recognizing the fact that provincial incomes are not equal, the federal government must accept the responsibility. They have the taxing powers necessary to raise the finances to bring about that type of equality right across the country.


Mr. Thomas:: Mr. Chairman, I am going to withhold any suggestions or criticisms I may have until the bill is before us, and probably until we get into the committee stage on the bill. I will say that this legislation could, and probably should, fill the gap that has been quite apparent in the unemployment insurance program. It is one for which we have pressed before, because it was one of the points in the seven point program laid down by the hon. member for Bow River during last session. I cerainly hope this legislation is not going to be so restrictive or so niggardly that the proper number of people are not going to be able to get benefits under it. Some of the welfare legislation which has been passed in former years has been entirely too restrictive. For example, the disabled persons pension was such that the Alberta government either had to cut off some of those who were receiving aid under the provincial program or continue to pay on their own, as they were forced to do.

Other than that, I am not going to say anything. We hope this bill is going to be wide enough at any rate to fill the gap that exists in the unemployment legislation and give all Canadians the benefits they should get as the result of an unemployment program.


Paul Joseph James Martin: I presume there is no one else who wishes to speak, so I accept the invitation of the hon. member for Hamilton West, who quite properly asked several questions. I think the discussion this afternoon in this preliminary canter has been very helpful. I thank hon. members for it.
The hon. member for Hamilton West pointed out that although we do not have the bill before us, it was incorrect to say that the bill was to provide an assistance program by the federal and provincial governments to two classes of people, the unemployable and the unemployed employables, in all parts of the country.


Ellen Louks Fairclough: I just said it was incorrect to say it was for the unemployables.


Paul Joseph James Martin: My hon. friend is partly right, because the bill with which we hope to deal shortly provides for this assistance only in those provinces with which we have agreements, the six provinces I have named and in at least one other I expect will come in very shortly, and possibly two others. Of course the hon. member was right likewise in pointing out that there was a hard core in this problem that would be left either with the municipalities alone or with the municipalities and provinces.
To appreciate the significance of that, one has to recall the recommendations made in the Rowell-Sirois report which, as the hon. member for Cape Breton South said, recommended that the federal government should assume entire responsibility for the unemployed employables and should also bear the responsibility for administration in connection with this group. It is also true, as the hon. member for Cape Breton South said, that in the proposals made to the provinces in 1945 the impression was created that the federal government was prepared in that package deal to assume 100 per cent responsibility for the unemployed employables.
The real fact is that a careful reading of the minutes of that conference will show that the federal government did not agree to assume entire responsibility, in the proposals which were part of the package deal, for the unemployed employables. All the federal government did was to agree to assume responsibility for this group for a limited

period, a period of two years, which was to be a period during which the Unemployment Insurance Act, which had been then in existence for five years, would be allowed to gather further experience, bring in other classes of workers under its coverage and generally profit by additional experience that would come from further administration of the act.
I think the value of this particular measure lies in at least the implication given by the hon. member for Hamilton West when she said that at no time-at least I understood her to say this, but perhaps it was the hon. member for Cape Breton South- was there ever any suggestion that the federal government should become responsible for those unfortunate fellow citizens of ours who are unemployed, and who even if work could have been provided for them were not capable of performing work. This legislation has, as I think its main value, that it reaches in very large measure that group of people once a certain condition has been met which we shall discuss when we come to the legislation.
I think we all felt-and certainly when we had a temporary period of unemployment about a year and a half ago-that it was unfortunate that in a federal state a situation should be created whereby needy individuals should go without assistance from the community in one form or another, simply because it had not been settled which jurisdiction was either constitutionally responsible or responsible because of the lack of agreement among the various levels of government.
Now, assuming the existence of the hard core problem which the hon. member for Hamilton West mentioned, this legislation will, in respect of those provinces with which we have agreements, remove that situation. By this legislation the federal government is not only agreeing to provide on a sharing basis for assistance for the unemployed employables once they reach a certain percentage of the population of the province, but it is also assuming a responsibility-and this is a new departure for us in Canada-once a certain proportion of the indigent group has been reached, along with the province, for that class of people. That is a new departure. It is one of the main purposes of this bill, and it is a purpose that we shall all want to bear in mind.
It is not asking too much that municipalities and provinces combined should continue to have some responsibility for those portions of the unemployed group in the country, whether employable or not, who are represented by the phrase "hard core". When we 67509-345J
Unemployment Assistance get to the bill we can indicate the extent to which we are relieving the provinces and the municipalities of a great responsibility in this particular.
My final observation is that I do not think my hon. friend should be concerned about the danger of dumping on to this legislation the responsibilities that should normally attend the Unemployment Insurance Act, because there is a check on that and that check will be the provincial governments, which will be called upon under this legislation to provide 50 per cent of the cost, either themselves with the municipalities or through the municipalities alone. Therefore, Mr. Speaker, I think the brief discussion that has preceded the introduction of the bill points out the value of this particular legislation, notwithstanding that we may have some disagreements on some details. This resolution does represent an important further step in the development of our social welfare program in this country.


Mr. Blair:: Mr. Chairman, may I ask the minister a question before he leaves? I have found some difficulty in outlining the definition of when a person is disabled under the disability act. When is a person unemployable, according to the minister's conception? Where is the dividing line between a permanent disability and unemployable?


Paul Joseph James Martin: Well, as far as this legislation is concerned, it will be up to the provinces and the municipalities to tell us, within the context of the legislation, which individuals come in that group. It will be a matter of administration, and I think we shall not experience any real difficulty. I shall go in to that further when we get to the bill.


Mr. Barnell:: Mr. Chairman, I have a question to ask the minister while the resolution is before us. I am wondering what provision is to be made in the legislation, or otherwise, for setting a floor or a ceiling, or both, upon the rate of assistance which will be paid?


Paul Joseph James Martin: The rate of assistance will
depend upon the rates paid by the provinces, of which the federal government commits itself to pay not more than 50 per cent.


Thomas Speakman Barnett: Do I understand from that, that the level of assistance to be paid is entirely in the hands of the provinces?


Paul Joseph James Martin: That is right.


Thomas Speakman Barnett: And, under this legislation, the federal government will be prepared to match whatever rate the province pays?


Paul Joseph James Martin: That is right.


William Gourlay Blair: Mr. Chairman, I should like to ask the minister another question. I asked the Minister of Labour about it the other

Unemployment Assistance day. It has to do with the question of people who are over 40 years of age and who would be considered employable but who, owing to their age, cannot get employment. I have in mind a municipality. An industry closed up there and many of those people were left without work. The point I am coming to is this. When they apply for work they find that any person over 40 years of age is not considered employable. They were told that very nicely when they made application. Of course, at the bottom of it all was the fact that they were not considered as fitting into the pension schemes, or the training schemes, of those firms to which they made application.
A person 40 years of age is too old to get a job. I wonder whether that can be taken care of in some way. Do they enter into the unemployables? Would it be considered at any time that a man 40 years of age is unemployable? These people cannot get jobs; they are not considered employable in the eyes of the managers of those companies to which they apply. They are unemployable.
This is a situation we must recognize. It is happening all across the country. The situation exists in my own riding. These people simply cannot move out of the town in which they live. There is no possibility of them getting jobs. They have tried very hard to get jobs. Whenever they apply for a job they are asked, "How old are you?" If they are 40 years of age they are told, "We do not want you in our firm because you do not fit into the pension plan, and we like to train our own men". Therefore to all intents and purposes, no matter how we regard it, they are still unemployables.
This is a situation we should recognize, and something should be done for these people. Their unemployfent insurance ran out on May 1. They are quite without funds except what they saved from their earnings. At the same time, as I suggested before, they are unemployable by reason of the fact that no firm will employ them. If they go to the unemployment insurance people they might be offered other jobs, but you cannot ask a man to go out and do work on a highway or do other forms of labour when he has been a factory man all his life, or perhaps an expert mechanic. It just does not work out that way.
At the present time the situation exists, and I again call it to the attention of the government. I asked the Minister of Labour about it the other day and I now appeal to the Minister of National Health and Welfare to do something for these people.


Paul Joseph James Martin: It will be covered by this legislation.


Ellen Louks Fairclough: In remarking on the date on which the agreement is to become effective

the minister said it would be retroactive for one year but would not go back prior to July 1, 1955.


Paul Joseph James Martin: The agreements are retroactive for 12 months. In the case of the six agreements that brings them to July 1, 1955.


Ellen Louks Fairclough: Do all the agreements go back to the same date?


Paul Joseph James Martin: Twelve months from the date-


Ellen Louks Fairclough: Of signing.


Paul Joseph James Martin: Yes.
Resolution reported and concurred in.
Mr. Martin thereupon moved for leave to introduce Bill No. 436, to authorize contributions by Canada in respect of unemployment assistance costs in the provinces.
Motion agreed to and bill read the first time.

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



DEPARTMENT OF DEFENCE PRODUCTION

[Stage Direction]
85. Departmental administration and payments to Canadian Commercial Corporation and other corporate agencies for services provided in connection with defence purchasing and production, $6,145,727.
The Deputy Chairman:: Shall the item carry?


Mr. Nicholson:: Mr. Chairman, I thought we were going to consider the estimates of the Department of the Secretary of State?


Mr. Harris:: I am sorry I was not able to advise my hon. friend-I was able to do it with respect to other parts of the house-but the Secretary of State is not available and in view of the time I thought if the Minister of Defence Production would just make a statement which would be available for the record, in any event there would be no harm done.


Clarence Decatur Howe: Mr. Chairman, in introducing the estimates of the Department of Defence Production I would like to deal in general terms with Canada's defence production program which the department administers, in order to illustrate the scope of the work undertaken. From a defence production standpoint Canada has accomplished much in the last five years and developments have taken place which have strengthened and broadened our defence potential. In a number of fields new sources of supply have been developed in this country, and it is of interest to note that whereas in 1951 some 25 per cent of our defence orders, in dollar terms, were placed in the United States, last year this figure had dropped to 2 per ceht.

An important factor in defence production is the state of the economy as a whole, and in this regard Canada has been most fortunate. Our industrial expansion and economic growth over the past years have added immeasurably to our defensive strength. Now that the initial build-up of the defence program has been completed, and re-equipment of our forces and maintenance of our defence production base have become the major considerations in the program, the underlying strength of the Canadian economy is of vital importance. It is against this background that the present program should be considered.
In carrying out its task of filling the defence requirements of Canada's armed forces, the Department of Defence Production has maintained a flexible production program which has been adjusted to changes in these requirements over the past five years. While this year's estimates of defence expenditures for equipment and services to be supplied by this department show little change, there are a number of adjustments and adaptations which I would like to discuss today, with some reference to the effect on the program of Canadian industry.
Five years ago I pointed out that there were certain phases of aircraft production in which it was felt that this country could make a contribution, not only to our own defence effort but to that of our allies as well. In some cases this meant using design and technical know-how of other countries and adapting them, where necessary, to our own needs. In 1951 deliveries of CF-100 all-weather interceptors and Orenda engines were just about to start, the F-86 Sabre was in quantity production powered by J-47 engines purchased in the United States, the Harvard trainer program was developing and there were plans for the production of the T-33 jet trainer.
Since then we have spent almost $2 billion on the aircraft program, more than three-quarters of it in Canada, and the tasks which were outlined in 1951 have been largely completed. A great number of CF-100 fighters have been produced, the majority being of the improved mark IV model, and further improvements are still being made. Canada has produced a very successful combination of the F-86 airframe and Orenda engine. The Harvard program has been completed and the Canadian manufacturer is now the sole source of supply for maintenance parts for this widely used training aircraft. The T-33 program has also been completed and current production is limited to replacement needs only.
During the same period we have for the first time established Canada as a producer of aero engines. The outstanding achievement, of
Supply-Defence Production course, has been the Orenda, of which improved versions are now being delivered. Rolls-Royce have completed production in their Canadian plant of Nene engines for the T-33 trainers, and the product has given excellent performance. In addition, a piston engine plant has been established near Montreal by Canadian Pratt and Whitney Limited which has supplied Wasp engines for both the Canadian and the United States governments and for supply under the Canadian mutual aid program to our NATO allies.
The production record of the past five years has borne out our expectation that a Canadian aircraft industry could successfully compete in certain fields with producers in other countries. The best evidence of this fact lies in the proven performance of the product. In the Orenda-powered F-86 Sabre, the Royal Canadian Air Force possess a day interceptor which is the equal of any in regular squadron service. The CF-100 continues to be one of the mainstays of the North American continental defence system, and will shortly make its appearance in Europe as part of the Canadian air division overseas. The success of this aircraft has demonstrated Canada's ability not only to build but also to design a first-class high performance aircraft. The same is true of the Orenda jet engine, which is so largely responsible for the excellent performance which the CF-100 and Sabre have given. At the same time, the Canadian aircraft industry has proven its ability to organize these complex production tasks quickly and to deliver at reasonable costs.
With respect to costs, we are satisfied that the decision to develop Canadian production has been justified economically. For various reasons, direct cost comparisons between countries are difficult to make. No two aircraft are identical and the types produced in Canada have been designed or modified to meet characteristic Canadian requirements. In addition, the size of the production run, which for Canadian requirements is bound to be limited compared with production runs in some other countries, has an obvious bearing on the element of overhead which must be borne by each aircraft produced. The record indicates, however, that the prices we have paid compare favourably with those we would have been required to pay for aircraft produced elsewhere.
But there is more than economic advantage to consider. A direct by-product of this policy is that we now have research and production facilities and engineering experience that did not exist in Canada before. From the point of view of our defence program this has been a major strategic gain. It has also added to our technological and industrial stature. It



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow we shall take second reading of the bill with respect to unemployment assistance and then the estimates of defence production.
At six o'clock the house took recess, without question put, pursuant to standing order.

Question



ANSWER TO QUESTION

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

Mr. Hahn: 1.	What was the total amount in the unemployment insurance fund for each of the years ending December 31, from 1951 to 1955 inclusive?
2.	What were the total payments of unemployment insurance claims during each of these years?
3.	What was the total administrative cost of operating the unemployment insurance service for each of these years?
4.	What was the total income of the unemployment insurance fund during each year?
Answer by: Hon. Milton F. Gregg (Minister of Labour):
With the approval of Mr. Hahn the reply to his question is given for each one of the corresponding fiscal years.
Fiscal	
Year	Amount
1951-52 			$782,828,328.15
1952-53 			 857,315,440.81
1953-54 			 887,529,068.44
1954-55 			 846,283,932.94
1955-56 			 859,470,557.93
1951-52 			$ 90,463,014.95
1952-53 			 135,330,319.91
1953-54 			 186,850,160.68
1954-55 			 257,627,984.14
1955-56 			 215,204,891.72
1951-52 			$ 23,519,567.26
1952-53 			 24,954,926.98
1953-54 			 26,096,722.06
1954-55 			 28,268,565.30
1955-56 			 26,622,106.29
1951-52 			$198,756,309.23
1952-53 			 209,817,432.57
1953-54 			 217,063,788.31
1954-55 			 216,382,848.64
1955-56 			 228,391,516.71

Thursday, June 28, 1956