1957-02-21

MISCELLANEOUS PRIVATE BILLS


[Stage Direction]
Mr. W. J. Henderson (Kingston) presented the first, second and third reports of the standing committee on miscellaneous private bills, and moved that the first report be concurred in.
Motion agreed to.


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I promised the Leader of the Opposition (Mr. Diefenbaker) yesterday that I would endeavour to give him a list of the matters that are apt to be, or which may possibly be, brought before parliament at this session. With respect to those specially mentioned in the speech from the throne, there are only three which are not already on the order papers either of this house or of the other place, and they will be brought forward almost at once. One is a bill to amend the Merchant Seamen Compensation Act, another is to revise the Federal District Commission Act, and a third is to ratify the north Pacific fur seal convention.
There are some matters which may arise, depending upon the actions of provincial governments or provincial legislatures. They would include, first of all, enabling legislation concerning hospital insurance; second, an act to amend the Judges Act, depending upon whether there is any requirement resulting from provincial legislation to increase the numbers of judges in any of the provinces; and, third, an amendment to the Lake of the Woods Control Board Act, depending upon action that has not yet been completed by the provincial legislatures of Ontario and Manitoba.
There will be bills to confirm the Alberta-Northwest Territories boundary survey, to constitute a peace bridge authority, to amend the Prairie Grain Producers' Interim Financing Act, to amend the Eastern Rocky Mountain Forest Conservation Act, the Northwest Territories Act and the Yukon Act. These are small amendments that are
not particularly urgent, but it might be convenient to dispose of them if there is an opportunity to do so.
There will be a bill to amend the Prisons and Reformatories Act, resulting from the fact that the government of British Columbia is establishing a new penal institution, and the purpose of the legislation would be to authorize the transfer of prisoners from existing institutions to the new institution.
There may possibly be bills to amend the Canadian and British Insurance Companies Act and the United Kingdom Financial Agreement Act of 1946. With respect to the latter, negotiations are progressing and as soon as they have been completed the Minister of Finance will be making an announcement about them.


Mr. Green:: That has to do with the
waiver of interest?


Louis Stephen St-Laurent: Well, with
the problem arising out of the request that has been submitted for the waiver of interest, and which would involve some modification of the original agreement. There may also be bills to amend the Canadian Vessel Construction Assistance Act, the Canada Evidence Act, the Fertilizers Act and possibly legislation to confirm tax agreements between Canada and other countries which have been or are being negotiated.
Of course there will be the legislation consequent upon the budget and the usual appropriation bills and the annual Canadian National Railways financing and guarantee bill. There might be other matters about which it would be found convenient, if there was time, to bring forward legislation but they will concern matters about which no decisions have yet been reached by the government.


Howard Charles Green: The Prime Minister did not mention specifically legislation to implement the findings of the committee of the Senate which investigated the narcotic drugs traffic. Can he tell the house whether it is intended to introduce such legislation?


Louis Stephen St-Laurent: There is
a bill before the other place at the present time dealing with the matter.


Howard Charles Green: Is it the intention to bring
in the legislation necessary to implement the budget?

Ministerial Statements


Louis Stephen St-Laurent: Well, it
is the intention if there is time to do so, but the experience over the last few days has been that the less controversial a recommendation to parliament is, the longer is the time taken in speeches by everyone to express his qualified approval of what has been submitted.


Howard Charles Green: Perhaps I could put it this
way. Does the Prime Minister consider it unlikely that the legislation implementing the budget will go through before dissolution?


Louis Stephen St-Laurent: Well, we
always hope that the legislation we bring forward can go through, but we do not attempt to rush matters.


Some hon. Members:: Oh, oh.


Louis Stephen St-Laurent: We want
hon. members to feel-


Mr. Argue:: A big change since the pipeline debate.


Louis Stephen St-Laurent: Well,
there are certain matters connected with the pipe line that I will be glad to discuss at any time it may be appropriate to do so. In the meantime I can assure the hon. gentleman that I am very happy with what discussion of the pipe line has brought about as a development in Canada.


Some hon. Members:: Hear, hear.


Louis Stephen St-Laurent: We will endeavour to have all matters dealt with in a manner that will satisfy hon. members that they have given to them the consideration they should. It may not be possible to have that done with respect to everything I have mentioned this afternoon.


Mr. Rowe:: In other words the election is most important.


Louis Stephen St-Laurent: Mr. Speaker, under a democratic system I think elections are extremely important, and that periodical elections are the best safeguard for respect for the rights of the people.


William Earl Rowe: The electors think so too.


Mr. Speaker:: Order.


Mr. Fleming:: Why did you not call the election last year? You have changed your mind since last summer.


Mr. Speaker:: May I suggest that the elections are not on yet.


William Earl Rowe: They are getting pretty close.


Mr. J. M. Macdonnell (Greenwood):: May I
ask a supplementary question of the Prime Minister. I understand that he made no
reference to the subject of legislation on the question of probation, which I understand is very dear to the heart of the Minister of Justice. I had hoped it might be on the list.


Louis Stephen St-Laurent: Mr. Speaker, I hope there might be time for even more of the good measures that we have under preparation to be considered and adopted by parliament.


Mr. Knowles:: May I ask the Prime Minister a supplementary question?


Mr. Harris:: Why not wait until the stage when questions are reached?


Stanley Howard Knowles: Did the Prime Minister's last remark in his original statement as to other legislation which it might be found convenient to bring down leave the door open for legislation with respect to old age pensions?


Louis Stephen St-Laurent: Mr. Speaker, it had nothing to do with the door with regard to old age pensions. That would be something that would be consequent upon the budget.


Stanley Howard Knowles: Then may we assume that that door is open?



ARTS. LETTERS AND SCIENCES SHAKESPEAREAN FESTIVAL, STRATFORD   ANNOUNCEMENT OF CONTRIBUTION BY FEDERAL GOVERNMENT

['I have done that already in the house, but I do not mind repeating it. It is because that kind of correspondence is never made public. After communicating with the government of the United Kingdom we ascertained that it was still their position, as it is ours, that there should not be the feeling that this kind of correspondence may some day have to be made public. It is a frank exchange of views between those who are thus corresponding and it has been in the past, and is still being found, very useful in trying to co-ordinate the views and the actions of the member governments of the commonwealth.']
Walter Edward Harris: Mr. Speaker, on the order for motions may I make an announcement. Perhaps I should explain why I am doing this. A request was received by the government and I do not think I can inform the house with respect to the matter in any better way than by reading the letter which I propose to send in answer to the request. It is addressed to Mr. Wilfrid P. Gregory of Stratford, and reads as follows:
Dear Mr. Gregory:	Re:	Stratford Shakespearean
Festival
May I refer to your request on behalf of the festival for financial assistance.
All of us are conscious of the importance and the status of the festival in Canadian cultural history. The initiative and imagination displayed by the people of Stratford have brought great credit to the community, the people of Ontario and indeed the whole of Canada. It would not be surprising, therefore, that the government of the province of Ontario would feel that this initiative and the great advantages which have accrued and will continue to accrue from the activities of the festival should be recognized, and we have noted that the provincial government have already contributed $100,000 and have been asked to contribute a further $150,000 to the capital program of the festival. We share their view that a permanent theatre in Stratford would not only be a recognition of the unique contribution which has

already been made by the festival, and by those who conceived and promoted it, but would be of lasting benefit to all Canadians.
This is to advise you that we shall include in the further supplementary estimates, which will be recommended to parliament next month, a grant to the capital program of the festival equal to that being contributed by the government of the province of Ontario, that is $250,000.


Mr. Monteith:: May I congratulate the government-


An hon. Member:: There is no need to do that.


Jay Waldo Monteith: -for this great assistance to a national enterprise.



[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: I should like to direct a question to the Prime Minister supplementary to the one that was asked yesterday by the hon. member for Victoria (Ont.). Would he be good enough to tell the house why he refused to table the letter directed to Sir Anthony Eden?


Louis Stephen St-Laurent: I have done that already in the house, but I do not mind repeating it. It is because that kind of correspondence is never made public. After communicating with the government of the United Kingdom we ascertained that it was still their position, as it is ours, that there should not be the feeling that this kind of correspondence may some day have to be made public. It is a frank exchange of views between those who are thus corresponding and it has been in the past, and is still being found, very useful in trying to co-ordinate the views and the actions of the member governments of the commonwealth.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: I would like to ask the Acting Secretary of State for External Affairs whether he is prepared to answer the question I asked yesterday concerning the proposed use of United Nations naval forces to guarantee freedom of shipping through the gulf of Aqaba?


Hon. Paul Marlin (Acting Secretary of State for External Affairs):: Mr. Speaker, I am
ready now to deal with this matter. I was aware that there was a news report over the radio yesterday morning which indicated that the Secretary of State for External Affairs
Inquiries of the Ministry had suggested that United Nations naval forces might be used to guarantee freedom of shipping through the gulf of Aqaba.
I can say that the Secretary of State for External Affairs made no such suggestion. The hon. member also asked whether or not naval forces were at the disposal of the United Nations for such a purpose, and the answer to that is that there are no naval forces at the disposal of the United Nations for this purpose.
I might add that no Canadian offer of naval forces has been made to the United Nations emergency force, nor has any request been received from the secretary general for such forces. If and when a request for naval reinforcements for the United Nations emergency force were made by the secretary general, it should be recalled that Canada is already supplying a higher proportion of the UNEF than any other participating country. It should also be remembered that there are other countries not now participating in the UNEF which have offered forces.
The Secretary of State for External Affairs, on behalf of the Canadian government, is exploring all possible avenues to break the present deadlock between Israel and the United Nations. If, as the result of negotiations now going on at the general assembly in New York, the United Nations emergency force were given specific duties to perform in the gulf of Aqaba requiring the use of naval forces, the matter would have to be considered by members of the United Nations in the light of any specific request made by the secretary general.



CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Carl O. Nickle (Calgary South):: I should like to direct a question to the Prime Minister. In view of the fact that even Liberal party candidates in western Canada are now joining the mass of western Canadian people in criticizing this particular act, would the Prime Minister not now indicate to this house that he will bring before this current session of parliament amendments to the Indian Act of 1951?


Louis Stephen St-Laurent: Mr. Speaker, that matter is now before the courts, and in previous cases decisions of the commissioners have been reversed by the courts to which they were submitted. It is quite possible that may happen again in this case. If it does not, there will be a situation that will have to receive serious consideration.

Inquiries of the Ministry ADMINISTRATION OF JUSTICE



CORPORAL PUNISHMENT


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Does the Minister of Justice intend to introduce legislation at this session, or to amend legislation which will come from the other place at this session, in accordance with the joint Senate and House of Commons committee recommendation that corporal punishment be removed as a part of a judicial sentence? If not, is it because he is in disagreement with the recommendation?


Hon. Stuart S. Garson (Minister of Justice):: The answer to the first question is no. With regard to the second question, it is not because the minister is in disagreement or agreement with the recommendation but because, as I have previously stated in this house, the whole subject matter of probation and remission to which the hon. member for Greenwood referred a moment ago is now under consideration by all the provincial governments and our own government. It was our thought that all matters relating to this subject, including the matter to which my hon. friend from Vancouver East has just referred, would be considered by the federal government with representatives of the provincial governments before new recommendations were brought to parliament.


Harold Edward Winch: May I say I was not referring to probation. May I, because it also refers to the Minister of Justice, ask this further question. Can the minister inform the house whether the regulations regarding disciplinary penalties in penitentiaries have been amended so far as corporal punishment is concerned in accordance with the recommendation of the joint committee of the Senate and House of Commons? If not, will they be so changed?


Stuart Sinclair Garson: Of a question of this sort, Mr. Speaker, I would have preferred to have notice. My impression is that the present practice in the penitentiaries is in accordance with the recommendations of the committee. If that is not the case, I will make a statement in the house, drawing the attention of hon. members to the extent to which they differ.



FAUTEUX COMMISSION REPORT


[Stage Direction]
On the orders of the day:
James MacKerras Macdonnell: May I
ask the Minister of Justice if he can give us, if not today then subsequently, figures showing how many people, particularly young
[Mr. St. Laurent (Quebec East).)
people, are going to prison every month by reason of the fact no progress has been made with regard to the matter of probation which I brought up nearly two years ago?


Stuart Sinclair Garson: Mr. Speaker, if my hon. friend is referring to juveniles, as he would denote them, going to penitentiaries, I would remind him that under the Juvenile Delinquents Act all that is necessary for any provincial administration to do is pass a provincial law bringing the operation of its law enforcement system under that act, in which event it would be impossible for any judge in that province to send a juvenile to a penitentiary. Therefore the action that has to be taken in this regard to cure what he has in mind is not a federal action at all but a provincial action.


James MacKerras Macdonnell: May I ask a supplementary question. My question was broad. It is true I referred especially to juveniles, but my question included everybody. If the minister chooses to narrow it down-


Mr. Speaker:: Order.


James MacKerras Macdonnell: -I wish to have the question answered, if not now, later.


Stuart Sinclair Garson: I am quite prepared to answer it now. I would answer it in the terms of a statement which I made on January 29, 1957, in reply to a question asked by my hon. friend himself. This is what I said, as reported at page 743 of Hansard:
On July 20 last, shortly after the Fauteux report was made public, I wrote to the provincial attorneys general pointing out that the Fauteux recommendations would require for their implementation action by the parliament of Canada and the provincial legislatures of Canada; and that I therefore thought that the federal and provincial ministers should consider the report in a joint conference to this end.
In their replies to this letter the provincial authorities indicated dates for such a meeting that varied from early in the month of October to as late as mid-January of this year.
Meanwhile, we had been getting ready for such a conference and, in this connection, gathering together all the available relevant data. This proved to be a bigger task than we had anticipated, so on October 18 I wrote to the provincial ministers to suggest that the best way of arriving at an accurate set of comparable figures for both federal and provincial ministers would be to have a meeting in Ottawa of senior federal and provincial officials for the exchange of the necessary statistical information. A meeting of senior federal and provincial officials was accordingly held in Ottawa on November 14 and 15 last, attended by representatives of all of the provinces except two.
I will not go on to detain the house with a repetition of the remainder of my statement, but I indicated that it had now been agreed by the provincial governments and ourselves that we would have a meeting as soon as it was convenient. I indicated the time which

I thought would be convenient and that was acceptable to the provinces. Until that time there would not be any purpose in action being taken in parliament because there would not be anything to bring to this parliament that had received the approval of the provinces.


James MacKerras Macdonnell: If the minister will read my question as it will be found in Hansard-


Mr. Speaker:: Order.


James MacKerras Macdonnell: -he will see that he has not answered it yet.


Mr. Speaker:: The hon. member for Halifax.



HIGHWAYS


[Stage Direction]
On the orders of the day:
Mr. S. R. Balcom (Halifax):: Mr. Speaker, I should like to address a question to the Minister of Transport. Has the government of Nova Scotia submitted plans and recommendations as yet for the proposed highway to the Halifax international airport? If not, is there any way of speeding up the action?


Hon. George C. Marler (Minister of Transport):: Mr. Speaker, the answer to the first part of the question is that the government of Nova Scotia has not yet submitted plans and specifications for the proposed highway to the Halifax international airport. I would like to tell the house that I have had conversations on this subject with the premier of Nova Scotia and discussions are continuing between the officials of my department and the officials of the highways department in Nova Scotia. We are doing everything possible to expedite a decision.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Does the government intend to take any steps to intervene or mediate in the strike that is holding up construction on the St. Lawrence seaway at the present time?


George Carlyle Marler: Mr. Speaker, I think that is a question that might more properly be directed to the Minister of Labour.


Wallace Bickford (Wally) Nesbitt: May I then direct my question to the Minister of Labour?
Inquiries of the Ministry


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, I shall take the question as notice and bring in a reply as soon as I can.



STATUS OF PROPOSED STRIKE AT POLYMER CORPORATION

[Stage Direction]
On the orders of the day:
Mr. J. W. Murphy (Lambion West):: Mr. Speaker, I wonder if the Minister of Labour could bring us up to date on the Polymer Corporation strike situation?


Milton Fowler Gregg: Last week end the mediator and representatives of the two parties concerned held prolonged meetings as a result of which they were able to reach agreements on a number of the questions in dispute, but I must say that the more vital questions were not settled. The parties jointly agreed that they would adjourn until the 22nd of this month, so a meeting is scheduled for tomorrow morning.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Joseph Warner Murphy: Mr. Speaker, I should like to address a question to the parliamentary assistant to the Secretary of State for External Affairs. It concerns the United States supreme court decision permitting 8,000-odd cubic feet a second to go through the Chicago drainage canal. My question is this: Was that extra flow of water through that drainage scheme discontinued at the end of January?
Mr. Lucien Cardin (Parliamentary Assistant to the Secretary of State for External
Affairs): Mr. Speaker, I am afraid I shall have to take the hon. member's question as notice.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I should like to address a question to the Minister of National Defence. Has the minister's attention been called to the statement of the United States secretary of defence that it is essential to the national security of the United States that newly developed nuclear weapons be incorporated into the American air defence system? If so, can he tell the house if Canada will have

Inquiries of the Ministry access to these new weapons and, if not, will our present equipment be of any material value for defence?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, the answer to the first question is that for the time being at least we will not have access to the type of equipment the use of which was announced in the United States, because a statute of that country, as I think is well known, states that United States atomic weapons are not available to other countries. That situation will continue until such time as the act is changed.
Concerning the second question as to whether our weapons will continue to be effective, I would like to point out that the secretary of defence of the United States was very careful to state in his announcement that the new nuclear weapons are supplemental to the tactical weapons that are generally employed. These are not to supplant those weapons but to add strength to them.
I may say that we have been working in close conjunction with the United States in the field to which the hon. gentleman has referred, and that we welcome the advent of new and more effective weapons for our mutual defence and the defence of NATO countries.


Stanley Howard Knowles: Mr. Speaker, may I ask the
Minister of National Defence a supplementary question. In view of reports from Washington to the effect that Canada has agreed to permit United States jet planes with nuclear weapons on board to fly over Canada, can the minister say whether this is correct?


Ralph Osborne Campney: Mr. Speaker, perhaps I should make a short statement on the implications of the United States statement as far as we are concerned. It should be clearly understood that the weapons dealt with in the Washington announcement are to be deployed within the United States. Nevertheless, as we all know, the air defence of Canada is closely related to the air defence of the United States. As a result of this there has been the fullest consultation, as I mentioned, between the two governments concerning the possible use of these new air defence weapons.
The principal weapon about to be brought into use by the United States which has implications for Canada's air defence at the present time is an air to air rocket launched from interceptor type aircraft. Such Canadian interests as may be involved in
[Mr. Cameron (Nanaimo) .1
the use of these weapons have been fully taken into account in the course of the consultations which have taken place between the two governments. As I said earlier, the Canadian government shares the view of the United States government that continuous improvement of the continental air defence system is very essential. It is a fact that the nuclear air defence weapons which have been developed will improve that joint defence capability. It is also clear, I think, that use must be made of the best means at hand to deter and if necessary to repel aggression.
Coming now to the specific question asked by the hon. member, I think it must be noted that the use of the weapons under consideration by the United States, which as .1 have said are supplemental and not to replace existing weapons, will be confined to situations of grave emergency. There is no question of their use in other circumstances, and only in situations of immediate danger would there be any question of aircraft armed with these weapons overflying Canadian territory.
I may say that arrangements have been made for very close consultation in that event; that is, in the event of grave danger or emergency. Canadian authorities have satisfied themselves that the safety hazards involved in the use of these weapons are not great, and that the safety devices to prevent premature or accidental discharge are entirely adequate.


Stanley Howard Knowles: May we take it from that statement that these weapons will not, then, be tested over Canadian territory; in other words, that they are to be brought over Canadian territory only in case of grave emergency?


Ralph Osborne Campney: Yes.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Esquimalt-Saanich):: Could the Minister of National Defence inform the house whether a decision has yet been reached to send additional troops to the United Nations emergency force in the form of a reconnaissance unit, which the minister said on February 5 was under discussion?


Ralph Osborne Campney: No, Mr. Speaker. A decision has not yet been taken, though some of these troops are being readied in case the decision is in the affirmative.



MADAWASKA COUNTY, N.B.    CONSTRUCTION OF RIFLE RANGE

[Stage Direction]
On the orders of the day:
Ralph Osborne Campney: Mr. Speaker, I should like to answer a question asked yesterday by the hon. member for Restigouche-Madawaska with regard to the Bellefleur rifle range in New Brunswick. The hon. member asked as to what progress had been made in its construction. In reply I may say that a contract for the construction of the range was awarded in October of last year. A limited amount of work was done prior to the advent of winter, and work on the project will recommence in the spring. It is expected that the range will be completed during the present year.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. E. G. Hansell (Macleod):: Mr. Speaker, may I ask a question of the Minister of Veterans Affairs? Has the minister given any further consideration to the setting up of the veterans affairs committee this session and, if not, can we expect that there will be any upward revision in war veterans allowances and pensions?


Hon. Hugues Lapoinle (Minister of Veterans Affairs):: Mr. Speaker, both parts of the question are under consideration.



FINANCE


[Stage Direction]
On the orders of the day:
William Earl Rowe: In
view of the statement by the Prime Minister regarding the legislation that is likely to be brought down, I would like to ask him if he would give consideration to introducing legislation to prevent the racketeering that is going on in the lending institutions of this country in view of the tight money policy of the government.


Louis Stephen St-Laurent: I am unaware that any racketeering is going on in these circles. If the hon. gentleman would be good enough to send me the information on which he must, naturally, be basing the language he used in his question, I will be glad to consider it.


William Earl Rowe: Thank you very much. I will be glad to do so.
Inquiries of the Ministry PIPE LINES



TRANS-CANADA PIPE LINES    PURCHASE OF STOCK BY MEMBERS OF PARLIAMENT

[Stage Direction]
On the orders of the day:
Mr. A. W. Stuart (Charlotte):: May I ask the
Minister of Finance whether consideration has been given to setting up the committee on privileges and elections to investigate the serious charges with regard to members of parliament purchasing stock in the Trans-Canada Pipe Lines company?


Walter Edward Harris: Mr. Speaker, the committee on privileges and elections is, I take it, a standing committee, and this matter might be taken up by the chairman. Certainly as house leader I will be glad to consider the question when I see it in Hansard.


Stanley Howard Knowles: Mr. Speaker, may I ask a question of the Minister of Finance. Will he give serious consideration, at our request, to the suggestion made by the hon. member for Charlotte (Mr. Stuart), so that the correctness or otherwise of a certain newspaper report of two days ago might be investigated? So far as we are able to ascertain it is an incorrect report.



TRANS-CANADA PIPE LINES    EFFECT OF PROFITS OF OFFICIALS ON CONSUMER PRICE

[Stage Direction]
On the orders of the day:
Mr. D. S. Harkness (Calgary Norih):: I want to direct a question to the Minister of Trade and Commerce. Can the minister tell the house by how much the price of natural gas will be increased to the consumer as a result of the large profits made available by Trans-Canada Pipe Lines to some of its officials?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, the price of gas to the consumer is a price that has been negotiated by the distributors with the consumers. I understand that it is a very reasonable price. I also think the price to the producers is a reasonable price. I do not know exactly what the hon. gentleman has been referring to, but I hope he does. He has been pretty much at sea about all pipe-line matters since that debate first began.


Douglas Scott Harkness: I think the minister understood quite well the purport of my question. The question is this: Who is going to pay for these large profits made available to the officers of this government-backed comnany?


An hon. Member:: The consumer.


Clarence Decatur Howe: The hon. gentleman has apparently changed his opinion as to whether this is an economic project or not.

Inquiries of the Ministry I assume he is sure that there will be profits. Had I been as sure, I might have bought some of the stock myself. I did not do so.


Mr. E. B. Huffman (Kent, Onl.):: I would like to ask a question of the Minister of Trade and Commerce supplementary to the question asked by the hon. member for Calgary North. Can the minister tell us how many years ago the Union Gas Company signed its original contract with Trans-Canada Pipe Lines?


Clarence Decatur Howe: From memory, I would say about two years ago. I would be glad to look it up, and if I am wrong I will correct this statement.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. G. C. Nowlan (Digby-Annapolis-Kings):: Would the Minister of Transport care to comment on the report that the S. S. William Carson, having now been refitted, will be used as a recreation centre for Canadian troops serving with the United Nations emergency force in the Middle East?


George Carlyle Marler: I had always thought that the William Carson was a recreation centre for the hon. gentleman who has just spoken.


George Clyde Nowlan: A supplementary question. Does the minister not think that his flippant answer indicates the careless way in which this most important matter has been dealt with?


George Carlyle Marler: Mr. Speaker, I think the answer I have just made indicates, in effect, that without the William Carson the Progressive Conservative party in the house would not have had anything to talk about in the last two years.



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilton (Notre Dame de Grace):: In view of the recent statement by the Prime Minister, can the Postmaster General inform the house whether the government has reached a decision regarding the resumption of twice daily mail delivery and, if so, what is the decision?


Hugues Lapointe: Not yet, Mr. Speaker.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Albert):: I should like to direct a question to the Minister of Transport. In view of the statement the Prime Minister just made regarding the possibility of legislation with respect to Canadian vessel construction, will the minister tell the house if the report of the royal commission on coastal shipping will be brought down this session and if not, why not?


George Carlyle Marler: Mr. Speaker, I am unable offhand to see the connection between the two matters-


Thomas Miller Bell: There is a very definite connection.


George Carlyle Marler: -to which the hon. gentleman has just referred. The legislation to which the Prime Minister referred was covered by his own statement. So far as the report of the royal commission on coastal trade is concerned, all I can say is that I have not yet received the report, and I shall not undertake to bring it down before it is received.


Thomas Miller Bell: Does the minister deny that there is any connection between the royal commission on shipping and the shipbuilding industry itself which will be affected by this statement and the proposed legislation?


George Carlyle Marler: I am afraid I cannot follow the convolutions of the hon. gentleman's arguments, and I do not see what the connection is between the three matters to which he has now referred.


Thomas Miller Bell: That is why you are holding up the report.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, in view of what I consider an adequate and proper lapse of time since I last asked this question I now redirect it to the Minister of Northern Affairs and National Resources. I apologize for not giving him notice, but I presume a great deal of preparation would not be required as the answer will be yes or no. Can the minister now inform the house when the representatives of Canada and the United States will

commence discussions with respect to the problems of the Columbia and other international rivers?


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Our embassy in Washington has been pressing the United States authorities to obtain a reply, and I hope to get it some time next week.



BACON-STATEMENT AS TO EXPERIMENT IN MARKETING

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, before orders of
the day are proceeded with I should like to answer a question asked yesterday by the hon. member for Wetaskiwin regarding studies of bacon grading. Because of both producer and consumer interest in the quality of Canadian bacon, the department has been conducting a series of studies for the purpose of learning consumer preferences on certain points of bacon quality. For the purpose of this study tentative grade standards have been established, and with the co-operation * of processors and retailers bacon graded according to these standards has been offered for sale in a group of retail stores in three Canadian cities.
The first study was undertaken in three Montreal food markets during the five-month period January to May of last year. Similar projects are now in progress at Edmonton and Toronto.
In the studies to date the price at which the graded bacon has been offered to the public has been higher than the price being charged for the regular commercial brands. There are definite indications of a consumer preference for at least a limited quantity of specially selected lean bacon. The studies are being continued, and it is proposed to obtain further response from consumers before reaching conclusions.


Mr. William Bryce (Selkirk):: I should like to ask a supplementary question. Can the minister tell us whether any of the new breed of hogs started at Lacombe-I think they call them Lacombe hogs-have been used in the experiment?


James Garfield Gardiner: I do not know that they
have been used in that experiment, but some of these hogs were shipped to Brandon to be shown there at the time of the show so breeders could become better acquainted with them.


William Scottie Bryce: Were they Yorkshire hogs?
Municipal Grants Act


James Garfield Gardiner: No, they were not Yorkshire hogs. They were the new hog that is produced at Lacombe.



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question
to the Minister of Trade and Commerce supplementary to the question and answer of yesterday regarding the visit to Canada of three representatives of the Euratom group. Can the minister say whether Canada is negotiating for the sale of uranium to any other countries apart from the United Kingdom?


Clarence Decatur Howe: Mr. Speaker, my statement indicated that we were prepared to sell to a list of friendly countries small quantities of uranium to meet their present requirements. That offer was made to every friendly country with which Canada has trade negotiations. As far as I know, no particular negotiations are under way. If a friendly country wants to buy a small amount of uranium the price is fixed and we are prepared to sell. I am not aware of any negotiation now under way.


Stanley Howard Knowles: May I ask a supplementary question. Did Canada agree to make any uranium available to any countries in the Pacific area, Japan, New Zealand or Australia?


Clarence Decatur Howe: Australia has its own production of uranium. I think we are considering an agreement with Japan to ship a certain quantity of uranium concentrates to that country for their experimental purposes. I think it is ten tons of material being discussed.



MUNICIPAL GRANTS ACT


[Stage Direction]
The house resumed, from Wednesday, February 20, consideration in committee of the following resolution-Mr. Harris-Mr. Robinson (Simcoe East) in the chair:
That it is expedient to bring in a measure to extend the benefits of the Municipal Grants Act and to provide for certain changes in connection with the administration of the act.
James MacKerras Macdonnell: Mr. Chairman, yesterday afternoon I indicated that we felt that this measure was going in the right direction, though going very, very slowly. The minister merely put his toe in the water, but he

Municipal Grants Act certainly did not show any indication whatever of being ready to take a swim. Indeed, it reminds me of a race between a snail and a tortoise.
I referred particularly to crown corporations, because it seemed to me there had been a direct failure to follow the clear statement made in 1952 by the then minister of finance in which he indicated that crown corporations were to pay their way. I read an item from the press indicating that some corporations had paid the full equivalent, some had paid nothing and others had gone part but not all the way.


Walter Edward Harris: Would my hon. friend permit me to interrupt? I read Hansard this morning and what the then minister of finance said at that time, and it did not seem to me there was anything in it with respect to the payment of municipal taxes. If I did not see it and it is there I wish my hon. friend would refer to it. I think the reference was to corporation income taxes to be paid to the federal government.


James MacKerras Macdonnell: I see the reference to corporation taxes, but I still maintain that the reasoning used, which was that crown corporations should behave like other corporations, is sound. Certainly I doubt whether the minister will argue that crown corporations which pay income tax on the ground that they must be competing on a level with others in the same kind of business, should not do the same with regard to municipal taxes. I feel that the minister would find it difficult to suggest that they should not pay their municipal taxes, but perhaps we can argue that matter further when we come to the second reading of the bill. It is exactly the same principle as far as I can see.
What we are facing here, it seems to me, is quite clear. We are facing not merely a matter of a few million dollars more or less which the dominion will pay to the municipalities-although that is important-but we really are facing or should be facing the question of the vast new responsibilities which the municipalities have assumed and have been obliged to assume in this brave new world. Indeed I think the minister will be forced to agree with certain quotations which I shall give this afternoon, which will make it perfectly clear that the municipalities are in serious difficulties, that a situation has overtaken them in which they have not the means of protecting themselves although the two senior levels of government have the means, the provinces partially and the dominion wholly, because the dominion, sitting at the top of the heap, gets the lion's share.
I want to point out that we as a party have been hammering at this question for years.

I want to put on the record a few short quotations because I think it is important that I do so. On April 30, 1956, a resolution was moved by Mr. Drew, seconded by Mr. Rowe, as follows:
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
" "This house is of the opinion that immediate consideration should be given to measures to assist the municipalities of Canada to meet their mounting financial problems, and in particular the immediate introduction of legislation which will provide for the exemption of all municipal councils and school boards from the payment of excise taxes including the 10 per cent sales tax, and which will further provide for payment to municipalities of full municipal taxes."
What I want to stress there is that as long ago as that we were talking about measures to assist municipalities to meet their "mounting financial problems". That was the broad consideration. Now I read from a resolution at the annual meeting of our party in 1954:
In order to enable provinces, municipal councils and school boards to discharge their constitutional functions,
(a) A more equitable distribution of the tax dollar as between the different taxing authorities in Canada . . .
Then it refers to exemption from taxes % and, third, legislation providing for taxation of all federal property. Finally in 1953, in the general election manifesto we find this:
We will introduce legislation exempting municipal councils and school boards from sales tax and excise tax . . .
And so on. I wanted to refer to that in order to put our own record clearly. Time forbids my going at any length into the representations the government have had from municipal authorities. They have been bombarded over the years, but precious little has come from it. I want to refer to an extract from what I imagine is the latest representation from the Association of Ontario Mayors and Reeves to the government of the province of Ontario and to the government of Canada. This was presented only last month in January, 1957.


Walter Edward Harris: I hope this is on municipal
taxes.


James MacKerras Macdonnell: I did not hear the minister.


Walter Edward Harris: I hope this is on the bill and not on any other point.


James MacKerras Macdonnell: It seems to me that the bill is a partial treatment of a pressing problem. Quite frankly, I have been dealing with it somewhat on that basis. There is no good in giving the municipality a mere mouthful when what they need is a meal. When this matter has been discussed in the past I think we have been able to deal with the problem as a whole. When I say, as I do, that this

is just a sop being thrown to the municipalities, I can only support that statement by having some chance to point out the magnitude of the problem.
I want to read briefly what the Ontario Association had to say. This is to be found at page 6 of the presentation entitled "The case for the municipalities of Ontario". They speak about costs of non-basic services and I want to refer to that matter, and then they say this:
The municipalities, in fact, became the deficit governments with never enough resources to meet both basic and imposed non-basic services.
Then on page 24 they say this:
To bring about an equitable adjustment of responsibility for services, the association has defined the services which are basically municipal in nature and which should be provided for by municipal governments as follows: . . .
I am going to skip part of that. I am going to skip the part which refers to basic municipal services and go on to what they call non-basic municipal services which have been imposed on them and which are the great reason for their present difficulties: I quote again.
The non-basic municipal services, having a wider than local scope and jurisdiction, or being of general benefit to the citizens at large, which this association contends should be financed solely by sources of general revenue in the control of the provincial and federal governments, are defined as follows:
Indigent relief.
Public welfare and social services (including all hospitalization and institutional costs now borne by municipalities),
Education,
Subsidization of housing,
Civil defence,
Administration of justice,
Provincial highways through municipalities	 In view of the most inequitable financial situation which exists at the municipal level of government and the urgent needs of municipalities, this association contends that the federal government should make greater contributions from its vast revenues for the alleviation of the municipal position.	1
I say no more about the representations which have been made by the municipalities, though there are several tomes containing them and one might read on and on. The municipalities were finally permitted to sit in on a conference between the dominion and the provinces but while that may have pleased them or may even have improved their social position by associating with federal ministers, I doubt if it did anything to improve their material position. Over the years it seems as though the municipalities have spoken to deaf ears.
I am now going to introduce one or two pieces of evidence from outside the municipalities. I hope the minister and his colleagues will pay more attention to these voices. I want to quote from Mr. J. Harvey Perry, from
Municipal Grants Act a publication called "Taxes, Tariffs and Subsidies" at page 47. Mr. Perry, of course* is well known here. At one time he was a highly valued public servant in the dominion service. This is what he has to say:
"The mounting cost of services which by tradition have devolved on the local governments (social welfare, education, roads, etc.), and the increasingly apparent anomalies of tax administration in. a multitude of small self-contained areas, are pressures forcing the gravitation of financial responsibility to senior levels of government. This trend is no doubt stimulated by chronic but heartfelt complaints from property owners that the burden of the property tax is becoming intolerable, that assessment methods are antiquated, and their application unfair, and so on. Municipal councils, always sensitive to this cry, have pleaded for a larger share of the tax pie in the post-war period rather than for an authorization of new tax sources."
Then I wish to quote from a new voice which has been heard only recently and which has apparently not been received with as universal acceptance as we might have expected from the government. I refer to the Gordon commission.
I want to read very briefly what they have to say. I hope when the minister makes his reply he will tell us whether or not these figures are right, and whether the arguments are right, because if he thinks they are right then I do not see how he can possibly go along with the present situation without doing something. We do not seem to me to be acting our age if we leave these things as they are.
I made a suggestion the other day about the suppliant position of provinces and municipalities. In that connection I once heard a doctor say that the way for doctors to succeed was "fo keep 'em sick, and keep 'em happy and go to see them every day". Now, facing a senior member of the profession right here, I apologize for saying that. It was only a suggestion made by one doctor who, I am sure, was not at the height of the profession. But sometimes I wonder whether the federal authorities feel it is not entirely unpleasant for them to have the provinces and municipalities come to them in lowly guise asking for little hand-outs here and there. It seems to me that is what they are getting. "Humble suppliants", my colleague the hon. member for Eglinton suggests, and I accept his words.
Here is what the Gordon report has to say, and I must say the figures are staggering. However, people are getting used to high figures these days. On page 94 the report states:
Social capital requirements over the next two or three decades will be the greater because in many Canadian cities and towns these facilities are at present inadequate. If they are to be brought up to standards that are nowadays considered reasonably satisfactory, and if provision

Municipal Grants Act
is to be made lor Increasing population, large sums of money will have to be spent. Although it is difficult to estimate the total expenditures that may have to be made over the next 25 years on housing and the various forms of social capital, they may well amount to nearly $100 billion at present prices.
I find it difficult to contemplate $100 billion, but I know it would be easy for the minister. I continue:
Expenditures of this magnitude, in our opinion, are well within the capacity of the Canadian economy to sustain, if it expands at the rate we anticipate. But if the task is to be accomplished in a manner that will best serve the welfare of the Canadian people, the problems of planning of jurisdiction and of finance will require more attention from all levels of government and from citizens generally than they have usually been able to command in the past.
I feel that is an understatement, and I do submit it to the minister with confidence that he will deal with it seriously. Of course we all know the answer that has been made to date to us on this side of the house. It is not, to my way of thinking, a very good answer, although the Prime Minister especially seems to like it. The answer is, "did we not win the last election?" Yes, they won the last election after their fashion. Nevertheless, the people who elected them expected them to behave as serious citizens, and I am suggesting that if they are going to behave as serious citizens they should take very seriously these statements put before them, opinions from competent people, and act accordingly.
I say again to the minister, are these serious statements? He will have a good many figures put before him during the course of this debate, and the question is, what should be done about them? It seems to me a serious inquiry is clearly indicated. One almost hesitates to use the words "royal commission" because I think the term royal commission has become somewhat shopworn. I am not tying myself to a royal commission. Perhaps what we need is a parliamentary committee, though I am afraid parliamentary committees will not have an exactly undivided mind on these things in the next few weeks. I have an open mind on the question, as to how it should be done, but I have not an open mind on the necessity of having this considered in a way that it has not been considered. After all, the municipalities have been kept outside the door. They were let in once on sufferance and they were pleased with that, I think, but the results have been trivial enough.
I say, therefore, we should act our age and do something to have this matter really investigated, not merely the piffling question of whether the federal government should pay taxes which they now evidently have
[Mr. Macdonnell.l
accepted. We should consider seriously this particular question, because if we go on denying it we seem to be like children building castles in the sand; the tide will come in and flatten them out.


Harold Edward Winch: Municipal Grants Act constitutionally, to the full taxation revenue from federal property within their boundaries.
In view of the minister's contention it is difficult to understand why he has not given any indication of his intention to change one section of the act as it now stands in order to have this taxation apply to the cost of sidewalks and roads. If the minister is prepared to accept municipal taxation on federal property, why is he not prepared to accept taxation on sidewalks and roads? I presume that our new $11 million post office in Vancouver is going to be eligible for taxation, and the government is quite prepared to pay taxes for police and fire protection supplied by the city of Vancouver. This protection would be of little value, however, if there were not roads over which the fire trucks could travel. I suggest to the minister that the supplying of roads and sidewalks is just as much an essential service as are any of the other services supplied by the local authorities.
The Minister of Finance made it clear that the assessment on federal property will be decided by the federal department. The government is now going to be a taxpayer the same as anybody else who owns a home or has an interest in business or industry. As far as individuals and businesses are concerned the local assessor makes his assessment, and if any of us objects to the assessment we have a right under law to appeal to an independent board. Now that the government is accepting responsibility for the payment of taxes, surely it is reasonable to ask that the government be treated as any ordinary citizen, business or industry, and be subject to assessment by the local authorities. If the government find that the assessment is incorrect then they can do as I did a few years ago, and appeal to an independent board. This seems most reasonable to me.
As I understood the remarks of the Minister of Finance the terms of this resolution are going to apply only to the municipalities. I ask you, sir, why this should apply only to the municipalities. I cannot speak with authority concerning the situation in all the provinces of Canada, but I believe I can in relation to the province of British Columbia. In British Columbia we have a great deal of federal property in what we term unorganized territory. In unorganized territory taxation is under the jurisdiction of the provincial government because the services have to be supplied by the provincial government. When he spoke the other day the Minister of Finance made it clear that in some circumstances they were
fMr. Winch.1
going to make the federal taxation payable because of the fact that land was taken out of the usual taxation field. I quote his words as they appear at page 1354 of Hansard for February 15, 1957:
However, recognition has been taken of the fact that the land they occupy is taken out of taxation, so provision is being made for a grant in lieu of taxes upon that land as well as upon federally-owned domestic establishments occupied by servants of the crown.
I was certain that I was correct in my understanding that there was a great deal of land taken out of taxation as far as British Columbia is concerned, so I wired the premier of British Columbia, not as the premier but as minister of finance, as follows:
Most interested in government motion re Municipal Grants Act to be debated very soon. Can you inform me speedily if there is federal government property within unorganized territory or the property taxation jurisdiction of provincial authority and if so the approximate valuation.
In reply to my telegram I received the following communication:
Re telegram, there are Department of Transport airports; Department of National Defence docks, fuel and ammunition dumps; radar installations, telegraph and road maintenance buildings on Alcan highway; post offices in unorganized towns, etc. No concept of value available.
I submit to the Minister of Finance through you, Mr. Chairman, that if it is right-and I believe it is-that the federal government should pay taxation on its properties within municipal boundaries because the land has been taken out of taxation and because services are supplied by the municipality, it is equally right that where a provincial government has land taken out of taxation because it is federal property and where the provincial government supplies the services, it should also be entitled as a matter of right and principle to the consideration outlined in the resolution which is now before us.
I have attempted to outline the position of this group with reference to this resolution. I reiterate that we welcome this resolution and the acceptance of federal responsibility for the payment of taxation on crown property. We feel, however, that the principle outlined in this resolution should be extended to the provincial field. I believe the Minister of Finance had the municipal situation with regard to finances at least partially in mind when he introduced this resolution. I urge him to give consideration to what in my estimation is one of the greatest needs in Canada at the present time, namely a realignment of the responsibilities and taxation abilities on the three levels of government, taking into account the problems which could not have been envisaged 100 years ago, so

there will be a new application of the fundamental principles of confederation in relation to the changed circumstances.
I sincerely hope the minister will bear all this in mind, and though he cannot at this time alter the major principles, that he will, when the bill comes before us, meet some of the detailed proposals that I have mentioned. We welcome the bill; it does not go quite far enough, but it is certainly a long step forward.


Mr. Holowach:: Municipal Grants Act
In the speech from the throne, the government refers to the economic climate of this country in the following words:
Excellent progress is being made in our national economic development. Expansion is evident in every part of Canada . . . Canadians in almost every part of the country have been enjoying the benefits of this invigorating economic climate.


Walter Edward Harris: Hear, hear.


Ambrose A. Holowach: The minister says "Hear, hear". Let us face it: The prosperity is not what it is claimed to be. It discounts the legitimate claim that farming and agriculture is depressed; that our veterans and senior citizens are distressed; that the high cost of living and inflation have brought disastrous effects upon all those who depend for their living on fixed incomes. And, further, it is unsatisfactory when we consider the predicament of that level of government which is closest to the people, namely municipal government.
The words in the speech from the throne sound pretty empty after the bluntness with which the municipalities interpret their own position. I draw your attention, Mr. Chairman, to the remarks made by their spokesman one year ago in Ottawa. Mayor J. David Stewart of Charlottetown spoke at a luncheon meeting on January 18 and I find the following report in the Montreal Gazette of January 19, 1956:
Municipal governments across Canada are being forced to the wall by financial problems. "I have myself the gravest of doubt that we will find in the present government the answer to our problems," he said. "They wear complacency like a cloak-I fear that in the end that cloak will be their shroud."
Mayor Stewart said Canada's civic leaders have presented the problems of municipalities to the federal government. They had asked for exemption from federal sales tax-a concession which would mean only a small loss to the federal government but an appreciable saving to municipalities. . . . "Certainly it has yet to be proven that the federal government has anything in mind other than the continual enlargement of its own powers and accretion to its own revenues."
I could also draw your attention, Mr. Chairman, to a more recent statement made by the federation of mayors and municipalities.


Walter Edward Harris: Not by the new president of that association?


Ambrose A. Holowach: 
Walter Edward Harris: Including provincial?


Ambrose A. Holowach: We believe that municipal purchases should be removed from the incidence of the federal sales tax. I do not think there is another place on this continent where the federal government demands of its municipal governments that they pay a tax to the federal government on their municipal purchases.
If there is, I certainly should like to hear it from the minister. In addition to this tax relief, I think that long-term capital ought to be made available to the municipalities by setting up a municipal lending corporation to which municipalities can come and which, after consideration, can make loans over a long period of time at reasonable rates of interest.
We submit that the request made by the Canadian Federation of Mayors and Municipalities that a conference be held between the three levels of government merits earnest consideration. At such a meeting the various other problems of civil defence, protection at railway crossings and so forth can be discussed. Unless and until the federal government shows some earnest and in my estimation, early effort to achieve these matters, the sharp financial crisis which faces the municipalities may not only threaten our economic growth but will result in political disunity.
I think there is more at stake than the mere financing of projects within municipalities. That stake is the right of our people to enjoy the very highest of standards of living. That stake is the right of the provinces and of the municipalities to have a fair share of the Canadian tax dollar. That stake is the violation of that right by the federal government. As reported in the submission, "it is time for all of us to face the facts". The fact is that the federal government, in its centralizing policies, in its taxing policies, is taking advantage of its position and little by little is eliminating the democratic and constitutional role assigned to the municipalities and to the provincial governments by the constitution.
I am rather disappointed when this government sees fit to spend billions of dollars elsewhere in give-away programs while the municipalities are treated with indifference,

Municipal Grants Act that very source that provides the government with the funds which allow them to be so generous elsewhere. I am surprised that we have billions of dollars in lend-lease. We build gigantic cement factories and colossal dams; we sell food at fire-sale prices and subsidize the efforts of others-and I commend to government for all that- but at the same time we ignore completely, for example, the municipal needs of our people in the matter of water, sanitation, slum clearance and so on. Believe me, the concept of the good Samaritan elsewhere is commendable. But let us have a little bit of that spirit back here in Canada for our own people.
In summing up I want to state once again that the government must appreciate the fact that this is a national problem which demands a solution at the national level and which calls for a policy not only of federal co-operation but also of fair sharing of the taxation dollar by the two junior levels of government.


Mr. Hollingworlh:: Mr. Chairman, I should
like to say a few words on this resolution. First of all I should like to comment on the remarks made by the hon. member for Greenwood, that affable gentleman whom I am going to call fairly soon "Mr. Too Little and Too Late". I was disappointed that he did not have a few kind words to say about the proposed legislation which has been introduced by the minister. I am glad to note that the hon. member for Vancouver East did so. I am sure the people of the city of Toronto will be extremely pleased with this resolution because they will be receiving a federal grant of about $1 million. I am sure that the people of my constituency of York Centre and the people of the township of North York will be most happy because they will be receiving about $800,000 a year under this proposed legislation.
I do not intend to talk this afternoon about the constitutional aspect. I should like to discuss the resolution. But I think what I should do in a few words is to keep pointing out, as I have done in the past, that you must consider the constitutional aspect of this thing. I suppose it means that I will be talking ad nauseam about the creatures of the province, but it is a fact that the municipalities are the creatures of the province. It seems to me that hon. members opposite, although they may realize that fact, skirt about the topic. Certainly they imply, as far as I can understand the matter, that this has now become almost a federal responsibility. Mr. Chairman, we all realize that the problems of the municipalities are the concern of all levels of senior governments. Of that fact there is no doubt.

But I often wonder, for example, about those provinces in western Canada which seem to be reducing their provincial debts very greatly. Of course that is to be commended. But if they are doing such a good job in that respect, I do not see why they cannot give greater grants to the municipalities. Certainly the municipalities are the direct concern of the provinces.
We have been helping the municipalities. The federal government has done a great deal.


Mr. Hahn:: I wonder if the hon. gentleman would permit a question?


Allan Henry Hollingworth: Surely.


Frederick George Hahn: I would ask him this question.
Is it not true that possibly the Dominion of Canada is a creature of the provinces, that they decided to make the dominion and thereby it became a creature and a responsibility of these provinces?


An hon. Member:: By no means.


Allan Henry Hollingworth: Mr. Chairman, I would
say that is not the concept that I understand. As I understand it, in 1867 certain lines of jurisdiction were given to the federal government and certain lines of jurisdiction were given to the provinces. That is the set-up in any federal system.


Frederick George Hahn: You have not said by whom, though.


Allan Henry Hollingworth: By the fathers of confederation. As I was saying just a moment ago, Mr. Chairman, I think it is true that the federal government has given assistance and has recognized this problem by helping in the way in which it constitutionally could do so. In other words, in tax rental agreements provision has been made to give the provinces substantial payments and then in turn those provinces can help the municipalities if they see fit to do so. But certainly that is something that is to be determined by the provinces concerned. In other words, we will help but we cannot and will not infringe upon provincial jurisdiction. If we did that and if we went ahead and gave substantial grants to the municipalities- something which I say constitutionally we cannot do-of course we would be centralizing, something which my friend the hon. member for Edmonton East has been talking about; and centralizers, of course, are very bad. In other words, we are damned if we do something and we are damned if we do not. I think the federal government has shown an admirable attitude towards the municipalities and I think that fact is most clearly seen by the fact that this legislation has been brought in today.

What I should like to say is that the great advantage of this legislation, as I see it, is the simplicity of it. It is simplicity itself. It provides grants for federal property in lieu of taxes. Several of us in this house deplored the fact that there was a floor of 2 per cent and it has now been removed. As I say, I think this again shows that the federal government is interested in doing everything it can possibly do to help the municipalities.
If I may, Mr. Chairman, I should like to allude for a few moments to the situation in my constituency of York Centre. I think it will be shown by these figures which I shall quote how much this legislation is helping the people in this part of Ontario. In 1955, for example, the federal grant for Downsview airport amounted to $338,000. At that time the airport operated its own school. If the township had operated the school at that time it would have received another $175,000 but it received only $338,000.
I might say, Mr. Chairman, that this Downsview airport is a tremendous undertaking. The people of North York are extremely pleased to have it in the township, notwithstanding the fact that sometimes the planes fly a bit low. The interesting thing is the way this amount has increased. In 1956, it went up to $500,000. Last year, one of the able members of the Department of Finance and myself were able to negotiate with the township of North York school board and as a result the school children from the Downsview airport will be educated by the township of North York. This, of course, means that more money will be provided by the department for the township.
At the present time the grant, as I say, will be in the neighbourhood of $800,000 per year. There are three reasons why the amount has gone up. First of all, the assessment has gone up considerably because of the extension of the Downsview airport through the erection of scientific and research facilities. A recreational centre has been built and we hope it will be used by the township people. Another reason also is found in the removal by the government of the 2 per cent provision. The township will be receiving full taxes, plus school taxes. Thirdly, of course, there is the payment of the school rate which, alone, would amount to $300,000 out of the $800,000.
I feel that these facts show how important this bill can be to certain constituencies. I might point out that the budget of North York township, the general rate, is $4.5 million this year. As I say, of that $800,000 will be paid by the federal government on
Municipal Grants Act account of this great property in North York. Of course, the total township budget is $16 million and the $4.5 million is exclusive, of school and metropolitan taxes. The township of North York has grown to a size of
175,000	people and is the third largest city in Ontario now. These are the municipalities which need assistance. Metropolitan Toronto and the metropolitan areas of other cities in Ontario and the other provinces are the ones that need assistance. My submission is that this bill is very definitely assisting those municipalities that really were desperate.
In conclusion I might say one thing, and that is that I feel this whole matter of municipal taxation and municipal assessment is one that has to be considered primarily from the provincial level. I do not know the problems of my friends from Alberta or British Columbia but, as I stated in this house last year, I do know there has been no revision of the Municipal Act in Ontario since 1917. Of course, the Municipal Act was first passed in 1837 under the Baldwin-Lafontaine ministry. It is an act that needs to be overhauled. The council and people of North York feel it is unfair for the general taxpayer in the township to pay taxes on real estate to support everything. In other words, this is a fundamental problem and must be resolved by the provincial governments. We cannot escape from the fact that the municipalities owe their existence to the provincial governments and the provincial governments must solve these problems. Certainly, the federal government is willing to help. This legislation is evidence of the fact that it is willing to help. I should like to commend the Minister of Finance for his attitude and I feel the government has done a splendid job. As I say, I know the people from my part of the country are extremely grateful for this generous assistance.


Mr. Starr:: In rising to speak on this resolution, may I say it is my intention to be quite brief because I have spoken many times in this house on the financial condition of the municipalities. The minister is well aware of my thoughts on this matter. It is rather difficult to stay within the scope of this resolution itself because the whole financial problem of the municipalities intertwines itself around, and is part and parcel of, the difficulties that are being confronted by governments at other levels.
The resolution we have before us now in the name of the Minister of Finance is one that is heartily welcomed. It has been advocated by various members of this House of Commons. At the moment, may I say that in my opinion it is a step in the right direction. It will help some municipalities, to

Municipal Grants Act some extent, in alleviating the heavy financial burden now being borne. I only hope that the, scope of this amendment will be favourable and will give the various municipalities affected their full share of taxes on federal property within their boundaries. It is understood of course that these grants will be made in lieu of taxes on properties owned by the federal government which require the normal municipal services.
The municipalities are faced with many financial problems in connection with schools, waterworks, etc. These represent capital expenditures which are unavoidable and which cannot be postponed at the present time. In many instances the municipalities are unable to finance these capital expenditures because of the tight money market. If they are able to sell their debentures, they must pay a premium in interest rates. I brought this to the attention of the minister earlier this session, and asked him whether or not consideration was being given to this question. Many municipalities, Mr. Chairman, that are unable to find a market for their debentures in Canada are forced to sell them in the United States at a high rate of interest.
In answer to a question of mine relating to this difficulty, the minister stated that possibly the municipalities are selling their debentures in the United States because they are able to sell them at a low rate of interest. This is far from the truth, because most municipalities are selling their debentures in the United States market as a result of being unable to sell them in Canada. In order to finance their necessary projects, they must go to the United States to obtain the money and as a result pay a high rate of interest.
Each year the Canadian Federation of Mayors and Municipalities as well as the association of mayors and reeves have presented a brief to this government regarding the plight of the municipalities. The government has turned a deaf ear to most of their pleas. In some cases, after many years of representation, as in the case of these municipal grants in lieu of taxes on federal property, something is done. The association of Ontario mayors and reeves recently presented a brief to this government. One of their representations deals specifically with interest rates on municipal debentures. They also request the earnest consideration of the government of Canada in providing means by which municipalities could obtain capital funds at reasonable rates of interest. The brief states that this is necessary so that they can supply essential municipal services to their expanding populations. The needs of these municipalities, Mr. Chairman, are not the needs

of tomorrow or the day after, but they are the needs of today. The government should give serious consideration to the problems that are being brought to their attention by the municipalities. I feel that the government should act as quickly as possible and not wait until tomorrow or the day after to take steps to alleviate these problems.
In regard to these grants, Mr. Chairman, I wish to ask the minister-and I hope he will be able to give me an answer-whether these grants in lieu of taxes will be paid on the full assessment of a particular municipality and at the prevailing mill rate of that municipality. The question now being asked by most municipalities, because they are in the process of preparing their budgets and establishing their mill rates, is whether these grants will be paid on the full assessment and at the prevailing mill rate.


Walter Edward Harris: Have we not paid the going rate on every occasion we have paid in the past?


Michael Starr: In municipalities that have federal property representing 2 per cent of the total value of property within their borders? I do not know that. That is the reason I am asking the minister to say whether this amendment will pay grants in lieu of taxes on the full assessment of that municipality and at the prevailing mill rate. Those municipalities are concerned because they are now preparing their budgets and are ready to set the mill rate. In smaller municipalities these grants in lieu of taxes will make some difference in their setting up of their mill rates.
There is also the question of airports. The federal government has an airport within the city of Oshawa which was used as an elementary school in the days of world war II. After the cessation of the war the air field was rented to the city of Oshawa at a nominal fee of $1 a year on a year-to-year basis. The municipality of Oshawa is maintaining this airport at a deficit each and every year. Will this airport be subject to these grants in lieu of taxes on the same basis as buildings which are the property of the federal government?
There is one other thing that I should like to bring to the attention of the minister. I urge him to endeavour to promote a conference of the provincial, municipal and federal governments in order to discuss a distribution of a fair share of the tax dollar. We should give this serious consideration. The municipalities, the provincial and federal governments should have an opportunity to discuss this very important question.
In ending my few remarks, Mr. Chairman, I wish to say that we welcome this legislation very much. We hope that the attitude of the federal government shows a tendency more

and more toward helping municipalities in their present financial difficulties.


Mr. Henderson:: Mr. Chairman, I rise to take part in this debate because the subject matter is of considerable importance and because I wish to support the resolution and the legislation. I wish also to commend the Minister of Finance on bringing it forward. I might say that this legislation is of great importance to my riding of Kingston, and particularly of great importance to Kingston city, the townships of Kingston and Pittsburgh where there are many government installations.
The minister has explained that the proposal will eliminate the 2 per cent formula and will mean that the government will pay grants in lieu of taxes on its main properties with some exclusions.
It is quite correct that the payments are grants in lieu of taxes. No one is insisting that crown property is taxable, but so long as the appropriate payments are made no one will argue about the proper title for them. The present propospal will increase the government payments on this account to about $16 million to $20 million a year, and will affect some 1,300 municipalities in Canada. Therefore, I think we can all consider this to be very important legislation. Further,- and I think this is very important-these grants will be effective from the first of this year. No doubt there will be places where improvements could be made in the legislation but I know that under the direction of our competent and very able Minister of Finance these amendments will be made later. Again I would like to commend him on bringing this progressive legislation forward. Incidentally, this legislation was originated and put into effect by this government. At the same time we all realize, as some of the previous speakers have said, that under our constitution the municipalities actually are the creatures of the provinces.
I do not think that the position of the municipalities is at all appreciated. To many they are but a lot of noisy spendthrifts who are always hard up. Nothing could be farther from the truth. There is some basis for their complaint. The fact is that our society has been subject to the full impact of modern science and technology, a thing which is commonly known to us and which has many effects upon our way of life, and sometimes we fail to appreciate it. I mean by "technology" the application of scientific knowledge to production. We are all aware that the industrial revolution which started some 200 years ago is still in full swing. It has revolutionized our lives in many ways, but my immediate point is its impact on municipal governments.
Municipal Grants Act
Our growing technology has brought about much larger populations in the western world with much higher standards of living. This simple matter of mere numbers is important because it has increased the problems and difficulties of social organization simply because there are more people in an area and in the social and political organization. Here may I quote-and I am sure the hon. member for Greenwood will appreciate this-from a report of the meeting held at Queen's University on municipal planning in August, 1956:
An example of the kind of change I mean is in the field of transportation where the development of the internal combustion engine has revolutionized our life. The aeroplane, the motor car, and other means of transportation have not only facilitated the development of large areas of the world but have revolutionized our modes of living. The motor car, for example, is responsible for a good part of the current problems of local government. It allows people to be transported relatively long distances in relatively short times; it permits them to live in one part of the country and work in another. It creates all the problems that go with urbanization, density of highways, density of traffic and so on. I do not wish you to think this is just a statement deploring the motor car; fundamentally, it is merely a statement of fact of what the motor car has done to our society.
The modern means of communication-telegraph, telephone, radio, television-all have developed a set of common tastes which have made people everywhere all want the goods and services which others have. There are now fewer differences in taste between rich and poor and between urban and rural dwellers than ever before. There is a commonness in taste which has in effect made most of our communities urban in their way of life. Everybody has now an urbanized or sophisticated taste in personal goods, consumers' durables, the social services, sanitary services, and overhead community services which the governments must provide. And it is this point that the impact of this change in tastes comes to bear on the municipality.
Thus the increase in numbers, advanced technology and changes in taste has developed population which makes demands on all municipalities for more and better service. This demand has to be met out of the traditional sources of municipal revenue which are inadequate, and so we get the "financial problem" of municipalities. Municipal governments are not just spendthrifts which spend all they have and then cry for more. The local governments are bearing the brunt of this social change-thus the need for funds.
That is the end of the quotation, Mr. Chairman, and I felt that this should be on the record. I feel that the municipal governments need all the attention, help and direction that can be given to them. It is primarily, legally, constitutionally the responsibility of the provincial governments but I am exceedingly pleased to see that our present government is taking the lead in one place where it can do so.
Since the hon. member for Ontario has quoted from the pamphlet entitled "The case for the municipalities of Ontario" which embraces the representations of the association

Municipal Grants Act of Ontario mayors and reeves to the government of the province of Ontario and the government of Canada, I should also like to quote two paragraphs from page 30 of the booklet, as follows:
This association has been one ol the municipal organizations urging that the federal government pay municipal taxation, or the equivalent thereof, in respect to all federal properties in all municipalities.
The association was highly gratified to note that in a recent announcement contained in the speech from the throne, the federal government proposes to extend the Municipal Grants Act to authorize payments of grants in lieu of taxes on federal property in all municipalities, where such property receives the normal municipal services.
Mr. Chairman, may I through you congratulate the minister and the officials of his staff who have been handling the administration of this act. I believe they have endeavoured in every way possible to assist the municipalities seeking grants. They have given them advice and direction and have performed their task with integrity.


Mr. White (Hastings-Fronienac):: Mr. Chairman, I should like to ask the minister a few questions based on a portion of his remarks which are found on page 1354 of Hansard of February 15 and read as follows:
This means that the federal government will, subject to certain exceptions, pay the equivalent of full municipal taxes, including school taxes, on its land and buildings in municipal areas.
The first question I should like to ask the minister is what he means by "certain exceptions". Am I to take it that this includes the exceptions now set out in the act? Are those the exceptions to which he referred in' his remarks?
My second question is this. What is the correct legal meaning of "pay the equivalent of full municipal taxes"? Does this mean that the government will pay the taxes based on the assessment made by the assessor of the municipality? What cognizance if any will be taken of what is defined in the present act as "accepted value"? Will the local assessor have the whole say as to the assessment of government property or will the assessment be subject to the opinion of the minister or officials of his department?
My third question relates to the property that is described in the act as class B property. Will any of the property which is now termed class B property be subject to taxation? In his remarks the minister referred to the situation that exists at Camp Gagetown in New Brunswick. I would like to ask the minister what will apply to the large airport in the county of Hastings located at Trenton which comprises a vast area of valuable land, extensive hangars and buildings and a large number of dwelling houses
[Mr. Henderson.!

in which the personnel employed by the air force and enlisted personnel reside.


Mr. Lusby:: Mr. Chairman, I wish to express briefly my approval of this resolution. I think the principle of municipal grants in lieu of taxation on federal property represents a deviation from the old doctrine that the crown is in the fortunate position of being exempt from local taxation. I believe that doctrine is of considerable antiquity and from conversations I have had with municipal officials from time to time concerning the doctrine I gather that in their opinion it is also of considerable iniquity.
Every hon. member realizes that there were extremely sound reasons for establishing such a doctrine in the remote past, and many also realize there are undoubtedly sound reasons today for not completely scrapping or eliminating that doctrine. I think it is clear, however, that under present day conditions the application of this doctrine does lead to a great many anomalies and inconsistencies, but the principle of the payment of municipal grants in lieu of taxation on federal property tends to remove a great many of these. This principle was inaugurated in 1950 on a somewhat more narrow basis and the legislation enacted in 1955 broadened and expanded the principle to a considerable extent. In the beginning at least there was a considerable element of unfairness in the application of this principle as between the municipalities. Those municipalities containing heavy concentrations of federal property benefited the most and, shall we say, skimmed the cream off the proposition. I believe it is fair to say that generally speaking a concentration of federal property is considered in itself a great advantage to any municipality, and it seems to me the result was a sort of double advantage. In other words a few fortunate municipalities benefited substantially while a large majority of less favoured ones benefited comparatively little or not at all. However I think the 1955 changes greatly reduced the element of unfairness and I believe that this pending legislation could be said to be designed to almost if not entirely eliminate the element of inequality.
I was pleased to note that more than 1,300 municipalities-I think that is something like two and one-half times the previous number -will now share in the enlarged grants, the annual total of which, estimated at from $16 to $20 million, if I recall the minister's figures correctly, will be about double the $9,500,000 estimated as payable for the current fiscal year.
Actually this resolution covers a comparatively narrow field but I suppose it was inevitable that the debate would tend to

wander off into the much broader general field of aid to municipalities and I suppose it was equally inevitable that the fathers of confederation would take something of a beating, which they have.
In his remarks the minister said that the present extension of the principle of municipal grants is not based upon municipal fiscal need, which he pointed out was a provincial matter. I do not think the element of municipal fiscal needs can be entirely ignored even in the narrow field embraced by this resolution and it is something that must be taken into account. It is perfectly true of course that the municipalities are merely emanations of the provincial governments and their fiscal needs are constitutionally a provincial matter. That of course is not to say-and I think this is a point that should not be overlooked entirely-that increased federal activity in many fields has not had a beneficial impact upon the monetary needs of the municipalities. For example, the great expansion of social security measures including old age, disabled and blind pensions, unemployment insurance and other federal aid in respect of the unemployed, all have relieved the municipalities of a considerable financial burden in relation to caring for the aged, the indigent and the helpless.
I would like to say also that I think the hospital insurance plan now pending will have very much the same effect; it is likely to benefit them greatly in their financial arrangements. Nonetheless, it must certainly be recognized that the present monetary resources of municipalities everywhere in this country are increasingly inadequate, one reason being that their existing taxation structure is based so largely on the real property tax and, in most cases, is too narrow. It seems to me that any proposal to assist municipalities merits consideration. On the other hand, Mr. Chairman, I do not believe that any satisfactory solution to this problem will be obtained by a piecemeal approach to it-aid here, aid there, and so on. I believe the proper approach would be through the provinces themselves. It might even be that some changes would be required in the constitution in order to solve these difficulties.
I would like to see some provision inserted in these tax rental agreements by which it would definitely be specified how much of the money paid to any province under such an agreement would be allocated to the municipalities. That would be a great advantage to the municipalities in that they would then have knowledge of exactly how much money they would receive as a result of any tax rental agreement. At the present 82715-974
Municipal Grants Act time they are largely dependent on the generosity or lack of generosity of the province.
In any event, Mr. Chairman, it is my opinion that this present resolution represents a very welcome measure of fiscal aid to a large number of municipalities across the dominion, and that, as I said before, it will eliminate an element of unfairness which previously existed between municipality and municipality. For that reason I would like to put myself on record as endorsing it wholeheartedly.


Mr. Jones:: Mr. Chairman, I would like to join with those who have complimented the minister on having introduced this bill. It is certainly a step in the right direction, though it does not entirely satisfy our needs or our hopes. However, it is an indication that he is giving thought to the plight of the municipalities-rightly so, I think, because part of the plight of those municipalities is the result of government policy, in particular the tight money policy resulting in high rates of interest on bond issues. Some municipalities, as a matter of fact, have found it impossible to market their bonds at all; they certainly cannot meet the high demands of the international market.
Since the municipalities are unable to borrow at reasonable rates, and are finding themselves badly "squeezed" I respectfully suggest to the minister that he would not give the same reply today as he did some two or three years ago when I asked him to re-open the Municipal Improvement Assistance Act so as to lend money to the municipalities under that act at 2 per cent. The minister said, then, that the act was brought forward during a crisis, and was intended to help the municipalities out. I suggest that a similar crisis is facing the municipalities today; they are being "squeezed" on the money market in connection with the improvements they must undertake to meet the needs of their growing populations. They cannot afford to pay the interest rate demanded, and, therefore, I think the minister should reconsider the answer he gave and find out whether such a crisis as the act was meant to provide for does not exist now.
In addition to this aspect of the situation, the action of the government in curtailing loans for homes and other buildings has had the effect of cutting down the number of potential taxable properties in the municipalities. Moreover, the cost of operating the municipalities is continually increasing; more has to be paid in wages, for the purchase of equipment and everything else. Yet, at the same time, the natural increase in the

Municipal Grants Act number of home^ and other buildings has definitely been set back as a result of government policy. I feel it is now time for the government to review the situation with regard to municipal loans and grants and also to review the whole question of municipal, provincial and federal relationship.
I suggest that a joint conference should be held with equal representation from the three bodies. Between them they could reallocate their fields of operation. When the British North America Act came into force 90 years ago, only the two senior levels of government were represented. The municipalities were not recognized. They had no part in the agreement neither have they in the course of the past 90 years been asked to enter a conference to see whether their rights could be recorded under the B.N.A. Act. For this reason I think it is time for a revision to be made, particularly since the bulk of Canada's wealth today is derived from within municipal boundaries. Factories and other concerns with earning power are usually to be found within municipal areas.
Municipalities have to provide facilities not only for their industries and for the people who live within their boundaries but also for the dominion services situated in their towns-I am referring to armories. Tanks use the roads, troops use the roads, the post offices, and so on. Thus, the federal government has a definite responsibility toward the municipalities, both directly and indirectly, as this bill acknowledges.
On January 17 I dealt briefly with the grants to municipalities, pointing out that the principle of the grant is wrong. We fought against grants from the provincial government of British Columbia for many years. We need something more stable; something that can be relied on, and the only stable thing I can understand is the full taxation of the property involved. A grant can be anything which the whim of a minister inclines him to make; it need bear no relation to the value of the service given. I think, therefore, that the only fair way of proceeding would be to assume the usual tax levied in the municipality in respect of the full value of the government property involved.
I would like to point out, Mr. Chairman, that for generations the municipalities have borne the cost of building and maintaining the roads and highways within their boundaries. Today, particularly in my own province of British Columbia, the provincial government has assumed part of the cost, especially of the main highways which pass through a municipality. It has also taken responsibility for some side roads, and this is a splendid move. One might well ask: Who should pay


for these roads; or, why should the federal government enter municipal areas and spend money raised in taxes on such roads.
In order to find an answer we should check the uses made of these roads and highways. Part of the traffic is purely municipal, made up of road users who live within the municipality; part is provincial, consisting of cars and trucks from other centres in the province, and the rest is composed either of interprovincial traffic, which is steadily growing- trucks and cars moving from one province to another-or of international cars and trucks which cross our borders daily with heavy loads, chiefly from or to the United States. The responsibility for the first two types of traffic I have mentioned is now accepted, quite rightly, by provincial and municipal governments. As to the growing volume of international traffic, we welcome it in general, but I would point out that huge trailer trucks are crossing the border and using our roads in increasing numbers each year. These heavy trucks, carrying fruit, vegetables, and other commodities, are very hard on our roads and highways.
Therefore both the provincial and municipal governments should receive some compensation for providing such suitable roads. The municipalities, with the assistance of the provincial government, look after municipal roads, and it is only just and fair to ask for assistance from the federal government to cover roads that carry international or interprovincial traffic. I think the federal government has a responsibility to help.
The federal government assumes the responsibility for other interprovincial and international matters such as international rivers and waterways, railways and pipe lines when they cross provincial borders or the international boundary. It is logical that they should assume the responsibility for the movement of fruits, vegetables, wheat and minerals from one province to another or across the international boundary. This traffic is definitely the responsibility of the federal government just as much as waterways are. Therefore the federal government should assume the responsibility for providing good highways for such traffic. I need hardly point out that this traffic brings in large amounts of revenue to the federal government.
For many years the policy of the United States government has been to accept this responsibility. Now that country has a fine network of highways thanks to the co-operation of the three governing bodies. I believe the time has arrived when we in Canada should have a similar policy and not just one long, unfinished trans-Canada highway but a network of feeder roads as well.

Obviously the federal government has a major part to play in this field. It could begin by paying full taxes on municipal property, thus assuming its fair share of building and maintaining roads within municipal limits. Later it could assume its responsibility for feeder roads in the provinces. The cost could be justly covered by the excise and sales taxes which the government now collects on automobiles and parts amounting to between $300 million to $350 million a year. Some of that money could well be allocated to assist municipalities and provinces in building and maintaining roads.
I was going to refer to the brief submitted to the government by the Ontario municipalities but it has been referred to so often that I am satisfied the minister will look into what they have to say, particularly about the cost of education. They point out that the cost of education is more a federal than a municipal or provincial matter. The well-being of the children of the nation and the standards of their education are a national matter. They are a matter of national pride. Therefore the federal government should see to it that all our boys and girls are in a position to receive the best education possible.
For many generations now we have imposed the total cost of education on the land, land that at one time possibly did represent wealth but no longer does because sometimes one can have a lot of land and be land poor and have no ability to pay. I think the basis of taxation for education should and must be changed. I know that the provincial governments are willing to do what is necessary if other sources of revenue are available, and in my opinion the revenue should come from the logical and natural source, the federal government.
In my opinion the municipalities, as one of the three governing bodies, are not getting their fair share of the national revenue. I am not saying they can get more under the present set-up but I urge the government to consider calling a joint conference to reallocate the fields of revenue and responsibility among the three levels of government as equal partners. Therefore I suggest that the minister should immediately assume a greater burden of taxation on federal property and also, as one speaker advocated abolish the present sales tax on municipal purchases. I do not think it is fair for the senior body to impose its will and collect money from taxpayers within municipal limits on the things they buy with which to provide streets and other essential services even for government buildings.


Mr. Michener:: Mr. Chairman, the resolution indicates that the Minister of Finance has
Municipal Grants Act a heart which can be reached even though he is reluctant to assume the role of a reformer. I do not need to labour the point that the resolution, which contravenes the old established immunity of the crown from taxation and in that sense is a reform, is really an act of simple justice which will not astonish anyone in the house or the country except from the point of view that it has been so long delayed.
The federal government has become big government to the extent that its properties comprise a very large percentage of properties in municipalities throughout the dominion. The government will spend over $5 billion and if you take that amount as a percentage of the gross national product it is at least one-sixth. That expenditure indicates to some degree the extent of activity under the control of the federal government in Ottawa and to a large extent under the control of the Minister of Finance and his associates. With this great enlargement of government it has become a pressing problem to recognize the services rendered by lesser levels of government to the federal government in its multifarious activities.
This measure, which we shall soon see, is designed to pay a proportionate amount of municipal taxation on federal property. How far it goes we shall know in due course and also what federal property is involved. Whether it extends to the great many varieties of federally owned and federally controlled property remains to be revealed, but I rather think it is limited more directly to federally owned property.
That in itself is a pretty extensive item when you consider the military establishments, the industries that are federally owned, the broadcasting commission, the film board and the great number of crown corporations with their subsidiary properties. There are also the properties having to do with grain storage and grain marketing. The activities of the government reach into every field and I am hopeful that recognition will be given to the simple justice of the claim of municipalities to receive payment for the services given to properties owned or controlled by the federal authority.
The basic services received and enjoyed by federal properties take about 63 per cent or 64 per cent of municipal revenues. These basic services have been described by others and are well known. They are really services to property and the justification for charging them to the home owner and property owner is that they are services to property.
So the federal government as a property owner should properly contribute, even though the crown, in view of its prerogatives,

Municipal Grants Act
has not been subject to taxation. I therefore say, with others, that this resolution is an act of simple justice which is somewhat overdue. It does not solve the problem of the municipalities and I think the Minister of Finance will admit that fact. I do not think he intends to solve the problem of the municipalities; certainly not in this measure. The municipalities in Canada are now embarking on capital expenditures which were delayed during the war period but which are mounting to the extent that their resources are simply unequal to the task confronting them. May I read a paragraph which I have gathered from various sources here about the trend in post-war capital spending of both provincial and municipal governments:
In 1946 total capital expenditures of provincial and municipal governments and their agencies amounted to $276 million, representing an increase of more than 80 per cent over the previous year.
That is the last year of the war.
Since that time, however, provincial capital expenditures have increased many times over-* from $138 million in 1946 to $677 million in 1955. Municipal capital expenditures,-
And this is what I want to emphasize particularly.
-although rising somewhat less than those of provincial governments, increased by 1955 to more than four times the 1946 level-from $138 million in the earlier year to $546 million last year. While it may not be possible for the provincial and municipal authorities to carry out their total planned capital spending for 1956, there is little doubt that these expenditures will be higher than in 1955; . . .
They are the last figures which I have. That is a recognition of these problems which, as I say, this act is not designed to solve. There are many other ways in which the federal government could help the municipalities to discharge their serious and growing responsibilities. The often quoted brief which the minister has had presented to him by almost every hon. member who has spoken calls for assistance from the federal government under five headings. I will remind him of those headings. Only one of them is dealt with here. At page 3 of the representations of the Ontario mayors and reeves they make representations to the federal government with regard to revenues derived by the federal government from motor vehicles and accessories; federal contributions towards the cost of education;-and that is not a new item in this house-increased federal contributions to social welfare and health services; federal responsibility for civil defence; and finally payments to be made by the federal government to municipalities in lieu of taxes on federal properties in all municipalities.
That by no means is an all-inclusive list of suggestions that have been made by the municipalities and on their behalf to this
[Mr. Michener.l
government in rather desperate efforts, I think, to meet their problems. For example, they have asked for relief from sales tax for themselves and their school boards. There have been suggestions that if the municipal taxpayer could deduct the amount of his municipal property tax from his taxable income under the Income Tax Act of Canada, that would put him in a stronger position to meet increased property taxes which have been his fate in the course of the last ten years.
The pressure, Mr. Chairman, with regard to these and many other requests for assistance from the federal treasury for matters under provincial and municipal jurisdiction shows an appalling confusion in the public finances of Canada. That confusion is what concerns me more than does the immediate problem which we are discussing, but I am not going to dwell on it because this is not the proper time to do so. However, I think that, in dealing with this immediate issue, the minister should be giving thought to the longer-range problem of the municipalities and the provinces which will not be met at all by anything we are proposing to do here today.
The simple reason that there is such a great clamour for money from the federal authority is that that is where the revenues are collected and that is where the surpluses are seen. The accumulation of taxpayers' funds in Ottawa, as compared with what other governments are able to collect even with high rates of taxation, is such that naturally a strong demand develops for money from Ottawa for things which are no responsibility of this government. We do not have to look far for example of it. Primary and elementary education is no responsibility of the Minister of Finance. Yet people are asking him to provide money for that purpose. They are asking for money for roads which are a provincial responsibility. They are asking for money for all kinds of things which are definitely provincial and municipal responsibilities. The reason is clear.
With that demand developing it seems to me that, in a federal system, the federal authority should give some leadership in finding a solution for that state of affairs. It cannot go on. As I say the confusion that is developing in the public finance of this federal country is appalling, and it should not be allowed to continue to grow in the pattern which was developed after the war. That pattern of tax rental agreements, which was a temporary palliative or a temporary expedient for restoring to the provinces the taxes which they had voluntarily given up for the purpose of the war,

has not been improved on substantially in the intervening years from 1946. The same pattern is followed.


Walter Edward Harris: There has been a great
improvement.


Daniel Roland Michener: The improvement, may I suggest, Mr. Chairman, comes down to a matter of a few dollars more here and a few [DOT]dollars more there but in principle there has been no improvement. The principle to which I object is this. Our public finance now becomes a matter of patchwork payments from one governmental authority to another. As I understand it, the hon. member for Cumberland suggested that it was the province's responsibility to look after its municipalities; and so it is constitutionally. But, as a matter of practical finance, the provinces are giving about as much as they can give by way of grants to the municipalities. Last year, as the minister knows, Ontario paid $185 million or thereabouts to the municipalities. Of that amount $84 million was for education and the rest was for roads and various services. Over 40 per cent of the revenues received by the provincial government was handed to the municipalities.


Mr. McCann:: They are taking it back this year.


Daniel Roland Michener: I should think that the
grants will be even larger this year. As the minister probably knows, the budget will be introduced in a few days.


James Joseph McCann: It is right here in the paper, the Ontario budget.


Daniel Roland Michener: The minister refers to the newspaper. I think the forecast was that the municipalities' share of the revenues would be even larger. But even the province of Ontario receives a substantial part of its revenues from grants from the federal government.


James Joseph McCann: Read the newspaper and you will quit.


An hon. Member:: They are not grants.


Daniel Roland Michener: As I have been reminded, these are not grants, they are transfer payments. The province of Ontario receives a very substantial part of its revenue from the federal authority, as do all the provinces. An average of something like 22 per cent to 25 per cent of the total revenues of the provinces comes by way of transfer payments from the federal authority. It ranges as high as 51 per cent for Prince Edward Island and 55 per cent for Newfoundland. So I say, we have developed a system of public finance which is a patchwork of transfer payments.
Municipal Grants Act Taxes are not collected by the authority which is responsible for spending the money. They are collected by one government, paid to another government and then there is a transfer from the second government to a third government.
You have transfers from Ottawa amounting to hundreds of millions of dollars, and that money is collected from the same taxpayer who pays all the taxes. This money is not collected by the federal authority in its own right because the federal authority is occupying provincial fields. These payments are made by the federal authorities to the province, and the province in turn is making grants to the municipalities. Even the federal authority is making grants to the municipalities. We are getting so unsystematic in our public finance that if we continue in this pattern eventually the taxpayer will not know how to call a government to account for misappropriation of his funds. It will not be evident from the authority that is spending the money, the authority that collected the taxes. It is not a sound principle, and I think the Minister of Finance agrees with that. The former leader of the present government made that quite clear in earlier days. He did not believe in this system of one public authority raising funds to be spent by another public authority.
Numerous suggestions have been made by members in this debate that there is a need for a more rational review and planning of our system of intergovernmental fiscal relationships. The fact this suggestion has been made by almost every member who has spoken is, I feel, ample evidence that the people of this country are alive to the problem. They have been educated and their governments have been educated to look to the federal authority to raise the money and to make it available to other levels of government. I believe the people realize that is not right, and they would like to see a more truly federal system of taxation devised under which the government raising the money has the responsibility for spending it. In this way you get a direct accountability by the government to its electors for the money which it takes from them and which it spends on their behalf. I do suggest that while this kind of thing is necessary it is necessary because this government has failed to grasp that problem which developed as a result of the war, has been growing ever since, and for which no sound remedy has been found. It does involve the co-operation of the provinces and the federal government but that co-operation is essential to any effective action under the federal system. It is not too much

Municipal Grants Act to expect that such co-operation will be forthcoming if the leadership which is needed comes from this authority.
(Translation):


Mr. Dupuis:: Mr. Chairman, on numerous occasions reference has been made, in this house and elsewhere, to the proportion of taxes collected throughout this country by the federal government as compared with the proportion raised by provincial or municipal governments. A point which has been overlooked, however, has been that of the responsibilities of the federal government towards these provinces or municipalities.
For instance we need only point out the extraordinary expenditures which fall upon the federal government with regard to social security legislation as applied for the benefit of the people of this country, old age pensions, family allowances, blindness and disability allowances, and so on. Likewise overlooked are the amounts spent by the federal government in the municipalities concerned-as demonstrated by this proposed legislation-in the form of public works, defence production, military establishments, and so on.
Montreal being the metropolis of this country and I a resident and ratepayer of that city, I feel it is my duty to speak in recognition of what the federal government is doing for the metropolis of this country even if the various opposition parties apparently refuse to recognize the federal government's contribution to municipal affairs in the forms of grants and donations in all fields. To prove it, I only have to point out in passing what our government is offering to the universities of my city, its grants to technical schools and to hospitals; it is so much less that the municipality has to pay out.
Here now is a further wise government proposal which will be of great help to municipalities and particularly-in view of its large population-to the metropolis of the country, the city of Montreal.
I understand that federal government properties in Montreal would be assessed at some $30 million, which means that, taking into account the compensation which ought to be paid, the city would perhaps collect more than one million dollars a year, an amount which it has never received in past years. The action taken by the government deserves our commendation. When the opposition tells us that this should have been done earlier, my reply is that it is never too late to do the right thing. Moreover, for many years now, the government has always come up in time with the introduction of beneficial measures when they have become necessary. Therefore, this grant of one million dollars to the city

of Montreal should be a reason for us to commend the government for this generous attitude with regard to the municipalities, and we should more particularly point out the fact that the federal government has never attached any strings in respect of almost all its gifts and contributions ever paid either in the provincial or in the municipal field.
For instance the federal government does not say that the amount of one million dollars of which the city of Montreal is going to benefit should be spent in any particular way. Not at all. The federal government has great respect for municipal autonomy. All it does is to pay a generous- not to say liberal-contribution, as these two words are synonymous. We recognize that now may be the time for the federal government-without encroaching on the autonomy of cities and municipalities-to contribute on a greater scale, notwithstanding what it has done for them so far, to a solution of the problem created by the abnormal expansion of cities, more particularly of the larger ones, like Montreal.
When we speak about the growth of our great cities and about the extraordinary expansion of the provinces, we tend to forget that the central government is largely responsible for the progress now taking place in Canada, a progress which is felt in provincial and municipal budgets, in all our provinces.
Our cities and provinces have never enjoyed such a high level of revenue. In my opinion, it is the result of the progressive policy of the Liberal party, a policy which is strikingly exemplified by the bill now before the house.
(Text):


Lewis Elston Cardiff: I am sorry I was not in the house when the minister explained the resolution, and he may have said things that I want to know now. If he did, I shall be glad to wait and read what he said in Hansard.
There are two airports in my riding and I wonder what effect this legislation will have on the properties in those airports. If the minister does not want to answer it now he can do so later.


Walter Edward Harris: I will.


Lewis Elston Cardiff: The minister did not answer it before?


Walter Edward Harris: No, I did not.


Lewis Elston Cardiff: One member who spoke a little while ago said that the municipalities were the creatures of the provinces. That

may have been true some years ago, but the minister said a few minutes ago that the taxing powers were an improvement on taxation. Well, if that means that the federal government is going to take away all the powers from the municipalities and the provinces, then it is true.


Walter Edward Harris: We have not taken any away.


Lewis Elston Cardiff: Just wait until I get through with a few figures I have. In 1939 the municipalities were getting 39 per cent of the tax dollar; the provinces were getting about 26 per cent; and the federal government was getting about 35 per cent. In 1949 it had changed, and the dominion government took 48 per cent of the tax dollar, the provinces 22 per cent and the municipalities 30 per cent. In this year the government is taking 77 per cent of the tax dollar, the provinces 12 per cent and the municipalities only 11 per cent. If that trend keeps on in the next 25 years we shall all be a charge on the state; the provinces and the municipalities will not have any say in it at all.
I am not opposed to this resolution; it is only giving back to the municipalities something which they should have had long ago.
As far as the taxation of those properties is concerned, the federal government is retaining the right to make the evaluation. In our county we have a valuator who goes around and tries to equalize the evaluation on the properties in the town and countryside. In this particular instance, if we are to be given anything on the properties in the airports, I think the evaluator of our municipality either should be taken in by the powers that be who are going to make the evaluations, or something should be done in that regard. If the government is going to pay taxes on the property, the property should be evaluated in the same way as other property is evaluated in that particular municipality. I would be glad to have the minister answer those questions.


Samuel Rosborough Balcom: Mr. Chairman, since I come from Halifax where there is such a concentration of defence property of the navy, army and air force, I think I should tell the committee how welcome these proposed changes are to the municipalities.
It seems to me that the old formula for these grants was sound, but it has been examined and now we have changes made which are going to benefit us greatly.
In the last year or so Halifax has undertaken to make new assessments at considerable expense so that the tax load will be spread over a little more evenly than in the past. I know this will benefit the federal treasury to a large extent. In 1945
Municipal Grants Act the grants to Halifax amounted to $827,359. The tax already paid to Halifax in 1956 amounts to $815,000, but this is only a part. More is to come, and the total will be greater by a large figure than the 1955 amount.
I should like to mention the municipality of Dartmouth. I understand that Dartmouth is the fastest growing town in the Dominion of Canada. In 1956, Dartmouth received $92,638. In addition to this, as in the city of Halifax, they are, of course, receiving cash in lieu of other taxes, or they are being paid for services and such things. But we have the county of Halifax which received $23,151 in 1956 under section 8. In addition to that they received $30,000 under the rural regulations. It has been only within the last two or three years that the county has received any consideration. It also happens that some of the most valuable property in and around Halifax, in the Bedford Basin, is now taken up with military properties, and we are hoping that when this amendment comes into effect they will be given the usual kind of consideration. We have to remember that rural municipalities must provide roads, schools and services for all of their people. They have not any large stores, corporations or head offices and really very little industry from which they can extract any taxes. If it so happens that they do obtain some industry the neighbouring city will try to annex that industry and if the rural people try to protest there is always the cry that you cannot stand in the way of progress. Therefore, 1 ask special consideration for the county.
At the same time I should like to draw the attention of the minister to this fact. I do hope that in the future when a municipality is short of money they will be provided with loans at a very low rate. I am not suggesting that they should be interest-free, but at a low rate when they are needed for essential services.
It was recently suggested by someone that the national harbours board has done too little for too little. I think it was suggested that the national harbours board had not done anything for Halifax but my observation would be that in this instance we are receiving in lieu of taxes too little for too much. I do not know whether the hon. member for Edmonton East said today that he welcomed this legislation or was glad to have it, but anyway he said that they were sending back more to the federal treasury than they were receiving. My information is that in Nova Scotia it is quite the reverse. For something like $50 million that is taken from us in taxes something

Municipal Grants Act like $250 million is returned to Nova Scotia in one way or another in grants and in all of these other things that seem to be coming in all the time.
The people of Halifax are hopeful that when this amendment goes through we will receive a considerable increase in the grants that are paid under the Municipal Grants Act.


Mr. Patterson:: Mr. Chairman my intervention in the debate at this time will be very brief. I believe that my colleague the hon. member for Edmonton East presented the views of our group in a capable manner and he also placed on record a number of figures which substantiated the points he emphasized. However, I would like to express appreciation of the fact that this government is beginning to recognize perhaps in a greater measure than heretofore the desperate position in which many of our municipalities find themselves because of the ever-increasing costs they meet in providing desirable and necessary services.
As we all know and as has been emphasized a number of times today the taxation field in which the municipalities are permitted to operate is very limited and at the present time in many of these areas property taxes are reaching a point where any additional assessment would be disastrous to property owners.
One of the main issues raised by speakers from this group at the time we were discussing the dominion-provincial fiscal arrangements was that in the formula submitted by this government there had been a complete failure to properly appreciate the difficulties confronting the provincial and municipal governments. The result was the drafting of a plan that fell far short of finding spontaneous acceptance on the part of the provinces of Canada. I believe that if we are to properly understand the position in which the municipalities find themselves at the present time and provide the necessary alleviation then we are going to have to go even much further than is indicated in the resolution currently before us. A great many organizations have referred to the position of the municipalities and have urged the federal government to give consideration to this particular matter. I have in my hand the submission to the Minister of Finance and the Minister of National Revenue prepared by the Canadian Chamber of Commerce and dated February 5, 1957. I want to read part of a sentence found on page 5 of this brief:
. . . the most urgent added demands are in the area of municipal and provincial responsibility and if at all possible it is desirable that the federal tax collector should make some room for unavoidable increases in municipal and provincial taxation.
[Mr. Balcom.l
Here we have the Canadian Chamber of Commerce recognizing the position in which our municipalities find themselves as they endeavour to cope with the problems that are theirs in the provision of municipal services. Another interesting statement can be found in the preliminary report of the royal commission on Canada's economic prospects. On page 96 we read:
It is suggested also that senior levels of government should accept the principle of an assessment on federal and provincial properties in order to compensate the municipalities for the services which they provide.
Throughout our economy we find various groups, individuals, organizations and commissions calling attention to the situation and requesting that some definite proposals be brought in by the federal government to take care of it.
In introducing this resolution the Minister of Finance stated that the purpose of the measure was not to alleviate the serious situation in the municipalities nor was this the motivating principle behind its introduction. Despite the motivation of this resolution I believe the implementation of its proposals will result in definite assistance to the municipalities. I think that must have been taken into consideration by the minister and his advisers when they were considering the drafting of this resolution.
The minister also stated that the fiscal needs of the municipalities are a provincial matter. I would suggest that the federal government should have recognized that fact and should have been willing to adopt a dominion-provincial fiscal policy that would have been more in keeping with the realities of the present situation. As I intimated before, we felt that in the presentation of their formula the government revealed a complete lack of understanding of the needs of the municipalities and the result was that they brought in a policy or formula which, as I said before, came far short of finding general support.
The hon. member for York Centre this afternoon referred to the opposition members who were calling on the federal government to take this question under advisement and he stressed the fact that this was a provincial responsibility. Perhaps some of these things may have been provincial responsibilities but we must recognize that when the federal government insists on taking out of the provinces and municipalities the greater portion of the taxation dollar then the provincial and municipal authorities are going to find it absolutely impossible to fulfil their obligations.


Walter Edward Harris: Where would we get our revenue if we did not do that?


Mr.   Pallerson@: That is all very well, but
when you take so much of the revenue out of the provinces and municipalities there is not going to be much of the taxation dollar left with which the municipal and provincial authorities can carry on and discharge their responsibilities. You certainly take a great deal out of my province and although I heard what was said by the hon. member for Halifax the same certainly does not obtain in the province of British Columbia. I suggest that we must go further than what is envisaged in these proposals. Good as these proposals are we will have to go further if we are going to provide the provincial and municipal governments with the necessary funds with which to carry on arid discharge their responsibilities in the field of providing services to their people.
One hon. member who participated in the debate this afternoon referred to the fact that these grants were really a return of some of the money the federal government has already drained off from the taxpayers in the provinces and municipalities arid I agree with that statement.
In speaking on the Municipal Grants Act on March 17, 1955 the hon. member for Peace River, the leader of the Social Credit group, as reported at page 2112 of Hansard for that date, stated:
And I suggest the government of Canada will never reach the point where it can say it is being fair and just in this matter until it is paying by way of grants sufficient to equal the taxes which would be paid to the municipalities at present rates of assessment.
In introducing this resolution some few days ago the Minister of Finance indicated that this is what the federal governinent is now prepared to do. Of course he also indicated that there were some exceptions under this plan.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Alexander Bell Patterson: Mr. Chairman while I was speaking prior to the dinner hour, the Minister of Finance, I believe, asked where the federal government would get the money necessary to finance its operations if the suggestions that I had made were carried through. We, of course, acknowledge the fact that revenues are necessary and required for the conduct of government, but I may say this: that if the federal government were to leave a greater proportion of the tax dollar in the municipal and provincial treasuries, fewer demands would be made upon the federal treasury.
Municipal Grants Act
In saying this, however, I do not mean to imply that taxes should not be paid, or grants in lieu of taxes not be made upon federal property within the municipalities.
1	do want to emphasize, however, the difficult position in which the municipalities find themselves in trying to cope with the ever-increasing cost of providing the necessary services required of them.
I believe the principle of this resolution is sound and it will of course, be supported.
I believe however, that consideration will have to be given to the wider problem and, through a thorough study of our taxation field and structure, sufficient funds placed at the command of the municipalities to enable them to carry on their work. I would refer to the statement made by the hon. member for Peace River who, speaking on the subject of the Municipal Grants Act last year, declared, in effect, that payments under the present system of grants in lieu of taxes should be equivalent to the amount of tax which would normally be paid.
The decision of the minister in acceding to this suggestion for the removal of the
2	per cent "floor" will be welcomed by all municipal authorities. Another part of the statement made by the Minister of Finance outlined the provision which is now being made for grants in lieu of taxes on defence establishments. I know that this move will certainly be welcomed by a number of municipalities in my own riding because there are extensive defence establishments located in several of them. Application has already been made by the Matsqui municipality, for instance, for grants in lieu of taxes with respect to the air field in that municipality, as well as on the naval station. In the Chilliwack municipality we have, of course, the large Camp Chilliwack. Thus, I feel that when this resolution comes into effect, and the act is amended, definite benefits will accrue to these municipalities.
I would still suggest that consideration be given to the payment of grants in lieu of taxes on property belonging to crown corporations. I do not think that these corporations should have the right to expect the services provided by municipalities without paying full taxes.
There is one other matter I would like to raise at this time, and it is in regard to experimental farms. I do not know just what the system is with regard to experimental farms at present-whether or not some grants are being paid in lieu of taxes -but I hope that when the minister again participates in the debate he will clarify this point for me.

Municipal Grants Act
I intimated at the beginning of my remarks that I was going to be very brief, and I want to keep at least somewhere within the circumference of that promise. We do welcome the resolution and, as I have said, we shall support it. However, we ask that consideration of this entire subject should be continued with a view to including those aspects and properties which are still excluded under the act as it now stands.
(Translation):


Mr. Deschaielels:: Mr. Chairman, I wish to commend the government and more particularly the Minister of Finance (Mr. Harris) for putting this resolution before the house.
I understand that grants have been , paid to certain municipalities since 1950, but that the act was originally restricted in scope so as to benefit only a limited number of the municipalities, grants being made only where the value of real property held by the federal government was in excess of 4 per cent of all assessable property in the municipality. In this way the city of Montreal, for instance, was not in a position to receive any assistance. The provisions of the act were extended in 1955 but here again the formula was not sufficiently broad to be of any help to Montreal.
This resolution provides for the payment of grants to every municipality in this country in which there is any federal real property, where such property benefits from normal municipal services.
This beneficial measure will therefore mean for Montreal a further revenue of approximately a million dollars or more. I know that all members and specially members representing constituencies of the island of Montreal are very happy about it.
If the federal government has its responsibilities, provinces have theirs, as does also the metropolis of Canada. We know that the city is ready to go ahead with large projects, for instance the building of a sports centre, but, between planning and doing there is always the problem of available resources. Because of the "jurisdiction" problem, it is not always easy for the federal government to help municipalities as much as it would like to, in carrying on projects such as that one.
Well, if we want municipalities to progress and to discharge their responsibilities, let us give them the maximum of privileges to which they are entitled, every time it is possible to do so.
That does seem to me to be the spirit behind the proposed legislation which will be greeted with satisfaction in all cities and

towns of this country and more particularly in the city of Montreal whose share of the burden has possibly been greater than that of others.
In conclusion, Mr. Chairman, may I point out that this step just taken by the government clearly shows its constant concern with the adequate distribution of the money it collects. It does so honestly, quietly and efficiently so that every part of the country may benefit thereby.
A short while ago the young people of this country were the ones who stood to benefit most from the government's generosity, through the setting up of the Canada Council. Today every municipality in this country is in that position, and soon there may be other classes of people who will continue to benefit from the wise and benevolent measures brought in by this government. (Text):


William McLean Hamilton: Mr. Chairman, it is a sore temptation to someone like myself who has sat on the Montreal city council for seven years and sits there still to deliver a long and detailed speech on this subject. However, I am going to restrain myself because I feel that the ground has been well covered by a number of other speakers on this side of the house who, having expressed appreciation for what is contained in the resolution, have pointed out certain additional requirements not met by the measure before us.
There is, however, one point that I feel should be brought to the attention of the minister and the house. It is a point which has been completely overlooked by the member for St. Mary who spoke this afternoon and the member for Maisonneuve-Rosemont who has just resumed his seat. In each case they lauded the government for this measure and left the impression that the government, particularly so far as Montreal is concerned, was doing everything that it should for that city. If I remember rightly, the member for Maisonneuve-Rosemont concluded by saying that this was just another example of the wise and benevolent measures the government was bringing in. First it was the Canada Council and now it was the municipalities and before very long it was going to be something else.
I think it would not be a bad idea, Mr. Chairman, for them to stop right there and with the Minister of Finance take a look at a particular situation that exists in Montreal and which could very well exist in a number of other cities across the country. I refer to those cases where the national harbours board represents a major portion of government property in the city area.

Turning to Montreal and taking figures as at April 30, 1955, we find that there is some $400 million of tax exempt property in the city out of a total valuation of $1,963 million. Of that tax exempt property the first classification, which amounts to $110 million, is property owned by the city of Montreal. The second classification, amounting to $55 million, is property owned by Catholic educational establishments. Then we have the third classification, the national harbours board, with $42,600,000 of property. It is followed by the fourth classification, other federal government property, amounting to $32,700,000. There are, of course, a number of other items making up the $400 million but we are not concerned with them at this point.
The point I wish to make at this juncture is that while this measure provides for the payment of taxes on $32 million worth of federal property it does not provide anything for the payment of taxes on a larger amount, $42 million, of national harbours board property. It is possible that if I went no further the minister would answer this statement by saying: Oh yes, but the national harbours board is a crown corporation and makes its own arrangements directly with the city for a reasonable grant. When we take that step and examine the basis of the grant we see just how inequitable are and have been the government's negotiations with municipalities across Canada on behalf of the various crown corporations.
I have pointed out that the value of national harbours board property in Montreal is some $42 million. At the time that valuation was taken the tax rate was $3.61 a hundred which, had that rate been applied, would have resulted in a tax on that property of some $1J million. Instead, the national harbours board negotiated with the city a five-year agreement commencing in 1955, under which their contribution is fixed at $150,000 a year or almost exactly one-tenth of what the normal municipal tax would be on that property.
I suggest that at the time the agreement was negotiated Montreal was not one of the cities coming within the terms of this legislation as it then existed. There were then no taxes whatsoever being paid at that time on the majority of federal properties in the city. Therefore it is quite possible that it looked like a good thing, at a time when the federal government was being obstreperous about paying taxes, to negotiate an agreement to bring in $150,000 a year from the national harbours board. But now that we have proceeded, and I think quite rightly, to a basis where we have made federal property in the city taxable we find that the city is bound with a five year agreement affecting
Municipal Grants Act
national harbours board property which yields them only one-tenth of what the proper return should be on the basis of municipal tax rates.
It may very well be, as the minister pointed out in his original statement, that the national harbours board does not make all the demands upon the services of the city that another taxpayer would. On the other hand, every hon. member will remember the debates that have taken place when on two successive occasions the Minister of Transport has risen in his place, on being questioned by me about the provision of a fire boat for Montreal harbour, and has said in effect: We do not need to provide a fire boat or fire protection equipment for Montreal harbour because the city does that and they have fine fire-fighting equipment. If there is a fire they come right along and put it out and there is no need for the federal government to take any steps to provide fire protection for Montreal harbour.
The minister and the government cannot have it both ways. If they are going to argue as they have in the past that the city has to supply them with protection, then they cannot turn around and say subsequently that they are not going to pay municipal taxes, which is exactly what they are doing at the present time. The major services of the city are being provided to the national harbours board, including the provision of water, sewers and fire protection, which I have already mentioned. The harbours board has its own police force which works on harbours board property but the surrounding property which is connected with the harbours board must be protected by the Montreal police force. One can go down the list of services being provided to the national harbours board almost indefinitely.
In conclusion I want to bring this specific point to the attention of the minister and to make a suggestion to him with respect to these long-term agreements-I do not know whether they exist in other cities-such as that which is now in effect in Montreal, which was entered into before the advent of legislation such as this and which places such a ridiculously low value upon the services provided to the harbours board by the city. I want to suggest to him that these agreements should be reopened and that we should not ask cities-and particularly Montreal- to continue over a period of years to receive only one-tenth of what they are entitled to receive.
Having said that, Mr. Chairman, I want to say that this is welcome legislation as far as it goes. It is something that has been needed for a long time. It is encourag-

Municipal Grants Act ing finally to see the government accepting a responsibility which has rightfully been theirs for many years and finally catching up with the advice which has been given to them from this side of the house for eight or ten years and which has been given to them over the same period by such organizations as the federation of mayors and municipalities and every group in Canada which has studied the matter. To someone like myself, Mr. Chairman, it is really encouraging to find that the government have up-dated themselves to the point where they are only about ten years behind the advice being given them by us rather than 15 years, 20 years, or 25 years.


Mr. Mclvor:: I am going to be like the hon. members on the other side of the house, Mr. Chairman. I am going to get on the bandwagon and congratulate the minister for bringing in this legislation. I am not going to introduce any "buts" or "ifs". The minister is just practising what he professes. He professes to be a Liberal. A Liberal, when he sees what is right and just, will put it across. Therefore he is a real minister practising what he preaches.
We have four large buildings in Fort William. If those buildings were in Ottawa they would look like something. We appreciate greatly the taxes that we will now receive for the protection and the services that Fort William is giving. I was going to ask the minister a question. The dominion government pays $33,000 a year in rents. Will we get any consideration for those buildings that are rented or will we not?


Thomas Miller Bell: Mr. Chairman, I want to mention only one special matter briefly here, namely the subject that was alluded to by the hon. member for Greenwood last night when he said that there will be an increasing need to consider corporations related to the crown under such legislation as this. I refer specifically to the situation in the Atlantic region wherein the cities of Halifax, Saint John, Moncton and Charlottetown have not been able to agree so far this year with the Canadian National Railways with regard to payments to them. I am only just mentioning here the difficulty that exists with respect to the several particular agreements with our city and the fact that in the future there must be uniform treatment for all concerned in those matters.
It may be that we should consider bringing such crown property under this legislation or it may be that special acts will be necessary. But I say that it is of increasing importance-and it is also of importance with respect to all our other crown corporations-


that this same treatment be given to them. If this legislation is right in principle-and everybody seems to agree on that point-we should extend it to include all other corporation property that is related to the crown.
I hope that agreement will be reached with the Canadian National Railways and the government over our taxation difficulties in these cities in the maritimes. If agreement is reached, that is all right. However, I say that we shall be obliged to face up to this increasing problem.
In closing, Mr. Chairman, I cannot resist simply saying this. When I hear of the financing difficulties experienced by the municipalities in central Canada, I cannot help mentioning the difficulty we have in the Atlantic region. A short while ago an hon. member referred to the fact that the municipalities are experiencing hardship wherein they are obliged to go to the United States for their bonds investment. We have been going there for many years. In fact it has now reached the stage where we cannot even consider investment plans for the future for our municipalities. If the tight-money policy and the credit restrictions of this government are affecting any area, I say that they are affecting the maritimes which have never even known what inflation is.


Mr. Boisvert:: Mr. Chairman, the purpose of this legislation is to bring in a measure to extend the benefits of the Municipal Grants Act to municipal corporations in Canada. I for one welcome this new legislation because it will improve the former legislation. In my own constituency it will be a great help as well as to the cities which are within a short range of Nicolet-Yamaska. I refer to the cities of Three Rivers, Victoriaville, Drum-mondville and Sorel.
Since the inauguration of this legislation we have seen quite good progress within the scope of the measure. From 1950 to 1954, 48 municipalities received $3 million; from 1954 to 1955, 150 received more than $9 million. With the new legislation, 13 municipalities will get from $16 million to $20 million. I therefore do not agree with the hon. member for Greenwood when, as reported at page 1494 of Hansard, he said this:
I think the government is dealing with this in a grudging way, and that it is another instance of too little and too late. They are really just nibbling at what I consider to be a very important subject.
It is a very important subject but we must bear in mind the fact that these new grants to municipalities will add to the subsidies paid by the federal government to the provinces which in turn are making grants to municipalities and to educational boards or to educational corporations.

I assert that this measure is in the spirit of confederation. This afternoon, when I was listening to the speech of the hon. member for St. Paul's, it sounded to me like a weak echo of what we hear so often in the province of Quebec, namely that the federal government has invaded the field of taxation to such an extent that the province of Quebec is unable to raise money as she would like to do.
Let us go back to confederation. What revenues were available to the province in 1867? There were those granted by statute which today amount to something over $20 million. Secondly, there was direct taxation, and the province could raise money by direct taxation only. Thirdly, there was the disposition of the natural resources which belonged to the province. What has happened since? At that time it was not envisaged that the progress would be so rapid or that we would be met by 'a development so large that people would believe the federal government was too strong. But that is the spirit of confederation.
I wish to quote from the remarks of Sir John A. Macdonald when he spoke during the parliamentary debate on confederation:
Let me again, before I sit down, impress upon this house the necessity of meeting this question in a spirit of compromise, with a disposition to judge the matter as a whole, to consider whether really it is for the benefit and advantage of the country to form a confederation of all the provinces; and if hon. gentlemen, whatever may have been their preconceived ideas as to merits of the details of this measure, whatever may still be their opinions as to these details, if they really believe that the scheme is one by which the prosperity of the country will be increased and its future progress secured, I ask them to yield their own views, and to deal with the scheme according to its merits as one great whole.
This is one of the numerous measures this government has brought forward in a spirit of compromise, a spirit of making this country greater and greater; in a spirit of keeping all the provinces, even the province of Quebec, within confederation.
This is my last word. I hope that in the near future we will see some other legislation which will bring relief to the municipalities and which will help education within the province. In the meantime I hope this will save the spirit of confederation, upon which attacks are made too often outside of this house.
Resolution reported and concurred in.
Mr. Harris thereupon moved for leave to introduce Bill No. 158, to amend the Municipal Grants Act.
Motion agreed to and bill read the first time.
Canadian Farm Loan Act CANADIAN FARM LOAN ACT



AMENDMENT TO INCREASE AUTHORIZED CAPITAL OF BOARD

[Stage Direction]
The house resumed, from Friday, February 15, consideration in committee of the following resolution-Mr. Harris-Mr. Robinson (Simcoe East) in the chair:
That it is expedient to authorize a measure to amend the Canadian Farm Loan Act to increase the authorized capital of the board from $3 million to $4 million.
Mr. Charlton:: I wonder if the minister is going to answer some of the questions that were put to him the other day.


Mr. Benidickson:: Yes, Mr. Chairman. The committee is well aware that it is not long ago that, as a result of more amendments than are presented at this time, a very extensive review of this act took place. One hon. member, I believe it was the hon. member for Battle River-Camrose, suggested that out of that labour of last session, including the work of the banking and commerce committee he felt little had developed except we had streamlined the application form. I feel that is an uninformed statement, Mr. Chairman, to say the least. I think even the board itself would give the fullest credit to the members of the committee for the work that they did in examining the operations of the board. I am very happy to be able to report to the house that in a period of something less than a year the total amount of loans and the average size of loan has increased very substantially.
In Canada as a whole, the number of loans approved for the period April 1, 1956 to January 31, 1957 was 2,751 amounting to $13,100,900. In the full year for the period April 1955 to March 31, 1956 the number of loans approved amounted to 1,949 and the amount of the loans was $7,791,000. I think the committee will be pleased to learn also that in this relatively short period of time since last session's work the amount of the average loan has increased. At the time we were considering the operations of the board the average loan was $3,898 for the last full year and for the period April 1, 1956 to January 31 of this year, the average loan has increased to $4,726.
Now, the hon. member for Greenwood requested some information to indicate what acceleration there might have been in loans in recent years. I have a table that covers a period of some 10 years, but perhaps orally I might just give the figures for the past five years. Taking the net increase in funds borrowed from the Minister of Finance, 1952-53 the total amounted to $1,600,000; in the next year they amounted to $3,700,000; then.

Canadian Farm Loan Act for 1954-55	$4,400,000; then, for 1955-56
$4,700,000; and for the 10-month period up to January 31 of this year to $5,300,000.
Now, similarly, the actual amount of loans dispersed to farmers showed a continuous increase. In the year 1952-53 the loans dispersed to farmers amounted to $5,118,000; in the next year, $7 million; the next year to $8,207,000; the next year to $8,254,000, slightly ahead of the year previously and in the current 10-month period ending January 31, 1957 they increased to $10,139,585. Some questions were advanced as to for how long a period the present increased authority might suffice before there was a requirement for parliamentary authorization of an additional increase in capital.
At the present time the minister may lend to the board $60 million based on the present capital. The amendment will permit the minister to lend the board an additional $20 million. That amounts to $80 million. The outstanding loans from the minister as at January 1, 1957, amount to $43,300,000, so that at present the further amount the minister may lend to the board is $36,700,000.
It is estimated that total borrowings from the Minister of Finance for the fiscal year ending March 31, 1957, will reach $8,500,000, and the loans dispersed in the current year when it ends on March 31, 1957, will probably amount to $13 million, to bring the total outstanding loans from the minister to $46,500,000, leaving a potential of future borrowing power of $33,500,000.
The hon. member for Greenwood and some others made reference to the time lapse between the time of placing an application and the completion of the application by the granting of a loan. The committee will recall that we were given some evidence last year. We were told in the banking and commerce committee that 50 per cent of all loans were completed within 50 days. I am able to report that an analysis of the applications has been made for one province, a representative province, namely, Ontario. In Ontario, in the present fiscal year to February 5, 1957, 533 loans were processed. The length of time between appraisal and head office approval of the loans is as follows: 22.4 per cent took less than 15 days; 50.3 per cent took less than 28 days; 64.4 per cent took less than 35 days; 80.5 per cent took less than 42 days. Therefore, I think members of the committee will again be pleased with that increase in the speed at which applications are dealt with.
The hon. member for Kindersley, at pages 1324, 1325 and 1326 of Hansard, made the point that he believed that applicants are denied a loan unless they actually reside on
[Mr. Benidickson.l

a farm, or at least have some buildings on the farm. I am told by the board that this is not a correct indication of the position. The board does appreciate the trend toward owning and residing in a house in a nearby village, and this, of course, has developed particularly in the province of Saskatchewan. In these circumstances, an applicant who is prepared to include his village residence as part of the security may obtain a loan from the board. Presumably, my hon. friend was referring to a farm that would have no buildings on it at all.
The hon. member for Acadia referred to the item on the back of the application dealing with chattel mortgages. I am told that has always been on the application. Up to now no exception has been taken to it. It is presumed that it followed the regular practice of the private lending companies for many years. I wish to point out to the committee that what it means is simply this: warning is given to the applicant that under certain circumstances he might be asked to provide a chattel mortgage; but if hon. members follow the procedure they will realize that the board, or its representative, is doubtless approached by a letter or a personal interview. The applicant is given this form to complete, and returns it, and then there is an appraisal and the board then writes indicating whether it is prepared to extend a loan. If it does so and if it feels that some chattel mortgage security is required, it states so in the letter. There is no obligation, of course, on the part of the applicant to proceed with the loan if he objects to the chattel mortgage request. I am told, however, that such requests are on the decline. I think that in the 10-months period that I say has been reviewed chattel mortgages were requested in about 16 per cent of the applications. I am told also that usually the term of the chattel mortgage is a relatively short one. The mortgage loan itself is probably for a long period but the chattel mortgage security is usually for a short term of possibly five years and would not run collateral in time to the long term of the land mortgages. I understand, too, that there is a very good reason for requesting chattel mortgages in certain circumstances.
I can illustrate this best by saying that certain farms would not be farms at all from the point of view of real productive worth had they not a valuable and substantial irrigation system, and to secure the irrigation system which is essential to the operation of the farm of course a chattel and not a real estate mortgage is required. This is just one illustration.
In so far as this clause is concerned, the applicant will receive the payment by

cheque and at his risk. I am assured that that has never caused any difficulty over the years. If a cheque has gone astray invariably the board has taken on the obligation of checking upon it, and I think possibly that particular clause in the application form could be looked at with the possibility of having it altered or making clearer to the applicant what is involved. I understand it is simply an authorization to send payment in that manner.
The hon. member for Dufferin-Simcoe complained that he felt farmers were being refused loans because they were energetic and enterprising enough to go out and seek some outside employment on a seasonal basis. Well, hon. members know that only those whose principal occupation is farming are entitled in the first place to receive loans; but I understand that my hon. friend has a completely wrong impression. The board appreciates the fact that some farmers are able to supplement their incomes by seasonal or part-time employment and this is, in fact, considered a favourable feature to be taken into account when approving the loan. I can understand, however, that if one continued indefinitely in this non-farm employment and had a long record of nonfarming at the time of the application he would not be classified as a person whose principal occupation was farming. But working for a short period and working in seasonal employment off the farm is no bar to the making of loans.
I myself, Mr. Chairman, would like to make a correction on page 1324 of Hansard. I referred to the total of loans outstanding as amounting to about $106 million. What I intended to refer to was the total amount of loans made by the board to date, which in fact amounts to $108 million as of March 31, 1956. Hon. members know from the annual report that as of the end of the last fiscal year the loans outstanding were something in excess of $40 million, I think about $43 million, and as of the present time they are approximately $50 million.
I think I have answered the principal questions raised in the previous sitting of the committee.


Mr. Howe (Wellington-Huron):: Mr. Chairman, I should like to say a few words on this resolution which indicates that the government is going to make additional dollars available to the farmers of Canada so that they may receive loans to help in their farming operations.
This would indicate that the government is beginning to realize farming is in a critical condition. We have heard many figures quoted both inside and outside this house which reveal the squeeze in which the
Canadian Farm Loan Act farmers find themselves. When we realize that today only about 15 per cent of the total population is engaged in farming it is made apparent that something is wrong which is causing very many people to leave the farms. We know of many instances where young farmers have sought to establish themselves. I am thinking particularly of veterans who gave the best years of their lives for our protection and who returned eager to take up the vocation in which they were brought up and trained. They used their gratuities to start up farming and found that the income was not sufficient to enable them to meet the interest payments on their loans and their tax payments. Many of these young farmers remained on the farm and as the hon. member for Dufferin-Simcoe pointed out the other evening many of them have had to go out and take other employment in order to increase their income and assist in meeting their interest and tax payments.
We hear a great deal about marginal and submarginal farm land. Much of the land that is considered marginal and submarginal was good fertile land at one time but in the last few years farmers have not been able to earn enough income from their farming operations to enable them to buy machinery and put in the necessary fertilizers that would permit them to work the land properly. This serves to point out the need for credit being made readily available to farmers.
During the last few days briefs have been presented by two leading Canadian farm organizations both of which indicate that more credit should be made available to farmers and that it should be made easier for farmers to obtain credit. I should like to quote first from the brief presented by the Canadian Federation of Agriculture:
Agriculture in Canada has not contributed to inflationary tendencies but rather the low prices it has been experiencing in recent years have been one of the few anti-inflationary forces tending to hold down the cost of living. We are therefore asking the government, through the Bank of Canada and chartered banks, to remove the recently imposed credit restrictions as they may affect the farm industry and to reduce interest rates to the level in effect in 1955-until such time as agricultural prosperity reaches a level comparable to that of industry generally in Canada.
A similar request is contained in the submission of the interprovincial farm union council in these words:
Fifty per cent of the farms in Canada are undercapitalized and as a result receive low or subsistence incomes. The solution of the problem facing these units lies in increasing either their actual size or their total production. Either course will require increased capital. This capital will have to be provided in the form of long-term and intermediate credit at low interest rates. The credit advanced should be directed to the farmers

Canadian Farm Loan Act who need it. That is, particularly to those in the low-income group or to younger farmers who are commencing farm operations. It should be available for expansion in land or buildings and for purchase of livestock and equipment necessary to put the unit on an economic basis. Repayment rates must take into consideration the type of farm operation, and also natural hazards such as the weather, which may at times make it necessary to extend times or terms of repayment.
In view of the displacement that has been and still is taking place on our farms, we cannot emphasize too strongly the need for implementation of this credit policy, so that the present crop of potential farmers may not be lost to the industry.
In the same connection there is a recommendation in the 1956-57 submission of the Canadian Chamber of Commerce which reads:
.	.	. that the federal government review the
question of agricultural credit and debt legislation and institute uniform provision on a national basis.
All these submissions serve to indicate how important it is that sufficient credit be made available to farmers in order that they may continue their farming operations. I sincerely hope that through the medium of this bill the government is going to speed up the machinery through which loans are made. It was rather interesting to hear the statement made by the parliamentary assistant that the processing of the loans is being speeded up and that some of them are going through faster than was the case previously. However, the farmer like everybody else does not like to have to ask for credit and usually it is done as a last resort and if it is going to take too long a time in order to get the loans through it will often be the case that the loari will come through too late to relieve the farmer of his pressing financial difficulties. I am of the opinion that the regulations under which the loans are made could be eased considerably. In several cases that have been brought to my attention the farmer was told that if he paid off his liabilities to the bank or to the machinery company he would be granted a loan. How could he possibly do this without depleting his stock and thus decreasing the source of his income?
I feel there are many ways and means by which legislation could be enacted in order to make loans available to an increased number of farmers. Although many farmers will welcome this present legislation its effectiveness will be lost unless this government takes more effective steps to make it possible for Canadian farmers to make a profit on thefr operations. Of what value are loans if it is impossible for the recipients of the loans to make enough profit on their operations with which to repay the loan? I maintain that the farmer of Canada whose income has dropped below 8 per cent of the national average and who receives only approximately

46 per cent of the consumer dollar is entitled to more consideration than that which is accorded him in this resolution. I believe there should be an entirely new assessment of the agricultural picture in Canada in order that the Canadian farmer's position may be equalized with that of other segments of our economy and in order that he may share to a greater extent in the great boom we are enjoying.


Hazen Robert Argue: Mr. Chairman, I listened with a great deal of interest to the information given to the committee by the parliamentary assistant. I noted particularly his comments concerning the work that was done last year by the banking and commerce committee. I believe that the work done by that committee last year in considering the whole question of the Canadian farm loan board's operations is an example of a parliamentary committee functioning at its best.
The parliamentary assistant will recall that last year when the bill was placed before the committee and members of this group who served on the committee suggested that a full discussion should take place of the entire operations of the Canadian farm loan board our suggestion met with great resistance from members representing the Liberal party. We were told that unless the bill was passed by the committee before Easter the whole benefit flowing from the bill would be lost to the farmers. We learned, of course, that this was not the case. We found that nothing would be lost by delay and nothing would be lost by having a full inquiry made. As a matter of fact we learned that a great deal might be gained from such an inquiry and I think the information given to us this evening indicates that the committee did a reasonably good job last year and that since the committee met the Canadian farm loan board has paid a measure of attention to the opinions of members of the committee and that the government itself which is responsible for the operations of the board has in fact moved in the direction of the opinions expressed by the members of the committee.
I think all of us who heard Dr. E. C. Hope, the economist of the Canadian Federation of Agriculture, last year were impressed by him as a witness and by his knowledge of the whole field of farm credit. I think his presentation, along with the written presentation from the interprovincial farm union council and the presentations made by other witnesses, together with other comments made before the committee, went a long way toward achieving the result that has become apparent since that time.

I do not think the delay that has taken place in the processing of applications, or the delay that is taking place now, is fully justified. I wonder if the parliamentary assistant could tell the house whether or not it is necessary for all applications for a loan to go to Ottawa before they are finalized? I am wondering if the divisional offices, particularly in some areas some distance from Ottawa, have authority to decide applications and make loans on the spot? It would seem to me that the days involved in having applications sent to Ottawa for final approval, if that is still being done, and, I take it it is, constitute a delay which could be obviated. I am wondering if the parliamentary assistant could give us the benefit of the statistics regarding the length of time taken to process applications from parts of Canada other than Ontario. He has given us some statistics for Ontario. I do not know for certain, but I take it the chances are that an application from a farmer in Ontario would take, in the circumstances, a shorter period to deal with than an application from other parts of Canada. However, that may not be the case.


William Moore Benidickson: Why should it, with
airmail?


Hazen Robert Argue: All right. I will ask the parliamentary assistant this: What are the figures regarding the time taken to process applications for the country as a whole, rather than the time taken to process them for one province? I cannot see any reason why he should have confined that information to one province.


William Moore Benidickson: It was a simple matter of the amount of work involved. I said I was quite satisfied that Ontario was representative. In the committee last year we analysed the situation in every province, particularly in che hon. member's province of Saskatchewan, and I can assure him that Ontario was not selected for the sake of any advantage to the board. But the hon. member will understand that there is a great deal of extra work involved in analysing in this detail each individual file over the past ten months, and I thought this would satisfy the house that a great change has taken place.


Hazen Robert Argue: With the assurance of the parliamentary assistant that the figures he gave for Ontario are reasonably accurate for the country as a whole, or would indicate the approximate time taken to process applications from the rest of Canada, I will proceed. I am pleased to see that there has been some considerable speed-up in the processing
Canadian Farm Loan Act of these applications, and the parliamentary assistant is aware, I am sure, that that is a very important thing.
This is not just a question of asking an applicant to wait another 30 or 60 days before he gets his money. Very often if he is not able to obtain a loan within a reasonable length of time his opportunity to buy a particular piece of land may vanish. I know that whenever a piece of farm property that is a reasonably good "buy" comes up for sale a number of people are interested in making a purchase. If a farmer who has to obtain money from the Canadian farm loan board has to wait an undue length of time for the money, he runs the risk of losing the purchase entirely or of having the sale price of the land run up because of competition.
I was interested in the submissions made by the Interprovincial Farm Union Council and the Canadian Federation of Agriculture this year, to all the members of the House of Commons in one case and to the cabinet in the other, in so far as they dealt with the Canadian farm loan board. The Canadian Federation of Agriculture and the Interprovincial Farm Union Council asked for a general expansion of credit in this field. The Canadian Federation of Agriculture, as I read their brief, made a particularly strong representation to the cabinet that the time taken to process these applications be speeded up, and that certain other steps should be taken by the board to make loans more readily available. Their submission reads, in part, as follows:
The unanimous opinion of those of our members who have had occasion to deal with the board is that its appraisal and lending policy is unnecessarily cautious and conservative.
That is the presentation made by the Canadian Federation of Agriculture to the Prime Minister of Canada and to the members of his cabinet in Ottawa on February 15, 1957. That statement, that the board in its appraisal and lending policy is unnecessarily cautious and conservative, has been made in the light of a rather decided improvement in the board's operation. The submission goes on as follows:
The result is that the young man who looks to the board as a source of credit for getting established in farming finds that the amount which is available from the board is entirely inadequate for his purpose.
We would recommend a review and liberalization of the board's appraisal practices, and legislative provision for increasing the percentage of the appraised value that may be borrowed by farmers, especially where the amount of money borrowed is moderate.
Mr. Chairman, I do not want to modify any remarks I have made as to the improvement that has taken place in the last few

Canadian Farm Loan Act months. The federation of agriculture did not, apparently, give a great deal of weight to that improvement; rather, they made a presentation along the lines of that which they made last year, complaining that the policy of the board was unnecessarily cautious and conservative. They recommended a review, and liberalization of the board's appraisal practices.
The bill that went to the committee last year received somewhat full consideration from members of that committee and, as the parliamentary assistant said himself, the work of that committee has resulted in certain improvements. I wonder if the parliamentary assistant-the minister is beside him-is prepared to have the bill which will be brought down following the adoption of this resolution sent to an appropriate committee of this house as the other one was, that is, to the banking and commerce committee or the agriculture committee, for a further review of the operations of the board, particularly in the last few months since the committee met on the other bill?
It would seem to me in the light of the recommendations of the Canadian Federation of Agriculture that there should be a review of the board's general practices. I think at this stage it would be all to the good if the bill which is to be presented to this house could once more be referred to the agriculture committee so that members of that committee would again have the chance to question the board as to its operations and, which is of equal importance, to give representatives of the Canadian Federation of Agriculture and of the Interprovincial Farm Union Council an opportunity to appear before the committee and state their views as to the operation of this act. I wonder if consideration has been given to referring this bill to the committee on agriculture?


William Moore Benidickson: I do not think this is an appropriate session for such a reference to be made, particularly in view of the thoroughness of the consideration which was given to the matter last year. And, again, it is my understanding that for several weeks the chairman of the board would not be available. He is at present carrying out a tour of the various branches. I may say with regard to this matter of appraising, an appraiser has been engaged, and this, I think, will prove advantageous. I believe that this will result in better co-ordination and uniformity of appraising throughout the various sections of the country. Is my hon. friend through?


Hazen Robert Argue: Go ahead. I will come again.


William Moore Benidickson: Some members have
made some comparison of the terms of a farm loan with those of a loan that would be provided in an urban area for housebuilding.
I think this is comparing oranges with grapefruit in many respects, but there are some features of the farm loan board loan that are better than C.M.H.C. loans. For one thing, the rate of interest on urban housebuilding loans today is 6 per cent while the farm loan rate is 5 per cent. The maximum loan under the farm loan board is $15,000 and I am told that the limit under Central Mortgage and Housing Corporation practices in the case of a loan for a house for an urban dweller is $12,800. I think some of these factors are worth remembering.


Hazen Robert Argue: I wonder whether the government has considered the presentation of the federation of agriculture on the very matter to which the parliamentary assistant has now referred. They ask that the loan percentage be increased from the present limit of 65 per cent on a first mortgage to 90 per cent in certain instances. They have asked that there be a sliding scale ranging from 65 per cent to 90 per cent.
While the statement of the parliamentary assistant is correct as to the maximum amount of money that may be obtained under the National Housing Act being less than the maximum amount obtainable from the farm loan board, the fact remains, as the Canadian Federation of Agriculture has stated in its brief, that the percentage of the appraised value that may be obtained under the National Housing Act is considerably higher than the percentage that may be obtained through the Canadian farm loan board.


William Moore Benidickson: Not necessarily. I understand that on the first $8,000 of borrowing under a C.M.H.C. loan the limit of loan is only 70 per cent except for some of these limited dividend corporation loans and other multiple dwelling loans of that typb.


Hazen Robert Argue: I will not quarrel with the
parliamentary assistant because he is in a field where he is perhaps an authority and I am not, but I would think that the Canadian Federation of Agriculture would check their statements very carefully before making them. On page 6 of their brief they make this statement:
Under N.H.A. 90 per cent of appraised value is loaned in the amount of $8,000, and then the percentage falls by stages to 80 per cent for loans to $12,800, which is the maximum under that act.
If the Canadian Federation of Agriculture is in error in their presentation, then of course their case is not as good as is set out but it would seem to me that an economist of Dr. Hope's standing would have checked

these statements rather carefully for the federation before they were made to the government.


William Moore Benidickson: I will recheck between
now and the time the bill is before us, but that was the information I obtained today.


Hazen Robert Argue: With the present agricultural situation, with farmers in a rather desperate position throughout the country with respect to cash, and short of cash for purchasing land and transferring land from father to son, I think the government should give very careful consideration to the requests made by the Canadian Federation of Agriculture. Over the years the federation has earned the reputation of being very careful in the views it sets forth and a farm body that analyses conditions exhaustively before making a request to the government. Very often when the farmers themselves look at the requests made by the federation they feel that the organization has erred on the side of moderation if it has erred at all.
But in this case the federation has made very strong statements about the farm loan board and the operations of the act and has pointed out to the government that even with the improvements that have been made there is a good case for a review of the operations of the board and an increase in the percentage of the appraised value that may be obtained by way of a loan. The federation has also requested that the period of repayment be extended from 30 to 40 years.
When the bill went to the committee on agriculture last year in its initial stages the maximum period of repayment was 25 years but when the bill came out of the committee there was a recommendation that the 25 years be increased to 30 years. I think that an increase from 30 to 40 years in the maximum length of time in which a loan may be repaid is an excellent idea. It is one of the blots on our nation that the whole history of agriculture is that when a young man begins farming he assumes a very heavy obligation and generally speaking when he finally clears his farm properties of debt he has reached retirement age. If the farmer is given a longer period of time to repay his obligation, then the amount of repayment in each year is of course reduced and the chances of the farmer meeting his payments are increased.


William Moore Benidickson: The amount of interest he pays is greater.


Hazen Robert Argue: Yes, of course, but I think the farmer himself is the best judge of how quickly he can repay such an obligation and of the amount by way of obligation that he should agree legally to pay each year. I do not think that extension of the length of time
Canadian Farm Loan Act over which a loan would be repaid would in any way, shape or form add to the risk involved to the government. I do not think it would reduce in any way the total amount of money that is repaid. I do not think the losses would be increased. They are very small now. I think such a measure would in fact create better security than there now is.
I have a further question to put to the parliamentary assistant having to do with the interest rates that the board has to pay to the government and the rates that the board is likely to be charging in the months ahead. Is the parliamentary assistant in a position to assure the committee that the cost of money to the board itself will not be increased and, more particularly and of greater importance, that the interest cost of loans to farmers will not be increased? The whole general strengthening and increasing of interest rates has placed a very heavy burden on many ordinary citizens and, goodness knows, the farmers are having enough difficulties now. I hope that at least in this credit field the assurance will be given that there will be no increase in the interest rates charged by the Canadian farm loan board.


William Moore Benidickson: I too have not got a crystal ball. My hon. friend endeavoured to get an assurance of that kind last year in the committee. I can simply tell him that the same rate of interest is being charged the borrower as was charged last year when we were considering farm loans. It is true that in the interval the cost of money to the board has gone up because the cost of money to the government has gone up. I think that on the last borrowing of the board from the Minister of Finance the charge was 4 per cent.


Mr. Stanton:: Mr. Chairman, I should like to make a few remarks based on my observations of the workings of the farm loan board in my own constituency.
It seems to me that when a person makes application for a loan on a farm the board should encourage him in some instances perhaps to work in industry or in some other line of employment in order that he may be able to get himself a start on equipping his farm with livestock, machinery, et cetera.
I notice that the parliamentary assistant made a statement to the effect that they can at times get other employment but not too much. I think that on certain occasions they could and should encourage an applicant to earn more money off his farm. If he is willing to work long hours, to do a certain amount of his farm work before the eight-hour day starts in the morning and after it finishes at night in order to earn for himself that much needed cash, he should be encouraged in so doing.

Canadian Farm Loan Act
I think that sometimes in the past loans have been turned down-indeed I know this to be a fact-because the person making application for the loan did not have sufficient income from his farm. I know that in my own constituency applications have been disallowed just because the person making the application did not have sufficient income. The reason he was making that application was to increase his stock and to put his buildings in better shape so that he could increase his income in the years to come. I think that fact should be given more consideration than it is being given at the present time. Many farmers make applications for a loan for the specific purpose of increasing their revenue. Sometimes there has been delay in the processing of the loan. In one specific instance I know that everything seemed to be in order and the loan was accepted but it took over a year for that loan to be processed. That seems to be an unreasonable time. In many instances where there is undue delay perhaps the applicant would lose the opportunity of purchasing the property.
I would say here, Mr. Chairman, that I believe that the percentage of the valuation of the said property with regard to which a loan may be made should be raised to at least 75 per cent. We know that in several instances the appraiser has put an extremely low valuation on farms. I know that to be the case in respect of farms with which I am well acquainted. I know that the appraised value has been much below the actual value. It has even been below the assessed value of the said farms. I do not believe it would be unreasonable to expect the farm loan board to accept a mortgage up to 75 per cent of the valuation. When we take into consideration the percentage with respect to loans through the Central Mortgage and Housing Corporation we cannot help but realize that it is no wonder that farmers are indignant when their applications for loans are disallowed. Perhaps the government or the board thinks that the farmer's income is not sufficient to justify allowing any more than 65 per cent of the total valuation of the farm. If that is the case, Mr. Chairman, there is something wrong with agriculture. If that is the case, the government should put forth a greater effort than they have put forth in the past to increase the farmer's net income.
Another thing I should like to know is how many applications have been disallowed. I have that question on the order paper at the present time. If we had that information, I believe it would give us a fair idea as to the eligibility and the efforts put forth by the farm loan board to service farmers,

especially young farmers who are anxious to get started and who are trying hard to set up a farm for themselves. It would give us an idea of how the farm loan board are trying to help them in their difficulties; and believe me, Mr. Chairman, the difficulties are many at the present time.
I can well remember the time, not so many years ago, when there was no trouble in getting a person to take a mortgage on a farm. In fact, people were looking for farm mortgages. But at the present time that money has completely dried up. The people of the country are placing their money in government bonds, stocks and elsewhere. There is only one salvation for the younger generation now and that is for the government to be more generous in lending money in order that these boys may be able adequately to stock and equip the farm for future years.
As to the time limit of 40 years given for payment of the mortgage, perhaps that is all right. I will not say too much about that matter. But if it is going to take a person that length of time to pay off a farm loan, perhaps it would be better if he entered some other occupation in order to make a living. When a man is 40 years paying off a mortgage, he is ready for the old age pension before he sees that mortgage discharged. I believe that the government should be more generous, percentagewise, with respect to the loans they advance to those expecting to start in farming or to those who are trying to place their farm in a condition in which it will be more remunerative having regard to the revenues which they hope to receive in future years.


Mr. Quelch:: Mr. Chairman, I have no intention of speaking again. I merely want to follow up a question I asked previously and the answer that the minister gave. I think the parliamentary assistant stated that only 16 per cent of the applicants were required to make out chattel mortgages.


William Moore Benidickson: And it is declining.


Victor Quelch: In view of the statement made by the federation of agriculture that the appraisal and lending policy is unnecessarily cautious and conservative and keeping in mind the fact that the loans are given only up to 65 per cent of that conservative appraisal, it is extremely hard to understand why in any case at all the farmer should be required to fill in a chattel mortgage. I think the minister must appreciate the fact that in times like those we have today, where money is extremely short and farmers are having great difficulty in carrying, it is loading them down with an unnecessary difficulty to force them to sign a chattel mortgage. That

Canadian Farm Loan Act
means that when they go to the bank they are going to find it extremely hard to get a loan or credit. As soon as the bank asks the farmer what his financial standing is and he discloses the fact that not only is the land mortgaged but that his chattels are mortgaged as well, I should imagine that his chance of getting a loan would indeed be very slim. Whilst I am glad to hear the minister say that the practice is declining I hope that in a very short time he will be able to say that the practice is no longer being carried out.


William Moore Benidickson: One of the reasons it is
declining is that, as my hon. friend will recall, last year in our amendments we abolished the provision for second mortgages. Under the statutes which related to second mortgages it was obligatory that with the second mortgage they also obtain a chattel mortgage.


Mr. Montgomery:: I do not intend to take
very much time, Mr. Chairman, but I would not like the parliamentary assistant to get the impression that because the members from the maritimes have not been complaining everything is satisfactory. On page 153 of Hansard for this year you will find that I drew attention to some of the complaints which I have in connection with this act. These complaints seem to be quite general, so I am not going to be repetitious. However, it does seem to me that the farmers with whom I have been in consultation have complained that their applications have not been dealt with very generously.
There must be a principle which the government has laid down in a regulation by means of which everybody is treated alike in so far as their farming ability is concerned. Anyone who is familiar with farmers will admit that there are times when one man will make a success in the same area and on the same farm, when another man may become a failure. I have no patience with those farmers who make applications for the sake of selling their farms to the board. I am not complaining on behalf of this type of applicant. I do not complain about the officials of the board. I have consulted the manager of the farm loan operation in my province, and I think he is an outstanding banker. It appears to me that he is going to make sure there are going to be no losses, and that is good business practice. It seems to me the fault lies back here at headquarters. The government must realize that this is only one of the complaints, one of the things which is hindering many young men who could be successful farmers. It is true, as the hori. member who just sat down mentioned, that there are many farming who
should not be farming. However, we have many young men in my province who have been brought up on the farm and I am prepared to say they would make successful farmers if they could get a certain amount of generous long term credit.
I have one case in mind which I am riot going to repeat because mention of it can be found in Hansard now. I feel it was ridiculous to turn down that farmer's application. It was a case either of local prejudice on the part of the appraiser or of not understanding the area, the family or the man's reputation. When these men' make an application and are turned down, when they are offered less than half the amount applied for on a farm that is worth twice as much on the market today as the loan for which they applied, is it not a ridiculous situation? I feel that this whole system of farm credit must be given a second look by the government. I do riot think we should complain about the officials who are administering the act. They are expected to show no losses, so they take no chances.
In my area where most of the men are potato growers-the same thing applies to grain, hay or dairy farming to some extent- you cannot get along with 100 acres of land. If a man is going to carry on successfully with the modern machinery that is required for farming, he must have from 300 to 400 acres of land, some of which is going to be in bush. In order to obtain that amount of land he has to get credit. As one hon. member speaking the other day said, since the government has gone into the lending business, individuals have stopped lending money. Individuals can put their money in stocks or bonds, just cut their coupons and feel much better about it than if they were to put their money in a long-term investment in a farm.
In so far as the suggestion to extend the time to 40 years is concerned, I am neutral. A year ago when the act was being considered, I supported the 30 year limit. I did so because the farmers with whom I had consulted in my province did not seem to want a loan for more than 30 years. Most of the good, reliable citizens in New Brunswick realize that if they cannot pay off a loan in 25 years they had better get out of the business. So far as we in New Brunswick are concerned I do not believe we would be asking for a longer term. What we do request is a more generous appraisal and a more sympathetic hearing of the application. I think 65 per cent, with the conservative appraisals that seem to be made, is not enough.
After looking over the report for 1956 I should like to ask the parliamentary assistant


Mr. Johnson (Kindersley):: Mr. Chairman, I must apologize to the parliamentary assistant for stepping out for a moment when he was answering my question. I wonder whether I can get further clarification on the point relating to getting a loan when there are no buildings on the farm. As I understand it, the parliamentary assistant said that if they give a chattel mortgage on their property in the town or village they are able to get a loan under the Canadian farm loan board regulations.


William Moore Benidickson: That is what I said because my hon. friend referred to the possibility of there being a farm that had no buildings on it.


Willis Merwyn (Merv) Johnson: They would require that only if the farm in itself was insufficient security for the Canadian farm loan board mortgage? Is that right, or must they have it on the property in the town on all occasions?


William Moore Benidickson: No; I think what I had reference to were my hon. friend's own words when we were last in committee, because he was referring to an illustration where conceivably there would be a farm that had no dwelling or buildings on it. Well, that kind of farm would not be eligible for a farm loan; but I said, if the farmer who was living in the village was prepared to secure his residence with the land then he would be entitled to a farm loan just as much as a self-contained farm.


Willis Merwyn (Merv) Johnson: They must have a mortgage on the buildings somewhere. The fact that the farmer does not live on the farm would not be a disqualification?


William Moore Benidickson: Not in itself.


Willis Merwyn (Merv) Johnson: There is one other feature that I would like to deal with for a moment and to get some information on from the parliamentary assistant. It relates to the statement made in the presentation of the Canadian Federation of Agriculture on farm credit, where it states:
The unanimous opinion of those of our members who have had occasion to deal with the board is that its appraisal and lending policy is unnecessarily cautious and conservative.
I am interested in knowing what action the government is proposing to take to meet that criticism. I think it is a valid criticism because I have a case which I would like to refer to briefly to illustrate the point. It is the case of a farmer who has a half section of land and who applied for a loan of $5,500 to purchase an additional quarter section of land on the same section. Now, that would mean that the security offered would be three quarter-sections of land with 419 acres in cultivation. This works out to just a little over $10 an acre, but he was turned down by the farm loan board because they said the applicant lived 20 miles away from the farm, which is not correct. The farmer does move into the town of Leader during the winter in order to educate his family and have his wife closer to medical services, but he does farm there in the summer. His application was turned down because, as they said, the farm is located in a district very subject to drought, with a crop

Canadian Farm Loan Act
average of 19.5 bushels. It is in that area and the farmer is going to need that additional quarter-section of land in order to survive. It is therefore related very closely to this conservative lending policy. The board is unwilling to take a gamble, even though the farmer farming that half section is taking a much bigger gamble. They said that the soil was very light with drifting occurring in the area. Drifting occurs in a lot of the land, but must this farmer be denied the opportunity of expanding his holdings to three quarter-sections because the board feels that it is not gilt-plated security for the loan? I do not think myself that there is much risk involved. In fact, this farmer stated that the local credit union was prepared to lend him $5,500 on that quarter-section but their interest rate was not as low as the rate of the Canadian farm loan board. Indeed, they are not set up for that purpose so he was unable to get his loan.
I would like the parliamentary assistant to give some assurance that this whole lending policy is going to be more liberalized to help farmers in precisely this circumstance so that farmers will be able to obtain loans to purchase the quarter-section they would like to purchase rather than run the risk of having their neighbours buy the quarter-sections of land, thereby denying them the opportunity of expanding in the future. The board should consider this and grant him the loan and I think he would have a good chance of succeeding. Can the parliamentary assistant give me some information on that?


William Moore Benidickson: I cannot debate with my hon. friend the justification on the part of the board for its loan policy with respect to any particular farm. My hon. friend has some information there. The board operates independently of the Department of Finance and unless my hon. friend came to me and I had the opportunity of going with him to the board or something of that kind, so that we were equally familiar with the facts, I could not possibly discuss an individual case.
While he was out I did say that in order to get uniformity in appraisals and co-ordination across the country an appraiser has been appointed, and I think that is a very meritorious step.
Now, with respect to being more generous, we all have short memories. As recently as 1952 the maximum loan provided under this act was only $5,000. It has been raised to $15,000. The maximum percentage for appraisal in 1952 was 50 per cent; it is now 65 per cent. Therefore, none of us must forget that there have been very substantial improvements in enlarging the opportunities for lending under this statute.


Mr. White (Middlesex East):: There were one or two questions I wanted to ask. The hon. member for Leeds also put a question that I wanted to ask. I wanted to know how many applications to the Canadian farm loan board in the year 1956 have been disallowed or refused. Then, I wondered whether the parliamentary assistant had any figures that would indicate to the committee the percentage of loans that are now held by lending institutions and individuals in Canada and the percentage held by the Canadian farm loan board as compared with other lending institutions? I wondered whether any consideration has been given to the possibility of exercising some supervision over the loans that are granted, similar to the plan followed by the Veterans' Land Act. I think that the supervision exercised there, while it may have been costly, was well received by those veterans who purchased land under the Veterans' Land Act. It worked to the advantage not only of the Veterans' Land Act but of those who had borrowed money, and I think the farming operations carried on by those individuals would indicate that it was a fairly successful operation.


William Moore Benidickson: Mr. Chairman, the hon. member for Leeds indicated that he had a question on the order paper respecting the number of loans that may have been rejected, and I will see that the answer is speeded up. If the hon. member for Vic-toria-Carleton wants similar information, why, of course that can be provided in a similar manner.
I have no information as to the relationship of the volume of loans of the Canadian farm loan board with those of private sources, but I have no doubt again that information can be obtained by my hon. friend by a question on the order paper directed to the dominion bureau of statistics.


John Alpheus Charlton: Mr. Chairman, the parliamentary assistant has stressed the fact that these loans have been increased from $5,000 to $15,000 since 1952 and that the percentage of loans on valuation has been increased from 50 per cent to 65 per cent. I wonder if he realizes that that means very little. It all depends on the appraiser who is placing a valuation on the farm. The loan might be greater on the basis of 50 per cent of valuation than it would be on the basis of 65 per cent so it might just as well have been left at 50 per cent if the appraisers are going to be told to be more strict in their appraisals than they were previously. That part of it really does not mean anything.
The proof of the inadequacy of the Canadian farm loan board is that young people

Canadian Farm Loan Act are leaving the farms by the thousands and they cannot get sufficient loans to start farming. As the parliamentary assistant realizes it takes at least $15,000 now to start operations on a farm of any reasonable size.
I want to ask the parliamentary assistant one question. Since second mortgage loans are not now allowed and since a chattel mortgage was obligatory on a second mortgage loan, in how many cases now does the board demand a chattel mortgage when making a first mortgage loan?


William Moore Benidickson: I said that for the period of the first ten months of the current year approximately 16 per cent of the loans had chattel mortgage security as well, and I said that the requirements and requests for chattel mortgages are steadily declining.


John Alpheus Charlton: For what particular reason would the board ask for a chattel mortgage?


William Moore Benidickson: My hon. friend may not have been in the house when I gave an illustration. However, I gave as an instance a fruit farm in British Columbia where irrigation and irrigation equipment were essential to the success of the operation. Without the investment in an irrigation system that farm would not have been productive. That was a substantial investment and equity on the part of the farmer.


John Alpheus Charlton: Yes, but you wanted the extra security and there was the fact that the irrigation equipment was so valuable and it was necessary for the farmer to have it in order to farm economically. I know of cases where farmers have refused similar loans for the very reason that they did not want to be tied down with a chattel mortgage. The parliamentary assistant knows very well that if a farmer permits himself to be tied down with a chattel mortgage he is cut off from receiving credit at the bank or any place else and he just cannot borrow additional money. It serves to tie him down so tightly that if he gets into a little jam and wants to go to the bank to borrow $200 or $300 he simply cannot get it. I think there must be a more adequate reason than the one given by the parliamentary assistant to the effect that the equipment was necessary.


William Moore Benidickson: I think generally the farmer does receive a little more money with a chattel mortgage.


John Alpheus Charlton: I know of a case in my own district where on a 180-acre farm with two sets of buildings on it the farmer was recently refused a loan for a nominal figure without a chattel mortgage being taken on all the livestock and equipment, so it is not


always the case that an additional loan is needed for special equipment or something of that nature.


Mr. Bryson:: Mr. Chairman, I was interested in hearing the parliamentary assistant earlier this evening refer to the lapse in time from the period when the appraisal was made until the loan was completely processed. I think the parliamentary assistant will appreciate the importance of that time lapse particularly in western Canada. I shall be interested to see the figures he will present later on in this debate regarding the time lapse in Canada generally.


William Moore Benidickson: I have put some representative figures on Hansard which my hon. friend can examine more carefully tomorrow. It does seem to me, however, that the so-called time delay is not often due to anything that the officials of the board can prevent. There are so many matters in connection with a mortgage that have to be attended to by others and in the majority of cases I think any lack of expedition is probably in those several other sources. I can think of land title certificates from solicitors. I can think of creditors who are asked to confirm certain debts and I can also think of the transfer of insurance. All of these things have to be done by other people who may be guilty of procrastination. Of course there is a certain element of time from the point of view of the time when the application is made and the completion and approval of the loan by the board.


Hugh Alexander Bryson: Yes, but is it not a fact that there is a long period in the winter when appraisals are not made at all? That was the aspect of delay to which I had reference. These things are particularly important in western Canada in relation to the smaller farmers who are endeavouring to enlarge their operations to make them more economical. The smaller farmers have no source of credit other than the Canadian farm loan board and in many cases the result is simply that the larger farmers who have sources other than the Canadian farm loan board are able to obtain credit quicker and frequently they are able to buy up lands which otherwise would be made available to smaller farmers to expand their operations had the board approved their loans.
In that connection I am wondering if the government is giving consideration to taking advantage of the very comprehensive soil maps that are available in some parts of western Canada. I am thinking particularly of Saskatchewan where we have extremely

comprehensive soil maps giving all the detailed information that would be necessary. If use were made of these maps it would possibly eliminate the waiting period in the winter months.
Mr. Chairman, may I call it ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, tomorrow we shall take the second reading of the Municipal Grants Act and then, when carried, it will be sent to the banking and commerce committee. We shall then continue with the present debate, and then take the amendment to the Exchequer Court Act and the resolution in the name of the Minister of Northern Affairs and National Resources; then the second reading of the bill to amend the Prairie Farm Assistance Act which I understand will go to the agriculture committee, if I recall yesterday's debate correctly; then
Business of the House we shall take supply, that is the estimates of the Minister of Northern Affairs and National Resources.


Howard Charles Green: Mr. Speaker, may I point out to the minister that copies of the Municipal Grants Act have not yet been distributed.


Walter Edward Harris: Well, I think the intelligence of my hon. friends opposite together with the knowledge concerning municipal grants which they revealed today is so great that there will not be any difficulty tomorrow.


Howard Charles Green: That depends on how soon we get the bill. We certainly cannot debate the bill until we have seen it and have had an opportunity to study it.


Walter Edward Harris: I have a great deal of faith in you.


An hon. Member:: May we quote you?


John Alpheus Charlton: Why don't you prove it?


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
82715-98$
[Stage Direction]
Questions

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

Mr. Michener: How many men and women employed by the Department of Veterans Affairs are not veterans?
Answer by: Mr. Bennett, Parliamentary Assistant, for the Minister of Veterans Affairs:
Return at January 31, 1957:
Men Women
Department of Veterans
Affairs	
743	4,786Canadian pension commission	
9	196


TRANS-CANADA PIPE LINES-DELIVERY OF GAS EAST OF MANITOBA
Mrs. Fairclough: 1.	What contracts have been signed for delivery of gas by Trans-Canada Pipe Lines to municipalities east of the Manitoba-Ontario border?
2.	What were the dates of these contracts and with whom were they completed (a) municipal councils: (b) distributing companies serving municipalities?
Answer by: Hon. George C. Marler (Minister
of Transport):
1 and 2. Counsel for Trans-Canada Pipe Lines Limited, in response to a request of the Board of Transport Commissioners for Canada for information with regard to all gas sales contracts, filed with the board on November 21, 1956, six gas sales contracts, those providing for delivery of gas by Trans-Canada Pipe Lines Limited in municipalities east of the Manitoba-Ontario border being the following:
Trans-Canada Pipe Lines Limited and Northern Ontario Natural Gas Co., dated June 12, 1956;
Trans-Canada Pipe Lines Limited and Northern Ontario Natural Gas Co., dated June 21, 1956;
Trans-Canada	Pipe	Lines	Limited	and
Consumers Gas Co. of Toronto, dated October 5, 1956;
Trans-Canada	Pipe	Lines	Limited	and
Quebec Natural Gas Corporation, dated March 26, 1956;
Trans-Canada	Pipe	Lines	Limited	and
Union Gas Company of Canada Ltd., dated June 5, 1956.


EXPERIMENTAL FARM, NAPPAN, N.S.
Mr. Lusby: 1.	What is the approximate total acreage of the dominion experimental farm at Nappan, Cumberland county, Nova Scotia?
2.	Of this acreage, approximately how much is (a) marshland; (b) cleared upland; (c) woodland?
3.	What is the total number of buildings of all kinds on the farm?
4.	What is the present number of permanent employees?
5.	What was the total number of seasonal employees during the calendar year 1956?
6.	What was the aggregate amount of the payroll during the calendar year 1956?
Answer by:	Right Hon. J. G. Gardiner
(Minister of Agriculture):
1.	564.
2.	(a) 149; (b) 319; (c) 96.
3.	40.
4.	46.
5.	16.
6.	$169,025.99.


PRODUCTION AND EXPORTS
Mr. Smith (Battle River-Camrose): 1.	How many hogs were raised in each of the ten provinces of Canada, during the years 1953, 1954, 1955 and 1956?
2.	How many hogs were exported from the province of Alberta, for each of the above mentioned years?
3.	How many hogs from Alberta were exported to each of the other nine provinces, for the years 1953, 1954, 1955 and 1956?
Answer by: Right Hon. J. G. Gardiner (Minister of Agriculture):

Questions
1. The number of hogs raised in each of the ten provinces of Canada is not available. The following tabulation gives the commercial marketings of hogs by province of origin:
Hog Gradings by Province of Origin
1953	1954	1955	1956British Columbia 	. . . 39,358	31,673	40,705	42,088Alberta 	. . . 1,432,438	1,461,770	1,685,887	1,571,836Saskatchewan 	. . . 419,888	421,346	562,359	576,804Manitoba 	. . . 321,104	335,152	435,507	387,9082,212,788	2,249,941	2,724,458	2,578,636Ontario 	.. . 1,843,207	1,786,738	1,997,314	2,196,306Quebec 	. . . 810,066	898,469	1,057,219	1,060,090New Brunswick 	... 38,113	40,576	38,015	38,409Nova Scotia 	20,950	17,812	15,763Prince Edward Island ...	.. . 77,607	82,041	81,766	70,4012,790,026	2,828,774	3,192,126	3,380,969Canada 	5,078,715	5,916,584	5,959,6052.	Exports (to other countries) of Hogs from Alberta1953 	
12,5901954 	
14,4711955 	
5,3061956 	
nil3. Market Receipts	of Alberta	Hogs in Other	Provinces	Receiving Province	1953	1954	1955	1956British Columbia 	293,383	300,591	331,058	317,187Saskatchewan 	7,084	6,848	9,500	10,445Manitoba 	73,771	74,246	66,148	57,746Ontario 	7,554	9,663	26,125	7,643Quebec 	13,417	7,871	13,524	12,694Total 	395,209	399,219	446,355	405,715


TRANS-CANADA HIGHWAY, ONTARIO
Mr. Nixon: 1.	Under the Trans-Canada Highway Act did the government of Ontario sign an agreement to complete the trans-Canada highway in Ontario by December 9, 1956?
2.	What percentage of the highway was completed by the government of Ontario by the agreed date?
3.	Has the government of Ontario signed a new agreement with the federal government setting a new completion date?
4.	If so, when was the agreement signed and what completion date is specified?
Answer by:	Mr. Bourgel, Parliamentary
Assistant, for the Minister of Public Works:
1.	Yes.
2.	By December 9, 1956, 63 per cent or approximately 900 miles of paved highway were completed, of which 453 miles of grading and 390 miles of pavement were completed under the trans-Canada highway agreement.
3.	Yes.
4.	The agreement was signed on July 27, 1956, and the completion date specified is December 31, 1960.


LOBSTER FISHING, NOVA SCOTIA
[Stage Direction]
Question 162-Mr. Lusby:
1.	How many lobster fishing licences were issued in Cumberland county, Nova Scotia, in the calendar year 1956?
2.	What was (a) the total weight; (b) the total value, of the catch of lobsters landed in Cumberland county in that year?
Answer by: Mr. MacNaught, Parliamentary Assistant, for the Minister of Fisheries:
1.	348.
2.	(a) 1,418,900 pounds.
(b) $400,128.
[Stage Direction]
Friday, February 22, 1957