1957-02-25

PIPE LINES


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, on February 19 I answered several questions on the subject of stock options for senior officials of Trans-Canada Pipe Lines. I now find that my memory was at fault, and that in fact, when the government entered into the agreement on May 8, 1956, copy of which was tabled in the house on May 9, I was aware of the fact that there were options outstanding.
I apologize for having inadvertently misled the house, but in fact hon. members have had the document referring to the options available to them since May 9, 1956. However, I should add that I am still of the view that there is nothing improper in the directors of Trans-Canada having granted stock options to certain of the corporation's employees and officers, upon whom in large measure the success of the enterprise has depended and will depend.


Mr. Howard C. Green (Vancouver-Quadra):: May I ask the Minister of Trade and Commerce when the options were exercised by Mr. Tanner and Mr. Coates?


Clarence Decatur Howe: I cannot say, Mr. Speaker. All I know is that when the prospectus was issued on the sale of the shares, the prospectus indicated that the options had been exercised. I have no knowledge of when they were exercised.


Howard Charles Green: Can the minister get that information and give it to the house?


Clarence Decatur Howe: It is private information of the company. I can ask for it. Whether or not I get it will depend on whether or not the company wants to give it. It is not information in the possession of the government.



IMMIGRATION


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: I wonder if I could make a very brief statement on Hungarian student refugees in Canada. Hon.
members may have noted in the press this morning that the board of governors of McGill University, acting in co-operation with the government of Canada and the national conference of Canadian universities, have made available a hostel for Hungarian student refugees until August 15, 1957, at which time these buildings will be required for academic use.
Details of the scheme, worked out by a small committee under the chairmanship of Senator Hartland Molson, were announced by Principal James on Saturday and, as I say, appeared in the morning papers. The hostel will provide accommodation for about 140 Hungarian students during the early part of their stay in Canada. The government has co-operated by helping with a loan of furnishings through the Department of National Defence and by providing for the subsistence of the students until May 31 or any earlier date on which they may accept employment. Dr. E. Clifford Knowles, chaplain and student counsellor at McGill University, is in direct charge of the project, and Mrs. Frederick Smith, who has been appointed by the national conference of Canadian universities as its liaison officer with newly arrived Hungarian refugee students, is working in collaboration with him.
Most of the Hungarian students, when they arrive in Canada, do not speak either English or French and are unfamiliar with Canadian measurements and standards. They are ignorant also of Canadian education practices. The principal of McGill indicated that while these students are in residence at Petofi house, which is the name McGill has given to this hostel, they will be given the opportunity to take intensive courses in English and French. As soon as they have acquired some knowledge of one or the other of the official languages, the Hungarian students will be provided with information regarding the various Canadian universities, so that they can make their choice and may apply for admission at the beginning of the next regular session in the autumn of 1957. Meanwhile, residence on the campus of McGill University will offer them an introduction to Canadian university life and an opportunity to establish contact with Canadian students.
As the hostel at McGill will accommodate 140 students and it is anticipated that in the very near future there will be approximately an additional 200 Hungarian students in Canada for whom accommodation has not yet been arranged, I am very hopeful-I should

Proposed Legislation
like all hon. members who represent university towns to note this-that other universities will be able to follow the example of McGill and, I might add, the examples of Toronto and the University of British Columbia and improvise temporary accommodation so these students may have an opportunity between now and the end of May of learning enough English or French to enable them to take employment of a character which should give them a real chance to continue their studies in our universities next autumn



MERCHANT SEAMEN COMPENSATION ACT


Hon. W. E. Harris (for ihe Minister of Labour) moved: for leave to introduce Bill No. 178, to amend the Merchant Seamen Compensation Act.


Howard Charles Green: Could we have an explanation?


Walter Edward Harris: As I think the house knows, the Minister of Labour has for some time been contemplating changes in the benefits and administrative provisions of this act, and this is a bill for that purpose.
Motion agreed to and bill read the first time.



PRAIRIE GRAIN PRODUCERS INTERIM FINANCING


Clarence Decatur Howe: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Prairie Grain Producers Interim Financing Act, 1956, to enable the governor in council to extend the application of the act to authorize and govern guaranteed loans that may be made by banks in the period October 1, 1957 to June 1, 1958; to provide that the rate of interest charged by the banks on a loan shall not exceed a rate prescribed by the governor in council; and to increase the maximum amount of a loan from fifteen hundred dollars to three thousand dollars.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order:
The Prime Minister-the following proposed motion:-That a select committee to be designated be appointed to consider such of the estimates as may be referred to it and to report from time to time its findings and recommendations to the house, and that the provisions of standing order 67(1) limiting the number of members on special committees be suspended in relation thereto.
[Mr. Pickersgill.l
Mr. SI. Laurent (Quebec Easl):: Stand.


Mr. Speaker:: May I perhaps state that this order under "government notices of motions", which is a motion in the name of the Prime Minister, should under our new rules be simply transferred to government orders.
Do I understand that this notice is to be transferred to government orders?


Mr. St. Laurent (Quebec East):: There is no objection to it being transferred to government orders. Since this is private members' day, we did not want to take up the time reserved for private members in discussing the motion at this moment.


Mr. Speaker:: Order. According to the rules, the motion appearing in the name of the Prime Minister under "government notices of motions" will be transferred to government orders.



TRANS-CANADA PIPE LINES ALLEGED MISLEADING OF PARLIAMENT    MOTION FOR ADJOURNMENT UNDER STANDING ORDER 26

Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise to ask leave to move the adjournment of the house under standing order 26. When I send to you, as I will in a moment, a copy of my motion Your Honour will notice that I have crossed out certain lines of the motion as I had drafted it before the house convened today. These lines have been crossed out in view of the apology the Minister of Trade and Commerce made to the house a few minutes ago. My amended motion reads as follows:
Mr. Speaker, I ask leave, seconded by the hon. member for Assiniboia (Mr. Argue), to move the adjournment of the house under standing order 26, for the purpose of discussing a definite matter of urgent public importance, namely, the fact that the Minister of Trade and Commerce, on behalf of Her Majesty in right of Canada, signed an agreement dated May 8, 1956, which was also signed by Mr. N. E. Tanner and Mr. C. S. Coates, who along with Mr. R. J. Wallace declared that they were all the persons who at that time held options to purchase shares in Trans-Canada and made certain pledges to Her Majesty in right of Canada with reference to their options, making it clear that the minister must have been aware of such options, and hence the need for this house to give consideration to the way in which parliament and the country have been misled by not being informed as to the extent to which there would be private gain as a result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury.


Mr. Speaker:: Has the hon. gentleman leave to move the adjournment of the house for the purpose set out in his motion?


Walter Edward Harris: No.


Mr. Speaker:: Those who support the motion will please rise.
And more than 20 members having risen.


Mr. Speaker:: Since more than 20 members have risen, the motion will be allowed for debate.
Mr. Knov/les: Mr. Speaker, I wish at the outset to say, as I implied in my introductory remarks a few moments ago, that we accept the apology of the Minister of Trade and Commerce for his misstatement which he now finds he made to the house last Tuesday afternoon. Perhaps he will not mind if even as one who accepts that apology I put on the record the facts which underlie the need in our view for having this matter discussed at this time.
Last Tuesday, February 19, as reported at pages 1417 and 1418 of Hansard, questions were asked relating to news reports to the effect that two gentlemen, Mr. N. E. Tanner and Mr. C. S. Coates, had made rather substantial gains from exercising their options to purchase shares of Trans-Canada Pipe Lines stock. My colleague the hon. member for Nanaimo (Mr. Cameron) asked this question:
Was the government aware that these gentlemen had options on blocks of stock at the time the government undertook the agreements to help to finance the company?
The reply made on that occasion by the Minister of Trade and Commerce (Mr. Howe), which he now admits was in error, was in these words:
No, Mr. Speaker, I was not aware of it and I doubt if the options were outstanding at that time.
There may be some connection between the minister's statement to the house today and the fact that for several days following that statement of his on February 19 I endeavoured to get to the bottom of this matter and to find out what the facts really were. I consulted sessional paper No. 174-P which was tabled by the minister's parliamentary assistant last year during the course of the pipe line debate and I ascertained that at the time the agreements were made between the government and Trans-Canada Pipe Lines Limited with respect to financial assistance to that company there were certain undertakings both ways. The government undertook to make a certain sum of money available to the company as a loan toward the building of the western leg of the pipe line. The company undertook to build that western leg by December 31, 1956, and it also undertook to repay the loan by April 2, 1957. In addition to those undertakings there was a five party agreement relating to the shares of Trans-Canada Pipe Lines Limited and
Trans-Canada Pipe Lines also relating to the options to purchase shares which were then outstanding.
I do not need to argue the point that they were then outstanding because despite the statement made by the Minister of Trade and Commerce last Tuesday he has now admitted that they were outstanding. Nevertheless I think the record should be made complete in this regard. The five party agreement that was signed at the same time as the agreement providing for the $80 million loan had to do with certain pledges regarding the shares and the options which the shareholders and the optionees made to the government. The shareholders agreed, by the terms of the agreement of May 8, 1956, to place all the shares which they then held

they appear to add up to 1,928,183- in escrow with the deputy minister of finance. The deputy minister of finance was given the authority by this agreement to hold those shares as security for the loan made by the government. Incidentally the agreement respecting the placing of those shares in escrow was signed by all the shareholders. Those signatures, so I understand through channels that are appropriately open to a member of parliament, in some instances were made by the shareholders themselves and in some instances they were made by attorneys signing on behalf of the shareholders.
We were all aware of that last year; we were all aware of the fact that all the shares then outstanding were placed in escrow. But something else was done at the same time and despite my further search through the record of the pipe line debate which we had in this house last year I cannot find any reference to that other fact.
The other fact is that in addition to the pledging of the shares, in addition to the shares being placed in escrow with Mr. K. W. Taylor, deputy minister of finance, all of the persons who then held options signed an agreement to the effect that if they exercised any of these options while the loan was still outstanding the shares they bought on the basis of those options would also be placed in escrow with the deputy minister of finance. According to this agreement there were at that time only three persons who held such options and those three persons signed to that effect under or over these words:
Being all the persons who hold options to purchase shares of Trans-Canada.
Those three persons were Mr. R. J. Wallace, who gave his address as Houston, Texas; Mr. N. E. Tanner, who gave his address as Calgary, Alberta; Mr. C. S. Coates, formerly of Texas but who gave his address as Toronto,

Trans-Canada Pipe Lines Ontario. I understand that Mr. Wallace signed through an attorney but that Mr. Tanner and Mr. Coates both signed this agreement in their own hands. The Minister of Trade and Commerce, acting on behalf of Her Majesty in the right of Canada, also signed in his own hand.
A point which I think needs to be crystal clear is that on the occasion of the agreement of May 8, 1956, there was down in black and white over the signatures of Mr. Tanner and Mr. Coates the fact that they then held options to purchase shares in Trans-Canada Pipe Lines Limited. Those two gentlemen, Mr. Tanner and Mr. Coates, along with Mr. Wallace, declared that at that time they were the only persons who held options to purchase shares in Trans-Canada Pipe Lines Limited.
In respect to the shares we were told in an appendix to the agreement how many there were, namely, 1,928,183, but we were not told in this agreement and I cannot find any place in the Hansard record of the debate where we were told in the house how many shares Mr. Wallace, Mr. Tanner and Mr. Coates held options to purchase or what were the terms of those options. However, we do know now, ten months after we were involved in that debate. I have been able to borrow from a friend of mine a copy of the prospectus.


Clarence Decatur Howe: From the man
who bought the shares?


Stanley Howard Knowles: This friend of mine happens to be in the press gallery and I doubt if he was able to buy any shares. As I say, I obtained this copy from a friend of mine in the press gallery acting in his individual capacity. On page 31 of the prospectus we are told that the company did issue to Mr. N. E. Tanner, president of the company, an option exercisable on or before March 8, 1959, to purchase 60,000 common shares of the capital stock of the company at a price of $8 per share. I still do not have precise evidence as to when those options were given to Mr. Tanner. However, the fact that they were exercisable until March 8, 1959, suggests that they were probably issued on March 8 in some earlier year.
Obviously it could not have been March 8, 1957, because we have not yet reached that date. They must, therefore, have been given to him on March 8, 1956, or, perhaps, on March 8, 1955, or even earlier. At any rate, the prospectus of Trans-Canada Pipe Lines Limited issued just a few weeks ago confirms the fact that Mr. Tanner had options and also establishes the fact that the number of options he had was 60,000.

The same prospectus indicates that Mr. C. S. Coates, executive vice president and general manager of the company, had an option exercisable on or before July 31, 1959, to purchase 50,000 common shares at the price of $8 per share, or for the market value of such shares at the date the option was exercised, whichever was the lesser.
In the paragraph to which I am referring, on pages 31 and 32 of the prospectus, there is also a reference to Mr. R. J. Wallace, the third of the trio of May 8, 1956, who at that time had been given by the company options on 5,000 shares. This same paragraph indicates certain other persons who have been given options since that time. Obviously these options were not outstanding when the agreement was drawn up on May 8, 1956, but have been issued since that time. The same paragraph contains this sentence.
In February, 1957, Mr. Tanner exercised the option granted to him to the extent of 55,000 shares, and Mr. Coates exercised the option granted to him for 50,000 common shares.
It is that latter information which came out in the press a week ago today which was the basis of the questioning that took place in the House of Commons last Tuesday afternoon. We now know that these two gentlemen, Mr. Tanner and Mr. Coates, have exercised, to the extent of 55,000 shares in the case of Mr. Tanner and 50,000 shares in the case of Mr. Coates, the options which they held a year ago to purchase shares in this company.
My motion, as Your Honour knows because you have in your hand a copy as I drafted it earlier today-some lines I have crossed out-originally made reference to the fact that last week the Minister of Trade and Commerce made a statement at variance with the facts.
It is now clear that the minister had forgotten. It is now clear that so far as any misleading of the house last Tuesday is concerned, that has been straightened out. But, Mr. Speaker, what still remains is the fact that all through that tumultuous pipe line debate of 1956 this house was never told how many options to purchase shares had been given to Mr. Tanner and Mr. Coates, nor was this house ever told what the terms of those options were. We were told by the Minister of Trade and Commerce on Friday, June 1 of last year-a day not soon to be forgotten-something that relates to what I am now raising as a matter of urgent public importance when he said: "This idea that the insiders are making a 'killing' is absolutely wrong."
Mr. Speaker, what a statement! The minister, when he made that statement on June 1 last year, knew, on his admission today- an admission which he did not make last

Tuesday but which he has made to the house today-that Mr. Tanner and Mr. Coates had these pieces of paper, these options, entitling them to purchase 60,000 and 50,000 shares respectively-options which at that time were only pieces of paper but which could become of great value. What was it that would make these pieces of paper assume great value? First of all, the passing of the bill which was put through this house last year to provide the loan to Trans-Canada Pipe Lines Limited, and also the loan for building the line through northern Ontario.
Subsequently, there were other developments which might take place to give greater value to these options, for example, the gaining of contracts to supply gas, and obtaining the necessary permission of the board of transport commissioners.
Lo and behold, now after these conditions have been met; after the money had been lent to the company and the building of the line is under way; after many contracts have been secured, more than the company thought they could get for the supplying of gas in Canada; after they have obtained permission from the board of transport commissioners,-in other words, when the point is reached where there is no risk whatever in exercising these options,-Mr. Tanner and Mr. Coates exercise those options which the minister, all during the debate last year, knew that they had. What is the result? They do exactly what on June 1 last year the minister told us could not be done; they make a killing as the result of support from the public treasury made available to Trans-Canada Pipe Lines Limited.
I submit that not only did the Minister of Trade and Commerce know this last year during that debate, as he now admits he did, but that those on the government side in the cabinet must have known it. Surely the Prime Minister did not sit there and allow a matter like this to go through without looking at an agreement like this and finding out, as a corporation lawyer, just what the fine print meant. Surely the Minister of Finance, whose deputy minister signed this agreement, receiving in escrow the shares and receiving the pledges that any shares purchased on the basis of these options would also be put in escrow, was not unaware of the existence of these options.
Yet, Mr. Speaker, we never had it brought out that these gentlemen, Mr. Tanner and Mr. Coates, on the basis of these pieces of paper which they had last year and about which the minister said in this house what he did, would make what by any definition is a real killing. They are permitted, by virtue of the options they had last year-by virtue
Trans-Canada Pipe Lines of the options about which the minister knew -to purchase these shares at $8 at a time when they are selling for $10. Incidentally I may say that, from the prospectus which I have before me, I understand that ordinary individuals who wish to buy shares in this company must buy them in package lots. They are obliged to take a debenture of $100 in order to get five of these shares at $10 each. Yet Mr. Tanner and Mr. Coates are able to buy in February, 1957, in the one case 55,000 shares and in the other case 50,000 shares at $8 each at a time when they are being sold at $10 a share which is to them immediately a profit of $110,000 in one case and $100,000 in the other. If that is not making a killing, I do not know the meaning of the word. Why are they able to make a killing? Because of the aid made available to Trans-Canada Pipe Lines Limited out of the public treasury because of a bill that was forced through this House of Commons last year.
Mr. Speaker, I doubt whether I have properly described the killing that these gentlemen are making because the press reports are to the effect that these shares, once they are being traded on the market, will be sold at even higher prices. Some press reports suggest $15 a share. One press report which I have on my desk says that a few days ago they were being bid at $19, with the asked price being $21. Therefore, Mr. Speaker, if one conjectures that the value of these shares may be as high as $18 or $20, you have each of these gentlemen, Mr. Tanner and Mr. Coates, in the position to make a profit of half a million dollars. Yet on June 1 of last year we were told that this was not a proposition in connection with which the insiders would make a killing. Here were these two insiders in a position then-on the basis of pieces of paper of which the minister was fully aware-to make the very kind of killing which the minister on June 1, 1956, said could not be made.
May I point out, Mr. Speaker, that one of the many efforts that we made to get proper discussion and a proper consideration of the pipe line bill last year related to these particular agreements which I have cited and to which the minister himself referred in his earlier remarks. You will recall, Mr. Speaker, that I contended that the bill was imperfect because it made reference to these agreements but did not include them as a schedule to the bill. I argued that they should have been included as a schedule to the bill so that parliament would be involved in whatever was contained in those agreements and so that we would have a chance to discuss them and question them, page by page and line by line. We were denied the right to have

Trans-Canada Pipe Lines those agreements as a schedule to the bill, both by a decision of the chair and by a refusal on the part of the minister to agree to our request. We continued to press for the agreements to be made a schedule to the bill right to the very end. That to which I am now going to refer cannot be proven from the record but I may say that on the night last year when the clauses of the bill were being put through in committee, under closure, without any debate whatsoever, there were a number of us who raised points of order at various stages. The last point of order I raised that night or that morning at 2 o'clock or 3 o'clock, whatever it was, or which I attempted to raise but which the chairman of the committee would not allow me to raise, was to the effect that Mr. Speaker had said that the place to do something about getting these agreements made a schedule to the bill was not while the Speaker was in the chair but when we were in committee on the bill. So when the battle was at its very end I was still trying to get these agreements included as a schedule to the bill. If we could have won that point we might have had a chance to ask questions about these options. We might have had a chance to find out-as we should have been told-that Mr. Tanner and Mr. Coates held options on 60,000 and 50,000 shares, respectively.
Mr. Speaker, we in this group view this matter extremely seriously. We feel that for a responsible minister of the crown to keep this one item of information to himself during the whole of last year's debate is not the part of responsibility. I say to him that in another parliament like unto ours action such as that would immediately be followed by the resignation of the minister. We were refused all the opportunities that we sought to get information and to ask questions. Here was a crucial point and we were given no opportunity to get the appropriate information nor did the minister offer to tell us on his own initiative that these men held these options. Hut-


Clarence Decatur Howe: I assume that my hori. friend reads the documents that are tabled. You certainly had notice there that those options were outstanding. If he did not read the notice, it is not my fault. I gave it to parliament for that purpose.


Stanley Howard Knowles: Mr. Speaker, I thank the minister for his interruption. Yes; I read those documents from stem to gudgeon, inside and out. But may I point out that while the document in question revealed the fact that these three men held options, it did not reveal how many options they held.


Clarence Decatur Howe: You could have asked that question.


Stanley Howard Knowles: Could have asked? Mr. Speaker, listen to my Liberal friends saying we could have asked. Were they here? What chance did we have?


John Whitney Pickersgill: You had 16 days to do it.


Mr. Harkness:: No questions were answered.


Stanley Howard Knowles: We were given absolutely no information as to how many options were held. As to those who held shares, that was included in the document but we were not given the information concerning this little sentence: "R. J. Wallace, N. E. Tanner, C. S. Coates, being all the persons who hold options to purchase shares of Trans-Canada."
I submit, Mr. Speaker, that not to have given that information was a grievous oversight on the part of the minister. In fact, he regarded it so lightly that he had forgotten all about it when he was asked the question on Tuesday of last week. The hon. member for Notre Dame de Grace says that perhaps the minister had not read the document. I do not think that. This minister has a reputation for care and for knowing what is in the fine print. We know we can stand up in the house on the orders of the day and ask him questions about uranium or wheat in Japan or box cars, and he has got the answers. He has full knowledge of what goes on in his department, and he cannot tell me he was not aware of this very important item.
As a matter of fact, Mr. Tanner and Mr. Coates would not have thought of this. idea themselves, of pledging their options. They only signed to pledge their options because the minister required it in the agreement when he asked them to sign it. So there we are, Mr. Speaker; we were taken through the whole of that debate without ever being given this information. My hon. friends say we did not ask for it. They know what chance we had to get this or any other information. They know how we tried in all ways, and they know that so far as these agreements were concerned, we did not have any chance whatever to discuss them. The minister would not even agree to adding them as a schedule to the bill. Once we got into committee of the whole, where we might have had a discussion concerning the agreements, we were under closure, double closure, triple closure that denied us an opportunity to discuss this matter.
Since we are making these references to Mr. Tanner and Mr. Coates, may I say just who these gentlemen are. According to the company's prospectus Mr. N. E. Tanner has been president of the company since March, 1954, when he resigned as president of Merrill Petroleums Limited and Sturdie Propane

Limited, which positions he had held since 1952. Prior to that time he was minister of lands and forests and minister of mines and minerals for the province of Alberta, which positions he had held for approximately 15 years. He is the director of the National Trust Company Limited and of the Alberta Gas Trunk Line Company Limited.
I understand that prior to his entry into provincial politics Mr. Tanner was a school teacher. The fact that a school teacher is now able to buy 55,000 shares at $8 per share or $440,000 worth of stocks is something, I am sure, that will amaze the school teachers who are in this house. Mr. Tanner, so we now find, was enjoying a salary last year from this company, while we were debating the matter here, of $35,000. We find now that his contract of employment is for five years at a salary of $35,000 a year, with the understanding that if at the end of the five years there is not mutual agreement about his continuing as president of the company, he will be given a separation allowance or a retiring allowance for five years of $15,000 a year. This is the poor, hardup company that last year we were called upon to aid by a loan of $80 million, plus a loan to build the northern Ontario section.
Now, what about the other gentleman, Mr. Charles S. Coates? I am not going into detail concerning Mr. R. J. Wallace, because he was only small fry. He has options to buy only 5,000 shares, which he has not yet exercised. Mr. Charles S. Coates, however, has been executive vice president and general manager of the company since August, 1954. The same prospectus tells us a little about him prior to that time. He was senior vice president of Tennessee Gas Transmission Company, with which he had been associated since the inception of that company in 1953, during which time he acted as general superintendent of construction, and he has specialized in pipe line engineering, construction and operation. Last year while we were debating matters in the house, Mr. Coates was drawing a salary of $45,000 a year. He is under contract now at $45,000 a year for the first three years of his employment and $50,000 a year for the remaining two years, and the possibility of being continued is included in his contract. But if he is not continued he does not get a pension the way Mr. Tanner does; he has to get by on $45,000 for three years and $50,000 for two years.
These two gentlemen, Mr. Nathan Tanner, a former Social Credit minister in Alberta, and Mr. Charles Coates, formerly of Texas and connected with the Tennessee Gas Transmission Company, held in their pockets last year
Trans-Canada Pipe Lines during the whole of this debate these options to purchase these shares which they have now exercised, and out of which they have done what the minister said could not be done, that is made a killing which was made possible by the financial support made available to them by this government forcing a bill through parliament.
I believe hon. members are aware of the fact, Mr. Speaker, that this matter has been the subject of considerable editorial opinion since it came to light as a result of the Canadian press story of a week ago. I have been interested in reading the editorials, a number of which I have on my desk, but I shall only refer to them. Without exception, any editorial I have seen dealing with this matter expresses the view that this is wrong and that when the public incurs the risk it is not right for private individuals to reap the gain. I noticed that the first newspapers that began to take that view were, I admit, papers not friendly to the government, such as the Ottawa Journal, the Toronto Telegram and the Toronto Globe and Mail.
However, Mr. Speaker, I hasten to emphasize that these are not socialist newspapers. They are newspapers that support private enterprise, yet even they cannot take this idea of the public putting up the money, the public taking the risk, and private individuals reaping huge gains such as Messrs. Tanner and Coates have reaped out of this, all of which was possible only because of what was done by the government and what was kept secret from us during the debate last year.
I hasten to add, Mr. Speaker, that on Saturday of last week another newspaper editorialized on this matter, and this time it is not a newspaper friendly to the Conservative party but rather a newspaper that has a reputation of being friendly to the Liberal party. I refer to the Toronto Daily Star, than which there is no better supporter of the Liberal party unless it be a certain newspaper in my own city. Even there, the Liberals are coming in for a bit of a pasting these days.
This is the headline on the editorial in the Toronto Daily Star: "Public Took Risk- Others Take Profit". Let me read a sentence or two:
Parliament was shamed and abused last year. so that the Trans-Canada pipe line bill could be passed by June 7, the government's excuse being that only thus could the prairie section of the line be completed in 1956. Well, the prairie leg isn't finished yet, but that hasn't depressed the long-awaited stock and bond financing of Trans-Canada Pipe Lines Limited. This has just got under way, and in a manner to warm any speculator's heart! The stock is at a premium and reports that officers of the company had already turned handsome speculative profits were discussed in parliament this week.

Trans-Canada Pipe Lines
The Toronto Daily Star goes on to suggest that, as it contended last year and as it contends now, this is the sort of venture that calls for public ownership. The Star ends its editorial with this sentence:
Federal governments in future will, we anticipate, be haunted by demands that the state take over ownership of the line so that the public may get the fullest benefits from it.
Last year we put up the hardest fight we could against what we believed at that time was a most iniquitous proposition. It now turns out it was more iniquitous than we realized at the time. It now turns out that included within the provisions to which we were asked to agree when we were asked to pass the bill which gave the government the right to make an agreement, included within those provisions was the fact of these options that these gentlemen held, the number and the terms of which were not made known to us but on the basis of which they could make the very killing which the Minister of Trade and Commerce said last year could not be made.
I asked in my motion that this matter might be debated by the house and that we might give consideration to the way in which parliament and the country had been misled. I contend my statement in that motion is well put. We were not informed as to the extent to which there would be private gain as a result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury.
I believe the people of this country will be shocked to learn the facts that will be brought out during this debate today. They were shocked last week when they learned that these two gentlemen were making this huge profit. When they now learn that they had in their pockets all through that debate, unbeknown to us and to the public of Canada but with the approval of the government, the pieces of paper that would make possible this profit, the sense of t shock will be such that there will be a rising protest against this government and I predict that there will be proper demands in the next few days as to what this government should do, not just what the Minister of Trade and Commerce should do but what the whole government should do.
I suggest, Mr. Speaker, that time has come to clear the air with respect to this whole deal; the time has come to make it clear that it is still possible for this line to be taken over in the name of the people of Canada and operated under public ownership so that, as newspapers, private enterprise supporters though they are, are saying, the public which took all the risk may get whatever gain there is from this Trans-Canada Pipe Lines project.


Mr. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I commence by saying that I had no information in advance of this motion being made today and anything that I may say will be entirely on the basis of the knowledge that I have of this proposition and the degree to which parliament has been deluded and deceived, either intentionally or unintentionally, by this government and in particular when this matter was before the house.
Now, sir, as far as this proposition is concerned, as it is now revealed, it indicates clearly why there was such haste last summer to get this legislation through the house, why the rules of parliament were trampled on and why members of this house were denied an opportunity of a detailed examination in committee of the reasons for the agreement, and also for an examination of the foundations on which this legislation was built.
I am going to start by reading some of the questions asked the other day by the hon. member for Vancouver-Quadra (Mr. Green) which indicate that the minister, when he replied to these questions, was not as careful with the truth as might be expected from one possessed of even an ordinary memory.
I quote from page 1417 of Hansard:


Howard Charles Green: I
should like to direct a question to the Minister of Trade and Commerce. Will the minister explain to the house the transaction under which the president and the vice president and general manager of Trans-Canada Pipe Lines Limited appear to have had the opportunity to make a very big profit on large blocks of shares of the company?


Clarence Decatur Howe: Mr. Speaker, I have no knowledge
of the transaction.
These are his first words. On the basis of the minister's explanatory alibi today, that statement still remains, "I have no knowledge of the transaction". Then, the minister goes on:
It is purely a transaction within a private company.
It was not a transaction within a private company; it was a transaction that was made when this company, with the assistance of the Minister of Trade and Commerce and the Prime Minister and the other members of the Liberal party, was trampling on the rights of parliament. They had that knowledge at that time. It was not an arrangement in a private company; it was an arrangement which ought to have been made known to parliament; for to conceal it and keep it from parliament was to obtain from parliament under false pretences the passage of this bill. Let me go on with the quotation:
I am aware that it Is the custom of companies that are owned largely by banking groups to induce

top management to take a personal stake in the enterprise and share in the good fortunes or bad fortunes of the company.
Were these men taking any risk? Was Tanner taking any risk to promise to exercise an option? Was Coates taking any risk? The only risk they were taking was that parliament might not pass the bill. They took no risk, none at all. They simply entered into an arrangement whereby at an assignable time in the future until 1959 they might exercise the option. In other words, there was no risk. They undertook, or at least had the right, to exercise an option after it was determined whether or not the company would be a success in so far as being able to finance is concerned.
The minister went on to say:
The offering was to acquire stock for $8 per share, which is the price paid for stock in the early formation of the group that undertook to build the pipe line, and if the stock proves to be worth more than $8 per share over the years there will be a profit.
I ask the minister when he replies to say what risk did these buccaneers take?


Clarence Decatur Howe: Is my hon. friend referring to Mr. Tanner and Mr. Coates at the moment?


John George Diefenbaker: The minister may reply.


Clarence Decatur Howe: Suppose you reply.


John George Diefenbaker: A buccaneer is one who reaps a piratical profit without any danger or fear to himself. It is in that sense that I use the expression. The minister said:
The offering was to acquire stock for $8 per share.
They were simply in the position where they were the pampered few, where, if the company became a success in so far as the ability to sell shares was concerned, then they would step in and reap the benefit; but if it turned out badly these men were in the shadows. Having undertaken nothing, having accepted no personal responsibility, having simply remained in the background, if the company succeeds, if the shares had a saleable value and if the saleable value was more than $8, then these gentlemen came in and reaped the benefit.


Mr. McCann:: If they sell.


John George Diefenbaker: On the other hand, if failure takes place, then there is no responsibility on them to lose $1.
The minister goes on to say:
The offering was to acquire stock for $8 per share, which is the price paid for stock in the early formation of the group that undertook to build the pipe line, and if the stock proves to be worth more than $8 per share over the years there will be a profit.
Trans-Canada Pipe Lines
Risk? This was an insured risk. If the price was below $8, in the event that the company got under way, these men did not have to exercise their option. They had the right to exercise it for two more years; they had the right to exercise it over such a length of time that it would then be realized by the time they exercised it that a profit would be showing.
I continue with the minister's quotation:
If the enterprise is as unsuccessful as my hon. friend predicted in the early debates, it may result in a loss to the man who exercised the option.
I say that was begging the question. If they had exercised their option before the matter came before parliament, if they had then undertaken to pay $8 and had assigned and allocated to them these shares, then they would have been subject to the uncertainties of investment, but nothing of the sort took place.
The minister ended his reply in this way:
In any case these men now have a share in the enterprise.
By every word uttered by the Minister of Trade and Commerce (Mr. Howe) on February 19 in answer to the hon. member for Van-couver-Quadra (Mr. Green) he left the impression that what these men had done was to secure a reward on the basis of risk.
We come now to the answer given to the question of the hon. member for Nanaimo (Mr. Cameron) who asked, as reported at page 1418 of Hansard of February 19:
Was the government aware that these gentlemen had options on blocks of stock at the time the government undertook the agreements to help to finance the company?
The minister replied:
No, Mr. Speaker, I was not aware of it and I doubt if the options were outstanding at that time.
Mr. Speaker, those are definite words. Today the minister says, "Well, I apologize because I forgot". That apology in no way eradicates the falsity of the answer that was given last week. We are not going to relive the days of the pipe line debate at this time: That has been concluded as far as parliament is concerned. But certainly the fact that these men without risk were able to make themselves fabulous profits under an agreement which must have been in the possession of the minister when he was before parliament last May and June demands more than a statement to the effect that the minister made a mistake the other day. Indeed, it demands an apology to parliament on his part and also on the part of the Prime Minister (Mr. St. Laurent), who must have known all of these facts. For if these facts had been before parliament last June all of the steamroller tactics which were used on that

Trans-Canada Pipe Lines
occasion could not have forced this legislation through parliament. Now we begin to realize why discussion was abolished and why closure was applied in a manner that denied every principle of parliamentary government. Now we begin to realize why it was that this government chose by its overwhelming majority to trample on the rights of parliament-I was going to say to reduce parliament to a shallow sham and a delusion-and all this was done for the purpose of forcing a bill before parliament without full discussion. Had there been full discussion of these matters and had a full disclosure been made to the house and to the Canadian people, this government would not have dared to pursue its course of forcibly placing this legislation before parliament and then depriving parliament of full discussion.
I agree with the content of this motion, for in effect we now find on February 25, 1957 facts which had they been generally known in May and June of last year would not have permitted this government to force legislation through the house. Now we understand the reason for the haste, the concealment of facts and the drawing of the curtains of secrecy over a transaction that could not have borne the light of day. Sir, I shall say no more than this: This is but another example of the manner in which parliament has been treated in the last few years and particularly since 1953. It has been denied information and refused answers to questions that the people of Canada have a right to know. In this case, however, the result of the concealment of information has been that a gigantic trick has been played on parliament and these three gentlemen stand to benefit. And who else? One wonders.
It is small wonder that last year when this matter was before parliament and a discussion was taking place regarding some of the gentlemen who were taking a leading part in the incorporation of the Trans-Canada Pipe Line Company Limited the motives of these gentlemen were seriously questioned. I refer in particular to Mr. Clint Murchison who was described as a man who possesses the popular Texas ambition of buying the rest of the United States, and of whom it was said that his companies are as varied as a pirate's treasure and that he is able to put one dollar by one dollar and make $11 million. Messrs. Tanner and Coates did not do that but they made a fairly good attempt.
They risked nothing but their signatures under the option agreement and they reaped fabulous profits. They did this under an agreement that was concealed from parliament up until recent days and following the
tMr. Diefenbaker.l
passage of the bill. Surely the Prime Minister, who last summer maintained a silence that will never be forgotten when this matter was before the house, will now say something in this regard. Throughout the course of the pipe line debate the Prime Minister failed in the face of strenuous argument from the opposition to rise and place before the house and the country the true facts. Some of those facts have now been revealed; will there be others in the future? I say that what has happened in connection with this transaction is bound to raise in the minds of even the least suspicious a suspicion that to too great an extent today ministers of the crown deign to give to parliament only whatever information will not be detrimental to the government. That is not parliament and that is not democracy. And always when they do that the ministers of the crown are reinforced by the support of those who follow them regardless of the consequences to parliament.
Sir, no apology on the part of the minister today can eradicate from the record the fact that these facts have been concealed and that the concealment took place last June in the face of repeated requests from the opposition to have the full facts disclosed. The government had in its possession this information which it knew it dared not produce if the bill was to pass, and it steadfastly concealed the information. For whose benefit was this done? That is a question that will only be answered in the days ahead.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, as it was in answer to my question of last Tuesday that the Minister of Trade and Commerce (Mr. Howe) gave the answer for which he has apologized today, I think it is only right that I should have some observations to make on this particular incident. I should say at the outset that I accept the statement of the minister that he had forgotten this particular detail of the Trans-Canada pipe line arrangement. I am obliged to accept this statement, Mr. Speaker, and I do so no matter with what strain on my powers of credulity. I am prepared to accept the minister's statement that he had completely forgotten a document which he himself signed ten months ago and which from internal evidence of that document was one which was drafted at his behest, because I doubt whether the Minister of Trade and Commerce (Mr. Howe) will ask us to believe that Messrs. Tanner and Coates and their colleagues requested the government to have an agreement drawn up whereby Messrs, Tanner, Coates, et al, when they realized their options, would place their shares in escrow.

I think there is unmistakable internal evidence that this particular agreement was drafted at the behest of the government, and I suggest that in all probability it was drafted at the behest of the particular minister of the crown who took the Trans-Canada Pipe Line bill so decisively under his wing last year.
When I accept this apology of the minister, when I accept his statement that he had forgotten this minor item in the various agreements signed in connection with a measure which was his particular interest less than ten months ago, I am almost obliged to do something else and to accept the tragic fact the right hon. Minister of Trade and Commerce is now past his ability to be of service to the Canadian people.
I noted just now when my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), suggested that in other parliaments such a situation as this would result automatically in the resignation of the minister involved the Minister of Trade and Commerce smiled quite merrily at this house. I suggest to you that that smile alone exhibits the state of mind of this government and its attitude toward the parliament of Canada, in fact its whole attitude toward parliamentary government because I do not think there is any hon. member of this house who would suggest that in this house we should not as far as possible follow those established precedents of honour and public decency which have long been the mark of the British House of Commons. Certainly no minister of the crown in Westminster would smile merrily when he was confronted with the fact of having conveyed misinformation to the House of Commons.
I submit that there are two questions involved in this matter. One is the attitude of this government toward parliament, which is a serious matter indeed. I cannot help thinking that this cavalier attitude toward the elected representatives of the people of Canada has been accentuated by the tragic success which the right hon. Minister of Trade and Commerce and his colleagues had last year in stifling discussion in this chamber. After all when people embark upon evil ways they develop an appetite for them, and when they meet with success in one instance then they see no reason why they should not go on in the future and acquire success after success no matter at what cost.
I suggest to you that while I accept the statement of the right hon. Minister of Trade and Commerce that he had forgotten completely that he had affixed his signature to a document by which Messrs. Tanner, Coates and Wallace agreed to place in escrow any 82715-102
Trans-Canada Pipe Lines shares they obtained by the exercise of their options ten months ago, while I accept that statement, I do so with the utmost difficulty. Moreover, I find it hard to believe that the Prime Minister of Canada (Mr. St. Laurent), who sat silent in this chamber throughout the debate last year, taking no part, apparently giving a complete green light to his colleague the Minister of Trade and Commerce, 1 have great difficulty in believing that the Prime Minister of Canada, with his reputation as a legal authority, as a corporation lawyer, did not acquaint himself with all the legal details regarding the agreements which the Minister of Trade and Commerce was signing on his behalf. If the Prime Minister was not aware of it, then I would have thought that during that acrimonious and bitter debate in this chamber he would have armed himself with complete knowledge of what his colleague had signed on behalf of his administration. Last week when the Minister of Trade and Commerce told me that he was unaware that these options were in existence, indeed that he doubted that they had been in existence, we had no word of correction from the Prime Minister to his colleague.
This raises a number of very important public questions, not only the question of the competence of the Minister of Trade and Commerce, because as I say when we accept his statement of today then we accept with it the very grave doubt of his continuing competence; we have not only that question, we have also the question of the competence of the Prime Minister of Canada to lead this government; if in a matter which has raised so much public concern the right hon. Prime Minister was apparently completely ignorant.
I was interested also in the statement on Tuesday last of the right hon. Minister of Trade and Commerce that he saw nothing wrong in these options of the existence of which he was unaware, that he considered it was a perfectly equitable and reasonable proposition that the officers of this company should be placed in a position to make a little extra profit for themselves over and above what the ordinary investor in this company would make. That to me revealed a shocking estimate of the functions of government and parliament because surely when he made that statement the right hon. Minister of Trade and Commerce must have forgotten that only last year he fought bitterly on the floor of this house to have the Canadian taxpayers help to finance this company and by so doing to create value for its shares which would redound to this profit that has now accrued to Messrs. Tanner and Coates.
The minister has said that he can see nothing wrong in coming to this parliament and

Trans-Canada Pipe Lines asking parliament to vote money that has been provided by the people of Canada for the operations of this government and to use it in part to develop stock market values which will go into the private pockets of certain individuals. That to me reveals a most astonishing state of public morals. I was at a loss to understand how the minister could take that position. When my colleague from Winnipeg North Centre spoke of this agreement relating to the options to purchase shares it was suggested by some hon. members who support this government that we should have asked how many options Messrs. Tanner and Coates held at that time.
It was suggested to us by some of the hon. members who support this government in its hour of trial that we should have asked how many options Messrs. Tanner and Coates held at that time. In fact, it was suggested to us quite clearly that if we in the opposition were on our toes we would go on the assumption that this government is dishonest and is hiding information, and that if we do not get the information it is entirely our own fault. That was the implication of the suggestion made to us-that we should have asked.
The fact is, of course, that the Minister of Trade and Commerce, who has now forgotten all about this agreement, last year very carefully refused to have it appended as a schedule to the act. Why? Why should he have insisted on departing from the procedure that has been commonly followed with regard to measures of this sort for many years? The answer is perfectly obvious. Had this agreement been an integral part of the act it would have been possible when the matter came before the committee of the whole, for the favourable position in which these two gentlemen had been placed to have been revealed.
But perhaps I am wrong, Mr. Speaker. I am beginning to think that the Minister of Trade and Commerce had no need to take that precaution, because he had already taken the precaution of seeing that we would not be able to discuss anything in committee. I think he was being over-cautious in this instance. There was not any particular fear that we would be able to "dig into" that agreement any more than we would be allowed to "dig into" the clauses of this bill.
I suggest to you, Mr. Speaker, that when we are confronted with a situation of this sort it is not enough for a minister of the crown to get up and say "I am sorry, but last week I gave you wrong information", when all the evidence points to one of two conclusions. One conclusion is that he deliberately misled the house. That is a conclusion we are not permitted to accept


in this chamber. The other is that the minister's memory has become so faulty that, I suspect, Mr. Speaker, he is no longer capable of administering the vast affairs which have been left in his hands to this date.


Clarence Decatur Howe: Mr. Speaker, there is one matter which I think we might dispose of
right away. All three speakers

the hon.
member for Winnipeg North Centre (Mr. Knowles), the hon. member for Nanaimo (Mr. Cameron) and the hon. Leader of the Opposition (Mr. Diefenbaker)-have referred to the reputation and to the competence of the Prime Minister (Mr. St. Laurent) and myself. I say that men do not build reputations by speeches in parliament; they build them by performance over a great many years. If there is any one of the three who have spoken who would like to compare his record with that of the Prime Minister or with that of myself, let him stand up and say so, and we will start comparing right at this moment. Before you discuss reputations you must build a reputation, and that goes for the Leader of the Opposition as it goes for the others.


Mr. Churchill:: His reputation in the house is better than yours.


Clarence Decatur Howe: Nevertheless, over the years I have managed to get along fairly well and to have enjoyed a fairly good reputation.
What is the crime now being discussed? Certain gentlemen undertook to promote a work which I believe to be of great national importance-the building of an all-Canadian gas pipe line. Certain of them contributed money. They were able to do that, and they contributed money to the extent of $8 a share for the shares they received to a total of some $16 million.
But you cannot build a project of that kind with money alone. You must also have brains and experience. These men had to hire men with brains and experience where they could find them. Where did they get them? First, they looked about for the man whom they believed to be the most competent by experience to handle the kind of operation needed to put this project together. They found Mr. Tanner, who at that time was; president of a growing oil company; a man with a permanent job, a job that undoubtedly would have made him prosperous over the years. They induced Mr. Tanner to leave that job and to become president of a company regarding which there was great doubt as to whether it could succeed; it was certainly a marginal project as far as its economics looked at that time.

They also needed an experienced pipeline engineer. Where did they find him? They found him as vice president in charge of construction for the Tennessee Gas Transmission Company, the largest gas company in the United States. They persuaded him to leave an established job with that company in order to come to Canada and help put together this project of great importance to the Canadian people.
What are they offered? I do not know much about options. That is a matter of private arrangement. I now know that at the time we made this agreement last year -I had forgotten it, but now I have been reminded-there were options outstanding, and those options were assigned to the government along with the shares. But it seems perfectly reasonable that people who put up money should get the shares at $8 a share, and it does not seem too unreasonable to me that people who put up their brains and reputations and leave safe jobs to join such an enterprise would have the option of subscribing for shares at the same price as the other entrepreneurs who took part in the project by investing their money.
You say these options represented a great fortune; that the same shares were sold to the public at $10 a share. In fact the treasury of the company received $9 a share from the $10 price, the extra dollar representing the cost of distribution to the public. So the cost to the company of these options is $1 a share. That might be a killing. I do not know. It seems to me that it is a reasonable reward for four years of hard work, four years of anxiety and four years that lead to success at a time when the difficulties of financing the project were probably the greatest in history.
I am going to give the house a little background to this issue of stock options. We have heard a great deal said about the great entrepreneur Frank M. McMahon. The Leader of the Opposition recommended that the whole Trans-Canada Pipe Lines scheme be scrapped and that Frank McMahon should take over. The hon. member for Vancouver-Quadra (Mr. Green) has also been a great admirer of Mr. McMahon and his building of the Westcoast Transmission Company.


Howard Charles Green: I do not think the minister will find that the former leader of the opposition made any such statement.


Clarence Decatur Howe: I was talking about the present Leader of the Opposition, and if the hon. member doubts what I have said I will be glad to look up Hansard. I will read to the house something about the Westcoast Transmission Company. I am reading now from its prospectus.
82715-102i
Trans-Canada Pipe Lines


An hon. Member:: What has that to do with
the present issue?


Clarence Decatur Howe: Trans-Canada Pipe Lines that starts from nothing to build a great project that I simply made sure that I had an agreement from the beginning that no stock would be acquired by any of the group involved for less than $8 a share. I believe that is a reasonable basis for financing, $8 a share in the promotion stages and stock sold after that to net the company $9 a share, a difference of $1, which seemed to me just owing to the fact that when the stock was sold to the public the basic financing had been completed. The bonds had been sold and the position had improved greatly.
That is the basis of any attack on this project. It seems to me it is somewhat important that the project is being built. I think the fact that the project is being built will impress the public much more than will the quibbling and bickering about the ways and means. The transaction between the government and Trans-Canada Pipe Lines was in the nature of a loan to the value of 90 per cent of the assets to be created; it was a loan bearing interest at 5 per cent per annum and one that, after examination by the counsel of the government and outside counsel retained for the purpose, was considered to be a good loan. Incidentally, at 2 o'clock tomorrow afternoon a cheque is going to be put in my hands by the company for the full amount of the loan plus interest at 5 per cent plus the expenses incurred by the government in supervising the transaction up to that point.


Stanley Howard Knowles: Would the minister permit a question?


Some hon. Members:: Sit down.


Clarence Decatur Howe: What do you want to know?


Stanley Howard Knowles: Will the shares that are in escrow be turned back to the shareholders at that time, including those taken out by Mr. Coates and Mr. Tanner?


Clarence Decatur Howe: Mr. Speaker, at that time, at 2 o'clock tomorrow afternoon, when the cheque is received and when the securities of the company are returned to their owners, the directors of the company will have full responsibility to their shareholders. The responsibility of the government with regard to the management of Trans-Canada Pipe Lines Limited will end, because of the fact that the government will not be involved in any way in the affairs of the company. The project will then be a free enterprise job and therefore poisonous to my hon. friend and poisonous to the Leader of the Opposition (Mr. Diefenbaker), and generally a situation which the parties they represent have done their best to prevent.


Mr. Ellis:: What about the northern Ontario section?


Clarence Decatur Howe: The northern Ontario section has nothing to do with the owners of the pipe-line company. That is a project being built in partnership by the government of Canada and the government of Ontario. It is wholly owned by those two governments. There is an agreement that it will be leased to Trans-Canada Pipe Lines Limited for operation when it is finished.


Alfred Claude Ellis: They have nothing to do with it, then?


Clarence Decatur Howe: Until the line is finished, Trans-Canada Pipe Lines have nothing to do with it; and until the lease is operative, Trans-Canada Pipe Lines Limited has nothing to do with the government's ownership. Let us get those two relationships firmly established because, after 2 o'clock tomorrow, if I am asked any information about Trans-Canada Pipe Lines Limited, I am very apt to say that that information is not in the possession of the government; and if it is not in the possession of the government it will not be brought down in this house.


Alfred Claude Ellis: That is your usual practice.


Clarence Decatur Howe: My hon. friend said that no one endorsed the McMahon proposal. May I read from page 4090 of Hansard of May 18, 1956.


Mr. Dickey:: Do you support the McMahon
proposals?


Mr. Hees:: The McMahon proposal looks like an excellent one. Yes, I certainly do.


John George Diefenbaker: Read on.


Clarence Decatur Howe: That was the
president of the national Progressive Conservative association who is speaking.


George Harris Hees: On a question of privilege, Mr. Speaker, may I say this. As usual the minister has made a completely wrong statement. I was not the president of the national Progressive Conservative association at that time. I had resigned. Once again the minister makes another misstatement.


Clarence Decatur Howe: On May 18, 1956?


George Harris Hees: I had resigned in January,
1956. Once again the minister is completely and I believe deliberately wrong.


Clarence Decatur Howe: Then I want to
say that I congratulate you. You escaped just in time.
The hon. member for Winnipeg North Centre quoted me from page 4632 of Hansard of June 1, 1956. Perhaps he will

allow me to read exactly what I said on that occasion, or at least the pertinent portion:
It has been represented that this will be a great gold mine for the owners of the shares. I hope so, because, as I have said, we are making sure that slightly more than half the shares will be sold to Canadians. If there is a gold mine in the project, I want to see Canadians benefit, but I would not buy shares myself with any expectation that they represent a gold mine . . .
This idea that the insiders are making a killing is absolutely wrong. Many times the men who have been working at this problem, working their hearts out trying to get it moving, have said to me, "If we could get $8 back and have a chance to buy the same shares at $9 or $10 when the line is in operation, it would be the greatest transaction we have ever made."


Stanley Howard Knowles: Now Tanner and Coates
have bought the rest of their shares at $8. Therefore the minister's statement is wrong.


Clarence Decatur Howe: I love to hear
my hon. friend attempt to tear down a man who I believe is a great Canadian', a man who started out as a school teacher, who spent 15 years as a member of the Alberta government, who went into business and was on the way to a successful career in business when he was called upon to take charge of a great national enterprise and has now brought that to a success. Now my hon. friends attempt to tear him down. That is their usual practice.


Mr. Blackmore:: That is their style.


Stanley Howard Knowles: My hon. friend has built him up.


Clarence Decatur Howe: I think he has built himself up.


Stanley Howard Knowles: A school teacher with
$400,000 to buy shares; boy!


Clarence Decatur Howe: My hon. friend was once a school teacher, but he has not done quite so well. I have not noticed any great monuments to him about Canada. I have read a great deal about him in Hansard, but no great accomplishments were mentioned.
Well now, that was the situation gentlemen. Make of it what you will. We will talk about it on the hustings. I will talk about this great Canadian project and the opposition it has encountered at all stages, particularly the battle in this house and the picayune attacks that are being made by two opposition parties. Then the opposition can tell the electors how much trouble they were able to create in the House of Commons, and we will let the voters decide. I think that is probably the best way to settle this argument. In the meantime, the transaction is what it is. I have explained it as it appears
Trans-Canada Pipe Lines to me. If anyone else wants to do any tearing down of reputations, let him stand up and go to it.


Mr. Solon E. Low (Peace River):: I feel that there are a few things that should be said today. I realize, of course, that this is the hunting season, and the fact that we are expecting a general election some time might, in itself, account for the bombastic oratory we have heard today. I would not look for anything else, of course. The two parties to my right are trying to wring out of the Trans-Canada Pipe Line controversy every drop they can possibly get that will help them in their losing battle.
However, I was surprised to see the Leader of the Opposition (Mr. Diefenbaker) stand up in this house and talk about buccaneers; about facts concealed; about how we now know the reason for the rush to force the bill through parliament; about the promoters of the company, including Mr. Tanner and Mr. Coates, having risked nothing but their signatures and reaped fabulous profits. I have said on former occasions that there seem to be two kinds of socialism in this country, one being promoted by the C.C.F. and the other by the Conservatives. The Conservative brand is not, it seems to me, nearly as down to earth as the other. I want to say, Mr. Speaker, that a lot of the stuff that has been spoken here this afternoon is sheer hypocrisy.
For a time last spring, as has already been pointed out, all that the Conservatives could do in this house was advocate that Frank McMahon and his company be the alternative to the Trans-Canada Pipe Line Company and given the opportunity to build this pipe line. At the time, I thought if the Conservatives knew anything about Frank McMahon and what he had made out of transmission companies they would probably be somewhat red in the face. It was interesting this afternoon to hear them talk about buccaneers in the light of the stand the Conservatives took a year ago.
I did not rise to defend anybody this afternoon except a man whom I consider to be a great Canadian. I was raised with him and I went to school with him. I am speaking now of Nathan Tanner, and I know something about his background. I know something about his success. I sat in the cabinet of Alberta with him for eight years, and I know something that was withheld today, whether or not deliberately I am not saying, but it was withheld. The hon. member for Winnipeg North Centre (Mr. Knowles) was very careful to point out and emphasize that Mr. Tanner was a school teacher prior
1614	HOUSE OF
Trans-Canada Pipe Lines to entering the Alberta cabinet. He emphasized that on two or three different occasions, and the fact he was a member of the Social Credit government, implying there was something immoral, something wrong, some departure from principle. In fact, Mr. Tanner has made a success of things in the field of business, as well as an outstanding success in the field of government.
Let me just point out the thing the hon. member for Winnipeg North Centre withheld from this house, and when he talks about guilt for withholding I think he should take a good look in the mirror. Here is something he did not take the trouble to find out. It is true Mr. Tanner was a school principal but everyone in southern Alberta who knew him also knew him as a merchant who had been conducting a successful business for quite a number of years while he was the principal of the school. By the time he was taken into the Alberta government, he and Mrs. Tanner owned a chain of groceterias. Now, that is something which has been withheld, and as I say whether or not the hon. member for Winnipeg North Centre knew it, I do not know. It is a point that he did not reveal.


Alfred Claude Ellis: What has that got to do with pipe lines?


Solon Earl Low: I will tell you what it has got to do with pipe lines; it has a whole lot to do with them.


Stanley Howard Knowles: I did not know it, if the hon. rqember would like to know.


Solon Earl Low: The hon. member says he did not know it.


Stanley Howard Knowles: But I still do not think it has anything to do with the case.


Solon Earl Low: The hon. member for Winnipeg North Centre is very assiduous in hunting up a lot of things that are good for his case, but he is not so assiduous in hunting up all the facts.


Alfred Claude Ellis: What are you doing now?


Solon Earl Low: I am just pointing out the facts of the case.


An hon. Member:: I still do not know what it has to do with pipe lines.


Solon Earl Low: I will tell you what it has to do with pipe lines. When Mr. Tanner left the government of Alberta, he and Mrs. Tanner sold their chain of groceterias and invested the proceeds in the stock of Merrill oil company, and Mr. Tanner was asked to become the president and general manager of Merrill oil. For some years Mr. and Mrs. Tanner held their stock in Merrill oil and Mr. Tanner

was being paid a substantial salary as the president and general manager of an expanding company, a company whose stock began to rise on the market because of the fact they found oil on some of their property. As the Minister of Trade and Commerce (Mr. Howe) has already said, Mr. Tanner was. well on the way to an interesting and perhaps very important career as the head of one of the western oil companies. They were making some money as a consequence of wise investment.
Certainly, there is nothing wrong about that. Of course, my friends in the C.C.F. hate to see anybody making money. Now, in 1952 Mr. Tanner was asked, as I said, to become the head of this transmission company. Mr. Tanner hesitated for some years before he did consent. Finally, however, the pressure upon him to become head of the Trans-Canada Pipe Line Company increased -I know the Minister of Trade and Commerce knows that this is a fact-and the pressure on him induced him to step down from his position as president and general manager of Merrill oil. He had to liquidate his stock in that company and Mrs. Tanner did also, in order to be able to qualify as a director in the new company. Now, they put every penny they had, every dollar they had, into the new company because they wanted to make a success of it, and I know that for those two years Mr. Tanner was trying his best to get this company organized and on a firm footing. He did not know from one day to the next when every penny he and his wife had scraped together and saved-


Alfred Claude Ellis: What about his $35,000 salary?


Solon Earl Low: Keep your big mouth quiet so I may continue. Mr. Speaker, when the man about whom I am speaking, Mr. Tanner, joined the Trans-Canada Pipe Lines Company it was nothing but a group of people who were trying to promote a pipe line transmission concern for the purpose of finding a market for Alberta gas. He and his partners put every dollar that the company owned into the original promotion. They paid for the engineering investigations; they put their money into attempts to sell gas, to try to get contracts for the purchase of gas, and all of that took a lot of money. They spent a good deal before they ever came to this parliament to ask for any assistance whatever, and it was only because of the fact that our "all-Canada policy, Canada-first policy" demanded that they build an all-Canada pipe line that it became necessary to come to the government for help.
It was because of the fact that there were certain disabilities attached to any private

company that was to yield to that policy that the government decided to come to their aid, and we agreed on both sides. But here was the important thing. These men did risk all they had, all that they could borrow somewhere, and they did not know from one day to the next whether they would ever get a penny of it back.


Alfred Claude Ellis: How many shares did Mr. Tanner
buy?	.


Solon Earl Low: Please let me say what I have to say. It does not make a bit of difference how many shares he bought. The point is, he put every penny that he and Mrs. Tanner had in the company.


Clarence Decatur Howe: Mr. Speaker, if I may interrupt, it might be well to tell the hon. members how many shares he had. Mrs. Tanner bought 10,000 shares.


Howard Charles Green: How many?


Stanley Howard Knowles: Nine thousand, nine hundred and ninety-nine shares.


Clarence Decatur Howe: At $8 a share. The Tanner family paid some $80,000 for the shares then purchased.


Stanley Howard Knowles: Mr. Tanner bought one share at $8.


Solon Earl Low: I said, Mr. Tanner and Mrs. Tanner worked as a family unit. They did risk everything they had, and it does not matter what the amount was. They risked everything they had and when they came into Trans-Canada Pipe Lines Company, under pressure, as I said, he stepped down from a very lucrative position and a very promising future that he had in the oil company. Then, they were given inducements, and I do not blame them for one second for asking for some security in that way when they stepped down from a position such as that.
Then, I think they are entitled to some consideration. If there is anything to be made by the company, then certainly they should share equitably in what is made. Well, they did come into the company with what has been termed options. Eventually, they exercised their options. I do not know how much money they had to borrow. I imagine they had to borrow a very great sum in order to exercise the option, but in so doing they are helping the company to finance and enable it to repay to the government tomorrow afternoon what was borrowed from the government to discharge that obligation. But they are taking upon themselves right now, I imagine, the Tanners, the Coates and various others, this severe financial responsibility by way of borrowings wherever they can get
Trans-Canada Pipe Lines them to exercise those options. And if they do, in that case I certainly can see nothing wrong whatever in giving those people the chance to make some money.
I have no doubt whatever that every detail of their transactions can be laid before this parliament or any other fair judicial commission, and nothing whatsoever wrong would be found with the way they have carried on. I do deplore the innuendoes and implications that are thrown around concerning people who have been singularly successful in business, and I do not share in that attitude at all. I want to say right here, Mr. Speaker, I am satisfied that Mr. and Mrs. Tanner have conducted themselves on a high plane morally and on principle, and when they make some money I am going to be the first to rejoice, because it tells me that we are living in a country where people have made some money and the rest of us can do so also if we use our God-given right-


Stanley Howard Knowles: Will my hon. friend permit a question?


Solon Earl Low: Yes.


Stanley Howard Knowles: Will the hon. member for Peace River not admit that if Mr. and Mrs. Tanner make a large sum of money out of the dealings to which he has referred that money will be a drain on the gross national product of Canada and will reduce what is available for other people such as old age pensioners?


Solon Earl Low: I think that, Mr. Speaker, is an example of about as short-circuited thinking as I have ever heard. It is absolutely typical of my hon. friends to the right.


Stanley Howard Knowles: My hon. friend has indicated that he is concerned about old age pensioners: now I wonder.


Solon Earl Low: Mr. Speaker, in the first place, let it be remembered that they have not made this money yet, and that is the only thing my hon. friend talks about. Let me make it abundantly clear, Mr. Speaker, that all that anybody can possibly say is that at the moment there is an apparent paper profit.


James Joseph McCann: Hear, hear.


Solon Earl Low: That is all, and these people over here make a tremendous thing out of an apparent paper profit. In the end, they may lose many millions of dollars as a company. Who knows? But they are risking this, and they are showing faith in their country.
Let me say one other thing. By showing initiative in risking what they have, in giving their investments, their management and their skills to the building of such a pipe line, they are making it possible to increase production in this eastern part of Canada which

Trans-Canada Pipe Lines will help to build up Canada. That is something this outfit will not look at at all. Because of their short-circuited vision they close their minds to it. I am speaking now of the C.C.F. Therefore, Mr. Speaker, I say it is about time that we got down to something like decent consideration of all the facts involved.
If there was at any time a concealment of facts which ought to be revealed in this House of Commons I do not condone it for one moment. I did not think that at the time of the pipe line debate last spring there was anything wrong with options granted to executives of the company. It is done in every organization that I know anything about and I would not be one bit surprised if a good many of my C.C.F. friends have been involved in just such transactions. I would suggest that we examine into the theatre which was built just outside Regina in which the premier of Saskatchewan was involved in a financial way. I imagine you would find some very interesting options there that were exercised.


Alfred Claude Ellis: What has a theatre got to do with the government?


Solon Earl Low: I understand there were some public moneys involved; that is, public guarantees.


Alfred Claude Ellis: Who is throwing innuendoes now?


Solon Earl Low: The one thing I am concerned about, and have been concerned about right from the beginning, is the completion of an enterprise which would just as quickly as possible provide a market for the natural gas of western Canada, particularly of Alberta, because I know it could help to strengthen the economy of Canada and it could bring back to the people of this whole country many hundreds of times any profits that any executive might make on options.


Howard Charles Green: Mr. Speaker, the discussion this afternoon has tended to stray some distance away from the motion that was moved by the hon. member for Winnipeg North Centre, and I would point out to you, and through you to the members of the house, that the essence of the motion is contained in the last few lines. The first part of the motion sets out certain facts with regard to non-disclosure by the Minister of Trade and Commerce, and then we find these words:
.	.	. hence the need for this house to give
consideration-
And here is the subject which the motion asks the house to consider-
-to the way in which parliament and the country have been misled by not being informed as to the extent to which there would be private gain as a

result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury.
There is the gravamen of the complaint made in this motion; and I suggest that the Minister of Trade and Commerce has made no answer whatever to that charge and of course he cannot do so, because it is only six days ago that he did mislead parliament. I have never been able to understand why he does these things, but I think under the pressure of debate he thinks of the first answer that will stop any further questioning, and he gives it; then a few days or weeks later he comes into the house and explains that he was wrong and that the real answer should have been something else. That is exactly what he did today. When the house opened he got up and said he was wrong in the answer he gave six days ago. I do not think anyone can justify actions of that kind, and the minister is quite properly being censured for having misled the house on February 19.


Mr. Hodgson:: It is not the first time.


Howard Charles Green: If I remember correctly I believe he also misled the house during the pipe-line debate a year ago, or in any event he did not make clear that there were these options outstanding.


Clarence Decatur Howe: How could you make it clearer than by tabling a document that mentions the options?


Howard Charles Green: I may be wrong but if I remember correctly-


Clarence Decatur Howe: Don't give us your memory. I gave the house mine and I was wrong. Consider the possibility that you might be wrong.


Howard Charles Green: I might be wrong, but I hope I would not try to get out of it by saying something that is not true. In the whole Trans-Canada Pipe Line project we have public funds being used to assist a private corporation and in effect to assist very large and powerful United States pipe-line companies which were quite able to put up all the money that was required if they had seen fit to do so.


Clarence Decatur Howe: The good old "Texas buccaneer" cry from your party.


Howard Charles Green: The minister dragged in a red herring today by trying to compare the situation that obtained in relation to Trans-Canada Pipe Lines Limited with that of Westcoast Transmission Company Limited. The minister knows and I think we all realize that Westcoast is entirely a private company,

building its line and doing all its work without any government assistance. The situation with regard to Westcoast Transmission Company Limited is vastly different from that of the Trans-Canada Pipe Lines Limited, which was able to get from the government an agreement to loan $80 million for building the easiest part of the line, which was supposed to have been finished last year but which of course was not finished. In that regard there was another instance of the minister misleading the house. He told the house last year that Trans-Canada Pipe Lines Limited had pipe rolled and ready-


John Horace Dickey: No, he did not.


Howard Charles Green: -to be brought to Canada.


John Horace Dickey: He never said anything of the kind.


Clarence Decatur Howe: That was never said by me, and my hon. friend is now trying to mislead the house. He is not being very successful, however, because everyone knows better.


Howard Charles Green: It is my information that they did not have the pipe rolled at all.


Clarence Decatur Howe: No one ever said they did have the pipe rolled.


John Horace Dickey: No one said they had.


Howard Charles Green: In addition to the loan of $80 million the governments are building the most difficult part of the pipe line from the Manitoba-Ontario boundary to Kapuskasing at a cost to the taxpayers of $117 million, and so this case is completely different from that of Westcoast Transmission Company Limited. The house and the people of Canada are entitled to an absolutely honest statement of all the facts in connection with this transaction.


Clarence Decatur Howe: Well, they will never get it from you.


Howard Charles Green: I hope that in future the minister will not be in such a rush to put things on the record in order to stop criticism, with the result that we have to learn in other ways that he has not been giving the proper facts.
It is material that these options were not exercised until about two weeks ago. They were exercised after the board of transport commissioners had made an order on January 31, 1957, giving the company the right to go ahead; and in making that order someone had appeared on behalf of the Minister of Trade and Commerce to urge that the order be made. It is not as though Mr. Tanner and Mr. Coates had exercised these options when there was the slightest risk. On the 82715-103
Trans-Canada Pipe Lines contrary they waited until after the order had been made by the board of transport commissioners and then exercised the options, and no one can deny that they are in a position to make large sums of money as a result.
I suggest that there should not have been any arrangement of this kind in the first place where the government and the country were involved. There should not have been the provision for these options under which the officers of the company could make profits. After all these gentlemen are not taking a great deal of chance in working for Trans-Canada Pipe Lines Limited. Mr. Tanner is receiving an annual salary of $35,000, I believe, which is guaranteed until 1959 or 1960, as I understand it, and Mr. Coates is receiving a salary of $45,000. These men really do not need much sympathy, and I do not believe they are asking for any, because they were well taken care of in the provision made for their salaries.
The whole attitude of the minister on this question is really fantastic. For one thing he has tried to allege that the Conservative party was against a Canada first pipe line.


Clarence Decatur Howe: Well, was I
mistaken? What was all the debate about during the last session, a debate that lasted for approximately six weeks?


Mr. Brooks:: That related to closure:


Clarence Decatur Howe: It did not indicate that you and your associates were in favour of the pipe line.


Howard Charles Green: It has nothing to do with
whether or not the Conservative party favoured a Canada first policy. Most of that debate was taken up by the question of closure. Practically all the time was spent in protesting the use of closure by the government, and very little time was left for discussing the pipe-line question at all.


John Horace Dickey: Because you did not want
to discuss the pipe line.


Howard Charles Green: As far as the pipe line was
concerned the main points in the debate related to the manner in which the government was stepping in to finance these great United States pipe-line corporations in the construction of the pipe line.
When Mr. Murchison first came and obtained a charter he was prepared to build that line from Alberta to Montreal and he was prepared to build it with his own money in just the same way the Westcoast Transmission Company Limited is building a line from the Peace river district down to Vancouver.

Trans-Canada Pipe Lines
Another pipe-line group, Western Pipe Lines I think it was, came into the picture and eventually we ended up with a company largely controlled by Tennessee Gas Transmission. As the minister knows, those were the main points of the debate a year ago.
We have been pressing the minister for years to adopt a Canada first policy with regard to these gas pipe lines. It will be remembered that back in 1950 we urged that the pipe line to the west coast should go from the Peace river down through British Columbia rather than from southern Alberta into southeastern British Columbia and then down into the United States.


Clarence Decatur Howe: With ninety per cent of the gas going into the United States.


Howard Charles Green: Yes, but the people of Canada are being served first. In 1950 the minister and the Prime Minister threw all their weight behind the proposal that gas to the west coast should go via a United States route. The only reason we spoke in favour of the McMahon plan for Westcoast Transmission Company Limited was that he proposed to bring gas from the Peace river right down through British Columbia serving practically every community in that province.


Clarence Decatur Howe: I suggest that my hon. friend is now deceiving the house. He cannot document a single statement he has made.


Howard Charles Green: I could quote-


Clarence Decatur Howe: Please do.


Howard Charles Green: -from those debates by the page.


Clarence Decatur Howe: Go ahead.


Howard Charles Green: Hon. members who were here at that time know that is what all the fighting on the pipe-line charters was about, trying to force a Canada first policy. Some of the minister's own supporters, the former member for Fraser Valley, George Cruick-shank; the former member for Comox-Alberni, Jack Gibson, and several others of the minister's supporters fought with us to force a Canada first policy. Eventually we were successful with regard to gas going to the west coast, and we have been successful with regard to gas to eastern Ontario.


Clarence Decatur Howe: Are you the man
who built the pipe line?


Howard Charles Green: The minister did not favour that policy for a long time.


Douglas Scott Harkness: The minister does not like to hear the true facts in this pipe-line business. He has built up a mythology about it with which he wants people to agree.


Howard Charles Green: The minister will remember that three days before he announced his Canada first policy the then leader of the opposition, Hon. Mr. Drew, made a very strong speech on the question in which he said:
Let the government declare that the first Interest to be served will be the interests of the Canadian people-a Canada first policy in the use of these resources.
Several days later the minister came out with the same policy. He will remember that on several occasions during subsequent debates I pointed out that he had at last got on the same side as myself and he replied, "Well, that worries me; I am afraid I must be wrong." When he comes into this house and alleges that the Conservative party was opposed to a Canada first policy he is distorting the facts and misleading the house more than he did in the answers he made last week.


Clarence Decatur Howe: Once again the hon. member is distorting the facts. I said that during last year's debate, that the Conservative party was opposing the pipe line; I did not say they were opposing the Canada first principle of a pipe line.


Howard Charles Green: You mean during the debate last year?


Clarence Decatur Howe: Yes.


Howard Charles Green: At that time we were opposing the way in which the minister was proposing to do it.


Clarence Decatur Howe: There are several ways of carrying out a pipe-line project within Canada.


An hon. Member:: You were opposing the pipe line.


Howard Charles Green: To come back to the motion before the house today, no matter how the minister may twist and turn he cannot get away from the facts. This motion sets out the actual fact that he did mislead the house last week. After having been some 22 years in parliament, during all of which time he has been a minister of the crown, surely we have reached the stage that when this senior minister gets up and makes a statement we should be able to rely upon his stating actual facts. It makes a farce of parliament when a leading minister does this thing time and time again, gets up in the house and gives replies that are inaccurate. How can parliament function when there is that little responsibility in the mind of this particular minister for giving parliament the facts?
When we vote on this motion, that is the question on which we shall be voting, whether or not this minister has mislead the house on this particular occasion. I suggest

that no matter how the vote may go in this house the fact that the house has been misled cannot be gainsaid.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, in rising to speak on this motion I want to say I have listened most carefully to the remarks of the Minister of Trade and Commerce, and of the hon. member for Peace River. I was very interested in listening to the remarks of the hon. member for Peace River, the leader in this house of the Social Credit group. The man is positively amazing in the way in which he can evade the question and build up a red herring. I almost had tears in my eyes as I listened to his long harangue, his long Horatio Alger story of Mr. Tanner, rising from a poor boy to a teacher and then to the position which he now occupies executively and financially.
I am quite certain that many of us were almost overcome when we were told that this man had been pressured into taking his present position, that he had been pressured into taking a position having a salary of $35,000 a year for five years, or a total of $175,000. He is now half way through his term, and if he should retire he will receive $15,000 a year extra, or a total of $75,000. He was pressured into taking a job which in five years will pay him $175,000, and which in ten years, if he retires after five years, will represent a total of $250,000.
Then he was given the right to purchase
60,000	shares at $2 less than the stock market value. It was most interesting to hear the hon. member for Peace River tell us how this Horatio Alger chap had sacrificed his all to take this job to the extent that he invested the sum of $8 to purchase one share. His wife purchased 9,999 shares at a cost of $79,992.
I think my hon. friend is making a mistake. He should have given the credit to Mr. Tanner's wife, not to Mr. Tanner. He only had a confidence amounting to $8.
However, it is interesting to note the type of speech made by hon. members of the Social Credit group, and I would suggest through you, sir, to the supporters of the Liberal party that before they applaud so heartily when they think they hear something against the motion now before this house, they should give consideration to the economics of the situation in Canada. That applies in particular to the supporters of Social Credit who have been weeping so many crocodile tears about the plight of old age pensioners and veterans, and who have even gone so far as to oppose the distribution of grants under the Canada Council because they felt increases in pensions ought to come 82715-103i
Trans-Canada Pipe Lines first. Yet on an issue which concerns hundreds of millions of dollars, the money being made by racketeers, they think it is quite all right for them to make the money on the stock market, not realizing that, on an economic basis, this is a completely unearned increment and, as such, has to come out of the finances of this country and is therefore not available to be used on services such as pensions.


John Whitney Pickersgill: Is this the new line?


Harold Edward Winch: I have never in my life heard such economic stupidity as we have heard from the hon. members on my left in the Social Credit group. As a matter of fact, the very situation we are now discussing is one of the major reasons why inflation exits in this country and one of the major reasons why money is not now available for the necessities that are required by our people with regard to housing and with regard to pensions, in particular.
I was most disappointed in the remarks of the Minister of Trade and Commerce. I have known the minister by reputation since I was 17 years of age, and I have known him personally since I came here after the election in 1953. But, sir, on an issue as important as the one we are now discussing it was a bit of a let-down to hear the minister mainly concerned open up by trying to becloud the issue completely. That is what he was trying to do in his opening sentences, by holding up the Prime Minister and saying that nobody could match his record.


Some hon. Members:: Hear, hear.


Harold Edward Winch: There, you see, is the empty-headedness of hon. members on the government side. Their brains are in their hands instead of being in their heads. I say that because those opening remarks of the Minister of Trade and Commerce were directly, or perhaps indirectly, an insult to every hon. member of this house. Over the years only one person can be Prime Minister but, Mr. Speaker, every hon. member of this house has responsibility, and I take it they are sincere in discharging those responsibilities. And in doing their jobs their reputations, as such, on the floor of parliament are just as good as that of the Prime Minister. I certainly say that as far as I am concerned, because the minister said, "I challenge any man to stand up and say he can meet the record of the Prime Minister." As hon. members of the House of Commons all of us can, because that is our responsibility. Only one person can be Prime Minister, but you can be for 24 years, Mr. Speaker, a member of parliament and 12 years leader of the opposition, doing your job and doing it well in the public's

Trans-Canada Pipe Lines estimation. So I think it was very unfair of the Minister of Trade and Commerce to try to raise the matter on the basis he did.
He followed these remarks not by discussing the issue that is now before us but by saying that something even worse has been done, mentioning Mr. Frank McMahon and Westcoast Transmission. We agree that what he spoke of has occurred. There is no question about that. That is why, Mr. Speaker, -and the minister's words have given added impetus to our conviction in the C.C.F. group -we say there should be an investment control board under the authority of an act of the House of Commons, and that is why there should be a capital gains tax so as to prevent that kind of financial racketeer increasing his ' income to an unnecessarily high basis.
Mr. Speaker, I would point this out and it is something which was not pointed out by the Minister of Trade and Commerce, namely that the Westcoast Transmission Company, despite all that has been said about it, was not a company that could not get started unless it had the backing of the finances of the federal government. That, in my estimation, is a great differentiation between the instance which the minister gave and the situation that we are discussing today.
Speaking about this stock business, the Minister of Trade and Commerce made this statement with regard to Mr. Tanner and Mr. Coates; I wrote it down at the time; "So it is only a natural thing in such an organization, and it is only money." I wrote it down and he said it. He said, "It is only money". But, Mr. Speaker, money means nothing unless it has value, and the value of money lies in what you can exchange it for-in the last analysis, consumer goods. So what he says is "only money" is taking away a great deal from the natural flow of money in Canada and has, therefore, a great effect on inflation through money unearned by people who benefit through a very peculiar stock manipulation.
The Minister of Trade and Commerce said that in our discussion we were bickering. Mr. Speaker, I can assure you that it is not a question of bickering at all. This, in my humble estimation, is one of the most important questions that has ever come up on the floor of the House of Commons; that is, that the proof is now conclusive that the House of Commons was misled with regard to the bill introduced last year, the bill that was forced through by a method unknown in any democratic parliament in the commonwealth of nations, and the contentions which were made by hon. members of two parties of the opposition a year ago have now been 

proven to be correct. It has taken approximately ten months, but after ten months the truth is now out that a bill was foisted on the parliament of this country and, therefore, on the people of Canada with regard to which all information was not given. This information was known to at least one cabinet minister and, undoubtedly, to others; and because the information was not made known and the evidence was withheld, we now have what is tantamount to a conspiracy between the government and private enterprise for fortunes to be made by a private enterprise company.
We must recognize-and it is important that we should do so, irrespective of the red herrings that the government and the "socreds" try to bring up on this picture- that Trans-Canada Pipe Lines could not have gone through and would not have gone through unless they could reach an agreement with the federal government. They could not finance. The federal government decided, in conjunction with the Ontario government, to finance a non-profitable line in a certain part of Ontario, something that is going to cost the federal government at least $80 million. But even at that this company could not finance the balance of their line.
Therefore without any question of doubt whatesover it was an arrangement whereby, by the use of the taxpayers' money, with this guarantee, a private company was to be put in a position in which it could then raise the money; the government could withdraw, and the private enterprise could make its millions to its heart's content. Not only could the company make millions to its heart's content but it is now obvious that the government knew- I will not say they conspired with them but they acquiesced-that two individuals in that company could make unwarranted profits out of stock market manipulation, because they could buy at less than the stock market price.
Surely, Mr. Speaker, we on this side of the house are in duty bound to face our responsibility to draw to the attention of the members of this house and of the people of Canada the despicable, low-down sell-out of parliament and of the people in the introduction of the bill last year in the way in which it was done, the way in which it was carried through, and the effect of it. Here I am going to say to the government that if they did not know this could happen, they have the power now to do something about it and we are asking them to do it. If they plead "not guilty" with regard to what happened last session, then they should prove it by taking action now at this session-this week, as a matter of fact-to see that this

unwarranted profit of the company is stopped; and I include the two executives who are involved.
As has already been pointed out, if a situation like this had even been rumoured in the House of Commons at Westminster, not only would a minister have resigned but, on such an occurrence, the government would have resigned, because it is without a doubt a betrayal of democracy and a betrayal of cabinet responsibility to parliament and to the people. Mr. Speaker, all you have to do is to go over the record of ten months ago and go over the record as it is now. I refer to the stock market record, the information in the press and the statements made in this House of Commons. Surely, Mr. Speaker, there should be a deep recognition of the fact that if this situation is allowed to continue without correction, it will be the biggest black eye ever given a democratic parliament in the history of the British commonwealth. Because the Prime Minister is Prime Minister, he must bear the major responsibility.
I can do no more than just say this. I do not say it because I am a member of the opposition, but I say it because over a period of 24 years I have come to have a love and an understanding of the meaning of parliament and of the responsibilities of members of parliament and of the cabinet. Because of that fact, and because of my respect for parliament and all it means and has meant over the centuries and because of my love for this country I appeal through you, Mr. Speaker, to the Prime Minister. Tough as it may be for him to recognize that a mistake has been made or to admit that a mistake has been made, I appeal to him to take the necessary corrective action. I can assure you, Mr. Speaker, that I will be the first man to stand in my place and applaud him if he has the integrity, the sincerity and the courage so to do.


George Harris Hees: Mr. Speaker, this matter of misleading the house seems to have become a habit with the Minister of Trade and Commerce. On Tuesday last, as has been said already, he was asked a simple question with regard to entering into an agreement which he signed and which enabled three senior officers of Trans-Canada Pipe Lines Limited to take up options covering 110,000 shares at $8 a share. That was an extremely important agreement. That was only ten months ago. The minister professed complete ignorance of the signing of such an agreement when asked about it last Tuesday. To put it mildly, that is extremely hard for the hon. members of this house to believe. You might say that was perhaps just one occurrence. But a few days prior to that I asked-
Trans-Canada Pipe Lines


John Horace Dickey: Order.


George Harris Hees: Why do you say "order"?


An hon. Member:: You are out of order.


George Harris Hees: A few days ago I asked the Minister of Trade and Commerce a straightforward question with regard to the trade deficit for 1956.


John Horace Dickey: Mr. Speaker, I rise on a point of order. I submit that while this discussion has ranged widely on the question of Trans-Canada Pipe Lines in matters relating to the motion, there is nothing in this motion with respect to trade or any other answer made in this house. I therefore submit that the hon. member is out of order in raising extraneous matters, and that his doing so will only lead to the necessity of debating a number of things not at all related to this particular question.


George Harris Hees: In answer to the hon. member, Mr. Speaker, I would remind him that this motion deals with the question of misleading the house. I am giving one other example, one of the many, of the Minister of Trade and Commerce misleading this house.


The Acting Speaker (Mr. Applewhaile):: Order. I do not think the hon. member is quite right there. I do not think the motion deals with the question of misleading the house in general. As was pointed out by an hon. member who spoke previously, the concluding words are as follows:
-parliament and the country have been misled by not being informed as to the extent to which there would be private gain as a result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury.
I think every hon. member of the house will admit that we have ranged far afield. In view of the nature of the speeches that have been made on both sides of the question, it is hard not to range far afield. However, I think previous speakers have confined themselves to pipe-line companies and similar matters. I think the hon. member for Halifax is right when he says that if the hon. member for Broadview introduces into the debate discussion of some other matters entirely unconnected with pipe lines as examples of the house having been misled, then the responsible minister will certainly be obliged to reply and we are likely to be discussing other instances than the one to which the motion submitted by the hon. member for Winnipeg North Centre refers. So I am going to ask the hon. member for Broadview to confine his remarks, as I know he can, to matters connected with Trans-Canada Pipe Lines and similar transactions.

Trans-Canada Pipe Lines


George Harris Hees: Naturally I bow to your wishes, but I simply mentioned that fact as an example of the design and pattern which has been developed recently in this house by the Minister of Trade and Commerce, who is making a very definite habit of misleading the house.
In his remarks a few minutes ago the Minister of Trade and Commerce spoke almost pathetically of the four years of great anxiety that were suffered by Mr. Tanner and Mr. Coates, as well as the other senior officials of Trans-Canada Pipe Lines. I never heard anything in my life that contained so much tommyrot. Anxiety for what? Was there anxiety over the fact that the shares might go down? Of course not; the shares were not going to go down. They did not have to take up their options until they were positive the shares would go up, and go up materially.
Was there anxiety over the fact that the bill would not pass? Of course not; they knew quite well that this government, with its dictatorial methods, would jam down the throat of parliament, by the use of closure, a bill which they had no right to have passed by this house. There was no anxiety there. Was there anxiety over the finances which Trans-Canada Pipe Lines was so anxious to obtain from the federal government? Of course not; it was quite obvious right from the start that the Minister of Trade and Commerce had given assurances to the officers of Trans-Canada that whatever they wanted in the way of financing or building would be made available to them. All they had to do was snap their fingers. They had the Minister of Trade and Commerce wrapped around their little finger, and they knew it. There was no anxiety whatever. This story about anxiety was really a comic piece which the Minister of Trade and Commerce introduced into this serious debate this afternoon.
From 1951 on, as we all know, this company came before the board of transport commissioners and gave unqualified assurances that this line would be built without any assistance from the public treasury. Then in August, 1955, they cried on the minister's shoulder and got the northern Ontario section built. Then in the fall of last year they had the prairie section financed for them. This whole enterprise, Mr. Speaker, has been made nothing more nor less than an investors' paradise. This line was an enterprise in which there was no risk taken by the company, and all the risks and financing that were required were put up by the people of Canada. According to the reports of the past few days, Mr. Tanner and Mr. Coates have already made paper profits of approximately half a million dollars each. This has been the story throughout this whole sordid procedure.
[The Acting Speaker (Mr. Applewhaite).]
Last year, Mr. Speaker, I said that from the favours which this company was receiving from this government it would be very surprising if at least a million dollars did not find its way into the campaign funds of the Liberal party for this campaign.


Some hon. Members:: Oh, oh.


George Harris Hees: I say again, judging from what we have heard since concerning the profits that are obviously being made by the shareholders of this company, that that would be a minimum figure. In the forthcoming election the people of Canada will have the satisfaction of knowing that a great many of the advertisements, the television programs, the radio broadcasts and the campaign literature as well as the campaign funds handed out to Liberal candidates, will have been made possible through the financing by the Canadian people of Trans-Canada Pipe Lines. It is obvious now that this company needed no financing by the public treasury at all, but could have been financed easily by any of the wealthy United States oil and gas companies which are participating so generously in the profits made by this enterprise.


Mr. F. S. Zapliiny (Dauphin):: Mr. Speaker, so far the debate on this motion has indicated quite clearly that it would be impossible to separate the immediate issues from the general question of the relationship between Trans-Canada Pipe Lines and the government. It seems now that there are two bases for this issue, that is a moral and an economic issue.
In the first place we have the position before us that the government has, not only on this occasion but on previous occasions in connection with this whole Trans-Canada Pipe Line question, misled the house and the committee a number of times. The situation is that the Minister of Trade and Commerce found it convenient to rise today and make an apology for having misled the house a week ago. It may be only a coincidence but if so it is a rather striking coincidence, that he chose this particular time to do it. I have great respect for the officials of his department, and I cannot believe it took them a whole week to find out that the minister had made an error.
It may only be coincidence that it was only after the hon. member for Winnipeg North Centre took it upon himself as a public duty to make a certain investigation and had obtained certain information which, by the very nature of it, had to come from the minister's department, that the minister found it convenient to rise and make his apology. This in itself is a rather serious situation because what would have been the

case had the hon. member for Winnipeg North Centre not been as alert as he usually is, and had he not gone to the trouble of making this investigation into the facts disclosing these misleading statements? It is quite possible that this apology would never have been made at all. The minister might have been quite prepared to let the matter slide and let that inaccurate reply join all the others that have been made over the years.
In doing this I think the hon. member for Winnipeg North Centre has performed a public service. It is the kind of thing which makes parliament effective, the kind of thing which makes democracy effective, when each member of this house takes it upon himself to make sure that the information given to the house and by that method to the public, is accurate information based upon the facts; in other words that it is the truth, the whole truth and nothing but the truth. Parliament would be that much stronger and democracy that much more effective if more of that kind of work were done in parliament. I feel, therefore, that the hon. member deserves the commendation of this house and of the public for having been effective as he has been in the past, in disclosing inaccuracies, whether they be inaccuracies caused by neglect or lack of memory or whether they be done for a purpose.
In reply to the motion the Minister of Trade and Commerce made a certain statement which in my opinion, raised some very important questions. He started off by making the amazing statement that you cannot build a pipe line with money; you must have brains. What does that mean? What is the implication of that? The implication, as I see it, is that the minister is abdicating the responsibility he has in this house, the responsibility he has to this country.
During the years of the war the same minister did not seem to have much difficulty in finding the brains to set up some of the finest national enterprises that we have in this country. He did not seem to find it difficult to locate the brains to establish the synthetic rubber plant known as the Polymer plant and many other enterprises such as the Trans-Canada Air Lines. Parliament was able to find the brains to conduct a utility such as the Canadian Broadcasting Corporation and a great many other publicly-owned utilities, which are giving this country great service and performing them at cost, and which are not there to provide a profit for any private individual or firm but to provide a service at cost. And then, all of a sudden, when we come to a pipe-line bill the minister gives up in despair and tells us that
Trans-Canada Pipe Lines all the brains he can lay his hands on, or that the government or parliament can lay its hands on, have been exhausted. Now they must go to a private company and finance this company because somebody in that company has all the brains with regard to the transmission of gas. What an argument.
If Mr. Tanner and Mr. Coates, or any combination of experts having anything to do with this company, had such qualifications as have been described and had been prepared to go to private sources to obtain the financing, then this parliament would not have been concerned with the matter. But the fact that the officials of this company came to this government and to this parliament and asked the public purse of Canada to take the risk indicates that they themselves did not have nearly as much confidence in themselves, or in their ability to organize the company, as the Minister of Trade and Commerce gave them credit for.
Perhaps the most serious implication in the minister's statement is that it strikes a blow directly at national enterprise. I was amazed and somewhat shocked to hear that in practically the same sentence he said-[DOT] referring to Mr. Tanner-that here was a man who was prepared to take the leadership of a great national enterprise. He referred again and again to Trans-Canada Pipe Lines as a national enterprise. Well, it is nothing of the sort.


An hon. Member:: Don't misquote the
minister.


Frederick Samuel Zaplitny: The words of the minister are on the record, and if I misquote him he will be well within his rights to correct me. I took the words down, and he referred to Trans-Canada Pipe Lines as a national enterprise.
Is it not a complete abdication of responsibility when this nation of ours, capable of doing what it was able to do in the second world war, capable of doing what it has been able to do through national enterprises since the war, all of a sudden folds up and has to term a private monopoly a national enterprise, has to hang the tag or the label of national enterprise on a privately-owned monopoly, the majority of which is owned by interests outside of our nation, in order to have an excuse to put some public funds into something which is not ours and which never will be ours under the present set-up? By saying that the minister admitted that if we are interested as a parliament, and if the government is interested in national enterprise as such, then what the government should have done was create a national

Trans-Canada Pipe Lines enterprise in 1951, when the charter was granted to the pipe-line company to build a pipe line.
That was the stage at which the minister would have been quite within his rights-and this parliament had a public duty to perform -in creating a national enterprise. If he had done that we would have had the pipe line built and functioning and carrying gas as far as Montreal by now. We would not be sitting around arguing as to when they are going to get as far as Winnipeg, or when they are going to get as far as Montreal. What excuse has the company for the delays which seem to be bedevilling the whole situation?
Had the government and this parliament taken the steps that this nation demanded of them they would have started back in 1950 or 1951 as a national enterprise, and we would have had today a trans-Canada gas line functioning and providing a service at cost to the Canadian people. But the government did otherwise. They decided to place public money into a private monopoly.
Let me refer again to the two gentlemen who have been the subject of discussion today, namely Mr. Tanner and Mr. Coates. I wish to make it quite clear, Mr. Speaker, that I do not desire to say anything about these gentlemen, or any others, which will damage their reputations or take away from them anything they have accomplished. I have never made it a habit to attack anyone's character in a matter of this kind. Therefore the whole question of whether or not Mr. Tanner by his efforts or by his brilliancy reached the position he has is beside the question. No one is attacking Mr. Tanner.


Clarence Decatur Howe: You have not been listening. Did you hear him called a buccaneer a while ago by the Leader of the Opposition?


Frederick Samuel Zaplitny: I did not use the term "buccaneer", nor did any member of this group so far as I can recall.


Mr. Marler:: Just the Leader of the
Opposition.


Frederick Samuel Zaplitny: If someone else used it he must have had a good reason for using the term. 1 am making it clear that the issue before us is not the character of Mr. Tanner, Mr. Coates or anyone else; it is the question of whether the government and this parliament were within their rights to finance a privately-owned company which happens to occupy a monopolistic position and to put these gentlemen, or any other gentlemen, in


the position of being able to profit individually and privately as a result of the public purse participating in the venture. That is the whole question.
If I may, I should like to refer to an editorial which appeared in the Toronto Telegram on February 22, which sets out the situation rather clearly. They put it in these words:
The issue of shares to management is a common practice in private companies, and on that basis Right Hon. C. D. Howe defended the Trans-Canada transactions involving senior officers. The fact remains that substantial private profits have accrued to individuals as a result mainly of governmental help for a company that pleaded inability to carry out its project without it. This is a situation that does nothing to create confidence in the manner in which governments have entered into the pipe line project.
The most serious criticism of the Trans-Canada deal is that, with the original risk capital put up by the taxpayers, the company and not the taxpayers will harvest the profits.
This is a forthright statement in an editorial in a newspaper which I think even the government on occasion has quoted in setting up some of its arguments, and that I think is the nub of the whole situation. That is why I felt almost a year ago, or the first time I spoke on this matter, that it would be a tragic mistake on the part of this parliament and on the part of this government to allow public funds to be used for the purpose of creating a private monopoly.
If we wish to go back to the beginning it must be remembered, Mr. Speaker, that it was the Minister of Trade and Commerce himself who on one occasion rose in this very house and announced that he had been instrumental in bringing together three pipeline companies and having them merged into what is now known as Trans-Canada Pipe Lines. If I remember correctly he said it was in his office that the conversations were held that resulted in this merger.
Referring to that almost a year ago, I made a statement which I think has been borne out by events. I said that the minister came very close to violating the Combines Investigations Act by taking part in the formation of a combine. Certainly it should not be the function of a minister of the crown to be a party to the formation of combines in this country, or the formation of monopolies, for the purpose of exploiting the consumers of this country, and that is exactly what was done.
That is where I think the minister made his fatal mistake, because at that time he had a choice of either going ahead with this project as a public enterprise, or as he himself calls it a national enterprise-and then it would have been a truly national enterprise instead of the phony national enterprise it is now- or he could have completely washed his hands
162S

of the thing and said, "All right, we will leave it to free enterprise and let those fellows do it on their own, and if they want to form a merger or go to the United States to get their capital, that is their business and we as the government will have nothing to do with it." But he took neither one choice nor the other. Instead he took the steps which helped to form this merger which in turn created this monopoly, this Frankenstein which now has its tentacles in the consumer's pocket, and this is only the beginning.
Then in order to add insult to injury as far as the taxpayer is concerned, after having made sure the consumer was going to have one pocket picked by this company through the forming of a monopoly, he stuck his hand into the other pocket as well and took out some of the taxpayer's money and gave it to this company and said, "Here is some money to make it easier for you to form this monopoly."
That is the kind of thing to which I have objected and to which I shall continue to object as long as I am in this parliament. I have done a little tabulating, and I find that the tax money of the people of my constituency was filched to the extent of about $500,000. This amount of money was taken from the people I represent by this government in order to provide this privately-owned company with an opportunity to set up a huge monopoly across the country which will exploit the very people who helped to finance it. Is that the kind of transaction to which the Minister of Trade and Commerce should be a party? That is the chain of events which put the government in the trouble they are in now.
Another statement the minister made which I think has very serious implications is this. If I heard him correctly, he said that sometime tomorrow afternoon he expects that Trans-Canada Pipe Lines will come along with a cheque for $80 million plus interest and place it in his hands, and then he concluded by saying that from then on as far as he is concerned it will be free enterprise, the government will have nothing further to do with it, and they will not answer questions about this company. He suggested that they would simply say that the information is in the hands of the company and that the government is not concerned.
Surely the minister does not think he can get away with that kind of statement. Over $100 million of the taxpayers' money is still involved in this business. The minister attempted to brush off the question of the northern Ontario section of the pipe line by saying that it has nothing to do with Trans-Canada Pipe Lines but is rather a joint project between the federal government and
Trans-Canada Pipe Lines the government of Ontario. Well, technically so far this may be so; but the very basis upon which that crown company was created in order to build that pipe line is contained in the agreement to which it is attached, which states very plainly that the purpose of setting up that crown corporation to build the northern Ontario section of the pipe line was so that immediately upon its completion it must be leased to Trans-Canada Pipe Lines which would have an option to buy it at any time they wished. What is more, the company is under no obligation to buy it at any time. In other words, they have it all their own way.
The agreement under which the pipe line is leased to the company for a period of 25 years is part and parcel of the whole thing. The sum of over $100 million is involved in that transaction; yet the minister stood up in this house and said that tomorrow after he receives a cheque for $80 million, as far as he is concerned it is a free enterprise from that point on.
That in itself is misleading the public to the nth degree, because the public treasury is involved in this entire pipe-line deal and will remain involved until the whole pipe line has been completed, and until such time as it suits the company to take complete ownership of the pipe line from Alberta right through to Montreal. They will only do that upon their own terms, and only if it appears to them to be the best thing to do. This government are not going to be able to shrug themselves away from the deal into which they have gotten themselves as easily as they think.
It is for this reason that I think the hon. member for Vancouver East was right on the beam when he made the plea that it is not too late even yet for this government to salvage something from this whole unhappy business for the Canadian public. It is not too late for this parliament to decide once and for all to end this miserable business and take the steps that need to be taken. It is not too late for the government to swallow its pride and admit its mistake and let this parliament make the move and take over the entire Trans-Canada Pipe Line project as a publicly-owned project to be handled for the benefit of the consumers of Canada, to provide a service at cost. Then the public of Canada will know in what their money is invested. If this is done they will then know that this is truly a national enterprise owned by the citizens of Canada and not by foreign interests, built to serve the citizens of Canada and not for the gain of a few private individuals.


Mr. W. M. Hamilton (Notre Dame de Grace):: Mr. Speaker, I should like to make a few comments in connection with this

Trans-Canada Pipe Lines motion, some of which might be slightly at variance with the opinions we have heard expressed this afternoon by those in the party to my left, because I am one of those who believe that in this free enterprise system it is permissible and even desirable that those who aid in the growth and development of some great company or national enterprise by contributing their capital or brain power are deserving of being suitably recompensed.


John Horace Dickey: That is at variance with your leader as well as the people to your left.


John George Diefenbaker: There is nothing at
variance at all except what exists in the imagination of the hon. member for Halifax.


William McLean Hamilton: There is nothing at variance between my leader and myself in our appreciation of the work of many men who have contributed to the growth and development of this country and who deserve to be recompensed for the contribution they have made. However, Mr. Speaker, when we enter a field in which people who have not contributed in any specific way to a particular project or to the growth and development of our country are rewarded for slight risks, then it is difficult even for those of us who stand foursquare in support of free enterprise to understand, and we begin to question and wonder what is happening.


John Horace Dickey: Speak to your colleague from Broadview about that.


William McLean Hamilton: think that stands particularly true when those who receive such rewards appear to have little to recommend them except a past political affiliation or perhaps even a present political affiliation. Both the Minister of Trade and Commerce and the leader of the Social Credit party made a great stand this afternoon on behalf of Messrs. Coates and Tanner. The Minister of Trade and Commerce presented these gentlemen as if they had almost single-handed made possible the development of the Trans-Canada Pipe Lines.


Mr. Nesbitt:: The gold dust twins.


William McLean Hamilton: The
leader of the Social Credit party particularly came to the defence of Mr. Tanner. He was a great Canadian who had suffered tremendously in order to enter this Trans-Canada Pipe Lines operation. He had endangered everything he had built up over the years in order to do this. Those were the remarks of the leader of the Social Credit party.


An hon. Member:: You are allowing your imagination to run wild.


William McLean Hamilton: Fortunately we have a Hansard in this house and those remarks can be checked. I made notes as the leader of the Social Credit party went along. Then the Minister of Trade and Commerce, referring I think specifically to Mr. Tanner, remarked that we do not build these things with money alone, that you must have brainpower. He pointed out that it was this brainpower which Mr. Tanner had brought to Trans-Canada which has merited this rather substantial allotment of shares under an option arrangement with him.
Let us for a moment examine the record of Mr. Tanner in order to see what brainpower he brought to this particular project. In the first instance the implication of the leader of the Social Credit party that Mr. Tanner had long been absent from the provincial government before he entered the affairs of Trans-Canada Pipe Lines is simply wrong. Mr. Tanner remained in the Social Credit cabinet of the province of Alberta until August, 1952. There is a slight overlapping, which is interesting to note, between the original developments leading to the creation of Trans-Canada Pipe Lines and Mr. Tanner's membership in the Alberta government.
Then Mr. Tanner left and went with Merrill Petroleums Limited, which is an Alberta company. The next apparent oversight on the part of the leader of the Social Credit party was his implication that when Mr. Tanner joined Trans-Canada Pipe Lines it was necessary for him to remove himself from Merrill Petroleums. I want to say he did not do that. The implication that Tanner was sacrificing something he had built up over the years was quite wrong. His interest in this corporation with which he, according to the leader of the Social Credit party, had been associated for so many years and had helped to build up was not long.
I hold in my hand the 1956 "Survey of Oils" published by the Financial Post which lists Mr. Tanner as chairman of Merrill Petroleums Limited. There was a change- this is important because of what I am going to say-in Mr. Tanner's position with this company. From the time he left the Social Credit cabinet to enter this company that had dealings with the Social Credit government he was president of Merrill Petroleums. As we all know that meant he was the operating head of the company, the man who was primarily responsible for the day-to-day activities.
When he joined Trans-Canada he resigned his presidency and moved upward as chairman of the board, where he lost contact with

the day to day operations of Merrill Petroleums. However, he still retained his interest and presided at directors' meetings. I suggest that was the best thing in the world that ever happened to Merrill Petroleums. Let me tell you what this great brainpower Which was emphasized so much by the Minister of Trade and Commerce in connection with this man actually did.
May I say that this company was formed in 1951, not before that as was suggested by -the leader of the Social Credit party.
While he was president of Merrill Petroleums-the Financial Post does not give the figures for the first couple of years -for the year ended June 30, 1953, the company had a net loss of $508,000; for the year ended June 30, 1954, it had a net loss of $1,160,000; in the six months ended December 31, 1954, which is the last figure available, it had a net loss of $288,000 in round figures. While Mr. Tanner was president, with this great brainpower of his, Merrill Petroleums was losing money hand over fist. However, as I pointed out, the move upward or perhaps the kick upward to chairman of the board, a position in which he was no longer the operating head, mirabilus dictu, which, if I may translate for the benefit of the Minister of Trade and Commerce, means marvellous to say-


John Horace Dickey: Mirabile dictu.


William McLean Hamilton: The
parliamentary assistant to the Minister of Trade and Commerce knows more Latin than he does trade and commerce. In the year following Mr. Tanner's presidency Merrill Petroleums made a profit of $856,000. Is that not a marvellous record for a man with this fantastic brainpower? As long as he was president of the company it lost money. The company's working capital dropped from $2,288,000 to a deficit in working capital of $4,410. That is what happened to the company. But as soon as he stops being the operating head of the company it makes almost $1 million. That is the kind of man the Minister of Trade and Commerce presented to the house this afternoon as the great brain to whom it was necessary to give an option of 60,000 shares of stock in order to get him as president of Trans-Canada Pipe Lines.
So far I have attempted to make these points. First, that the defence of Mr. Tanner and the information given in his connection this afternoon by the leader of the Social Credit was quite erroneous. Mr. Tanner did not have any long period following his exit from the Social Credit government in which to build up a business or
Trans-Canada Pipe Lines knowledge. He went straight from the Social Credit cabinet as minister of mines into a company doing business with the Social Credit government. Then about two years later he leapfrogged from there into a company doing business with both the federal and provincial governments.
I think the figures we have shown demonstrate the brainpower, so-called, of Mr. Tanner that would merit the stock option agreement which he got. I forbear to suggest why Mr. Tanner should have got that stock option. I really do not know. It does not seem to me he got it for the ability he had demonstrated to that date, yet I would not want to think he got it because he had been minister of mines in the Social Credit government of Alberta and thus facilitated certain negotiations with Trans-Canada Pipe Lines. Because, as I said in the beginning-


Mr.   Johnsion@Bow River: Are you stating that as a fact?


William McLean Hamilton: No,
I said I did not want to think that.


Mr. Johnston (Bow River):: You might as well say what you think, instead of hiding behind implications.


William McLean Hamilton: As
I said in the beginning, Mr. Speaker, I do feel we should make a difference, in examining a situation such as the one in which the Minister of Trade and Commerce is now involved, between people who have demonstrated their qualifications, who have had long experience in the field, who have put up hard-earned money, or who have turned to account their demonstrated brain power, and people without such qualifications. The former are the people who deserve the reward, and I do not think there is anyone in this party who will gainsay that. But I do reserve to myself the right to question, examine and, in this case, to complain about someone who receives rewards without there being appreciable evidence of any reason why he should receive them.
Let me point out, before closing, one or two points which, again, I think the Minister of Trade and Commerce missed this afternoon. The minister implied that the only profit that was being made by Coates and Tanner was $1 per share. In order for that to be so it would be necessary for them to have sold this stock on the market at the going price when it came out, and we know it was not necessary for them to do that. In fact it is highly probable that they did not do so. In the first place, the stock came out at a premium substantially in excess of the $10 figure which the minister quoted and, second,
1628	HOUSE OF
Trans-Canada Pipe Lines there was no obligation upon them whatsoever to sell the stock at that point.
Finally, and this is a point which has been missed by all speakers up to the present, there still exists in the name of Mr. Nathan E. Tanner an option to purchase 5,000 shares of the stock of Trans-Canada Pipe Lines at a guaranteed price of $8 a share, and that option is exercisable until March 8, 1959. At any point between now and March 8 of that year, Mr. Tanner can walk in and pick up 5,000 shares of the stock of Trans-Canada Pipe Lines at a guaranteed price of $8 a share and sell them the same day on the market, if he wishes to do so, at whatever price they happen to fetch. That has not been brought out, and that is right here in the prospectus.


An hon. Member:: What a brain.


William McLean Hamilton: The
way it is arrived at is quite simple, Mr. Speaker. The original option covered 60,000 shares and Mr. Tanner has only picked up
55,000	shares. He has left these other 5,000 shares there. For what reason he has done this I don't know, but whatever the reason is, the option is good until March, 1959. This particular treatment is even more favourable than that given to Mr. Coates, because Mr. Coates is required to pay the going market price for the shares when he exercises his option whereas Mr. Tanner is in a position to purchase them at a guaranteed price of $8 no matter whether they are selling as at $25, $50 or $100 a share.


Stanley Howard Knowles: Is it not "whichever is the lesser" in the case of Mr. Coates?


William McLean Hamilton: I am
sorry; "whichever is the lesser". The normal option agreement would, of course, take into consideration the market price and would not exercise such an unduly favourable provision in respect to a prospective shareholder.
It seems to me that there is little more to add to what I have already said and to the facts as I have placed them before the house. I hold in my hand a Canadian "Who's Who" for 1952-54 which was published in 1954, but I cannot find in that book any record whatsoever of Mr. Tanner having been actively engaged as a merchant in the province of Alberta, a point which was made quite strongly by the leader of the Social Credit party this afternoon. I am surprised at this, because it does give his affiliations, such as school trustee, town councilman, cadet instructor, member of the Alberta research council, commissioner of boy scouts, president of a certain church. And then, of course, it outlines his long record in the Social Credit government from 1935 to 1952, which included his tenure of office as minister of mines from (Mr. Hamilton (Notre Dame de Grace).]

1937 to 1952. But I cannot find any record of his having been a merchant.


Charles Edward Johnston: Does that indicate that he was not?


William McLean Hamilton: No,
it doesn't.


Charles Edward Johnston: Why don't you speak out frankly?


An hon. Member:: He hasn't the courage.


William McLean Hamilton: Mr. Speaker, I will put it on the record in the most forthright manner possible-


Charles Edward Johnston: You are not
doing it so far.


William McLean Hamilton: The
Minister of Trade and Commerce came into this house and made a statement which was completely erroneous. It is impossible for this house to do business under terms of that kind. That is one fact. The second fact is that since the inception of Trans-Canada Pipe Lines the minister's attitude towards this house has been to deny us an opportunity to discuss this measure in a way which would have brought out the facts and which would have brought out the strange situation where we find a minister of mines of one government suddenly emerging with tremendously preferred treatment as the senior official of a corporation, for no apparent reason whatsoever.
As one who believes that the government must be founded on two things, first of all the personal respect of members of the cabinet for the House of Commons and its right to information and, secondly, the personal integrity of every member who sits in any legislature in Canada, I find these events, Mr. Speaker, a cause of great disappointment and dismay.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Alfred Claude Ellis: Mr. Speaker, I was quite interested in the statement made this afternoon by the Minister of Trade and Commerce, particularly because of the minister's failure to come to grips with the subject matter of the motion presented to this house this afternoon. During the time the Minister of Trade and Commerce was speaking I took notes, and I failed to find any reference to the_ point at issue at this time. He drew a red herring across the trail by going into a discussion of Westcoast Transmission Company.

I was greatly interested in what he had to say on that score, and I want to assure him that I will read his remarks tomorrow when I receive Hansard because, as Your Honor knows, we hold no brief for West-coast Transmission Company nor for any other privately-owned pipe-line company in this country. I think it is an extremely poor argument indeed to suggest that because Westcoast Transmission Company undertook certain procedures, the very fact that that was done absolves Trans-Canada Pipe Lines of any blame in connection with anything they have done. I think the minister's argument would tend to suggest that he believes that two wrongs make a right.
When the specific allegation is made that there was something improper in the way this matter was handled he seems to suggest that because some other pipe-line company does business in a certain way, that fact in some way excuses the actions taken by himself with regard to the matter now before the house. It seems to me that the sum total of the argument presented by the Minister of Trade and Commerce was that since some Other pipe-line company was a worse offender than Trans-Canada Pipe Lines, therefore that fact absolves Trans-Canada Pipe Lines or the government of any blame in this connection.
It seems to me that the argument presented by the Minister of Trade and Commerce this afternoon points out more clearly than anything else the need for public ownership of pipe lines in this country. There is only one way in which the interests of the general public can be guaranteed, and that is through public ownership. I think this whole debate will point out that one inescapable fact. If nothing else comes of this discussion we have had this afternoon, I think it will impress upon the Canadian people the fact that the only way in which their interests can be protected is when they themselves, through their government, have the ownership and control of these carriers which are so essential in this modern day.
The minister on former occasions has made certain references to the role of some of the gentlemen who have been prominently mentioned this afternoon. He also spoke of the need for these options as a means of providing some incentive for men at the top to put forth their best effort. It seems to me, Mr. Speaker, that the options we have been discussing thus far in this debate are certainly not designed to create any selfreliance or further initiative on the part of the gentlemen concerned. We know that the president of the company had one share in his name. It was brought to our attention
Trans-Canada Pipe Lines this afternoon-indeed we knew it from the debate of ten months ago-that there was some other person of the same surname on the list of shareholders. But I suggest that fact is immaterial. The fact of the matter is that the president of Trans-Canada Pipe Lines owned one $8 share. Hence when we hear the tearful stories about all these tremendous risks encountered in this particular venture, we have to bear those facts in mind.
We heard some reference to the worry and the anxiety. I dare say there was a certain amount of worry and anxiety. I suppose some of that anxiety was removed when the government decided to grant a loan of $80 million of the taxpayers' money, because after they received the charter they sat there on their haunches and did nothing until 1956. Even when the initial proposals to build the northern Ontario section were made in an effort to get some action out of this company, they were even then not prepared to go ahead. Apparently the only way the government were able to persuade them to go ahead with this venture was when they promised to lend them the money to build the western leg of the line. Worry and anxiety about whether the government would lend them the $80 million is about the only type of anxiety I could see in this particular venture.
It seems to me the Minister of Trade and Commerce is selling many Canadians short when he suggests that there is a shortage of skill or a shortage of brains here in Canada, that there are only one or two people in this country who can possibly undertake a venture of this sort. I think that is an insult to a great many Canadian businessmen who I am sure are quite capable of carrying out a venture of this kind. Moreover, I suggest that any public-spirited businessman in this country would be happy to serve this country if he were called upon to aid in the building of a pipe line under public ownership. I suggest that any man who would refuse simply by virtue of the fact that, by continuing in private ownership, he hoped he might get options to purchase stock in order that he might amass a personal fortune for himself, is not the type of public-spirited man who has built up this country over the years.
It seems to me, Mr. Speaker, that the other red herring that was drawn across the path this afternoon had to do with an attempt to introduce into the debate the personal affairs of the president of Trans-Canada Pipe Lines Limited. I do not think the personnel or the individuals concerned is an important matter. I think the principle is all-important. We had this great effort that the hon. member for Peace River presented this afternoon, when he tried to reduce us to tears over the

Trans-Canada Pipe Lines plight of this gentleman who had, to use the hon. member's own expression, "stepped down", the implication being that he was making a great personal sacrifice.
He has a salary of $35,000 a year and a retiring allowance or separation allowance or pension or whatever you want to call it of $15,000 a year for a few years after retirement, plus the option to purchase 60,000 shares of stock. Then we are told that this man is "stepping down", that he is lowering his standard of living. When a man makes more money than the Prime Minister of Canada, nevertheless we are told that he is stepping down in the economic scale in order to take on the responsibility of president of Trans-Canada Pipe Lines.


An hon. Member:: What was he making previously?


Alfred Claude Ellis: I am not in a position to say that. Perhaps our hon. friends who mentioned earlier today that some people were withholding information should have informed us as to the previous salaries. At the same time on this question of withholding information, when the hon. member for Peace River spoke this afternoon I think perhaps he might have informed us as to what salary was being received by the president of Trans-Canada Pipe Lines at the time he was president of Merrill Petroleums Limited.
This suggestion that there was a great personal sacrifice on the part of the president of Trans-Canada Pipe Lines in taking over the presidency I think will not meet a very favourable response from the people of this country. I am certain that those who have been connected with this venture have been very well rewarded indeed.
It seemed to me, Mr. Speaker, that the hon. member for Peace River made some reference to the fact that this was only a paper gain, and that since presumably he has not disposed of the shares, actually he has not made that money. Of course the only thing standing in the way of realizing a real capital gain is the selling of the shares, and the moment he wants to put those shares on the market he will realize his gain. My suggestion is that the reason the gentleman will not put them on the market is he hopes they will go up in value.
You know, pipe lines have been very profitable undertakings. As a matter of fact the house is now considering a bill concerning Trans-Mountain pipe line. We know these shares once sold for $10 and today they are selling at around $115. The company is asking permission for a stock split. My suggestion is this, that if Trans-Canada Pipe

Lines is as successful or even if it is only half as successful as Trans-Mountain pipe line, by holding these shares the president of the company stands to make more than the $110,000 which he may realize at this moment. If these shares follow the general tendency to increase in value they might go up to $50 a share, and by holding these shares until that time the president of Trans-Canada Pipe Lines can make as high as $3 million in capital gains. I do not know what type of argument it is to say that because he has not seen fit to sell the shares, it is only a paper profit.
One statement to which the hon. member for Dauphin referred just before six o'clock was that of the Minister of Trade and Commerce to the effect that as of 2 p.m. tomorrow afternoon the government would be no longer involved in the affairs of Trans-Canada Pipe Lines. The presumption is that when he is asked a question on the orders of the day the minister will say it is no longer the concern of the government, it is a private enterprise. There are varying opinions on that. There is an editorial in the Ottawa Journal of Thursday, February 21, which I think neatly states this question in its proper perspective. The editorial is entitled, "But is it a private company?" It reads:
A ked in parliament about the transaction under which two ranking officers of Trans-Canada Pipe Lines Limited were given options to buy tens of thousands of shares of the company's common stock (one bought 55,000 shares and the other 50,000 shares, netting them immediately an enormous paper profit) Mr. C. D. Howe described the arrangement as "nothing unusual", something "purely within a private company".
Is that right?
Trans-Canada Pipe Lines Limited was a private company when it started out; when it entered into an arrangement with the government under which, given a monopoly, it undertook to build a pipe line with its own money to bring Alberta gas to eastern Canada.
Did it remain a private company when having defaulted on its undertaking it begged and received money from the public treasury to carry on the work it was pledged to do on its own?
And does it remain a "private company" when at this very moment a segment of the pipe line through which northern gas will flow-that through northern Ontario-is made possible only because the dominion government and the government of Ontario put up millions of public money for Trans-Canada to do a job it had undertaken to do on its own?
The truth is that in so far as bringing Alberta gas to eastern Canada is concerned Trans-Canada Pipe Lines Limited would not exist at all were it not for government money; public money.
That being the record-and the record is there for all to read-Mr. Howe's statement about Trans-Canada being a "private company" free to do what it pleases to enable its directors to make money out of its common stock, seems a bit strange to say the least.
And not less strange when it is remembered that dividends on this common stock must come out of the price eastern consumers will pay for Alberta gas.


Mr. Speaker:: Order; this must not be taken as a precedent, because the reading of editorials is not in accordance with our rules of debate.


Alfred Claude Ellis: I had just concluded the reading of the editorial, Mr. Speaker. I desired to place that editorial on record because I think it sums up very neatly the proper concept. The position of the Minister of Trade and Commerce that because this loan is going to be repaid at two o'clock tomorrow the government has no further interest in Trans-Canada Pipe Lines is utter nonsense. After all, in the first negotiations leading up to the legislation being put through parliament under dictatorial methods last spring, there was no talk initially of the loan to build the western leg. We had been led to understand that the government of Ontario and the government of Canada would build the northern Ontario section, and the balance of the line would be financed by Trans-Canada Pipe Lines. Then when nothing was done they stalled around and delayed, waiting of course for their anxiety to be removed through a loan of $80 million from the public purse. The minister is certainly not going to suggest that if the loan had not been made, even at this time the government of Canada would not be interested in the future of this line.
The fact of the matter is that this pipe-line company will have a monopoly. Once the pipe line is built, and once consumers have converted to that type of energy or fuel, then the company exercises a complete monopoly. Therefore, even apart from the arrangements under which the line was built, no responsible government official could say today it is not the concern of this government what is done by this pipe-line company with respect to consumers, markets and so forth.
This afternoon the Minister of Trade and Commerce sought to create the impression that these are two separate matters. When the minister was asked about the northern Ontario section I recall he said that was separate and distinct. Is it?


Clarence Decatur Howe: Public ownership.


Alfred Claude Ellis: That is the point; we argued that if Ontario and the federal government were going to build the northern Ontario section, logically and sensibly we should have built the whole line. That is the position we take.


Mr. Brown (Brantford):: You said that a year ago.


Alfred Claude Ellis: We said that a year ago, and we say it today. What has happened today is the best proof possible that our position was sound at that time. There could be no greater vindication of the stand which C.C.F. members took in that debate last spring than what
Trans-Canada Pipe Lines has transpired since. We have been consistent throughout in our advocacy of public ownership of this pipe line, and it appears evident today that all the fears we expressed at that time concerning the future of this pipe line, that a group of private individuals were using the building of the pipe line not primarily to provide energy to consumers in Ontario but as a means of enriching their own pockets, have been realized.
There is an essential difference, in that we maintain that the resources of this country ought to be used to the advantage of the people of Canada.
I can recall some hon. gentlemen suggesting that the pipe line is not a natural resource. That is true, but it is even more important; because whoever gets control of the pipe line has a monopoly over the transportation of that energy, and conceivably is in a position to take advantage of both the producer at one end and the consumer at the other, although we know the pipe line is controlled in large measure by the producers of gas. In other words, they control not only the sources of supply but the means whereby the gas is transported to the consumer.
Now, Mr. Speaker, what has happened since that ill-fated day when this legislation was finally passed in the House of Commons I think indicates very clearly the need for rethinking with respect to our policy toward the building of pipe lines in this country. It is clearly evident that there is only one way in which the public interest can be guaranteed and protected, and that is by public ownership.
I should like to make this comment in closing. The hon. member for Winnipeg North Centre and my colleague from Nanaimo presented a very clear-cut case dealing with the relationship of the Minister of Trade and Commerce to this particular matter. When the Minister of Trade and Commerce got to his feet he did not answer the allegations. He led us far astray. He talked about Westcoast Transmission. He has not answered the complaints. He has not answered the criticism levelled at him this afternoon; and I would suggest to the Prime Minister, or to the Minister of Finance, that he do what the Minister of Trade and Commerce failed to do this afternoon, namely rise and give us a reasonable explanation for the conduct of the government over the last 10 months.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I consider the time of this house valuable. That is why when I speak I just crack off what I have to say in short order. I just wonder how much this pipe-line debate has cost the taxpayers of Canada this afternoon and tonight.

Trans-Canada Pipe Lines


Mr. Caslleden:: How much money has been made out of it?


Daniel (Dan) McIvor: I think the Leader of the
Opposition said a good thing-he says some good things-when he said that the pipe line was finished last year. I thought it was, but we have the pipe line through and all around this house now, Mr. Speaker, until we are sick and tired of hearing it. We heard that the pipe line was coming only to Winnipeg and that the government put up the money. The Minister of Trade and Commerce told us last year that we were not taking much risk. Tomorrow we are getting the money back at 5 per cent. If any corporation had a manager who would invest $50 million or more and make 5 per cent I know what would happen. He would get either an increase in salary or a trip to Dublin on the other side of Ireland and good wishes for the future.
I think we have heard enough about this pipe line. Let us get on with the business of the house. Thank you for your patience.


Harold Edward Winch: This is the business of the house.


Mr. Carl O. Nickle (Calgary South):: Trans-Canada Pipe Lines
At that stage Trans-Canada Pipe Lines caught on with the public of Canada and the United States, and in recent weeks the project has been successfully financed. Demand has far exceeded the supply of securities.
A good many Canadians, including myself, found that the orders which were actually filled represented only a small fraction of the stock they would like to have bought. I think, as a result of this, some artificial ideas have been created in the mind of the public about the value of this security. Mr. Speaker, I do have a tremendous faith in the long-term future of this project, and I believe that in the years ahead it is going to be profitable. I believe, also, that its shareholders will benefit. But I do know that when this pipe line is built and in operation, regardless of how successful or unsuccessful it is going to prove to the shareholders, it is going to result in some tremendous developments in the chemical and petrochemical industries in western Canada, and is going to make life a good deal easier for many hundreds of thousands of Canadians between Saskatchewan and Quebec who will have access to a new and convenient fuel for home heating.
But to return to the question of the Trans-Canada company, the issue before us is, I think, whether the minister made a mistake, whether he mislead the house. I think the answer to that is yes. Then the further question arises here today whether or not certain executives of the company have profited unduly. They have been called several different terms here today; I will not mention the names which have been applied to them, but I think it is fair to say that no one in this house who has any conception of what lies behind the building up of a project such as this would apply the kind of terms to these two gentlemen that we have heard here today.
In conclusion, sir, may I say that I believe these two gentlemen who have received options on Trans-Canada stock deserve the options they have received. They have not deserved some of the criticism which has been heaped on them today. My only regret, speaking lightly, is that I was not in a position to participate in the same kind of option myself. I think they, together with a great many others concerned in this project, have achieved something that Canada will finally appreciate.


Mr. A. M. Nicholson (Mackenzie):: Mr. Speaker, although the headline in the Ottawa Journal reads "Misled House, Howe Admits" only the Minister of Trade and Commerce and the hon. member for Fort William have spoken from the government side to debate this important subject.
[Mr. Nickle.l
The hon. member for Calgary South did criticize the minister for misleading the house, but the balance of his speech seemed to give a good deal of comfort to hon. members opposite. We feel that the Prime Minister, who has achieved a reputation as a very able corporation counsel, should come to the rescue of his colleague and offer something more constructive and more valuable than has been presented by the hon. member for Fort William.
Last Tuesday my colleague the hon. member for Nanaimo asked, in a supplementary question, whether the government was aware that these gentlemen had options on blocks of stock at the time the agreement was undertaken to help finance the company. The minister in charge might have replied, "The hon. member has not given me notice. I will consider the matter and bring down the answer shortly." Instead, the minister replied:
No, Mr. Speaker, I was not aware of it and I doubt if the options were outstanding at that time. This is an internal matter within the management of a private company. I assume the directors took the responsibility for making the arrangement. There was nothing underhanded about the arrangement because it is fully explained in the prospectus governing the sale of stock. It is not an unusual provision for companies engaged in such a business as Trans-Canada Pipe Lines Limited.
I submit, Mr. Speaker, that at this late hour the Prime Minister should not leave this matter to the hon. member for Calgary South, but should make a defence of what has transpired. I hope the Prime Minister will enter the debate and try, if he can, to offer some justification for the action the Minister of Trade and Commerce has taken.
I am surprised that more hon. members of the Social Credit party have not taken part in this debate. The hon. member for Peace River was a school teacher, and I think all of us who are concerned about the place of democracy in this changing world should be concerned when people leave school teaching and get involved in a transaction of this nature. I find that the hon. member for Lethbridge, who has been interjecting occasionally, was teaching school at the time Mr. Tanner was teaching in Alberta.


An hon. Member:: He taught Mr. Tanner himself.


Alexander Malcolm Nicholson: The hon. member for Bow River, the hon. member for Battle River-Camrose, the hon. member for Red Deer, and the hon. member for New Westminster, were all school teachers in Alberta, I believe.
It is not so long ago that our party had a book called "Who Owns Canada?", and another publication called "The Fifty 'Big

Shots' The late Mr. Aberhart relied extensively upon these two publications when he pointed out that one of our problems in Canada resulted from the fact that huge fortunes had been collected by a few people, and it would appear to me that those of the Social Credit party who have given up teaching to participate in public life in Canada must be somewhat embarrassed when one of their colleagues is involved in a transaction of this nature.


Charles Edward Johnston: On a point of order, Mr. Speaker, I am one of the school teachers to whom the hon. member has referred. I do not think for a moment that Mr. Tanner is involved in any such scandalous affair as the present speaker seems to indicate, and I think it is unfair to make such an implication.


Alexander Malcolm Nicholson: I do not think that is a
point of order.


Charles Edward Johnston: A point of decency.


Alexander Malcolm Nicholson: I hope the hon. member for Bow River will take part in the debate and express his views. Mr. Speaker, we are indebted to members of the press gallery who listen to these discussions from time to time. George Bain, writing in the Globe and Mail of February 21, had some interesting comments to make.


An hon. Member:: What paper? Globe and Mail?


Mr. Speaker:: Order. I let the hon. member for Regina City read a complete editorial which had appeared in the Ottawa Journal. I waited until the very end and then I told him, and at the same time served notice on all hon. members, that what he had done should not be used as a precedent, especially during this debate. If the hon. gentleman will look at the motion which has been moved by his colleague from Winnipeg North Centre he will see that even in what he is saying now-and for what he says now he should use his own words and not the words of anybody else-he is getting far afield.


Alexander Malcolm Nicholson: No, Mr. Speaker, I think if you will read the motion you will see that it concerns a certain agreement signed on May 8, 1956, which was also signed by Mr. Tanner and Mr. Coates who, along with Mr. Wallace, declared that they were all the persons who at that time held options to purchase shares in the Trans-Canada company and made certain pledges to Her Majesty in right of Canada concerning their options, making it clear that the minister must have been aware of such options; hence
Trans-Canada Pipe Lines the need for this house to give consideration to whether the federal parliament and the people have been misled through not being informed as to the extent to which there would be private gain as a result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury.


Mr. Speaker:: Order. The first few lines the hon. gentleman has just read were part of the original motion, but before the motion was moved some of those lines were removed.


Alexander Malcolm Nicholson: I left out some lines. However, Mr. Speaker, I will not read what Mr. Bain wrote. He writes much better than I can speak.
n


An hon. Member:: Hear, hear."


Alexander Malcolm Nicholson: But he says a few things I am sure the house would like to know about.


Mr. Speaker:: The hon. gentleman may be quite right when he says the member of the press gallery writes better than the hon. gentleman speaks. But the point is that it is against our rules for anyone to quote newspapers in debate. The hon. gentleman is supposed to use his own words. Citation 265 in Beauchesne's third edition reads as follows:
265. It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.
I would ask the hon. member to be good enough to conform to the rules.


Alexander Malcolm Nicholson: Oh, yes, Mr. Speaker, I was not proposing to proceed to read the article. But Mr. Bain draws our attention to the fact that a year ago Mr. Tanner had invested about $16 and that now he is able to make a capital gain of about $110,000-


An hon. Member:: How much did his wife
make?


Alexander Malcolm Nicholson: The hon. member for Red Deer can tell us about Mrs. Tanner, but the fact is that here is a former school teacher-


John Horne Blackmore: There is nothing wrong with that.


Alexander Malcolm Nicholson: No; that is quite all right. He had two shares at $8 a year ago. These shares are now leaving Mr. Tanner in a position where he has about a half a million dollars more than he would have had if the parliament of Canada had not come to the assistance of Trans-Canada Pipe Lines and made loans a year ago.


John Horne Blackmore: Canada also has a pipe line she would not have had.
1638	HOUSE OF
Trans-Canada Pipe Lines


Alexander Malcolm Nicholson: There again, Mr. Speaker, I wish I could read Judith Robinson's article the other day on the price we paid for a pipe line. I think the government members and the Social Credit members who have not spoken in this debate cannot go back to the people who sent them here and attempt to justify this type of action. Just a short time ago the Social Credit members voted against the Canada Council.


Mr.   Johnsion@Bow River: We are not
debating that matter.


Mr. Speaker:: Order.


Alexander Malcolm Nicholson: I am not debating it either. At that time they were so sorry for the old age pensioners of Canada that they could not find a cent ior the Canada Council, but now they are justifying the fortunes which are being built up by Mr. Tanner, Mr. Coates and those who are associated with them in Trans-Canada Pipe Lines.


John Horne Blackmore: If all goes well. There is plenty of risk yet.


Alexander Malcolm Nicholson: Mr. Speaker, there appear to be quite a number of Social Credit members who are anxious to take part in this debate.


John Horne Blackmore: They know something about it. You don't.


Mr. Speaker:: Order.


Alexander Malcolm Nicholson: Our case has been presented by my colleagues. However, I want to emphasize again that before the debate closes I hope some members of the cabinet will come to the assistance of the minister, if they can do so, or if they will.


John Horne Blackmore: He does not need any assistance.


Alexander Malcolm Nicholson: He is the minister who has been responsible for many crown corporations which have been successful. However, in my view he has done a great disservice to Canada in asking the taxpayers to bail out this corporation and make it possible for such large fortunes to be made by a mere handful of people.


John Horne Blackmore: And to receive good interest on their investment.


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, there are a few remarks that I should like to make in this debate. Actually I think some of the issues that have arisen in the discussion have been rather fundamental.
I was much interested in the speech which was made to the house by the hon. member for Calgary South. I think the hon. member perhaps did a good deal to focus our attention upon what to me are the real issues involved in the debate that has arisen. He


made some reference to the idea that, in his opinion, some of the debate had been an attempt to blast the personal reputations of a few of the officers of this Trans-Canada Pipe Lines company. In listening to that section of his remarks I felt he was dealing principally with the speech made this afternoon by his colleague the hon. member for Notre Dame de Grace, who I thought went to some length in making the question of Mr. Tanner's involvement in this matter a personal issue.
However, I think in the main portion of his speech he brought the matter into what, to me, is its proper perspective, and indicated that the fact that a Mr. Tanner and certain other gentlemen happen to be involved in this debate because of their holding office in Trans-Canada Pipe Lines is really incidental. I think that point has been brought out quite clearly in some of the speeches that have been made by other C.C.F. members participating in this debate. All I should like to say is that as far as I am concerned, if people like Mr. Tanner or any others who go into the business life of this country want to play with fire, they can expect occasionally to have their hands scorched a little bit.
There are some of us who are prepared to challenge the philosophy which was inherent in the speech by the hon. member for Calgary South and in the speech made by the Minister of Trade and Commerce, namely that certain practices to which they referred are right and legitimate. To me that is the real issue that is involved in this debate. As indicated by the resolution introduced by the hon. member for Winnipeg North Centre, it has arisen on this particular occasion because Trans-Canada Pipe Lines became directly involved in the legislation that was before this house last year. The practices carried on in connection with such things as the stock options and other related practices that the hon. member for Calgary South and the Minister of Trade and Commerce are prepared to accept as normal business practices are the practices which we are prepared directly to challenge.
As I say, it is because of the fact that Trans-Canada Pipe Lines and its actions and those of its officers became directly the property of this house through the use of public funds to assist this project that we feel it is only right and appropriate that we use this occasion to focus attention on our belief that this is the sort of practice which should not be continued in Canadian business life; that this is the sort of practice that goes to the root of some of the economic problems that are growing daily in this nation; and that in fact many of the problems that are involved

in what has been referred to as the government's tight money policy arise in part out of the fact that we have a government which is prepared to allow our economy to go on functioning with this sort of practice in it.
I was particularly interested this afternoon in certain references that were made by the hon. member for Peace River to what he called short-circuited thinking. As far as I am concerned, if any particular segment of the membership of this house have been indulging in what could be called short-circuited thinking, it is the members of the group led by the hon. member for Peace River. Time after time, Mr. Speaker, we have listened to the hon. member for Peace River and some of his colleagues get to their feet on the floor of this house and give us long dissertations on what they call in a rather vague manner putting purchasing power into the hands of the people".
They allow themselves to be completely blinded to the fact that the practice of making unearned gains from stock transactions, such as the one under discussion, is one of the most effective means used by a small minority of the people of this country, who have been able to manoeuvre into a favourable position, to withhold full purchasing power from the hands of the people.
If they are going to talk in this house and throughout the country about the idea of putting purchasing power into the hands of the people, it seems to me they had better check their own circuits for shorts, so far as their thinking is concerned. They had better get down to doing some real thinking about what is involved in putting purchasing power into the hands of the people. Every time somebody like the officer of a pipe-line company manages to short-circuit out of the purchasing stream that goes into the pockets of the average Canadian citizen the amount of money which is being short-circuited in this transaction, then the average citizen is the loser.
Occasionally the department of the Minister of Trade and Commerce issues statistics about the gross national product, the total amount of wealth that is available to the citizens throughout Canada, the wealth that is produced by the people of Canada. If we have a population of 15 million or 16 million, that wealth can only be divided so far amongst so many of us. I am not going to try to suggest what the exact amount of this gain might be, because I could not make the kind of analysis of the stock transactions of Trans-Canada Pipe Lines that was made by the hon. member for Calgary South, but every time $50,000 or $100,000 or $500,000 is taken out of the purchasing stream by this sort
Trans-Canada Pipe Lines of transaction, then you are reducing the purchasing power that can go into the hands of the old age pensioners or the wage earners of this country.


Charles Edward Johnston: Nonsense.


Mr. Hahn:: Another short-circuit.


Thomas Speakman Barnett: This, Mr. Speaker, is getting down to what to me is the important issue in this debate. Probably it is not going to be settled tonight as to whether it is my thinking that is short-circuited or whether it is that of the hon. member for Peace River or the hon. member for New Westminster. Perhaps it is a good thing that the Minister of Trade and Commerce did make a little mistake in giving information to this house. This has provided us with an opportunity to take a look at this thing in the light of the facts that have become available to us since we had the debate last year.
I believe the hon. member for Calgary South suggested we were making election material of this. I suggest that this is the stuff out of which the next election campaign should be made. It is quite legitimate that, as we approach the election, these should be the issues on which the attention of the Canadian people should be focused.
I feel the hon. member made an honest presentation of the situation to the house so far as his views on the matter went. However, it is his outlook, his philosophy, which I feel is wrong.


Carl Olof Nickle: Will the hon. member permit a question?


Thomas Speakman Barnett: Yes.


Carl Olof Nickle: You say this is good election campaign material. Do you consider that you are using fair election campaign material when a member of your party will call a man who cannot defend himself before this house a racketeer?


Thomas Speakman Barnett: A buccaneer?


Colin Cameron: It was the leader of your party who did that.


Mr. Sinclair:: That is right; it was.


Thomas Speakman Barnett: I cannot recall any member of the party to which I belong referring to anybody inside or outside this house as a buccaneer or a racketeer. However, I make no bones about my own opinion. I am not thinking of any individual as being better or worse than any other, but so far as I am concerned the philosophy which was outlined to this house by the hon. member for Calgary South is the philosophy of the buccaneer and racketeer which has been

Trans-Canada Pipe Lines going around in this world for the last several thousand years. This party is against that. I am not making any allegations against any individual who honestly holds those opinions, but I just happen to disagree with him.
So far as I am concerned, that is the issue.
I do not quarrel with the hon. member for holding these views. I am only sorry he has not been able to correct his thinking to the point where he can see how far away he is from the reality of life as faced by the ordinary Canadian citizen. I know he moves in the realm of quick gains and enhanced values because of oil discoveries and that sort of thing.


John Horne Blackmore: And possible quick losses, too.


Thomas Speakman Barnett: This is an ethereal realm in which the average Canadian citizen does not have an opportunity of moving. I do not blame the hon. member for not having been able to descend from these clouds where people think nothing of $100,000 in quick gains, down to the level of the man who has to go out and earn his daily bread by the sweat of his brow. I feel more sorrow than anger so far as he is concerned in this particular situation.
As I say, I would not quarrel with the opinion that was expressed or the value that was put upon Mr. Tanner by the hon. member for Calgary South. I think he was attempting to give an honest opinion. My own comment on that would be to recall a phrase used by the Minister of Trade and Commerce last year when he said that we may have to grasp the nettle of public ownership. I would suggest to the hon. member for Calgary South and other members who have been discussing Mr. Tanner pro and con that so far as Mr. Tanner is concerned, he has put himself in the position where he has to grasp the nettle of this stock transaction.


John Horace Dickey: There are one or two things I should like to add to this debate before the question is put. I shall be as brief as possible. Clearly there are two fundamental misapprehensions on the part of hon. members who have seen fit to support the proposal placed before the house by the hon. member for Winnipeg North Centre. The first is that the action of this parliament in approving the legislation which provided a loan to Trans-Canada Pipe Lines in some way eliminated all risk that was attendant upon that project.
The hon. member for Calgary South has dealt with that aspect of the matter. I think it should be underlined that any action taken by this parliament was not intended or

designed to eliminate any risk that was being run by anybody who was putting risk capital in this venture, or who was connected with it from that point of view. The risks of the venture were all still there. All this parliament did was to make it possible for the project to proceed in a way that enabled the company to make the necessary purchase and sale contracts for gas that eventually made the project financeable. Those in this house who opposed the loan proposals last year were not opposing something that would expose the taxpayers, or the public purse, to risk. They were opposing the only feasible method at that time which could get the pipe line started and put the company in a position to finance itself, and for that reason they were opposing the building of the pipe line itself and nothing else.
The second misconception that underlies the attitude particularly of the C.C.F. party is that what was put up by way of a loan was in some way providing risk capital for this project. Mr. Speaker, nothing of course could be farther from the fact. The loan that was provided and which was drawn upon by Trans-Canada Pipe Lines during the course of the construction of the western section this year was a fully secured loan, secured by a first mortgage on the entire undertaking of the company. It was a loan at a fixed rate of interest of 5 per cent, and it was not in any respect risk capital, nor was the government or the taxpayer of Canada participating in this company in a way which was intended to give the public treasury any investment in the company which would participate either in the eventual profits of the company or in the risk of loss. The fact is that, as has already been pointed out, this loan, fully secured as it was, is now to be repaid with interest and with all expenses incurred in connection with the loan by the government. That, I think, disposes of one of the main bases of the arguments that have been put forward by the speakers for the C.C.F. party in this house this afternoon and this evening.
It is quite understandable, Mr. Speaker, that the C.C.F. party would take this particular position. After all, they are a socialist party; they were against the idea of a pipe line being constructed under private ownership. They believed that this was a field in which public ownership should be called upon to provide these facilities.


Stanley Howard Knowles: Hear, hear.


John Horace Dickey: The government, for perfectly good reasons which still exist, felt that the preferable way was the Canadian traditional method of private enterprise. Obviously, the C.C.F. party from the very beginning have

been against the idea of private risk capital being involved in this project. They therefore have been against the idea of private profit in connection with the project, and they have been consistent in that respect. They are fundamentally against not only the people who have been given and who have exercised options for the purchase of stock making any profit out of the transaction, but they are also on principle against the investors who have invested, in the case of the original investors at $8 a share and in the case of those who have been investing since the public issue at $10 a share, making any profit. As I say, that policy is consistent with their principles.
But, Mr. Speaker, what about the position of the official opposition? I understand they are not a party that lacks confidence in the ordinary workings of the private enterprise system. They are not against the proposition that those who risk their capital in a project of this kind should not, if the project turns out to be a profitable one, reap a reasonable profit that may be coming to them. But the Progressive Conservative party in this house has aligned itself with the proposal of the C.C.F. party in this regard. Their members rose to bring this matter to debate, and it has been supported by a number of speakers from their membership.
It is true, Mr. Speaker, that I believe two of the speakers for the official opposition, the hon. member for Vancouver-Quadra and the hon. member for Notre Dame de Grace, say that the proposal before the house is not what those who propose it say it is but is something different. Well, now, Mr. Speaker, I submit that the proposal before the house and the wording in which it is couched have been pretty carefully thought out and selected by the members of the C.C.F. party to express their views in relation to the way a project of this kind should be handled; and any attempt on the part of the official opposition to say that the wording of this proposal is something different from what it is intended to be, and that they can support it without adopting the basic principles upon which it is founded, is quite erroneous.
The wording shows that they are critical of the fact that some private gain has been possible as a result of the financial support from the public treasury for this project. The Leader of the Opposition has supported the protests of the hon. member for Winnipeg North Centre, and several of his supporters have done the same thing. Mr, Speaker, I do submit that they cannot take this position without the suggestion being quite reasonably made that they are in fact supporting and adopting the socialist principle which is the basis of this motion.
Trans-Canada Pipe Lines
The Minister of Trade and Commerce pointed out what is the basis of the stock option arrangements that Mr. Tanner and Mr. Coates have exercised in accordance with the statements made in the agreement of May 8 and in the other agreements. That is that their investment in this company has not been only a matter of the $8 per share they are undertaking to put up for these shares. There is the additional investment of their energies and abilities, and in fact the dedication of four or five years of their lives to a project which at the time they took it on and during the developmental period while it was being brought to its present state is and for some years in the future will be an investment which provides no certainty of profit at all. These stock options give them an opportunity to reap the benefit of this investment of theirs.
The position of the official opposition apparently is that for some reason or other they do not agree that this system of private enterprise should be permitted to work in this instance. I submit that this is the kind of situation in which the government was wise in trying to have this job done by private enterprise. There is every reason to expect that those who have contributed to and invested in this enterprise either in the form of capital or in the form of service should be given the normal opportunities to make their profit, and that all the profits should not go to those who now are able to come in and put their money into the purchase of stock.
I submit, Mr. Speaker, the suggestion of the motion is that there was something kept from this house and that the house was misled as to some tremendous profit that was going to be made in some hidden way. The motion does not suggest that it was merely a matter of a mistake concerning an unimportant fact; it attacks the whole basis of this arrangement. As far as I am concerned I am quite prepared to let all the socialists in this house-those who are avowed socialists and those who are not-support this position.


Louis Stephen St-Laurent: Mr. Speaker, I do not propose to detain the house very long, and I do not think it is necessary. The first thing that appears to me to be necessary is to consider the terms of the motion that has been offered to Your Honour and which you now have before you. That motion was drafted with five lines in it which the hon. member for Winnipeg North Centre felt, quite properly I think, should be struck out after the Minister of Trade and Commerce explained today that it was by inadvertence he stated last Tuesday

Trans-Canada Pipe Lines that he was not aware that these options existed. The hon. gentleman said he accepted the statement made by the Minister of Trade and Commerce and the apology for the mistakes that had been made in the statement of February 19, so that part is not in the motion.
What is in the motion at the present time is a statement that there was signed on behalf of Her Majesty by the Minister of Trade and Commerce, for the government, a contract which contained the statement that there were options for the shares; and that because that kind of contract was signed it is clear that the minister must have been aware of such options when the contract was signed, and in the words of the motion:
. . . hence the need for this house to give consideration to the way in which parliament and the country have been misled by not being informed as to the extent to which there would be private gain as a result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury.
Well, Mr. Speaker, the contract was signed on May 8 and was tabled in the house on May 9. Hon. gentlemen have been curious to know whether colleagues of the Minister of Trade and Commerce were aware that options existed. They certainly were aware that options existed, just as all those who looked at the documents which was tabled on May 9 were aware that the options existed. Hon. gentlemen say that for some reason or other they did not see fit to ask what was the extent of the options and at what price they had been given. That no doubt is because they considered at that time, as we considered at that time, that that question was of very little importance. At that time the question was whether or not a pipe line would be built by private enterprise.
The members of the C.C.F. party thought it should be a publicly-owned pipe line whereby the government of Canada would have to negotiate with the commission of the government of Alberta to get gas that was already under contract by the producers to the Trans-Canada pipe line, and they would have subjected the government of Canada or an agency of the government of Canada established by it to the jurisdiction of the public utility commissions of the provinces where the gas was going to be distributed. We felt that was undesirable and that if there could be established a pipe line built and exploited by private enterprise it would be much preferable not to have the government of Canada or an agency of the government of Canada subject to a producers' commission such as exists in Alberta to control the exportation from that province of that

gas, and subject to the public utilities commissions of the provinces where the gas would be distributed.
Personally I felt that if we had been put into that position in order to have the use of this gas in eastern Canada it would have resulted in losses for the government of Canada. There would have been constant pressure for an increase in the price to the producers, who were heard to complain and whose complaints were voiced in this house that the prices they were being offered were insufficient to cover their costs of the producers. There certainly would have been the same kind of protests against the costs to the consumers just as we constantly hear -perhaps with some justification-about the burden of the freight charges that have to be collected by the Canadian National Railways for the transportation of freight.
It would have been an extremely difficult and uncomfortable position for any Canadian government, and I am not at all confident that it would not have resulted in substantial losses for the taxpayers of Canada. In any event we decided that if we could get a pipe line built and exploited by private enterprise it was desirable to have it done in that way. We know there were options outstanding on shares of this company. There are ten million common shares in the stock of this company, and 1,928,183 had been subscribed and paid for at $8 a share.


Stanley Howard Knowles: I am sure the Prime Minister knows there were 1,000 or more shares that had been paid for at $1 a share.


Louis Stephen St-Laurent: I was under the impression it was only one share apiece for the original incorporators that were paid for at that price. Perhaps the hon. gentleman is better informed.


Stanley Howard Knowles: One thousand and two were paid for at $1 a share.


Louis Stephen St-Laurent: That was merely for the purpose of incorporating the company and setting it up; but the original shares, the 1,927,181, were sold at $8 per share, and there were options for 60,000 shares to Mr. Tanner and 50,000 shares to Mr. Coates at the same price of $8 per share. At the time no one could inform the house that there were going to be profits and gains as the result of any financial support that was to be given to the company to enable it to get started, and to get the kind of contracts that were necessary to complete the financing of this pipe line.
The Minister of Trade and Commerce asserted from the start that as soon as it was demonstrated to the producers on the one hand, and to the prospective consumers on the

other hand, that the line was going to be built and that financing had been arranged for it or was being arranged for it, there would be no lack of signatories both for the supply of gas in Alberta and for the purchase of gas along the line. That is what has happened.
The Minister of Trade and Commerce was also satisfied that there were such assurances that that would happen, that the money being advanced for the construction of the section across the prairies would be repaid before March 31, 1957-and we are informed that it will be repaid before March 31, 1957-and that the objective of getting the line built and exploited by private enterprise will be realized for the benefit of the Canadian public, and it will be a great contributing factor to industrial development and at the same time the comfort of the people of Canada.
That will have been done because we had sufficient confidence in the future of this country to take whatever risk there was in making that advance and in counting upon the fact that with something which seems almost uncanny to many the Minister of Trade and Commerce has frequently been right in the predictions he has made relating to industrial development. I hope it is not disappointing to anyone to know that the money advanced is going to be returned with interest not later than tomorrow. I would hope there would be none who would feel that that was going to be of such political disadvantage to them, although it was of advantage to the Canadian economy, it is something that should be regretted.
With respect to the number of shares involved in these options, 110,000 against 10,000,000 they represent a little over 1 per cent of the capital stock. If this company can be administered and can serve the Canadian people without there being any other involvement than the involvement resulting from the building by the government of Canada and the government of Ontario of the northern Ontario section, and leasing it at a price which will cover interest and amortization with an option to the company to purchase whenever it is prepared to pay every cent that will have been disbursed by either government, I think that will be of lasting benefit to the Canadian people.
One might have suspected, although suspicions are not things that should be entertained, that because two parties in this house had vigorously opposed everything tending to place this agency in the position where it could build this pipe line, they felt that because there was an election coming on it would be preferable to have attention focused bn these so-called paper profits that may be 82715-1041
Trans-Canada Pipe Lines made by two of the executives of this company than upon the benefits to the Canadian, economy of getting a pipe line from Alberta; to Quebec at no cost to the federal treasury, I hope that is not the case and that it is-


Stanley Howard Knowles: I rise on a question of privilege. The Prime Minister hopes that the motives which he has just imputed are not the case. Then why did he say what he did? Is he in order in imputing motives? My point of order is that the Prime Minister has imputed to us motives concerning the issue that we raised today which I submit are incorrect. We were prompted to raise this issue today, first because the Minister of Trade and Commerce misled us last Tuesday. Our examination of what he said last Tuesday led us to the realization that we had been misled a year ago by not being informed as to the number of these options to purchase; shares. It was because of that misleading of this house that we felt this matter should be dealt with today, and the Prime Minister must accept that as our motive.


Louis Stephen St-Laurent: I accept the hon. gentleman's statement of his motive. He said he was misled. He was not misled. The fact that there were options was disclosed to the house by the tabling of the document.


Stanley Howard Knowles: We were not informed how many options there were.


Louis Stephen St-Laurent: When did you ask how many there were?


Stanley Howard Knowles: When were we able to ask any questions during the pipe-line debate?


Louis Stephen St-Laurent: During the 16-day debate you preferred to raise points of order rather than deal with the subject matter of the bill.


Stanley Howard Knowles: We had closure on each clause.


Mr. Speaker:: Order. May I suggest that instead of referring to proceedings which took place at one time and which fortunately have been concluded, we now proceed with the proceedings now before the house.


Louis Stephen St-Laurent: To proceed with the proceedings now before the house, I do not reproach the hon. gentleman for not having asked that question, as it did not appear any more important to him then than' it did to us at the time. We knew there were these options existing at a price of $8 per share; we knew that 1,927,181 of them had been sold at $8 per share, and we knew that the other 1,002 shares-

Trans-Canada Pipe Lines


Stanley Howard Knowles: May I just correct that; that figure should be 2,002 shares, according to page 43 of the company's prospectus.


Louis Stephen St-Laurent: I hope the hon. gentleman will not feel that he was misleading the house when he said "1,002" when he should have said "2,002".


Stanley Howard Knowles: I did not wait six days to make the correction.


Louis Stephen St-Laurent: Although I do not want to impute motives I do want to suggest that there is no possible connection whatsoever between the price at which these shares were optioned to executives and the fact that there could or should be an increase in old age pensions. There is nothing to demonstrate that these shares could have been sold at any other price than $8 or perhaps $10 with the commissions that had to be allowed, if the options had not been taken up. The original shares have all been issued at this price of $8 a share, and that was, well, just about 19 times as many as were included in the option.
That being the situation I submit quite confidently that the closing lines of this motion are entirely and absolutely contrary to the facts as demonstrated before the house. There has been no lack of information as to the extent to which there will be private gain as a result of the financial support made available to Trans-Canada Pipe Lines Limited from the public treasury. The hon. gentlemen who have spoken from the other side are using what hindsight they may possess now because of the flurry that took place when these shares were put on the market. I hope there will not be any substantial recession in the price of these shares.
The hon. gentleman can laugh, but unfortunately there are a great many people who have had no occasion to laugh, after having been illusioned by the flurry that took place after an issue that was oversubscribed, in the light of the subsiding which very shortly followed that flurry.
There is no firm determination yet of what these shares are worth. An hon. gentleman, one of the hon. members for Calgary who has had some experience in the organization and operations of petroleum companies, told us he hoped that in the long pull, after some five years, this company will be able to begin paying dividends. I hope it may not be as long as five years, because the economic development of this country is proceeding quite rapidly; but whatever time it may take, there can be no certainty that in a short period there will be a continued demand for these shares at anything more than the original subscribers will have paid for them.
IMr. St. Laurent (Quebec East).]
To say that there was a profit arranged here would be to say to us-and perhaps that is what the hon. gentleman would wish to say -that we were very strangely misled, because from the very start we insisted on stating that there must be no profits for insiders with regard to any assistance they got, in part, from the Canadian government.


Stanley Howard Knowles: What do you call this?


Louis Stephen St-Laurent: I call this the kind of option that it was proper to hold, and that did not indicate at the time any prospects of a profit-


An hon. Member:: They have made it.


Louis Stephen St-Laurent: They have not made it, or if they have they have confided more in the hon. gentleman than they have confided in us. Therefore I suggest that the foundation for this motion disappears entirely, and that there remains only the continuation of the theory of the hon. members who belong to the C.C.F. party that the only proper way for any big thing to be done is to have it done by the government and not by private enterprise, because, if there is private enterprise there can be some profit, and to make a profit is a sin.


Stanley Howard Knowles: Mr. Speaker-


Mr. Speaker:: Order. The hon. gentleman has already spoken.


Some hon. Members:: Question.


Stanley Howard Knowles: I recognize that I do not have any right of reply-


Clarence Decatur Howe: Then why not sit
down?


Stanley Howard Knowles: I am not asking for that, Mr. Speaker. I rise only to suggest that as a mark of non-confidence in the government we be given the chance to vote on this question.


Mr. Speaker:: The hon. gentleman, as I understand him, is not rising for the purpose of exercising a right of reply, because I think he and I understand each other on this. He has not that right.


Stanley Howard Knowles: I agree. I am asking for a vote.


Mr. Speaker:: Those in favour of the motion will kindly say yea.


Some hon. Members:: Yea.


Mr. Speaker:: Those opposed will kindly say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it. Perhaps I might explain that the reason I said "The yeas have it"-would hon.

members please be seated, because I will say "Call in the members" in a few moments-is because citation 179 of Beauchesne, third edition, indicates that the only matter that is before the house is a motion to adjourn, and within two minutes the house will rise and the adjournment be carried out automatically by virtue of another standing order, No. 7, which requires the house to rise at ten o'clock. All we are voting on is a motion to adjourn the house.


Stanley Howard Knowles: Let's have the vote.


Mr. Speaker:: Call in the members.



BUSINESS OF THE HOUSE

James Sinclair: Tomorrow we shall take first the motion standing in the name of the Prime Minister for a select committee on estimates; then the resolution standing in my name concerning the sockeye salmon protocol; then the bill in the name of the Minister of Justice to amend the Exchequer Court Act; then the resolution in the name of the Minister of Trade and Commerce concerning the Prairie Grain Producers Interim Financing Act. Then, if we have time, we will take the Canadian Farm Loan Act and the Export Credits Insurance Act.


[Stage Direction]
It being thirteen minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.
[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. Gillis: 1.	What was the total cost of constructing the Canso causeway?
2.	How much was paid by the federal government?
3.	How much was paid by the provincial government?
4.	Was the federal government consulted as to the advisability of imposing tolls on the Canso causeway?
Answer by: Hon. George C. Marler (Minister
of Transport):
1.	The construction work on the Canso causeway is not completed. Construction cost to December 31, 1956, is $19,575,028.
2.	$19,575,028.
3.	Under the agreement between the federal government and the government of the province of Nova Scotia the province is committed upon completion of the project to contribute $5,500,000 toward the capital cost, subject to the proviso that if the total cost of tl>e project is less than $22,760,000 the payment by the province shall be reduced proportionately. The exact amount of the contribution by the province cannot be determined until the construction work is completed and the total cost established.
4.	The agreement between the federal government and the government of the province of Nova Scotia provided that the province, if it so desired, could levy tolls on the highway portion of the causeway but the federal government was not consulted as to whether or not it was advisable to impose such tolls.


FERRY SERVICE PAYMENTS
Mr. Van Horne: 1.	Have financial payments of any kind been paid to Captain Romeo Allard of Cross Point, Quebec, in connection with the operation of ferries between Campbellton, New Brunswick, and Cross Point, Quebec; and between Dalhousie, New Brunswick, and Miguasha, Quebec?
2.	If so, what total amount?
Answer by: Hon. George C. Marler (Minister
of Transporf):
1.	(a) Campbellton, New Brunswick and Cross Point, Quebec-No.
(b) Dalhousie, New Brunswick and Miguasha, Quebec-Yes.
2.	(a) Nil.
(b) 1945-$12,000; 1946-$12,000; 1947- $12,000; 1948-$12,000; 1949-$22,000; 1950- $22,000; 1951-$19,000; 1952-$19,000; 1953- $19,000.


POSTAL SERVICE COSTS, BRUCE PENINSULA
Mr. Howe (Wellinglon-: Huron):
1.	What was the cost to the Post Office Department of the mail service by the Canadian National Railways from (a) Palmerston to Kincardine; (b) Palmerston to Southampton; (c) Palmerston to Owen Sound, for the year 1954?
2.	What is the cost of these same mail services since truck carriers have been instituted?
Answer by:	Mr. Kirk, Parliameniary
Assistant, for the Postmaster General:
1.	(a)	$36,692.50;	(b)	$49,443.04;
(c) $57,085.38.
2.	(a) $14,588.37 (annual contract commencing Sept. 30, 1956);	(b)	$19,853.58;
(c)	$58,945.34 (no change, train service
retained).


SALK VACCINE STATISTICS
Mr. McMillan: 1.	How many persons in Canada received immunization injections of Salk vaccine in 1956?
2.	What was the incidence of reported cases of anterior poliomyelitis among the immunized and non-immunized groups in the same period?
3.	How much Salk vaccine will be available throughout Canada in 1957?
Answer by: Hon. Paul Martin (Minister of
National Health and Welfare):
1.	By the summer of 1956 some 1,800,000 children across Canada had received Salk polio vaccine without charge under the national health program. It is expected that by the end of the current fiscal year (March 31, 1957) an additional 1,000,000 children will have been vaccinated, bringing the total to 2,800,000. A very substantial proportion of these children will have received two or more doses of the vaccine.
2.	During 1956, Canada was again fortunate in having an exceptionally small number of cases of poliomyelitis. It will be recalled that in 1955 we had the lowest rate reported in 10 years, with 1,021 cases of all forms of polio, of which 551 were paralytic. Provisional figures for 1956 indicate a total of only 602 cases of all forms of polio, including 361 paralytic cases. When these figures are compared with the t average for the preceding five years they are even more striking. Polio cases of all forms in 1956 were only 15 per cent of the five-year average, while paralytic cases in 1956 amounted to but 23 per cent of this average.
Preliminary figures from nine provinces indicate that during 1956 paralytic poliomyelitis occurred in only 10 children who had received vaccine. A total of 158 cases of paralytic poliomyelitis were reported among all children under 15 years of age in these provinces during the same period. No child who had received all three doses of vaccine

Questions
developed paralytic poliomyelitis, nor were there any polio deaths among vaccinated children.
Although wide annual variations in the number of polio cases have been observed over the years, there is good reason to hope that the extension of the immunization program will exert a progressively beneficial influence in the reduction of the occurrence of paralytic polio.
3.	It is not possible at this time to give a precise answer to this question. The federal government is at present continuing to share 50 per cent of the cost of all vaccine used in provincial immunization programs. Provincial needs for vaccine call for substantial quantities yet to be produced and the utilization of the vaccine will depend upon the ability of the provinces to develop their respective programs. Continuing production will in all likelihood be more than sufficient to enable the provinces to achieve their objective of bringing the total number of vaccinated children to 4,000,000 by the end of the fiscal year 1957-58.



BREWERIES AND DISTILLERIES


Mr. Knowles: In each of the last three taxation years, what was the total amount claimed as a deduction for corporation income taxes by all breweries and distilleries with head offices in Ontario and Quebec, with respect to (a) newspaper advertising; (b) magazine advertising; (c) promotional advertising; (d) any other advertising costs?
Answer by: Hon. J. J. McCann (Minister of
National Revenue):
No information is available for any taxation year on (a) newspaper advertising; (b) magazine advertising; (c) promotional advertising; (d) any other advertising costs.



UNITED STATES-CANADA    FILM IMPORT AND EXPORT VALUES

Mr. Dinsdale: 1.	What is the dollar value of films imported from the United States of America, each year since 1950?
2.	What is the dollar value of Canadian films exported to the United States of America, each year since 1950?
Answer by: Mr. Dickey, Parliamentary Assistant, for the Minister of Trade and
Commerce:
1.	The dollar value of films imported from the United States of America in each year from 1950 to the present has been as follows:
1950		 $ 4,445,904
1951	  5,586,413
1952	  6,273,995
1953		 7,244,099
1954		 8,059,843
1955		 10,336,413
1956	(January-November, latest figures
available)	 10,130,543
2. The dollar value of films exported to the United States from Canada as Canadian produce in each year from 1950 to the present has been as follows:
1950		 $	493,752
1951	  1,825,875
1952	  1,508,178
1953		 1,915,828
1954	  664,882
1955		 868,339
1956		 716,478



POLIO VACCINE AVAILABILITY AND EXPORT

Mr. McMillan: 1.	Has polio vaccine been available for use by practising physicians in Canada?
2.	Is consideration being given to the export of surplus vaccine manufactured in Canada?
Answer by: Hon. Paul Martin (Minister of
National Health and Welfare):
1.	All Canadian-produced vaccine has been absorbed in the federal-provincial immunization program. However, to date three commercial manufacturers in the United States have been licensed to distribute Salk polio vaccine in Canada. All imported vaccine has been subjected to the same rigid safety and potency tests in the federal laboratory of hygiene as Canadian-produced vaccine. This material has been distributed through ordinary commercial channels and has been available to private medical practitioners through usual sources of supply.
2.	While at present there is no surplus of Canadian-manufactured vaccine, it appears likely that continuing production will become more than sufficient to meet provincial requirements. Thus consideration is being given to permitting the export of Canadian-produced vaccine to assist other countries in their efforts to protect children against polio, particularly where critical situations are being encountered. Before any recommendation is made in this respect however it will be assured that the total requirements of each province will be fulfilled, as determined by the availability of personnel and facilities for the administration of the vaccine. This will not be fully apparent for some time but in co-operation with provincial health authorities, officers of the Department of National Health and Welfare are conducting a survey of the situation to determine the most appropriate time to permit surplus Canadian-manufactured vaccine to be made available to others where there may be a demonstrated health need.

Tuesday. February 26, 1957