1957-01-28

Hon. W. E. Harris (Minister of Finance) moved: 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 bring in a measure to extend the benefits of the Municipal Grants Act and to provide for certain changes in connection with the administration of the act.


[Stage Direction]
Motion agreed to.


Walter Edward Harris: 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 Farm Assistance Act to increase the awards and the levy authorized by the act.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Motion No. 1-Mr. Knowles:
For a copy of the judgment of the Exchequer Court of Canada in case No. 73805 between the Minister of National Revenue, appellant, and the Publishers' Guild of Canada Limited, respondent; and also a copy of the judgment of the Exchequer Court of Canada in case No. 78533 between the Publishers' Guild of Canada Limited, appellant, and the Minister of National Revenue, respondent.

[Stage Direction]
Motion No. 3-Mr. Goode:
For a copy of all correspondence exchanged between the provincial government of British Columbia, the New Westminster harbour board and the federal government, in 1956 and 1957, regarding an alleged cessation of planning and actual work on the Deas island tunnel across the main channel of the Fraser river.
Hon. James Sinclair (Minister of Fisheries):: I wonder if the hon. member would permit this to stand until the Minister of Public Works returns to the house.


Mr. Goode:: Agreed.
Motion stands.



BANK OF CANADA MONETARY POLICIES


[Stage Direction]
Motion No. 5-Mr. Bell:
For a copy of all correspondence exchanged between the provincial government of New Brunswick and the federal government, in October and November, 1956, regarding the monetary policies of the Bank of Canada and their effect on the economy of the province of New Brunswick.
Right Hon. L. S. Si. Laurent (Prime Minister):: When I noticed in Votes and Proceedings the announcement of the hon. gentleman's intention to ask for these papers I communicated at once with the premier of New Brunswick. I have had an answer from him that he has no objection, so I do not need to make the usual reservation.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 6-Mr. Fraser (Peterborough):
For a copy of the broadcast "Portrait of Sir Wilfrid Laurier," given over CBC Wednesday evening, January 23,	1957, between 9.30 p.m. and
10 p.m.-	.


Mr. H. O. White (Middlesex East) moved:: That, in the opinion of this house, the government should consider the advisability of amending the Income Tax Act and regulations made under the act, so as to provide a final receipt for those income tax returns filed for the preceding calendar year for individuals whose income is $10,000 or less.
He said: Mr. Speaker, this problem was discussed a year ago but with respect to the resolution I had on the order paper at that time there was some question as to whether it would be ruled out of order by Your Honour, and so I took advantage of the bill introduced by the hon. member for Kamloops (Mr. Fulton) and made some remarks at that time concerning my opinion as to how the changes in the Income Tax Act might apply. Having revised the resolution appearing on the order paper in the meantime, I welcome this opportunity to present to hon. members some of the arguments which I feel are good and valid reasons for some changes and amendments to the Income Tax Act as they apply to those taxpayers whose incomes are not in the high or extra high brackets.

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One of the first objects that I have heard has always been, "Well, you are drawing a distinction between those who are in receipt of an income of $10,000 and those who are below that figure". I hasten right here to point out that the government now draws a line between various categories or groups of taxpayers, and those in the higher income tax bracket pay a greater percentage of tax. Therefore, to provide for those taxpayers in the lower income group a final settlement 12 months after the 30th day of April in each tax year would not be so difficult. It would not be difficult also because of the fact that, as I understand it, where fraud is charged the income tax department can take almost any number of years and bring the taxpayer before the courts of the land. Therefore, I cannot see that it would be too difficult to administer.
I, therefore, make no apologies, Mr. Speaker, for bringing this matter to the attention of the house and taking up some of the time of the house to present my views, and I think they are the views of a large number of Canadian citizens.
If we believe in democracy-and I think we all do-we acknowledge it is government by the people and for the people not government by a ruling class. Consequently, I think if a poll were taken the vast nfajority of taxpayers would be in favour of some amendment to the act which would let them know when they were finished with one year's business. At this moment I should also like to mention that I doubt whether there are over 5 per cent of the income tax payers in the bracket which I have mentioned whose income could not be revised either way.
As I said on another occasion, if my income tax return or that of any other hon. member or individual taxpayer was submitted to ten different officials or assessors of the income tax branch those gentlemen would come up with ten different answers or maybe 20 if you went back a second time. Consequently I think the time is long past due when some method should be established by which a definite and correct conclusion could be reached. I do not think this would be difficult because it seems to me that any qualified efficiency firm or accounting firm could set up a system to administer the act more speedily and satisfactorily. While I am mentioning these things I might point out that there are many harassed taxpayers who have worried themselves into a premature grave over the problem of income tax. As I said last year, I hold no brief for those persons who deliberately set out to defraud the income tax branch and consequently the Canadian people of what is their just payment

under the law. I also want to point out that in my opinion the vast majority of Canadians are law abiding citizens regardless of what the income tax people may think about this.
I plan to appeal to the reason of both the Minister of Finance and the Minister of National Revenue. I doubt if we depart from the British system of justice whereunder the accused is innocent until he is proven guilty in any other legal procedure, but people being prosecuted by the income tax branch are considered guilty until they have proved themselves innocent.
As I mentioned previously, I am not alone in bringing to the attention of the government the problems confronting individual taxpayers because many individuals and groups are expressing concern in this regard. I have on my files hundreds of letters from taxpayers in Ontario who have written to me protesting the present system under which they are never certain just where they stand with the income tax branch. In order to point out how widespread is this concern, there are many county councils which have passed resolutions along this line. I am going to refer to just a few of the counties near my constituency. These include Elgin, Huron and Perth, Lanark, Grey and Halton, Bruce, Lincoln, Oxford and Waterloo, Brant-Haldimand, Middlesex and Lambton. There are some others, but at the moment I do not have their resolutions on file. In addition to that many chambers of commerce have protested the present set-up as well as the federation of agriculture, the farmers' union and various women's institutes. I want to mention particularly two groups of women's institutes in Essex, the Malden Women's Institute and the Women's Institute of Essex County. They have both written to me backing up what I had to say a year ago and expressing the hope that some satisfactory solution can be found for the problem.
There have been many editorials and newspaper comments supporting the stand I took, and I should like to refer the government to a couple of clippings which I have and which I think are most pertinent to the problem. We all realize that the government has grown and now reaches into the private life of practically every individual in Canada. History has a habit of repeating itself. I have here a front page editorial which appeared in the Toronto Saturday Night of September 4, 1954. This was commenting upon what had gone on in Great Britain during and at the close of the war, with particular reference to ministerial responsibility to parliament. They were referring to an incident concerning the taking over of a 700-acre farm in Great Britain and what they

say has a bearing on the understanding which the provinces had when they relinquished their taxation rights at the beginning of the war. The resignation of a particular minister in Great Britain had been called for, and the editorial went on to say:
There was a time when such a resignation would have excited little comment: it would have been expected as the only possible course for a minister who had failed to keep his department in good order. But there was surprised and respectful applause for Sir Thomas Dugdale: he had actually admitted that a minister is responsible for the conduct of the civil servants under his direction. In other words, the principle of responsibility has been so generally ignored that any recognition of it by the members or minions of government comes as a distinct shock.
Canadians have had many opportunities in recent years to study the growing disinclination of both federal and provincial cabinet ministers to accept responsibility for the sins of their departments, and considering the complacency with which this ministerial attitude has been accepted, they are likely to see a good deal more of it. There will be no change until they understand that this sort of thing can only mean government not by elected representatives but by an uncontrolled civil service.
When ministers refuse to share the blame for waste, inefficiency and worse in their departments, they are admitting that the job of government has grown too big for them; they are claiming, in effect, that while they should still be trusted with the direction of the nation's business, they should not be expected to worry about the people they have hired for the day-to-day handling of that business. If we condone this attitude, we must be prepared to accept the inevitable result: the end of our control, as electors, over the way we are to be governed.
I commend to the government a second reading of that editorial in their leisure time because it does indicate the drift that is going on in this country toward a certain amount of bureaucracy. Another clipping along the same line rather intrigued me. It reads:
History Repeats Itself
Twenty centuries ago, and thereafter for four hundred years, the Romans ruled Britain without interfering in the private lives of the people. The Roman government attended to its own affairs and allowed the people to attend to theirs. Indeed, as Douglas Jerrold points out in his book "England: Past, Present and Future" it was from the Roman empire that the western world learned the art and purpose of government and the application of the rule or law to the preservation of the lives of free men living in ordered and mutually dependent societies.
However, as I have mentioned before, we see the various departments of government reaching out and trying to control the private lives of individuals from day to day, and it cannot in the end, in my estimation, lead to anything but disaster. For this reason I am asking the department to consider and review its attitude as it applies to the income tax payer in this country. The present attitude is, I believe, having a somewhat disastrous effect, but, no doubt because of the ever-increasing degree of inflation, that effect is
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not as apparent as it might be in other circumstances. Nevertheless, it is certainly discouraging production and, in a sense, it is penalizing the very people who form the productive element in our nation. When you take in-as I am doing here-that group of people whose net income is less than $10,000 a year, you are covering the vast majority of the productive enterprises of this country.
Some people are saying "I am not going to work for the government any more; I am just going to make a living out of my land or business. I am not going to hire a lot of help in order to make a few dollars. If I should lose, it would be 'just too bad'; if I win, the government will only take it from me and wonder why I did not make any more". Consequently, every small businessman, every self-employed individual and every working man who engages in parttime work has begun to question the results of his efforts as far as his income tax commitment is concerned. They are wondering: "If we do some overtime or put in some extra work for ourselves, will all we have gained be confiscated?" The net result of this situation is that we are in a sense, rewarding the non-productive and punishing those who are productive in our economy.
That is not the whole story either, Mr. Speaker. There is the fear in the minds of many people that sooner or later they will be "hauled on the carpet" and have their business transactions for years past-possibly over the past 15 or 20 years-made subject to review. We in the western world, have been told about the terror in totalitarian countries where the gestapo comes knocking on the door in the night. That is held up as one of the things to be feared in a totalitarian world. Well, the income tax department does not even wait until night before they knock on the door-they come in at any time, represented, in many cases, by a little man with a lot of authority. Yes, I am "sticking my neck out" a long way, as I mentioned earlier. The department seizes your books and seizes your assets, and you are presumably guilty until you are proven innocent. I know whereof I speak. I do not plan, Mr. Speaker, to bring to your attention four individual cases with which I am very familiar, but I will mention two of these cases involving estates. The people concerned were told that they owed the department a sizeable sum of money, and the heirs and the legal firms representing them were afraid to fight the case. Accordingly, they paid. It almost reached a point where it amounted to blackmail rather than the administration of the law.

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In a couple of other cases in which the people appealed, when they said they were going to take the matter to the income tax appeal board, some time later one of the officials appeared and said, "We have reviewed this whole case; there are some mistakes; we are sorry but there is an error; forget all about it." If those people had paid the amount demanded, it would have been an admission that they were wrong. I am willing to bet that there are many cases in which the people, rather than fight, pay the amount demanded but do not owe the department at all.
Many of these taxpayers-good, law-abiding citizens-are finding that the department are autocratic and overbearing in their approach to the taxpayer. In fact, a good friend of mine retired years ago and went to Devon, England. In England during the war all kinds of restrictions were placed on individuals, as was done here, as we know, through the wartime prices and trade board. I well remember a letter he wrote to me and in which he said, "The government of Britain are making a crook out of every honest Englishman." I venture to say that the income tax department here, through their methods, are making crooks out of many otherwise honest people. I do not know whether I should use the word "warn", but at any rate I think I should tell the department that there is a rising tide of resentment against the department and the methods that are used in collecting what they allege are amounts owing.
I mentioned the small businessman. I want to point out that agriculture is not the only industry affected. Practically all small business across the country is affected. Those large corporations and companies doing a big business have their accounting systems set up; they have men who watch every angle of taxation so as to save as much as they possibly can in every financial move they make. But the smaller income tax payer is not able to hire that expert advice and opinion and consequently he must take his chances. Labour are watching closely so that in the overtime work they do, and by means of which they may contribute to the economy of the country, they are not penalized. They watch their overtime and pay close attention to it. In many cases lawyers advise their clients to settle rather than to fight the department because they figure that if they go to court and fight the matter or antagonize the department, the department will just clamp down on the law firm as well. Consequently they hesitate to take on these accounts.

I know of one particular case in which a certain individual was taking care of accounts for several clients. As soon as that individual died the accounts of every client of his immediately came under surveillance, and they had not anyone to fight their battle. They had expected that this particular individual knew all about their business and could fight the case for them. As soon as he had passed on, there was no one left to fight the battle. Consequently many of them were taken for either large or small sums. I think this is a terrible state of affairs.
Then there are many people who go to the income tax department for advice. But according to what has happened in the courts and in the appeal boards, that is not the place to go for advice.
I hold in my hand a couple of clippings from newspapers, and the heading on one item is, "You take Official Tax Advice at Own Peril". This clipping is from the Ottawa Journal of February 21, 1955 and says that the oral or written statements and opinions of assessors and others when dealing with taxpayers from time to time, however sincerely expressed, can hardly be said to fulfil these requirements of section 14 of the Income Tax Act.
Then I should like to cite what happened to one taxpayer, as illustrated by an article in the London Free Press of March 12, 1956. Evidently this taxpayer in company with his auditor consulted the local officials, his only contact with the department, and they agreed that the cash basis method of computing his income for tax purposes was acceptable to them. However, some years later he was assessed for a considerable sum. He appealed to the income tax appeal board, which board ruled that the taxpayer was overly optimistic in his assumption that the cash method of computing income had been accepted. The joker is the word "accepted" in the act. According to the board the term "accepted" indicates the unqualified acceptance in appropriate form on behalf of the crown which leaves no scope for doubt. The oral or written statements or opinions of assessors or others, however sincerely expressed, cannot be considered as fulfilling this requirement. Consequently, therefore, you must take their advice with a grain of salt because later the department will repudiate it. I feel this is a regrettable state of affairs because these small taxpayers about whom I am talking should be able to obtain correct advice from the department. However, experience has proven that advice is not dependable.
A little earlier I mentioned the chamber of commerce brief. The chamber of commerce recommended that the right to assess

be limited to a one-year period dating from the assessment. There is a joker in that, too, Mr. Speaker, and I claim that is not good enough. Some assessments are delayed for years and the taxpayer does not know his position. It provides a loophole and an alibi for the department. The Department of National Revenue demands that the individual taxpayer's returns be in four months after the close of the calendar year. However, when it comes to the department processing these returns, that can go on for years and years without arriving at any finality.
Just last evening on the train coming to Ottawa I met some of the members of the legislative and without asking them for their opinions on the subject they expressed concern about the lack of finality and suggested that something should and could be done about it. While I am mentioning that I might say that I think there is a desire on the part of the taxpayer to have a clear definition of capital gains. There is no such clear definition today. I would say that if the government is as efficient as they would lead the public to believe there is no reason in the world why these returns could not be processed within 12 months from April 30.
There is another alarming angle. I suppose there are two sides to every story, but I have had several taxpayers come to me and say that the assessors who appeared at their places demanded cash and would not take a cheque. I suppose there is a possibility of someone giving a cheque that would bounce, and consequently they did not want to be caught that way. On the other hand, I am just wondering why they demanded cash. In my opinion that angle should be investigated because the demand does not ring true.


Mr. Bonidickson:: Would my hon. friend give particulars on that?


Harry Oliver White: No, sir, I am not going to divulge the names of the people who came to me. They are in sufficient trouble now. Last year, Mr. Speaker, there were quite a number of Liberal members who had resolutions on the order paper or mentioned in their speeches the problems I am bringing to the attention of the house today. I would hope these members would be influential in furthering the cause about which I am speaking this afternoon. I noticed that there was one member on the government side who had the courage of his convictions and made a speech accordingly.
There are those who will say this cannot be done. I would think such an answer by the government or the officials concerned would be an admission of inefficiency
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or an admission that the department does not want to settle individual accounts within any stated time. It would be an admission also that the officials of the department like the power with which they are vested and are loath to relinquish it.
Recently I had two cases brought to my attention. One man had been making returns for many years when he was approached and told that his account was incorrect. He was asked for quite a sum of money and said he did not have that kind of money, but he would allot a certain percentage of his monthly pay cheque to meet their account. This was agreed upon. The account was reduced from thousands to hundreds. Then his wife was taken sick and she was in and out of hospital for many months. When the due date for the next income tax payment rolled around the man informed the department he could not pay it because he did not have the cash. He was informed that his wages would be garnisheed. He pointed out to the department that the refundable portion of the amount deducted from his wages for income tax purposes would more than cover what he owed the department, but they would not agree to that. They garnisheed his wages. As hon. members know, in the case of some companies this means that you are let out of your job.


William Moore Benidickson: Will my hon. friend give me the particulars of that?


Harry Oliver White: Yes, sir. I had a letter from an individual who said that apparently her only crime was saving money for her old age. When the income tax department found cash in the bank they were immediately suspicious and investigated every possible angle. Her conclusion was that all the government wanted to do was to worry her to death before she was 70 and able to collect the old age pension.
A year ago I mentioned the efficiency of Eaton's and Simpson's in keeping track of their customers' accounts.
The Minister of Finance rather questioned what I had to say. I therefore took the trouble to find out how many accounts Eaton's and Simpson's processed in their mail order departments in a day and how many employees they had. As I understand it, the Eaton company employs about 5,000 people in its mail order department. This has nothing to do with the retail sales. They service about 50,000 orders a day and the average time taken to process an order is 20 minutes. The income tax department employ over 6,000 people. There are approximately 9 million people of tax-paying age in the country. They are not all taxpayers. I did not have time to review the

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income tax statistics to find out exactly the number, but there are in Canada about 1,500 persons for each employee in the income tax department, to say nothing of those who are not eligible for taxation. Therefore, it would seem to me that there could be a great deal more efficiency employed by the department than is employed at the present time.
While what I have to say now has nothing to do with the settling of accounts yearly, I do want to point out that those persons who are contributing to approved pension plans are able to deduct from their income tax the amount paid for such a plan, but those who are individually or self-employed help to pay for it because industry or concern passes on those costs. They become part of the cost of doing business. Consequently, those people who are individually or self employed are not able to deduct any payments they might make to a pension plan of their own. They are, in a sense, contributing to the pension plans of others in the costs of things they have to buy. That is something the department should look into. All self-employed people are under that kind of double-edged sword arrangement. On the one hand they are paying for others and on the other they are not able to deduct the costs of their own plans.
There is another comment I wish to make. We saw this during the early part of the last session. Planes and many other pieces of war goods were declared surplus and obsolete. They were bought as junk at a fraction of their original cost. Then, after being purchased as junk, they were sold to belligerent countries in the Middle East. My contention is that if some of the money obtained was used for hospitalization plans, increases in pensions and things like that for our own Canadian people it would be putting money to much better use.
I also wish to point out that it would take a Philadelphia lawyer to understand the Income Tax Act. The department expects individuals who are busy trying to run their own business to understand all the ramifications of the act.
In conclusion I wish to point out, Shakespeare said that life is a stage and every person plays a part. I think everyone knows the part the income tax department is playing, with eminent success.


William Moore Benidickson: Mr. Speaker, this subject is not new to the house. As a matter of fact, last session we had a very worth-while debate on a subject very close to the resolution we are discussing now because of the introduction of an amendment

to a statute by the hon. member for Kamloops. At that time the hon. member for Middlesex East, who is now proposing this resolution, spoke and he said, as reported at page 3237 of Hansard:
The income tax is probably the fairest method of collecting taxes because those who are most able to pay are the ones from whom taxes are taken. But the way in which it is done at the present time is extremely unsatisfactory.
I take it that in essence this is still the reason for his bringing forward this resolution today. On the other hand, I want to remind him and the house that last year when this matter was under discussion it was indicated that while the government at that time had under its income tax provisions an opportunity to reassess, beyond conditions of fraud and misrepresentation, a taxpayer's return within a period of six years, consideration would be given to reducing that opportunity in regard to time. In August of last year, when the Income Tax Act was amended by this house, it was proposed as a government measure that this period of time within which re-assessment could take place under normal conditions be reduced from six years to four years. It is true that the public bill, as introduced by the hon. member for Kamloops, proposed three years, but I suggest to the house it is reasonable to think that this fairly important reduction passed last year, from six years to four years, is worthy of a try-out without the most radical suggestion made by the hon. member for Middlesex East.
Some complications would result if we were to accept at its face value the proposition of the hon. member for Middlesex East. While there is some vagueness in the wording, he suggests that we can within a year of filing arrive at a conclusion with respect to the tax obligation of all individuals filing tax claims.
Our laws also provide a certain number of privileges to the taxpayers. It is not clear in the hon. member's resolution that he would similarly want to restrict the taxpayer in so far as his rights are concerned in asking for re-assessment in the case of a deduction at source. Under the present law the taxpayer is given the privilege of two years within which to ask the taxation department to refund to him certain moneys that he considers due by reason of certain deductions that are provided under law. That is not clear and if we were to accept the hon. member's resolution as proposed this afternoon I suggest it would take away from the taxpayer whose income is taxed at the source privileges that he now has of two years' opportunity of applying to

the income tax department for a re-assessment and a reconsideration of his tax payments and his application for a refund for lawful deductions.
In the legislation proposed by the hon. member for Kamloops last year there was at least recognition of the fact that there should not be restrictions for the department in so far as taxpayers are concerned in cases of fraud and misrepresentation. In the resolution that has been presented to us this afternoon I find no reservation with respect to that matter and I think it will commend itself to the house as unworthy of acceptance on that score alone, because surely the present opportunities of the income tax department should be furthered and continued in terms of being able to reassess in the case of taxpayers regarding whom there is very definite evidence of fraud and misrepresentation in the matter of their filing.


Mr. Nesbitt:: The hon. member covered
that.


William Moore Benidickson: It is not in the resolution. If we were to accept the resolution I know my hon. friend who just rose would be among the first to say we passed a resolution which was not accepted holus-bolus as a government.
Another thing which I think should be taken into consideration by hon. members is the general element of justice and fairness in tax matters as it relates to all taxpayers across the country. I find that in the most recent publication of the Department of National Revenue entitled "Taxation Statistics for 1956" and which is based on tax returns for the year 1954 the following information is available to all of us. It is reported there that the total number of taxable income returns for the year 1954 was 3,410,160. The number of non-taxable returns was 1,393,250. This means that a grand total of 4,803,410 tax returns were considered by the officials of the Department of National Revenue in 1954. I submit to the common sense of hon. members that they would not want to employ in the Department of National Revenue on a peak work period basis and then a lay-off basis the number of employees who would be required from April 30 to the end of the calendar year to process that number of returns.
I know the proposer of this proposition is sincere in his suggestion and I also know that generally speaking he speaks for an agricultural community. I want to point out to him that the taxation statistics for the year 1954 to which I have referred show that out of a total of 4,800,000 returns only 43,000 farmers and fishermen submitted returns that were subsequently found to be
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taxable. In addition there were 171,000 farmers and fishermen who submitted returns that were non-taxable.
There are many hon. members of this house who represent ridings which are basically composed of wage earners who have income from only one source and that is from an employer. Respecting the employees' class, a total of 3,032,300 employees filed returns on income that was taxable and a total of 994,660 employees filed returns on income that was not taxable. If we are to regard the element of fairness, I do not think the mass of people whose basic income is taxed at the source for income tax purposes as a result of their being employees would be satisfied if they felt that this government or any other government was restricted, as is suggested by the resolution before us, in its opportunity to examine carefully the returns of other taxpayers who have a more complicated situation, such as business proprietors, farmers and fishermen and professionals, in order to assure that everybody is paying the just and proper rates that are passed by this parliament.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, as the parliamentary assistant to the Minister of Finance has so aptly put it, it is not so much the collection of taxes or the rates charged that is objected to, but rather it is the method of collecting taxes that is objected to, and that is what is behind the resolution of the hon. member for Middlesex East.
I suppose, Mr. Speaker, tax collectors and tax collecting methods have been unpopular throughout history. As many hon. members probably know, in the old and difficult days of the Romans the job of tax collector was hired out at a certain price. In other words, if the government of the day wanted a certain amount of taxes collected from a given area and they expected, let us say, the equivalent of $100,000 to come from a specific part of the country, someone would contract to take the job and if they succeeded in collecting more than $100,000 in taxes they filled their own pockets with the surplus. We all know, of course, that such a thing would not be allowable today; however, in effect it may not be as unallowable as it might appear because while the tax collectors of today receive a salary I think some of them have the attitude which says, "Get all you can". I know of one particular instance which comes to mind and there are other instances which I could cite. Just recently in my own town a man who operates a small business was visited by the collectors who said, "Well, we got so much out of so and so and now we are

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going to see how much we can get out of you". If that is the attitude of the tax collectors it is little wonder that the general public is complaining about the methods used by the officials of the Department of National Revenue because the state of mind represented by the "get all you can" attitude is not a desirable one.
There are people in other positions who have the same type of attitude. For instance, it is often believed that some policemen like to get as many convictions as possible because they think they might earn a promotion on this account. I cannot help but feel that a great many junior officials of the Department of National Revenue have the feeling that the more they can get out of the people the greater will be their chances of promotion. I know full well that when this department was before the special committee on estimates last year the minister denied that this was the case. I am not suggesting that the minister was trying to mislead anyone, as I think he sincerely believes what he said. I do not suppose for a minute that the department condones such a state of affairs, but I am quite sure in my own mind that many of the junior officials feel that if they do a good job and bring in a lot more revenue they are going to get promoted. I cannot help feeling that that is so as it is only human nature to feel that if you are making a success of your job you are going to get a promotion.
Another thing that was brought' out last year when the affairs of the Department of National Revenue were being considered by the special committee was the length of time books of a company or an individual would be retained by the departmental officials when they were on a fishing expedition. Several times I have mentioned in the house the case of a private company where the books were taken by the departmental officials for examination. The officials arrived at the home of the owner at six o'clock in the morning. The owner was in Europe with his wife, but his son was there. The officials ransacked the house for the books, and I suppose in doing so they were within the law as they had a warrant. These books were kept for over a year, I believe for 15 months, at great inconvenience to the company. For instance, they did not know what money was owing to them because their accounts receivable book was away. They did not know what money they owed because their accounts payable ledger was away.
I see no reason why the department should keep books for that length of time. There is no reason why they could not have books of this kind photostatted and use the photostats

in making their investigation. On previous occasion reference has been made to how good the Department of National Revenue is at photostatting. There is no reason why they could not use methods of that kind in this type of case so that the books might be returned and permit businesses of this type to carry on.
The hon. member who has just resumed his seat has said that he feels one year might be too short a time, that we should try out the four-year period, as was agreed to last year. There may be something in what he says, but I cannot help but feel that if the period was reduced to one year it would work out very well. I know the department will say that this would place a terrific strain on the department, that it would be an incredible thing to do, but I think most hon. members have seen examples in other fields where people have had to do something and have gone out and done it. Many of us can remember when during the war the length of military training was reduced. The usual length of training was from six months to a year but during the war we had to have people in a hurry. In my own experience in the navy the length of training was from three to four months. The results may not have been perfect but I know the people in that branch of the service did a pretty good job even though they had to get their training in a hurry. The same sort of argument could be applied to the Department of National Revenue. When people know they have only a certain length of time to do things they will get them done.
There is another item I should like to mention, the drawing up of income tax returns. As everyone knows, this is an exceedingly complicated matter. I think the hon. member for Kenora-Rainy River (Mr. Benidickson) agreed that this is so. In fact it is so much so that sometimes people go to lawyers to have this done. I do not think many lawyers know much about this sort of thing. I know I do not and I have an accountant draw up mine for me. A great many other people do the same thing.
However, many people, such as farmers, do not know just whom to go to in order to have their income tax returns drawn up. They should go to a chartered or public accountant, but very often they do not. As I say, many lawyers do not know too much about it but they still go ahead and draw up these forms, but they are responsible for any mistakes they may make on behalf of their clients. On the other hand, many people will go to a township clerk to have their income tax returns drawn up. They do this in perfectly good

faith but, as hon. members know, this presents a very complicated problem in completing the returns, allowing for depreciation and so on.
Someone may go to a township clerk and the township clerk makes a mistake. Then several years later the farmer may find that he owes a lot of money plus interest. He may not be penalized because there was no intent to defraud, but he does have to pay interest. Yet he had his income tax return made out in completely good faith by someone who held himself out as knowing what he was doing. The township clerk holds himself out as an agent who knows and the farmer is penalized. It seems to me that if someone holds himself out as an agent to know, as we call it in law, and draws up income tax returns, he should be liable in damages for any mistakes he may make. If a lawyer makes a mistake he is liable for the consequences. I think that should apply to these other people.
The hon. member for Middlesex East (Mr. White) who proposed this resolution said that there are many practical reasons why the burden of proof should be shifted. The individual must now prove that he is not guilty. I cannot help but feel that this constitutes a dangerous precedent. It may be all very well for government officials to go on fishing expeditions to see what they can find out, for a year as proposed in the resolution, but it is a dangerous precedent. This is contrary to all the principles of British justice which apply throughout the Englishspeaking world, and it is a very dangerous thing. Once it gets into one department of government the next thing we know it will be the case with all departments.
As has been mentioned by the hon. member for Middlesex East, quite often a person will be assessed a certain amount of tax but rather than appeal it to the income tax appeal board, which might entail employing a lawyer, he may decide to pay even though he feels he is not liable. Lawyers may not charge as much as members of some other professions, but they do charge fairly well. You may require a specialist in income tax law which is going to cost more. Even though a man wins his appeal where the sum involved is fairly small he may not be any further ahead.
Quite often a man decides to pay the amount he is assessed for because he feels that even if he won his case it would not be worth it. There might be $500 involved, and even though he wins he might have to pay half that amount to his lawyer. This is the rather unfortunate state of affairs that exists.
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I appreciate that that is not strictly the fault of the government, but that is what results from this type of law.
There is one last thing I would like to mention. After a reassessment is made a man may find that he owes $4,000 or $5,000. If he is a small businessman or a farmer and has to get that amount of money right away he may find himself in difficulty. I know that at times the Department of National Revenue will allow a little time for payment, but they do not have to. If a small businessman or farmer has to raise $4,000 or $5,000 or $6,000 in a hurry it may well mean the ruination of his business or his farm. We all know that when you have to sell something in a hurry you cannot realize its full value. If a farmer has to sell part of his farm or if a businessman has to sell some of his stock-in-trade in a hurry he may find that he must sell at a considerable discount and thus suffer a heavy loss in relation to what he has to pay. I would like to point out that though the words "fraud and misrepresentation" were not contained in the resolution, the hon. member for Middlesex East (Mr. White) dealt with that aspect, and said that this was in no way intended as a means of covering up people who had been dishonest and who had tried to cheat the government of its just due.
The last point I would try to make is this: when it is found that people have not paid what they should have paid, then, though perfectly innocent of any intention to deceive, they are not only penalized by having to pay the amount claimed plus interest, but they often have to suffer a considerable loss in being forced to sell part of a farm or business in order to raise funds in a hurry. I think that if he does nothing else, the Minister of Finance might consider some amendment to the act under which a time limit would be allowed so that people would not have to ruin themselves in an effort to raise money regardless of the circumstances.


Mr. F. D. Shaw (Red Deer):: When I first read this resolution, Mr. Speaker, I wrote across it: "Supported with reservations." One of the reservations I had in mind has already been mentioned here, namely the possibility of fraud and misrepresentation.
The hon. member who sponsored this resolution (Mr. White, Middlesex East) has stressed that he is in no way endeavouring to protect those who are guilty of fraud or misrepresentation. I certainly would not suggest, either, that protection should be given to such persons, but the sponsor did make his position perfectly clear on this point. The parliamentary assistant (Mr. Benidickson) urged opposition to the resolution on the

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ground that this proviso was not contained in it. I cannot help but think-


William Moore Benidickson: They could not be found out within such a short period of time.


Frederick Davis Shaw: I cannot help but feel that more than once in cases where this house has had government resolutions, even government bills, before it for consideration, all has not been stated; in fact, very few government resolutions give a clear picture of the full import of what is intended. Indeed, it often happens that this house, having passed a bill in the belief that it knew what it was doing, finds later that regulations have been attached to that bill to give it an effect which was never intended by the house itself when it passed the measure.
The parliamentary assistant referred to the fact that the taxpayer is given two years in which to claim reassessment and refund. It does occur to me that there might be a strong argument there for saying that the government, or the Department of National Revenue, should also be limited to two years with regard to its own actions; what is fair for the taxpayer on one hand should also be perfectly fair for the department. There is a difference between the two. The department has the wherewithal to hire experts to complete their job, while the individual is often an overworked, oppressed person who has all too little time and, possibly, all too little ability when it comes to keeping books.
I think it is inevitable that the national revenue department should be the most unpopular department of government. After all, they are in the business of collecting taxes, and none of us likes taxes. I think, myself, that the department becomes unpopular in relation to the weight with which taxation bears down on the public. During times like the present when most people believe that taxes are particularly oppressive there is bound to be considerably more criticism. I do feel, however, that the Department of National Revenue and the government can rid themselves of a good deal of the criticism which presently falls upon them by making a concerted effort to remove the anomalies and the inconsistencies which are found within the act itself.
I noticed in the press this morning that only within the last few days the Canadian Bar Association, I believe, and the accountants have made representations to the Department of Finance urging the removal from the act of certain obvious anomalies. I shall not refer to these anomalies in detail, though I could; they are there, and certainly consideration should be given to the correction of this difficulty.

It is also true, Mr. Speaker, that right across the country we find a great variation in the interpretation of the regulations; one finds a difference between the interpretation made by two district offices, in some instances, within a single province. I happen to have had evidence of a certain case which was handled by one of the district offices. It was discovered that the taxpayer in question was the responsibility of another district, and the accounts were accordingly transferred. However, in the second district a different interpretation was placed upon various sections of the act. I sometimes wonder, in this connection, how much of the time of the head office staff here in Ottawa is occupied in correcting errors made in district offices-errors of actual calculation and errors in interpretation. I doubt very much if we will get that information, but from what I hear via the "grapevine" a very substantial part of the time of head office is occupied in straightening out the difficulties which are constantly and chronically arising in the district offices.
That leads me to suggest this: I wonder if the department is doing enough to familiarize its employees in district offices with interpretations as accepted by head office. What effort is made to bring the staff together to consider and study interpretations? I think, myself, that no matter what is being done in this connection more should be undertaken. I agree with the hon. member for Oxford (Mr. Nesbitt) that it is probably these administrative difficulties that are causing the greatest amount of trouble.
Consider, for example, a farmer who has not either the time or, possibly, the ability- I am only thinking of certain cases; I am not condemning all farmers, or anyone else for that matter-to keep a clear record of his accounts. It does happen that in many cases people have neither the time nor the ability to organize an acceptable accounting system. In these cases the department imposes upon such people what it calls a "net worth statement". In some respects these things are perfectly vicious. I have known the affairs of certain individuals and I have examined net worth statements and, believe me, though you know they are wrong you just cannot prove they are wrong. It is one of the strangest things I have encountered while in public office.
Then there is the practice of placing the onus upon the taxpayer himself; in other words, the department will sometimes set down an almost fantastic figure and say: "We say this is right. If it is not, you prove it is wrong."
I will give the house a typical example- something that recently happened. A farmer

had among his papers a receipt for $1,200, money that he had spent to buy cattle. The department had it included as income and kept insisting that he account for this $1,200. It is almost unbelievable. I would not have believed it myself if I had not seen these papers and the receipt. This is the sort of thing that causes annoyance and aggravation. I sometimes think that when the Department of National Revenue recruits new personnel it does not give sufficient attention to-if I may use this word-training its men.
After all, there are right ways and there are wrong ways of dealing with the public. I should think that the Department of National Revenue would be more concerned than any other department in dealing with them in the right way. They can be firm. They can insist upon the provisions of the act being adhered to. But I am sometimes troubled by the attitudes of those who can-I think someone in a previous debate described them as little gods-and do create a certain animosity among taxpayers or prospective taxpayers. The situation is just not good. I sometimes think that these regulations we now have seem to be predicated upon a premise or assumption held by some that people are inherently dishonest. People are not inherently dishonest. I think it is an error on the part of the Department of National Revenue to create the impression that that is what they sometimes believe. Rather, I would say that it would be an admission that the administration is incompetent, and that in so many cases they try to cover up their incompetence by these unfair procedures and pressures which are imposed upon prospective taxpayers.
I want to say to the parliamentary assistant to the Minister of Finance that I think we have come a long way in the past few years in clarifying income tax returns. I think it has been a progressive step. The department are simplifying them to a considerable degree and on the income tax forms they are putting a good deal of information for the purpose of assisting the one who is filing or preparing the return to complete the return with less chance of error. I wish to commend the department for that improvement.
As does the hon. member for Oxford, I feel there is still room for considerable improvement in the field of administration. I will frankly state to you, Mr. Speaker, that I am not fully aware of all the implications in reducing this to a one-year period. However, I would say this. If two years is considered good for the taxpayer on the one hand, certainly it should be considered good enough for the Department of National Revenue on the other hand.
There is just one other thing I wish to say, Mr. Speaker, and it is in connection with 82715-45
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some of the things that annoy people. A perfectly honest person, we will say, files a return. He completes it to the very best of his ability. Some time later he is informed that he owes more money and of course he is frequently called upon to pay interest on what he owes the department. Yet the department itself can hold a taxpayer's money for quite a considerable period of time but he has no right to claim anything whatsoever by way of interest. It appears that the only safe thing for the average taxpayer to do is to overpay. Then, of course, he is caught again because, Mr. Speaker, in overpaying he runs into financial difficulties, is obliged to borrow and is up against possibly an even higher interest rate. I have said before and I say again that if the department expects me to pay interest on what I owe them, surely the least I can expect is for them to pay me some interest not on what they owe me but on the amount of money which they took from me over and above what the law of the land requires me to pay.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, I want to make a few brief remarks on this matter. First of all, I want to refer to what was said by the parliamentary assistant to the Minister of Finance. He pointed out one or two technical omissions in the resolution, notably one referring to fraud, and I think that was answered. I think what we are all trying to do is to reach a reasonable solution of this matter. Incidentally, Mr. Speaker, I would hope that before this debate concluded we would have a somewhat detailed statement not merely from the finance department who look at the principles of taxation matters and decide them, but also from the revenue department who have the business of actually doing the work of collecting. It seems to me that this is rather a question of what is reasonable from a technical point of view rather than in any sense a matter of principle. We are none of us talking about matters of principle, except the principle of being fair. In order to know what is fair one must have a picture of the technique involved in the actual business of collecting.
In the discussion of a year ago, on June 12, 1956, the Minister of National Revenue gave us some figures indicating the way in which the work of the Department of National Revenue had been catching up with arrears of previous years. As reported at page 4959 of Hansard of 1956 he said this:
I am very happy to say that that backlog of work has been cleaned up and we are now on a current basis. The same amount of work, or considerably more work, is now being done with 6,000 to 7,000 employees that was formerly done by 11,000 or more.

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I come back to what I said a moment ago. What we are all trying to do is to find out what is reasonable or what can be reasonably expected of the department. It is for that reason that I wish we could have a more technical statement giving us a picture of the actual delays that are involved. I would hope that this resolution would not merely be voted down but that it would be taken by the government as a basis for further consideration and that there would be full explanation. If the actual proposal contained in this resolution cannot be fully accepted, then perhaps it can be partly accepted. The people who ought to be able to tell us about the matter are those who are in the day-to-day business of administering the taxes.
I do not think that I need to spend further time in speaking on the matter. I have not before me definite illustrations of the hardship which is being caused, although I think we need have no doubt that hardship is being caused.
I was particularly impressed by a remark made in the course of the debate a year ago-and I think it has been repeated again this afternoon-about the difficulty which is caused to people who find it almost impossible to keep their records in apple-pie order over the years and who, when faced with something that happened years ago, are in great embarrassment. I suppose it is also true to say that even though the amounts involved may not be large, nevertheless many people, notably farmers, have a much more difficult task in making up their income tax returns than do many of those who live in the city, particularly those who are on a salary basis or a semi-salary basis. Their problem is a piece of cake compared with the problem of the farmer. It therefore seems to me that every effort should be made to shorten the time and that the department should show itself to be co-operative in so doing.


William Moore Benidickson: This time was cut a third last year.


James MacKerras Macdonnell: Yes, it was. I notice that the parliamentary assistant said that it was reasonable that this system be tried out for a few years. But in answer to that proposal, I suggest it is just as reasonable or more reasonable to ask the department, who are experts in this matter, to consider carefully whether they cannot come up and say, "Yes, we can do it in less than four years. We have reviewed the situation and we are able , to say that we can do it in less than four years."
That leaves one point that I want to make. It may be that certain reservations must be

made. I think we have all agreed that fraud must be expected. In the case of fraud we realize that no arrangement can stand merely because it has existed over a certain number of years. Now, there may be some other qualifications. There may be a qualification which I am not able to put into apt words where new facts arise and where perhaps the matter should be opened up. I realize that is difficult to do, and I realize that may open the door very wide. Perhaps to some extent I am unintentionally torpedoing my friend's resolution when I say that, but my point is merely this. I think we might ask the department not to take an arbitrary position and say that a year ago we reduced it to four years, and we are not going to consider it any further for some years to come. My request of the department is that they take a fair look at the subject. A suggestion has been made that they should have two years just as an individual has two years.
If an argument in detail is made by the department showing that is not fair then the mover of the resolution and other people who have supported it, who are fair minded men, I am sure would be convinced. I do suggest it is fair that they should have a chance to be convinced, and when I say "a chance to be convinced", I mean there should be a reasoned and detailed argument made as to what really is the time required.


William Moore Benidickson: I am sure my hon. friend will agree, will he not, that this was examined by an estimates committee last year when the Minister of National Revenue (Mr. McCann) was before that committee.


James MacKerras Macdonnell: I do not disagree with that, but after all this government wants us to believe that year by year they are getting bigger, better and brighter. I am sure they would say they had learned a lot in the last year.


Mr. J. W. Monteith (Perth):: The hon. member for Greenwood (Mr. Macdonnell) has just said he had no definite illustration of unfairness. I should like to bring to the attention of the house, Mr. Speaker, a case decided by the income tax appeal board on October 29, 1956. The judgment was handed down by Mr. Fordham. The case concerned an elderly gentleman in western Ontario who had farmed all his life and who had always been fond of horses. Eventually, he acquired a horse which managed to win for several years. Later on the assessors made an examination of his books and ascertained, by the net worth method, that he had more money than they would have expected from a perusal of his income tax returns. As a consequence, they

assessed him and the assessment took place over a number of years from 1947 onward.
This gentleman filed a notice of appeal, and after the notice was filed the total assessment was reduced by some $7,093. In other words, the department admitted that the original assessment was not correct. I should like to quote from some of the facts cited in Mr. Fordam's judgment.
It may be observed at this point that in the returns for the years 1947 to 1951, inclusive, appellant mentioned having received in the United States of America "race horse purses only". No amounts were mentioned, but in the part of each return in which this acknowledgment was made there is no space provided for the showing of any amounts, in any event.
Then, later in the judgment there is this observation:
As already observed, the appellant obediently reported in the appropriate place in each of his income tax returns for the years 1947, 1948, 1949, 1950 and 1951 that he had received race-horse purses in the United States of America, but this disclosure has availed him nothing. He might well have been asked for particulars of these purses as and when the returns were received and examined. Likely, he would then have learned, before it was too late, that the incidence of income tax rendered desirable the keeping of a careful record of all prize money received across the border. I find it rather difficult to comprehend why no attention was paid to appellant's clear reference to moneys earned by him in the neighbouring country. It is easy to see how he may have been lulled into a feeling of security in the matter when no questions were put to him by local assessors.
It has been considered for some years that race horse winnings would be capital gains. This man had reported to the department the receipt of the money and the department had done nothing about it. Then eight years later they come to him and he is assessed a great amount of money. Let us not forget this assessment was arrived at by the net worth method, and Mr. Ford-ham had a word to say about that:
There is something unsatisfactory about arbitrary assessments as they are necessarily founded on estimate and conjecture to a large extent and these methods of approach leave ample room for error on the part of the computer.
Of course the computer in this case is the department. I am bringing this case to the attention of the house because although the taxpayer has reported the source of the income he was not asked to explain it nor was he told that the amount would be taxable. As Mr. Fordham points out, it certainly does not seem fair at this stage. I feel it is manifestly unfair to assess a man who is 69 years of age some eight years after he has reported income and upon which he has not been questioned in any manner whatever.
There are other instances of gross unfairness in the establishing of taxable income on the net worth basis. In my opinion, Mr. Speaker, we come down to the fact that 82715-45J
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the administration of the department does not dispense British justice. According to the department the taxpayer is guilty until proven innocent, but I believe that he should be innocent until proven guilty.


Mr. F. S. Zaplitny (Dauphin):: I am assuming, Mr. Speaker, that the hon. member for Middlesex East (Mr. White) will be replying to some of the comments that have been made about this motion. My object in rising, chiefly, is to ask a number of questions for the purpose of clarification. Perhaps the hon. member would be kind enough to make a note of the questions because I would appreciate an explanation.
First, I want to say that if the principle of the resolution is to bring about, at some point, finality to the income tax cases of individuals then I feel that the principle is a good one. It is a cause of irritation and disturbing for people to have their income tax affairs gone over year after year without reaching a point at which they can say, I have fulfilled my obligations to the government; the case is closed. It would appear to me that the intention behind the motion is good and on that basis the motion has merit.
One thing that bothers me is, I was going to say the haziness of the motion, but I do not wish to be too hard on the mover. It appears to me there are a number of questions left unanswered. Just looking at the second last line of the motion, I find these words:
. . . a final receipt for those whose income tax returns filed for the preceding calendar year . . .
The question that arises in my mind is this. Is that a final receipt, as is stated in the motion, for the income tax return? .
If it means exactly what it says, then I am a little doubtful as to whether it really is the intention because I would imagine the hon. member means a final receipt for income tax obligations or assessments rather than the returns themselves.
Then, it goes on to say, "for the preceding calendar year". I am thinking of something of this nature. Suppose I, as an individual taxpayer, were slow in filing my income tax returns, as unfortunately many of us are at times, and suppose I filed for the calendar year 1956 in November 1957, which I do not suggest is a good example but it could happen, then, what is the purport of the resolution? Is it that I should receive a final receipt for the preceding calendar year? Surely, one would not expect to receive a final receipt for the preceding calendar year if he filed within a month or two of the next calendar year. That would be, of course, an impossible and unreasonable thing

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to expect. Then, if he did not receive it that year and it carried over into the next year then, of course, he would not be receiving a receipt for the preceding calendar year. This is one of the things I would like to have explained.
Then, the resolution states further, "for individuals whose income is $10,000 or less". I would like the hon. member to tell us what he means by "income of $10,000 or less". Does he mean gross income, net income or taxable income? If he means taxable income, then, of course, we understand his point, but again I would like him to explain, if he will be so good as to do so.


William Moore Benidickson: Ninety per cent would be subject to the resolution because they have incomes of less than $10,000 a year.


Frederick Samuel Zaplitny: That is a sad commentary on the so-called prosperity the Liberals talk about. I was wondering also why the limit was set at $10,000 or less? What particular reason was there for choosing $10,000?
Another question which arises is, what happens in connection with refunds? If we take the wording strictly and interpret the words "final receipt", the word "final" in all its implications would either prevent or interfere with the individual's claim for refunds for overpayments or overassessments. These are some of the questions I should like to have clarified. Again, I wish to say that if the intention or the principle of the motion is that as quickly as possible after the returns have been filed the case should be brought to a point of finality, then I feel the motion has merit, but as it stands now there are some grave doubts in my mind as to what is exactly meant by the motion itself and I hope the hon. member will be kind enough to give us an explanation.


Mr. J. C. Van Horne (Resiigouche-Mada-waska):: Mr. Speaker, there can be no question that, in accordance with the established principles of British justice, a sword should not be permitted to hang over the heads of our people. That is exactly the situation with regard to the very long period of time during which an assessment can be made against any citizen in Canada in regard to his income tax.
I have had some experience in police work over the years and I have some knowledge of the methods by which investigations are carried out. The criterion of success of any investigator in the income tax branch is usually the amount of money he can bring in or the assessments he can increase.
Another point I should like to bring out- and I am in a position to prove it, preferably privately-is that political influence plays

a very great part in the establishment of assessments in regard to income tax.


Mr. Weir:: You are wrong there.


Ralph Byron Horner: I happen to know. Last year a question was asked of the Minister of National Revenue in connection with the number of investigations that were being made and the minister replied that he could not find investigators to do the work. I know one investigator who took the trouble to come all the way up to Ottawa to see me for the sole purpose of telling me that he had to leave as an investigator in the income tax branch because he no sooner got an assessment or a big amount of money lined up and was prepared to bring the assessment to court or to implement a charge in court than he would be instructed by Ottawa to forget the whole thing and leave the person alone. He decided that he had better quit before he got involved in some shady deal. He was forced to do it because of government orders coming from Ottawa, shady deals being carried out by the members of the government.


William Moore Benidickson: Will my hon. friend name that gentleman?


Ralph Byron Horner: I said I would do it preferably privately.


William Moore Benidickson: All right.


Ralph Byron Horner: Principles of justice
demand that the citizens of a free land be given greater consideration than they are given at the present time in regard to income tax assessments.
There is nothing in the resolution now before us to deprive a citizen of his right to appeal, or to prevent a citizen from taking advantage of the safeguards that exist in the law at the present time. The whole idea is to make our people free. After a certain period of time they can look back and say, "Well, we are clear of the income tax branch. They have had so many months in which to investigate us; they have not done so and therefore we are now free". It is indeed a pleasure to add my word of approval to the resolution.


William Gilbert Weir: Mr. Speaker, I have been in this house nearly as long as most hon. members have and perhaps there has been the odd occasion when people have come to me with income tax problems. Standing here in my place today I want to say that I deny emphatically the charge made by the hon. member for Restigouche-Madawaska. From my experience I wish to say that if he thinks that political influence is used in settling income

tax problems and things of that kind, then I deny it and say that he is completely wrong.


Ralph Byron Horner: I can prove I am right and I will.


William Gilbert Weir: He says that political influence is used. I deny that. From any experience that I have ever had, and in any discussions that I have ever had with anyone, I say that the income tax officials are honest, but maybe not always with the best discretion in carrying out their duties, but I deny the charge that political influence is exercised in respect of the settlement of income tax claims.


Ralph Byron Horner: You have no means of knowing.


William Moore Benidickson: The member speaking has been here longer than most members.


William Gilbert Weir: The object of this resolution is to reduce the time in which the final settlement of income tax claims may be made. As the parliamentary assistant pointed out in discussing this matter, steps to that end were taken a year ago when the period allowed for review of a return was reduced from six years to four years. I think all of us would like to see the period reduced even further but, having regard to the fact that that step was taken a year ago, one naturally would feel that there is some ground for saying that there should be a little further time to gain added experience under the new regulation.
I am perfectly aware of what is said about the payment of income tax. Nobody likes to pay income tax and certainly no one relishes having his income tax affairs too closely probed. I think we are all conscious of that. My approach to this resolution this afternoon is from a somewhat different angle, and if I am regarded as being critical in this connection, well, it is just too bad. I am bound to say that I think the public relations of the Department of National Revenue could be greatly improved.


Some hon. Members:: Hear, hear.


William Gilbert Weir: I think the department could well afford to launch a campaign indicating a greater willingness on their part-they claim they already do this but I think they could indicate a greater sense of willingness -to assist the taxpayer and make him conscious of an obligation to the state rather than what might be described as a sense of fear for those people who exercise a considerable measure of authority in the matter of income tax.


An hon. Member:: Make sure the minister hears this.
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William Gilbert Weir: Having said that, I would point out I am perfectly conscious of the fact that wage earners do not have much leeway inasmuch as their income tax is deducted at source and their position is different from that of the small businessman who sometimes is not able to hire the most qualified bookkeepers and accountants and therefore has to deal with a problem of considerable importance; but I am thinking more particularly of the farmer who is confronted with the problem of having to make out an income tax return that completely meets the requirements of the act and the regulations thereunder without perhaps there being any leeway to question certain items. Concerning the matter of keeping records and books, I think some progress has been made and even the problem of the farmer is being worked out in a more satisfactory manner than was the case a while ago, but nonetheless the farmer is in a peculiar situation which is admittedly difficult. I return to the matter of the desirability of having the income tax people demonstrate in some manner to the public that they are friends of the taxpayer rather than being viewed with fear or as something to be avoided.
The final comment I wish to make relates to cases where there is a suspicion of wrongdoing or fraud and steps are taken to carry out an investigation. Unfortunately I have heard of cases where the investigation has extended over a considerable period of time which I think any reasonable person would consider an unreasonable length of time. While there may be many outstanding difficulties and perplexing ramifications involved in some of these cases, I think a hardship is worked upon a businessman who has all the responsibility of running a business, paying his bills and collecting from customers when his books and records are taken from him and kept by the department for many months in some cases. I think this is too severe a penalty to impose on a man despite the fact that he may be suspected of fraud or misrepresentation. Although it may mean more expense for the department, I think there is much to be said for either having a photostatic copy made of the books and records or expediting the investigation so that the documents are returned within a shorter period of time in order that the businessman may conduct his business in the ordinary way.
I do not think I would have risen to speak on this occasion if it were not for what I consider the totally unfounded remarks made by the hon. member for Restigouche-Mada-waska (Mr. Van Horne) which I believe are completely false.

Income Tax Act


Ralph Byron Horner: Mr. Speaker, I rise on a question of privilege. You would not thank me if I gave you the name of the person who exerted that influence and succeeded in getting his income tax reduced from $286,000


An hon. Member:: Get a soap box.


The Acting Speaker (Mr. Applewhaile):: Order. The hon. member is not rising on a question of privilege but is continuing a point of debate.


Mr. Gauthier (Portneuf):: He doesn't know what a question of privilege is.


Mr. John Palleil (Peel):: Mr. Speaker, I too was not going to speak in this particular debate except to make a few comments. I do not have the experience as a politician that the hon. member for Portage-Neepawa (Mr. Weir) has, but I have a certain training in law and one thing I learned in my training in the law is that if a man is accused of something one of the indications of his guilt is his immediate denial of the accusation.


Pierre Gauthier: You must be a very good lawyer, one of the best in Ontario. That is some philosophy.


John Cameron Pallett: Concerning the resolution
before the house the question arises as to whether we feel that certain work can be carried out by departmental officials. I recall when the estimates of the department with which the resolution before us deals were before the estimates committee last year the departmental officials were careful to point out that the backlog of work was caught up and they were now in a position to deal with the returns on a current basis. I suggest, Mr. Speaker, that the resolution submitted today merely accepts the representation of the department and puts their word to the test.
We all know that, when we pay our ordinary bills and receive a receipt from the person to whom the account is paid, the account is considered closed. It would seem to me that the law applying to individuals in this country should also apply to the government of the country. When we legislate for the individual we should say that the government are also bound by the same terms.
It was also pointed out in the estimates committee last year that the assessors of the Department of National Revenue bear no responsibility for advising a taxpayer if he has made a mistake in failing to claim certain exemptions. The officials of the department check the returns for mathematical errors to ascertain that the taxpayer has paid everything that is due to the department but they do not feel bound to advise him if he has failed to claim deductions to which he might

be fully entitled. Again this is a principle which does not apply to the ordinary individual. If through an error you overpay a person the law prescribes that you are entitled to receive back the amount you overpaid, but apparently that same law does not apply to the income tax department. If you overpay the department through an error they feel under no obligation to advise you as to the amount of overpayment and it is not remitted to you.
I completely support this resolution and I add my remarks to those of the hon. member who said that the parliamentary assistant's representations today do not speak very well for the other Liberal propaganda concerning the high standard of living which this country is enjoying. In the figures concerning the number of taxable returns submitted by the parliamentary assistant there was an admission of the very high percentage of people who do not make sufficient money to actually qualify as taxpayers. In other words they are not making the minimum amount of money which has been established as the basis below which you are not making enough to properly exist and should therefore not be called upon to pay income tax. The figures used by the parliamentary assistant in support of his department could be used equally well as a direct denial of the propaganda which the government has been spreading for the last few years concerning how well off everyone is in this country. The parliamentary assistant also admitted today that those earning $10,000 or less constitute 90 per cent of the Canadian people.
Ten per cent of the people of the country are making most of the money. According to the parliamentary assistant it would appear that the policy of the government is to permit the wealth of the country to be controlled by 10 per cent of the people. I see the Minister of Justice (Mr. Garson) is smiling.


Mr. Garson:: I would challenge the hon. member to support his statement of fact with any statistics that will bear examination.
Mr. Pallet!: One thing I have learned in this house is that statistics work both ways and no one is so adept at using them as the Minister of Justice. I suggest that the minister look after his own department; I suggest that he see to getting out certain reports that are needed and certain findings by commission that have been asked for by the people. The minister should confine himself to matters concerning his own department.


Stuart Sinclair Garson: Has my hon. friend any
support or foundation for this allegation of fact other than some figment of his own imagination?


John Cameron Pallett: It has always been my contention that good government depends upon imagination. If I have imagination I am very proud of it. Statistics are available from a department run by another minister, by a minister who runs practically every department. If the Minister of Justice wants these figures all he has to do is to ask the dominion bureau of statistics for them. They are available and will show that the policies of this government permit the wealth of this country to be controlled by a very limited segment of the population.


The Acting Speaker (Mr. Applewhaite):: I think if there is anyone at fault at the moment it is the occupant of the Speaker's chair. I have permitted the hon. member to complete the point he was making but I think the time has come when I should point out to the house that what we are discussing is whether or not there is to be a time limit on the issuance of official receipts under the Income Tax Act. This is a rather narrow subject which has resulted in incidental discussion of other matters under the Income Tax Act, which I believe it was the desire of the house should be discussed under this resolution. However, I am afraid that the discussion of broad policies concerning the proportion of the population who are or who are not paying income tax is a little beyond the scope of this resolution.
I heard the interjection by the parliamentary assistant that this $10,000 figure mentioned in the resolution would apply to some 90 per cent of the taxpayers. That statement was made, but I think we would be going beyond the purport of the resolution if we were to discuss why or why not 90 per cent of the people were paying taxes and 10 per cent were not, or vice versa. What we are discussing is whether or not there should be a time limit on the issuing of finalized receipts for individuals.


John Cameron Pallett: Mr. Speaker, I welcome your bringing the debate back to a proper basis, bearing in mind the interruption by the Minister of Justice. In conclusion, may I say that a resolution of this sort providing for the issuing of a receipt after one year deserves the earnest consideration of this house and of the government. According to the government's own admission last year before the estimates committee, the work of the department is current and I think this resolution should be supported by all hon. members.
Income Tax Act


Mr. G. W. Montgomery (Vicloria-Carlelon):: Mr. Speaker, I do not propose to take up very much time. I was beginning to feel that we were getting a long way from what was intended by the mover of the resolution. Sometimes when you get off the track it results in some of the statements that are made being given a wrong interpretation. I am prepared to support this resolution in the terms in which it appears on the order paper.
I think the hon. member for Portage-Neepawa (Mr. Weir) put his finger on a very important point when he referred to public relations. I doubt if any hon. members can go beyond their own constituencies in speaking of a matter of this kind; I know I cannot. My experience has been that most people are honest and do not mind paying a fair amount of taxes. The complaints that come to me mostly concern people who have made their returns and who feel that things have therefore been wound up. Actually there is no limit on the winding up of these tax matters.
An amendment was approved last year reducing the period from six to four years, but that does not mean very much. Rightly or wrongly it happens quite often that an assessor will come along to a farmer and the minute he announces himself-most of these people are honest-the farmer wonders why he has come to see him and he gets excited. We all know that bad propaganda spreads very fast, and while I admit that this does not happen in all cases there have been cases where people have thought a settlement had been reached but after two or three years the matter is opened up again. In my constituency the assessors have done a fairly reasonably good job, but these matters do create unsatisfactory feelings. It makes the people begin to think that they are all crooks.
Some income tax officials will bend over backwards in order to try to help straighten out matters when approached in the right way, but they cannot go beyond the law and the regulations. When a person disagrees with an assessment made by a tax assessor his only course is to appeal. I am told that in many cases relief is given, but there are many appeals on the agenda. In order to start an appeal a man must put up security and then he has to wait anywhere from one to two or three years before his case is heard because there is such a backlog of appeals to be heard. When the amount involved is only $500 or $1,000 a man may feel that he just cannot afford to appeal his case. He has to have accountants. And, Mr. Speaker, there are many little transactions among farmers

Income Tax Act
which should never be taken into consideration; they do not amount to a hill of beans. However, once the department gets interested in a case it seems to pile up these little things to an extent that amazes the farmer. The farmer becomes excited; he "gets mad" and immediately suspects the department of "trying to do him." The quickest and easiest way of getting out of the problem is the course he will take, and I am satisfied that a good many people who have to pay $300, or $500 or maybe $1,000 would not have to pay at all if they could get their case to an appeal board within a reasonable time and at a reasonable expense.
That is the way I feel about it and for that reason I consider that this resolution will serve a very useful purpose if it enables the government to consider and reconsider some of these matters. I note that the effect of this resolution is limited to those whose incomes do not exceed $10,000, and I feel that this being the case the government would probably not lose much money anyway, even supposing there were to be some mistakes. The parliamentary assistant to the minister has led us to believe that this taxpaying group is the largest in the country, and if this is so I believe it is time more information was made available regarding it. The figure of $10,000 is, maybe, too high a figure to have specified; it would be interesting to have the views of the department upon a possible alternative figure. But I do think there is a class of people who should be given a final receipt at the end of two years-


William Moore Benidickson: Two years, did you say?


Gage Workman Montgomery: Yes, two years from the time the income was earned.


William Moore Benidickson: The filing might be in April, and that means just eight months.


Gage Workman Montgomery: You are presumed to file when the law says you must file. If you are late you have to pay a penalty.
The point I am making is this: There is no final receipt at this moment. At the end of three years there is no final receipt. The department can re-open a case at any time if they wish, and all they have to say is: "We believe you have kept back information; you have treated us fraudulently."


William Moore Benidickson: The crown must prove in court there is fraud.


Gage Workman Montgomery: Yes, but the department need not lay the charge as fraud and prove it; they need only allege it, and allege they can prove it. In their own minds they might be satisfied they could do so, but actually they do not prove it before they re-open a case.

These are matters which it is very proper to bring before the house and the government for consideration, because I believe there is a lot of misunderstanding about the whole question in the country.


Mr. E. B. Huffman (Kent. Oni.):: When I read this resolution over, Mr. Speaker, I was in very much the position of the hon. member for Dauphin (Mr. Zaplitny)-I felt I would like some clarification of what period really is meant. I note that the hon. member for Greenwood (Mr. Macdonnell) does not agree with the impression of the mover of this resolution; also, the hon. member who has just sat down (Mr. Montgomery) has indicated his interpretation of this as meaning "two years". From my own point of view I can understand that there may be some confusion as to the real essence of what is contained in this motion.
One other thing. I think this motion, if it were accepted, would create two classes of taxpayers in Canada. The motion as now worded affects those whose income amounts to $10,000 a year or less. In the 1954 taxation statistics it was shown there were 3,125,100 individual taxpayers; there were fewer than 60,000 taxpayers whose annual income exceeded $10,000. Now, if it were possible for the mover of this motion to accept the suggestion of his colleague from Greenwood that the time limit be extended to two years-[DOT] and certainly there has been evidence on the part of the government of willingness to close the gap, because only last year it was brought down from six years to four years-some progress might be made. As we note, there is not quite complete agreement at the present time between the mover of the resolution, on the one hand, and the hon. member for Greenwood on the other, and I think we might almost indicate that all individual taxpayers be included in this resolution, in which case we would not be making any distinction.
I have read this resolution over with a great deal of concern because the mover of this resolution is within the same tax office as I am myself. Two or three things were said here this afternoon which I think cast a reflection on all income tax offices. The words "reaching out to control private lives" were used; the words "fill their pockets" were also used. I hope that at no time I will ever be accused of trying to use catch phrases that will leave an aspersion upon those people who are engaged to do a type of job which is not, I am sure, the easiest work to do.
One other thing. The mover of this motion was reading a number of supporting resolutions from different counties, but I note that he did not mention the county from which I come. I do not know whether they did not

support this resolution of a year ago. However, I am of the opinion that something needs to be done, because only this weekend I had a taxpayer at my home whose case is being investigated back to 1942. It is almost impossible for this individual to get all the receipts that are necessary if he is to prove his case. The original assessment was for some $28,000 but after he was able to establish a certain number of receipts, a second assessment of $22,000 was made. Then, after a great deal of effort he secured more receipts, and the third assessment was for $10,000 plus about $3,600 in penalties. During all this time he had been employing an accountant, and I can readily understand why he engaged an accountant after hearing the hon. member for Oxford (Mr. Nesbitt) that lawyers were not very good on this type of case. But this has proved an expensive procedure for this taxpayer to have to follow, and the money he has to pay in defending his case is money that cannot be charged as an expense. While I agree, Mr. Speaker, that this may be departing from the subject a little, I think this is one question which should possibly be considered when the Minister of Finance (Mr. Harris) is reviewing the tax structure.
So, Mr. Speaker, I rise at this time to indicate my interest in this resolution as brought forward by the hon. member for Middlesex East.


Mr. F. E. Lennard (Wentworth):: Mr. Speaker, there is just one point I would like to emphasize-the point made by the hon. member for Portage-Neepawa (Mr. Weir) when he said that the Income Tax Department could have much better public relations than it has, and that they should be considered as more friendly to the people whose affairs they have to investigate than they are. I had a personal experience. I may say that I have no personal axe to grind with the income tax department. This happened in 1947. One week end when I arrived home I found a form letter addressed to me and stating that I owed the income tax department a considerable sum of money for the previous year's taxes. Mr. Speaker, if I had had a weak heart at that time, I would not be here to tell you about the matter. I can tell you that I nearly fell through the floor. I did not know where I could dig up this money. I felt that there had been an error but I was not too sure. The accountant who looked after my affairs was away for the week end and I was forced to decide to let the matter go until the next week end. I may say that the department gave me only a few days in which to pay up, or else. However, when I arrived home next week end, I found a letter from the income tax department stating 82715-46
Income Tax Act
that they were sorry, that they had made a mistake, that they had found my cheque in their files and just to ignore their letter of such and such a date.
Mr. Speaker, I do not object to mistakes. We all make them. But this was merely a sort of slaphappy way of making an apology for a mistake that was made by them. Some person should really have come out to see me personally and to apologize for this mistake. I can tell you, Mr. Speaker, that if I had had a weak heart, as I said before, I would have dropped right there and that is just one instance. From some of the gestapo methods that are being employed today in some parts of the country, I know that is just what should happen. The public relations in connection with income tax should certainly be improved in no uncertain way.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, before the debate closes I want to make just one statement. The hon. member for Red Deer (Mr. Shaw) has already spoken on this matter and he stated the position of this group. We are going to vote for the resolution but we do so with some little reservation in that we feel that perhaps one year is not quite long enough to allow before the final and complete receipt is given. With that exception we are going to vote for the resolution. We believe that the resolution is a proper one in principle. There may be some of the details of administration that are not too practical but with that one exception we are going to vote for the resolution.


Mr. Deputy Speaker:: If the hon. member for Middlesex East speaks now he will conclude the debate.


Harry Oliver White: Mr. Speaker, I wish to thank all hon. members who have taken part in the debate for the contributions they have made. I also wish to thank the parliamentary assistant for his explanation of the problems with which the department are faced. I think the debate has been a fruitful one. The hon. member for Dauphin (Mr. Zaplitny) asked some questions and I shall attempt to answer them. The objective I had in mind was to bring about some finality at some date in order that the taxpayer will know that his obligation to the state has been paid and that he has a receipt to show it. In the resolution I am not asking that a receipt be given for income tax returns supplied to the department but rather, as I say, a receipt showing that whatever he may owe the state has been paid in full. The taxpayer wants an acknowledgment so that he knows that it has been paid in full.

Income Tax Act
There was some question as to the time and date. What I had in mind was this. For the year 1956 the returns are supposed to be in the hands of the department by this coming April 30. Twelve months from that 30th day of April something final should be arrived at. I appreciate what other members have had to say and what the parliamentary assistant had to say. In introducing the resolution what I had in mind was that we impress upon the government the need for some finality and the need to avoid going over a long period of years-six years or seven years, as the case may be-before the department has reviewed those returns.


William Moore Benidickson: The time was reduced last year from six years to four years.


Harry Oliver White: Oh, that is not quite the case exactly. While it may seem to the taxpayer that this reduction is going to answer all his questions, he has not any receipt as to any finality. Consequently, while it is welcome, it is not complete. Hence I say that 12 months from the 30th day of April I would hope that the department would have arrived at some conclusion and that the account could be settled. I greatly appreciate the suggestion of the hon. member for Kent, Ontario, (Mr. Huffman) that a two-year limit might be acceptable. As I said, my intention was to bring to the attention of the government the problems confronting individual taxpayers. Again, the hon. member for Kent, Ontario, suggested that this include all individual returns except corporations, companies and so on. As I mentioned previously, the government income tax department draw a line between those who are inside $3,000, $4,000 and $5,000. Consequently I felt that somewhere a line could be drawn. It does not matter where you draw the line, there are those who are just inside and those who are just outside.
Then the hon. member for Dauphin inquired as to the exact meaning. I mean taxable income and I think the vast majority of hon. members rather understood that was what I had in mind.
I appreciate what the hon. member for Portage-Neepawa (Mr. Weir) had to say.


William Moore Benidickson: May I ask the hon. member a question?


Harry Oliver White: Yes.


William Moore Benidickson: You are now saying that the $10,000 figure meant $10,000 of taxable income?


Harry Oliver White: Taxable income.


William Moore Benidickson: In other words, it would involve a lesser number of people than I indicated to the house when I said that 90 per cent of the taxpayers would be exempt from any further concern on their part from the investigating authorities after the end of the calendar year.


Harry Oliver White: That puts another light on the subject. The parliamentary assistant to the Minister of Finance indicated that would take in 90 per cent of the taxpayers. If we put it at taxable income of $10,000, he says it is going to take in a great many more.


William Moore Benidickson: Yes. You are overlooking the personal exemptions.


An hon. Member:: That is all right.


Harry Oliver White: I will let it go at that, then. Previously I did not have time in which to go into the taxation statistics for the year 1956 but I am going to take a moment or two now to do so. According to the report of 1956-that would be for the 1955 taxation year-I find that some 3,341,490 people in Canada had incomes under $10,000. I said also that the income tax department employed something over 6,000 people. I find that means there was one employee for every 500 taxpayers. It does not appear to me as though the problem would be insurmountable.
Coming back to what the hon. member for Portage-Neepawa had to say about public relations, I may say that we have municipal tax collectors and I have never heard of a case of animosity towards municipal tax collectors in which the affairs of the taxpayer had been handled in such a manner that any blame was attached to them. However, such is not the case in the income tax department. I think the hon. member made a very good suggestion. Probably the department will recognize it and take steps to correct the matter.
Mention was made by the parliamentary assistant that probably I represent a rural constituency. It is true that in years gone by Middlesex East was a rural constituency, but today approximately five out of six people are residents in the city of London. This is the bundle of letters I have received in the last year or year and a half and with the exception of about 10 they are all from business and professional people. Farmers are not inclined to write letters. They will come to see you, but they do not put their troubles in writing. Business and professional people are used to writing letters and consequently one receives more from them.
This motion may be defeated in the house, Mr. Speaker, but I feel certain from the nature

of the discussion on both sides that the presentation of it will have a good effect. I believe I have answered all the questions that were asked and I hope those who feel there is some merit in the motion will support it.


Louis Stephen St-Laurent: I was paired with the hon. the Leader of the Opposition (Mr. Diefenbaker). Had I voted, I would have voted against the motion.



EDUCATION


Mr. R. R. Knight (Saskatoon) moved:: That, in the opinion of this house, the government should take into consideration the advisability of taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
He said: Mr. Speaker, I bring forward this resolution, and the house no doubt knows that it is not for the first time. I regret very much that there may not be the time before the house rises tonight to give the matter a thorough discussion, but such time as there is we can profitably spend on it. I bring the resolution forward not for political reasons, not with any geographical bias, but simply because I believe the implementation of this resolution would be a good thing for the children of Canada.
When I refer to the children of Canada may I say, although it may be used against me at a later date-that is immaterial to me-that I am no more concerned with the interests of the children of my own province of Saskatchewan than I am with the interests of the children of Nova Scotia, Quebec, Manitoba or any other Canadian province. The resolution has as its object the establishment of some degree of equalization of educational opportunity for all Canadian children.
Such equality of opportunity is surely the birthright of every Canadian child. The present state of inequality of opportunity in education across Canada is due simply to the lack of adequate finances and the differences in the ability of the various provinces to assist education from their own resources; therefore the resolution suggests that the

Education
federal government should financially support the provinces in such educational efforts as they are now putting forth or which they might decide to inaugurate. The program of education, the subjects taught and the administration of the educational assistance must lie in the hands of the provinces themselves; with that I am in complete agreement. For that reason I have been careful to write into the resolution the following words:
.	.	. without encroaching in any way on the
exclusive jurisdiction of the provinces in this field.
In opposing this resolution in former times when it was discussed the question of such aid not being constitutional was the only argument the government was able or found expedient to produce. Usually early in the debate the government put up a cabinet minister, a sort of government hatchet man, who had the double function of using one end of the hatchet, perhaps the blade end, on the content of the resolution itself, while the handle served as a kind of pointer which enabled the backbenchers on the Liberal side to know in which direction they must go.
I think on one occasion the Minister of Justice (Mr. Garson) led the brigade, in spite of the fact that the premier of his own Liberal province of Manitoba has frequently asked for federal aid for education. On another occasion the Minister of Citizenship and Immigration (Mr. Pickersgill) led the Liberal troops into battle, in spite of the fact that at the very time which he launched his attack the educational expenditure per child in his own province of Newfoundland was $86 as compared with $292 in the province of the minister who sits beside him, British Columbia.
The aforesaid members of the government have faithfully followed the line set by the cabinet ministers, though to my personal knowledge they have followed with increasing reluctance as the years have gone by. One can understand what pressures must be placed on those members who oppose this resolution, particularly in some of the more needy provinces. 1 am thinking particularly of the maritimes, for I cannot understand how any member representing a constituency in one of the Atlantic provinces could be conscientiously opposed to this particular resolution. However, as I said in a speech the other day, I think we are making progress.
When I came to this house 12 years ago and raised this question of federal aid to education there was a polite, or perhaps not so polite, raising of eyebrows. "What?" they said. "Do we mention education in the federal parliament? This is solely a matter of provincial jurisdiction". But we in this house have

come to accept federal grants to various forms of education. We have accepted, and gratefully as far as I am concerned, federal grants for technical education, vocational education, grants to universities, and the very successful D.V.A. plan upon which I compliment the government. Can anyone say conscientiously that the acceptance of those particular grants has in any way involved federal control, or has in any way interfered with the jurisdiction of the provinces in the matter of education?
And what of the present? The people of the United States have a special day or week devoted to practically every subject you can name, and I suppose we tend to imitate them. I know there is such a thing as an education week, and I am going to suggest that in this House of Commons we have had "education week" during the past week at the end of which I speak. Not only do we have the grants I have mentioned, but we have had foreshadowed legislation which is to increase grants for technical education and vocational education, increased grants to universities, the setting up of a Canada Council which is to administer some of those grants and to promote increased expenditures in the arts and sciences, and to administer increased scholarships with emphasis upon the humanities.
What a change has taken place over the years I have been in this house. Those who have conscientiously and persistently advocated these changes might like to take unto themselves some credit for the fact that we have made some advances in this field, but I would suggest that although perhaps we have had some success in popularizing and publicizing the need for federal aid to education, it has been hard economic facts which have in large part produced the change. There is the dilemma in which the municipalities find themselves, the increasing difficulty they experience in carrying on adequate educational services. I think they feel almost unanimously that the basis for taxation for the purposes of education must be broadened in some way or other. No longer can it be put on the uncertain basis of real estate in the local field, as it has been in the past, with the assistance of the provinces which in many cases have not been able to give assistance in full measure. Speaking nationally, there is the growing national consciousness that other nations, some of them opposed to us ideologically, have been forging ahead in these matters while we have been indulging in the niceties of constitutional argument.
I have been encouraged by what I detect as a change in attitude in this house. I have

reason to congratulate the hon. member lor Gloucester (Mr. Robichaud). I cannot quote his speech because it was made in another debate, but since it was similar in subject to the present debate I think I can at least refer to it. He was even vociferous in his acceptance of increased grants for technical and vocational training. Those things having been settled, he then turned to the problem in the lower schools and said there was a gap left that must be filled. He did not suggest it had to be filled by federal funds-he has to remember his position-but having made the proper genuflection to the constitution he proceeded to say what this gap was, and it was the need for assistance to secondary and primary schools in his particular district.
What was the solution he offered? I might almost have put the words into his mouth. The solution he offered was that the provinces would have to be urged to give education a great share of the grants which they receive from the federal government.
After all, is that not largely what I have been advocating in this house for years? The hon. member felt, as did another Liberal hon. member, that this should be handled in a delicate way. I appreciate the need on his part for such delicate handling.
I also wish to offer my congratulations to another hon. member of this house who made a very useful and eloquent speech. I realize that he was talking about university grants, another field of education, but he supported the same general principles. He said that every Canadian, no matter what his background or province or racial origin, should benefit equally in the field of education and other fields. He said that was the aim of the government to which he pays allegiance in the making of such grants. He said also that the sooner we placed educational facilities within reach of a greater number of young Canadians, the better it would be for the whole country.
As I said, that might have been an echo of my own voice. In his eloquent speech this member, the hon. member for Dollard (Mr. Rouleau) said he was in warm support of the type of education we were discussing at that time. The hon. member did bring in the constitutional angle and said he would be loath to do anything that was against the constitution. I wish he would rise today and in that same eloquent way support the resolution I have moved. If he did so he would find himself in good company. In a speech such as I am about to make I cannot bring in too much documentation. I have files a foot thick containing everything that
Education
everybody has said with regard to this subject over the last dozen years. I have resolutions which have been passed by the Canadian school trustees' association, the Canadian teachers' federation, boards of trade, Legion branches, town councils and, as recently as the last two or three days, the Canadian Labour Congress. The Canadian and Catholic Confederation of Labour presented a brief to the government the other day in favour of university grants.
There are those who would argue that such grants are unconstitutional in terms of the British North America Act. Mr. Picard, the president of that organization, made no bones about his position on these grants. Last Friday evening he was interviewed as part of a news broadcast, and said that in his opinion anyone who was against these university grants would be against old age pensions and family allowances. I have made this same statement in regard to the matter I am talking about today. It would seem that perhaps my case is making some progress.
I have also asked, what about health? I do not think the word "health" is mentioned in the British North America Act; the Minister of Justice can correct me if I am wrong. However, we have grants in aid of health education. We have grants to assist the provinces in the building of hospitals. I do not think anyone has ever raised any question as to their constitutionality. There are other reasons, I suppose.
There is one organization which has made a special contribution to the cause of education, the Canadian school trustees' association. Naturally we would expect that that would be so. I believe it was in 1953 that this association formed a research committee to look into the whole subject of education financing in Canada. This is the book to which I had reference, and I would recommend its reading to any hon. member who is interested at all in this problem. It is entitled "School Finance in Canada" and was published in 1955. It is the report of the Canadian school trustees' association school finance research committee. The man responsible for the organization of this work was Dr. M. E. LaZerte, who is well known to educationists across this country.
When the Canadian school trustees' association had completed this book and had arrived at certain conclusions in regard to the whole matter they decided to interview the cabinet, particularly the Prime Minister (Mr. St. Laurent), in order to plead their case. Whatever his reasons may have been, whether political or constitutional, I think it was unfortunate that the Prime Minister should have refused to receive those gentlemen who came to see him on that particular

Education
occasion. Let us give the Prime Minister credit for being honest when he said that since he considered this matter was not within the purview of the federal government he had to refuse to see the representatives of this influential and widespread organization. I think in more than one way that action was a mistake. That is a serious charge for me to bring, so perhaps I had better document it. I have here an editorial which appeared in the Ottawa Citizen of May 24, 1956, reading as follows:
In a recently prepared brief, the Canadian school trustees' association thanked Canada's Prime Minister and cabinet for granting an interview. But the trustees were too optimistic. They had to add a postscript: "Unfortunately the Prime Minister refused to hear the delegation". On parliament hill, it seems, scant recognition is given to any national interest in the well-being of the provincial school systems.
Yet this brief presents powerful arguments for federal aid to education-arguments that cannot be ignored.
May I interject to say that I intend to let this editorial make my argument for me at the moment.
It points out that the kind and quality of education provided in the provinces are of direct concern to Canada's civil service and its armed forces, its economic development and its trade. It states that tens of thousands of teachers have very little academic or professional training, and declares that "without federal assistance it is impossible to staff the schools of all provinces with adequately trained teachers." For the next ten years, about $200 million annually will have to be spent on new schools and renovations. The trustees contend that revenues-federal revenues-from income and corporation taxes, sales taxes and customs duties, should pay part of the cost.
The trustees' brief quotes Dr. Garnet Page, general manager of the chemical institute of Canada-
-as warning that as a matter of survival Canada must train more mathematics and science teachers and produce more scientists and technicians. It quotes pleas for federal aid from the Canadian teachers' federation, the Canadian federation of mayors and municipalities, a royal commission on New Brunswick's schools and the premier of Manitoba, and it adds its own plea.
It is hardly possible to maintain that these representations are not of national concern. If parliament should decide that it ought to give greater aid to education-on the basis, incidentally, of ample precedents like existing vocational training assistance and research scholarships-it could surely find means that would involve no interference with provincial control of the schools.
I shall proceed in my own words from here. I did mention this book "School Finance in Canada" put out by the Canadian school trustees' association, and I would like to have the permission of the house to put on the record in the form of four columns a sample of the type of research that has been done there. What I have brought down here are four tables, showing respectively the cost of primary and secondary education per pupil in each province; persons teaching without professional training; the percentage of enrolled grade 7 students reaching grade 11, and the percentage of population aged 15 to 19 not attending any school. That is not the way in which this was drawn up originally, but I have chosen these columns as a sample of the work which was carried out.
If you, sir, could secure me the permission of the house to have these placed on the record-


Mr. Speaker:: Has the hon. gentleman leave to have these tables printed in Hansard, and to dispense with his reading of them?


Some hon. Members:: Agreed.
He is not the first businessman who has Mr. Knight: Thank you, Mr. Speaker. The
given this warning.	(Table 53) Cost of primary and secondary education per pupil 1951-52	tables are (Table 21) Persons teaching without prof, training 1952-53	as follows: (Page 25) Per cent of enrolled grade VII students reaching	(Page 23) Per cent of population age 15 to 19 not attending any school (1951)	1951-52	Rural	UrbanNewfoundland	
$ 86.11	432	45.6	65	58Prince Edward Island	
88.70	85	34.1	61	56Nova Scotia	
120.25	519	37.5	57	53New Brunswick	
153.58	648	22.4	63	54Quebec	
139.48	1,643	(C) 9.4	78	65(P)41.8	Ontario	
190.82	334	42.3	60	55Manitoba	
167.65	263	42.0	60	52Saskatchewan	
196.44	693	39.2	52	45Alberta	
198.76	475	49.6	50	49British Columbia	
292.58	50	58.9	50	47Canada	
-	-	-	63	57
Table and page numbers above have reference to the report of the Canadian school trustees association school finance research committee, "School Finance in Canada", published, February, 1955.
fMr. Knight.]

If we are to have and retain good teachers we shall have to pay them. That goes without saying. I imagine that hon. members of this house take a good deal of care with regard to the qualifications of the doctors who deal with the bodies of their children, but they are not quite so alert to the necessity of qualification among those who cater to the children's minds. Let me say, too, that in this field, we get very much what we pay for; I think there is a close cost-quality relationship, if I may use that term, in education just as in other things. Oh, I know there are those faithful souls who for the love of the work and the love of the community work for nothing or next to nothing, but generally speaking this is not the case. I am talking particularly about male teachers, and I think it is important that there should be more male teachers. I do not want to discuss the psychological reasons behind that statement, but I think boys of a certain age probably need men teachers. But you cannot get men teachers who are prepared to deny themselves their own right to live in decency, to bring up a family and provide in turn for the education of their own children.
The supply of teachers is not keeping pace with the increase in child population. High school teachers are almost impossible to obtain. I know district after district which at the present time is using inferior teachers, men or women not qualified to teach high school at all, because no others are obtainable. The people who live near such schools are waking up at last. I think most people in Canada have begun to show an increased concern about this problem. They know that increasing thousands of children of both public and high school ages are crowding the school doors, and they know we have not the facilities to accommodate them. Let us face that fact. And this crowding will increase progressively over the years. We have a scientific deduction, if such a thing is possible, made in this very book as to what the school population will be in the future; there is an estimated increase, over 1952, of 70 per cent in primary schools and 75 per cent in secondary schools by the year 1965. No one can tell me that the facilities we have now will be adequate to provide the number of places necessary to accommodate and educate this growing stream of young people. They are asking us for bread; we cannot give them a stone.
I wonder if it would disturb the constitution too much if the federal government were to assume some of the capital cost of schools, where the need exists, in the same way they do with regard to hospitals. They do it for
Education
hospitals; why not for schools? I admit that health is perhaps more important than education because, after all, one has to be alive; but after that I think we could do with a little education.
In most of the provinces, of course, the answer I am going to get from my hon. friends is, "What about the provinces who have sole jurisdiction over education? What are they doing?" Well, they are doing their best. Sometimes their best is not sufficient, as many members of this house very well know. The provinces have increased their grants, and I am glad to see that my own province of Saskatchewan, also the province of Quebec, have increased their grants substantially. However, many of the provinces have reached the limit of the taxes they can raise on property. In my own province-and let me emphasize again that I am not pleading for my own province, or for my own province only, but for the children of Canada-school tax arrears jumped from $5 million at the end of 1953 to $10 million at the end of 1955. These are tax arrears. The municipalities and provinces have reached the end of their resources, and only the federal government is left to come to our aid. The public of Canada would, I am quite sure, support this plea I am making for the granting of federal money for education, so long as no interference with provincial responsibilities was implied.
The last sentence contains the key to the whole situation. When will my hon. friends realize that nobody in the world, as far as I know, has any designs to interfere in the control of education? What is taught, how it is taught, where it is taught or anything else of that kind lies within the jurisdiction of the province; all we want to do is support the hands of those people within the provinces who are trying to educate these children. That is all we want to do, and it is entirely a financial problem; administration and curricula are entirely provincial responsibilities and long may they so remain.
To strengthen my argument I could have quoted educationists on this occasion. I have quoted dozens of them on previous occasions, and no notice was taken; their words have been ignored. Thus, for today, I have chosen someone who, although a scholar, may, through the fact that he is a businessman and a successful one, appeal more to some of my hon. friends. I said, "to some". Speaking of teachers and professions, he says this:
We are failing to give a reward consistent with either equity of incentive and we are therefore endangering the future welfare of our whole economy.

Education
That is the end of the first quotation. The gentleman I refer to, and from whom I have quoted, is Mr. James Muir, chairman and president of the Royal Bank of Canada. He also said, and I quote from the Montreal Gazette of January 11:
Our duty as citizens is not to direct educational policy, but to ensure that our educational system is provided with the financial tools to do the job which, in the next ten years or so, it will be called upon to do.
May the government rise to that challenge. With those words, sir, I think I shall conclude.


Mr. Maurice Breton (Jolielle-L'Assomplion-Montcalm):: Mr. Speaker, I believe it is my duty to oppose this resolution by the hon. member for Saskatoon (Mr. Knight) for the following reasons. The present government proposes to create a fund of $100 million to help universities in this country, and to provide $60 million yearly in subsidies to the same universities. This step represents considerable progress, and I do not think it would be wise at this time, financially speaking, to go further than that.
The second reason is this. By way of new fiscal agreements with the provinces the federal government will increase its payments to these provinces by an amount of about $127 million a year for five years. The provinces which feel the need of increasing their grants to their educational system may do so with the money provided by the new fiscal agreement.
In the third place, the resolution that is actually before the house would provide grants to the provinces for the purpose of expansion and equalization of educational opportunity across Canada. This means that some conditions should be attached to these grants.
I may say the fourth reason is this, Mr. Speaker. The fact is that some provinces actually challenge the right of the federal government to take money from the general fund in order to provide help in education. It is true that actually the federal government proposes to help universities but I submit that this help is given for culture and not for education. I do not think it would be wise to go further than that and invade the field of education that is represented in primary and secondary levels. Besides that, I believe this resolution infringes on the legislation the government is proposing to bring in this year in the field of culture. For all those reasons I believe it is our duty to oppose it.


Mr. G. C. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, this resolution which is now before the house has been discussed on various occasions in the past, and I do not propose to take much of the time of the house at this

particular moment. I think the hon. member for Saskatoon is to be commended for having brought this matter to the attention of the house on the various occasions on which he has done so, and for the forceful arguments he has advanced in support of the resolution.
I know of one general attack which can be made on this resolution. It is one which was made last year by the Minister of Citizenship and Immigration, who was the hon. gentleman who replied to the hon. member for Saskatoon. I happen to have been sitting here at the time. I remember the debate. He discussed the provincial autonomy problem with respect to education in the Dominion of Canada. There is no doubt, Mr. Speaker, that an argument could be made with respect to provincial autonomy.
Speaking for myself and for all members of the party to which I belong, may I say this. If we believed that the implementation of this resolution would result in an infringement of provincial autonomy in the field of education, then certainly neither I nor any of the hon. members associated with me would give it support. But you have two answers, I think, to that argument.
In the first place the resolution itself, as it is now before the house-and I think it is in slightly different form than the resolution which was introduced some years ago-specifically provided for the exclusive jurisdiction of the provinces in the field of education. That provision is written into the resolution. Therefore such members of the house as see fit to support this resolution can do so without any suggestion that they are attempting to impinge upon the exclusive jurisdiction of the provinces in the field of education.
Then you have the British North America Act itself which, in section 93, states that in and for each province the legislature may exclusively make laws in relation to education. Hence you have a double-barrelled protection, Mr. Speaker. In so far as the resolution is concerned, we have written into it the provision that this shall not interfere with provincial autonomy; and we have the British North America Act itself which says that the provinces shall have exclusive jurisdiction in making laws with respect to education. I therefore frankly cannot see the validity of the argument that the acceptance of this resolution necessarily impinges on provincial jurisdiction in the field of education.
I can see where, if it were handled in a way in which no government would handle it, terms and conditions possibly could be attached which would interfere, or would tend to interfere with the field of education in so far as provincial jurisdiction is concerned, but no government would think of

Education AFTER RECESS
doing such a thing. No matter what party might be in power in this parliament in the years to come, it would not think of doing such a thing. We all recognize the fact that to the province is given, and properly so, exclusive jurisdiction in the field of education. Surely it is possible for a government, as this government is doing every day, to make grants to a province without impinging upon the jurisdiction of the province and making it a vassal or fief or controlling it in any shape or form.


Stuart Sinclair Garson: Would the hon. member permit a question?


George Clyde Nowlan: Yes.


Stuart Sinclair Garson: Would he think it is possible for the federal government to make moneys available in the large sums in which apparently, from the arguments that have been made, would be required, without taking any precautions whatsoever to see whether they would be spent in a prudent and proper manner, and to provide for any federal supervision which might be regarded as necessary to that end?


George Clyde Nowlan: That is an involved question, Mr. Speaker. It is like every other question a good lawyer might ask. It is one to which it is rather difficult to answer either yes or no. But certainly if one were obliged to answer it as briefly as that, I would say yes, for this reason. You are making a grant to a responsible provincial government without attaching terms and conditions to the grant.
I think one condition which would have to be attached is that it be expended in the field of education, as undoubtedly-I shall finish this sentence and then call it six o'clock, Mr. Speaker, if I may-this government proposes to do with respect to the Canada Council. Although we have not the bill before us yet, apparently we are going to grant to the Canada Council a principal sum of $50 million; and the income is going to be used by the Canada Council, I suspect, without too many terms and conditions being attached by this parliament.
Certainly with provincial governments of the stature and status we have in Canada today it is possible for this government to make grants to provinces in the field of education without in any manner directing the way in which the provincial governments may administer them in the field of education itself.
At six o'clock the house took recess.
The house resumed at eight o'clock.


George Clyde Nowlan: When the house rose at six o'clock, Mr. Speaker, I was suggesting that it would be possible to carry out the terms of this resolution without infringing upon the exclusive jurisdiction of the provinces in the field of education. As I said, there are ramifications that could be debated in this way or that, but the primary point is that grants should be made to the provinces for education purposes, and that having been done that the administration of those moneys could be left within the jurisdiction of the provinces, as has been done in so many cases in the past with federal grants.
The hon. member who preceded me in this debate this afternoon suggested that there should be no further consideration of this resolution at the moment because of the fact that the Canada Council grants were before the house and they took into consideration the portion of the education field which was contemplated by this resolution. It is true that the proposed measure with respect to the Canada Council will assist the provinces in the field of education, and to that extent the measure deserves the support of all members in the House of Commons and of the people generally. The resolution before us considers the field of education with respect to the primary and secondary school level, as I see it. It is a matter of the provincial responsibility with respect to education, and certainly the proposed grants through the Canada Council would go toward assisting universities. They would in no way assist the provinces with respect to the primary or secondary school level.
The hon. member went on to say that in so far as the provincial responsibility was concerned, that was something the provinces had to meet out of the payments which were being received from the dominion treasury or from other sources of revenue. It may be, Mr. Speaker, that there are provinces in Canada which can meet the demands of primary and high school education out of funds which are available to them either through the fiscal payments from the dominion treasury or from their ordinary fields of revenue, but certainly that is not true of every province. It is not true of my own province, because it was only six or eight months ago that the then premier of Nova Scotia, the head of the Liberal government of that province, pointed out that even under the new fiscal arrangements the amount the province would receive would be $5 million

Education
short of the bare minimum required to meet the services and governmental responsibilities of Nova Scotia.
When you consider that according to the bureau of statistics the school population of this country, and I am speaking not of the universities but of the primary and secondary schools, over the period between now and 1960 will be increased by over 100 per cent, and when you appreciate all the burdens that will impose upon the municipalities and the provinces, it suggests that certainly my own province could not meet this additional burden out of the revenue which it will now receive. I doubt if there is any province in Canada that can do so. I think the time has come, therefore, when the dominion government should give most careful consideration to this resolution, which has been discussed on so many occasions in the past.
One could indulge, if one wanted to do so, in a discussion of the whole problem of education. I do not propose to do that at the moment. But I should like to say one word, not only about the fiscal demands for plant and equipment but the demands upon the teaching profession in the various provinces of Canada as well. I believe every hon. member in this house knows that the teachers in our primary and secondary schools are making tremendous sacrifices, and that the great majority of them could go into fields of private endeavour and earn more money than in the field which they are occupying. They continue this work because they have a service to perform, and they are performing a remarkably good service. These teachers cannot get the salary range which they deserve when the fiscal arrangements with respect to provincial finances are frozen, as they are at the moment in the various provinces of which I have knowledge, and certainly those in the east.
Therefore, without taking further time of the house at the moment, I do want to say for myself, and I believe for all members with whom I am associated, that we are heartily in accord with the purpose of this resolution. We believe that sooner or later the purport of this resolution will be developed into specific enactments by the parliament of Canada. We feel the time is long since passed when more steps should have been taken than have been up to the present, and I do feel that the government of Canada facing this situation should deal with it in an objective way. If there are no more valid reasons against the necessary action than the question of provincial autonomy, which was raised at one time by the Minister of Justice and at another by the Minister of Citizenship and Immigration, then I think

the parliament of Canada should take some steps in this direction during the present session.


Mr. C. W. Carter (Burin-Burgeo):: I should like to commend the hon. member for Saskatoon for his persistence in focusing our attention on this very important problem of education. Last Thursday we devoted a whole day to debating a resolution proposed by the hon. member for York Centre (Mr. Holling-worth) which dealt with some aspects of this problem. I feel it is fitting that we should follow up that debate with another one today concerning a similar resolution which affords an opportunity of discussing points not previously covered.
The resolution under debate reads as follows:
That in the opinion of this house, the government should take into consideration the advisability of taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
As I compare this resolution with those of previous years I believe I can detect a slight change in emphasis. The earlier resolutions placed emphasis on the attainment of equality of opportunity, while the present resolution seems to emphasize the need for relieving the financial crisis in education. While equality of educational opportunity is a consummation devoutly to be wished, in my opinion it is one that can hardly be attained in a vast country like Canada, with so many different political jurisdictions, with such great variations in natural wealth, and with such great variations in geographical conditions.
The hon. member for Saskatoon pointed up this difficulty when he compared the per capita expenditure of $86 in Newfoundland with $292 per student in another province. Any grants the federal government might make available to the provinces for education would serve only to maintain this inequity unless, of course, the grants were made on a basis of need, in which case the province with the highest standard would not receive any assistance at all.
Instead of thinking in terms of educational opportunity, I believe it is more realistic to think in terms of minimum educational requirements, or of providing a minimum degree of educational opportunity because educational opportunity is not directly related to money or to per capita expenditures. We all know of cases where people with the same educational opportunity have had varying degrees of success in the outside world and have made very different contributions to the country in general. Neither is there any

assurance that we are even now receiving full value for the money we do spend on education. The dean of the law school of Columbia University recently made references in his report to the calamity of graduate students who came to Columbia law school without being able to read and write intelligently, and we have heard similar criticisms from the presidents of our own Canadian universities.
It would appear, therefore, that the crisis in education is not wholly financial. Certainly part of the crisis is inherent in the system itself, and I believe the time has come when our educational system should receive a thorough overhauling. Perhaps we shall find that we still have a horse and buggy system of education in a motor age.
Part of the crisis also is due to the shortage of teacher supply, and it has been found, in my province at least, that additional money and increases in teachers' salaries are not the complete solution to this problem. Be that as it may, there is no doubt that a very considerable part of the crisis is financial. This is true even in the richest provinces. How much more is it true in the poorer provinces, especially in the Atlantic provinces, and in my own province in particular it is truest of all.
In Newfoundland we have from 100,000 to 120,000 children in our schools. The provincial government is spending $10 million on education out of a total budget of $42 million, and this sum does not take into consideration the very considerable amount of money paid in fees, in donations by organizations and in free labour in the construction and maintenance of school buildings. If we could put an assessment on these extra values we would probably find that they would total over another $1 million. It has been estimated that in 25 years our population in Newfoundland will double. That means an extra school population of 100,000 or 120,000 to be provided for. That means an extra 3,500 classrooms to be built. At $15,000 a classroom this amounts to somewhere around $60 million, or around $3 million per year just on new buildings alone.
Our child population in Newfoundland is increasing more rapidly than in any other part of Canada. It is increasing so rapidly that it has been estimated that an extra 170 teachers per year will be required to take care of the increase in classroom population. This, together with replacements because of retirements, death, marriage and transfers from the teaching profession to other occupations, bring the total of new teachers required yearly up to 600, and we have facilities for training fewer than half that number.
Education
If we think in terms of minimum educational opportunity I think it would be worth while to look forward to the graph of intelligence based on the normal intelligence quotients of the human race. Generally speaking we find that such a graph tells us that about 5 per cent of our population have superior intelligence. I do not know just how many children are in all the classrooms in Canada, but perhaps there would be 4 million. That means one-twentieth, or 5 per cent, of those should be in our universities, and if they are not there this constitutes a tremendous waste of brainpower in our country. In my own province of Newfoundland, with a population of 400,000 and a school population of say 100,000, we should have 5,000 students receiving university training. These are the people best suited for the learned professions from which the country will draw its lawyers, doctors, dentists, engineers and scientists and teachers.
We cannot do without these. Another 5 per cent or 5,000 still could profit from university training and should be able to obtain it.
At the other end of the scale we have 5 per cent representing children who because of their mental condition require special facilities for educational training. That is a field where practically nothing at all is being done at the present time. Between these groups we have varying degrees of intelligence which must be trained to the maximum in order to enable them to take part in the economic and social life of our country.
How can the poorer provinces cope with the terrific financial expenditures involved in the educational field? I know it has been suggested that the federal government might turn back to the provinces certain sources of taxation. That might be very well in the case of some provinces. It might help to solve the problem as far as Quebec and Ontario were concerned, and possibly also as far as Alberta and British Columbia were concerned, but it certainly would not begin to solve the problem in the maritime provinces in general and in Newfoundland in particular. We simply do not have the taxation resources to yield the required revenue even if the federal government turned back certain sources of taxation to us.
What then is the alternative? The problem in the case of the poorer provinces is that they simply do not have the money or the means of getting it. The only possible source of money is the federal government, but federal financial aid for education involves some very real difficulties.
I listened to the hon. member for Digby-Annapolis-Kings as he spoke a while ago, and I find myself unable to go along with

Education
him in the easy manner in which he soared over the obstacles that present themselves in connection with this problem. The trend of thought developed by the hon. member is based on the assumption that the present order of society, so comfortable for us in Canada, is destined to continue and endure forever. As much as I would like to believe that, I do not think the hon. member's easy optimism is in accordance with reality. The poet Tennyson has said, "The old order changeth, yielding place to new", and at no time in the history of mankind was that saying truer than at present.
Let us face the facts. There are two and a half billion people in this world, but less than one-half billion find it a comfortable world, or find our present order of society one they wish to preserve. In my very own riding there are 40,000 people who do no find this present order of society very comfortable. For over two billion of the earth's inhabitants it is an extremely uncomfortable world indeed, and these two billion people, or 80 per cent of the entire human race, desire a change. Furthermore there are 800 million communists in the world who have dedicated their lives to changing our present order of society. We are wasting our time in trying to preserve the status quo. Change is bound to come, and a new order of society is inevitable. We cannot hold it back, any more than we can hold back the ocean with our hands. The only thing we can do is to help shape it in the way we wish to have it, and that is why education is of such paramount importance. That, I think, is fact No. 1, a fact which no one can dispute.
Fact No. 2 is that there is a great deal of apathy, indifference and self-satisfaction abroad in our land. Fact No. 3 is the trend toward shifting responsibility to other people. We say, "Let George do it," and in most cases the "George" we have in mind is the federal government. The fourth fact is the trend toward bigness, toward bigger and bigger business, toward bigger and bigger government. We see this trend persisting even at the cost of personal freedom. To me these are danger signals, and if persisted in these trends will inevitably result in the destruction of our way of life.
I agree with the hon. member for Digby-Annapolis-Kings that there is no danger foreseeable in the lifetime of the present generation, or during the time this government might be in power or during such time as any party in this house might be in charge of the government of our country or during the time any of the personalities in this house might dominate the political scene in Canada. But we know that time, like an ever-rolling

stream, bears all its sons away. Old parties pass on, new parties take their place.


Some hon. Members:: Hear, hear.


Chesley William Carter: Personalities disappear and new personalities come on the scene.


Some hon. Members:: Hurrah.


Chesley William Carter: If the present trends are persisted in, who can say what type of personality will dominate the political scene in Canada in 40 or 50 years' time? We all know what happened in Italy and Germany when education came under the direct control of such personalities as Hitler and Mussolini. Who says it cannot happen here? I do not want to appear as a prophet of doom, but I think if we face facts honestly we cannot rule out the possibility of such events occurring in Canada.
There is one other fact that we must always bear in mind. Once education in the provinces becomes dependent on federal funds, that condition will always remain. I do not see how there will ever be in the future an opportunity for the provinces to take back that burden from the federal government. Despite the Canada Council, education in the provinces, once it becomes dependent upon federal funds, will also be dependent upon the personality that controls the purse strings. Therefore I believe the premier of Quebec has a point when he maintains that federal aid for education involves not only constitutional difficulties but dangers as well.
What then is the answer? There seems to be no positive answer. It is rather a choice between two evils. In finding an answer we must follow certain well established principles, such as the importance of the individual, the country's need and what the national interest demands. We must put first things first. I submit that the national interest demands that this problem of education must be solved somehow in spite of whatever dangers or risks are involved.
The resolution states that whatever grants be made available should not interfere with provincial jurisdiction, which would indicate that perhaps one of the ways of approaching a solution is by making grants available for educational plants, for building construction and maintenance. Certainly in a country like Canada, with all of our vast natural resources, given mutual good will it should be possible to find a solution which will enable federal aid to be made available together with the proper safeguards to minimize the risk involved.

Education


Mr. J. A. Smith (Battle River-Camrose):: Mr. Speaker, 1 wish to compliment the mover of this resolution, the hon. member for Saskatoon, for again bringing before this house and the people of Canada a matter of such great importance. I listened most intently to the remarks of the last speaker. With some small portion of what he had to say I must say I can agree, but with the larger portion of what he had to say I must disagree. I agree with him in that I feel that we in Canada should place first things first. To me one of the first things that we as a nation of intelligent people should consider is the education of our young people. That should be something we as a group of people should consider as one of the first demands on all levels of government.
All the ten provinces of Canada are today faced with two problems of major concern in the field of education. The first is the drastic shortage of qualified teachers in each and every province, and the second is the lack of modern school plants to cope with an ever-increasing school population. A few years ago the Canadian school trustees' association embarked upon the preparation of a report dealing with school finances in Canada. The committee in charge of this particular research was headed by Dr. M. E. LaZerte, former president of the Canadian teachers' federation, former president of the Alberta teachers' association; former dean of the faculty of education at Alberta and now, I am given to understand, dean of the faculty of education at the University of Manitoba.
Dr. LaZerte and his committee made a most extensive survey of the whole matter of school finances, and ended up with a recommendation which pointed out vividly that there was room for federal aid to education in Canada. I do know there is no apathy, especially in the west, when it comes to federal aid to education. Every social club, every organized group of men and women in western Canada by and large has passed resolutions calling upon the federal government to give federal aid to education.
Dr. LaZerte brought forth some startling figures in his studies. In one place he dealt with the probable increase in secondary school enrolment in Canada. He secured figures from the dominion bureau of statistics which indicated that from 1952 up to 1964 and perhaps longer there would be a tremendous increase in the number of students enrolled in Canadian high schools. He pointed out that in 1952 there were 305,200 students enrolled in Canada-with the exception of Quebec-in grades 9 to 12 or grades 9 to 13. This figure increased as
the years went on and we find that in 1955 there were 345,850 high school students in Canada. It was estimated by the dominion bureau of statistics that by 1964, there would be well over 600,000 students registered in high school courses in Canada.
That figure of 600,000 for 1964 is an increase of approximately 200,000 over the figure for 1955. Two hundred thousand more high school students will mean 8,000 more classrooms to be constructed at an estimated cost of $15,000 per room, and 8,000 new teachers to handle those 8,000 additional classrooms and this with Canada facing a very drastic shortage of fully qualified teachers. We as Canadian people I hope will exert greater and greater efforts to see that all our young people are given at least a basic high school training.
The 1951 census indicated a very gloomy picture regarding school attendance by our young people. It indicated that of young people in Canada between the ages of 15 to 19 years, 63 per cent of those residing in rural areas were not in attendance at school and 57 per cent of those living in urban areas were not in high school. Where were they? They were certainly not at school receiving the type of education that would make them better and more capable men and women; they were out working. What was the reason? Did those young people representing 63 per cent of those residing in rural areas not desire to go to high school? I do not think so. I feel that they found it impossible to do so.
As has been pointed out, we spent the whole of last Thursday in a comprehensive and inlightening debate on the advisability of establishing national scholarships for worthy university students. I am certain, Mr. Speaker, all hon. members will agree that educational opportunity for young people should be made uniform right across Canada. The view has been expressed here that it would be impossible to introduce a uniform standard of education throughout Canada; but, Mr. Speaker, I have never yet felt that anything was impossible. Certainly we should be striving for a uniform standard of education, the best standard that we as Canadian people can give to our young citizens.
I am prepared to admit there are certain sections of Canada which fin'd it far more difficult than others to finance education. I know that even in the wealthier provinces the provincial governments are finding it increasingly difficult to provide the ever-increasing amounts of money needed for this purpose. The fact that we do have a wide disparity of wealth in Canada, Mr. Speaker,

Education
I regard as a strong argument why the federal government should enter this field and attempt to do something to ensure that a child in the poorest province in Canada should have an opportunity to receive the same type of education as one in any of the wealthier provinces.
The following figures, Mr. Speaker, are cited in the report of the research committee of the Canadian school trustees' association with regard to the provincial effort in education during the year 1951-52. They deal with combined provincial and municipal expenditures on elementary and secondary education in the nine provinces of Canada with regard to which they were able to obtain information. The committee point out that in Newfoundland the amount per capita spent on education in this particular year was $19.61; on the other hand, they point out, the per capita income of that province in that year was only $576. In Prince Edward Island the per capita amount spent on education was $16.84, and the per capita personal income, $633. Nova Scotia spent $25.61 per capita; the average income was $781. New Brunswick spent $29.41; average income, $711. When we move west, we find that Ontario spent $33.52 per capita on education; average income, $1,341. In the western provinces, Manitoba, with an average income of $1,110 spent $28.29 per capita on education. Saskatchewan, with an average income of $1,306, spent $39.34; Alberta, with an average income of $1,251, spent $39.42, and British Columbia with an average income of $1,256 spent $45.34.
All this means, Mr. Speaker, that it costs money to educate the young people of Canada. It does cost money, though not as much as it should cost the people of Canada, by any means. It means that in those provinces where there is a low average income the per capita amount spent on education is low; that the young people in those provinces are not getting the education they deserve as young Canadians. I say it is high time the federal government realized that this situation is one they should deal with in the interests of young Canadians and Canadians in general, rather than sit piously by doing nothing.
Mr. Speaker, it has been suggested that if the federal government were to enter the field of federal aid for education we would eventually reach a position where the federal government was the dominating authority. That is not necessarily true. We already have, at the present time, a position where the federal government is giving money, earmarked for specific social purposes, to the provinces, though the management and administration of those social services are in

provincial hands. The federal government has already entered the field of education, with or without the consent of the British North America Act. Only last week a conference was held here in Canada to discuss vocational education and increased aid for vocational education in the ten provinces of Canada. We know that this year the federal government proposes, and rightly so, to give large sums to the universities of Canada in the way of construction grants. We know that following the war the federal government provided education-and rightly so-[DOT] for many of the young men returning from world war II. The Canada Council plan has already been mentioned.
As I have already pointed out, this resolution has been before the house for a great many years. It is one which should, I feel, receive more than mere consideration by the government and hon. members; it should be acted on by the government now.
In a submission which was supposed to have been made to the Prime Minister at one time, the Alberta school trustees' association and other associated bodies would have made this recommendation to the government. I quote:
It Is now recommended that federal grants to the provinces in aid of education be greatly increased and that they be "general" instead of "special" in nature.
-in other words a grant to be made to the provinces to be spent on education as the provinces saw fit. Quoting still further:
That to assist in financing elementary and secondary education the federal government be requested to give aid to the extent of $150 million per annum at the present time, one-third of this aid to be on a "per pupil" basis and two-thirds as equalization grants to provinces with low taxpaying ability, the latter payments to be proportional to provincial needs.
The principle of giving grants according to the need of an area is already recognized in many of the provinces across Canada. We have in the province of Alberta equalization grants which are given to school divisions which are not as fortunate as others. The wealthier a school division is, the smaller these grants are. The more unfortunate it happens to be, the greater the grant which it receives. I would suggest, Mr. Speaker, that many of the "straw men" who have been put forward from time to time in opposition to this resolution are merely political straw men, and that if this government were so disposed it could immediately call in the ministers of education of the ten provinces, and they would soon arrive at a fair and equitable system of granting federal aid to all the provinces of Canada.

Education


Stuart Sinclair Garson: Mr. Speaker, in rising to take part in this debate I should like first of all to congratulate those who have preceded me for the important and eloquent contributions they have made. It is quite natural, in my opinion, that they should have done so, having regard to the fact that this subject matter has been before us on previous occasions and we are all, in a manner of speaking-and I am sure this applies with particular force to the hon. gentlemen who introduced this resolution-producing variations upon a theme by the hon. member for Saskatoon.
I could not help thinking, however, that amongst all those who have spoken, perhaps the hon. member for Battle River-Camrose, who has just taken his seat, has contributed more than has any other hon. member to a sort of basic understanding of the nature of this resolution, by the moving plea he put forth on behalf of the poverty-stricken province of Alberta for assistance from the federal government toward the support of its primary education. When, as he eloquently and cogently pointed out, this was what he was seeking, we had here a revealing measure of the nature of the resolution before us.
Another feature of the debate which struck me as being rather encouraging was to have the hon. member for Saskatoon quote, with no inconsiderable approval, Mr. James Muir -I think he is still president of the Royal Bank of Canada, or chairman of the board -and then to find myself in agreement with both of them on the point upon which Mr. Muir was quoted, namely that Canada should spare no effort as a nation to provide the best possible education that we can provide for all Canadians. If I recognized the quotation, this part of which my friend the hon. member for Saskatoon did not quote, I think one of the reasons was that Mr. Muir was apprehensive as to whether the free world was maintaining an educational system which could be compared with that of the unfree.
The hon. gentleman who introduced this motion stated, and it was quite unnecessary that he should have done so, that he was no more interested in the children of Saskatchewan than he was in those of any other province. I think we all approach this subject as Canadians with a desire to get the best system of education we can by means which are reasonably acceptable to all parts of our country. I read the wording of the motion:
That, in the opinion of this house, the government should take into consideration the advisability of
taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
I should like to submit, Mr. Speaker, that the provision which has already been made by this government is the only way we can bring ourselves within the language of this resolution, especially the clause "without encroaching in any way on the exclusive jurisdiction of the provinces in this field." In other words I should like to submit that the provision which has been made is the only provision which can be made which does not encroach upon the jurisdiction of the provinces.
I say that because, as is well known, the fiscal arrangements we now have between the federal government and the provinces are the product, in large measure, of the recommendations of the Rowell-Sirois commission. I do not think we have ever had before in the history of Canada a royal commission which could compare with it in the way its recommendations and the matter which supported them have stood examination, and the validity of whose findings in spite of the passage of time has continued to be sound and unchallengeable.
When he says that our job is to provide the provinces with the financial resources to do the job, I should like to point out to my friend the hon. member for Saskatoon that we have set out to do that in accordance with the recommendations of the Rowell-Sirois commission; that we have in a large measure succeeded; and that the only way in which my hon. friend can acquire argumentative validity for his submissions to the house today is by shutting his eyes completely to what has been done with regard to implementation of the Rowell-Sirois commission report. For example, he says he wants the federal government-and if I am misquoting him I hope he will correct me__________
which has made grants to Canadian universities, to make to the support of primary education further grants of the same kind as those they have made to the universities. He says if they can make them to the one, they could make them equally well to the other.
I submit to him that it is one thing to make grants to the universities of Canada which constitute, when they are received, a minor part of their income, and which are made to institutions which are fully autonomous, self-supporting and self-governing; but it is a different thing altogether to make grants, which would be a large part of the

Education
income of the primary schools of the province, to provincial governments whose provincial departments of education actively control, supervise and make policy for the whole primary school system of the province.
I am sure the hon. member for Saskatoon, as a school teacher versed in the history of our country, would be one of the first to agree with me when I say it is not an accident that, at the time of confederation, in the distribution of powers under the British North America Act the legislatures of the provinces were given exclusive authority to make laws in relation to education. This, Mr. Speaker, was a deliberate provision upon which certain of the fathers of confederation insisted as a condition to the formation of the Canadian federation in order to protect their religion, their language and their way of life.
The point of this is that primary education is concerned entirely with the instruction of the young during that highly formative period of their lives, which instruction, as the Rowell-Sirois report points out, is of decisive importance with regard to religious training and the preservation of language and culture. Let me quote from volume II of the Rowell-Sirois report:
We have already said that the instruction of the young during their formative years is a matter which the provinces must continue to control (subject of course, to the safeguard for religious minorities provided in the British North America Act and amendments). A free hand in something so important to the social and cultural life of the people seems to us to be vital to any provincial autonomy worthy of the name, and it is obvious that any attempts to alter the existing arrangements would meet with powerful opposition and would provoke profound resentment.
In relation to that quotation, Mr. Speaker, I would point out that if federal grants were sufficiently large to be worth while to the provincial governments which received them, the dominion treasury simply could not defend handing those large sums of money to the provincial governments without assuming some responsibility as to the manner in which they would be spent. The hon. member for Digby-Annapolis-Kings said that would be a simple matter to overcome, and they could be handed out under certain conditions. But if they were handed out under certain conditions it would be necessary to follow the grants to make sure those conditions had been fulfilled. Under those circumstances it seems to me quite beyond all reason to imagine that provincial autonomy over primary education would be maintained.


Mrs. Fairclough:: May I ask the minister a question? As I listened to the hon. member for Digby-Annapolis-Kings this afternoon it seemed to me the minister was misrepresenting what the hon. member said. Does the

minister maintain that these funds, in the hands of the provinces, might be subject to misappropriation?


Stuart Sinclair Garson: No, Mr. Speaker, my words did not say that and they were not susceptible of any such inference.


Ellen Louks Fairclough: Oh, yes, they were.


Stuart Sinclair Garson: If the hon. lady draws that inference I can only leave her to her own conclusions.


Ellen Louks Fairclough: That is the inference I draw.


Stuart Sinclair Garson: It is for this reason, Mr. Speaker, that on a previous occasion the former leader of the opposition, Mr. Drew, stated in the course of a debate on this same subject that he was completely in favour of provincial autonomy in these matters. I agree with him, and I suggest that the Rowell-Sirois report, from which I now propose to quote, supports both of us in that view. One should remember that this Rowell-Sirois commission was sitting shortly after the greatest depression through which we have ever passed, when conditions of primary education in the Dominion of Canada were infinitely worse than they ever had been before or since. It was in relation to conditions at that time, not in relation to the relatively good condition of education today, that these remarks were made, which I now quote:
Many representations have been made to us that financial help should be extended by the dominion to the provinces for various purposes, such as scholarships, technical training, grants to be used for general educational purposes provided that the provinces did not reduce their own expenditure on education. These representations appear to have been inspired largely by consternation at the reductions in educational expenditure which certain provinces, under the stress of the depression, have felt compelled to make. It has even been contended that the dominion is bound to see that there is equal educational opportunity, as far as is practicable, for every Canadian child. We have the deepest sympathy for these views which have been advanced by many of the organizations most closely associated with education in Canada, and we share to the full the regret that, especially in recent years, education has been terribly neglected in many of the poorer parts of the country and that wholly disproportionate sacrifices have been imposed on those who have devoted their lives to this important public service. But the representations appear to us to go too far in denying the right of each province to decide the relative importance of expenditure on education and expenditure on other competing services. It is our hope that provision can be made for the fiscal needs of all provinces, including within those needs provision for the education of the young. Our financial proposals aim at placing every province in a position to discharge its responsibilities for education, on a scale that is within the means of the people of Canada, if it chooses to do so. Once this position is established it seems to us best that education, like every other form of welfare service in a democratic community, should have to fight for its life, and that a generous provision for the education of the children of the nation should depend, not on any

arbitrary constitutional provision, but on the persistent conviction of the mass of the people that they must be ready to deny themselves some of the good things of life in order to deal fairly by their children. Hence we do not think that it would be wise or appropriate for the dominion to make grants to the provinces ear-marked for the support of general education.
As we all know, following upon the delivery of this report, in view of the fact that there were public men in Canada who had to be educated with regard to these matters and who at first opposed the implementation of the provisions of the report-most of them not in the Liberal party-the implementation of the report was delayed until that educational process was completed. There are still some signs in this house that it is not complete yet.
It was not possible, until the first wartime tax suspension agreement, to develop anything along the lines of the Rowell-Sirois recommendations. Under that wartime tax suspension agreement, which had been condemned in another form as an absolutely impossible arrangement for the provinces, there was not one of the provincial treasuries that did not have a most favourable experience as regards increasing its ability to spend money for education and other provincial services, and as regards treasury surpluses they were able to show during that period. When the war was over this was followed by the first post-war tax rental agreement.


Mr. Hodgson:: When was the Rowell-Sirois report brought out?


Stuart Sinclair Garson: The Rowell-Sirois report itself was brought out in May, 1940.


Clayton Wesley Hodgson: That may be, but it was finished in May, 1933.


Stuart Sinclair Garson: I think perhaps my hon. friend may have in mind that some of the hearings, perhaps in Ontario, were finished in May, 1938; but the whole thing certainly could not have been finished in 1938.


Clayton Wesley Hodgson: Does the minister not think a report brought out in 1938 or 1940 is outmoded? This country is moving much faster than that.


Mr. Pickersgill:: Certainly not.


Stuart Sinclair Garson: It is because of that fallacy in the minds of a number of members in this house that year after year we have the presentation of this resolution and some of the speeches in support of it. I will not say they are made in ignorance of the contents of this report, but at least they are made in disregard of it.
Now, the present suggestion is, to adopt the language of the motion, that money shall be
Education
made available to the nrovinces for educational purposes, "without encroaching in any way on the exclusive jurisdiction of the provinces in this field".
Well, I want to try to show hon. members, Mr. Speaker, that this is precisely what these agreements have done; and I should first like to give as an example the experience of my own province of Manitoba. The Manitoba revenues which were surrendered under these agreements in 1946 were worth a little over $8 million a year. In place of these we got under the agreement a guaranteed minimum of $13,500,000 and received in the year ended March 31, 1948, about $14,500,000. To make a long story short, Mr. Speaker, we shall receive in the present fiscal year, I believe-I have not checked the exact figure-something close to $35 million, which is more than our entire budget in 1949. Now, will any member of any party in this house have the hardihood to rise in his place and say that with this increase in revenue it is not possible for the provinces to support primary education?


Clayton Wesley Hodgson: What is your surplus this year?


Mr. Knowles:: What is the increase in the cost of education?


Mr. McCullough (Moose Mountain):: What was the federal budget in 1939?


Stuart Sinclair Garson: Let us leave that one province out. It is true Manitoba had a very favourable settlement in that contract, but let us take the agreement as a whole.


Stanley Howard Knowles: Will the minister permit a question before he leaves Manitoba?


Stuart Sinclair Garson: Yes, surely.


Stanley Howard Knowles: Will the minister say whether he thinks the contributions made by the federal government to Manitoba for education, such as contributions for vocational training, contributions for the building of Carpathia school in Winnipeg and the school at Fort Churchill, all of which are outside of these grants, violate the Rowell-Sirois principle or interfere with provincial control over education?


Stuart Sinclair Garson: No, I do not for one moment, because they are all earmarked grants, all made upon certain conditions which must be complied with; but they relate only to certain technical training.


Stanley Howard Knowles: Oh, no.


Stuart Sinclair Garson: Well, I put it this way so as not to waste time. They do not relate to primary education.

Education


Stanley Howard Knowles: Carpathia school is an
elementary school in the city of Winnipeg.


Stuart Sinclair Garson: I know.


Stanley Howard Knowles: The school at Fort
Churchill is an elementary and high school.


John Whitney Pickersgill: And it has nothing to do with primary education in general.


Stanley Howard Knowles: It certainly does.


Stuart Sinclair Garson: My hon. friend cannot use up my time and trap me by these-


Robert Ross (Roy) Knight: May I ask one question?


Stuart Sinclair Garson: One at a time. My hon. friend from Winnipeg North Centre cannot trap me by these atypical cases which he cites. He knows as perfectly well as I do that there is not now, in Canada, federal contributions to primary education, in the terms in which they are recommended in the resolution which is before us.
Now, let us take the grants from the federal treasury under these federal-provincial agreements. To go to the first post-war tax agreement, that is the first tax rental agreement in 1947-48, the sum of $80 million in that year was paid to seven provinces. In the last year of that same agreement 1951-52 another province having come in in the meantime, the $80 million had gone up to $122 million. Then a new agreement was negotiated, and in 1952-53 the first year of the new agreement with nine provinces that $80 million had gone up to $286 million, and in 1953-54 the second year of the second agreement, just one year later, it had gone up to $309 million by operation of the escalator clause, in order to take care of increased expenditures, including education. In 1956-57 the last year of that agreement, still with nine provinces, it had gone up by escalation and the like to $357 million.


Ralph Byron Horner: Will the minister permit a question?


Stuart Sinclair Garson: No; my time is running out. I will be glad to answer the hon. member's questions at the end, if I have time.
During the past year we have been negotiating a third agreement, and we hope to have all the provinces of Canada included. The amount payable, as nearly as we can estimate it at this moment, under the third agreement is $640 million, plus certain other adjustments of taxation and so forth of $35 million, or a total of $675 million.
In other words the contribution of the federal government under this head in the period from 1947-48, when it was $80 million, has gone up in ten years to $675 million in 1957-58, or by almost eight and a half times.

Will any reasonable man tell me that in that large increase there is not elbow room within which the province of Alberta can find some way of taking care of its primary education, or even the province of Newfoundland? It is an increase of eight and a half times in federal payments.
The great virtue, Mr. Speaker, of this arrangement is that it complies with the resolution of my hon. friend from Saskatoon. This is the only way in which this money can be paid "without encroaching in any way upon the exclusive jurisdiction of the provinces". As the provinces get this money, they can spend it on roads, they can spend it on bridges, they can spend it on graft, they can do what they like with it, or they can spend it on education.


Robert Ross (Roy) Knight: Is the minister aware that one of his colleagues took the exactly opposite position in opposing this resolution? The Minister of National Health and Welfare said the reason it was unconstitutional was that it was earmarked for education.


Stuart Sinclair Garson: I heard my colleague and I heard my hon. friend from Saskatoon. I think the explanation of my hon. friend's remark is that he himself did not understand the minister.


Robert Ross (Roy) Knight: Thank you very much; no one else does.


Stuart Sinclair Garson: The fact of the matter is that the Rowell-Sirois commission was in my opinion much the most distinguished commission we had ever had. It would be a very happy situation if all our commissions produced as satisfactory a report as it did.


Stanley Howard Knowles: You had better explain yourself.


Stuart Sinclair Garson: And I would say that, because we have for our measures support from the fact that we took the Rowell-Sirois recommendations and implemented them. By and large, having regard to the fact that we have been passing through an era which has tested the financial arrangements of governments at every level, municipal, provincial and federal, the Rowell-Sirois policies have worked out remarkably well. They certainly have provided, if the provinces choose to spend it for that purpose, plenty of money with which to pay for education.
The hon. member for Saskatoon may perhaps recall that on an earlier occasion, I think it was in 1952, I pointed out that under these tax agreements then in effect over a period of five years not one of the treasuries of all the provinces of Canada had shown a deficit; they all showed surpluses, and those surpluses for the 5-year period totalled

nearly two-thirds of a billion dollars of provincial debt reduction. My hon. friend the hon. member for Saskatoon says, "If we do not pay some money they are going to have to close up primary education." Well, the only thing wrong with all these arguments is that the facts do not bear them out. It is only by ignoring the facts-I will not say suppressing them

but by paying no attention to them, that my hon. friend can make the kind of argument he does.
I sympathize entirely with him on the importance of primary education and the importance of increasing school teachers' salaries. But I say when he is proposing to do this by transgressing the provision which was put into the constitution of Canada most deliberately by the fathers of confederation, and which has proven over the years since to have been a very wise provision; and since the facts as I have related them show that the provinces, if they wish to do so, can make adequate provision for education, there is no case upon which he can ask for the support of his present resolution in this house.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I was delighted to hear that the Minister of Justice (Mr. Garson) had great sympathy for the hon. member for Saskatoon and for the position he took. I think it is unfortunate that the minister does not have a little knowledge as well about the real situation in the educational system, because I am quite sure there is not a teacher in the country who would not get up and refute everything he said. When he tells us and asks us to believe that the provinces are able to cope with this problem under the present financial arrangements, he flies right in the face of the express views of all educational authorities in Canada. The minister may be an expert in law, but I suspect he has not been paying very much attention to the mundane business of the local administration of schools or he would not attempt to put over as logical arguments the fantastic statements he has made this evening.
I was interested to find that apparently he bases his opposition to this resolution on two grounds. The first is the findings of the Rowell-Sirois commission. I remember the findings of that commission very well. I was a member of the British Columbia legislature at the time and it was notorious, as the Minister of Justice well knows, why that particular section of the Rowell-Sirois commission's report was included and why it contained the weak, feeble and unconvincing arguments he has quoted here tonight. At that time there was no doubt in the mind
Education
of anyone that it was a political consideration which forced that particular section of the Rowell-Sirois report.
The other ground upon which the minister apparently bases his position is a constitutional one, and I was quite interested when he suggested that of course there had been no contravention of provincial autonomy over education in regard to grants for universities, because they were all minor in quantity. I was reminded, Mr. Speaker, of the story you may remember about the young lady who was the subject of some censure over the results of her behaviour. Her defence was, "Well, it was such a very small baby". Surely, Mr. Speaker, the Minister of Justice is the last person who should suggest to us that a minor fracture of the constitution is permissible but a large one is unthinkable.


Stanley Howard Knowles: He got away with a fairly large one.


John Whitney Pickersgill: Would the hon. gentleman permit a question?


Colin Cameron: Yes.


John Whitney Pickersgill: This resolution calls for payments to the provinces, if I read it correctly.


Colin Cameron: Yes.


John Whitney Pickersgill: Surely these university
grants are not paid to the provinces. There is no parallel at all.


Colin Cameron: No, they are not paid to the provinces; and that brings me to another statement of the Minister of Justice when he suggested, if you please, Mr. Speaker, that provincial universities- and this is true of all the western universities -which have been established by provincial legislatures are more autonomous bodies than are provincial governments. What an astonishing point of view. We can make grants to universities because they are autonomous-


Stuart Sinclair Garson: Mr. Speaker, I rise on a question of privilege. My hon. friend has attributed to me a suggestion which I did not make. He is confusing it with an inference which he improperly drew.


Stanley Howard Knowles: We all heard it.


Colin Cameron: Those were the words the minister used.


Stuart Sinclair Garson: Hansard will show the words I used.


Colin Cameron: Yes; if you do not change them, Hansard will show that you referred to universities as autonomous bodies, and therefore that the grants to them could not be put on the same basis as grants to provincial governments.

Education


An hon. Member:: Word for word.


Colin Cameron: I suggest to you, sir, that not only is the minister advancing quite a ridiculous argument, but he is also overlooking a very important factor. That is that provincial universities, while every effort has been made to remove them from the control of provincial governments, are nevertheless subject to considerable pressure when a provincial government wishes to exercise it, because the provincial government has control of all the grants. These arguments do not seem to add up to any sort of reality.
I want to deal particularly with the main thesis of the minister's refutation of the resolution tonight, and that is that the educational wants of Canadian children are or can be adequately cared for by the present fiscal arrangements. I want to suggest to him that his thinking is far out of date, because there is not a province in Canada at the present time that has established an adequate primary and secondary educational system.
I suppose sometimes we tend to forget what a very large bite we undertook to chew when in Canada we decided to educate all children, and we may also tend to forget that it is a relatively new development. It was a new idea when about 100 years ago, I suppose, perhaps a little more in some parts, it was decided to provide elementary education for all children. At that time it was possibly a fairly easily achieved ambition, because no doubt the first thought was that it would be very elementary education that the vast majority would require or would wish or would have to have provided for them. In fact until comparatively recent times this was the case.
I recall that when I went to high school in British Columbia a much smaller proportion of the children who attended elementary school with me went on to high school than today go from high school to university. At that time the high school student was the rarity, and the cost of education per capita was in consequence very much less than it is today. But I think we have to go even further than that. I think we must consider for a moment just what are the purposes of our education. Sometimes I am rather dismayed at the implications of some statements which are made with regard to education; the idea that the purpose of education is to produce so many people skilled in this particular line and so many in another specialized field and so many in some profession or trade. I think we lose sight of the fact that education is something else again. Education should primarily be the 
process of developing human beings, and in order to do that there is one thing we have to do which our educational system has never been able to do even from the start; that is to maintain and encourage the natural curiosity and inquisitiveness of the human being.
Every human being starts off life as a bundle of curiosity, and it is the way in which human beings develop and the way in which societies develop; but when you gather 40 or 50 pupils into a class and ask a teacher to take charge of them, all that teacher can do is to maintain sufficient order to wrest from those students an unwilling acceptance of certain information and facts. I have no doubt whatever that much of our trouble today with regard to juvenile delinquency has been primarily caused by the fact that our educational system stifles that necessary inquisitive, curious feature of human nature. In order to maintain it, the very first thing we need is about twice as many teachers as we have at the present time, and that is an extremely conservative estimate.
I would go further and quote something I said to a teachers' gathering in my constituency not long ago, when I told them- and you may think it was a very rash thing for a politician to say-that I hoped the time would come when half those in attendance at the gathering would be found unqualified for their jobs; but of course I was quite safe, because each one was quite convinced that I was referring to his neighbour and not to him. I then went on and suggested something further. I said I also hoped that I would see the status and the rewards of the teaching profession raised to the degree where there would be two applicants for every vacancy in the profession.
Unless we can approach something like that, then we are not going to really fulfil the fundamental purposes which were referred to tonight by the Minister of Justice, the purposes of the fathers of confederation, and so on. Today the world is a much more complex place than it was in their day. If ever there was a time when children required individual attention, when they required the encouragement of their speculative intellects, today is the time; because they have to combat an enormous barrage of influences and of propaganda which are definitely antisocial and anti-intellectual in nature.
We may think we can solve these problems by banning certain deleterious aspects of our society, like crime comics, but the only real protection for young people from some of the evil influences of modern society is the development in them of inquiring minds which will seek always to extend the boundaries of

Education
their knowledge. I suggest that in order to do this a very large proportion of the national income of this country must be devoted to providing the sort of scholastic environment which will produce those inquiring minds which will be made safe from the influences of some aspects of this modern world. To do that is beyond the capacity of even the richest province.
When the tax rental agreements were brought up in the legislature in Victoria I was very dubious about them. Curiously enough a Liberal member of the legislature and I were the only ones who were dubious. I was dubious because I doubted whether the great and good federal government would always see eye to eye with those of us who considered that there were vast improvements to be made in the society in which we lived. Tonight we have had proof that I was right. The spokesman for this government still does not admit that we have a crisis in education. Putting it in simple emotional terms, you may say that you cannot buy these things; but the bitter truth is that you have to buy them, and with hard dollars. We will have to offer inducements to the best brains in our society to undertake this most important job in our whole society, because the whole rest of our lives depends upon what those to whom we entrust our children are able to do with their trust.
The whole of our elaborate and complex society rests finally on the shoulders of the primary teacher. She is the first one who sets the child's mind in a certain direction. I would suggest that all the obstacles that have been raised tonight of insurmountable constitutional blocks will eventually be blown apart when finally it dawns on this government that it has to take action in this field, just as it took action in the field of family allowances, in the field of grants to universities, both of which I suggest are perhaps suspect to the constitutional purist. I have never been able to understand why grants in aid of technical education were not subject to the ban, but apparently they are not.
We know quite well that eventually, when they are met with the demands of public opinion, these blocks will be removed; but the tragic thing is that in the meantime a whole generation of Canadian citizens is suffering and much of the future of this country is being endangered, because if we go on this way we shall invite the worst possible fate that could overtake us. That is, that the next generation will be no wiser than we are.
(Translation):


Mr. Guy Rouleau (Dollard):: Mr. Speaker, in the first place I should like to congratulate the hon. member for Saskatoon (Mr. Knight) on moving this resolution designed to give financial assistance to our educational institutions and teaching establishments. In so doing, he affords us all, as members of this house, an opportunity to show our interest in matters of education in this country. It is a valuable contribution to the future of Canadian youth and to Canada as a whole.
This debate also gave us the opportunity of hearing an excellent speech on the question of education by the Minister of Justice (Mr. Garson) and of being informed of the position of the government of our country on this matter.
I also wish to thank the hon. member for Saskatoon for the kind words he had on my behalf because of the speech I made last week in a debate on a similar subject. In his remarks this afternoon, he expressed the wish that I give my opinion on the question he submitted to our consideration. Mr. Speaker, as a man in public life, I have never been afraid to express my opinion, neither here nor elsewhere, and it is with pleasure that I take this opportunity to express my views on the matter he submitted to us.
In the speech he just made, the hon. member for Nanaimo (Mr. Cameron) told us that the Minister of Justice seemed unaware of the fact that there is a financial crisis in the field of education. I listened most carefully to the remarks of the Minister of Justice and I for one am convinced that he is conscious of the needs felt by all provinces in matters of education. I know that the Minister of Justice is mindful of provincial autonomy and that he leaves to each province the care of discharging its obligations.
Of course, Mr. Speaker, I agree with the hon. member for Saskatoon when he says that our schools are faced with certain financial difficulties in each and every educational field, primary, secondary and university. Because of the increase in our population we have to build more schools and universities. We also recognize the necessity of providing higher pay for college and university professors as well as for high school and elementary school teachers. These people are putting heart and soul in the teaching of our children and I do think that everybody here will agree that they should be better paid.

Education
Still the problem which we have to face in the educational field also exists in other fields. I need only mention here the difficulties faced by municipalities in their administrative work, precisely because of their current rapid expansion. However, the financial difficulties which we are facing in the educational field are such as to deserve study by all those who are in charge of the various government activities in this country.
To my mind, Mr. Speaker, this is a critical problem since it has a bearing on the future of our children, of the younger generation of this country and of the nation as a whole.
In seeking to settle this financial problem, we must take into account the British North America Act in so far as it concerns the rights which have been reserved to the various provinces on confederation.
Last week during a debate initiated by the hon. member for York Centre, I had the opportunity of expressing my views on the attitude that we should adopt here in this house, with regard to education, in order to ensure that provincial autonomy in this connection be respected. In my conclusion I supported the granting of university scholarships which would in no way threaten the autonomy of the provinces, on the contrary.
To return to the discussion now under way, let us read over the resolution submitted by the hon. member for Saskatoon:
That, in the opinion of this house, the government should take into consideration the advisability of taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
When I first read the resolution, I felt inclined to support it. However, after listening to the speech delivered this afternoon by the hon. member for Saskatoon, I think I should make considerable reservations, and perhaps even more than reservations. Mr. Speaker, I do not want to speak of the hon. member personally, but I fear this resolution coming from the C.C.F. benches creates a great danger. Indeed, during the four years I have spent in this house, I have noticed that certain members of his party seemed to forget, on several occasions, that we had in Canada a constitution giving rights to the provinces in certain fields, and more particularly in the field of education. When I read carefully the resolution moved by the hon. member, I see that it included the following sentence:
.	.	. without encroaching in any way on the
exclusive jurisdiction of the provinces . . .
However, while making his speech this afternoon, the hon. member had this to say: "The public of Canada would support, I am quite sure, this plea which I am making for the granting of federal money for education, so long as there was no interference with provincial responsibilities implied".
Earlier, Mr. Speaker, the hon. member had said: "I wonder if it would disturb the constitution too much if the federal government were to assume some of the capital cost of schools". He concludes by saying that he does not believe it would.
Mr. Speaker, I suggest that the educational system, both on the primary and secondary level, is exclusively within the jurisdiction of the various provincial legislatures. When the hon. member says that we should assume some of the capital cost of schools, we already see there an encroachment upon the autonomy of the provinces, and that is exactly what we do not want.
In that same speech, the hon. member said:
What is taught, how it is taught, and where it is taught or anything else of that kind lies within the jurisdiction of the province. All we want to do is to support the hands of those people within the provinces who are trying to educate these children. That is all we want to do and it is entirely a financial problem.
Well no, Mr. Speaker, it is not solely a financial matter; it is a problem affecting the organization of education in this country and more particularly in the provinces, a prerogative which has been guaranteed to us by the British North America Act which provides that education is exclusively a provincial matter.
In the province of Quebec, as in any other Canadian province, I am sure that the legislative body wishes to discharge its responsibilities in accordance with the rights and powers guaranteed by the constitution. That is what is provided by section 93. As I said last week, when we have to deal with education we must be very careful to respect that guarantee given to the provinces by the fathers of confederation.
It is for that reason, Mr. Speaker, that I cannot accept in its entirety the resolution moved by the hon. member for Saskatoon; I wonder if the hon. member realizes the difference between what we could call here education proper, which comes under provincial jurisdiction, and Canadian culture, a field where the government of our country

may have, in some cases, certain responsibilities. I agree with the hon. member when he says that our educational system is in great need of funds. Since the planning of education has been entrusted to the provinces the solution of this financial problem in the field of secondary and primary education is their sole responsibility. Therefore, as a representative of a federal constituency, I will not even discuss these problems in so far as they relate to primary and secondary education.
In the field of university education, the problem is just as serious. However, who provides the universities with the funds they require to educate our children? These funds come from credits voted by the different provincial legislatures, in certain cases from federal grants, and from certain amounts put at the disposal of our universities by private enterprise or by private individuals anxious to help our young Canadians.
Needs are growing, Mr. Speaker, precisely because more and more young people, throughout this country, are entering university. I am happy to note that fact. It proves that Canadian culture is constantly being raised to higher levels, and this is as it should be. I had occasion last week to express my views on the matter of primary and secondary education. As I said a while ago, it is different in the case of universities. In fact, there is in that field a cultural aspect regarding which the federal government could make a contribution without however laying down any condition. That is in complete agreement with the findings of the Massey report which recommended assistance to universities, which is urgently required.
For a long time the Prime Minister of our country has been concerned with the problems of universities. Recently, when he received an honorary degree from the University of Sherbrooke, he announced that he would recommend to parliament that grants to universities be increased from 50 cents to $1 for each university student in the country, thus bringing to $16 million annually the amount of statutory federal grants to universities.
In the speech he made on November 12 last at the national conference of Canadian universities, the right hon. Prime Minister said, and I am quoting from La Presse of Tuesday November 13, 1956:
I have already explained why the federal government had the right to offer such assistance. I feel that it is not only its right but its duty to do so.
In the same speech the Prime Minister added:
My colleagues and I feel that the annual federal grants to universities should be continued and
Education
increased and we are prepared to recommend to parliament, at the next regular session, that they be doubled.
That is what the parliament of Canada has done at the very beginning of this session. And if I refer to Hansard of last Friday, January the 15th, I see that the Prime Minister in the explanations he gave us on the subject of the assistance that the Canadian government wants to give to various universities in this country, takes into account the autonomy of the provinces. During the same debate I noticed that the leader of the official opposition (Mr. Diefenbaker), agreed with the Prime Minister. I suggest that all the members of the house recognize that we should help Canadian universities. However, I want to be sure that such assistance will be granted with due respect for the autonomy of the universities and provinces. In order to insure that this autonomy will not be affected, it is provided in the measure introduced by the government that the universities of the various provinces of the country will not be forced to accept the grants, but that they can refuse them if they believe that this would encroach upon the autonomy of the provinces.
The resolution of the government provides that the grants will be distributed by an independent organization.
The hon. member for Nanaimo (Mr. Cameron) said a moment ago that there was no difference between the measure introduced by the Prime Minister and the proposal of the hon. member for Saskatoon. The Minister of Citizenship and Immigration (Mr. Pickers-gill) pointed out that there is all the difference in the world between these two proposals since under the resolution of the Prime Minister, the grants will be offered to the universities and not directly to the provinces.
Before concluding my remarks, Mr. Speaker, I wish to make a special appeal to private enterprise in this country to provide an ever increasing help to our universities and our university students.
I also wish to congratulate the hon. members of this house for the interest they have shown in the problems of education and teaching in our country. In so doing, they prove that they are conscious of their responsibilities; I urge them to continue to work for the future of our country with due respect to the spirit and the letter of our Canadian constitution.
The hon. member for Saskatoon said this afternoon that he was glad to find that an ever increasing number of hon. members show their interest in education. However, I would not want the growing interest to

Education
which he referred to be taken as an excuse to encroach upon certain sections of the Canadian constitution.
However, I cannot give my full support to the resolution before the house, precisely on account of the explanations given by the hon. member. In my opinion, if the resolution were carried in its present form, it would be an encroachment upon the constitution and that cannot be allowed. Such an action would be an interference in a field exclusively reserved to provincial jurisdiction. I am still convinced that no hon. member would wish to encroach upon what we call provincial autonomy.


Mr. Andre Gauthier (Lake St. John):: Mr. Speaker, I have very little time left before ten o'clock but I do think I have time enough to make a few remarks. The hon. member for Saskatoon (Mr. Knight), I am convinced, has introduced his motion in a sincere effort to find a solution to the problem of education in general.
I do not have to demonstrate the need for supporting education. That is a generally recognized fact. All of us here to the best of our ability, are searching for a formula according to which our young fellow citizens may be allowed to benefit more from education.
Education is a personal responsibility of parents. That is a privilege which is rightfully theirs. Still, man is not able to develop, to realize his whole potentialities except as a member of society. That being the case, those in authority must exercise their complementary duties. In my province this is first of all the business of the local school board to which I am particularly happy to pay tribute.
Our federal system nevertheless recognizes the exclusive responsibilities of the provincial authorities to legislate in educational matters. I will remind hon. members that the fathers of confederation did not deem it wise to include these in the general powers granted to the provinces under section 92. They chose instead to draw up a separate section to deal with this matter, a fact which indicates the importance they attached to the subject. It was their wish that education be a provincial matter. Even with the best intentions in the world, I do not think that we should do anything which would, in any way, diminish the responsibilities of the province.
The mover of the motion has taken the precaution to include the following reservation:
Without encroaching in any way on the exclusive jurisdiction of the provinces in this field.
That is undeniable recognition of the fact that the federal government has no jurisdiction in that field, and that should be sufficient to dispose of the resolution. Problems coming within the field of our jurisdiction are numerous and varied; some are very difficult to solve. We should spend our time and energy working for the common good of our constituents in the fields in which we have jurisdiction and which were assigned to us by the provisions of the British North America Act.
Federal legislators are duty bound to be very circumspect and careful in matters of education. The province of Quebec has most imperative and special reasons to be jealous of the field of education. It is the only means available to French-speaking Canadians of keeping the language and traditions inherited from their forefathers. If there is a crisis in the field of education, a fact recognized practically everywhere, let us leave to the provincial authorities the trouble of studying the problem and let us help them to solve it if they so request us. The proposals designed to put an end to the present financial crisis in the field of education referred to in the resolution must come from the provinces. They will I am sure set the required conditions and guarantees.
For all the reasons I just gave-it is already ten o'clock, Mr. Speaker

I must say that I will oppose this resolution of the hon. member for Saskatoon and I move the adjournment of the debate.
(Text):
On motion of Mr. Gauthier (Lake St. John) the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Lapointe:: Tomorrow we shall go into supply and continue, and I hope complete, the study of the supplementary estimates. Then we shall take up the legislation as announced by my colleague the Minister of Finance on Friday, in the order in which he announced it.


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

[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. Thatcher: What action has the government or the Bank of Canada taken, in an effort to curb inflation, to control loans made by finance companies, small loan companies, insurance companies, credit unions, etc.?
Answer by: Hon. W. E. Harris (Minister of Finance):
The government and the Bank of Canada have made it clear in discussions with finance companies and the larger retailers that a continued expansion of credit is not desirable, but no specific controls have been imposed on loans made by finance companies, small loan companies, insurance companies, credit unions, etc.


DELIVERY QUOTAS, WESTERN PROVINCES
Mr. Hansell: 1.	How many points in the three western provinces respectively closed the last crop year with a wheat delivery of (a) over five bushels quota; (b) five bushels quota; (c) under five bushels quota?
2.	How many points in western Canada received an eight bushel quota?
Answer by:	Mr. Dickey, Parliamentary
Assistant, for the Minister of Trade and Commerce:
Number of
Province	delivery
points
1. (a) Over five	Manitoba	
375bushels	Saskatchewan	..1,001Alberta	
492Total	1,868
Questions
(b) On five	Manitoba	 -
bushels	Saskatchewan .. 103
Alberta	 85
Total	 188
(c)	Under five	Manitoba	
Nonebushels	Saskatchewan	..	"Alberta	
"2. On eight bushel Manitoba	
316quota	Saskatchewan	..	307Alberta	
195Total	
818


STEEL PRODUCTION, 1955-56
Mr. Gillis: What was the total tonnage of basic steel produced in Canada for the years 1955 and 1956, by (a) Algoma Steel Corporation; (b) Stelco; (c) Dominion Steel and Coal Corporation?
Answer by:	Mr. Dickey, Parliamentary
Assistant, for the Minister of Trade and Commerce:
Production of steel ingots and steel castings
Eleven months ended November Year 1955	1956
net tons of 2,000 lbs.
Steel ingots
Open hearth-basic .	3,917,051	4,234,329Electric 	524,692	510,993Total steel ingots.	4,441,743	4,745,322Steel castings	Open hearth-basic .	26,003	29,427Converter 	164	284Electric 	61,491	80,634Total steel castings	87,658	110,345
(a), (b) and (c) Under section 15 of the Statistics Act returns for individual companies may not be released.
739

Tuesday, January 29, 1957


MUNICIPAL GRANTS ACT
Walter Edward Harris: 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 bring in a measure to extend the benefits of the Municipal Grants Act and to provide for certain changes in connection with the administration of the act.


[Stage Direction]
Motion agreed to.

Walter Edward Harris: 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 Farm Assistance Act to increase the awards and the levy authorized by the act.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 1-Mr. Knowles:
For a copy of the judgment of the Exchequer Court of Canada in case No. 73805 between the Minister of National Revenue, appellant, and the Publishers' Guild of Canada Limited, respondent; and also a copy of the judgment of the Exchequer Court of Canada in case No. 78533 between the Publishers' Guild of Canada Limited, appellant, and the Minister of National Revenue, respondent.

[Stage Direction]
Motion No. 3-Mr. Goode:
For a copy of all correspondence exchanged between the provincial government of British Columbia, the New Westminster harbour board and the federal government, in 1956 and 1957, regarding an alleged cessation of planning and actual work on the Deas island tunnel across the main channel of the Fraser river.
James Sinclair: I wonder if the hon. member would permit this to stand until the Minister of Public Works returns to the house.


Tom Goode: Agreed.
Motion stands.


BANK OF CANADA MONETARY POLICIES
[Stage Direction]
Motion No. 5-Mr. Bell:
For a copy of all correspondence exchanged between the provincial government of New Brunswick and the federal government, in October and November, 1956, regarding the monetary policies of the Bank of Canada and their effect on the economy of the province of New Brunswick.
Louis Stephen St-Laurent: When I noticed in Votes and Proceedings the announcement of the hon. gentleman's intention to ask for these papers I communicated at once with the premier of New Brunswick. I have had an answer from him that he has no objection, so I do not need to make the usual reservation.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 6-Mr. Fraser (Peterborough):
For a copy of the broadcast "Portrait of Sir Wilfrid Laurier," given over CBC Wednesday evening, January 23,	1957, between 9.30 p.m. and
10 p.m.-	.

Harry Oliver White: That, in the opinion of this house, the government should consider the advisability of amending the Income Tax Act and regulations made under the act, so as to provide a final receipt for those income tax returns filed for the preceding calendar year for individuals whose income is $10,000 or less.
He said: Mr. Speaker, this problem was discussed a year ago but with respect to the resolution I had on the order paper at that time there was some question as to whether it would be ruled out of order by Your Honour, and so I took advantage of the bill introduced by the hon. member for Kamloops (Mr. Fulton) and made some remarks at that time concerning my opinion as to how the changes in the Income Tax Act might apply. Having revised the resolution appearing on the order paper in the meantime, I welcome this opportunity to present to hon. members some of the arguments which I feel are good and valid reasons for some changes and amendments to the Income Tax Act as they apply to those taxpayers whose incomes are not in the high or extra high brackets.

Income Tax Act
One of the first objects that I have heard has always been, "Well, you are drawing a distinction between those who are in receipt of an income of $10,000 and those who are below that figure". I hasten right here to point out that the government now draws a line between various categories or groups of taxpayers, and those in the higher income tax bracket pay a greater percentage of tax. Therefore, to provide for those taxpayers in the lower income group a final settlement 12 months after the 30th day of April in each tax year would not be so difficult. It would not be difficult also because of the fact that, as I understand it, where fraud is charged the income tax department can take almost any number of years and bring the taxpayer before the courts of the land. Therefore, I cannot see that it would be too difficult to administer.
I, therefore, make no apologies, Mr. Speaker, for bringing this matter to the attention of the house and taking up some of the time of the house to present my views, and I think they are the views of a large number of Canadian citizens.
If we believe in democracy-and I think we all do-we acknowledge it is government by the people and for the people not government by a ruling class. Consequently, I think if a poll were taken the vast nfajority of taxpayers would be in favour of some amendment to the act which would let them know when they were finished with one year's business. At this moment I should also like to mention that I doubt whether there are over 5 per cent of the income tax payers in the bracket which I have mentioned whose income could not be revised either way.
As I said on another occasion, if my income tax return or that of any other hon. member or individual taxpayer was submitted to ten different officials or assessors of the income tax branch those gentlemen would come up with ten different answers or maybe 20 if you went back a second time. Consequently I think the time is long past due when some method should be established by which a definite and correct conclusion could be reached. I do not think this would be difficult because it seems to me that any qualified efficiency firm or accounting firm could set up a system to administer the act more speedily and satisfactorily. While I am mentioning these things I might point out that there are many harassed taxpayers who have worried themselves into a premature grave over the problem of income tax. As I said last year, I hold no brief for those persons who deliberately set out to defraud the income tax branch and consequently the Canadian people of what is their just payment

under the law. I also want to point out that in my opinion the vast majority of Canadians are law abiding citizens regardless of what the income tax people may think about this.
I plan to appeal to the reason of both the Minister of Finance and the Minister of National Revenue. I doubt if we depart from the British system of justice whereunder the accused is innocent until he is proven guilty in any other legal procedure, but people being prosecuted by the income tax branch are considered guilty until they have proved themselves innocent.
As I mentioned previously, I am not alone in bringing to the attention of the government the problems confronting individual taxpayers because many individuals and groups are expressing concern in this regard. I have on my files hundreds of letters from taxpayers in Ontario who have written to me protesting the present system under which they are never certain just where they stand with the income tax branch. In order to point out how widespread is this concern, there are many county councils which have passed resolutions along this line. I am going to refer to just a few of the counties near my constituency. These include Elgin, Huron and Perth, Lanark, Grey and Halton, Bruce, Lincoln, Oxford and Waterloo, Brant-Haldimand, Middlesex and Lambton. There are some others, but at the moment I do not have their resolutions on file. In addition to that many chambers of commerce have protested the present set-up as well as the federation of agriculture, the farmers' union and various women's institutes. I want to mention particularly two groups of women's institutes in Essex, the Malden Women's Institute and the Women's Institute of Essex County. They have both written to me backing up what I had to say a year ago and expressing the hope that some satisfactory solution can be found for the problem.
There have been many editorials and newspaper comments supporting the stand I took, and I should like to refer the government to a couple of clippings which I have and which I think are most pertinent to the problem. We all realize that the government has grown and now reaches into the private life of practically every individual in Canada. History has a habit of repeating itself. I have here a front page editorial which appeared in the Toronto Saturday Night of September 4, 1954. This was commenting upon what had gone on in Great Britain during and at the close of the war, with particular reference to ministerial responsibility to parliament. They were referring to an incident concerning the taking over of a 700-acre farm in Great Britain and what they

say has a bearing on the understanding which the provinces had when they relinquished their taxation rights at the beginning of the war. The resignation of a particular minister in Great Britain had been called for, and the editorial went on to say:
There was a time when such a resignation would have excited little comment: it would have been expected as the only possible course for a minister who had failed to keep his department in good order. But there was surprised and respectful applause for Sir Thomas Dugdale: he had actually admitted that a minister is responsible for the conduct of the civil servants under his direction. In other words, the principle of responsibility has been so generally ignored that any recognition of it by the members or minions of government comes as a distinct shock.
Canadians have had many opportunities in recent years to study the growing disinclination of both federal and provincial cabinet ministers to accept responsibility for the sins of their departments, and considering the complacency with which this ministerial attitude has been accepted, they are likely to see a good deal more of it. There will be no change until they understand that this sort of thing can only mean government not by elected representatives but by an uncontrolled civil service.
When ministers refuse to share the blame for waste, inefficiency and worse in their departments, they are admitting that the job of government has grown too big for them; they are claiming, in effect, that while they should still be trusted with the direction of the nation's business, they should not be expected to worry about the people they have hired for the day-to-day handling of that business. If we condone this attitude, we must be prepared to accept the inevitable result: the end of our control, as electors, over the way we are to be governed.
I commend to the government a second reading of that editorial in their leisure time because it does indicate the drift that is going on in this country toward a certain amount of bureaucracy. Another clipping along the same line rather intrigued me. It reads:
History Repeats Itself
Twenty centuries ago, and thereafter for four hundred years, the Romans ruled Britain without interfering in the private lives of the people. The Roman government attended to its own affairs and allowed the people to attend to theirs. Indeed, as Douglas Jerrold points out in his book "England: Past, Present and Future" it was from the Roman empire that the western world learned the art and purpose of government and the application of the rule or law to the preservation of the lives of free men living in ordered and mutually dependent societies.
However, as I have mentioned before, we see the various departments of government reaching out and trying to control the private lives of individuals from day to day, and it cannot in the end, in my estimation, lead to anything but disaster. For this reason I am asking the department to consider and review its attitude as it applies to the income tax payer in this country. The present attitude is, I believe, having a somewhat disastrous effect, but, no doubt because of the ever-increasing degree of inflation, that effect is
Income Tax Act
not as apparent as it might be in other circumstances. Nevertheless, it is certainly discouraging production and, in a sense, it is penalizing the very people who form the productive element in our nation. When you take in-as I am doing here-that group of people whose net income is less than $10,000 a year, you are covering the vast majority of the productive enterprises of this country.
Some people are saying "I am not going to work for the government any more; I am just going to make a living out of my land or business. I am not going to hire a lot of help in order to make a few dollars. If I should lose, it would be 'just too bad'; if I win, the government will only take it from me and wonder why I did not make any more". Consequently, every small businessman, every self-employed individual and every working man who engages in parttime work has begun to question the results of his efforts as far as his income tax commitment is concerned. They are wondering: "If we do some overtime or put in some extra work for ourselves, will all we have gained be confiscated?" The net result of this situation is that we are in a sense, rewarding the non-productive and punishing those who are productive in our economy.
That is not the whole story either, Mr. Speaker. There is the fear in the minds of many people that sooner or later they will be "hauled on the carpet" and have their business transactions for years past-possibly over the past 15 or 20 years-made subject to review. We in the western world, have been told about the terror in totalitarian countries where the gestapo comes knocking on the door in the night. That is held up as one of the things to be feared in a totalitarian world. Well, the income tax department does not even wait until night before they knock on the door-they come in at any time, represented, in many cases, by a little man with a lot of authority. Yes, I am "sticking my neck out" a long way, as I mentioned earlier. The department seizes your books and seizes your assets, and you are presumably guilty until you are proven innocent. I know whereof I speak. I do not plan, Mr. Speaker, to bring to your attention four individual cases with which I am very familiar, but I will mention two of these cases involving estates. The people concerned were told that they owed the department a sizeable sum of money, and the heirs and the legal firms representing them were afraid to fight the case. Accordingly, they paid. It almost reached a point where it amounted to blackmail rather than the administration of the law.

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In a couple of other cases in which the people appealed, when they said they were going to take the matter to the income tax appeal board, some time later one of the officials appeared and said, "We have reviewed this whole case; there are some mistakes; we are sorry but there is an error; forget all about it." If those people had paid the amount demanded, it would have been an admission that they were wrong. I am willing to bet that there are many cases in which the people, rather than fight, pay the amount demanded but do not owe the department at all.
Many of these taxpayers-good, law-abiding citizens-are finding that the department are autocratic and overbearing in their approach to the taxpayer. In fact, a good friend of mine retired years ago and went to Devon, England. In England during the war all kinds of restrictions were placed on individuals, as was done here, as we know, through the wartime prices and trade board. I well remember a letter he wrote to me and in which he said, "The government of Britain are making a crook out of every honest Englishman." I venture to say that the income tax department here, through their methods, are making crooks out of many otherwise honest people. I do not know whether I should use the word "warn", but at any rate I think I should tell the department that there is a rising tide of resentment against the department and the methods that are used in collecting what they allege are amounts owing.
I mentioned the small businessman. I want to point out that agriculture is not the only industry affected. Practically all small business across the country is affected. Those large corporations and companies doing a big business have their accounting systems set up; they have men who watch every angle of taxation so as to save as much as they possibly can in every financial move they make. But the smaller income tax payer is not able to hire that expert advice and opinion and consequently he must take his chances. Labour are watching closely so that in the overtime work they do, and by means of which they may contribute to the economy of the country, they are not penalized. They watch their overtime and pay close attention to it. In many cases lawyers advise their clients to settle rather than to fight the department because they figure that if they go to court and fight the matter or antagonize the department, the department will just clamp down on the law firm as well. Consequently they hesitate to take on these accounts.

I know of one particular case in which a certain individual was taking care of accounts for several clients. As soon as that individual died the accounts of every client of his immediately came under surveillance, and they had not anyone to fight their battle. They had expected that this particular individual knew all about their business and could fight the case for them. As soon as he had passed on, there was no one left to fight the battle. Consequently many of them were taken for either large or small sums. I think this is a terrible state of affairs.
Then there are many people who go to the income tax department for advice. But according to what has happened in the courts and in the appeal boards, that is not the place to go for advice.
I hold in my hand a couple of clippings from newspapers, and the heading on one item is, "You take Official Tax Advice at Own Peril". This clipping is from the Ottawa Journal of February 21, 1955 and says that the oral or written statements and opinions of assessors and others when dealing with taxpayers from time to time, however sincerely expressed, can hardly be said to fulfil these requirements of section 14 of the Income Tax Act.
Then I should like to cite what happened to one taxpayer, as illustrated by an article in the London Free Press of March 12, 1956. Evidently this taxpayer in company with his auditor consulted the local officials, his only contact with the department, and they agreed that the cash basis method of computing his income for tax purposes was acceptable to them. However, some years later he was assessed for a considerable sum. He appealed to the income tax appeal board, which board ruled that the taxpayer was overly optimistic in his assumption that the cash method of computing income had been accepted. The joker is the word "accepted" in the act. According to the board the term "accepted" indicates the unqualified acceptance in appropriate form on behalf of the crown which leaves no scope for doubt. The oral or written statements or opinions of assessors or others, however sincerely expressed, cannot be considered as fulfilling this requirement. Consequently, therefore, you must take their advice with a grain of salt because later the department will repudiate it. I feel this is a regrettable state of affairs because these small taxpayers about whom I am talking should be able to obtain correct advice from the department. However, experience has proven that advice is not dependable.
A little earlier I mentioned the chamber of commerce brief. The chamber of commerce recommended that the right to assess

be limited to a one-year period dating from the assessment. There is a joker in that, too, Mr. Speaker, and I claim that is not good enough. Some assessments are delayed for years and the taxpayer does not know his position. It provides a loophole and an alibi for the department. The Department of National Revenue demands that the individual taxpayer's returns be in four months after the close of the calendar year. However, when it comes to the department processing these returns, that can go on for years and years without arriving at any finality.
Just last evening on the train coming to Ottawa I met some of the members of the legislative and without asking them for their opinions on the subject they expressed concern about the lack of finality and suggested that something should and could be done about it. While I am mentioning that I might say that I think there is a desire on the part of the taxpayer to have a clear definition of capital gains. There is no such clear definition today. I would say that if the government is as efficient as they would lead the public to believe there is no reason in the world why these returns could not be processed within 12 months from April 30.
There is another alarming angle. I suppose there are two sides to every story, but I have had several taxpayers come to me and say that the assessors who appeared at their places demanded cash and would not take a cheque. I suppose there is a possibility of someone giving a cheque that would bounce, and consequently they did not want to be caught that way. On the other hand, I am just wondering why they demanded cash. In my opinion that angle should be investigated because the demand does not ring true.


William Moore Benidickson: Would my hon. friend give particulars on that?


Harry Oliver White: No, sir, I am not going to divulge the names of the people who came to me. They are in sufficient trouble now. Last year, Mr. Speaker, there were quite a number of Liberal members who had resolutions on the order paper or mentioned in their speeches the problems I am bringing to the attention of the house today. I would hope these members would be influential in furthering the cause about which I am speaking this afternoon. I noticed that there was one member on the government side who had the courage of his convictions and made a speech accordingly.
There are those who will say this cannot be done. I would think such an answer by the government or the officials concerned would be an admission of inefficiency
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or an admission that the department does not want to settle individual accounts within any stated time. It would be an admission also that the officials of the department like the power with which they are vested and are loath to relinquish it.
Recently I had two cases brought to my attention. One man had been making returns for many years when he was approached and told that his account was incorrect. He was asked for quite a sum of money and said he did not have that kind of money, but he would allot a certain percentage of his monthly pay cheque to meet their account. This was agreed upon. The account was reduced from thousands to hundreds. Then his wife was taken sick and she was in and out of hospital for many months. When the due date for the next income tax payment rolled around the man informed the department he could not pay it because he did not have the cash. He was informed that his wages would be garnisheed. He pointed out to the department that the refundable portion of the amount deducted from his wages for income tax purposes would more than cover what he owed the department, but they would not agree to that. They garnisheed his wages. As hon. members know, in the case of some companies this means that you are let out of your job.


William Moore Benidickson: Will my hon. friend give me the particulars of that?


Harry Oliver White: Yes, sir. I had a letter from an individual who said that apparently her only crime was saving money for her old age. When the income tax department found cash in the bank they were immediately suspicious and investigated every possible angle. Her conclusion was that all the government wanted to do was to worry her to death before she was 70 and able to collect the old age pension.
A year ago I mentioned the efficiency of Eaton's and Simpson's in keeping track of their customers' accounts.
The Minister of Finance rather questioned what I had to say. I therefore took the trouble to find out how many accounts Eaton's and Simpson's processed in their mail order departments in a day and how many employees they had. As I understand it, the Eaton company employs about 5,000 people in its mail order department. This has nothing to do with the retail sales. They service about 50,000 orders a day and the average time taken to process an order is 20 minutes. The income tax department employ over 6,000 people. There are approximately 9 million people of tax-paying age in the country. They are not all taxpayers. I did not have time to review the

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income tax statistics to find out exactly the number, but there are in Canada about 1,500 persons for each employee in the income tax department, to say nothing of those who are not eligible for taxation. Therefore, it would seem to me that there could be a great deal more efficiency employed by the department than is employed at the present time.
While what I have to say now has nothing to do with the settling of accounts yearly, I do want to point out that those persons who are contributing to approved pension plans are able to deduct from their income tax the amount paid for such a plan, but those who are individually or self-employed help to pay for it because industry or concern passes on those costs. They become part of the cost of doing business. Consequently, those people who are individually or self employed are not able to deduct any payments they might make to a pension plan of their own. They are, in a sense, contributing to the pension plans of others in the costs of things they have to buy. That is something the department should look into. All self-employed people are under that kind of double-edged sword arrangement. On the one hand they are paying for others and on the other they are not able to deduct the costs of their own plans.
There is another comment I wish to make. We saw this during the early part of the last session. Planes and many other pieces of war goods were declared surplus and obsolete. They were bought as junk at a fraction of their original cost. Then, after being purchased as junk, they were sold to belligerent countries in the Middle East. My contention is that if some of the money obtained was used for hospitalization plans, increases in pensions and things like that for our own Canadian people it would be putting money to much better use.
I also wish to point out that it would take a Philadelphia lawyer to understand the Income Tax Act. The department expects individuals who are busy trying to run their own business to understand all the ramifications of the act.
In conclusion I wish to point out, Shakespeare said that life is a stage and every person plays a part. I think everyone knows the part the income tax department is playing, with eminent success.


William Moore Benidickson: Mr. Speaker, this subject is not new to the house. As a matter of fact, last session we had a very worth-while debate on a subject very close to the resolution we are discussing now because of the introduction of an amendment

to a statute by the hon. member for Kamloops. At that time the hon. member for Middlesex East, who is now proposing this resolution, spoke and he said, as reported at page 3237 of Hansard:
The income tax is probably the fairest method of collecting taxes because those who are most able to pay are the ones from whom taxes are taken. But the way in which it is done at the present time is extremely unsatisfactory.
I take it that in essence this is still the reason for his bringing forward this resolution today. On the other hand, I want to remind him and the house that last year when this matter was under discussion it was indicated that while the government at that time had under its income tax provisions an opportunity to reassess, beyond conditions of fraud and misrepresentation, a taxpayer's return within a period of six years, consideration would be given to reducing that opportunity in regard to time. In August of last year, when the Income Tax Act was amended by this house, it was proposed as a government measure that this period of time within which re-assessment could take place under normal conditions be reduced from six years to four years. It is true that the public bill, as introduced by the hon. member for Kamloops, proposed three years, but I suggest to the house it is reasonable to think that this fairly important reduction passed last year, from six years to four years, is worthy of a try-out without the most radical suggestion made by the hon. member for Middlesex East.
Some complications would result if we were to accept at its face value the proposition of the hon. member for Middlesex East. While there is some vagueness in the wording, he suggests that we can within a year of filing arrive at a conclusion with respect to the tax obligation of all individuals filing tax claims.
Our laws also provide a certain number of privileges to the taxpayers. It is not clear in the hon. member's resolution that he would similarly want to restrict the taxpayer in so far as his rights are concerned in asking for re-assessment in the case of a deduction at source. Under the present law the taxpayer is given the privilege of two years within which to ask the taxation department to refund to him certain moneys that he considers due by reason of certain deductions that are provided under law. That is not clear and if we were to accept the hon. member's resolution as proposed this afternoon I suggest it would take away from the taxpayer whose income is taxed at the source privileges that he now has of two years' opportunity of applying to

the income tax department for a re-assessment and a reconsideration of his tax payments and his application for a refund for lawful deductions.
In the legislation proposed by the hon. member for Kamloops last year there was at least recognition of the fact that there should not be restrictions for the department in so far as taxpayers are concerned in cases of fraud and misrepresentation. In the resolution that has been presented to us this afternoon I find no reservation with respect to that matter and I think it will commend itself to the house as unworthy of acceptance on that score alone, because surely the present opportunities of the income tax department should be furthered and continued in terms of being able to reassess in the case of taxpayers regarding whom there is very definite evidence of fraud and misrepresentation in the matter of their filing.


Wallace Bickford (Wally) Nesbitt: The hon. member covered
that.


William Moore Benidickson: It is not in the resolution. If we were to accept the resolution I know my hon. friend who just rose would be among the first to say we passed a resolution which was not accepted holus-bolus as a government.
Another thing which I think should be taken into consideration by hon. members is the general element of justice and fairness in tax matters as it relates to all taxpayers across the country. I find that in the most recent publication of the Department of National Revenue entitled "Taxation Statistics for 1956" and which is based on tax returns for the year 1954 the following information is available to all of us. It is reported there that the total number of taxable income returns for the year 1954 was 3,410,160. The number of non-taxable returns was 1,393,250. This means that a grand total of 4,803,410 tax returns were considered by the officials of the Department of National Revenue in 1954. I submit to the common sense of hon. members that they would not want to employ in the Department of National Revenue on a peak work period basis and then a lay-off basis the number of employees who would be required from April 30 to the end of the calendar year to process that number of returns.
I know the proposer of this proposition is sincere in his suggestion and I also know that generally speaking he speaks for an agricultural community. I want to point out to him that the taxation statistics for the year 1954 to which I have referred show that out of a total of 4,800,000 returns only 43,000 farmers and fishermen submitted returns that were subsequently found to be
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taxable. In addition there were 171,000 farmers and fishermen who submitted returns that were non-taxable.
There are many hon. members of this house who represent ridings which are basically composed of wage earners who have income from only one source and that is from an employer. Respecting the employees' class, a total of 3,032,300 employees filed returns on income that was taxable and a total of 994,660 employees filed returns on income that was not taxable. If we are to regard the element of fairness, I do not think the mass of people whose basic income is taxed at the source for income tax purposes as a result of their being employees would be satisfied if they felt that this government or any other government was restricted, as is suggested by the resolution before us, in its opportunity to examine carefully the returns of other taxpayers who have a more complicated situation, such as business proprietors, farmers and fishermen and professionals, in order to assure that everybody is paying the just and proper rates that are passed by this parliament.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, as the parliamentary assistant to the Minister of Finance has so aptly put it, it is not so much the collection of taxes or the rates charged that is objected to, but rather it is the method of collecting taxes that is objected to, and that is what is behind the resolution of the hon. member for Middlesex East.
I suppose, Mr. Speaker, tax collectors and tax collecting methods have been unpopular throughout history. As many hon. members probably know, in the old and difficult days of the Romans the job of tax collector was hired out at a certain price. In other words, if the government of the day wanted a certain amount of taxes collected from a given area and they expected, let us say, the equivalent of $100,000 to come from a specific part of the country, someone would contract to take the job and if they succeeded in collecting more than $100,000 in taxes they filled their own pockets with the surplus. We all know, of course, that such a thing would not be allowable today; however, in effect it may not be as unallowable as it might appear because while the tax collectors of today receive a salary I think some of them have the attitude which says, "Get all you can". I know of one particular instance which comes to mind and there are other instances which I could cite. Just recently in my own town a man who operates a small business was visited by the collectors who said, "Well, we got so much out of so and so and now we are

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going to see how much we can get out of you". If that is the attitude of the tax collectors it is little wonder that the general public is complaining about the methods used by the officials of the Department of National Revenue because the state of mind represented by the "get all you can" attitude is not a desirable one.
There are people in other positions who have the same type of attitude. For instance, it is often believed that some policemen like to get as many convictions as possible because they think they might earn a promotion on this account. I cannot help but feel that a great many junior officials of the Department of National Revenue have the feeling that the more they can get out of the people the greater will be their chances of promotion. I know full well that when this department was before the special committee on estimates last year the minister denied that this was the case. I am not suggesting that the minister was trying to mislead anyone, as I think he sincerely believes what he said. I do not suppose for a minute that the department condones such a state of affairs, but I am quite sure in my own mind that many of the junior officials feel that if they do a good job and bring in a lot more revenue they are going to get promoted. I cannot help feeling that that is so as it is only human nature to feel that if you are making a success of your job you are going to get a promotion.
Another thing that was brought' out last year when the affairs of the Department of National Revenue were being considered by the special committee was the length of time books of a company or an individual would be retained by the departmental officials when they were on a fishing expedition. Several times I have mentioned in the house the case of a private company where the books were taken by the departmental officials for examination. The officials arrived at the home of the owner at six o'clock in the morning. The owner was in Europe with his wife, but his son was there. The officials ransacked the house for the books, and I suppose in doing so they were within the law as they had a warrant. These books were kept for over a year, I believe for 15 months, at great inconvenience to the company. For instance, they did not know what money was owing to them because their accounts receivable book was away. They did not know what money they owed because their accounts payable ledger was away.
I see no reason why the department should keep books for that length of time. There is no reason why they could not have books of this kind photostatted and use the photostats

in making their investigation. On previous occasion reference has been made to how good the Department of National Revenue is at photostatting. There is no reason why they could not use methods of that kind in this type of case so that the books might be returned and permit businesses of this type to carry on.
The hon. member who has just resumed his seat has said that he feels one year might be too short a time, that we should try out the four-year period, as was agreed to last year. There may be something in what he says, but I cannot help but feel that if the period was reduced to one year it would work out very well. I know the department will say that this would place a terrific strain on the department, that it would be an incredible thing to do, but I think most hon. members have seen examples in other fields where people have had to do something and have gone out and done it. Many of us can remember when during the war the length of military training was reduced. The usual length of training was from six months to a year but during the war we had to have people in a hurry. In my own experience in the navy the length of training was from three to four months. The results may not have been perfect but I know the people in that branch of the service did a pretty good job even though they had to get their training in a hurry. The same sort of argument could be applied to the Department of National Revenue. When people know they have only a certain length of time to do things they will get them done.
There is another item I should like to mention, the drawing up of income tax returns. As everyone knows, this is an exceedingly complicated matter. I think the hon. member for Kenora-Rainy River (Mr. Benidickson) agreed that this is so. In fact it is so much so that sometimes people go to lawyers to have this done. I do not think many lawyers know much about this sort of thing. I know I do not and I have an accountant draw up mine for me. A great many other people do the same thing.
However, many people, such as farmers, do not know just whom to go to in order to have their income tax returns drawn up. They should go to a chartered or public accountant, but very often they do not. As I say, many lawyers do not know too much about it but they still go ahead and draw up these forms, but they are responsible for any mistakes they may make on behalf of their clients. On the other hand, many people will go to a township clerk to have their income tax returns drawn up. They do this in perfectly good

faith but, as hon. members know, this presents a very complicated problem in completing the returns, allowing for depreciation and so on.
Someone may go to a township clerk and the township clerk makes a mistake. Then several years later the farmer may find that he owes a lot of money plus interest. He may not be penalized because there was no intent to defraud, but he does have to pay interest. Yet he had his income tax return made out in completely good faith by someone who held himself out as knowing what he was doing. The township clerk holds himself out as an agent who knows and the farmer is penalized. It seems to me that if someone holds himself out as an agent to know, as we call it in law, and draws up income tax returns, he should be liable in damages for any mistakes he may make. If a lawyer makes a mistake he is liable for the consequences. I think that should apply to these other people.
The hon. member for Middlesex East (Mr. White) who proposed this resolution said that there are many practical reasons why the burden of proof should be shifted. The individual must now prove that he is not guilty. I cannot help but feel that this constitutes a dangerous precedent. It may be all very well for government officials to go on fishing expeditions to see what they can find out, for a year as proposed in the resolution, but it is a dangerous precedent. This is contrary to all the principles of British justice which apply throughout the Englishspeaking world, and it is a very dangerous thing. Once it gets into one department of government the next thing we know it will be the case with all departments.
As has been mentioned by the hon. member for Middlesex East, quite often a person will be assessed a certain amount of tax but rather than appeal it to the income tax appeal board, which might entail employing a lawyer, he may decide to pay even though he feels he is not liable. Lawyers may not charge as much as members of some other professions, but they do charge fairly well. You may require a specialist in income tax law which is going to cost more. Even though a man wins his appeal where the sum involved is fairly small he may not be any further ahead.
Quite often a man decides to pay the amount he is assessed for because he feels that even if he won his case it would not be worth it. There might be $500 involved, and even though he wins he might have to pay half that amount to his lawyer. This is the rather unfortunate state of affairs that exists.
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I appreciate that that is not strictly the fault of the government, but that is what results from this type of law.
There is one last thing I would like to mention. After a reassessment is made a man may find that he owes $4,000 or $5,000. If he is a small businessman or a farmer and has to get that amount of money right away he may find himself in difficulty. I know that at times the Department of National Revenue will allow a little time for payment, but they do not have to. If a small businessman or farmer has to raise $4,000 or $5,000 or $6,000 in a hurry it may well mean the ruination of his business or his farm. We all know that when you have to sell something in a hurry you cannot realize its full value. If a farmer has to sell part of his farm or if a businessman has to sell some of his stock-in-trade in a hurry he may find that he must sell at a considerable discount and thus suffer a heavy loss in relation to what he has to pay. I would like to point out that though the words "fraud and misrepresentation" were not contained in the resolution, the hon. member for Middlesex East (Mr. White) dealt with that aspect, and said that this was in no way intended as a means of covering up people who had been dishonest and who had tried to cheat the government of its just due.
The last point I would try to make is this: when it is found that people have not paid what they should have paid, then, though perfectly innocent of any intention to deceive, they are not only penalized by having to pay the amount claimed plus interest, but they often have to suffer a considerable loss in being forced to sell part of a farm or business in order to raise funds in a hurry. I think that if he does nothing else, the Minister of Finance might consider some amendment to the act under which a time limit would be allowed so that people would not have to ruin themselves in an effort to raise money regardless of the circumstances.


Frederick Davis Shaw: When I first read this resolution, Mr. Speaker, I wrote across it: "Supported with reservations." One of the reservations I had in mind has already been mentioned here, namely the possibility of fraud and misrepresentation.
The hon. member who sponsored this resolution (Mr. White, Middlesex East) has stressed that he is in no way endeavouring to protect those who are guilty of fraud or misrepresentation. I certainly would not suggest, either, that protection should be given to such persons, but the sponsor did make his position perfectly clear on this point. The parliamentary assistant (Mr. Benidickson) urged opposition to the resolution on the

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ground that this proviso was not contained in it. I cannot help but think-


William Moore Benidickson: They could not be found out within such a short period of time.


Frederick Davis Shaw: I cannot help but feel that more than once in cases where this house has had government resolutions, even government bills, before it for consideration, all has not been stated; in fact, very few government resolutions give a clear picture of the full import of what is intended. Indeed, it often happens that this house, having passed a bill in the belief that it knew what it was doing, finds later that regulations have been attached to that bill to give it an effect which was never intended by the house itself when it passed the measure.
The parliamentary assistant referred to the fact that the taxpayer is given two years in which to claim reassessment and refund. It does occur to me that there might be a strong argument there for saying that the government, or the Department of National Revenue, should also be limited to two years with regard to its own actions; what is fair for the taxpayer on one hand should also be perfectly fair for the department. There is a difference between the two. The department has the wherewithal to hire experts to complete their job, while the individual is often an overworked, oppressed person who has all too little time and, possibly, all too little ability when it comes to keeping books.
I think it is inevitable that the national revenue department should be the most unpopular department of government. After all, they are in the business of collecting taxes, and none of us likes taxes. I think, myself, that the department becomes unpopular in relation to the weight with which taxation bears down on the public. During times like the present when most people believe that taxes are particularly oppressive there is bound to be considerably more criticism. I do feel, however, that the Department of National Revenue and the government can rid themselves of a good deal of the criticism which presently falls upon them by making a concerted effort to remove the anomalies and the inconsistencies which are found within the act itself.
I noticed in the press this morning that only within the last few days the Canadian Bar Association, I believe, and the accountants have made representations to the Department of Finance urging the removal from the act of certain obvious anomalies. I shall not refer to these anomalies in detail, though I could; they are there, and certainly consideration should be given to the correction of this difficulty.

It is also true, Mr. Speaker, that right across the country we find a great variation in the interpretation of the regulations; one finds a difference between the interpretation made by two district offices, in some instances, within a single province. I happen to have had evidence of a certain case which was handled by one of the district offices. It was discovered that the taxpayer in question was the responsibility of another district, and the accounts were accordingly transferred. However, in the second district a different interpretation was placed upon various sections of the act. I sometimes wonder, in this connection, how much of the time of the head office staff here in Ottawa is occupied in correcting errors made in district offices-errors of actual calculation and errors in interpretation. I doubt very much if we will get that information, but from what I hear via the "grapevine" a very substantial part of the time of head office is occupied in straightening out the difficulties which are constantly and chronically arising in the district offices.
That leads me to suggest this: I wonder if the department is doing enough to familiarize its employees in district offices with interpretations as accepted by head office. What effort is made to bring the staff together to consider and study interpretations? I think, myself, that no matter what is being done in this connection more should be undertaken. I agree with the hon. member for Oxford (Mr. Nesbitt) that it is probably these administrative difficulties that are causing the greatest amount of trouble.
Consider, for example, a farmer who has not either the time or, possibly, the ability- I am only thinking of certain cases; I am not condemning all farmers, or anyone else for that matter-to keep a clear record of his accounts. It does happen that in many cases people have neither the time nor the ability to organize an acceptable accounting system. In these cases the department imposes upon such people what it calls a "net worth statement". In some respects these things are perfectly vicious. I have known the affairs of certain individuals and I have examined net worth statements and, believe me, though you know they are wrong you just cannot prove they are wrong. It is one of the strangest things I have encountered while in public office.
Then there is the practice of placing the onus upon the taxpayer himself; in other words, the department will sometimes set down an almost fantastic figure and say: "We say this is right. If it is not, you prove it is wrong."
I will give the house a typical example- something that recently happened. A farmer

had among his papers a receipt for $1,200, money that he had spent to buy cattle. The department had it included as income and kept insisting that he account for this $1,200. It is almost unbelievable. I would not have believed it myself if I had not seen these papers and the receipt. This is the sort of thing that causes annoyance and aggravation. I sometimes think that when the Department of National Revenue recruits new personnel it does not give sufficient attention to-if I may use this word-training its men.
After all, there are right ways and there are wrong ways of dealing with the public. I should think that the Department of National Revenue would be more concerned than any other department in dealing with them in the right way. They can be firm. They can insist upon the provisions of the act being adhered to. But I am sometimes troubled by the attitudes of those who can-I think someone in a previous debate described them as little gods-and do create a certain animosity among taxpayers or prospective taxpayers. The situation is just not good. I sometimes think that these regulations we now have seem to be predicated upon a premise or assumption held by some that people are inherently dishonest. People are not inherently dishonest. I think it is an error on the part of the Department of National Revenue to create the impression that that is what they sometimes believe. Rather, I would say that it would be an admission that the administration is incompetent, and that in so many cases they try to cover up their incompetence by these unfair procedures and pressures which are imposed upon prospective taxpayers.
I want to say to the parliamentary assistant to the Minister of Finance that I think we have come a long way in the past few years in clarifying income tax returns. I think it has been a progressive step. The department are simplifying them to a considerable degree and on the income tax forms they are putting a good deal of information for the purpose of assisting the one who is filing or preparing the return to complete the return with less chance of error. I wish to commend the department for that improvement.
As does the hon. member for Oxford, I feel there is still room for considerable improvement in the field of administration. I will frankly state to you, Mr. Speaker, that I am not fully aware of all the implications in reducing this to a one-year period. However, I would say this. If two years is considered good for the taxpayer on the one hand, certainly it should be considered good enough for the Department of National Revenue on the other hand.
There is just one other thing I wish to say, Mr. Speaker, and it is in connection with 82715-45
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some of the things that annoy people. A perfectly honest person, we will say, files a return. He completes it to the very best of his ability. Some time later he is informed that he owes more money and of course he is frequently called upon to pay interest on what he owes the department. Yet the department itself can hold a taxpayer's money for quite a considerable period of time but he has no right to claim anything whatsoever by way of interest. It appears that the only safe thing for the average taxpayer to do is to overpay. Then, of course, he is caught again because, Mr. Speaker, in overpaying he runs into financial difficulties, is obliged to borrow and is up against possibly an even higher interest rate. I have said before and I say again that if the department expects me to pay interest on what I owe them, surely the least I can expect is for them to pay me some interest not on what they owe me but on the amount of money which they took from me over and above what the law of the land requires me to pay.


James MacKerras Macdonnell: Mr. Speaker, I want to make a few brief remarks on this matter. First of all, I want to refer to what was said by the parliamentary assistant to the Minister of Finance. He pointed out one or two technical omissions in the resolution, notably one referring to fraud, and I think that was answered. I think what we are all trying to do is to reach a reasonable solution of this matter. Incidentally, Mr. Speaker, I would hope that before this debate concluded we would have a somewhat detailed statement not merely from the finance department who look at the principles of taxation matters and decide them, but also from the revenue department who have the business of actually doing the work of collecting. It seems to me that this is rather a question of what is reasonable from a technical point of view rather than in any sense a matter of principle. We are none of us talking about matters of principle, except the principle of being fair. In order to know what is fair one must have a picture of the technique involved in the actual business of collecting.
In the discussion of a year ago, on June 12, 1956, the Minister of National Revenue gave us some figures indicating the way in which the work of the Department of National Revenue had been catching up with arrears of previous years. As reported at page 4959 of Hansard of 1956 he said this:
I am very happy to say that that backlog of work has been cleaned up and we are now on a current basis. The same amount of work, or considerably more work, is now being done with 6,000 to 7,000 employees that was formerly done by 11,000 or more.

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I come back to what I said a moment ago. What we are all trying to do is to find out what is reasonable or what can be reasonably expected of the department. It is for that reason that I wish we could have a more technical statement giving us a picture of the actual delays that are involved. I would hope that this resolution would not merely be voted down but that it would be taken by the government as a basis for further consideration and that there would be full explanation. If the actual proposal contained in this resolution cannot be fully accepted, then perhaps it can be partly accepted. The people who ought to be able to tell us about the matter are those who are in the day-to-day business of administering the taxes.
I do not think that I need to spend further time in speaking on the matter. I have not before me definite illustrations of the hardship which is being caused, although I think we need have no doubt that hardship is being caused.
I was particularly impressed by a remark made in the course of the debate a year ago-and I think it has been repeated again this afternoon-about the difficulty which is caused to people who find it almost impossible to keep their records in apple-pie order over the years and who, when faced with something that happened years ago, are in great embarrassment. I suppose it is also true to say that even though the amounts involved may not be large, nevertheless many people, notably farmers, have a much more difficult task in making up their income tax returns than do many of those who live in the city, particularly those who are on a salary basis or a semi-salary basis. Their problem is a piece of cake compared with the problem of the farmer. It therefore seems to me that every effort should be made to shorten the time and that the department should show itself to be co-operative in so doing.


William Moore Benidickson: This time was cut a third last year.


James MacKerras Macdonnell: Yes, it was. I notice that the parliamentary assistant said that it was reasonable that this system be tried out for a few years. But in answer to that proposal, I suggest it is just as reasonable or more reasonable to ask the department, who are experts in this matter, to consider carefully whether they cannot come up and say, "Yes, we can do it in less than four years. We have reviewed the situation and we are able , to say that we can do it in less than four years."
That leaves one point that I want to make. It may be that certain reservations must be

made. I think we have all agreed that fraud must be expected. In the case of fraud we realize that no arrangement can stand merely because it has existed over a certain number of years. Now, there may be some other qualifications. There may be a qualification which I am not able to put into apt words where new facts arise and where perhaps the matter should be opened up. I realize that is difficult to do, and I realize that may open the door very wide. Perhaps to some extent I am unintentionally torpedoing my friend's resolution when I say that, but my point is merely this. I think we might ask the department not to take an arbitrary position and say that a year ago we reduced it to four years, and we are not going to consider it any further for some years to come. My request of the department is that they take a fair look at the subject. A suggestion has been made that they should have two years just as an individual has two years.
If an argument in detail is made by the department showing that is not fair then the mover of the resolution and other people who have supported it, who are fair minded men, I am sure would be convinced. I do suggest it is fair that they should have a chance to be convinced, and when I say "a chance to be convinced", I mean there should be a reasoned and detailed argument made as to what really is the time required.


William Moore Benidickson: I am sure my hon. friend will agree, will he not, that this was examined by an estimates committee last year when the Minister of National Revenue (Mr. McCann) was before that committee.


James MacKerras Macdonnell: I do not disagree with that, but after all this government wants us to believe that year by year they are getting bigger, better and brighter. I am sure they would say they had learned a lot in the last year.


Jay Waldo Monteith: The hon. member for Greenwood (Mr. Macdonnell) has just said he had no definite illustration of unfairness. I should like to bring to the attention of the house, Mr. Speaker, a case decided by the income tax appeal board on October 29, 1956. The judgment was handed down by Mr. Fordham. The case concerned an elderly gentleman in western Ontario who had farmed all his life and who had always been fond of horses. Eventually, he acquired a horse which managed to win for several years. Later on the assessors made an examination of his books and ascertained, by the net worth method, that he had more money than they would have expected from a perusal of his income tax returns. As a consequence, they

assessed him and the assessment took place over a number of years from 1947 onward.
This gentleman filed a notice of appeal, and after the notice was filed the total assessment was reduced by some $7,093. In other words, the department admitted that the original assessment was not correct. I should like to quote from some of the facts cited in Mr. Fordam's judgment.
It may be observed at this point that in the returns for the years 1947 to 1951, inclusive, appellant mentioned having received in the United States of America "race horse purses only". No amounts were mentioned, but in the part of each return in which this acknowledgment was made there is no space provided for the showing of any amounts, in any event.
Then, later in the judgment there is this observation:
As already observed, the appellant obediently reported in the appropriate place in each of his income tax returns for the years 1947, 1948, 1949, 1950 and 1951 that he had received race-horse purses in the United States of America, but this disclosure has availed him nothing. He might well have been asked for particulars of these purses as and when the returns were received and examined. Likely, he would then have learned, before it was too late, that the incidence of income tax rendered desirable the keeping of a careful record of all prize money received across the border. I find it rather difficult to comprehend why no attention was paid to appellant's clear reference to moneys earned by him in the neighbouring country. It is easy to see how he may have been lulled into a feeling of security in the matter when no questions were put to him by local assessors.
It has been considered for some years that race horse winnings would be capital gains. This man had reported to the department the receipt of the money and the department had done nothing about it. Then eight years later they come to him and he is assessed a great amount of money. Let us not forget this assessment was arrived at by the net worth method, and Mr. Ford-ham had a word to say about that:
There is something unsatisfactory about arbitrary assessments as they are necessarily founded on estimate and conjecture to a large extent and these methods of approach leave ample room for error on the part of the computer.
Of course the computer in this case is the department. I am bringing this case to the attention of the house because although the taxpayer has reported the source of the income he was not asked to explain it nor was he told that the amount would be taxable. As Mr. Fordham points out, it certainly does not seem fair at this stage. I feel it is manifestly unfair to assess a man who is 69 years of age some eight years after he has reported income and upon which he has not been questioned in any manner whatever.
There are other instances of gross unfairness in the establishing of taxable income on the net worth basis. In my opinion, Mr. Speaker, we come down to the fact that 82715-45J
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the administration of the department does not dispense British justice. According to the department the taxpayer is guilty until proven innocent, but I believe that he should be innocent until proven guilty.


Frederick Samuel Zaplitny: I am assuming, Mr. Speaker, that the hon. member for Middlesex East (Mr. White) will be replying to some of the comments that have been made about this motion. My object in rising, chiefly, is to ask a number of questions for the purpose of clarification. Perhaps the hon. member would be kind enough to make a note of the questions because I would appreciate an explanation.
First, I want to say that if the principle of the resolution is to bring about, at some point, finality to the income tax cases of individuals then I feel that the principle is a good one. It is a cause of irritation and disturbing for people to have their income tax affairs gone over year after year without reaching a point at which they can say, I have fulfilled my obligations to the government; the case is closed. It would appear to me that the intention behind the motion is good and on that basis the motion has merit.
One thing that bothers me is, I was going to say the haziness of the motion, but I do not wish to be too hard on the mover. It appears to me there are a number of questions left unanswered. Just looking at the second last line of the motion, I find these words:
. . . a final receipt for those whose income tax returns filed for the preceding calendar year . . .
The question that arises in my mind is this. Is that a final receipt, as is stated in the motion, for the income tax return? .
If it means exactly what it says, then I am a little doubtful as to whether it really is the intention because I would imagine the hon. member means a final receipt for income tax obligations or assessments rather than the returns themselves.
Then, it goes on to say, "for the preceding calendar year". I am thinking of something of this nature. Suppose I, as an individual taxpayer, were slow in filing my income tax returns, as unfortunately many of us are at times, and suppose I filed for the calendar year 1956 in November 1957, which I do not suggest is a good example but it could happen, then, what is the purport of the resolution? Is it that I should receive a final receipt for the preceding calendar year? Surely, one would not expect to receive a final receipt for the preceding calendar year if he filed within a month or two of the next calendar year. That would be, of course, an impossible and unreasonable thing

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to expect. Then, if he did not receive it that year and it carried over into the next year then, of course, he would not be receiving a receipt for the preceding calendar year. This is one of the things I would like to have explained.
Then, the resolution states further, "for individuals whose income is $10,000 or less". I would like the hon. member to tell us what he means by "income of $10,000 or less". Does he mean gross income, net income or taxable income? If he means taxable income, then, of course, we understand his point, but again I would like him to explain, if he will be so good as to do so.


William Moore Benidickson: Ninety per cent would be subject to the resolution because they have incomes of less than $10,000 a year.


Frederick Samuel Zaplitny: That is a sad commentary on the so-called prosperity the Liberals talk about. I was wondering also why the limit was set at $10,000 or less? What particular reason was there for choosing $10,000?
Another question which arises is, what happens in connection with refunds? If we take the wording strictly and interpret the words "final receipt", the word "final" in all its implications would either prevent or interfere with the individual's claim for refunds for overpayments or overassessments. These are some of the questions I should like to have clarified. Again, I wish to say that if the intention or the principle of the motion is that as quickly as possible after the returns have been filed the case should be brought to a point of finality, then I feel the motion has merit, but as it stands now there are some grave doubts in my mind as to what is exactly meant by the motion itself and I hope the hon. member will be kind enough to give us an explanation.


Ralph Byron Horner: Mr. Speaker, there can be no question that, in accordance with the established principles of British justice, a sword should not be permitted to hang over the heads of our people. That is exactly the situation with regard to the very long period of time during which an assessment can be made against any citizen in Canada in regard to his income tax.
I have had some experience in police work over the years and I have some knowledge of the methods by which investigations are carried out. The criterion of success of any investigator in the income tax branch is usually the amount of money he can bring in or the assessments he can increase.
Another point I should like to bring out- and I am in a position to prove it, preferably privately-is that political influence plays

a very great part in the establishment of assessments in regard to income tax.


William Gilbert Weir: You are wrong there.


Ralph Byron Horner: I happen to know. Last year a question was asked of the Minister of National Revenue in connection with the number of investigations that were being made and the minister replied that he could not find investigators to do the work. I know one investigator who took the trouble to come all the way up to Ottawa to see me for the sole purpose of telling me that he had to leave as an investigator in the income tax branch because he no sooner got an assessment or a big amount of money lined up and was prepared to bring the assessment to court or to implement a charge in court than he would be instructed by Ottawa to forget the whole thing and leave the person alone. He decided that he had better quit before he got involved in some shady deal. He was forced to do it because of government orders coming from Ottawa, shady deals being carried out by the members of the government.


William Moore Benidickson: Will my hon. friend name that gentleman?


Ralph Byron Horner: I said I would do it preferably privately.


William Moore Benidickson: All right.


Ralph Byron Horner: Principles of justice
demand that the citizens of a free land be given greater consideration than they are given at the present time in regard to income tax assessments.
There is nothing in the resolution now before us to deprive a citizen of his right to appeal, or to prevent a citizen from taking advantage of the safeguards that exist in the law at the present time. The whole idea is to make our people free. After a certain period of time they can look back and say, "Well, we are clear of the income tax branch. They have had so many months in which to investigate us; they have not done so and therefore we are now free". It is indeed a pleasure to add my word of approval to the resolution.


William Gilbert Weir: Mr. Speaker, I have been in this house nearly as long as most hon. members have and perhaps there has been the odd occasion when people have come to me with income tax problems. Standing here in my place today I want to say that I deny emphatically the charge made by the hon. member for Restigouche-Madawaska. From my experience I wish to say that if he thinks that political influence is used in settling income

tax problems and things of that kind, then I deny it and say that he is completely wrong.


Ralph Byron Horner: I can prove I am right and I will.


William Gilbert Weir: He says that political influence is used. I deny that. From any experience that I have ever had, and in any discussions that I have ever had with anyone, I say that the income tax officials are honest, but maybe not always with the best discretion in carrying out their duties, but I deny the charge that political influence is exercised in respect of the settlement of income tax claims.


Ralph Byron Horner: You have no means of knowing.


William Moore Benidickson: The member speaking has been here longer than most members.


William Gilbert Weir: The object of this resolution is to reduce the time in which the final settlement of income tax claims may be made. As the parliamentary assistant pointed out in discussing this matter, steps to that end were taken a year ago when the period allowed for review of a return was reduced from six years to four years. I think all of us would like to see the period reduced even further but, having regard to the fact that that step was taken a year ago, one naturally would feel that there is some ground for saying that there should be a little further time to gain added experience under the new regulation.
I am perfectly aware of what is said about the payment of income tax. Nobody likes to pay income tax and certainly no one relishes having his income tax affairs too closely probed. I think we are all conscious of that. My approach to this resolution this afternoon is from a somewhat different angle, and if I am regarded as being critical in this connection, well, it is just too bad. I am bound to say that I think the public relations of the Department of National Revenue could be greatly improved.


Some hon. Members:: Hear, hear.


William Gilbert Weir: I think the department could well afford to launch a campaign indicating a greater willingness on their part-they claim they already do this but I think they could indicate a greater sense of willingness -to assist the taxpayer and make him conscious of an obligation to the state rather than what might be described as a sense of fear for those people who exercise a considerable measure of authority in the matter of income tax.


An hon. Member:: Make sure the minister hears this.
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William Gilbert Weir: Having said that, I would point out I am perfectly conscious of the fact that wage earners do not have much leeway inasmuch as their income tax is deducted at source and their position is different from that of the small businessman who sometimes is not able to hire the most qualified bookkeepers and accountants and therefore has to deal with a problem of considerable importance; but I am thinking more particularly of the farmer who is confronted with the problem of having to make out an income tax return that completely meets the requirements of the act and the regulations thereunder without perhaps there being any leeway to question certain items. Concerning the matter of keeping records and books, I think some progress has been made and even the problem of the farmer is being worked out in a more satisfactory manner than was the case a while ago, but nonetheless the farmer is in a peculiar situation which is admittedly difficult. I return to the matter of the desirability of having the income tax people demonstrate in some manner to the public that they are friends of the taxpayer rather than being viewed with fear or as something to be avoided.
The final comment I wish to make relates to cases where there is a suspicion of wrongdoing or fraud and steps are taken to carry out an investigation. Unfortunately I have heard of cases where the investigation has extended over a considerable period of time which I think any reasonable person would consider an unreasonable length of time. While there may be many outstanding difficulties and perplexing ramifications involved in some of these cases, I think a hardship is worked upon a businessman who has all the responsibility of running a business, paying his bills and collecting from customers when his books and records are taken from him and kept by the department for many months in some cases. I think this is too severe a penalty to impose on a man despite the fact that he may be suspected of fraud or misrepresentation. Although it may mean more expense for the department, I think there is much to be said for either having a photostatic copy made of the books and records or expediting the investigation so that the documents are returned within a shorter period of time in order that the businessman may conduct his business in the ordinary way.
I do not think I would have risen to speak on this occasion if it were not for what I consider the totally unfounded remarks made by the hon. member for Restigouche-Mada-waska (Mr. Van Horne) which I believe are completely false.

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Ralph Byron Horner: Mr. Speaker, I rise on a question of privilege. You would not thank me if I gave you the name of the person who exerted that influence and succeeded in getting his income tax reduced from $286,000


An hon. Member:: Get a soap box.


The Acting Speaker (Mr. Applewhaile):: Order. The hon. member is not rising on a question of privilege but is continuing a point of debate.


Pierre Gauthier: He doesn't know what a question of privilege is.


John Cameron Pallett: Mr. Speaker, I too was not going to speak in this particular debate except to make a few comments. I do not have the experience as a politician that the hon. member for Portage-Neepawa (Mr. Weir) has, but I have a certain training in law and one thing I learned in my training in the law is that if a man is accused of something one of the indications of his guilt is his immediate denial of the accusation.


Pierre Gauthier: You must be a very good lawyer, one of the best in Ontario. That is some philosophy.


John Cameron Pallett: Concerning the resolution
before the house the question arises as to whether we feel that certain work can be carried out by departmental officials. I recall when the estimates of the department with which the resolution before us deals were before the estimates committee last year the departmental officials were careful to point out that the backlog of work was caught up and they were now in a position to deal with the returns on a current basis. I suggest, Mr. Speaker, that the resolution submitted today merely accepts the representation of the department and puts their word to the test.
We all know that, when we pay our ordinary bills and receive a receipt from the person to whom the account is paid, the account is considered closed. It would seem to me that the law applying to individuals in this country should also apply to the government of the country. When we legislate for the individual we should say that the government are also bound by the same terms.
It was also pointed out in the estimates committee last year that the assessors of the Department of National Revenue bear no responsibility for advising a taxpayer if he has made a mistake in failing to claim certain exemptions. The officials of the department check the returns for mathematical errors to ascertain that the taxpayer has paid everything that is due to the department but they do not feel bound to advise him if he has failed to claim deductions to which he might

be fully entitled. Again this is a principle which does not apply to the ordinary individual. If through an error you overpay a person the law prescribes that you are entitled to receive back the amount you overpaid, but apparently that same law does not apply to the income tax department. If you overpay the department through an error they feel under no obligation to advise you as to the amount of overpayment and it is not remitted to you.
I completely support this resolution and I add my remarks to those of the hon. member who said that the parliamentary assistant's representations today do not speak very well for the other Liberal propaganda concerning the high standard of living which this country is enjoying. In the figures concerning the number of taxable returns submitted by the parliamentary assistant there was an admission of the very high percentage of people who do not make sufficient money to actually qualify as taxpayers. In other words they are not making the minimum amount of money which has been established as the basis below which you are not making enough to properly exist and should therefore not be called upon to pay income tax. The figures used by the parliamentary assistant in support of his department could be used equally well as a direct denial of the propaganda which the government has been spreading for the last few years concerning how well off everyone is in this country. The parliamentary assistant also admitted today that those earning $10,000 or less constitute 90 per cent of the Canadian people.
Ten per cent of the people of the country are making most of the money. According to the parliamentary assistant it would appear that the policy of the government is to permit the wealth of the country to be controlled by 10 per cent of the people. I see the Minister of Justice (Mr. Garson) is smiling.


Stuart Sinclair Garson: I would challenge the hon. member to support his statement of fact with any statistics that will bear examination.
Mr. Pallet!: One thing I have learned in this house is that statistics work both ways and no one is so adept at using them as the Minister of Justice. I suggest that the minister look after his own department; I suggest that he see to getting out certain reports that are needed and certain findings by commission that have been asked for by the people. The minister should confine himself to matters concerning his own department.


Stuart Sinclair Garson: Has my hon. friend any
support or foundation for this allegation of fact other than some figment of his own imagination?


John Cameron Pallett: It has always been my contention that good government depends upon imagination. If I have imagination I am very proud of it. Statistics are available from a department run by another minister, by a minister who runs practically every department. If the Minister of Justice wants these figures all he has to do is to ask the dominion bureau of statistics for them. They are available and will show that the policies of this government permit the wealth of this country to be controlled by a very limited segment of the population.


The Acting Speaker (Mr. Applewhaite):: I think if there is anyone at fault at the moment it is the occupant of the Speaker's chair. I have permitted the hon. member to complete the point he was making but I think the time has come when I should point out to the house that what we are discussing is whether or not there is to be a time limit on the issuance of official receipts under the Income Tax Act. This is a rather narrow subject which has resulted in incidental discussion of other matters under the Income Tax Act, which I believe it was the desire of the house should be discussed under this resolution. However, I am afraid that the discussion of broad policies concerning the proportion of the population who are or who are not paying income tax is a little beyond the scope of this resolution.
I heard the interjection by the parliamentary assistant that this $10,000 figure mentioned in the resolution would apply to some 90 per cent of the taxpayers. That statement was made, but I think we would be going beyond the purport of the resolution if we were to discuss why or why not 90 per cent of the people were paying taxes and 10 per cent were not, or vice versa. What we are discussing is whether or not there should be a time limit on the issuing of finalized receipts for individuals.


John Cameron Pallett: Mr. Speaker, I welcome your bringing the debate back to a proper basis, bearing in mind the interruption by the Minister of Justice. In conclusion, may I say that a resolution of this sort providing for the issuing of a receipt after one year deserves the earnest consideration of this house and of the government. According to the government's own admission last year before the estimates committee, the work of the department is current and I think this resolution should be supported by all hon. members.
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Gage Workman Montgomery: Mr. Speaker, I do not propose to take up very much time. I was beginning to feel that we were getting a long way from what was intended by the mover of the resolution. Sometimes when you get off the track it results in some of the statements that are made being given a wrong interpretation. I am prepared to support this resolution in the terms in which it appears on the order paper.
I think the hon. member for Portage-Neepawa (Mr. Weir) put his finger on a very important point when he referred to public relations. I doubt if any hon. members can go beyond their own constituencies in speaking of a matter of this kind; I know I cannot. My experience has been that most people are honest and do not mind paying a fair amount of taxes. The complaints that come to me mostly concern people who have made their returns and who feel that things have therefore been wound up. Actually there is no limit on the winding up of these tax matters.
An amendment was approved last year reducing the period from six to four years, but that does not mean very much. Rightly or wrongly it happens quite often that an assessor will come along to a farmer and the minute he announces himself-most of these people are honest-the farmer wonders why he has come to see him and he gets excited. We all know that bad propaganda spreads very fast, and while I admit that this does not happen in all cases there have been cases where people have thought a settlement had been reached but after two or three years the matter is opened up again. In my constituency the assessors have done a fairly reasonably good job, but these matters do create unsatisfactory feelings. It makes the people begin to think that they are all crooks.
Some income tax officials will bend over backwards in order to try to help straighten out matters when approached in the right way, but they cannot go beyond the law and the regulations. When a person disagrees with an assessment made by a tax assessor his only course is to appeal. I am told that in many cases relief is given, but there are many appeals on the agenda. In order to start an appeal a man must put up security and then he has to wait anywhere from one to two or three years before his case is heard because there is such a backlog of appeals to be heard. When the amount involved is only $500 or $1,000 a man may feel that he just cannot afford to appeal his case. He has to have accountants. And, Mr. Speaker, there are many little transactions among farmers

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which should never be taken into consideration; they do not amount to a hill of beans. However, once the department gets interested in a case it seems to pile up these little things to an extent that amazes the farmer. The farmer becomes excited; he "gets mad" and immediately suspects the department of "trying to do him." The quickest and easiest way of getting out of the problem is the course he will take, and I am satisfied that a good many people who have to pay $300, or $500 or maybe $1,000 would not have to pay at all if they could get their case to an appeal board within a reasonable time and at a reasonable expense.
That is the way I feel about it and for that reason I consider that this resolution will serve a very useful purpose if it enables the government to consider and reconsider some of these matters. I note that the effect of this resolution is limited to those whose incomes do not exceed $10,000, and I feel that this being the case the government would probably not lose much money anyway, even supposing there were to be some mistakes. The parliamentary assistant to the minister has led us to believe that this taxpaying group is the largest in the country, and if this is so I believe it is time more information was made available regarding it. The figure of $10,000 is, maybe, too high a figure to have specified; it would be interesting to have the views of the department upon a possible alternative figure. But I do think there is a class of people who should be given a final receipt at the end of two years-


William Moore Benidickson: Two years, did you say?


Gage Workman Montgomery: Yes, two years from the time the income was earned.


William Moore Benidickson: The filing might be in April, and that means just eight months.


Gage Workman Montgomery: You are presumed to file when the law says you must file. If you are late you have to pay a penalty.
The point I am making is this: There is no final receipt at this moment. At the end of three years there is no final receipt. The department can re-open a case at any time if they wish, and all they have to say is: "We believe you have kept back information; you have treated us fraudulently."


William Moore Benidickson: The crown must prove in court there is fraud.


Gage Workman Montgomery: Yes, but the department need not lay the charge as fraud and prove it; they need only allege it, and allege they can prove it. In their own minds they might be satisfied they could do so, but actually they do not prove it before they re-open a case.

These are matters which it is very proper to bring before the house and the government for consideration, because I believe there is a lot of misunderstanding about the whole question in the country.


Edward Blake Huffman: When I read this resolution over, Mr. Speaker, I was in very much the position of the hon. member for Dauphin (Mr. Zaplitny)-I felt I would like some clarification of what period really is meant. I note that the hon. member for Greenwood (Mr. Macdonnell) does not agree with the impression of the mover of this resolution; also, the hon. member who has just sat down (Mr. Montgomery) has indicated his interpretation of this as meaning "two years". From my own point of view I can understand that there may be some confusion as to the real essence of what is contained in this motion.
One other thing. I think this motion, if it were accepted, would create two classes of taxpayers in Canada. The motion as now worded affects those whose income amounts to $10,000 a year or less. In the 1954 taxation statistics it was shown there were 3,125,100 individual taxpayers; there were fewer than 60,000 taxpayers whose annual income exceeded $10,000. Now, if it were possible for the mover of this motion to accept the suggestion of his colleague from Greenwood that the time limit be extended to two years-[DOT] and certainly there has been evidence on the part of the government of willingness to close the gap, because only last year it was brought down from six years to four years-some progress might be made. As we note, there is not quite complete agreement at the present time between the mover of the resolution, on the one hand, and the hon. member for Greenwood on the other, and I think we might almost indicate that all individual taxpayers be included in this resolution, in which case we would not be making any distinction.
I have read this resolution over with a great deal of concern because the mover of this resolution is within the same tax office as I am myself. Two or three things were said here this afternoon which I think cast a reflection on all income tax offices. The words "reaching out to control private lives" were used; the words "fill their pockets" were also used. I hope that at no time I will ever be accused of trying to use catch phrases that will leave an aspersion upon those people who are engaged to do a type of job which is not, I am sure, the easiest work to do.
One other thing. The mover of this motion was reading a number of supporting resolutions from different counties, but I note that he did not mention the county from which I come. I do not know whether they did not

support this resolution of a year ago. However, I am of the opinion that something needs to be done, because only this weekend I had a taxpayer at my home whose case is being investigated back to 1942. It is almost impossible for this individual to get all the receipts that are necessary if he is to prove his case. The original assessment was for some $28,000 but after he was able to establish a certain number of receipts, a second assessment of $22,000 was made. Then, after a great deal of effort he secured more receipts, and the third assessment was for $10,000 plus about $3,600 in penalties. During all this time he had been employing an accountant, and I can readily understand why he engaged an accountant after hearing the hon. member for Oxford (Mr. Nesbitt) that lawyers were not very good on this type of case. But this has proved an expensive procedure for this taxpayer to have to follow, and the money he has to pay in defending his case is money that cannot be charged as an expense. While I agree, Mr. Speaker, that this may be departing from the subject a little, I think this is one question which should possibly be considered when the Minister of Finance (Mr. Harris) is reviewing the tax structure.
So, Mr. Speaker, I rise at this time to indicate my interest in this resolution as brought forward by the hon. member for Middlesex East.


Frank Exton Lennard: Mr. Speaker, there is just one point I would like to emphasize-the point made by the hon. member for Portage-Neepawa (Mr. Weir) when he said that the Income Tax Department could have much better public relations than it has, and that they should be considered as more friendly to the people whose affairs they have to investigate than they are. I had a personal experience. I may say that I have no personal axe to grind with the income tax department. This happened in 1947. One week end when I arrived home I found a form letter addressed to me and stating that I owed the income tax department a considerable sum of money for the previous year's taxes. Mr. Speaker, if I had had a weak heart at that time, I would not be here to tell you about the matter. I can tell you that I nearly fell through the floor. I did not know where I could dig up this money. I felt that there had been an error but I was not too sure. The accountant who looked after my affairs was away for the week end and I was forced to decide to let the matter go until the next week end. I may say that the department gave me only a few days in which to pay up, or else. However, when I arrived home next week end, I found a letter from the income tax department stating 82715-46
Income Tax Act
that they were sorry, that they had made a mistake, that they had found my cheque in their files and just to ignore their letter of such and such a date.
Mr. Speaker, I do not object to mistakes. We all make them. But this was merely a sort of slaphappy way of making an apology for a mistake that was made by them. Some person should really have come out to see me personally and to apologize for this mistake. I can tell you, Mr. Speaker, that if I had had a weak heart, as I said before, I would have dropped right there and that is just one instance. From some of the gestapo methods that are being employed today in some parts of the country, I know that is just what should happen. The public relations in connection with income tax should certainly be improved in no uncertain way.


Ernest George Hansell: Mr. Speaker, before the debate closes I want to make just one statement. The hon. member for Red Deer (Mr. Shaw) has already spoken on this matter and he stated the position of this group. We are going to vote for the resolution but we do so with some little reservation in that we feel that perhaps one year is not quite long enough to allow before the final and complete receipt is given. With that exception we are going to vote for the resolution. We believe that the resolution is a proper one in principle. There may be some of the details of administration that are not too practical but with that one exception we are going to vote for the resolution.


Mr. Deputy Speaker:: If the hon. member for Middlesex East speaks now he will conclude the debate.


Harry Oliver White: Mr. Speaker, I wish to thank all hon. members who have taken part in the debate for the contributions they have made. I also wish to thank the parliamentary assistant for his explanation of the problems with which the department are faced. I think the debate has been a fruitful one. The hon. member for Dauphin (Mr. Zaplitny) asked some questions and I shall attempt to answer them. The objective I had in mind was to bring about some finality at some date in order that the taxpayer will know that his obligation to the state has been paid and that he has a receipt to show it. In the resolution I am not asking that a receipt be given for income tax returns supplied to the department but rather, as I say, a receipt showing that whatever he may owe the state has been paid in full. The taxpayer wants an acknowledgment so that he knows that it has been paid in full.

Income Tax Act
There was some question as to the time and date. What I had in mind was this. For the year 1956 the returns are supposed to be in the hands of the department by this coming April 30. Twelve months from that 30th day of April something final should be arrived at. I appreciate what other members have had to say and what the parliamentary assistant had to say. In introducing the resolution what I had in mind was that we impress upon the government the need for some finality and the need to avoid going over a long period of years-six years or seven years, as the case may be-before the department has reviewed those returns.


William Moore Benidickson: The time was reduced last year from six years to four years.


Harry Oliver White: Oh, that is not quite the case exactly. While it may seem to the taxpayer that this reduction is going to answer all his questions, he has not any receipt as to any finality. Consequently, while it is welcome, it is not complete. Hence I say that 12 months from the 30th day of April I would hope that the department would have arrived at some conclusion and that the account could be settled. I greatly appreciate the suggestion of the hon. member for Kent, Ontario, (Mr. Huffman) that a two-year limit might be acceptable. As I said, my intention was to bring to the attention of the government the problems confronting individual taxpayers. Again, the hon. member for Kent, Ontario, suggested that this include all individual returns except corporations, companies and so on. As I mentioned previously, the government income tax department draw a line between those who are inside $3,000, $4,000 and $5,000. Consequently I felt that somewhere a line could be drawn. It does not matter where you draw the line, there are those who are just inside and those who are just outside.
Then the hon. member for Dauphin inquired as to the exact meaning. I mean taxable income and I think the vast majority of hon. members rather understood that was what I had in mind.
I appreciate what the hon. member for Portage-Neepawa (Mr. Weir) had to say.


William Moore Benidickson: May I ask the hon. member a question?


Harry Oliver White: Yes.


William Moore Benidickson: You are now saying that the $10,000 figure meant $10,000 of taxable income?


Harry Oliver White: Taxable income.


William Moore Benidickson: In other words, it would involve a lesser number of people than I indicated to the house when I said that 90 per cent of the taxpayers would be exempt from any further concern on their part from the investigating authorities after the end of the calendar year.


Harry Oliver White: That puts another light on the subject. The parliamentary assistant to the Minister of Finance indicated that would take in 90 per cent of the taxpayers. If we put it at taxable income of $10,000, he says it is going to take in a great many more.


William Moore Benidickson: Yes. You are overlooking the personal exemptions.


An hon. Member:: That is all right.


Harry Oliver White: I will let it go at that, then. Previously I did not have time in which to go into the taxation statistics for the year 1956 but I am going to take a moment or two now to do so. According to the report of 1956-that would be for the 1955 taxation year-I find that some 3,341,490 people in Canada had incomes under $10,000. I said also that the income tax department employed something over 6,000 people. I find that means there was one employee for every 500 taxpayers. It does not appear to me as though the problem would be insurmountable.
Coming back to what the hon. member for Portage-Neepawa had to say about public relations, I may say that we have municipal tax collectors and I have never heard of a case of animosity towards municipal tax collectors in which the affairs of the taxpayer had been handled in such a manner that any blame was attached to them. However, such is not the case in the income tax department. I think the hon. member made a very good suggestion. Probably the department will recognize it and take steps to correct the matter.
Mention was made by the parliamentary assistant that probably I represent a rural constituency. It is true that in years gone by Middlesex East was a rural constituency, but today approximately five out of six people are residents in the city of London. This is the bundle of letters I have received in the last year or year and a half and with the exception of about 10 they are all from business and professional people. Farmers are not inclined to write letters. They will come to see you, but they do not put their troubles in writing. Business and professional people are used to writing letters and consequently one receives more from them.
This motion may be defeated in the house, Mr. Speaker, but I feel certain from the nature

of the discussion on both sides that the presentation of it will have a good effect. I believe I have answered all the questions that were asked and I hope those who feel there is some merit in the motion will support it.


Louis Stephen St-Laurent: I was paired with the hon. the Leader of the Opposition (Mr. Diefenbaker). Had I voted, I would have voted against the motion.



EDUCATION


Robert Ross (Roy) Knight: That, in the opinion of this house, the government should take into consideration the advisability of taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
He said: Mr. Speaker, I bring forward this resolution, and the house no doubt knows that it is not for the first time. I regret very much that there may not be the time before the house rises tonight to give the matter a thorough discussion, but such time as there is we can profitably spend on it. I bring the resolution forward not for political reasons, not with any geographical bias, but simply because I believe the implementation of this resolution would be a good thing for the children of Canada.
When I refer to the children of Canada may I say, although it may be used against me at a later date-that is immaterial to me-that I am no more concerned with the interests of the children of my own province of Saskatchewan than I am with the interests of the children of Nova Scotia, Quebec, Manitoba or any other Canadian province. The resolution has as its object the establishment of some degree of equalization of educational opportunity for all Canadian children.
Such equality of opportunity is surely the birthright of every Canadian child. The present state of inequality of opportunity in education across Canada is due simply to the lack of adequate finances and the differences in the ability of the various provinces to assist education from their own resources; therefore the resolution suggests that the

Education
federal government should financially support the provinces in such educational efforts as they are now putting forth or which they might decide to inaugurate. The program of education, the subjects taught and the administration of the educational assistance must lie in the hands of the provinces themselves; with that I am in complete agreement. For that reason I have been careful to write into the resolution the following words:
.	.	. without encroaching in any way on the
exclusive jurisdiction of the provinces in this field.
In opposing this resolution in former times when it was discussed the question of such aid not being constitutional was the only argument the government was able or found expedient to produce. Usually early in the debate the government put up a cabinet minister, a sort of government hatchet man, who had the double function of using one end of the hatchet, perhaps the blade end, on the content of the resolution itself, while the handle served as a kind of pointer which enabled the backbenchers on the Liberal side to know in which direction they must go.
I think on one occasion the Minister of Justice (Mr. Garson) led the brigade, in spite of the fact that the premier of his own Liberal province of Manitoba has frequently asked for federal aid for education. On another occasion the Minister of Citizenship and Immigration (Mr. Pickersgill) led the Liberal troops into battle, in spite of the fact that at the very time which he launched his attack the educational expenditure per child in his own province of Newfoundland was $86 as compared with $292 in the province of the minister who sits beside him, British Columbia.
The aforesaid members of the government have faithfully followed the line set by the cabinet ministers, though to my personal knowledge they have followed with increasing reluctance as the years have gone by. One can understand what pressures must be placed on those members who oppose this resolution, particularly in some of the more needy provinces. 1 am thinking particularly of the maritimes, for I cannot understand how any member representing a constituency in one of the Atlantic provinces could be conscientiously opposed to this particular resolution. However, as I said in a speech the other day, I think we are making progress.
When I came to this house 12 years ago and raised this question of federal aid to education there was a polite, or perhaps not so polite, raising of eyebrows. "What?" they said. "Do we mention education in the federal parliament? This is solely a matter of provincial jurisdiction". But we in this house have

come to accept federal grants to various forms of education. We have accepted, and gratefully as far as I am concerned, federal grants for technical education, vocational education, grants to universities, and the very successful D.V.A. plan upon which I compliment the government. Can anyone say conscientiously that the acceptance of those particular grants has in any way involved federal control, or has in any way interfered with the jurisdiction of the provinces in the matter of education?
And what of the present? The people of the United States have a special day or week devoted to practically every subject you can name, and I suppose we tend to imitate them. I know there is such a thing as an education week, and I am going to suggest that in this House of Commons we have had "education week" during the past week at the end of which I speak. Not only do we have the grants I have mentioned, but we have had foreshadowed legislation which is to increase grants for technical education and vocational education, increased grants to universities, the setting up of a Canada Council which is to administer some of those grants and to promote increased expenditures in the arts and sciences, and to administer increased scholarships with emphasis upon the humanities.
What a change has taken place over the years I have been in this house. Those who have conscientiously and persistently advocated these changes might like to take unto themselves some credit for the fact that we have made some advances in this field, but I would suggest that although perhaps we have had some success in popularizing and publicizing the need for federal aid to education, it has been hard economic facts which have in large part produced the change. There is the dilemma in which the municipalities find themselves, the increasing difficulty they experience in carrying on adequate educational services. I think they feel almost unanimously that the basis for taxation for the purposes of education must be broadened in some way or other. No longer can it be put on the uncertain basis of real estate in the local field, as it has been in the past, with the assistance of the provinces which in many cases have not been able to give assistance in full measure. Speaking nationally, there is the growing national consciousness that other nations, some of them opposed to us ideologically, have been forging ahead in these matters while we have been indulging in the niceties of constitutional argument.
I have been encouraged by what I detect as a change in attitude in this house. I have

reason to congratulate the hon. member lor Gloucester (Mr. Robichaud). I cannot quote his speech because it was made in another debate, but since it was similar in subject to the present debate I think I can at least refer to it. He was even vociferous in his acceptance of increased grants for technical and vocational training. Those things having been settled, he then turned to the problem in the lower schools and said there was a gap left that must be filled. He did not suggest it had to be filled by federal funds-he has to remember his position-but having made the proper genuflection to the constitution he proceeded to say what this gap was, and it was the need for assistance to secondary and primary schools in his particular district.
What was the solution he offered? I might almost have put the words into his mouth. The solution he offered was that the provinces would have to be urged to give education a great share of the grants which they receive from the federal government.
After all, is that not largely what I have been advocating in this house for years? The hon. member felt, as did another Liberal hon. member, that this should be handled in a delicate way. I appreciate the need on his part for such delicate handling.
I also wish to offer my congratulations to another hon. member of this house who made a very useful and eloquent speech. I realize that he was talking about university grants, another field of education, but he supported the same general principles. He said that every Canadian, no matter what his background or province or racial origin, should benefit equally in the field of education and other fields. He said that was the aim of the government to which he pays allegiance in the making of such grants. He said also that the sooner we placed educational facilities within reach of a greater number of young Canadians, the better it would be for the whole country.
As I said, that might have been an echo of my own voice. In his eloquent speech this member, the hon. member for Dollard (Mr. Rouleau) said he was in warm support of the type of education we were discussing at that time. The hon. member did bring in the constitutional angle and said he would be loath to do anything that was against the constitution. I wish he would rise today and in that same eloquent way support the resolution I have moved. If he did so he would find himself in good company. In a speech such as I am about to make I cannot bring in too much documentation. I have files a foot thick containing everything that
Education
everybody has said with regard to this subject over the last dozen years. I have resolutions which have been passed by the Canadian school trustees' association, the Canadian teachers' federation, boards of trade, Legion branches, town councils and, as recently as the last two or three days, the Canadian Labour Congress. The Canadian and Catholic Confederation of Labour presented a brief to the government the other day in favour of university grants.
There are those who would argue that such grants are unconstitutional in terms of the British North America Act. Mr. Picard, the president of that organization, made no bones about his position on these grants. Last Friday evening he was interviewed as part of a news broadcast, and said that in his opinion anyone who was against these university grants would be against old age pensions and family allowances. I have made this same statement in regard to the matter I am talking about today. It would seem that perhaps my case is making some progress.
I have also asked, what about health? I do not think the word "health" is mentioned in the British North America Act; the Minister of Justice can correct me if I am wrong. However, we have grants in aid of health education. We have grants to assist the provinces in the building of hospitals. I do not think anyone has ever raised any question as to their constitutionality. There are other reasons, I suppose.
There is one organization which has made a special contribution to the cause of education, the Canadian school trustees' association. Naturally we would expect that that would be so. I believe it was in 1953 that this association formed a research committee to look into the whole subject of education financing in Canada. This is the book to which I had reference, and I would recommend its reading to any hon. member who is interested at all in this problem. It is entitled "School Finance in Canada" and was published in 1955. It is the report of the Canadian school trustees' association school finance research committee. The man responsible for the organization of this work was Dr. M. E. LaZerte, who is well known to educationists across this country.
When the Canadian school trustees' association had completed this book and had arrived at certain conclusions in regard to the whole matter they decided to interview the cabinet, particularly the Prime Minister (Mr. St. Laurent), in order to plead their case. Whatever his reasons may have been, whether political or constitutional, I think it was unfortunate that the Prime Minister should have refused to receive those gentlemen who came to see him on that particular

Education
occasion. Let us give the Prime Minister credit for being honest when he said that since he considered this matter was not within the purview of the federal government he had to refuse to see the representatives of this influential and widespread organization. I think in more than one way that action was a mistake. That is a serious charge for me to bring, so perhaps I had better document it. I have here an editorial which appeared in the Ottawa Citizen of May 24, 1956, reading as follows:
In a recently prepared brief, the Canadian school trustees' association thanked Canada's Prime Minister and cabinet for granting an interview. But the trustees were too optimistic. They had to add a postscript: "Unfortunately the Prime Minister refused to hear the delegation". On parliament hill, it seems, scant recognition is given to any national interest in the well-being of the provincial school systems.
Yet this brief presents powerful arguments for federal aid to education-arguments that cannot be ignored.
May I interject to say that I intend to let this editorial make my argument for me at the moment.
It points out that the kind and quality of education provided in the provinces are of direct concern to Canada's civil service and its armed forces, its economic development and its trade. It states that tens of thousands of teachers have very little academic or professional training, and declares that "without federal assistance it is impossible to staff the schools of all provinces with adequately trained teachers." For the next ten years, about $200 million annually will have to be spent on new schools and renovations. The trustees contend that revenues-federal revenues-from income and corporation taxes, sales taxes and customs duties, should pay part of the cost.
The trustees' brief quotes Dr. Garnet Page, general manager of the chemical institute of Canada-
-as warning that as a matter of survival Canada must train more mathematics and science teachers and produce more scientists and technicians. It quotes pleas for federal aid from the Canadian teachers' federation, the Canadian federation of mayors and municipalities, a royal commission on New Brunswick's schools and the premier of Manitoba, and it adds its own plea.
It is hardly possible to maintain that these representations are not of national concern. If parliament should decide that it ought to give greater aid to education-on the basis, incidentally, of ample precedents like existing vocational training assistance and research scholarships-it could surely find means that would involve no interference with provincial control of the schools.
I shall proceed in my own words from here. I did mention this book "School Finance in Canada" put out by the Canadian school trustees' association, and I would like to have the permission of the house to put on the record in the form of four columns a sample of the type of research that has been done there. What I have brought down here are four tables, showing respectively the cost of primary and secondary education per pupil in each province; persons teaching without professional training; the percentage of enrolled grade 7 students reaching grade 11, and the percentage of population aged 15 to 19 not attending any school. That is not the way in which this was drawn up originally, but I have chosen these columns as a sample of the work which was carried out.
If you, sir, could secure me the permission of the house to have these placed on the record-


Mr. Speaker:: Has the hon. gentleman leave to have these tables printed in Hansard, and to dispense with his reading of them?


Some hon. Members:: Agreed.
He is not the first businessman who has Mr. Knight: Thank you, Mr. Speaker. The
given this warning.	(Table 53) Cost of primary and secondary education per pupil 1951-52	tables are (Table 21) Persons teaching without prof, training 1952-53	as follows: (Page 25) Per cent of enrolled grade VII students reaching	(Page 23) Per cent of population age 15 to 19 not attending any school (1951)	1951-52	Rural	UrbanNewfoundland	
$ 86.11	432	45.6	65	58Prince Edward Island	
88.70	85	34.1	61	56Nova Scotia	
120.25	519	37.5	57	53New Brunswick	
153.58	648	22.4	63	54Quebec	
139.48	1,643	(C) 9.4	78	65(P)41.8	Ontario	
190.82	334	42.3	60	55Manitoba	
167.65	263	42.0	60	52Saskatchewan	
196.44	693	39.2	52	45Alberta	
198.76	475	49.6	50	49British Columbia	
292.58	50	58.9	50	47Canada	
-	-	-	63	57
Table and page numbers above have reference to the report of the Canadian school trustees association school finance research committee, "School Finance in Canada", published, February, 1955.
fMr. Knight.]

If we are to have and retain good teachers we shall have to pay them. That goes without saying. I imagine that hon. members of this house take a good deal of care with regard to the qualifications of the doctors who deal with the bodies of their children, but they are not quite so alert to the necessity of qualification among those who cater to the children's minds. Let me say, too, that in this field, we get very much what we pay for; I think there is a close cost-quality relationship, if I may use that term, in education just as in other things. Oh, I know there are those faithful souls who for the love of the work and the love of the community work for nothing or next to nothing, but generally speaking this is not the case. I am talking particularly about male teachers, and I think it is important that there should be more male teachers. I do not want to discuss the psychological reasons behind that statement, but I think boys of a certain age probably need men teachers. But you cannot get men teachers who are prepared to deny themselves their own right to live in decency, to bring up a family and provide in turn for the education of their own children.
The supply of teachers is not keeping pace with the increase in child population. High school teachers are almost impossible to obtain. I know district after district which at the present time is using inferior teachers, men or women not qualified to teach high school at all, because no others are obtainable. The people who live near such schools are waking up at last. I think most people in Canada have begun to show an increased concern about this problem. They know that increasing thousands of children of both public and high school ages are crowding the school doors, and they know we have not the facilities to accommodate them. Let us face that fact. And this crowding will increase progressively over the years. We have a scientific deduction, if such a thing is possible, made in this very book as to what the school population will be in the future; there is an estimated increase, over 1952, of 70 per cent in primary schools and 75 per cent in secondary schools by the year 1965. No one can tell me that the facilities we have now will be adequate to provide the number of places necessary to accommodate and educate this growing stream of young people. They are asking us for bread; we cannot give them a stone.
I wonder if it would disturb the constitution too much if the federal government were to assume some of the capital cost of schools, where the need exists, in the same way they do with regard to hospitals. They do it for
Education
hospitals; why not for schools? I admit that health is perhaps more important than education because, after all, one has to be alive; but after that I think we could do with a little education.
In most of the provinces, of course, the answer I am going to get from my hon. friends is, "What about the provinces who have sole jurisdiction over education? What are they doing?" Well, they are doing their best. Sometimes their best is not sufficient, as many members of this house very well know. The provinces have increased their grants, and I am glad to see that my own province of Saskatchewan, also the province of Quebec, have increased their grants substantially. However, many of the provinces have reached the limit of the taxes they can raise on property. In my own province-and let me emphasize again that I am not pleading for my own province, or for my own province only, but for the children of Canada-school tax arrears jumped from $5 million at the end of 1953 to $10 million at the end of 1955. These are tax arrears. The municipalities and provinces have reached the end of their resources, and only the federal government is left to come to our aid. The public of Canada would, I am quite sure, support this plea I am making for the granting of federal money for education, so long as no interference with provincial responsibilities was implied.
The last sentence contains the key to the whole situation. When will my hon. friends realize that nobody in the world, as far as I know, has any designs to interfere in the control of education? What is taught, how it is taught, where it is taught or anything else of that kind lies within the jurisdiction of the province; all we want to do is support the hands of those people within the provinces who are trying to educate these children. That is all we want to do, and it is entirely a financial problem; administration and curricula are entirely provincial responsibilities and long may they so remain.
To strengthen my argument I could have quoted educationists on this occasion. I have quoted dozens of them on previous occasions, and no notice was taken; their words have been ignored. Thus, for today, I have chosen someone who, although a scholar, may, through the fact that he is a businessman and a successful one, appeal more to some of my hon. friends. I said, "to some". Speaking of teachers and professions, he says this:
We are failing to give a reward consistent with either equity of incentive and we are therefore endangering the future welfare of our whole economy.

Education
That is the end of the first quotation. The gentleman I refer to, and from whom I have quoted, is Mr. James Muir, chairman and president of the Royal Bank of Canada. He also said, and I quote from the Montreal Gazette of January 11:
Our duty as citizens is not to direct educational policy, but to ensure that our educational system is provided with the financial tools to do the job which, in the next ten years or so, it will be called upon to do.
May the government rise to that challenge. With those words, sir, I think I shall conclude.


Maurice Breton: Mr. Speaker, I believe it is my duty to oppose this resolution by the hon. member for Saskatoon (Mr. Knight) for the following reasons. The present government proposes to create a fund of $100 million to help universities in this country, and to provide $60 million yearly in subsidies to the same universities. This step represents considerable progress, and I do not think it would be wise at this time, financially speaking, to go further than that.
The second reason is this. By way of new fiscal agreements with the provinces the federal government will increase its payments to these provinces by an amount of about $127 million a year for five years. The provinces which feel the need of increasing their grants to their educational system may do so with the money provided by the new fiscal agreement.
In the third place, the resolution that is actually before the house would provide grants to the provinces for the purpose of expansion and equalization of educational opportunity across Canada. This means that some conditions should be attached to these grants.
I may say the fourth reason is this, Mr. Speaker. The fact is that some provinces actually challenge the right of the federal government to take money from the general fund in order to provide help in education. It is true that actually the federal government proposes to help universities but I submit that this help is given for culture and not for education. I do not think it would be wise to go further than that and invade the field of education that is represented in primary and secondary levels. Besides that, I believe this resolution infringes on the legislation the government is proposing to bring in this year in the field of culture. For all those reasons I believe it is our duty to oppose it.


George Clyde Nowlan: Mr. Speaker, this resolution which is now before the house has been discussed on various occasions in the past, and I do not propose to take much of the time of the house at this

particular moment. I think the hon. member for Saskatoon is to be commended for having brought this matter to the attention of the house on the various occasions on which he has done so, and for the forceful arguments he has advanced in support of the resolution.
I know of one general attack which can be made on this resolution. It is one which was made last year by the Minister of Citizenship and Immigration, who was the hon. gentleman who replied to the hon. member for Saskatoon. I happen to have been sitting here at the time. I remember the debate. He discussed the provincial autonomy problem with respect to education in the Dominion of Canada. There is no doubt, Mr. Speaker, that an argument could be made with respect to provincial autonomy.
Speaking for myself and for all members of the party to which I belong, may I say this. If we believed that the implementation of this resolution would result in an infringement of provincial autonomy in the field of education, then certainly neither I nor any of the hon. members associated with me would give it support. But you have two answers, I think, to that argument.
In the first place the resolution itself, as it is now before the house-and I think it is in slightly different form than the resolution which was introduced some years ago-specifically provided for the exclusive jurisdiction of the provinces in the field of education. That provision is written into the resolution. Therefore such members of the house as see fit to support this resolution can do so without any suggestion that they are attempting to impinge upon the exclusive jurisdiction of the provinces in the field of education.
Then you have the British North America Act itself which, in section 93, states that in and for each province the legislature may exclusively make laws in relation to education. Hence you have a double-barrelled protection, Mr. Speaker. In so far as the resolution is concerned, we have written into it the provision that this shall not interfere with provincial autonomy; and we have the British North America Act itself which says that the provinces shall have exclusive jurisdiction in making laws with respect to education. I therefore frankly cannot see the validity of the argument that the acceptance of this resolution necessarily impinges on provincial jurisdiction in the field of education.
I can see where, if it were handled in a way in which no government would handle it, terms and conditions possibly could be attached which would interfere, or would tend to interfere with the field of education in so far as provincial jurisdiction is concerned, but no government would think of

Education AFTER RECESS
doing such a thing. No matter what party might be in power in this parliament in the years to come, it would not think of doing such a thing. We all recognize the fact that to the province is given, and properly so, exclusive jurisdiction in the field of education. Surely it is possible for a government, as this government is doing every day, to make grants to a province without impinging upon the jurisdiction of the province and making it a vassal or fief or controlling it in any shape or form.


Stuart Sinclair Garson: Would the hon. member permit a question?


George Clyde Nowlan: Yes.


Stuart Sinclair Garson: Would he think it is possible for the federal government to make moneys available in the large sums in which apparently, from the arguments that have been made, would be required, without taking any precautions whatsoever to see whether they would be spent in a prudent and proper manner, and to provide for any federal supervision which might be regarded as necessary to that end?


George Clyde Nowlan: That is an involved question, Mr. Speaker. It is like every other question a good lawyer might ask. It is one to which it is rather difficult to answer either yes or no. But certainly if one were obliged to answer it as briefly as that, I would say yes, for this reason. You are making a grant to a responsible provincial government without attaching terms and conditions to the grant.
I think one condition which would have to be attached is that it be expended in the field of education, as undoubtedly-I shall finish this sentence and then call it six o'clock, Mr. Speaker, if I may-this government proposes to do with respect to the Canada Council. Although we have not the bill before us yet, apparently we are going to grant to the Canada Council a principal sum of $50 million; and the income is going to be used by the Canada Council, I suspect, without too many terms and conditions being attached by this parliament.
Certainly with provincial governments of the stature and status we have in Canada today it is possible for this government to make grants to provinces in the field of education without in any manner directing the way in which the provincial governments may administer them in the field of education itself.
At six o'clock the house took recess.
The house resumed at eight o'clock.


George Clyde Nowlan: When the house rose at six o'clock, Mr. Speaker, I was suggesting that it would be possible to carry out the terms of this resolution without infringing upon the exclusive jurisdiction of the provinces in the field of education. As I said, there are ramifications that could be debated in this way or that, but the primary point is that grants should be made to the provinces for education purposes, and that having been done that the administration of those moneys could be left within the jurisdiction of the provinces, as has been done in so many cases in the past with federal grants.
The hon. member who preceded me in this debate this afternoon suggested that there should be no further consideration of this resolution at the moment because of the fact that the Canada Council grants were before the house and they took into consideration the portion of the education field which was contemplated by this resolution. It is true that the proposed measure with respect to the Canada Council will assist the provinces in the field of education, and to that extent the measure deserves the support of all members in the House of Commons and of the people generally. The resolution before us considers the field of education with respect to the primary and secondary school level, as I see it. It is a matter of the provincial responsibility with respect to education, and certainly the proposed grants through the Canada Council would go toward assisting universities. They would in no way assist the provinces with respect to the primary or secondary school level.
The hon. member went on to say that in so far as the provincial responsibility was concerned, that was something the provinces had to meet out of the payments which were being received from the dominion treasury or from other sources of revenue. It may be, Mr. Speaker, that there are provinces in Canada which can meet the demands of primary and high school education out of funds which are available to them either through the fiscal payments from the dominion treasury or from their ordinary fields of revenue, but certainly that is not true of every province. It is not true of my own province, because it was only six or eight months ago that the then premier of Nova Scotia, the head of the Liberal government of that province, pointed out that even under the new fiscal arrangements the amount the province would receive would be $5 million

Education
short of the bare minimum required to meet the services and governmental responsibilities of Nova Scotia.
When you consider that according to the bureau of statistics the school population of this country, and I am speaking not of the universities but of the primary and secondary schools, over the period between now and 1960 will be increased by over 100 per cent, and when you appreciate all the burdens that will impose upon the municipalities and the provinces, it suggests that certainly my own province could not meet this additional burden out of the revenue which it will now receive. I doubt if there is any province in Canada that can do so. I think the time has come, therefore, when the dominion government should give most careful consideration to this resolution, which has been discussed on so many occasions in the past.
One could indulge, if one wanted to do so, in a discussion of the whole problem of education. I do not propose to do that at the moment. But I should like to say one word, not only about the fiscal demands for plant and equipment but the demands upon the teaching profession in the various provinces of Canada as well. I believe every hon. member in this house knows that the teachers in our primary and secondary schools are making tremendous sacrifices, and that the great majority of them could go into fields of private endeavour and earn more money than in the field which they are occupying. They continue this work because they have a service to perform, and they are performing a remarkably good service. These teachers cannot get the salary range which they deserve when the fiscal arrangements with respect to provincial finances are frozen, as they are at the moment in the various provinces of which I have knowledge, and certainly those in the east.
Therefore, without taking further time of the house at the moment, I do want to say for myself, and I believe for all members with whom I am associated, that we are heartily in accord with the purpose of this resolution. We believe that sooner or later the purport of this resolution will be developed into specific enactments by the parliament of Canada. We feel the time is long since passed when more steps should have been taken than have been up to the present, and I do feel that the government of Canada facing this situation should deal with it in an objective way. If there are no more valid reasons against the necessary action than the question of provincial autonomy, which was raised at one time by the Minister of Justice and at another by the Minister of Citizenship and Immigration, then I think

the parliament of Canada should take some steps in this direction during the present session.


Chesley William Carter: I should like to commend the hon. member for Saskatoon for his persistence in focusing our attention on this very important problem of education. Last Thursday we devoted a whole day to debating a resolution proposed by the hon. member for York Centre (Mr. Holling-worth) which dealt with some aspects of this problem. I feel it is fitting that we should follow up that debate with another one today concerning a similar resolution which affords an opportunity of discussing points not previously covered.
The resolution under debate reads as follows:
That in the opinion of this house, the government should take into consideration the advisability of taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
As I compare this resolution with those of previous years I believe I can detect a slight change in emphasis. The earlier resolutions placed emphasis on the attainment of equality of opportunity, while the present resolution seems to emphasize the need for relieving the financial crisis in education. While equality of educational opportunity is a consummation devoutly to be wished, in my opinion it is one that can hardly be attained in a vast country like Canada, with so many different political jurisdictions, with such great variations in natural wealth, and with such great variations in geographical conditions.
The hon. member for Saskatoon pointed up this difficulty when he compared the per capita expenditure of $86 in Newfoundland with $292 per student in another province. Any grants the federal government might make available to the provinces for education would serve only to maintain this inequity unless, of course, the grants were made on a basis of need, in which case the province with the highest standard would not receive any assistance at all.
Instead of thinking in terms of educational opportunity, I believe it is more realistic to think in terms of minimum educational requirements, or of providing a minimum degree of educational opportunity because educational opportunity is not directly related to money or to per capita expenditures. We all know of cases where people with the same educational opportunity have had varying degrees of success in the outside world and have made very different contributions to the country in general. Neither is there any

assurance that we are even now receiving full value for the money we do spend on education. The dean of the law school of Columbia University recently made references in his report to the calamity of graduate students who came to Columbia law school without being able to read and write intelligently, and we have heard similar criticisms from the presidents of our own Canadian universities.
It would appear, therefore, that the crisis in education is not wholly financial. Certainly part of the crisis is inherent in the system itself, and I believe the time has come when our educational system should receive a thorough overhauling. Perhaps we shall find that we still have a horse and buggy system of education in a motor age.
Part of the crisis also is due to the shortage of teacher supply, and it has been found, in my province at least, that additional money and increases in teachers' salaries are not the complete solution to this problem. Be that as it may, there is no doubt that a very considerable part of the crisis is financial. This is true even in the richest provinces. How much more is it true in the poorer provinces, especially in the Atlantic provinces, and in my own province in particular it is truest of all.
In Newfoundland we have from 100,000 to 120,000 children in our schools. The provincial government is spending $10 million on education out of a total budget of $42 million, and this sum does not take into consideration the very considerable amount of money paid in fees, in donations by organizations and in free labour in the construction and maintenance of school buildings. If we could put an assessment on these extra values we would probably find that they would total over another $1 million. It has been estimated that in 25 years our population in Newfoundland will double. That means an extra school population of 100,000 or 120,000 to be provided for. That means an extra 3,500 classrooms to be built. At $15,000 a classroom this amounts to somewhere around $60 million, or around $3 million per year just on new buildings alone.
Our child population in Newfoundland is increasing more rapidly than in any other part of Canada. It is increasing so rapidly that it has been estimated that an extra 170 teachers per year will be required to take care of the increase in classroom population. This, together with replacements because of retirements, death, marriage and transfers from the teaching profession to other occupations, bring the total of new teachers required yearly up to 600, and we have facilities for training fewer than half that number.
Education
If we think in terms of minimum educational opportunity I think it would be worth while to look forward to the graph of intelligence based on the normal intelligence quotients of the human race. Generally speaking we find that such a graph tells us that about 5 per cent of our population have superior intelligence. I do not know just how many children are in all the classrooms in Canada, but perhaps there would be 4 million. That means one-twentieth, or 5 per cent, of those should be in our universities, and if they are not there this constitutes a tremendous waste of brainpower in our country. In my own province of Newfoundland, with a population of 400,000 and a school population of say 100,000, we should have 5,000 students receiving university training. These are the people best suited for the learned professions from which the country will draw its lawyers, doctors, dentists, engineers and scientists and teachers.
We cannot do without these. Another 5 per cent or 5,000 still could profit from university training and should be able to obtain it.
At the other end of the scale we have 5 per cent representing children who because of their mental condition require special facilities for educational training. That is a field where practically nothing at all is being done at the present time. Between these groups we have varying degrees of intelligence which must be trained to the maximum in order to enable them to take part in the economic and social life of our country.
How can the poorer provinces cope with the terrific financial expenditures involved in the educational field? I know it has been suggested that the federal government might turn back to the provinces certain sources of taxation. That might be very well in the case of some provinces. It might help to solve the problem as far as Quebec and Ontario were concerned, and possibly also as far as Alberta and British Columbia were concerned, but it certainly would not begin to solve the problem in the maritime provinces in general and in Newfoundland in particular. We simply do not have the taxation resources to yield the required revenue even if the federal government turned back certain sources of taxation to us.
What then is the alternative? The problem in the case of the poorer provinces is that they simply do not have the money or the means of getting it. The only possible source of money is the federal government, but federal financial aid for education involves some very real difficulties.
I listened to the hon. member for Digby-Annapolis-Kings as he spoke a while ago, and I find myself unable to go along with

Education
him in the easy manner in which he soared over the obstacles that present themselves in connection with this problem. The trend of thought developed by the hon. member is based on the assumption that the present order of society, so comfortable for us in Canada, is destined to continue and endure forever. As much as I would like to believe that, I do not think the hon. member's easy optimism is in accordance with reality. The poet Tennyson has said, "The old order changeth, yielding place to new", and at no time in the history of mankind was that saying truer than at present.
Let us face the facts. There are two and a half billion people in this world, but less than one-half billion find it a comfortable world, or find our present order of society one they wish to preserve. In my very own riding there are 40,000 people who do no find this present order of society very comfortable. For over two billion of the earth's inhabitants it is an extremely uncomfortable world indeed, and these two billion people, or 80 per cent of the entire human race, desire a change. Furthermore there are 800 million communists in the world who have dedicated their lives to changing our present order of society. We are wasting our time in trying to preserve the status quo. Change is bound to come, and a new order of society is inevitable. We cannot hold it back, any more than we can hold back the ocean with our hands. The only thing we can do is to help shape it in the way we wish to have it, and that is why education is of such paramount importance. That, I think, is fact No. 1, a fact which no one can dispute.
Fact No. 2 is that there is a great deal of apathy, indifference and self-satisfaction abroad in our land. Fact No. 3 is the trend toward shifting responsibility to other people. We say, "Let George do it," and in most cases the "George" we have in mind is the federal government. The fourth fact is the trend toward bigness, toward bigger and bigger business, toward bigger and bigger government. We see this trend persisting even at the cost of personal freedom. To me these are danger signals, and if persisted in these trends will inevitably result in the destruction of our way of life.
I agree with the hon. member for Digby-Annapolis-Kings that there is no danger foreseeable in the lifetime of the present generation, or during the time this government might be in power or during such time as any party in this house might be in charge of the government of our country or during the time any of the personalities in this house might dominate the political scene in Canada. But we know that time, like an ever-rolling

stream, bears all its sons away. Old parties pass on, new parties take their place.


Some hon. Members:: Hear, hear.


Chesley William Carter: Personalities disappear and new personalities come on the scene.


Some hon. Members:: Hurrah.


Chesley William Carter: If the present trends are persisted in, who can say what type of personality will dominate the political scene in Canada in 40 or 50 years' time? We all know what happened in Italy and Germany when education came under the direct control of such personalities as Hitler and Mussolini. Who says it cannot happen here? I do not want to appear as a prophet of doom, but I think if we face facts honestly we cannot rule out the possibility of such events occurring in Canada.
There is one other fact that we must always bear in mind. Once education in the provinces becomes dependent on federal funds, that condition will always remain. I do not see how there will ever be in the future an opportunity for the provinces to take back that burden from the federal government. Despite the Canada Council, education in the provinces, once it becomes dependent upon federal funds, will also be dependent upon the personality that controls the purse strings. Therefore I believe the premier of Quebec has a point when he maintains that federal aid for education involves not only constitutional difficulties but dangers as well.
What then is the answer? There seems to be no positive answer. It is rather a choice between two evils. In finding an answer we must follow certain well established principles, such as the importance of the individual, the country's need and what the national interest demands. We must put first things first. I submit that the national interest demands that this problem of education must be solved somehow in spite of whatever dangers or risks are involved.
The resolution states that whatever grants be made available should not interfere with provincial jurisdiction, which would indicate that perhaps one of the ways of approaching a solution is by making grants available for educational plants, for building construction and maintenance. Certainly in a country like Canada, with all of our vast natural resources, given mutual good will it should be possible to find a solution which will enable federal aid to be made available together with the proper safeguards to minimize the risk involved.

Education


James Alexander Smith: Mr. Speaker, 1 wish to compliment the mover of this resolution, the hon. member for Saskatoon, for again bringing before this house and the people of Canada a matter of such great importance. I listened most intently to the remarks of the last speaker. With some small portion of what he had to say I must say I can agree, but with the larger portion of what he had to say I must disagree. I agree with him in that I feel that we in Canada should place first things first. To me one of the first things that we as a nation of intelligent people should consider is the education of our young people. That should be something we as a group of people should consider as one of the first demands on all levels of government.
All the ten provinces of Canada are today faced with two problems of major concern in the field of education. The first is the drastic shortage of qualified teachers in each and every province, and the second is the lack of modern school plants to cope with an ever-increasing school population. A few years ago the Canadian school trustees' association embarked upon the preparation of a report dealing with school finances in Canada. The committee in charge of this particular research was headed by Dr. M. E. LaZerte, former president of the Canadian teachers' federation, former president of the Alberta teachers' association; former dean of the faculty of education at Alberta and now, I am given to understand, dean of the faculty of education at the University of Manitoba.
Dr. LaZerte and his committee made a most extensive survey of the whole matter of school finances, and ended up with a recommendation which pointed out vividly that there was room for federal aid to education in Canada. I do know there is no apathy, especially in the west, when it comes to federal aid to education. Every social club, every organized group of men and women in western Canada by and large has passed resolutions calling upon the federal government to give federal aid to education.
Dr. LaZerte brought forth some startling figures in his studies. In one place he dealt with the probable increase in secondary school enrolment in Canada. He secured figures from the dominion bureau of statistics which indicated that from 1952 up to 1964 and perhaps longer there would be a tremendous increase in the number of students enrolled in Canadian high schools. He pointed out that in 1952 there were 305,200 students enrolled in Canada-with the exception of Quebec-in grades 9 to 12 or grades 9 to 13. This figure increased as
the years went on and we find that in 1955 there were 345,850 high school students in Canada. It was estimated by the dominion bureau of statistics that by 1964, there would be well over 600,000 students registered in high school courses in Canada.
That figure of 600,000 for 1964 is an increase of approximately 200,000 over the figure for 1955. Two hundred thousand more high school students will mean 8,000 more classrooms to be constructed at an estimated cost of $15,000 per room, and 8,000 new teachers to handle those 8,000 additional classrooms and this with Canada facing a very drastic shortage of fully qualified teachers. We as Canadian people I hope will exert greater and greater efforts to see that all our young people are given at least a basic high school training.
The 1951 census indicated a very gloomy picture regarding school attendance by our young people. It indicated that of young people in Canada between the ages of 15 to 19 years, 63 per cent of those residing in rural areas were not in attendance at school and 57 per cent of those living in urban areas were not in high school. Where were they? They were certainly not at school receiving the type of education that would make them better and more capable men and women; they were out working. What was the reason? Did those young people representing 63 per cent of those residing in rural areas not desire to go to high school? I do not think so. I feel that they found it impossible to do so.
As has been pointed out, we spent the whole of last Thursday in a comprehensive and inlightening debate on the advisability of establishing national scholarships for worthy university students. I am certain, Mr. Speaker, all hon. members will agree that educational opportunity for young people should be made uniform right across Canada. The view has been expressed here that it would be impossible to introduce a uniform standard of education throughout Canada; but, Mr. Speaker, I have never yet felt that anything was impossible. Certainly we should be striving for a uniform standard of education, the best standard that we as Canadian people can give to our young citizens.
I am prepared to admit there are certain sections of Canada which fin'd it far more difficult than others to finance education. I know that even in the wealthier provinces the provincial governments are finding it increasingly difficult to provide the ever-increasing amounts of money needed for this purpose. The fact that we do have a wide disparity of wealth in Canada, Mr. Speaker,

Education
I regard as a strong argument why the federal government should enter this field and attempt to do something to ensure that a child in the poorest province in Canada should have an opportunity to receive the same type of education as one in any of the wealthier provinces.
The following figures, Mr. Speaker, are cited in the report of the research committee of the Canadian school trustees' association with regard to the provincial effort in education during the year 1951-52. They deal with combined provincial and municipal expenditures on elementary and secondary education in the nine provinces of Canada with regard to which they were able to obtain information. The committee point out that in Newfoundland the amount per capita spent on education in this particular year was $19.61; on the other hand, they point out, the per capita income of that province in that year was only $576. In Prince Edward Island the per capita amount spent on education was $16.84, and the per capita personal income, $633. Nova Scotia spent $25.61 per capita; the average income was $781. New Brunswick spent $29.41; average income, $711. When we move west, we find that Ontario spent $33.52 per capita on education; average income, $1,341. In the western provinces, Manitoba, with an average income of $1,110 spent $28.29 per capita on education. Saskatchewan, with an average income of $1,306, spent $39.34; Alberta, with an average income of $1,251, spent $39.42, and British Columbia with an average income of $1,256 spent $45.34.
All this means, Mr. Speaker, that it costs money to educate the young people of Canada. It does cost money, though not as much as it should cost the people of Canada, by any means. It means that in those provinces where there is a low average income the per capita amount spent on education is low; that the young people in those provinces are not getting the education they deserve as young Canadians. I say it is high time the federal government realized that this situation is one they should deal with in the interests of young Canadians and Canadians in general, rather than sit piously by doing nothing.
Mr. Speaker, it has been suggested that if the federal government were to enter the field of federal aid for education we would eventually reach a position where the federal government was the dominating authority. That is not necessarily true. We already have, at the present time, a position where the federal government is giving money, earmarked for specific social purposes, to the provinces, though the management and administration of those social services are in

provincial hands. The federal government has already entered the field of education, with or without the consent of the British North America Act. Only last week a conference was held here in Canada to discuss vocational education and increased aid for vocational education in the ten provinces of Canada. We know that this year the federal government proposes, and rightly so, to give large sums to the universities of Canada in the way of construction grants. We know that following the war the federal government provided education-and rightly so-[DOT] for many of the young men returning from world war II. The Canada Council plan has already been mentioned.
As I have already pointed out, this resolution has been before the house for a great many years. It is one which should, I feel, receive more than mere consideration by the government and hon. members; it should be acted on by the government now.
In a submission which was supposed to have been made to the Prime Minister at one time, the Alberta school trustees' association and other associated bodies would have made this recommendation to the government. I quote:
It Is now recommended that federal grants to the provinces in aid of education be greatly increased and that they be "general" instead of "special" in nature.
-in other words a grant to be made to the provinces to be spent on education as the provinces saw fit. Quoting still further:
That to assist in financing elementary and secondary education the federal government be requested to give aid to the extent of $150 million per annum at the present time, one-third of this aid to be on a "per pupil" basis and two-thirds as equalization grants to provinces with low taxpaying ability, the latter payments to be proportional to provincial needs.
The principle of giving grants according to the need of an area is already recognized in many of the provinces across Canada. We have in the province of Alberta equalization grants which are given to school divisions which are not as fortunate as others. The wealthier a school division is, the smaller these grants are. The more unfortunate it happens to be, the greater the grant which it receives. I would suggest, Mr. Speaker, that many of the "straw men" who have been put forward from time to time in opposition to this resolution are merely political straw men, and that if this government were so disposed it could immediately call in the ministers of education of the ten provinces, and they would soon arrive at a fair and equitable system of granting federal aid to all the provinces of Canada.

Education


Stuart Sinclair Garson: Mr. Speaker, in rising to take part in this debate I should like first of all to congratulate those who have preceded me for the important and eloquent contributions they have made. It is quite natural, in my opinion, that they should have done so, having regard to the fact that this subject matter has been before us on previous occasions and we are all, in a manner of speaking-and I am sure this applies with particular force to the hon. gentlemen who introduced this resolution-producing variations upon a theme by the hon. member for Saskatoon.
I could not help thinking, however, that amongst all those who have spoken, perhaps the hon. member for Battle River-Camrose, who has just taken his seat, has contributed more than has any other hon. member to a sort of basic understanding of the nature of this resolution, by the moving plea he put forth on behalf of the poverty-stricken province of Alberta for assistance from the federal government toward the support of its primary education. When, as he eloquently and cogently pointed out, this was what he was seeking, we had here a revealing measure of the nature of the resolution before us.
Another feature of the debate which struck me as being rather encouraging was to have the hon. member for Saskatoon quote, with no inconsiderable approval, Mr. James Muir -I think he is still president of the Royal Bank of Canada, or chairman of the board -and then to find myself in agreement with both of them on the point upon which Mr. Muir was quoted, namely that Canada should spare no effort as a nation to provide the best possible education that we can provide for all Canadians. If I recognized the quotation, this part of which my friend the hon. member for Saskatoon did not quote, I think one of the reasons was that Mr. Muir was apprehensive as to whether the free world was maintaining an educational system which could be compared with that of the unfree.
The hon. gentleman who introduced this motion stated, and it was quite unnecessary that he should have done so, that he was no more interested in the children of Saskatchewan than he was in those of any other province. I think we all approach this subject as Canadians with a desire to get the best system of education we can by means which are reasonably acceptable to all parts of our country. I read the wording of the motion:
That, in the opinion of this house, the government should take into consideration the advisability of
taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
I should like to submit, Mr. Speaker, that the provision which has already been made by this government is the only way we can bring ourselves within the language of this resolution, especially the clause "without encroaching in any way on the exclusive jurisdiction of the provinces in this field." In other words I should like to submit that the provision which has been made is the only provision which can be made which does not encroach upon the jurisdiction of the provinces.
I say that because, as is well known, the fiscal arrangements we now have between the federal government and the provinces are the product, in large measure, of the recommendations of the Rowell-Sirois commission. I do not think we have ever had before in the history of Canada a royal commission which could compare with it in the way its recommendations and the matter which supported them have stood examination, and the validity of whose findings in spite of the passage of time has continued to be sound and unchallengeable.
When he says that our job is to provide the provinces with the financial resources to do the job, I should like to point out to my friend the hon. member for Saskatoon that we have set out to do that in accordance with the recommendations of the Rowell-Sirois commission; that we have in a large measure succeeded; and that the only way in which my hon. friend can acquire argumentative validity for his submissions to the house today is by shutting his eyes completely to what has been done with regard to implementation of the Rowell-Sirois commission report. For example, he says he wants the federal government-and if I am misquoting him I hope he will correct me__________
which has made grants to Canadian universities, to make to the support of primary education further grants of the same kind as those they have made to the universities. He says if they can make them to the one, they could make them equally well to the other.
I submit to him that it is one thing to make grants to the universities of Canada which constitute, when they are received, a minor part of their income, and which are made to institutions which are fully autonomous, self-supporting and self-governing; but it is a different thing altogether to make grants, which would be a large part of the

Education
income of the primary schools of the province, to provincial governments whose provincial departments of education actively control, supervise and make policy for the whole primary school system of the province.
I am sure the hon. member for Saskatoon, as a school teacher versed in the history of our country, would be one of the first to agree with me when I say it is not an accident that, at the time of confederation, in the distribution of powers under the British North America Act the legislatures of the provinces were given exclusive authority to make laws in relation to education. This, Mr. Speaker, was a deliberate provision upon which certain of the fathers of confederation insisted as a condition to the formation of the Canadian federation in order to protect their religion, their language and their way of life.
The point of this is that primary education is concerned entirely with the instruction of the young during that highly formative period of their lives, which instruction, as the Rowell-Sirois report points out, is of decisive importance with regard to religious training and the preservation of language and culture. Let me quote from volume II of the Rowell-Sirois report:
We have already said that the instruction of the young during their formative years is a matter which the provinces must continue to control (subject of course, to the safeguard for religious minorities provided in the British North America Act and amendments). A free hand in something so important to the social and cultural life of the people seems to us to be vital to any provincial autonomy worthy of the name, and it is obvious that any attempts to alter the existing arrangements would meet with powerful opposition and would provoke profound resentment.
In relation to that quotation, Mr. Speaker, I would point out that if federal grants were sufficiently large to be worth while to the provincial governments which received them, the dominion treasury simply could not defend handing those large sums of money to the provincial governments without assuming some responsibility as to the manner in which they would be spent. The hon. member for Digby-Annapolis-Kings said that would be a simple matter to overcome, and they could be handed out under certain conditions. But if they were handed out under certain conditions it would be necessary to follow the grants to make sure those conditions had been fulfilled. Under those circumstances it seems to me quite beyond all reason to imagine that provincial autonomy over primary education would be maintained.


Ellen Louks Fairclough: May I ask the minister a question? As I listened to the hon. member for Digby-Annapolis-Kings this afternoon it seemed to me the minister was misrepresenting what the hon. member said. Does the

minister maintain that these funds, in the hands of the provinces, might be subject to misappropriation?


Stuart Sinclair Garson: No, Mr. Speaker, my words did not say that and they were not susceptible of any such inference.


Ellen Louks Fairclough: Oh, yes, they were.


Stuart Sinclair Garson: If the hon. lady draws that inference I can only leave her to her own conclusions.


Ellen Louks Fairclough: That is the inference I draw.


Stuart Sinclair Garson: It is for this reason, Mr. Speaker, that on a previous occasion the former leader of the opposition, Mr. Drew, stated in the course of a debate on this same subject that he was completely in favour of provincial autonomy in these matters. I agree with him, and I suggest that the Rowell-Sirois report, from which I now propose to quote, supports both of us in that view. One should remember that this Rowell-Sirois commission was sitting shortly after the greatest depression through which we have ever passed, when conditions of primary education in the Dominion of Canada were infinitely worse than they ever had been before or since. It was in relation to conditions at that time, not in relation to the relatively good condition of education today, that these remarks were made, which I now quote:
Many representations have been made to us that financial help should be extended by the dominion to the provinces for various purposes, such as scholarships, technical training, grants to be used for general educational purposes provided that the provinces did not reduce their own expenditure on education. These representations appear to have been inspired largely by consternation at the reductions in educational expenditure which certain provinces, under the stress of the depression, have felt compelled to make. It has even been contended that the dominion is bound to see that there is equal educational opportunity, as far as is practicable, for every Canadian child. We have the deepest sympathy for these views which have been advanced by many of the organizations most closely associated with education in Canada, and we share to the full the regret that, especially in recent years, education has been terribly neglected in many of the poorer parts of the country and that wholly disproportionate sacrifices have been imposed on those who have devoted their lives to this important public service. But the representations appear to us to go too far in denying the right of each province to decide the relative importance of expenditure on education and expenditure on other competing services. It is our hope that provision can be made for the fiscal needs of all provinces, including within those needs provision for the education of the young. Our financial proposals aim at placing every province in a position to discharge its responsibilities for education, on a scale that is within the means of the people of Canada, if it chooses to do so. Once this position is established it seems to us best that education, like every other form of welfare service in a democratic community, should have to fight for its life, and that a generous provision for the education of the children of the nation should depend, not on any

arbitrary constitutional provision, but on the persistent conviction of the mass of the people that they must be ready to deny themselves some of the good things of life in order to deal fairly by their children. Hence we do not think that it would be wise or appropriate for the dominion to make grants to the provinces ear-marked for the support of general education.
As we all know, following upon the delivery of this report, in view of the fact that there were public men in Canada who had to be educated with regard to these matters and who at first opposed the implementation of the provisions of the report-most of them not in the Liberal party-the implementation of the report was delayed until that educational process was completed. There are still some signs in this house that it is not complete yet.
It was not possible, until the first wartime tax suspension agreement, to develop anything along the lines of the Rowell-Sirois recommendations. Under that wartime tax suspension agreement, which had been condemned in another form as an absolutely impossible arrangement for the provinces, there was not one of the provincial treasuries that did not have a most favourable experience as regards increasing its ability to spend money for education and other provincial services, and as regards treasury surpluses they were able to show during that period. When the war was over this was followed by the first post-war tax rental agreement.


Clayton Wesley Hodgson: When was the Rowell-Sirois report brought out?


Stuart Sinclair Garson: The Rowell-Sirois report itself was brought out in May, 1940.


Clayton Wesley Hodgson: That may be, but it was finished in May, 1933.


Stuart Sinclair Garson: I think perhaps my hon. friend may have in mind that some of the hearings, perhaps in Ontario, were finished in May, 1938; but the whole thing certainly could not have been finished in 1938.


Clayton Wesley Hodgson: Does the minister not think a report brought out in 1938 or 1940 is outmoded? This country is moving much faster than that.


John Whitney Pickersgill: Certainly not.


Stuart Sinclair Garson: It is because of that fallacy in the minds of a number of members in this house that year after year we have the presentation of this resolution and some of the speeches in support of it. I will not say they are made in ignorance of the contents of this report, but at least they are made in disregard of it.
Now, the present suggestion is, to adopt the language of the motion, that money shall be
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made available to the nrovinces for educational purposes, "without encroaching in any way on the exclusive jurisdiction of the provinces in this field".
Well, I want to try to show hon. members, Mr. Speaker, that this is precisely what these agreements have done; and I should first like to give as an example the experience of my own province of Manitoba. The Manitoba revenues which were surrendered under these agreements in 1946 were worth a little over $8 million a year. In place of these we got under the agreement a guaranteed minimum of $13,500,000 and received in the year ended March 31, 1948, about $14,500,000. To make a long story short, Mr. Speaker, we shall receive in the present fiscal year, I believe-I have not checked the exact figure-something close to $35 million, which is more than our entire budget in 1949. Now, will any member of any party in this house have the hardihood to rise in his place and say that with this increase in revenue it is not possible for the provinces to support primary education?


Clayton Wesley Hodgson: What is your surplus this year?


Stanley Howard Knowles: What is the increase in the cost of education?


Edward George McCullough: What was the federal budget in 1939?


Stuart Sinclair Garson: Let us leave that one province out. It is true Manitoba had a very favourable settlement in that contract, but let us take the agreement as a whole.


Stanley Howard Knowles: Will the minister permit a question before he leaves Manitoba?


Stuart Sinclair Garson: Yes, surely.


Stanley Howard Knowles: Will the minister say whether he thinks the contributions made by the federal government to Manitoba for education, such as contributions for vocational training, contributions for the building of Carpathia school in Winnipeg and the school at Fort Churchill, all of which are outside of these grants, violate the Rowell-Sirois principle or interfere with provincial control over education?


Stuart Sinclair Garson: No, I do not for one moment, because they are all earmarked grants, all made upon certain conditions which must be complied with; but they relate only to certain technical training.


Stanley Howard Knowles: Oh, no.


Stuart Sinclair Garson: Well, I put it this way so as not to waste time. They do not relate to primary education.

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Stanley Howard Knowles: Carpathia school is an
elementary school in the city of Winnipeg.


Stuart Sinclair Garson: I know.


Stanley Howard Knowles: The school at Fort
Churchill is an elementary and high school.


John Whitney Pickersgill: And it has nothing to do with primary education in general.


Stanley Howard Knowles: It certainly does.


Stuart Sinclair Garson: My hon. friend cannot use up my time and trap me by these-


Robert Ross (Roy) Knight: May I ask one question?


Stuart Sinclair Garson: One at a time. My hon. friend from Winnipeg North Centre cannot trap me by these atypical cases which he cites. He knows as perfectly well as I do that there is not now, in Canada, federal contributions to primary education, in the terms in which they are recommended in the resolution which is before us.
Now, let us take the grants from the federal treasury under these federal-provincial agreements. To go to the first post-war tax agreement, that is the first tax rental agreement in 1947-48, the sum of $80 million in that year was paid to seven provinces. In the last year of that same agreement 1951-52 another province having come in in the meantime, the $80 million had gone up to $122 million. Then a new agreement was negotiated, and in 1952-53 the first year of the new agreement with nine provinces that $80 million had gone up to $286 million, and in 1953-54 the second year of the second agreement, just one year later, it had gone up to $309 million by operation of the escalator clause, in order to take care of increased expenditures, including education. In 1956-57 the last year of that agreement, still with nine provinces, it had gone up by escalation and the like to $357 million.


Ralph Byron Horner: Will the minister permit a question?


Stuart Sinclair Garson: No; my time is running out. I will be glad to answer the hon. member's questions at the end, if I have time.
During the past year we have been negotiating a third agreement, and we hope to have all the provinces of Canada included. The amount payable, as nearly as we can estimate it at this moment, under the third agreement is $640 million, plus certain other adjustments of taxation and so forth of $35 million, or a total of $675 million.
In other words the contribution of the federal government under this head in the period from 1947-48, when it was $80 million, has gone up in ten years to $675 million in 1957-58, or by almost eight and a half times.

Will any reasonable man tell me that in that large increase there is not elbow room within which the province of Alberta can find some way of taking care of its primary education, or even the province of Newfoundland? It is an increase of eight and a half times in federal payments.
The great virtue, Mr. Speaker, of this arrangement is that it complies with the resolution of my hon. friend from Saskatoon. This is the only way in which this money can be paid "without encroaching in any way upon the exclusive jurisdiction of the provinces". As the provinces get this money, they can spend it on roads, they can spend it on bridges, they can spend it on graft, they can do what they like with it, or they can spend it on education.


Robert Ross (Roy) Knight: Is the minister aware that one of his colleagues took the exactly opposite position in opposing this resolution? The Minister of National Health and Welfare said the reason it was unconstitutional was that it was earmarked for education.


Stuart Sinclair Garson: I heard my colleague and I heard my hon. friend from Saskatoon. I think the explanation of my hon. friend's remark is that he himself did not understand the minister.


Robert Ross (Roy) Knight: Thank you very much; no one else does.


Stuart Sinclair Garson: The fact of the matter is that the Rowell-Sirois commission was in my opinion much the most distinguished commission we had ever had. It would be a very happy situation if all our commissions produced as satisfactory a report as it did.


Stanley Howard Knowles: You had better explain yourself.


Stuart Sinclair Garson: And I would say that, because we have for our measures support from the fact that we took the Rowell-Sirois recommendations and implemented them. By and large, having regard to the fact that we have been passing through an era which has tested the financial arrangements of governments at every level, municipal, provincial and federal, the Rowell-Sirois policies have worked out remarkably well. They certainly have provided, if the provinces choose to spend it for that purpose, plenty of money with which to pay for education.
The hon. member for Saskatoon may perhaps recall that on an earlier occasion, I think it was in 1952, I pointed out that under these tax agreements then in effect over a period of five years not one of the treasuries of all the provinces of Canada had shown a deficit; they all showed surpluses, and those surpluses for the 5-year period totalled

nearly two-thirds of a billion dollars of provincial debt reduction. My hon. friend the hon. member for Saskatoon says, "If we do not pay some money they are going to have to close up primary education." Well, the only thing wrong with all these arguments is that the facts do not bear them out. It is only by ignoring the facts-I will not say suppressing them

but by paying no attention to them, that my hon. friend can make the kind of argument he does.
I sympathize entirely with him on the importance of primary education and the importance of increasing school teachers' salaries. But I say when he is proposing to do this by transgressing the provision which was put into the constitution of Canada most deliberately by the fathers of confederation, and which has proven over the years since to have been a very wise provision; and since the facts as I have related them show that the provinces, if they wish to do so, can make adequate provision for education, there is no case upon which he can ask for the support of his present resolution in this house.


Colin Cameron: Mr. Speaker, I was delighted to hear that the Minister of Justice (Mr. Garson) had great sympathy for the hon. member for Saskatoon and for the position he took. I think it is unfortunate that the minister does not have a little knowledge as well about the real situation in the educational system, because I am quite sure there is not a teacher in the country who would not get up and refute everything he said. When he tells us and asks us to believe that the provinces are able to cope with this problem under the present financial arrangements, he flies right in the face of the express views of all educational authorities in Canada. The minister may be an expert in law, but I suspect he has not been paying very much attention to the mundane business of the local administration of schools or he would not attempt to put over as logical arguments the fantastic statements he has made this evening.
I was interested to find that apparently he bases his opposition to this resolution on two grounds. The first is the findings of the Rowell-Sirois commission. I remember the findings of that commission very well. I was a member of the British Columbia legislature at the time and it was notorious, as the Minister of Justice well knows, why that particular section of the Rowell-Sirois commission's report was included and why it contained the weak, feeble and unconvincing arguments he has quoted here tonight. At that time there was no doubt in the mind
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of anyone that it was a political consideration which forced that particular section of the Rowell-Sirois report.
The other ground upon which the minister apparently bases his position is a constitutional one, and I was quite interested when he suggested that of course there had been no contravention of provincial autonomy over education in regard to grants for universities, because they were all minor in quantity. I was reminded, Mr. Speaker, of the story you may remember about the young lady who was the subject of some censure over the results of her behaviour. Her defence was, "Well, it was such a very small baby". Surely, Mr. Speaker, the Minister of Justice is the last person who should suggest to us that a minor fracture of the constitution is permissible but a large one is unthinkable.


Stanley Howard Knowles: He got away with a fairly large one.


John Whitney Pickersgill: Would the hon. gentleman permit a question?


Colin Cameron: Yes.


John Whitney Pickersgill: This resolution calls for payments to the provinces, if I read it correctly.


Colin Cameron: Yes.


John Whitney Pickersgill: Surely these university
grants are not paid to the provinces. There is no parallel at all.


Colin Cameron: No, they are not paid to the provinces; and that brings me to another statement of the Minister of Justice when he suggested, if you please, Mr. Speaker, that provincial universities- and this is true of all the western universities -which have been established by provincial legislatures are more autonomous bodies than are provincial governments. What an astonishing point of view. We can make grants to universities because they are autonomous-


Stuart Sinclair Garson: Mr. Speaker, I rise on a question of privilege. My hon. friend has attributed to me a suggestion which I did not make. He is confusing it with an inference which he improperly drew.


Stanley Howard Knowles: We all heard it.


Colin Cameron: Those were the words the minister used.


Stuart Sinclair Garson: Hansard will show the words I used.


Colin Cameron: Yes; if you do not change them, Hansard will show that you referred to universities as autonomous bodies, and therefore that the grants to them could not be put on the same basis as grants to provincial governments.

Education


An hon. Member:: Word for word.


Colin Cameron: I suggest to you, sir, that not only is the minister advancing quite a ridiculous argument, but he is also overlooking a very important factor. That is that provincial universities, while every effort has been made to remove them from the control of provincial governments, are nevertheless subject to considerable pressure when a provincial government wishes to exercise it, because the provincial government has control of all the grants. These arguments do not seem to add up to any sort of reality.
I want to deal particularly with the main thesis of the minister's refutation of the resolution tonight, and that is that the educational wants of Canadian children are or can be adequately cared for by the present fiscal arrangements. I want to suggest to him that his thinking is far out of date, because there is not a province in Canada at the present time that has established an adequate primary and secondary educational system.
I suppose sometimes we tend to forget what a very large bite we undertook to chew when in Canada we decided to educate all children, and we may also tend to forget that it is a relatively new development. It was a new idea when about 100 years ago, I suppose, perhaps a little more in some parts, it was decided to provide elementary education for all children. At that time it was possibly a fairly easily achieved ambition, because no doubt the first thought was that it would be very elementary education that the vast majority would require or would wish or would have to have provided for them. In fact until comparatively recent times this was the case.
I recall that when I went to high school in British Columbia a much smaller proportion of the children who attended elementary school with me went on to high school than today go from high school to university. At that time the high school student was the rarity, and the cost of education per capita was in consequence very much less than it is today. But I think we have to go even further than that. I think we must consider for a moment just what are the purposes of our education. Sometimes I am rather dismayed at the implications of some statements which are made with regard to education; the idea that the purpose of education is to produce so many people skilled in this particular line and so many in another specialized field and so many in some profession or trade. I think we lose sight of the fact that education is something else again. Education should primarily be the 
process of developing human beings, and in order to do that there is one thing we have to do which our educational system has never been able to do even from the start; that is to maintain and encourage the natural curiosity and inquisitiveness of the human being.
Every human being starts off life as a bundle of curiosity, and it is the way in which human beings develop and the way in which societies develop; but when you gather 40 or 50 pupils into a class and ask a teacher to take charge of them, all that teacher can do is to maintain sufficient order to wrest from those students an unwilling acceptance of certain information and facts. I have no doubt whatever that much of our trouble today with regard to juvenile delinquency has been primarily caused by the fact that our educational system stifles that necessary inquisitive, curious feature of human nature. In order to maintain it, the very first thing we need is about twice as many teachers as we have at the present time, and that is an extremely conservative estimate.
I would go further and quote something I said to a teachers' gathering in my constituency not long ago, when I told them- and you may think it was a very rash thing for a politician to say-that I hoped the time would come when half those in attendance at the gathering would be found unqualified for their jobs; but of course I was quite safe, because each one was quite convinced that I was referring to his neighbour and not to him. I then went on and suggested something further. I said I also hoped that I would see the status and the rewards of the teaching profession raised to the degree where there would be two applicants for every vacancy in the profession.
Unless we can approach something like that, then we are not going to really fulfil the fundamental purposes which were referred to tonight by the Minister of Justice, the purposes of the fathers of confederation, and so on. Today the world is a much more complex place than it was in their day. If ever there was a time when children required individual attention, when they required the encouragement of their speculative intellects, today is the time; because they have to combat an enormous barrage of influences and of propaganda which are definitely antisocial and anti-intellectual in nature.
We may think we can solve these problems by banning certain deleterious aspects of our society, like crime comics, but the only real protection for young people from some of the evil influences of modern society is the development in them of inquiring minds which will seek always to extend the boundaries of

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their knowledge. I suggest that in order to do this a very large proportion of the national income of this country must be devoted to providing the sort of scholastic environment which will produce those inquiring minds which will be made safe from the influences of some aspects of this modern world. To do that is beyond the capacity of even the richest province.
When the tax rental agreements were brought up in the legislature in Victoria I was very dubious about them. Curiously enough a Liberal member of the legislature and I were the only ones who were dubious. I was dubious because I doubted whether the great and good federal government would always see eye to eye with those of us who considered that there were vast improvements to be made in the society in which we lived. Tonight we have had proof that I was right. The spokesman for this government still does not admit that we have a crisis in education. Putting it in simple emotional terms, you may say that you cannot buy these things; but the bitter truth is that you have to buy them, and with hard dollars. We will have to offer inducements to the best brains in our society to undertake this most important job in our whole society, because the whole rest of our lives depends upon what those to whom we entrust our children are able to do with their trust.
The whole of our elaborate and complex society rests finally on the shoulders of the primary teacher. She is the first one who sets the child's mind in a certain direction. I would suggest that all the obstacles that have been raised tonight of insurmountable constitutional blocks will eventually be blown apart when finally it dawns on this government that it has to take action in this field, just as it took action in the field of family allowances, in the field of grants to universities, both of which I suggest are perhaps suspect to the constitutional purist. I have never been able to understand why grants in aid of technical education were not subject to the ban, but apparently they are not.
We know quite well that eventually, when they are met with the demands of public opinion, these blocks will be removed; but the tragic thing is that in the meantime a whole generation of Canadian citizens is suffering and much of the future of this country is being endangered, because if we go on this way we shall invite the worst possible fate that could overtake us. That is, that the next generation will be no wiser than we are.
(Translation):


Guy Rouleau: Mr. Speaker, in the first place I should like to congratulate the hon. member for Saskatoon (Mr. Knight) on moving this resolution designed to give financial assistance to our educational institutions and teaching establishments. In so doing, he affords us all, as members of this house, an opportunity to show our interest in matters of education in this country. It is a valuable contribution to the future of Canadian youth and to Canada as a whole.
This debate also gave us the opportunity of hearing an excellent speech on the question of education by the Minister of Justice (Mr. Garson) and of being informed of the position of the government of our country on this matter.
I also wish to thank the hon. member for Saskatoon for the kind words he had on my behalf because of the speech I made last week in a debate on a similar subject. In his remarks this afternoon, he expressed the wish that I give my opinion on the question he submitted to our consideration. Mr. Speaker, as a man in public life, I have never been afraid to express my opinion, neither here nor elsewhere, and it is with pleasure that I take this opportunity to express my views on the matter he submitted to us.
In the speech he just made, the hon. member for Nanaimo (Mr. Cameron) told us that the Minister of Justice seemed unaware of the fact that there is a financial crisis in the field of education. I listened most carefully to the remarks of the Minister of Justice and I for one am convinced that he is conscious of the needs felt by all provinces in matters of education. I know that the Minister of Justice is mindful of provincial autonomy and that he leaves to each province the care of discharging its obligations.
Of course, Mr. Speaker, I agree with the hon. member for Saskatoon when he says that our schools are faced with certain financial difficulties in each and every educational field, primary, secondary and university. Because of the increase in our population we have to build more schools and universities. We also recognize the necessity of providing higher pay for college and university professors as well as for high school and elementary school teachers. These people are putting heart and soul in the teaching of our children and I do think that everybody here will agree that they should be better paid.

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Still the problem which we have to face in the educational field also exists in other fields. I need only mention here the difficulties faced by municipalities in their administrative work, precisely because of their current rapid expansion. However, the financial difficulties which we are facing in the educational field are such as to deserve study by all those who are in charge of the various government activities in this country.
To my mind, Mr. Speaker, this is a critical problem since it has a bearing on the future of our children, of the younger generation of this country and of the nation as a whole.
In seeking to settle this financial problem, we must take into account the British North America Act in so far as it concerns the rights which have been reserved to the various provinces on confederation.
Last week during a debate initiated by the hon. member for York Centre, I had the opportunity of expressing my views on the attitude that we should adopt here in this house, with regard to education, in order to ensure that provincial autonomy in this connection be respected. In my conclusion I supported the granting of university scholarships which would in no way threaten the autonomy of the provinces, on the contrary.
To return to the discussion now under way, let us read over the resolution submitted by the hon. member for Saskatoon:
That, in the opinion of this house, the government should take into consideration the advisability of taking steps to relieve the financial crisis in education, without encroaching in any way on the exclusive jurisdiction of the provinces in this field, by granting financial assistance to the various provinces for the expansion and equalization of educational opportunity across Canada.
When I first read the resolution, I felt inclined to support it. However, after listening to the speech delivered this afternoon by the hon. member for Saskatoon, I think I should make considerable reservations, and perhaps even more than reservations. Mr. Speaker, I do not want to speak of the hon. member personally, but I fear this resolution coming from the C.C.F. benches creates a great danger. Indeed, during the four years I have spent in this house, I have noticed that certain members of his party seemed to forget, on several occasions, that we had in Canada a constitution giving rights to the provinces in certain fields, and more particularly in the field of education. When I read carefully the resolution moved by the hon. member, I see that it included the following sentence:
.	.	. without encroaching in any way on the
exclusive jurisdiction of the provinces . . .
However, while making his speech this afternoon, the hon. member had this to say: "The public of Canada would support, I am quite sure, this plea which I am making for the granting of federal money for education, so long as there was no interference with provincial responsibilities implied".
Earlier, Mr. Speaker, the hon. member had said: "I wonder if it would disturb the constitution too much if the federal government were to assume some of the capital cost of schools". He concludes by saying that he does not believe it would.
Mr. Speaker, I suggest that the educational system, both on the primary and secondary level, is exclusively within the jurisdiction of the various provincial legislatures. When the hon. member says that we should assume some of the capital cost of schools, we already see there an encroachment upon the autonomy of the provinces, and that is exactly what we do not want.
In that same speech, the hon. member said:
What is taught, how it is taught, and where it is taught or anything else of that kind lies within the jurisdiction of the province. All we want to do is to support the hands of those people within the provinces who are trying to educate these children. That is all we want to do and it is entirely a financial problem.
Well no, Mr. Speaker, it is not solely a financial matter; it is a problem affecting the organization of education in this country and more particularly in the provinces, a prerogative which has been guaranteed to us by the British North America Act which provides that education is exclusively a provincial matter.
In the province of Quebec, as in any other Canadian province, I am sure that the legislative body wishes to discharge its responsibilities in accordance with the rights and powers guaranteed by the constitution. That is what is provided by section 93. As I said last week, when we have to deal with education we must be very careful to respect that guarantee given to the provinces by the fathers of confederation.
It is for that reason, Mr. Speaker, that I cannot accept in its entirety the resolution moved by the hon. member for Saskatoon; I wonder if the hon. member realizes the difference between what we could call here education proper, which comes under provincial jurisdiction, and Canadian culture, a field where the government of our country

may have, in some cases, certain responsibilities. I agree with the hon. member when he says that our educational system is in great need of funds. Since the planning of education has been entrusted to the provinces the solution of this financial problem in the field of secondary and primary education is their sole responsibility. Therefore, as a representative of a federal constituency, I will not even discuss these problems in so far as they relate to primary and secondary education.
In the field of university education, the problem is just as serious. However, who provides the universities with the funds they require to educate our children? These funds come from credits voted by the different provincial legislatures, in certain cases from federal grants, and from certain amounts put at the disposal of our universities by private enterprise or by private individuals anxious to help our young Canadians.
Needs are growing, Mr. Speaker, precisely because more and more young people, throughout this country, are entering university. I am happy to note that fact. It proves that Canadian culture is constantly being raised to higher levels, and this is as it should be. I had occasion last week to express my views on the matter of primary and secondary education. As I said a while ago, it is different in the case of universities. In fact, there is in that field a cultural aspect regarding which the federal government could make a contribution without however laying down any condition. That is in complete agreement with the findings of the Massey report which recommended assistance to universities, which is urgently required.
For a long time the Prime Minister of our country has been concerned with the problems of universities. Recently, when he received an honorary degree from the University of Sherbrooke, he announced that he would recommend to parliament that grants to universities be increased from 50 cents to $1 for each university student in the country, thus bringing to $16 million annually the amount of statutory federal grants to universities.
In the speech he made on November 12 last at the national conference of Canadian universities, the right hon. Prime Minister said, and I am quoting from La Presse of Tuesday November 13, 1956:
I have already explained why the federal government had the right to offer such assistance. I feel that it is not only its right but its duty to do so.
In the same speech the Prime Minister added:
My colleagues and I feel that the annual federal grants to universities should be continued and
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increased and we are prepared to recommend to parliament, at the next regular session, that they be doubled.
That is what the parliament of Canada has done at the very beginning of this session. And if I refer to Hansard of last Friday, January the 15th, I see that the Prime Minister in the explanations he gave us on the subject of the assistance that the Canadian government wants to give to various universities in this country, takes into account the autonomy of the provinces. During the same debate I noticed that the leader of the official opposition (Mr. Diefenbaker), agreed with the Prime Minister. I suggest that all the members of the house recognize that we should help Canadian universities. However, I want to be sure that such assistance will be granted with due respect for the autonomy of the universities and provinces. In order to insure that this autonomy will not be affected, it is provided in the measure introduced by the government that the universities of the various provinces of the country will not be forced to accept the grants, but that they can refuse them if they believe that this would encroach upon the autonomy of the provinces.
The resolution of the government provides that the grants will be distributed by an independent organization.
The hon. member for Nanaimo (Mr. Cameron) said a moment ago that there was no difference between the measure introduced by the Prime Minister and the proposal of the hon. member for Saskatoon. The Minister of Citizenship and Immigration (Mr. Pickers-gill) pointed out that there is all the difference in the world between these two proposals since under the resolution of the Prime Minister, the grants will be offered to the universities and not directly to the provinces.
Before concluding my remarks, Mr. Speaker, I wish to make a special appeal to private enterprise in this country to provide an ever increasing help to our universities and our university students.
I also wish to congratulate the hon. members of this house for the interest they have shown in the problems of education and teaching in our country. In so doing, they prove that they are conscious of their responsibilities; I urge them to continue to work for the future of our country with due respect to the spirit and the letter of our Canadian constitution.
The hon. member for Saskatoon said this afternoon that he was glad to find that an ever increasing number of hon. members show their interest in education. However, I would not want the growing interest to

Education
which he referred to be taken as an excuse to encroach upon certain sections of the Canadian constitution.
However, I cannot give my full support to the resolution before the house, precisely on account of the explanations given by the hon. member. In my opinion, if the resolution were carried in its present form, it would be an encroachment upon the constitution and that cannot be allowed. Such an action would be an interference in a field exclusively reserved to provincial jurisdiction. I am still convinced that no hon. member would wish to encroach upon what we call provincial autonomy.


André Gauthier: Mr. Speaker, I have very little time left before ten o'clock but I do think I have time enough to make a few remarks. The hon. member for Saskatoon (Mr. Knight), I am convinced, has introduced his motion in a sincere effort to find a solution to the problem of education in general.
I do not have to demonstrate the need for supporting education. That is a generally recognized fact. All of us here to the best of our ability, are searching for a formula according to which our young fellow citizens may be allowed to benefit more from education.
Education is a personal responsibility of parents. That is a privilege which is rightfully theirs. Still, man is not able to develop, to realize his whole potentialities except as a member of society. That being the case, those in authority must exercise their complementary duties. In my province this is first of all the business of the local school board to which I am particularly happy to pay tribute.
Our federal system nevertheless recognizes the exclusive responsibilities of the provincial authorities to legislate in educational matters. I will remind hon. members that the fathers of confederation did not deem it wise to include these in the general powers granted to the provinces under section 92. They chose instead to draw up a separate section to deal with this matter, a fact which indicates the importance they attached to the subject. It was their wish that education be a provincial matter. Even with the best intentions in the world, I do not think that we should do anything which would, in any way, diminish the responsibilities of the province.
The mover of the motion has taken the precaution to include the following reservation:
Without encroaching in any way on the exclusive jurisdiction of the provinces in this field.
That is undeniable recognition of the fact that the federal government has no jurisdiction in that field, and that should be sufficient to dispose of the resolution. Problems coming within the field of our jurisdiction are numerous and varied; some are very difficult to solve. We should spend our time and energy working for the common good of our constituents in the fields in which we have jurisdiction and which were assigned to us by the provisions of the British North America Act.
Federal legislators are duty bound to be very circumspect and careful in matters of education. The province of Quebec has most imperative and special reasons to be jealous of the field of education. It is the only means available to French-speaking Canadians of keeping the language and traditions inherited from their forefathers. If there is a crisis in the field of education, a fact recognized practically everywhere, let us leave to the provincial authorities the trouble of studying the problem and let us help them to solve it if they so request us. The proposals designed to put an end to the present financial crisis in the field of education referred to in the resolution must come from the provinces. They will I am sure set the required conditions and guarantees.
For all the reasons I just gave-it is already ten o'clock, Mr. Speaker

I must say that I will oppose this resolution of the hon. member for Saskatoon and I move the adjournment of the debate.
(Text):
On motion of Mr. Gauthier (Lake St. John) the debate was adjourned.



BUSINESS OF THE HOUSE

Hugues Lapointe: Tomorrow we shall go into supply and continue, and I hope complete, the study of the supplementary estimates. Then we shall take up the legislation as announced by my colleague the Minister of Finance on Friday, in the order in which he announced it.


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

[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. Thatcher: What action has the government or the Bank of Canada taken, in an effort to curb inflation, to control loans made by finance companies, small loan companies, insurance companies, credit unions, etc.?
Answer by: Hon. W. E. Harris (Minister of Finance):
The government and the Bank of Canada have made it clear in discussions with finance companies and the larger retailers that a continued expansion of credit is not desirable, but no specific controls have been imposed on loans made by finance companies, small loan companies, insurance companies, credit unions, etc.


DELIVERY QUOTAS, WESTERN PROVINCES
Mr. Hansell: 1.	How many points in the three western provinces respectively closed the last crop year with a wheat delivery of (a) over five bushels quota; (b) five bushels quota; (c) under five bushels quota?
2.	How many points in western Canada received an eight bushel quota?
Answer by:	Mr. Dickey, Parliamentary
Assistant, for the Minister of Trade and Commerce:
Number of
Province	delivery
points
1. (a) Over five	Manitoba	
375bushels	Saskatchewan	..1,001Alberta	
492Total	1,868
Questions
(b) On five	Manitoba	 -
bushels	Saskatchewan .. 103
Alberta	 85
Total	 188
(c)	Under five	Manitoba	
Nonebushels	Saskatchewan	..	"Alberta	
"2. On eight bushel Manitoba	
316quota	Saskatchewan	..	307Alberta	
195Total	
818


STEEL PRODUCTION, 1955-56
Mr. Gillis: What was the total tonnage of basic steel produced in Canada for the years 1955 and 1956, by (a) Algoma Steel Corporation; (b) Stelco; (c) Dominion Steel and Coal Corporation?
Answer by:	Mr. Dickey, Parliamentary
Assistant, for the Minister of Trade and Commerce:
Production of steel ingots and steel castings
Eleven months ended November Year 1955	1956
net tons of 2,000 lbs.
Steel ingots
Open hearth-basic .	3,917,051	4,234,329Electric 	524,692	510,993Total steel ingots.	4,441,743	4,745,322Steel castings	Open hearth-basic .	26,003	29,427Converter 	164	284Electric 	61,491	80,634Total steel castings	87,658	110,345
(a), (b) and (c) Under section 15 of the Statistics Act returns for individual companies may not be released.
739

Tuesday, January 29, 1957