1957-12-13

[Stage Direction]
Ninth report of standing committee on railways, canals and telegraph lines.-Mr. Fraser.


[Stage Direction]
On the orders of the day:
Right Hon. L. S. Si. Laurent (Leader of the Opposition):: Mr. Speaker, may I take a moment or two at this time to express on behalf of all the members of the official opposition our good wishes to the Prime Minister and his colleagues the Minister of Finance and the Minister of National Defence who, I believe, will be leaving early this evening to attend the extraordinary council meeting of the North Atlantic Treaty Organization in Paris next week. I can assure the Prime Minister and his colleagues that these good wishes are very sincere and I have no doubt that they are shared by every member of this house-


Some hon. Members:: Hear, hear.


Louis Stephen St-Laurent: -regardless of party affiliations and generally by the people of Canada.
Of course these good wishes extend also to the Secretary of State for External Affairs who, I understand, had to leave a little earlier and who by this time has probably already reached his first destination.
Naturally these good wishes include the very hearty and confident hopes that the Prime Minister and the members of his party will have a comfortable and safe journey and will be back in our midst at the time fixed in their schedule. Those personal wishes come from the esteem and friendship which the members of this house have for the Prime Minister and his colleagues who will be representing Canada on this important occasion.
We all realize, of course, how important to the members of the North Atlantic Treaty Organization is this special meeting and, as the Prime Minister reminded the house
on Wednesday in the exchange of questions and answers recorded in Hansard of that day, the character of the meeting probably arises from the earlier meeting of the Prime Minister of the United Kingdom and the President of the United States a few weeks ago. The Prime Minister added:
It also arises from the realization that the recent scientific advances on the part of the U.S.S.R. have called for an intensified examination of NATO and its principles, to the end that it may advance to the future stronger than ever before in its purposes and in its aims.
There are, no doubt, many difficult and complex problems which will be the object of consideration at this meeting. We understand the heads of the governments of most of the member countries will be present. I am not going to refer any more to these difficulties, because that would not serve any useful purpose at this time, but we have had an example of their number and complexity in these exchanges which have taken place from time to time in the House of Commons, and the Prime Minister said on Wednesday that as to the furtherance and extension of the application of article 2 of the North Atlantic treaty he felt he would be speaking with the approval of the members of the house.
I think I can say in a general but very sincere way that the Prime Minister may feel that he and his colleagues will have behind them the support of all the members of this house and of the public generally in their efforts to promote what has been the usual attitude of Canada as a middle power in its endeavours to smooth out the disagreements which are bound to arise from time to time between the leaders of countries engaged in a common pursuit, disagreements which are certainly overweighed by the general desire of all the members of the organization, their governments and peoples, to promote and try to secure peace in the world.
They will be doing this at a time when we are all reminded of the age-old promise of peace in the world to men of good will.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, may I join the Leader of the Opposition in expressing good wishes to the Prime Minister and the members of his party who are attending this very important conference in Paris. There are times when party differences are put aside and we can be unanimous

NATO-Paris Conference in our good wishes, and this is especially so in connection with a conference of this nature.
I think in all probability this organization has never met with the eyes of so many people upon it as at the present time. I was very glad to hear the Secretary of State for External Affairs say the other day that some way must be found of negotiating with those with whom we have been at variance over the years in order that the world may be protected from the threat of destruction which has been hanging over it for so long.
The North Atlantic Treaty Organization, I remember well, was first suggested at the United Nations by the Leader of the Opposition. I was a member of the Canadian delegation when that proposal was made at the United Nations assembly in 1946, and there is one feature of it which I hope the Prime Minister and his colleagues will stress, namely article 2, for economic co-operation. I believe more can be done to unite the western nations by article 2 than by any other means.
All we hope is that our delegation will be able to promote peace among the nations of the world, and I can assure the Prime Minister that we wish him and the delegation every success in the great undertaking in which they will be engaged next week. I know, as the Leader of the Opposition has said, that this feeling is shared not only by everyone in this House of Commons but by the people in every part of Canada.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I am sure it will not require a multiplication of words to add my good wishes to the expressions of good will which the Prime Minister and his colleagues have received from all sides of the house on leaving to take part in this summit conference in Paris. I can only say that those speakers who have preceded me spoke words which are in my own heart and mind.
I should also like to say that the circumstances at this time are unusual. These are dangerous times, and it seems to me they will require an unusual amount of co-operation among the nations which are now called the free nations of the world. If this NATO meeting can result in an extension of the application of article 2 in such a manner as to bring about this unusual measure of cooperation, I think we can see some life at the other end of the tunnel. I believe representatives of the nations attending this meeting must go to unusual lengths in seeking ways of removing fear, because I believe that today fear is the greatest cause of world tension.

I believe the place to start is with ourselves and the way we work with other nations and treat other nations. I also believe that there is more reason today to play the game with the utmost honesty, in the first place, than ever before and if our delegation can give leadership at the NATO conference in that respect and on a high moral plane I am satisfied the results will be good. Our best wishes go with them.
Right Hon. J. G. Diefenbaker (Prime
Minister): Mr. Speaker, I need not say how deeply grateful I am to have the expression of the viewpoint of the right hon. Leader of the Opposition and the leaders of the C.C.F. and Social Credit parties. This is one of those times when in a spirit of unity the House of Commons demonstrates the true relationship between members of various political parties that is of the essence of parliamentary government and the preservation of freedom as we see it. Indeed, what has been said here this morning is indicative of the strength of our system, which permits strong and definite opinions being expressed regarding those matters which separate us while at the same time maintaining not only the amenities but the friendships that exist among those who although they represent different viewpoints are united in their common dedication to the worth-while things of life.
As I speak for my colleagues and myself, may I say how much what has been said here today will mean to us in the days that are ahead as we meet with the representatives of the other 14 countries composing NATO, not in an aggressive attitude, not in a belligerent attitude, but in a realization that only in the maintenance of our undivided unity and in dissolving those things that separate us from time to time will freedom truly be preserved.
When reference was made to the fact that the Leader of the Opposition first raised this question of unity in the free world it brought to me a feeling of pride as a Canadian that the idea and concept should have been first introduced at an international meeting by one of those within this parliament who still occupies a high position in the deliberations of our country. There is no one, I am sure, who realizes more than I that in recent months, indeed in the last year and a half or two years, certain profound differences have arisen among members of NATO.
There is nothing unhealthy or abnormal in that fact. Communist countries are able to deny the beneficial effect of criticism or disagreement. We know there have been difficulties and disagreements, and my hope is that this conference, playing as it does an important role in providing a forum for consultation, will achieve that unity of purpose

to which I have already alluded, that rededication to principles upon which NATO had its beginnings, the redeclaration of its aims and purposes, so that we shall be able among the forces of freedom to advance into the sombre days of the future once again realizing that we have established a unity beneficial to the maintenance of peace. Indeed, without it peace cannot be assured.
We should not exaggerate our difficulties nor our problems. That we can meet at this time and that the heads of the various states will be able to meet indicates that the alliance retains its basic strength and vitality, that its principles still retain a basic similarity of point of view.
There is one thing that I think we must make clear, and that has been made clear this morning. NATO has no aggressive purpose. Mention was made of the need to dissipate fear in the world as a major element in preserving peace. At this meeting I hope it will again be made abundantly clear that this is a defence alliance; that the basic purpose of NATO is to deter aggression and to preserve peace. That is the attitude of this parliament as I see it today.
A prime minister's responsibility, and the responsibility of those associated with him, must always be so to speak as to convey to other nations what has been the traditional position of Canada, a middle power exerting its influence, as the Leader of the Opposition said, among other nations joined with us who have their disagreements-disagreements which are natural-and do those things which we believe are necessary.
My hope is that out of this NATO meeting will come that new spirit which is expected not only by the peoples of the free world, but also by men and women of good will everywhere. Our purpose will be to make the contribution, however small, that is available to us to bring about the achievement of what the Leader of the Opposition said, peace on earth to men of good will.


INDONESIA
[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Prime Minister):: As numbers of relatives of Canadians in Indonesia have been endeavouring through this department to secure information with regard to their relatives located there, I feel that a statement at this time might clarify the situation.
The information received from our various diplomatic missions abroad indicates that the position of Dutch nationals and Dutch interests in Indonesia has not yet been clarified, although it is evident that many Dutch
Inquiries of the Ministry nationals resident in Indonesia are being encouraged to leave. Our embassy in Djakarta has reported that there is no immediate threat to non-Dutch nationals or interests, as armed security enforcement by the Indonesian army remains reasonably good. One hundred and thirteen Canadians are registered with our embassy in Djakarta as residents of Indonesia. About 30 of these are with the United States oil companies in Sumatra, 30 with the embassy, Colombo plan and other foreign aid dispensing agencies, and the remainder are mostly missionaries. I should like to repeat that no measures have been taken against Canadian nationals and no evacuation of Canadians is now contemplated. However, if evacuation becomes necessary, emergency procedures to achieve this end have already been planned.


PROPOSED ESTABLISHMENT OF NEUTRAL
[Stage Direction]
On the orders of the day:
Major James William Coldwell: Mr. Speaker, may I direct a question to the Prime Minister. I am going to try to put the question in such a way as not to embarrass him, and he will understand that I am not trying to embarrass him in any way. I will put it this way. May I hope that the Prime Minister and his delegation will give sympathetic consideration to the proposal for the establishment of a neutral zone, particularly for atomic weapons, as suggested by two countries, I believe, namely Poland and Czechoslovakia and which is somewhat in line with the proposal made by Sir Anthony Eden in 1955. May I express the hope that sympathetic consideration will be given to that matter.


John George Diefenbaker: Mr. Speaker, the attitude of the Canadian delegation will be to give the fullest consideration to every proposal which is made and which has as its purpose the amelioration of the present tensions. The suggestion of my hon. friend will certainly receive that sympathetic consideration.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. James Sinclair (Coast-Capilano):: Mr. Speaker, I should like to address a question to the Minister of Justice. Can he inform us as to the negotiations respecting Britannia mines?


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, I am glad the hon. gentleman is able to ask this question. A meeting was
2308	HOUSE OF
Inquiries of the Ministry held yesterday of representatives of the company from New York, representatives of the men, the minister of mines of British Columbia, my colleague the Minister of Public Works and myself. It was a valuable and helpful meeting. Certain understandings in principle were arrived at which involve the various representatives reporting back to those to whom they are responsible. I hope to be able to make a fuller and perhaps a final statement on Monday or Tuesday.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hon. D. S. Harkness (Minister of Agriculture):: Mr. Speaker, some days ago the hon. member for Peace River asked for a report on the progress of P.F.A. inspections in the Peace river area, where disastrous crop conditions exist. Yesterday he asked the Prime Minister whether the government would make a full investigation. I think I should point out that the investigation currently being carried on, as will become clear when I make this statement, is perhaps as thorough an investigation into what the crop conditions are as could possibly be made.
Inspections are being carried out in the Peace river country and Athabasca districts of Alberta as speedily as possible, but the work is being delayed by extremely bad weather. In the Peace river area on December 9 there were 25 field inspectors working, and supervisory officers were contacting as many other qualified men as are available with a view to getting the inspection work completed in as short a time as possible. I might say we hope to have 50 men at work as soon as they can be secured, given their training and put into the field.
Checking offices have been opened at Sex-smith and Falher, and clerks have been hired to help process returns as they come in. A third office may be opened in the town of Peace River. It has been reported that four inches of snow and rain fell on December 8 and that road conditions are extremely bad, which is delaying the work. In several districts the inspectors can get around only on horseback.
Because of the bad weather and the inability of the field inspectors to report promptly, it is not possible to say how much of the work has been done to date. However, a close check is being kept and the supervisory officials who have been sent to the area are doing all they can to avoid any delays.


The hon. member for Athabasca said to me yesterday that the same conditions prevail there as in the Peace river country. I promised him that I would investigate that matter, and I have a report on it. In the Athabasca district about 70 townships have been applied for, and inspections are almost completed. While harvesting has been delayed in some parts by the weather, the situation does not compare with that in Peace river. There appears to be a problem in about ten townships, and the municipality of St. Paul has asked to meet with the district supervisor. A meeting has been arranged for December 16.
It appears that in this district, as in several others, there are some unthreshed crops that are salvageable; that is, it will be possible to thresh them this winter or in the spring. In such cases the inspection work will not be undertaken until harvesting is completed. In most of the Peace river area the unthreshed crops remaining in the fields are definitely not salvageable.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I should like to address a question to the Minister of Labour. I am sorry I was not able to give him notice until after coming into the house. Has the Minister of Labour received a further request on behalf of the salmon gill net and seine fishermen of British Columbia who are faced with a problem in connection with unemployment insurance because they have fewer than 15 contributions? If so, can he tell the house what steps are being taken by him or by the unemployment insurance commission to deal with the serious problem being faced by these fishermen?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, in answer to the hon. member's question I wish to say that I have received representations from the united fishermen and allied workers' union in British Columbia as well as other representations with regard to relaxing the seasonal provisions of the unemployment insurance regulations further so that fishermen with fewer than 15 stamps might receive seasonal benefits.
This matter has been given very careful study with my officials, and the decision is that I do not feel a further relaxation of these provisions would be in order at this time. I am sure it will be appreciated that a relaxation of the requirements on behalf of one particular group would soon result in

demands from other groups and individuals for a similar relaxation. To meet this demand would entail a further revision of the seasonal benefit regulations which have just recently been revised to provide a longer benefit season. Thus I am afraid I cannot see my way clear to recommend the further relaxation which has been requested in this case.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. E. L. Morris (Halifax):: I desire to ask a question of the Minister of Transport of which I have given him notice. Can the minister advise whether the Labrador will continue to be based in Halifax after completion of icebreaking duties in the St. Lawrence?


Hon. George H. Hees (Minister of Transport):: I wish to thank the hon. member for advising me of his intention to ask this question. The Labrador has been based in Halifax for quite some time and it is not the intention of the government to change these arrangements.


Mr. Lucien Cardin (Richelieu-Vercheres):: May I ask the Minister of Transport whether tenders were called in connection with the refitting of the H.M.C.S. Labrador?


George Harris Hees: I am sorry, Mr. Speaker, but I could not hear the hon. member's question. Would he speak a little louder?


Louis-Joseph-Lucien Cardin: I was asking whether the minister could tell the house whether tenders were called for the refitting of the Labrador.


George Harris Hees: The work being done on the Labrador at the present time is under the jurisdiction of the Department of National Defence. Perhaps the question could more appropriately be directed to my colleague.


Louis-Joseph-Lucien Cardin: May I redirect my question to the Minister of National Defence.


An hon. Member:: Pass the buck.


Hon. G. R. Pearkes (Minister of National Defence):: I could not say offhand whether or not tenders were called. If tenders were called they would be placed with the Minister of Defence Production.


Some hon. Members:: Oh oh.


Louis-Joseph-Lucien Cardin: May I ask the Minister of
Defence Production whether tenders were called for the refitting of the Labrador?


An hon. Member:: Who is next?


Hon. Howard C. Green (Acting Minister of Defence Production):: Mr. Speaker, I thought that was coming. Unfortunately I cannot pass the question any further along the line. I shall
Inquiries of the Ministry have to make inquiries and let the hon. member have an answer in a day or two.



AUTOMOBILES


[Stage Direction]
On the orders of the day:
Hon. J. M. Macdonnell (Acting Minister of Trade and Commerce):: Mr. Speaker, yesterday the hon. member for Essex West asked this question:
Is there any prohibition on the export from Canada of automobiles of Canadian manufacture to communist China or to other Asian countries?
The answer is this. All shipments to communist China require an export permit. In the case of Canadian built passenger cars permits are granted, and hon. members may be interested to know that to date this year three automobiles have been exported to communist China. Permits are also required for Hong Kong, Macao, Outer Mongolia, North Korea, Sinkiang, Tibet and Indo-China.


Mr. D. F. Brown (Essex West):: I have a supplementary question. Do I understand that three automobiles were exported to communist China?


James MacKerras Macdonnell: That is the answer.


Donald Ferguson Brown: Would export permits be granted for any number of automobiles that may be required by communist China from Canada?


James MacKerras Macdonnell: From the answer furnished me I cannot see that there would be any limit on the number. It says "All shipments to communist China require an export permit". An export permit is required, and that is the only requirement.


Donald Ferguson Brown: I have a further supplementary question. Is any consent of the government of the United States required for the export of automobiles from Canada to communist China?


Some hon. Members:: Oh, oh.


James MacKerras Macdonnell: I cannot believe that that is so, but in order to give a final positive answer I think I should take this as notice.


Mr. J. A. Byrne (Kootenay East):: May I
ask a supplementary question of the Acting Minister of Trade and Commerce. Under the existing Canadian-American defence agreements, could a United States company prevent one of its Canadian subsidiaries from accepting orders for non-strategic materials- for example, automobiles-from the republic of China? I hope the minister will take this question as notice.


James MacKerras Macdonnell: I will take that as notice.

Inquiries of the Ministry



REPORTED STATEMENT BY CANADIAN HIGH COMMISSIONER TO UNITED KINGDOM

[Stage Direction]
On the orders of the day:
Hon. Jean Lesage (Montmagny-L'Isiei):: should like to direct a question to the Prime Minister. Might I ask him whether the high commissioner of Canada to the United Kingdom was expressing government policy when he said this, according to this morning's Globe and Mail:
The things we have are needed for industrial production in the United Kingdom . . . Our raw materials are waiting to be taken and used.


John George Diefenbaker: Mr. Speaker, I have not seen the item. I intend to make no observation on an excerpt appearing in the press.



CANADIAN NATIONAL STEAMSHIPS


[Stage Direction]
On the orders of the day:
Mr. C. E. Johnston (Bow River):: May I
direct a question to the Minister of Transport. Yesterday I asked the minister if he would give the house a statement with regard to the condition that now exists on the C.N.S. ships. His answer to me was in these words:
it-
That is the newspaper.
-stated that those officers were quite willing to sail under foreign registry.
I should like to suggest to the minister that just repeating what a newspaper had said is not a responsible statement to be made to this house. May I ask the minister if he would make a further investigation into this serious problem and give a statement to the house on his own responsibility as to the condition and the safety of these ships as they exist today. Maybe he is not prepared to give a statement today. Perhaps he would prefer to give it tomorrow or Monday, but I think we should have an up to date statement with regard to these ships. I wonder whether he would be good enough to do that.


George Harris Hees: The question asked by the hon. member yesterday was with regard to a statement which appeared in the press to the effect that officers manning these eight ships were not willing to sail under foreign registry.
My answer was that following the article to which he referred a further article-and as I said yesterday I believe it was a Canadian Press dispatch of the following morning-corrected the article to which he was referring and said that, contrary to the

previous article, I believe all 65 officers on these eight ships had stated they were willing to sail under foreign registry. Seven of them, however, said that although they were willing to sail under foreign registry they would prefer to sail under Canadian registry.
I thought, Mr. Speaker, I had answered the hon. member's question in full. If he wants a further statement I will be glad to give it to him at this time. The eight ships are in Halifax harbour. The officers are on the ships; the ships are in good condition. I am afraid I can give the hon. member no information other than that.
Mr. T. A. M. Kirk (Shelburne-Yarmouth-
Clare): I would like to address a supplementary question to the Minister of Transport. Would he give the house the answer to the all-important question, which is, when will the service between Canada and the West Indies be restored?


George Harris Hees: Well, Mr. Speaker, the hon. member for Laurier asked that same question yesterday. The hon. member for Shelburne-Yarmouth-Clare was in the house, and he heard my answer. It is the same today. I do not know.


Mr. Kirk:: You still do not know?


George Harris Hees: That is right.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. F. C. Christian (Okanagan Boundary):: I would like to ask a question of the Minister of Northern Affairs and National Resources or the acting minister, notice of which has been given. In connection with the South Saskatchewan river dam project, has the government given consideration as to whether the dam is to be primarily for the storage of water for irrigation purposes or for the generation of electric power, or for both purposes?
If so, what tentative or final decision has been reached with the government of Saskatchewan with respect to the use or uses of this project?


Douglas Scott Harkness: Mr. Speaker, this question should have been addressed to the Minister of Agriculture, who answers for the South Saskatchewan dam, so I shall answer it in that capacity. In connection with the first part, it has always been known that the dam was for irrigation and power purposes. The project has always been discussed from those

two points of view. It is perhaps primarily for irrigation purposes, but the power feature also was important.
As to what tentative or final decision has been reached with the government of Saskatchewan, negotiations are still going on with that government in regard to the matter.


Right Hon. J. G. Gardiner (Melville):: Mr. Speaker, might I ask the Minister of Agriculture another question with regard to the same matter. The statement has been made that this is primarily a dam and reservoir built for the purpose of providing irrigation. It has never been understood to be that. As a matter of fact it has been said many times that no one would build that dam for the purpose of supplying water for irrigation only; it would be too expensive. I would just like to ask the minister if he would not agree that the greatest possible use to which this dam could be put would be to supply water to an area that is at present the driest section of the drought area of western Canada, it being in the middle of that area. The supplying of water for-


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


James Garfield Gardiner: -other purposes, that is to say for farming, community and industrial purposes is most important, and not primarily irrigation.


Douglas Scott Harkness: Mr. Speaker, I do not really understand why the hon. gentleman rose. I have stated in answer to the question I was asked that this dam was built for both irrigation-which was what I was asked- and for power purposes. Of course everybody understands and has known that in addition to the irrigation benefits which will come from the project, the fact that this large body of water will be collected as a result of the building of the dam or reservoir is going to raise the water table. The whole project will naturally have many beneficial results, merely from the fact that this large body of water has been brought into existence.


James Garfield Gardiner: Well, Mr. Speaker, my hon. friend suggests that he does not know why I rose. I rose because he had, in addition to giving an answer to the question-


Some hon. Members:: Oh, oh.


James Garfield Gardiner: Mr. Speaker, I am explaining why I stood up at the time.


An hon. Member:: We are not interested.


James Garfield Gardiner: -in addition to giving that answer-
Inquiries of the Ministry


Mr. Speaker:: Order. If the right hon. gentleman proposes to ask another question-


James Garfield Gardiner: No, I am not asking another question. This is a question of privilege.


Mr. Speaker:: There is no question of
privilege involved.


James Garfield Gardiner: There is a question of privilege, when it is stated that I did so and so and I am suggesting I did not.


Mr. Speaker:: I am sorry I do not agree with the right hon. gentleman.



ST. LAWRENCE SEAWAY INQUIRY AS TO EFFECT OF IMPOSITION OF TOLLS

[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: I would like to address a question to the Prime Minister. Would the government give consideration to making a proper survey of the effect on our Canadian economy of proposed tolls on the St. Lawrence seaway? I ask this question having in mind that the tolls set should have no discriminatory effect against Canada or any industry in Canada.


George Harris Hees: I will take that question as notice.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavista-Twil-lingate):: Mr. Speaker, I should like to ask the house leader whether it would be possible, either now or during the debate on the Beechwood resolution, to have answers given to starred question No. 45, which I put on the order paper in the hope of having answers before that debate took place.


Mr. Speaker:: This is the question that relates to the Beechwood project?


John Whitney Pickersgill: And other matters, sir, which while they do pertain to that motion are perhaps not strictly relevant.


Mr. Speaker:: Yes. I have been considering that question following the ruling I made about the first two items in the question relating to Beechwood being out of order. The remainder of the question appeared to be in order, and is it to that part of the question which the hon. member directs his question?


John Whitney Pickersgill: It is that part of the question to which I have directed my question to the house leader.


Mr. Speaker:: To make it clear, I consider that items 1 and 2 of the question are out

Inquiries of the Ministry of order because they relate to the Beech-wood project, which is on the order paper and shortly to be discussed. The remainder of the question referred to other matters and I see no objection to its being dealt with if the hon. minister wishes to do so.


Howard Charles Green: We will look into the suggestion made by the hon. member.


John Whitney Pickersgill: I appreciate that very much.


Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, in continuation of the point raised by the hon. member for Bonavista-Twillin-gate, I wonder if starred question No. 48 could be answered today. Evidently an answer was ready last Wednesday but through some inadvertence it was not delivered.


Howard Charles Green: Mr. Speaker, I think I can get even here. This is the responsibility of the Minister of Transport.


John Whitney Pickersgill: He denied it yesterday.


George Harris Hees: Mr. Speaker, my department has advised me that since there are replies due from several departments with regard to this question, the Secretary of State is collecting these answers and will deal with the matter. I may be wrong, but that is what my departmental officials advise me.


Hon. Ellen L. Fairclough (Secretary of State):: Mr. Speaker, I will look into the matter.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I address a question to the Minister of Transport. Has the minister yet ascertained whether he has received the letter to which I made reference yesterday and which was written to him on November 15 by the Canadian National Railways veterans association at Vancouver, urging an increase in the pensions of retired C.N.R. employees? If the minister has not received the letter, may I have the privilege of sending over to him a copy of the letter which was sent to me, together with a copy of a letter addressed to Mr. Donald Gordon, so the minister can study this important question?


George Harris Hees: I will be very glad to receive it.



EXCISE TAX ACT

Hon. Donald M. Fleming (Minister of Finance) moved: the third reading of Bill No. 231, to amend the Excise Tax Act.
Motion agreed to and bill read the third time and passed.



INCOME TAX ACT

[Stage Direction]
The house resumed, from December 12, 1957, consideration of the motion of Mr. Fleming for the second reading of Bill No. 232, to amend the Income Tax Act.
Mr.   Alex. B. Macdonald@Vancouver-Kings-way: Mr. Speaker, when I moved the adjournment of this debate last night I was pointing out that the proposed amendments to the Income Tax Act still leave that act as one which taxes some of those who should not be taxed and fails to tax some of those who should be taxed, with the result that we do not have sufficient revenue to provide sound taxation policies which would be fair to all people in Canada.
In particular, the amendments fail to do enough in the way of exemptions for children. Naturally I welcome the extension of the exemption in the case of dependent children from $150 to $250, but I think hon. members will agree that this is not nearly enough in view of the cost of living and, in particular, the cost of raising a child in the world today. I agree, too-and I think this statement was made by the hon. member for Montmagny-L'Islet (Mr. Lesage) last night- that the better course to pursue would undoubtedly be to improve family allowances. I say that partly because we know that increasing income tax exemptions in respect of dependent children does not help those many Canadians who do not pay income tax at all. I say it also because too often in my law practice I have had experience with cases where it was most important that something be given to the mother in the family, as is the family allowance, rather than to the father because in broken homes or nearly broken homes, due to alcoholism or some other factor, the breadwinner was not capable of looking after his own family. The principle adopted under the family allowance regulations of sending the cheque directly to the mother is a beneficent one, and I regret that the government has not seen fit to improve family allowance at the present time.
In addition, of course, the present act, as I pointed out last night, does not begin to meet the legitimate expectations of the

Canadian people for an increase in the amount of personal exemptions.
What are the proposals I have to make with a view to alternative revenues; because if we are going to increase personal exemptions and give a better break to the children of Canada, to give every one of them an equal chance of recreation, health, housing and educational advantages, where are we to find the alternative revenues? I wish to draw attention to three cases where we are failing to tax those who should be taxed, cases where special privilege is still enshrined as a principle in our income tax legislation.
The first I will deal with briefly, because it has already been dealt with in this house; that is, the iniquitous 2 per cent tax for the old age security fund. That 2 per cent, as hon. members of this house know, applies only upon the first $3,000 of taxable income; so the situation arises-and I say it is an iniquitous situation-where a man with $3,000 of taxable income pays $60; a man with $30,000 of taxable income pays the same sum, $60, and a man with $300,000 of taxable income still pays $60 only.
This is special privilege with a vengeance, and it is also poor husbandry on the part of the government, because there is an additional source of revenue were that 2 per cent not only to be extended throughout all income tax brackets but graduated, as it should be, to fall more heavily on large incomes.
The next example I wish to refer to is the privilege-I call it the special privilege- conferred under section 38 of the Income Tax Act; that is, the privilege of deducting from taxation 20 per cent of all dividends received from Canadian companies. This situation, grotesque in terms of fair taxation, was presented to the house by the hon. member for Nanaimo speaking on March 12 of this year, and I want to give the house again the example he then presented to the former minister of finance. I am referring to page 2471 of Hansard for 1957.
Here, as the hon. member pointed out, you can consider two cases, each concerning married men with no children. Each has a gross income of $11,133. In the case of the man who gets that $11,133 in dividends from Canadian companies, his income tax would be $1,877.24 before the rebate is given, plus a surtax of 4 per cent on investment income over $2,400, or $349, making the total tax $2,226.56. That man would get a tax credit of 20 per cent of $11,133, his gross income, which would amount to $2,226.60.
In the case of this unearned income, that special credit under section 38 entirely wipes out his tax and $60 only is paid into the old
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age security fund. In the case of the man who earns the income, he pays his full tax of $1,877.24.
With all deference, Mr. Speaker, I submit that this is discrimination which still exists in our income tax legislation. It is a case where we are extending favours to income that comes from owning, not doing. We are extending a special favour to income that is begotten by wealth, not service, when in all fairness and simple justice it should of course be the other way around.
The next section to which I wish to turn for my third point is section 8, subsection 1 of the Income Tax Act. The general section provides that any income conferred upon a shareholder of a corporation is of course taxable, but the exception is this. Any advantage of benefit conferred on a shareholder is not taxable when it confers "on all holders of common shares in the capital of the corporation a right to buy additional common shares therein."
What are some of the consequences that flow from those very few words? Already in this session of parliament we have given attention to two bills, one to increase the capitalization of the British Columbia Telephone Company from $75 million to $150 million and the other the Bell Telephone Company bill. I am referring to these merely as examples of the millions of dollars which go completely untaxed in this country because of that particular little section. In the case of the British Columbia Telephone Company the spokesman for that company stated quite frankly in committee that their increased capitalization would be issued in the form of share rights. They said they had always followed that procedure, and with the approval of the board of transport commissioners they intended to follow it in the future. In other words they will grant to their existing shareholders the right to purchase the new stock issued at six or eight points below the market, as the spokesman said. In the case of the Bell Telephone Company the increased capitalization-


Mr. Speaker:: Order. I am not sure that I follow the connection of the hon. member's remarks with the bill before the house. This is an act to amend the Income Tax Act and it is relevant, as I understand the precedents, to discuss the sections of the Income Tax Act which are to be amended by this bill but not to review the act as a whole. I have allowed a certain amount of general discussion of taxation policies, but it seems to me that the hon. member is going pretty far afield. If other hon. members do the same this debate may reach no conclusion.

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Mr. Macdonald (Vancouver-Kingsway):: Mr. Speaker, with all deference may I state that my position is that we cannot weigh the advisability of approving the particular proposals with respect to revenues advanced by the government without considering alternative proposals.


Mr. Speaker:: It is my view that the hon. member is out of order in discussing all the other provisions of the Income Tax Act which are not under review or subject to amendment in this bill. I would refer to a ruling of the Speaker in 1949 on that subject, to be found in the Journals of the House of Commons of the second session of 1949 at page 237, which reads:
On the second reading of an amending bill-it is the principle of the amending bill and not the principle of the act to be amended, which is the "business under consideration". The discussion must therefore relate exclusively to the principle of the amending bill.
As I say, I allowed a certain amount of discussion of the principle of income tax which is proposed to be modified, but it seems to me that the hon. member is going out into other forms and aspects of taxation which are not before us.


Alexander Barrett Macdonald: Mr. Speaker, I am pleased to abide by your ruling though with regret, not quarrelling so much with the ruling, which of course I cannot and do not do, as with the manner in which the government has introduced these changes, which perhaps has already been the subject of enough debate and rulings in this house and I will not refer further to it.
In order that my remarks already on the record will make some sense, I will conclude by saying that I regret that the government has not opened up section 8 of the Income Tax Act, because I believe that many millions of dollars now accruing to Canadians as unearned income could and should be the subject of income tax legislation.


Stanley Howard Knowles: Mr. Speaker, before the hon. member concludes his remarks I wonder if there is not a special consideration that Your Honour should think about in relation to the matter that is now before us. No one can deny the technical correctness of the position Your Honour has just taken. May I also say that I understand Your Honour is not bound by any commitment that a minister of the crown may have given, but you will recall that on Friday evening, December 6, the Minister of Finance had this to say as reported at page 2023 of Hansard:
Again when the bills are introduced-the bill to amend the Income Tax Act, the bill to amend the Excise Tax Act-hon. members will have their full

opportunity to discuss the measures, offer suggestions and move whatever amendments they choose to offer-
Lest I be accused of omitting part of the sentence-perhaps I should omit it so as not to put these words of the minister on the record again-I will complete the sentence, which is as follows:
[DOT]-and to oppose those measures if they dare.
In view of the minister's statement, which the house accepted, that there would be full opportunity on the bill to amend the Income Tax Act and the bill to amend the Excise Tax Act to discuss the measures and offer suggestions, I wonder if you, sir, should not continue to allow the measure of latitude that you have allowed thus far in this debate. I think last night you allowed latitude to the first spokesman for the official opposition, which was quite proper, and you allowed it to others. It may be that the particular matter the hon. member for Vancouver-Kingsway got into seems too specific to come under this suggestion of the Minister of Finance, but I wonder just where we will get the general discussion which the house as a whole believed we would have following that statement by the Minister of Finance.


Donald Methuen Fleming: There is nothing in the
statement I made that would undertake to override the rules of debate. What I said was that we would have a full opportunity to discuss the measures. This is one of the measures now under discussion, and whatever is relevant and properly within the rules of the house can be said; but there is no suggestion in the remarks I made on Friday night that there is any right on this occasion to override the normal limits of debate under the rules of the house.


Stanley Howard Knowles: It
is perfectly true that the Minister of Finance did not say he was asking the house to set aside its rules, but I think it is known that there are times when suggestions like this are made, and it is assumed that unanimous consent has been given if there is no objection. The house operates that way on many occasions. If the house misunderstood the meaning of the Minister of Finance last Friday I suppose that is unfortunate, but it did seem to me that what the minister was saying at that time was that we should not worry about the loss of the eight-day budget debate because we would have an opportunity to discuss these matters. He did not use these words at that point, but somewhere he used the words "to their heart's content".
Where do we get that opportunity if we do not get it on the second reading of so general a bill as the bill to amend the

Income Tax Act? For example, when we get into committee on this bill there is no question but that we are then limited strictly to the clauses of the bill, but at this point it would seem to me that you might continue to allow reasonable latitude.


Mr. Speaker:: I do propose to allow reasonable latitude. As the hon. member has pointed out, I consider that general remarks and arguments about what other taxation reductions might have been undertaken, other than those which are in this bill, are a proper subject of discussion, in view of the way in which these matters come before the house; but the reason I rose was that the hon. member for Vancouver-Kingsway was getting into discussion of specific sections of the Income Tax Act which are unaffected by this bill. I do not want to preclude him from discussing income tax in principle in connection with this bill, as I did not interfere with other members doing that before, but it is a question of becoming too specific. If hon. members will endeavour to hold the balance there I shall not try to restrict them unduly.


Alexander Barrett Macdonald: Mr. Speaker, I will proceed and try not to trespass on your patience or your ruling. I shall try to speak in a very general way and bring my remarks to a conclusion.
The point I was making about share rights was simply this. That is a general way of financing private expansions in corporate financing. It results in great increments to the shareholders of the companies concerned. Sometimes they can realize that benefit by retaining the shares which are given to them at below the market price; sometimes they can realize the benefit by selling the share rights; but however it may be done, it is a source of great benefit to a relatively small group of Canadians, which is totally untaxed at the present time.
I am going to conclude now, Mr. Speaker, by requesting all members, when they consider these specific amendments that are being proposed by the government, to ponder seriously whether the government has gone nearly far enough. I would appeal particularly to the members of the Liberal party to my right when these questions come up, such as the allowance to construction workers which is not going to be given to loggers at the present time, such as the adequacy of the exemptions for children, to speak as they think and to vote as they speak. I appeal to the government to consider trying to embody in the Income Tax Act what Shakespeare called "this even-handed justice". I ask them to proceed in the direction of redressing 96698-147
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the balance between those who pay too little on too much and those who pay too much on too little.
Unfortunately the amendments which have been proposed do not clearly mark out that direction at all, much less strike out boldly in the direction of that social equality which should be the first objective of a democracy.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, on second reading of this bill I should like to say just a word. This Social Credit group, which has been in this house for quite a number of years, has not taken as much time in the house as generally is taken on a good many measures which some people may think deserve some attention, but which at times we have thought did not require all the attention which had been given to them. But when it comes to matters under the Department of Finance, whether it is taxation, inflation, tight money-no matter what the subject might be within the confines of that department-we feel that we have been sent here with a sort of special mission, a mission that will propose that which is right and proper in monetary fields and condemn those monetary policies which we believe work to the disadvantage of the people.
We are now considering Bill No. 232, which has been brought in by the Minister of Finance, and which he himself has declared is brought in more or less as a substitute for his budget. It deals with a reduction in the income tax. I might say we support the bill partly by compliment and partly by condemnation. The reduction proposed in this bill is commendable but puny. I think all will recognize that any reduction in income tax must be acceptable because it leaves that much more spending power in the hands of the consuming public, yet we do believe that there is a class of people which this reduction in income tax does not touch at all.
I refer to the particular class of people who are so poor they do not even reach the bracket of income where they must pay any income tax. It does not affect them at all, and they are the people who are more in need of consideration than any other class of people in the country. They are the old age pensioners who have to live on that which they receive by way of their pensions; they are the recipients of war veterans allowances, war veterans pensions, and all those social service benefits that go to them through the social service acts. People who may have to live on just those amounts of money are not affected by this bill. In other words, those who need it most cannot get any benefit from the present government's taxation policy.

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There are other people who should be considered when legislation is proposed for a reduction of income tax. For a good many years many of us have been advocating the inclusion of medical expenses as a justifiable exemption in matters of income tax. This bill does not touch that matter at all, yet if any consideration is given it should be given to those who are burdened by expenses because of illness over which perhaps they have no control at all.
Just the other day I received a letter from a man who is a cripple. He cannot walk to work; he must have transportation. He cannot even get on a bus; he must be driven to his work in a car. He can drive a car although he is unable to walk. Well, the department will not allow him anything for the expense of operating his car. They will not allow any exemption for that. Yet we find that an employee or the manager of a company or firm is in a different position.
Perhaps he does not even own his own car and does not need to, because he is in a position where he can use a company car. The company gets an exemption for the running expenses of that car, but the poor man does not get any recognition with regard to the expenses of running his car, and if he happens to be a cripple a car is an absolute necessity.
It seems to me that is unjust. I think a good deal of our taxation legislation is unjust by reason of the principle of taxation, but it certainly is unjust when the poor and the needy are forgotten in matters of taxation policy.
Yesterday the hon. member for Port Arthur referred to the exemption of expenses of university students. I have brought up this matter at previous sessions. The university student works a little bit during the summer months to earn some money with which to go to university. During the time he is attending university his earning power is almost at a standstill. His father helps to finance him but the father gets no recognition for that except that the young man or young woman may be a dependant and the father gets the benefit of the $400 exemption allowance on income.
There are a lot of these cases that we could bring before the minister, but I am not going to labour this point. I do not want to get away from the actual principle of income tax. While the bill gives some relief to some taxpayers, it does not give relief to the very people who stand most in need of it.
In replying to certain discussion the other day the minister said that he was conscious

of the evils of taxation. He suggested that this is something nobody likes, but somehow or other the government feels that it must continue to tax. Of course I am not saying there should not be some form of reasonable taxation, but while the minister says that taxation is an evil but which he apparently regards as necessary, I find that the government will never countenance any suggestion that will lead to a reduction of taxation without affecting income. That is an important point.
As far as this group are concerned, we believe that taxation could be very considerably reduced if it were not for the fact that the government knows very well that when it spends money it must get the money from somewhere to spend. You cannot have it both ways, according to present government policy, which is the policy that was pursued by the previous government. As a matter of fact, so far as actual monetary policy is concerned there is no difference between the preceding administration and the present government. There is absolutely none. As a matter of fact, as far as I can see it does not take any particular brains to run a finance department if it is a matter of balancing income with expenditure.


Mr. Argue:: In that case even you might make it.


Ernest George Hansell: In that case even I might make it, not that I want the job at all. The fact of the matter is that the finance minister is in an almost impossible position. He is trying to operate the finance department and determine financial policies under a financial system that does not work, that is not self-liquidating. Oh, I see Mr. Speaker rising.


Mr. Speaker:: Perhaps it is unnecessary for me to say anything, because the hon. member recognizes that we cannot enter into a general discussion of the economics of different financial systems.


Ernest George Hansell: Mr. Speaker, I rather anticipated something like this. I am afraid my anticipation has been realized, and that a perfectly good speech is going to be seriously spoiled. I appreciate the comment on the point of order that was offered by the hon. member for Winnipeg North Centre, that we were given to understand by the finance minister that by reason of the fact he did not bring down a budget, the widest latitude would be given on this measure for the discussion of monetary matters.


An hon. Member:: That was a Conservative promise.


Ernest George Hansell: The finance minister is shaking his head. He is not nodding it; he is shaking it. Evidently he did not mean that.


Donald Methuen Fleming: I did not say that.


Ernest George Hansell: He did not say that but he left that impression with a good many of us. If he did not say it and if he does not mean it, then that is the reason he did not bring down a budget, because he does not want his monetary policy exposed. There has been a good deal of discussion here on the point of whether the Bank of Canada controls him or whether he has any influence or control over the Bank of Canada. I do not blame him for not wanting that matter discussed.


Mr. Speaker:: Order. The hon. member will have an opportunity to discuss these matters on the estimates. I appreciate the point made by both members that this is the only opportunity of discussing the financial changes which the government is making at the present time, and for that reason I have allowed some latitude. However, I do not think this is the only opportunity, and I think we must keep within a reasonable distance of the bill, which is an income tax bill.


Ernest George Hansell: Mr. Speaker, I think I will have to agree with you on the point that when the minister's estimates come before us we will be able to discuss monetary policy on the first item. I am only sorry that his estimates did not come down a week ago, when the house leader indicated they would.


Donald Methuen Fleming: The finance estimates were brought down. They were under discussion last Friday night, and we will be discussing them again.


Ernest George Hansell: I think the house leader indicated that they would be brought back again on Monday or Tuesday.


Donald Methuen Fleming: No.


Ernest George Hansell: The minister shakes his head this way again. However, I do ask that the minister not leave the first item until the dying days of the session. May I say that this group have behaved pretty well in not occupying the time of the house unreasonably, but when it comes to matters of monetary policy that is the time we wish to make our voices heard.
With those remarks I am going to take my seat because I may as well put my speech in cold storage for a future occasion. Perhaps it will come out a little hotter when I make it. We are going to vote for this measure because it is commendable. It reduces income tax, but we do believe that after all the boasting in election speeches this is a pretty puny reduction in the tax.


Mr. Claude Ellis (Regina City):: Mr. Speaker, I am pleased to have this opportunity of putting before the house a few observations which I arrived at as a result of discussions 96698-1474	1
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with many of my constituents during the summer months concerning the tax changes which the people in my constituency thought they were going to get from the government in this first session of this parliament. I would preface my remarks by stating that the attitude which I and, I am sure, other C.C.F. members have taken with regard to the Income Tax Act is that it is part of a tax structure which is extremely unfair to the low income groups in Canada.
In my judgment the income tax was never intended as a tax to be levied against those on modest incomes. By its very nature the income tax was considered a means of taxing those on comfortable or high incomes. But over the years-and the war years gave an impetus to this downward movement-the exemptions under the income tax act in many countries have been pushed downward so that today there are many people in Canada who are required to pay income tax and who are earning salaries which place them at or near the subsistence level.
For example, we have minimum wage legislation in Canada. In my own province and in my own city that wage is $30 a week. I would suggest that the minimum wage is exactly what the name implies; it is the barest minimum on which a worker can be expected to live. Yet we have the strange situation that a single worker in Canada earning just over $20 a week-in other words $10 less than the minimum wage paid in the cities of Saskatchewan-is required to pay income tax. I suggest that the Income Tax Act in that respect is very unreasonable.
It is all very well to talk about inequities under the Income Tax Act, but I think over the years we in the C.C.F. group have suggested a means whereby we might remove from the income tax rolls at least a number of these people who are earning incomes so low that by no stretch of the imagination should they be considered to be earning enough to pay income tax. For many years we have advocated in this house that the exemption for income tax purposes for single taxpayers should be increased from $1,000 to $2,000 a year and for married taxpayers from $2,000 to $3,000.
I for one was highly elated last spring to find that the Conservative party, after many years, had finally arrived at the position where their policy was brought into line. Whether it was under the impetus of the election in the immediate future or for whatever reason, I do not know. Nevertheless they came out and suggested, declaimed, promised or pledged that if elected they would increase the exemption for single taxpayers from

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$1,000 to $1,500, and that for married taxpayers the exemption would be raised from $2,000 to $3,000. Where the statement was made through the press or on the public platform, as was done by the Minister of Transport in his Gananoque speech, I can say one thing of the government, namely that the publicity work done on behalf of the Conservative party must have been very effective, because the people in my constituency were definitely under the impression that the government was going to increase the exemptions under the Income Tax Act as outlined just a moment ago. The promise was given, and I do not think any responsible Conservative can deny that that pledge was made in various ways and so effectively that people throughout Canada expected this type of reform in the Income Tax Act.
What has happened? There has been no move whatever to increase the exemptions. Thus we find the situation continuing where, as I say, single workers earning over $20 a week, which is below the minimum wage paid in those provinces of Canada which have minimum wage legislation, are yet required to pay income tax.
It is true that there has been a move to increase the exemption per child under the terms of the Income Tax Act. Here again at the present time a family with four children earning less than $2,600 a year is not affected by this move at all. In other words, as far as tax reductions are concerned that family is receiving no benefit whatsoever. I would remind the government that their promises with regard to tax reductions were not merely specific pledges to increase the exemptions, but there was a blanket assurance on the part of the Conservative government that they would cut taxes.
Last evening reference was made to their frequent claim that the pockets of the Canadian taxpayers were being picked to a certain extent. In my constituency I was often stopped in the street in the months of August and September by constituents who said, "When are you going down to Ottawa? When is parliament opening? When are we going to get those tax reductions?" The man in the street had been led to believe, as indeed the Prime Minister pledged, that his government would call a September session in order to cut taxes.
Hon. members supporting the government have made frequent boasts during the course of this session, and we shall probably hear a great many more, that they have kept their pledges, and that they have done all the things they promised to do. Here is one specific instance in which they are a far
IMr. Ellis.]
cry from the action which was promised by the government prior to June 10.
With respect to the vast number of Canadian citizens who, notwithstanding the great claims of prosperity in this country, are earning incomes so low that they are never called upon to pay income tax, there is no measure of tax relief whatsoever from this government. The old age pensioner on his mere pittance is still paying the sales tax on the necessities of life and in some instances excise tax on things which are necessary to life. There is no tax reduction for the pensioners, for those living on annuities, or who have retired on modest savings and who are not paying income tax because their income is not high enough. There is no measure of tax relief for that group of Canadian people.
I therefore suggest that when hon. members opposite get to their feet, pat themselves on the back and boast about how they have reduced taxes, they should explain why they consider that the vast number of Canadian people who are earning very low incomes should be ignored in this fashion. I should like the Minister of Finance to explain to the house why, in conformity with the pledges made by the government prior to the election, there is no provision to increase the exemptions for single or married taxpayers under the terms of this act, and to suggest to the house how the government can claim to have reduced taxes and to have kept their pledges with respect to tax reductions as long as they have failed to take any action to reduce the taxes paid by the people with the lowest incomes in this country. Such tax reduction can only be brought about through reductions in the sales tax, a tax which is levied on the lowest paid worker, the recipient of the lowest income in this country.
My colleague the hon. member for Van-couver-Kingsway suggested, with respect to the increase in the exemption, per child, that perhaps an even more effective way of granting assistance to family groups throughout this country would have been an increase in the family allowance. Such a move would certainly have extended benefits to all families in Canada, not merely to families which are earning incomes of over $2,600 a year. Whatever measure of tax relief is given, this legislation must be considered in terms of what the bill does not do and the vast number of Canadian people who are ignored under its terms.
I realize, Mr. Speaker, that when we talk about further tax reductions we are always asked, "Well, where is the government going to get this money? What is the alternative form of revenue?". I think the Minister of

Finance certainly has reason to expect suggestions as to how alternative forms of revenue can be obtained. I suggest however that, for one thing, the absence of a tax on capital gains is a pretty sad commentary on the tax structure in the country at the present time.
On former occasions members of this house have pointed out the part played by capital gains in the creation of large fortunes. As a matter of fact, if we were to go through the history of the large fortunes in Canada and the United States we would find that in the main the accumulation of that wealth was through capital gains and certainly not through salaries or wages, regardless of how large they might be. I think there might be some argument as to whether capital gains constitute income, but I believe the economists generally will agree that capital gains are income and, like other income, represent taxpaying ability.
That is the basis upon which taxes should be levied, on the ability of the individual to pay. Therefore the refusal of the government to face up to this problem and to tax Canadians on their ability to pay means that the greater part of the tax levied must be borne by the low-income groups who are living at the subsistance level. We find the incredible situation in Canada where Canadian workers, earning less than the minimum wage, are required to pay income tax.
As far as capital gains are concerned, the thing that must be borne in mind is that capital gains result from the sale of assets and that they are not too dissimilar from ordinary trading profits; but in any event the accumulation of wealth from capital gains represents on the part of the taxpayer the ability to pay, and that should be the basis upon which Canadians should be taxed.
There are a number of other matters with which I should certainly like to deal, but I would like to make some brief reference to the clause concerning the allowability of expenses to construction workers. This is something of course, in which I have been interested for some time. I come from a constituency-


Donald Methuen Fleming: My hon. friend is referring to a clause of the bill, which of course is not in order in a speech on second reading. If he could leave that matter until we go into the committee and deal with the clause then it would not raise any difficulties.


Alfred Claude Ellis: Perhaps I gave a wrong impression, Mr. Speaker. It was not my intention to deal with that clause specifically, except to say that I do hope the government intends to apply the widest possible interpretation to this section because-
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Donald Methuen Fleming: That could be said in commitee.


Alfred Claude Ellis: -as the minister will remember from past experience, we have had the buck passed between the former minister of national revenue and the former minister of finance regarding the application of that section I would merely like to say this, that I am somewhat alarmed by the exclusion of loggers, which would seem to indicate that we have some reason for apprehension in that regard. However, I will make no further comment until we get into committee.
There are a number of other matters which I think should command the attention of the house in connection with this legislation. I note with some regret the failure of the government to take some steps to allow medical expenses, which is another matter with which the hon. member for Winnipeg North Centre and other members of this group have been particularly concerned over the years.


Stanley Howard Knowles: So
was the Minister of Finance.


Alfred Claude Ellis: As my colleague points out, the Minister of Finance was very interested in this matter when he sat on the opposite side of the house.


Donald Methuen Fleming: Do you think he is no longer interested in it?


Alfred Claude Ellis: I regret that his interest has perhaps somewhat waned since he moved across the aisle. Perhaps the ability to pay is involved in the ceiling placed on tax paid with respect to old age security. I should have thought the principle of taxing people on their ability to pay could have been applied in this instance. However, the failure of the government to make any move to correct these obvious flaws in the act indicates that it is not too much concerned about bringing in an over-all change in the Income Tax Act.
Now, as in other matters, we have argued that there was really no change in the government last June 10; it was just a change of faces and a change of personalities. We find in this and other legislation that any changes are those involving minor parts of the act, changes involving amounts, but there is no indication on the part of the government that they are going to bring in substantial or far-reaching changes in the tax structure of the country. I do hope the Minister of Finance and his colleagues will not continue their practice of boasting of pledges kept, but will just refresh their memories with regard to their statements made last spring, particularly those with reference to increases in the exemption levels for single and married taxpayers.

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Furthermore, having regard to the pledges made by the Prime Minister, members of the present cabinet and members of his party prior to the last election, I hope they will feel that they are under a solemn and moral obligation to the people of Canada to do a great deal more in so far as tax reduction is concerned than is outlined in the bill now before us.


Mr. William Bryce (Selkirk):: Mr. Speaker, I have just a few words to say. In particular
I	want to raise a problem which I have raised on different occasions before Mr. Ilsley, Mr. Abbott and Mr. Harris and now I should like to do so before the present Minister of Finance.
It may seem strange to members in this house that I should be asking for some protection for the farmer with respect to income tax, because it was only yesterday or the day before that we were pleading how poverty stricken was the farmer and how we needed some way of boosting his income. In fact the Minister of Agriculture appreciated the problem of the farmer, and I am hopeful that, while the farmer is the backbone of this country and while he is up against it financially at the present time, these days will change and he will come back into his own and receive a fair return for his produce.
Now I think the farmer gets a raw deal from the Minister of Finance. His whole family's earnings are taxed as the return for one individual. If the farmer has some boys under 16 years of age he cannot deduct anything for wages paid those boys. My own boy is a grown man now with his own farm, but I have some grandsons who can go out, at
II	and 12 years of age, and run a tractor or other farm machinery, thus saving their father the expense of hiring a man.
While that is going on the wife does a tremendous amount of work around the farm. She produces extra food for sale, such as eggs, poultry and chickens. All these things are sold in the name of the farmer. You have the wife and three or four children producing on the farm and all their work goes to make up the income of the farm, yet the whole thing is taxed as the earnings of one man.
I am going to appeal to the Minister of Finance, who always seems to me to be fair, to look into this. When I raised this question before it was answered in this way; that if this were done for the farmer's wife or family it would have to be done in the same way with regard to others. But if a thing is wrong, it is wrong; and it does not matter how many situations you have to look into. I do not want to labour the point. I think the farmer is getting a raw deal through being

taxed as one person while other people help him to earn his income. There should be a reduction in the tax having regard to the services those other people render on the farm.


James Allen (Jim) Byrne: Mr. Speaker, unlike the hon. member for Port Arthur I will not have to apologize when I return to my constituency for the small reduction which has been made in the income tax, because the people in my riding did not fall for all the promises that were made. The result was that the Conservative candidate lost his deposit and the other pie in the sky candidate ran third.


James Sinclair: Which party was that?


James Allen (Jim) Byrne: 
[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
James Allen (Jim) Byrne: Mr. Speaker, just to bring this overcrowded house up to date with regard to what I was saying prior to the noon recess, I was speaking of the special circumstances surrounding employment in the mining industry, where because of the nature of the industry many of the mines are located at high altitudes where for a number of reasons in some cases the members of the family are unable to reside with the employee. I have reference to several personal acquaintances of mine who are in just such circumstances. They are required to maintain their families in homes at a lower altitude and maintain themselves at the site of the operation. This circumstance works a great hardship on them. I feel that they should also be included in the provision that has been introduced in this amendment.
There are other circumstances surrounding employment in the mining industry to which we might also give some consideration. By the nature of its undertakings mining is a particular hazardous occupation. Miners are required by law to provide themselves with protective equipment such as hard hats and hard-toed shoes. In many instances a pair of leather boots which are accepted as the best footgear to meet safety requirements may cost up to $24 a pair, and the miner may
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wear out two or three pairs of boots in one year. In some cases the mining company will pay a portion of the cost of this equipment by making deposits to the supplying retailer, but even when that has transpired a pair of leather shoes is said to last only six months at the most, and because of the acid content of the water to which they are exposed they deteriorate rapidly. The supplying of this equipment is a considerable expense for the miner, and this is another case where special consideration might be given.
The person who is employed on a wage or salary has no opportunity to make provision for any of these circumstances. In many instances a small businessman is given some latitude in determining what are actual expenses and what are not, and it may be that many of these small businesses are able to operate only because they are in a position to make these deductions from actual earnings. I think this is probably true in many cases, and there is still the basic difference between this group and those on salary that seems to discriminate against employees who work on a payroll basis.
For instance, an automobile is generally recognized as a necessity today. Business-men are able to make certain deductions which almost write off the cost of their automobiles, and in many instances they can deduct the cost of operating them. The cost of operating automobiles under normal circumstances would total approximately between $800 and $1,000 a year, and the value of the automobile is reduced by about $500 each year. We certainly cannot assume a cost of less than $1 a day for the maintenance of an automobile. This is an expense which must be met by those of us on wages and salaries who own cars, and we are given no consideration with respect to income tax deductions.
One hon. member mentioned earlier the question of the 2 per cent tax for old age security. I do not agree with the hon. member that this is irregular as he would seem to indicate, but I think there is room for some improvement here. The ceiling on old age security for income tax purposes could justifiably be increased. It would have the effect of bleeding off from those who are already in good financial circumstances and receiving the old age security pension a certain sum of money. It is generally understood they do not actually require the old age security payments, but for the purposes of administration everyone has been included in the act.
In addition to the parents of a university student I believe the student himself should be given special consideration in cases where he earns over $1,000 a year. He should be

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exempt from taxation, because in view of the high cost of education $1,000 is not going to provide him with a full year of university training.
That is all I have to say on this question. I hope the minister will see fit to give consideration to these matters, and more particularly that he will include other categories of employees for exemption when living apart from their families.


Mr. Speaker:: The hon. member for Bur-naby-Coquitlam.


Donald Methuen Fleming: Mr. Speaker, before my hon. friend is called on I wonder if hon. gentlemen would permit me to say this. Far be it from me to wish to ask any hon. member to curtail his remarks in any way. I am, however, one of the ministers who expect to leave to attend the NATO council meeting by plane at seven o'clock tonight. I cannot leave until this bill is disposed of, and I simply ask the consideration of hon. members under these rather cramping circumstances.


Mr. Mclvor:: Short speeches, yes.


Mr. Erhart Regier (Burnaby-Coquitlam):: Mr. Speaker, I wish to assure the minister in my opening sentence that I intend to be very brief indeed. However, this is a field in which I have taken some particular interest over a number of years, and I would not like to see the opportunity pass by without expressing my pleasure at being able to endorse the principle of the bill we now have before us. I think its effect will be much more widespread than that of the bill we dealt with yesterday. I feel that in a much more direct manner the purchasing power of that section of the Canadian people whose purchasing power ought to be enhanced at this time especially is going to be aided by the passage of the bill that is now before us.
I am pleased to note that quite contrary to my expectations the new government we now have, that is now amending the Income Tax Act, is following what I feel is a sounder course than the old government followed when they gave tax relief under the Income Tax Act. What I have in mind here again relates to the urgent need to keep at a maximum the purchasing power of our Canadian people, because we are threatened with an apparent overproduction of consumer goods all along the line. When the old government made its last amendment to the Income Tax Act, as I recall it, the awards were made on a percentage basis, and the wealthy people who did not actually need a reduction in taxation were able to obtain benefit away in excess of what the ordinary taxpayer received.

One of the underlying principles of the amendment before us, as I see it, is that more or less all taxpayers in the country-and this applies to all corporations-are receiving an even sum of money which, of course, means that under this bill much more in proportion is to be given to the poor than to the rich. I feel that is something that is very desirable.
I should like to call the minister's attention to one thing with respect to the principle of the bill. I notice that he recognizes the need to raise the exemption for dependants. In my opinion the raising of the exemption for dependants is a much more urgent and pressing matter than reducing the rate of taxation. I do not think anyone can argue that we can bring up a child these days on the annual exemption allowed in the Income Tax Act. I have always failed to see the reasons for granting an adult an exemption of $1,000 and only a few hundred dollars for a dependant. If this government wishes to help family life in our nation they might well consider at some future time extending the principle they have adopted in this bill, namely the principle that the exemptions for dependent children should be raised. I rather regret that the sum allowed for a child is not at least $500.
I also wish to pass on a thought in connection with what the previous speaker and other speakers have already referred to, namely the principle that a certain class of workers who have to live away from home should be given an extra concession. I should like to impress upon the minister my belief at least that there are tens of thousands of other people, not necessarily all manual labourers, who must earn their living away from home, and I feel that to begin to discriminate as between one class and another of our Canadian citizens in the Income Tax Act is a regrettable thing. While I do not intend to oppose the adoption of the principle which the amendment signifies, I do feel that it has in it an element of discrimination.
I should also like to call the minister's attention to another problem, and I regret that it is not being touched here. About a year or so ago, when we had the last amendment to the Income Tax Act, there was a provision to encourage the Canadian people to save more money. We were granted the right to deduct the premiums paid on certain types of insurance and annuity policies. I notice no mention of that here, and I regret that. I hope the minister will look very carefully at the regulations which his department has drawn up under the existing Income Tax Act in that regard, because I feel the limitations which are being imposed are much too severe. I am sure the intent of the former minister

of finance is not being carried out by the very limiting restrictions which have been placed upon the types of insurance and annuity policies which are exempt.
The history of the Income Tax Act, Mr. Speaker, is that it was imposed during the first world war in order to help pay for the burden of that war. It was retained after the war, and the argument which has always been given for its retention rather than its abolition is that since a welfare program is under way in our Canadian life, the Income Tax Act is a useful instrument whereby the government might take from those who have more than enough in order to help, through various pieces of welfare legislation, those of our citizens who have less than enough.
At the present time we seem to have lost that intent of the Income Tax Act. While there is some recognition in the bill before us that the government seems to feel that we ought to return to the old intent of the Income Tax Act, and that they are prepared to grant some concessions, yet they have not changed the basic exemptions of the average worker. They remain at $1,000 for a single person and $2,000 for a married person. I realize the rates have been reduced, but the exemption has not been raised.
We have in our present economy a situation where we are levying an income tax on the below-average wage earner. I feel that this is putting a completely new purpose to the Income Tax Act, a purpose which I should like to see eliminated. I should like to see the day when exemptions are raised to the point where the average and below average wage earner are exempt from paying income tax.
Our proposal is that the exemptions should be raised to at least $1,500 for a single person and $3,000 for a man and his wife, with a dependant exemption of $500 for each child. I feel if that proposal were adopted the government would be going a long way toward making the Income Tax Act once again an income tax act and not a general measure of taxation of our people.
(Translation):


Mr. C. N. Barbes (Chapleau):: Mr. Speaker, as the representative of the riding of Chapleau, I would like to offer a few remarks in connection with Bill 232, amending the Income Tax Act.
Back in March, 1957, the present Minister of Finance (Mr. Fleming) delighted in lambasting the Liberals, denouncing cyclical budgets and recommending numerous exemptions. But last week, after six months of hard work and just before Christmas he 96698-148
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brought down in the house bits of halfmeasures, mere cracker bits.
I think that on the financial festive table to which he had invited Canadian taxpayers six months ago, there is very little to satisfy his guests, that is, the Canadian taxpayers.
Last May and June, Mr. Speaker, I urged the citizens of my own riding of Chapleau to leave the administration of this country in the hands of people who had had valuable experience and a remarkable record in overcoming difficulties through the many measures they had enacted since 1940.
Many thousands of electors were beguiled by the Conservatives and their enticing promises. At times they were even dazzled by the bright pictures of what the country would be like under a new Conservative government.
Thousands of electors felt that a tax-happy administration would be replaced by openhanded "exemption granters" who would abolish some of the taxes and promote new undertakings right across the board.
Well, after six months, it must now be realized that as far as the income tax, at least, is concerned, the new government is not giving as much as it had dangled before the eyes of large families or of plucky men who have to take jobs far from home and work hard at them but who find in this bill nothing but eye-wash, nothing but little tufts of straw-a meaningless electoral argument-compared to the promises made in the spring of 1957.
Apparently an exemption is granted for construction workers enabling them to include reasonable board and lodging expenses they have to pay when they cannot work in their ordinary place of residence.
In our area, numerous loggers, prospectors and miners travel 100, 200 and 300 miles from home for the purpose of getting work. Their travelling expenses should be taken into account.
Again, the government should provide advantages for workers in areas such as Abitibi, Gaspe, Lake St. John and others too, who have to leave their home and family and take a job far away.
An advantage is given to construction workers who are away for 36 hours; nothing is given to our workers who are away for 36 days and more.
On the other hand, the deduction for each child has been increased by $100. It is an improvement to a certain extent, although it falls far short of what families should receive,

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for the forthcoming year, from those who, last spring, promised so much to our children and who had accused the Liberals of holding on to 500 million dollars, allegedly the fruit of overtaxation by a tax-happy lot. But out of all this, we are given mere crumbs that cannot substantially relieve the burden of those who have a large family.
Yes, Mr. Speaker, there was indeed a more efficient way, which the government could have used, to bring relief to taxpayers most in need of it: raising family allowances. There again, the promise had been that these would be doubled whereas the matter is merely being considered. And all this time in hundreds of our homes, you will find thousands of people who, this fall, four months after the Conservative victory, do not earn enough to provide decent clothing or food for their children. Yet, those are the allowances the Conservatives had promised to double. Let us hope that they will do so before long, for an increase is sorely needed and it has been promised. What are you waiting for? If you cannot give us jobs, give us allowances, you who felt so mighty last June.
No, there has been as yet no increase in family allowances under the new government. It is true that in 1957, in the thick of the struggle in this House of Commons, neither the Conservative leader nor the Minister of Finance mentioned the matter. It was the Conservative candidates, like the one in Chapleau, for instance, who promised everything under the sun and described us as greedy "taxers".
Today, however, the new government will at least accept my telling its members that, especially in the light of those promises, and of increases in other respects, old age pensions and so on, the children in my riding, and all the others want family allowances that will make up for the loss in the buying power of the dollar since 1945.
The Conservative leaders in La Reine, Amos and elsewhere in my own riding of Chapleau, are quite right in admitting to each other that the Conservatives have always been unlucky when they come into power. In 1957 it's the same as in 1930, and if we did not already have social legislation, the situation would be disastrous. The truth of the matter is that the people are always unlucky when they call in the Conservatives to lighten their burden.
(Text):
On a different subject, Mr. Speaker, please allow me to offer my personal wishes to the Minister of Finance for Godspeed, bon voyage and a prompt return to Canada.


Stanley Howard Knowles: Mr. Speaker, yesterday on another bill the Minister of Finance chose not to make a speech in opening the debate on second reading but rather to make a speech at the conclusion of that debate. I note that today he did not avail himself of the opportunity to speak in moving the second reading of this bill, and I hope he will do as he did yesterday and make a speech closing the debate, so he may deal with some of the general points that have been raised. I make that plea to him because he knows that if he waits until we get into committee on the clauses of the bill it will not be possible for him to deal with some of the more general comments that Your Honour and the house have permitted members to make while we have been on the motion for second reading.
I shall not take the time of the house to repeat the arguments on some of the points that have been raised, but I should like to press the minister for a reply to the arguments advanced regarding the deductibility of medical expenses for income tax purposes. As the minister knows, on at least two occasions this session, as recorded on page 248 of Hansard for October 22 and on page 1896 of Hansard for December 5, I asked the minister whether the government would be doing something about this matter in line with the position taken by the Minister of Finance himself during the days when he was with us on this side of the house. On both occasions he asked me to exercise a little patience and wait until his budgetary proposals were brought before us.
As a matter of fact, the day before those proposals were announced I put my question to him and, of course, I was told to look back to a previous answer. When I did so the statement was that I should wait until we got into committee of supply last Friday evening at eight o'clock. I must not try to allege that the minister promised me he would make a statement, but I thought when he asked me to wait until that time I could look forward to some remarks on this question. I listened in vain Friday night; no comment was made on this point.
I say to the minister that it will not be good enough for him to remind me of what all of us know, namely that an action of some sort regarding this matter was taken by the house in the budget of last spring. As the minister knows, neither he nor I was particularly happy about that action. It is now part of the law that a taxpayer can, without putting in any receipts, claim $100 blanket deductibility for medical expenses, charitable donations and trade union dues. Well, that

is fine. To many people it does mean a slight increase in the deductibility to which they are entitled.
But I am sure the minister agrees with me now as he did last spring that in the main all that Mr. Harris did was to increase the basic exemption for everybody by $100. Surely that is not to be taken now as an implementation of this government's view that the exemption level should be raised to $1,500 for single persons and $3,000 for married persons. It still stands that so far as over-all medical expenses are concerned, unless people have extremely heavy expenses they get no special consideration that is not accorded to every other taxpayer.
I remind the minister of the many debates we have had on this question and of how he and the Secretary of State (Mrs. Fairclough) in particular, plus other members of the Conservative party, supported strongly-and we appreciated their support-the motions I moved on this matter a number of times. The minister will recall that on one occasion the former Liberal government permitted a motion asking for consideration of the matter to be passed, and after that the present minister and others berated the former government for not having done any more in response to that motion than give it consideration that amounted to nothing.
It is still a serious matter. It is in our view still a matter of unfairness that persons with medical expenses are not allowed any special consideration for those expenses unless they get over that 3 per cent floor. It is still a matter of unfairness when eyeglasses, hearing aids and many more drugs than those listed in the schedule are not allowed.
My main purpose in speaking in the debate at this time, conscious as I am of the fact that the Minister of Finance must get away tonight to Paris, is to press him to make a statement on this matter at this time. He can assume, I take it, that when we get into committee on the bill there are some amendments that we shall probably move from this corner of the house. After the ruling of yesterday there is no doubt about that. But there is one amendment we cannot move. We cannot present any amendment having to do with medical expenses, because in the amending bill there is nothing which deals with that subject. That is my reason for urging the minister to speak on this matter when he closes the debate on second reading.
While I am on my feet, may I join with others in saying that I regret that the Conservative government has forgotten the statement made during the election campaign about the desirability of raising the basic exemption levels to $1,500 for single persons 96698-148J
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and $3,000 for married persons. We also feel that the $100 increase in the dependants' exemption is not adequate. That, of course, is a matter that we can deal with when we get into committee on the bill, not only by speeches but by an appropriate amendment when we reach that clause of the bill.
When you take all these things into consideration, and when you bear in mind the comments that were made last night by the hon. member for Montmagny-L'Islet, it seems to me that there is justification for some of the criticisms that have been made about this budget to the effect that it is hardly the kind of generosiy the Minister of Finance would like us to believe it to be. As a matter of fact, I was quite interested in the concluding portion of the minister's speech yesterday when he, with great delight, held in his hand a cartoon depicting a couple of members walking out of the front door of the parliament buildings, obviously Liberal members-


James Sinclair: Tut, tut.


Stanley Howard Knowles: realize that the hon. member for Coast-Capilano (Mr. Sinclair) has a voice that permits him to say little more than "tut, tut", and probably it is just as well. Underneath this cartoon is the caption, "That was a smashing attack you made on the government just before we voted unanimous confidence". I shared with the Minister of Finance his pleasure in describing that cartoon. I suggested at the time, but I note that my words did not reach Hansard, that he might ask the house for permission to have the cartoon placed on Hansard.


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: That is not an impossibility. I realize that for the most part our Hansard is not an illustrated periodical, but it could be made to include a cartoon, and I think the minister's speech would be embellished if it were illustrated with the occasional cartoon such as the one to which he referred yesterday. If he would like to go along with my suggestion that that cartoon be placed on the record, I should be very happy to urge that the house give unanimous consent.
Perhaps when he has obtained that consent he might also be willing to ask the house to give unanimous consent to put another cartoon in the record. This one I should like to describe. It is in the Winnipeg Free Press of Tuesday, December 10. I realize that I must be careful in quoting from the Winnipeg Free Press. I got into a little trouble yesterday by quoting from one of the editorials in this paper with which I

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happened to agree. However, this is an interesting cartoon. It is a picture of the Minister of Finance. He is shown there in tails and white tie, with a clean handkerchief in his pocket and a flower in his buttonhole. His face is well drawn. There is not a smile on it. He holds in his hand, upside down, a silk hat on which appears the word "Budget"; it is not "budgie" but "Budget". Underneath is a slogan, "Fleming the Magician Will Now Pull an Elephant out of his Magic Hat". What has the Minister of Finance in his hand which he has just pulled out of his magic hat? He has in his hand a little mouse. I should be glad if this cartoon, along with the other one, could be placed upon the pages of Hansard.


Donald Methuen Fleming: Mr. Speaker-


Mr. Speaker:: I must inform the house that if the minister speaks now he will close the debate.


Donald Methuen Fleming: Mr. Speaker, this is the first occasion, if my recollection serves me correctly, on which my hon. friend has invited me to make a speech. If my memory be faulty in that respect, it will certainly be the first occasion on which he has invited me to make a lengthy speech, when I fear I shall have to disappoint him.
There are many things I might, under ordinary circumstances, wish to say at this time, Mr. Speaker, but with the departure of the plane for Paris for this NATO meeting now only a matter of a few hours away I will ask the house to excuse me with only very brief comment on one or two points that have been raised.
Indeed, I think my comments should be of a general nature. Various suggestions have been put forward with regard to individual tax measures and tax reforms which are desirable in the view of those who have put them forward. Let me say in general that I came into this portfolio with an open mind on many of these questions, and also with the views I have already expressed on many of these questions in the past when a member of the opposition. I have not changed the views that were expressed then. I hope, given time and opportunity, to be able to carry further into effect some of the reforms that have been advocated by my colleagues and myself in times past.
But we cannot do it all in the first year. We cannot do it all in the first five months. We have gone as far as the limitations imposed upon us this year have permitted us to go. We simply had to accept the budget that was introduced last March on behalf of the previous government, and operate within

that budget. That is my general comment with regard to the various matters that have been mentioned here in the course of debate.
As to views that have been expressed by my colleagues or myself on specific matters in times past, we have gone, we think, under the existing circumstances and limitations, a long way at this time, and we hope the house will view the present proposals in that light, namely the light of the limitations that we inherited. Our efforts in this respect are not going to end now. We are going to go on seeking to do what we can in fulfilment of a program of tax reform.
My friend the hon. member for Winnipeg North Centre asked me for a specific comment about the matter of the deduction of medical expenses. What I have just said applies to that matter. These and all other matters are going to receive continuing consideration. In my concluding remarks last Friday night I said something that evidently was taken up wrongly by those who followed me. I was trying to point out that the problems that have faced the government have been very heavy. We have done the best we could. We had a series of international conferences to prepare for and attend. We have done as much in this respect as I think flesh and blood can be expected to be equal to. We have not been able to do everything, but we are not going to stop our efforts now.
There are one or two matters that were touched upon that I think might more appropriately be dealt with in committee. I shall have a word to say there about this matter of the relief brought to construction workers, but I think those comments can more appropriately be made in the committee.


Ernest George Hansell: I would like to ask the minister just one question. I understood him to say that he was soon leaving for the NATO conference, and I do not think we want to hold things up; but would he care to state when he expects his estimates will be proceeded with? Will we wait until he returns, or what is the program?


Donald Methuen Fleming: The estimates of the Department of Finance cannot be called again in committee of supply until after we return from NATO, and the schedule calls for our being back, I think, just a matter of about three hours before the house adjourns for the Christmas recess.


Ernest George Hansell: Thank you.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Casselman in the chair.

On clause 1-Construction workers.
Donald Methuen Fleming: Mr. Chairman, I think I should offer the committee a brief statement on clause 1 in view of the fact that some hon. members in the debate on second reading raised questions about the extent of the tax relief provided by this clause.
As I indicated in an earlier statement, this clause is intended to provide a measure of relief for construction workers. I take it there is no issue as to the measure of tax relief afforded to construction workers, but questions were raised as to why they should be singled out for this particular consideration. Might I give the house a statement on that point, sir.
As I mentioned in my remarks last Friday night this is a new provision and, in its genesis, it goes back to a directive issued by the former government in the year 1956. Until that time there had been no attempt to include in the income of construction workers such allowances as are made to them by their employers for board and lodging when they were working away from home. That directive was confined to construction workers, and at no time in the consideration of this matter has any question been raised as to any other persons. The directive out of which the whole matter emanated related to construction workers and construction workers alone.
There was discussion of this matter in the house last spring, and at that time the former minister of finance said the new directive purported to treat from that point on, or gave notice that from that point on the government would treat such moneys as taxable income in the hands of construction workers. In the discussions in the house, and in face of protests from members of my party, the then minister of finance said the new directive would not be applied to income for the year 1956, but it would be applied as from January 1, 1957.
Shortly after coming into office we received representations on this point from both the construction industry and the Canadian Congress of Labour. These representations in every case have been confined to the construction worker. No representations have been made on behalf of any others.
I would not have the committee think this problem is free of difficulty. On the contrary, the whole matter is beset by some very serious administrative problems. We are, in a sense, opening a door and we will have to watch very closely the way this new provision works out, to see how the administrative problems are met. We are admittedly going a long way in this provision, but it
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was indicated to us that some firms-for instance, those engaged in construction on the D.E.W. line-had found it difficult to persuade construction workers to go to that area in the face of the directive that had been issued and the statement of the former minister of finance that the directive would be applied to all allowances accruing after January 1, 1957.
A question was raised about loggers. We have received no representations on that score, and the Canadian Congress of Labour in its submissions to us on more than one occasion put the case on behalf of the construction worker, and the construction worker alone.


Jean Lesage: There is no union of loggers in our province; they appeal to their member for parliament.


Donald Methuen Fleming: We have given to this plea of the construction workers very careful study and have brought forward this amendment, not without misgivings in regard to the difficulties of administration which might present themselves. I would, however, ask the committee to bear in mind that there has been no opportunity for giving consideration to the position of other workers who may consider that their tax position should be regarded as equivalent to that of the construction worker in the view embodied in the present clause.
Any attempt to deal with other groups would necessarily require the most careful study before any action could responsibly be taken. I am asking the committee therefore to approve the clause in this form, to give us an opportunity to watch-as we will watch very carefully-the application of the clause; and the matter will, I can assure the committee, be the subject of continuing study. I hope for that reason the committee will see fit to give us the opportunity to go forward with this clause, meeting as it does a problem, not of our creation, but a problem created by the directive of a year and a half ago; and will also give us the opportunity of seeing how this works out in operation and in administration before we are asked to revise it or to extend it.


Mr. Crestohl:: I should like to direct a question to the minister. I wonder if he could tell us whether in a case where a worker whose talents and knowledge are essentially required and who is shifted about the country, say in the construction of aeroplanes, from his ordinary residence to the location where construction is going on, the term "construction worker" would also be applied

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to that classification. Would the words "construction worker" also apply to this classification, because in reality they are construction workers. If a worker on the D.E.W. line is called a construction worker, then I think certainly an aeroplane construction worker might also be called a construction worker. Would the provisions of the bill also apply to those engineers who are summoned away from home for the purpose of helping in the construction of aeroplanes?


Donald Methuen Fleming: Mr. Chairman, the hon. member is asking me for an advance interpretation of expressions used in this clause. I can only say to him that the interpretation will be a matter for the Department of National Revenue, and having regard to the purpose of the clause I am quite satisfied that the department will endeavour to place a fair and ample interpretation upon it.
As to what type of construction is contemplated here, the hon. member is seeking, I take it, to draw a distinction between someone who is engaged in constructing buildings which will become fixtures, part of the real estate, and someone who is engaged in constructing a chattel. I think I can say to him in this respect that a man who is engaged in the construction of a factory, a canal, a bridge or a road is obviously a construction worker. When it comes to the matter of fabricating an aeroplane or some chattel I should think that process would be more properly described as manufacturing than as constructing, for this purpose.


Leon David Crestohl: May I point out that I have a particular reason for asking this question. These are men of special talent whose ability and scientific knowledge are required. As a result of their particular knowledge and talent they are often summoned from one place to another. Would the minister not think these people should be placed in a special category, and that they should be offered the relief which the bill intends to provide?


Donald Methuen Fleming: I am quite sure the hon. member is aware a man who is on, shall we call it, a travel status for his employer, a man who is travelling about on behalf of his employer, is not assessed for whatever the employer lays out as part of his travelling expenses or living allowance while engaged in his travels on behalf of his employer.


Thomas Speakman Barnett: Mr. Chairman, I listened very carefully to the Minister of Finance when he spoke on clause 1 of the bill. I am sure the proposal which it contains in so far as construction workers are concerned will be welcomed. The minister made reference to a directive on which we had considerable

discussion in the house a year ago. As I understand it, the proposal for an amendment to the Income Tax Act which he is now bringing forward is in fact making legal something which, apparently, had been carried on as a practice in the industry over a number of years, a practice to which the Department of National Revenue has turned, more or less, a blind eye. I think that is obvious in the light of the directive we were discussing here last year under the name of bulletin No. 10.
Certainly I welcome the suggestion that discrimination against construction workers is to be eliminated. Nevertheless, from what the minister said in his opening statement it has become apparent that we will have to start all over again a wearing down process on the new Minister of Finance at a time when some of us felt we were beginning to penetrate the conscience of the former minister of finance to eliminate this kind of discrimination.
I must say that in listening to the Minister of Finance on the question of administrative problems I fail to follow his argument that because of administrative difficulties the broader provisions which some of us have been suggesting cannot be brought in at this time. Particular reference has been made to the situation of the loggers or bushworkers by a number of hon. members who have spoken earlier in this debate, and in pursuing the subject I should like to suggest that if the minister is thinking in terms of administrative problems he will really have a problem on his hands when he begins his attempt to determine whether or not certain workers are construction workers.
I would remind him that in some of the west coast logging camps where all the workers are organized in an industrial union there are probably a good many workers who are in construction classifications. The minister will find himself up against the peculiar difficulty of having to try to draw a fine dividing line between certain workers in these camps who can qualify as construction workers and certain others who, he will have the trouble of deciding, are not construction workers.
Earlier someone here was talking about a Pandora's box, and I think the minister, as a result of the approach he has made to this problem, has opened the way to a large number of administrative problems which he has not envisaged. The Minister of Finance has suggested that he has not had any representations on this matter of allowable deductions except on behalf of construction workers.
I quite agree with him that the Canadian Labour Congress has made a major point of

this question of construction workers, because it was a problem which had arisen as a result of this bulletin of the Department of National Revenue. But when he says he has not received any other representations at all, I do not know whether or not he is referring to the situation as far as the Department of Finance is concerned only since he took office. I do know, however, that I have in my hand a letter dated December 9 of this year addressed to him from what is known in British Columbia as the loggers' local of the international woodworkers of America.
Mr. Donald Fleming,
Minister of Finance,
Parliament Buildings,
Ottawa, Ontario.
Dear Sir:
This is a copy of a letter which is addressed to the minister, copies of which were sent to me and some other people. The body of the letter states in part:
Based on press releases, it is my understanding that you proposed amendments to the Income Tax Act, to provide that construction workers will be entitled to use expenditures of transportation and board costs away from home as deductible from taxable earnings. It is also my understanding that legislation for this provision will be introduced in the near future and become effective for application on earnings during 1957.
We welcome this proposed change, as we have endeavoured for quite some time to get this type of legislation. However, we regret that it does not cover loggers who have identical problems. We have, over a period of years, made presentations to the federal government for this type of legislation, and in order to obtain support on this problem, our submissions have included requests for all workers with this type of problem.
I think that makes it clear that as far as the loggers are concerned they recognize the justice of the claim of the construction workers.


Donald Methuen Fleming: What is the date of the letter my hon. friend read?


Thomas Speakman Barnett: December 9, 1957.


Donald Methuen Fleming: I have not seen the original letter yet.


Thomas Speakman Barnett: I realize it is possible that this particular letter may not have come to the attention of the minister but I think he will have noted from the context as I read it that this particular local of the international woodworkers has made representations to the government, according to their statement, over a period of years. I might explain to the minister that this particular local which is known colloquially in British Columbia as the "loggers local" is the organization which represents the workers in the scattered logging camps along the coast of British Columbia from Vancouver to the Alaska border and because of the fact it is predominantly a loggers local it can be considered the spokesman
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of the loggers in the entire logging industry *of British Columbia and Alberta. This is not a new problem at all nor one which has not had prior consideration within the Department of Finance.
I am going to turn for a few minutes to the debate which took place in this house last April when we were discussing the Income Tax Act. Following an extended discussion on the subject dealt with in clause 1 of this bill, as found at page 3035 of Hansard of April 3 last, I referred to statements that had been made by the then minister of finance and I said:
For some of the things the minister said I am inclined to hope that this may be a case of things having to get worse before they can get better.
I was referring to the minister's refusal to deal with the problem of bulletin No. 10. I suppose one could say that things are perhaps a little better at this moment than they were then as far as the stated intention of the government is concerned. I then went on to say:
I made reference to this matter in my budget speech. I said I thought this bulletin which is under discussion was extending the discrimination that I have been attempting to draw to the attention of the minister at the budget stage for the last several sessions.
I welcome the statement which the minister has made in part, because up until this year the only thing I have been able to get in the way of an answer from the opposite side of the house has been a few inconclusive words from the minister's parliamentary assistant on this subject. The one point to which I want to make reference, seeing that the discussion has gone this far, is this.
I agree in part with what the minister has been saying, namely that this problem is not something which is unique to the construction industry. As far as I am concerned, it applies equally, and as seriously, for example to the logging industry. In my opinion from the study I have made of the matter over the past several sessions, this whole question can be resolved only by a suitable amendment to the Income Tax Act-
Well, we now have an amendment to the Income Tax Act but the question as to whether it is a suitable one is open to debate. I went on to say:
-one that will remove what to me is a discrimination that now exists against the expenses that are incurred by those on wages and salaries in the course of earning a living.
As I said, I was refeiring at that time to some of the remarks that were made by the then minister of finance. I think I should point out that Mr. Harris made remarks which certainly should have come to the attention of the present minister if he has been giving any consideration to this problem. It will be found on page 3025 of Hansard of April 3, 1957, that Mr. Harris had this to say:
There is no question but that the construction industry is unusual in this field, yet it is not wholly

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unique. There are other industries in which allowances for board and lodging are given.
Later, on the same page, he said:
We have been doing our best to find a rule which would tax every one with the same kind of income unless there was a real case to be made for an exception. I think all hon. members of the committee would agree with me on that score, namely that if there are exceptions-if I am being taxed for one thing that some hon. gentleman opposite is not being taxed for-there must be great justification for that exception to be made.
Later, on the same page, he went on to say:
We want to see that all other workers who are in about the same kind of situation will have their cases considered on their merits and we will be able to know where to draw the line with respect to the exemption, whether it should be drawn just at the construction workers or whether it should be extended beyond that.
On page 3028 he continued with remarks to the effect that he thought it was clear that he had no fixed idea on this matter but, however, he did want a consistent tax law.
Some of us were inclined at that time to say, "All right, let us have a little more patience about this question and be prepared to wait a little longer so that we can have a consistent tax law." I suggest that we have now waited for some months and while it is perfectly true that there has been a change of government and that we have a new Minister of Finance nevertheless I think it is apparent from those remarks made by the previous minister of finance that this is something which has not suddenly come under review within the Department of Finance and I can see no real reason why the present minister should not have been able to proceed to bring in a proposal that would have been equitable as far as all the working people of Canada are concerned.
It is interesting, of course, to discover that apparently our present Minister of Finance is able to put forward one point of view in one particular situation in one place and to put forward a rather different point of view when he is speaking to a different audience on some occasions. I have in my hand a copy of the Ottawa Citizen of December 10 and on page 3 there is a story which is headed, "Fleming Blasts U.S. Subsidiaries Lacking Canadian Shareholders". The story goes on at some length to describe the remarks made by the minister to the audience to which he was speaking on that occasion. However, farther down in the article it is reported that the Minister of Finance:
Slightly changing the topic he suggested a few simple thoughts-
Well, I have heard it suggested on occasion-


The Acting Chairman (Mr. Rea):: Order. May I remind the hon. member that we are on Bill 232 and I hope his remarks are going to come within the subject matter of this bill. I have been waiting to hear just how they are related to it but at the moment the Chair does not see in what way they are related.


Thomas Speakman Barnett: I assure you, Mr. Chairman, that I made reference to the headline of this article purely for the purpose of allowing the Minister of Finance to identify it. What I am about to refer to is directly related to the topic under discussion, as I see it. The paper reports with respect to the Minister of Finance:
Slightly changing the topic he suggested a few simple thoughts for ways in which tax laws should be devised, framed, interpreted and applied.
Then it lists under nine points the ways in which the Minister of Finance thought this would be done. Point No. 5, as reported in the paper, is this:
Taxes ought as a rule to be general in their application. The legislator should avoid discriminatory provisions.
When the Minister of Finance was making that statement he was, in effect, agreeing with some of the statements made in this chamber last year by his predecessor when we were discussing the point that we have under consideration in this clause of Bill No. 232.
Earlier in my remarks I made reference to the fact that, having looked into the matter for several sessions, I had come to the conclusion that the problem with which we are dealing can be dealt with only by a suitable amendment to section 5 of the Income Tax Act. Well, we have before us in the committee today a proposal for an addition to section 5 of the Income Tax Act but, Mr. Chairman, in my opinion this is not a suitable amendment to the Income Tax Act because it is discriminatory and restrictive in its application. While, as I said earlier, it may be something that is welcomed by the construction workers at this time, nevertheless I am quite sure that they would be quite happy to see it applied to all other workers who find themselves in similar situations. Therefore, I should like to move:
That clause 1 be amended by deleting therefrom the word "construction" where it appears in lines 6, 12 and 13 on page 1, and in line 4 on page 2.
The clause as amended would then read:
(2) Notwithstanding subsection (1), in computing the income of a taxpayer for a taxation year from an office or employment, where the taxpayer was, during the year, employed as a worker, there shall not be included
(a) the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by him for, board and lodging, received by him.

(i)	in respect of, in the course of or by virtue his employment as a worker at a site from which, by reason of distance from the place where he maintained a self-contained domestic establishment (hereinafter in this subsection referred to as his "ordinary place of residence") in which he resided and actually supported a spouse or a person dependent upon him for support and connected with him by blood relationship, marriage or adoption, he could not reasonably be expected to return daily to his ordinary place of residence, and
(ii)	in respect of a period while he was required by his duties to be away, for a period of not less than 36 hours, from his ordinary place of residence; or
(b) the value of, or an allowance (not in excess of a reasonable amount) in respect of expenses incurred by him for, transportation between his ordinary place of residence and the site referred to in subparagraph (i) of paragraph (a), received by him
(i)	in respect of, in the course of or by virtue of his employment described in subparagraph (i) of paragraph (a), and
(ii)	in respect of a period described in subparagraph (ii) of paragraph (a), during which he received board and lodging, or a reasonable allowance in respect of expenses incurred by him for board and lodging from his employer.


Charles Edward Rea: Order. On this amendment I want to point out that May, 16th edition, at page 554 says:
An amendment is out of order if it is irrelevant to the subject matter or beyond the scope of the bill.
The explanatory note of the bill reads: This new subsection provides that a person employed as a construction worker at a construction site from which he cannot reasonably be expected to return daily to his ordinary place of residence where he maintains a home in which he lives with his wife or other dependant shall not be required to include in income the value of free board and lodging furnished during the period of necessary absence or free transportation furnished to or from the construction site, or a reasonable allowance paid to him to cover expenses of such board and lodging or transportation.
Now, it is strictly for the construction workers, and after reading the citation from May, at page 554, the Chair must rule the amendment is out of order.


Stanley Howard Knowles: Mr. Chairman, have you taken into consideration citation 502 of Beauchesne's 3rd edition, which reads:
A private member may move that certain specified taxes be readjusted and that the scope of tax exemptions be enlarged.
I suggest, sir, for your consideration the question whether my hon. friend's amendment is not a request that the scope of the exemption proposed by the government be enlarged.


Charles Edward Rea: I might also point out to the hon. member for Winnipeg North Centre citation 344 of Beauchesne's 3rd edition:
It is an imperative rule that every amendment must be relevant to the question on which the amendment is proposed.
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This, in the opinion of the Chair, is enlarging the scope of the bill and therefore the Chair must rule the amendment out of order.


Daniel (Dan) McIvor: Mr. Chairman, I have sense enough to know that I am not able to say anything that would make the minister change his bill now, but I think he will take into consideration every suggestion that has been made. Since he wants to get away in a few minutes to bid farewell to his family, I say pass the bill and get it out of sight.


Frank Claus Christian: I will not take up much of the time of the committee, but I do wish to say this. Since the words "construction worker" have not been defined in the bill, that in itself will lead to a lot of confusion and dissatisfaction. I have two questions to ask the Minister of Finance. Why were not the words "construction worker" defined in this bill? Would a carpenter who goes from one logging camp to another to do carpentry work come within the definition of a construction worker?


Donald Methuen Fleming: Mr. Chairman, I think the answer to the second question is very clearly yes, he would be a construction worker under the conditions described by my hon. friend. As for asking for a statutory definition, I think we can leave the application of the words of this clause to the Department of National Revenue. It seems to me it is not a case for spelling out in detail lengthy definitions in this legislation. My hon. friend recalls that one of the purposes of the Income Tax Act when it was first introduced to replace the old income war tax act was to get away from the principle of a multiplicity of statutory definitions, many of which had given rise to a great deal of litigation in the courts.
(Translation):


Mr. Villeneuve (Roberval):: Mr. Chairman, the phraseology and the general pattern of section 1 of this bill to amend the Income Tax Act are somewhat of a surprise to me. Indeed when I read the proposed subsection 2 of section 5 of the act, describing the class of workers who are to be allowed board, lodging and transportation expenses after an absence of more than 36 hours, I cannot help pointing out to the hon. Minister of Finance (Mr. Fleming) that this is too restrictive a clause.
You see, construction workers employed at a construction site make up a limited class of workers, especially in the riding I represent; in point of fact, it is a class which includes very few individuals.

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In my opinion, the case of loggers and mine workers should have been particularly provided for.
About 50 per cent of workers in my riding have to go out and work in bush camps in the winter time. They often have to work 50, 75 and even 100 miles away from home, yet they are by no means provided for in section 1 of this bill.
Not far from my constituency there is at this time a very important project under way. The Aluminum Company of Canada is building a huge dam at des Passes falls employing for this purpose three to four thousand workers. About 90 per cent of these men have to live on the spot, travelling home only occasionally. I am sorry that they are not covered by this clause. I am certainly not surprised at the apparent generosity shown towards the end of that particular clause, which provides that the workers involved may be exempted for the year 1957. When I say I am not surprised, I mean that the number of workers thus exempt will be so small that the government can well afford to show itself very generous in this regard. It gives colour to the government's purpose, pretending to be granting a tax exemption whereas, in fact, all this is a mere show of words, a sham exemption wrapped up in involved phraseology.
I wish to go on record as protesting against that restrictive definition which discriminates against a large number of other categories of workers who would also have deserved to be tax exempt as regards food, board and transportation.
(Text):


Douglas Mason Fisher: Mr. Chairman, I should like to ask the minister several questions, one having to do with interpretation has already been brought up. In logging and especially in the pulp and paper industry there is a great deal of construction work involved and you cannot say that it is of a temporary nature because the whole course of the operation is towards permanency. I can think of actual highways that have been built. Some of our companies have constructed 200 to 300 miles of highways. For example, Marathon Corporation usually plans to construct up to 17 miles of highway a year and a number of bridges. So far as water works are concerned, they construct sluices, flumes, skidways and things like that which are permanent. If the company were to set up its bookkeeping operations in a suitable way, would it be possible to allow men detailed to that kind of work to have, instead of paying board and room, some adjustment of their wages to cover expenses

in order that they may qualify under the construction clause of the act? That is my first question.
Second, the minister seemed to suggest that no studies have been made in relation to woods workers. I would remind him of an answer that was given to me and which can be found on page 938 of Hansard. I asked the following questions:
Have any officials of the government made any studies and/or reports on the application and the possible effects of the extension of the expense deductions given to transport employees under subsection 7, section 11 of the Income Tax Act, to workers in either the woods or construction industry or both?
The answer was "yes". I realize that this is a slightly different section but I would infer from this that studies have been made with regard to woods workers. I should like to know the meaning of the statement the minister made in relation to that answer.
The third question I should like to ask has to do with the point the minister brought up about representation and strength of representation. I am sure we can all agree that when there is what one might call strong lobbying it is bound to bring something to the attention of the government, but just because the loggers and the bush workers have not been strong or vocal enough in presenting their case, whereas the railway workers and the construction workers have, surely should not mean that the one should have an advantage over the other when the similarities in their situations are so obvious. I should like to ask the minister whether he feels that strength of representation is more important than just the straight fairness of the position.


Donald Methuen Fleming: Mr. Chairman, to the first question I would say at once that if the particular individual concerned is substantially engaged in construction he would certainly be regarded by the Department of National Revenue as a construction worker in the interpretation of this clause. I cannot think of a clearer case of a man who is a construction worker than someone who is engaged in road construction.
As to the second question and the written answer given in reply to my hon. friend's question as found at page 938 of Hansard, I draw his attention to the fact that his question was put this way:
Have any officials of the government made any studies and/or reports on the application and the possible effects of the extension of the expense deductions given to transport employees under subsection 7, section 11 of the Income Tax Act, to workers in either the woods or construction industry or both?
The answer was "yes". If my hon. friend expected a separate answer with regard to

each of these categories he should have put his question in proper form for that purpose. The answer is quite correct because a study had been made with regard to construction workers, as my hon. friend can see.
On his third point, it is not a matter of the strength of the representation in terms of the number of those for whom the spokesman speaks. That is not the simple basis upon which the decision ought to be taken. It is a question of the equities and the fairness of the case that is put forward. What are the intrinsic merits of the case? In my view every case ought to be considered on its merits regardless of the number of those affected. If there is injustice to one or two people then, if the proposed expedient is sound, that should call for the exercise of a legislative remedy if the merits of the case justify it.
But the point I was making earlier was that the representations we received, and there were many of them, were all on behalf of workers engaged in construction. We made a study of that subject and we felt there was a good case. We saw and can still see administrative difficulties involved. I hope that no hon. member thinks that we underestimate the administrative difficulties that may be involved. But we thought that there was a good case there on its intrinsic merits and that we should ask the house to deal with that case.
Since I became minister we have not received any representations on behalf of other groups. What I tried to convey in my opening remarks on this clause was that every case would have to be considered and studied very carefully on its merits. Certainly I would not be in a position today to say that any other particular group should have similar legislative consideration extended to it.
We are prepared to look at any such case and assess it on its intrinsic merits. But here today, in the absence of such thorough-going study, I do not think my hon. friend would expect a snap decision or a commitment to be given by the Minister of Finance.


Douglas Mason Fisher: Further to the answers that were given, may I say this. I have no desire to score on the minister and I am sure he has no desire to score on me in reference to the answer I read in Hansard. But it just points up the fact that the "yes" which I thought was all embracing only partially covered the question. I will see that in future my questions are more specific. But on the point of definition may I ask this question. If, as I plan to do as a result of the minister's remarks, I write to the pulp and paper companies in the region in which I am interested and inform them of the gist of the minister's statement
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and advise them to set up matters so that when people are on specific construction jobs the evidence of that fact will be very clear, would the minister see anything out of order in that or anything out of principle?


Donald Methuen Fleming: It will be a matter to be decided in each individual case as to whether the particular taxpayer is a construction worker within the meaning of the clause; and that will be a matter of proof by evidence.


Alfred Claude Ellis: There are a number of questions I should like to ask arising out of the minister's statement that the details would be left to the department officials to interpret. In view of the discussion we had in the house in the early part of April with regard to this matter, there are several things that I should like to clear up. The minister will recall that a great deal of the argument revolved around the question of whether a construction worker was a permanent employee or a temporary employee, and the former minister of finance argued that if a construction worker was not employed on a year round basis he would under no circumstances be able to claim exemption. I should like to ask the present minister whether any distinction is being made under this amendment as between temporary employees and permanent employees. In other words, if a construction worker takes a job with a firm which lasts through the winter months, just because that firm is not in a position to guarantee that he will be carried on the payroll throughout the following summer or the following winter, is this construction worker on that account going to be denied exemption under the present amendment?


Donald Methuen Fleming: I think the answer to my hon. friend's question was given by me earlier in reply to an earlier question. Let us take the case of the permanent employee. The case was given earlier of an engineer who goes about on behalf of a construction firm engaged in overseeing construction projects. If that man is a permanent employee and is travelling on behalf of his employer I think you will find that in every case his travelling expenses are covered by his employer. There is no problem with regard to him. But let us take the case of that firm or that engineer hiring persons to go out on a particular job, we will say for a month, two months, three months or four months. That latter is the man on whose behalf this particular clause is introduced. As long as he receives that allowance for board and lodging within the terms of this clause, in his capacity as a construction worker, from his employer he will, in respect of that allowance so received by him, now receive exemption under this clause.

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Alfred Claude Ellis: The other question has to do
again with an interpretation placed on this matter by the former minister of finance and which seemed to indicate that if a group of employees, in a desire to maintain employment for themselves during the winter months, were required to leave their normal place of residence in order to get work they would not be considered as employees entitled to exemption by virtue of the fact that they were not employed by a particular firm and were not travelling to the new place of employment on the orders of the company. My question is this. If during the winter months a group of carpenters find that there is no work in their own locality and if on their own, in order to maintain employment, in order to maintain their household in their normal place of residence, leave their home to take employment elsewhere, will they be entitled to the exemptions under this bill before us?


Donald Methuen Fleming: I think it is clear from the clause that the worker in question, if he leaves home on his own in search of employment is in this position. We will say he goes from Ottawa to Aylmer in search of employment in the construction industry. The expense incurred by him in that respect does not come within the terms of this clause. But if, on obtaining employment in Aylmer, the nature of his employment is such as to bring him within the terms of the clause, then he will receive the benefit of the clause. In other words, every case has to be dealt with on its own facts. But if I correctly apprehend the example given by my hon. friend, namely, the man who goes away from home in search of work, if there is no more than that to the case it is not covered.


Alfred Claude Ellis: The reason I asked the question is this. There are a number of workers in my own constituency who find work slack during the winter months. They are tradesmen. If they find that they can get employment in some other locality they leave. They cannot move their families; they cannot uproot their families and move to a new community on a temporary basis. Knowing that there is employment, or having good reason to believe that they can get employment in some neighbouring community, they leave and get work for a number of months. The thing I am concerned about is this. Just because they do not work for a particular construction company and travel to the new job on the orders or as employees of that company, I do not think they should be denied this exemption. I still feel that the workers in question should be entitled to deduct their expenses just as would the employees who work for a particular company and who move on instructions of the employer.

I have tried to make my point quite clear. As I say, it stems from the rather categorical statement made last year when we discussed this matter in the house by the then minister of finance, who argued point blank that if these people went on their own, unless they were ordered to do so by their employers they were not entitled to any consideration.


Donald Methuen Fleming: My hon. friend will recall that this clause applies to allowances in respect of board and lodging or something equivalent paid by the employer to the employee. Obviously, in the case cited by my hon. friend the individual concerned is not receiving payment from the employer.


Alfred Claude Ellis: That is the very point I was trying to lead up, namely the manner in which this amendment is limited. It is not a question of giving consideration to construction workers who must leave their normal place of residence. There are laid down in the amendment conditions which will deny to many construction and other workers who must leave their homes in order to provide their families with a pay cheque any benefit under the section which we are now considering. That was my point in bringing this matter to the attention of the minister. I feel that the section is not broad enough. Notwithstanding the worthy objectives outlined by the minister, there are still in my own constituency many who are not going to obtain any benefit at all under the provisions of this bill, even though, in order to provide for the needs of their families, they find it necessary to leave their normal place of residence.


Charles Edward Rea: Shall clause 1 carry?


Mr. Campbell (The Baitlefords):: I should like to put one more question to the minister. Let us take the case of a group of, we will say, woodsmen, working for a pulp and paper company and engaged in the operation of cutting down pulpwood and so on. Suppose the pulp and paper mill decide they want to build a road and take a group of these men from the logging operation and put them at constructing a road. They clear a right of way for the road and probably work on it for one, two, three or four months or even a year or so on that kind of work. Where would it put them if they were allowed benefits for that time and then when they went back to their old jobs.


Donald Methuen Fleming: I think in a case like that, the Department of National Revenue would have to examine the question very closely to see whether in essence, having regard to all the circumstances, the man is substantially a construction worker.


Mr. Hahn:: I would like to raise one question on subsection (b) of clause 1. I note there it says:
The value of, or an allowance (not in excess of a reasonable amount)-
My question is, firstly, who decides the mode of transportation; is it the employee or the employer. Secondly, what is considered a reasonable amount? For example, how is it determined whether one should travel by air, by car or by bus and so on?


Donald Methuen Fleming: Mr. Chairman, I do not think I can lay down any hard and fast categorical rule as to the particular mode of transportation to be used. I suppose, if in any case a dispute arose as to whether an allowance had been extravagant, it would be necessary for the department to examine the allowance made for transportation as compared with the cost of transportation available to the worker in the circumstances and if it were to appear that the amount was in excess of what was the fare required in any acceptable and normal form of transportation then a question might be raised about it.
However, I think it is most unlikely that any serious problem will arise in determining a reasonable allowance for that purpose. If a man were, we will say, to hire a motor car or to use his own car and charge up at the rate of 50 cents a mile instead of the normal and usual charge made by employees of say nine or ten cents a mile, then that would be regarded as unreasonable and as an obvious attempt to pad. It is a question to be determined in every case in the light of all the circumstances.


Frederick George Hahn: What I had in mind was whether the employee or the employer decides the method of transportation. For instance, if an employer says a man should be transferred from a job in the Kitimat area to one at Stewart for example, which is just a straight case of using such methods of transportation as are available-it might be transport by boat from one place to another and if the time element entered the picture it might be air-will the decision depend upon the method determined by the employer or will it be the one the employee chooses to take in the circumstances?


Donald Methuen Fleming: This is not a new type of legislation, Mr. Chairman. The Department of National Revenue is dealing with these cases with respect to transportation allowances all the time and there will be no more difficulty in interpreting and applying this clause than there has been in the thousands of cases with which the department is now dealing.
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Thomas Speakman Barnett: Mr. Chairman, I would like to direct a question to the minister in clarification of a point raised by the hon. member for Regina City with respect to this matter of travelling expenses. As I read the clause, on the question of travelling expenses one has to refer to subclause (a) (i) which says in part:
-in the course or by virtue of his employment as a construction worker-
Now I think a question does arise there in view of what the minister has said about not going along with the suggestion made by the hon. member for Regina City as to what is going to be the interpretation of the point at which employment commences.
I would phrase my question in this way: If a construction worker is referred by the officers of the national employment service to do a job and the situation is such that there is no local hiring agency or office of the construction company at the place from which he leaves and the formalities with respect to his employment are not completed until he actually arrives at this job, in that case may it not be considered that by virtue of his employment he would be entitled to his travelling expenses in going to the job.


Donald Methuen Fleming: Not unless the employer provided an allowance for the worker in those circumstances as a term of his employment.


Thomas Speakman Barnett: Well does the minister mean to say that if it is not the practice of a particular employer-as is sometimes the case in the logging industry-to advance fares before a man leaves his home and that man has to pay his own way to the job and is not reimbursed by the company, he will not be entitled to this exemption?


Donald Methuen Fleming: My friend's question takes us into an entirely new field, entirely new and quite outside the scope of the present clause. He is raising the whole auestion of the definition of expenses under section 11 of the act, expenses laid out for the purpose of earning income. Now that does not arise under this clause at all; this is a clause dealing with allowances by an employer to an employee and my friend's question does not arise here at all. It takes us into the interpretation of an entirely different section of the act.
I might say that section 11 was put in the act a long time ago and has been the subject of constant interpretation. It is a matter of determination in every case under section 11, whether an expense is incurred or an expenditure is laid out for the purpose of earning the income. If a man goes to another place to look for work, I think the department in that case is not going to treat his expenses as being laid out for the purpose

Income Tax Act
of earning the income. However, I must take the position that this question does not arise under this clause at all. We are entering a different field, a different part of the act entirely.


Thomas Speakman Barnett: Mr. Chairman, on this point, the provisions under section 11 of the act, as I have always been led to believe in the discussions raised on this point, are provisions for expense allowances which are allowed to certain categories of people, such as travelling salesmen etc. Those on wages and salaries have been specifically denied these provisions under section 11 of the act because of the provisions of section 5 and my understanding is that the only way in which those in receipt of income from wages and salaries can qualify for any of these deductions enjoyed by other people is, as I suggested earlier, for a suitable amendment to be made to section 5 of the act which is a limiting section. As I understand it, those whose incomes come from wages and salaries can only deduct expenses for certain specific things. Now I fail to see that the question I have raised is not relevant to the proposal that the minister is bringing forward to provide an exemption for certain additional expenses under section 5 of the act.


Donald Methuen Fleming: Mr. Chairman, the opening words of section 5 state:
Income for a taxation year from an office or employment is the salary, wages and other remuneration, including gratuities, received by the taxpayer in the year plus
(a) the value of board, lodging and other benefits-
Of any kind whatsoever, and so on. The purpose of the amendment is to provide that in the cases defined by the clause now under debate the construction worker does not carry that allowance from the employer into his income upon which tax may be levied.


Charles Edward Johnston: May I suggest to the Minister of Finance that the coal miners cannot carry that expenditure into their income tax either. Why should it be that just one certain branch of industry is allowed this exemption? Why should not other workers be entitled to the benefit of its provisions? In the mining industry it often happens that the owner of a mine will transfer some of his help to another mine under his ownership, yet the men concerned are not allowed to make this deduction. A particular case occurs to me where men employed in a mine in Evansburg were moved to Drum-heller, still employed by the same company. I think this is a case quite parallel to the conditions under which construction workers are employed. Thus we find that one group of workers are penalized because they do not

receive the concession granted to another group. It seems hardly fair that while we are giving this assistance to one group of people, another group should not be receiving it. I think this provision should be made sufficiently broad to cover all industries where a similar situation exists.


Donald Methuen Fleming: I gather that the hon. member was not in the committee earlier this afternoon when we were reviewing this subject. There was an extended discussion of this point.


Thomas Speakman Barnett: As hon. members of the committee realize, when earlier today I proposed an amendment which would have met the point so laudably raised by the hon. member for Bow River, you, Mr. Chairman, ruled that the amendment was out of order. The question of order was mentioned by my colleague the hon. member for Winnipeg North Centre. Your Honour may have realized that it was partly because of the impending departure of the Minister of Finance that he did not deal with this point of order more extensively than he did, and I should like to say this: in view of all the discussion which has taken place on this question, and in view of suggestions which he made, and to which I myself referred earlier, that amendments to the tax laws should be non-discriminatory in their application, the minister could leave for Paris with a much clearer conscience and expect to have a much happier reception on his return to Canada if he would consider accepting the amendment which I proposed, and moving it himself before he leaves on this important mission.


Donald Methuen Fleming: I assure the hon. member that if we do not get on with this section I will not be getting to Paris anyway.


[Stage Direction]
Clause agreed to.
On clause 2-Partial Dependency.
Hazen Robert Argue: Mr. Chairman, on clause 2, I think the increase in the allowable exemptions to dependents was a good move by the minister when he introduced his baby budget, but I do feel that it falls far short of the campaign promises which were made by the Conservative party. It seems to me that to implement their campaign promises would require a much larger exemption on account of dependent children, and for that reason we in this group are proposing at this time that the $250 exemption be increased to $500 for a child of family allowance age, and that the exemption of $500 should be increased to $750 for a child beyond family allowance age.

During the recent election campaign the Conservative party made much of its statement that the previous government had overtaxed the people by $500 million. Time and time again throughout the campaign the Prime Minister made the statement that the average family was being overtaxed by $120 a year, or $10 a month. He put this statement in another way when he said that every Canadian man, woman and child had had their pockets picked by $30. The proposal I am about to make would, if followed, result in the government meeting and carrying out its own campaign statements to the effect that the average family is overtaxed by $120.
I have here an example of an income tax payer who has an income of $4,000, and who has two dependants of family allowance age. Under the Harris budget, with a taxable income of $1,700, this taxpayer would pay $235 in the course of a full year. Under the proposal I am suggesting, increasing the allowance to $500, this taxpayer would pay $110, representing a saving of $125. This, as I say, is in line with the Prime Minister's statement during the election campaign and it goes a good deal beyond the tax relief granted by the Minister of Finance in his budget.
There is an overlying reason why I have advocated such an increase. I feel that the previous government made a very drastic mistake when they did nothing over many years to prevent family allowances losing their purchasing power, and I have calculated that to restore family allowances to the purchasing power they had when they first became effective in 1945 will take an increase of 64 per cent on the basis of the amount set at that time. Proposals for an increase along these lines were not accepted by the previous government and they are not being accepted by this government, and I feel the suggestion I am now making is a realistic alternative to the suggestion that we in this group have made for so many years that family allowances should be increased by 60 per cent over the 1945 rate in order to restore their purchasing power.
Because of this argument-the desirability of giving the income tax earner something which would provide him with some real measure of relief-I move:
That clause 2 be amended by deleting the figure "$250" from lines 19, 25 and 32, and by substituting therefor the figure "$500", and also by deleting the figure "$500" from lines 20, 26 and 32 and by substituting therefor the figure "$750".
The government said during the election campaign that the public of this country had been overtaxed by $500 million and yet the Minister of Finance in his budget-his peanut budget-said that the total tax relief would
Income Tax Act
amount to $146 million. If you add to that the amount the government is increasing expenditures from the national treasury in other fields you still arrive at a total that is far short of the $500 million tax relief that was so clearly a commitment made by the present government in the election campaign to the people of Canada. The motion I have moved on behalf of this group is certainly in line with the promises of the Conservative party and is directed toward seeing that the government fulfils its own election promises.


Charles Edward Rea: Is the
house ready for the question?


Howard Charles Green: May I submit to Your Honour that this amendment is out of order. It would involve the expenditure of additional sums running, I believe, into approximately $150 million. Under the rules of the house it was never contemplated that a private member could put forward an amendment of this kind. It makes a farce of the financial responsibility of the government and if this practice is to be followed then we will in effect no longer have responsible government in Canada. I submit to Your Honour that this wrenches any ruling that was made yesterday completely out of all recognition and I would ask Your Honour to rule the amendment out of order.


Stanley Howard Knowles: Mr. Chairman, despite the fact that I seem to have collected something of the voice of the hon. member for Coast-Capilano, I would be prepared if necessary to argue this point of order at length. I am satisfied, however, that it is not necessary to do so. In fact, I wondered when the Minister of Public Works got up where he was yesterday.
This amendment is on all fours with the amendment that was moved yesterday. Yesterday it was an amendment in committee to a taxation bill which had not been preceded by a ways and means resolution and it was an amendment that proposed a further reduction in a tax which the government was asking parliament to reduce. Today we have exactly the same thing. Today we have a taxation bill which was not preceded by a ways and means resolution in which the government is asking for a reduction in a certain tax. This amendment seeks a further reduction in that same tax.
The Minister of Public Works seems to have added some new words to his vocabulary since he moved across the way. He now says this would be a farce. May I say, Mr. Chairman, that if there is any farce so far as the proceedings in connection with this budget are concerned they relate to the failure of the government to precede taxation

Income Tax Act
measures with proper ways and means resolutions. I would like to take this opportunity, sir, of congratulating you on making a ruling at eight o'clock yesterday which was consistent with the ruling which Mr. Speaker made last Monday. I think everyone knows that I did not agree with the ruling which Mr. Speaker made on Monday but once he made it I accepted it and, having accepted it, my whole argument yesterday was that you, sir, should make a ruling consistent with the position that the Speaker took when he was in the chair and I do not think it is inappropriate for me to congratulate you on the ruling that you made and on its absolute consistency.
The Minister of Public Works said that if Your Honour did accept this amendment it would make a farce out of our financial proceedings. I say if there is any farce it is the government's own fault. I say to the Minister of Public Works, one who belongs to the Conservative party which a year ago wanted the rule of law to be preserved in this house, that he is asking Your Honour to make a farce out of procedure. He is urging you to make a ruling directly opposite to the ruling you made after due consideration at eight o'clock last evening. As I say, if hon. members on the government benches want to proceed with a procedural debate they can have it but relying on the consistency of the ruling that Your Honour made last night I do not think it is necessary.
Your Honour recognizes that I did not press the point with regard to the amendment that my colleague the hon. member for Comox-Alberni made to clause 1 of this bill. I must say I think Your Honour had a point in suggesting that perhaps there was something slightly irrelevant to what was before the committee in clause 1 but there is no irrelevance so far as this amendment to clause 2 is concerned. This amendment seeks to do exactly what was sought to be done by the amendment proposed yesterday, namely to ask for a reduction in a tax further to the reduction proposed by the government. All the citations we cited from May and the other authorities and the excellent citations you read from Campion all support the validity of the position you took yesterday, a position which I feel you have no alternative but to take again today.
I can see that the advantage of the ruling yesterday and the advantage of what is now happening may be that the government will not again make the mistake it made at this session in bringing in a budget without following the proper budget procedure but that is of their own making, even against our advice. In view of the present situation and

in view of the ruling you made last night I trust you will make a proper and consistent ruling at this time and accept the amendment that has been moved on our behalf by my friend the hon. member for Assiniboia.


Charles Edward Rea: As all
hon. members know, when this question arose yesterday I spent a considerable amount of time on it and went into every citation that was given and I gave my ruling last night. In looking at this amendment I still feel that this amendment seeks a reduction in taxes and therefore I will have to rule that it is in order.


Howard Charles Green: Mr. Chairman, with great
respect I appeal your ruling.


Stanley Howard Knowles: never thought I would hear that from my hon. friend.


John Whitney Pickersgill: This is restoring the
ancient glory of parliament, I suppose.


An hon. Member:: You had better think that over.


John Whitney Pickersgill: Boy, oh boy, the dictatorial mentality certainly develops quickly.


Stanley Howard Knowles: May
I point out that this is not only Friday the 13th, it is a black Friday the 13th.


John Whitney Pickersgill: Unlucky Friday.


Charles Edward Rea: Order
while the Clerk is writing out the appeal.
Shall I rise and report to the house?


Some hon. Members:: Agreed.
Mr. Speaker resumed the chair, and the chairman of the committee made the following report:
Mr. Speaker, In committee of the whole, Bill No. 232, an act to amend the Income Tax Act, was being considered. Mr. Argue moved the following amendment:
"That clause 2 he amended by deleting the figure '$250' from lines 19, 25 and 32, and by substituting therefor the figure '$500', and also by deleting the figure '$500' from lines 20, 26 and 32 and by substituting therefor the figure '$750'." Mr. Green raised a point of order to the effect that the amendment was out of order on the ground that it was not open to a private member to propose a reduction in a tax proposal submitted by the government. I ruled that, in my opinion, such an amendment was in order; whereupon Mr. Green appealed to the house from the ruling of the chair.
Mr. Speaker put the question as follows: The question is the following. In committee of the whole, when Bill No. 232, an act to amend the Income Tax Act, was being considered, Mr. Argue moved the following amendment;
"That clause 2 be amended by deleting the figure '$250' from lines 19, 25 and 32, and by substituting therefor the figure '$500', and also by deleting the figure '$500' from lines 20, 26 and 32 and by substituting therefor the figure '$750'."
Mr. Green raised a point of order to the effect that the amendment was out of order on the ground that it was not open to a private member to propose a reduction in a tax proposal submitted by the government. The chairman ruled that in his opinion such an amendment was in order, whereupon Mr. Green appealed to the house from the ruling of the chair.


Mr. Speaker:: I declare the appeal sustained and the chairman's ruling overruled.
And the house having resumed in committee:
On section 2-Partial dependency.


Charles Edward Rea: Since the chairman's ruling has not been confirmed by the house, I must declare the amendment out of order. Shall clause 2 carry?


Stanley Howard Knowles: Mr. Chairman,-


Charles Edward Rea: It being five o'clock, I do now leave the chair.


Mr. Speaker:: It being five o'clock the house will proceed to the consideration of private and public bills, the former having priority.



PRIVATE BILLS


Stanley Howard Knowles: Mr. Speaker, this may seem strange coming from me, and if I went too far it might seem a little irrelevant, but I would like to say a word with respect to this group of bills. Since all these bills are before us in the name of the hon. member for Spadina (Mr. Rea), out of respect for him and his stand a few minutes ago we are prepared to let them all pass without debate.
Bill No. 103, for the relief of Marguerite Downie Malo.-Mr. Rea.
Bill No. 104, for the relief of Irene Patricia Heffernan Brown.-Mr. Rea.
Bill No. 105, for the relief of Catherine Ann Naylor Couture.-Mr. Rea.
Bill	No.	106,	for	the	relief	of	Antonio
Bucci.-Mr. Rea.
Bill	No.	107,	for	the	relief	of	Maurice
Robert.-Mr. Rea.
Bill	No.	108,	for	the	relief	of	Frances
Dorothy Denenberg Bloomfield.-Mr. Rea.
Bill No. 109, for the relief of Theodore Elbert Holtham.-Mr. Rea.
Bill No. 110, for the relief of Claude Murray Kirk.-Mr. Rea.

McGee McGrath McGregor McPhillips Maloney Mandziuk Monteith Montgomery Morris Morton
Muir (Cape Breton North and Victoria) Muir (Lisgar)
Pallett
Phillips
Argue
Ashbourne
Barbes
Barnett
Batten
Blackmore
Boulanger
Bryce
Bryson
Byrne
Campbell
(The Battlefords) Caron Castleden Christian Coldwell Crestohl Dechene Dumas Ellis Fisher Gardiner
Gauthier (Portneuf)
Gour
Habel
Hahn
Hansell
Holowach
Huffman
Irwin
Johnson (Kindersley) Johnston (Bow River)
Aiken
Anderson
Arsenault
Baskin
Beech
Bell (Carleton) Best Brooks Broome
Browne (St.John's West)
Campbell
(Lambton-Kent)
Cardiff
Charlton
Chown
Coates
Courtemanche
Crouse
Diefenbaker
English
Fairclough, Mrs. Fairfield Fleming Fulton

Private Bills-Divorce
Bill No. Ill, for the relief of John Alfred Crease.-Mr. Rea.
Bill No. 112, for the relief of Catherine Rita Marian Laker.-Mr. Rea.
Bill No. 113, for the relief of Jacqueline Marchand Cote.-Mr. Rea.
Bill No. 114, for the relief of Pola Baron Brisebois.-Mr. Rea.
Bill No. 115, for the relief of Graziella Bernier Murray.-Mr. Rea.
Bill	No.	116,	for	the	relief	of	Claus
Elstorpff.-Mr. Rea.
Bill	No.	117,	for	the	relief	of	Denis
LeBlane.-Mr. Rea.
Bill No. 118, for the relief of Patricia Mary Gorman Walsh.-Mr. Rea.
Bill No. 119, for the relief of Madeline Audrey Booth Hibbard.-Mr. Rea.
Bill No. 120, for the relief of Lily Sklar Titleman.-Mr. Rea.
Bill No. 121, for the relief of Alice Florence Chaisson Boychuk.-Mr. Rea.
Bill No. 122, for the relief of Cecile Cha-gnon Tremblay.-Mr. Rea.
Bill No. 123, for the relief of Roger Albert Bersier.-Mr. Rea.
Bill No. 124, for the relief of Herman Ray-vals.-Mr. Rea.
Bill No. 125, for the relief of Helen Frances Knight Koomas.-Mr. Rea.
Bill No. 126, for the relief of Marie Cecile Philomene Gilberte Pregent Bouchard.-Mr. Rea.
Bill No. 127, for the relief of Joyce Eugenie Swanburg Millette.-Mr. Rea.
Bill No. 128, for the relief of Evelyn Mahaffy Major.-Mr. Rea.
Bill No. 129, for the relief of Ruth Mary Ledden Wallace.-Mr. Rea.
Bill No. 130, for the relief of Catherine Lammie Graham McLean.-Mr. Rea.
Bill No. 131, for the relief of Irene Tinkoff Goldmann.-Mr. Rea.
Bill No. 132, for the relief of Joseph Fishman.-Mr. Rea.
Bill No. 133, for the relief of Lucille Ther-rien Deguise.-Mr. Rea.
Bill No. 134, for the relief of Doris Rose May Cook Thomas.-Mr. Rea.
Bill No. 135, for the relief of Olive Clara Benson Pitman.-Mr. Rea.
Bill No. 136, for the relief of Mildred Irene Mitchell Gauthier.-Mr. Rea.
Bill No. 137, for the relief of Laurette Racine Pollender.-Mr. Rea.
Bill No. 138, for the relief of George Wilkinson Pridmore.-Mr. Rea.

Bill No. 139, for the relief of Kathleen Mary Hicks Rainville.-Mr. Rea.
Bill No. 140, for the relief of Violet June Bockus Good.-Mr. Rea.
Bill No. 141, for the relief of Ethel Rappa-port Lomon.-Mr. Rea.
Bill No. 142, for the relief of William Newell.-Mr. Rea.
Bill No. 143, for the relief of Sally Ruth Pall Gold.-Mr. Rea.
Bill No. 144, for the relief of Nicholas Vlahos.-Mr. Rea.
Bill No. 145, for the relief of Stefan Weber. -Mr. Rea.
Bill No. 146, for the relief of Mary Russell Leclaire.-Mr. Rea.
Bill No. 147, for the relief of Joseph Roland Langevin.-Mr. Rea.
Bill No. 148, for the relief of Eileen Hannah Thomson Scott.-Mr. Rea.
Bill No. 149, for the relief of Miriam Jurist Stern.-Mr. Rea.
Bill No. 150, for the relief of Bernice Edith Knights Blake.-Mr. Rea.
Bill No. 151, for the relief of Michael Francis McTigue.-Mr. Rea.
Bill No. 152, for the relief of Zygmunt Habdank Bielinski.-Mr. Rea.
Bill No. 153, for the relief of Daphne Louisa Ruby Burrows Newland.-Mr. Rea.
Bill No. 154, for the relief of Reine Isabel Charles Bisson.-Mr. Rea.
Bill No. 155, for the relief of Elizabeth Cave Collyer DuBoyce.-Mr. Rea.
Bill No. 156, for the relief of Elvi Russak Urb.-Mr. Rea.
Bill No. 157, for the relief of Norma Rose Cohen Freeman.-Mr. Rea.
Bill No. 158, for the relief of Shirley Janet Whitton Ladds.-Mr. Rea.
Bill No. 159, for the relief of Venise Gosselin Hotte.-Mr. Rea.
Bill No. 160, for the relief of Bertha Wexler Azeman.-Mr. Rea.
Bill No. 161, for the relief of Emilia Shutko Suranow.-Mr. Rea.
Bill No. 162, for the relief of Amy Isabel Wonham Saunderson.-Mr. Rea.
Bill No. 163, for the relief of Marie Anna Eliza Labrecque Ladouceur.-Mr. Rea.
Bill No. 164, for the relief of Donald Stewart Walker.-Mr. Rea.
Bill No. 165, for the relief of John Joseph Sebaski.-Mr. Rea.
Bill No. 166, for the relief of Gwen Home
Segal.-Mr. Rea.

Bill No. 167, for the relief of Gwendolyn Alice Wilson Hermann.-Mr. Rea.
Bill No. 168, for the relief of Agnes Traiton Rathburn.-Mr. Rea.
Bill No. 172, for the relief of Loueisa Knutton Roberge.-Mr. Rea.
Bill No. 173, for the relief of Dorothy Miriam Skinner Stuckey.-Mr. Rea.
Bill No. 174, for the relief of Albert Renaud. -Mr. Rea.
Bill No. 175, for the relief of David St. Clair Wilson.-Mr. Rea.
Bill No. 176, for the relief of Omer Arthur Menard.-Mr. Rea.
Bill No. 177, for the relief of Dorothy Nettie Clarke Hay.-Mr. Rea.
Bill No. 178, for the relief of Frederick William Hovermann.-Mr. Rea.
Bill No. 179, for the relief of Bertha Viola Beatrice Good Malcolm.-Mr. Rea.
Bill No. 180, for the relief of Mabel Florence Adams Hadden.-Mr. Rea.
Bill No. 182, for the relief of Marie Marthe Moreau Roy.-Mr. Rea.
Bill No. 183, for the relief of Pierrette Picard Gagnon.-Mr. Rea.
Bill No. 184, for the relief of Marcelle Richard Deschambault.-Mr. Rea.
Bill No. 185, for the relief of Florence Irene Burness Williams.-Mr. Rea.
Bill No. 186, for the relief of Jean Paul Pelletier.-Mr. Rea.
Bill No. 187, for the relief of Mildred Mabel Desmarais Demers Joly.-Mr. Rea.
Bill No. 188, for the relief of Leonne Liane Andree Belanger Botham.-Mr. Rea.
Bill No. 189, for the relief of Shirley Alma Lawson Wilson.-Mr. Rea.
Bill No. 190, for the relief of Sarah Yam-polsky Pinsky.-Mr. Rea.
Bill No. 191, for the relief of Karina Mercs Bunte.-Mr. Rea.
Bill No. 192, for the relief of William Garnet Mills.-Mr. Rea.
Bill No. 193, for the relief of Violet Pitman Proulx.-Mr. Rea.
Bill No. 195, respecting the St. Mary's River Bridge Company.-Mr. Nixon.
Bill No. 102, respecting Alaska-Yukon Pipelines Ltd.-Mr. Chown.



SECOND READINGS-SENATE BILLS

[Stage Direction]
Bill No. 200, for the relief of Pierre Rothe. -Mr. Rea.
Bill No. 201, for the relief of Vasyl Dudka. -Mr. Rea.
Bill No. 202, for the relief of John Francis Bernard Deegan.-Mr. Rea.
Private Bills
Bill No. 203, for the relief of Jean Guy Joseph Desparois.-Mr. Rea.
Bill No. 204, for the relief of John Howard Cooper Thompson.-Mr. Rea.
Bill No. 205, for the relief of Romeo Raymond.-Mr. Rea.
Bill No. 206, for the relief of Annette Allard Huint.-Mr. Rea.
Bill No. 207, for the relief of Vera Dziedzic Volkman.-Mr. Rea.
Bill No. 208, for the relief of William Toulouse.-Mr. Rea.
Bill No. 209, for the relief of Frances Maud Mercer Barter.-Mr. Rea.
Bill No. 210, for the relief of Florence Bloomfield Cichella.-Mr. Rea.
Bill No. 211, for the relief of Carmen Baron Matucha.-Mr. Rea.
Bill No. 212, for the relief of Martine Rolland Badeaux.-Mr. Rea.
Bill No. 213, for the relief of Gertrude Laurence Delisle Laplante.-Mr. Rea.
Bill No. 214, for the relief of Viola Carmela Starnino Dizazzo.-Mr. Rea.
Bill No. 215, for the relief of Ludek Peter Rubina.-Mr. Rea.
Bill No. 216, for the relief of Bernhard Wilhelm Michael.-Mr. Rea.
Bill No. 217, for the relief of Paul-Emile Bedard.-Mr. Rea.
Bill No. 218, for the relief of Gordon Frank Skilling.-Mr. Rea.
Bill No. 219, for the relief of Michael To-dascu.-Mr. Rea.
Bill No. 220, for the relief of Iris Dorothy Birks Yates.-Mr. Rea.
Bill No. 221, for the relief of Marion Gloria Ewart Balleine.-Mr. Rea.
Bill	No.	222,	for	the	relief	of	Yvonne
Florence Kee Brien, otherwise known as Yvonne Florence Kee Durocher.-Mr. Rea.
Bill No. 223, for the relief of Christine Mary Mackay Leavitt.-Mr. Rea.
Bill	No.	224,	for	the	relief	of	William
Lucien Proulx.-Mr. Rea.
Bill No. 225, for the relief of Lionel Houde. -Mr. Rea.
Bill	No.	226,	for	the	relief	of	Gilberte
Henriette Marie	Harchoux Vuillaume.-Mr. Rea.
Bill No. 227, for the relief of Catherine Maitland Moenting Johnstone.-Mr. Rea.
Bill No. 228, for the relief of Maria Torossi Chartrand.-Mr. Rea.
Bill No. 229, for the relief of Judith Sidney
Browne Stein.-Mr. Rea.
[Stage Direction]
Industrial Relations
Bill No. 230, for the relief of Florence Wedge Whitlock.-Mr. Rea.
Bill No. 233, for the relief of Jean-Baptiste Gagnon.-Mr. Rea.
Bill No. 234, for the relief of Christine Sil-verson Manchur.-Mr. Rea.
Bill No. 235, for the relief of Joseph Napoleon Leon Prosper Brault.-Mr. Rea.
Bill No. 236, for the relief of Kaarlo Kustaa Loikkanen.-Mr. Rea.
Mr. Speaker:: By standing order these bills will now be referred to the standing committee on miscellaneous private bills.



INDUSTRIAL RELATIONS


Stanley Howard Knowles: the second reading of Bill No. 3, to provide for pay for statutory holidays for employees and pay for work performed on statutory holidays.


Some hon. Members:: Explain.


Stanley Howard Knowles: Mr. Speaker, this is a bill which I have had the privilege of presenting to the house on previous occasions. I hope that it may fare better in this parliament than it has in the past. As a matter of fact, I have had the privilege of presenting from time to time two bills which are companions to each other, one calling for annual holidays with pay, and this one calling for statutory holidays with pay.
It was something of a satisfaction when the speech from the throne was read at the opening of this parliament to discover that the new government had taken notice of at least one of these matters and promised that provision would be made for a bill to provide annual holidays with pay. That, of course, is another matter, and one which is under debate under two other orders but, as I say, it is good to note that by bringing these matters before parliament from time to time some progress is made.
I confess that just now when I looked at the speech from the throne to find the reference to the labour legislation that was to be introduced I happened to glance at another paragraph in that speech. I am afraid I would be out of order if I read it now, but it is my view that this particular paragraph-the second paragraph in the speech from the throne-has been blacked out by what happened here a little while ago.


Some hon. Members:: Order.


Stanley Howard Knowles: Who
is calling order?
Mr. Speaker, it is readily recognized in this day and age that the time has come for

workers in industry to have as a matter of right certain time off, not only annual vacations with pay but statutory holidays. Progress in this field in Canada has been very slow to date. As far as I can ascertain, only six provinces have any legislation regarding statutory holidays. Those six are Newfoundland, Nova Scotia, Manitoba, Saskatchewan, Alberta and British Columbia- two in the east and the four in the west. Even the legislation which these provinces have is in most instances not very advanced. In the case of Newfoundland and British Columbia, according to the latest information I have been able to obtain, all the legislation does is to state that certain days are public holidays. No provision is made in the legislation of these two provinces for overtime rates of pay for those who work on those holidays, or for pay as a matter of right on those holidays to those who are let off from their regular work.
In the other four provinces, Nova Scotia, Manitoba, Saskatchewan and Alberta, the legislation goes one step further inasmuch as provision is made for certain statutory holidays and for those who work on them to be paid at rates set out either in legislation or in regulations made under the legislation. These rates of pay vary. In most cases the legislation provides for overtime rates to a varying extent.
In only one of the six provinces I have just named does the legislation go all the way. That one province is Saskatchewan, where in the matter of statutory holidays there is, first of all, provision for such holidays to be observed; where there is, in the second place, provision for an overtime rate of pay for those who are required to work on statutory holidays; and in the third place provision that all employees who are entitled to these holidays get paid for them at their regular rate of pay, without having to work on those days.
Now, Mr. Speaker, the purpose of this legislation is to introduce that principle at the federal level. Everyone knows that labour legislation in this country is the subject of divided jurisdiction, that most of our workers come under provincial jurisdiction, leaving about 10 per cent of our workers under federal labour jurisdiction. Because of this situation it has been a matter of interest to those of us who follow these things that the federal authorities should take the lead so that this legislation should not only bring benefit to those workers who are under federal labour jurisdiction but in order that the provinces may be encouraged to follow suit.

In this instance, therefore, we are asking the federal government not just to do something which the provinces have done, because the provinces have not gone very far in this field; we are asking that the federal government should take the lead. Let it be perfectly clear that any law with regard to labour which the federal government may pass does not impose any legal obligation on the provinces. But it does have a moral effect in that the provinces feel that they have to pay some attention to it. It is on that basis that we are pressing this legislation now and placing it before the House of Commons.
Those who argue against this legislation- and I know what the arguments are because we have had this bill up before-contend sometimes that the federal government should not get too far ahead of the provinces. To me that argument seems so weak that it hardly calls for an answer although I have already answered it. Another argument used by those who would oppose this kind of legislation is that this is a matter to be left to collective bargaining. That is an argument we have had to meet all along the line as far as labour legislation is concerned. Everything, from hours of work, the number of days to be worked a week, wages, working conditions, everything on which labour has sought legislation has been met with the argument that this should be left to bargaining between employers and employees. In the early days it was not even collective bargaining, it was just a matter of leaving it to employers and employees, and in practical terms that meant leaving it to the employers.
Today we have reached the stage of collective bargaining and the tendency of those who are opposed to this kind of legislation is still to suggest that this should be left to machinery of this kind. We have had to face that argument in the House of Commons with regard to such matters as annual vacations with pay, yet this session there is not only my bill but a government bill on the order paper dealing with this matter. We have had to meet this same argument with regard to equal pay for equal work; we have had to meet it with regard to fair employment practices; we had to meet it a number of years ago with regard to the protection of pension rights. I remember raising this matter, seemingly times without number, and being told by the late Humphrey Mitchell and others that this was not a matter concerning which we should seek to enact legislation. But, ultimately, the house did enact legislation protecting pension rights against loss due to strikes or lockouts, along the lines I had proposed.
And so, step by step, it has been recognized that there are certain rules of the game, certain labour practices, which in all fairness
Industrial Relations
should be regulated by legislation. There is no doubt in my mind but that sooner or later this one will be recognized as other matters have been so recognized. My plea is that it be sooner rather than later and so I present this bill to the house. As I say, it is the same bill that has been presented on previous occasions. It proposes that all the workers who come under federal labour jurisdiction shall be given certain holidays off work with full pay, those holidays being New Year's day, Good Friday, Victoria day, July 1, Labour day, Thanksgiving day, Remembrance day and Christmas day.
I might point out that these are the holidays that are observed for the most part in all parts of this country. There are some holidays that are observed only in certain areas such as the civic holiday that we observe in some areas on the first Monday in August and then there are holidays like St. Jean Baptiste day that are observed in the province of Quebec. My bill provides for a minimum of eight statutory holidays a year with pay leaving it to the possibility of provincial legislation extending it to some of those holidays that are observed locally if this is desired.
May I point out that my bill of necessity is one containing quite a few details. That is what devolves upon one when he presents a bill rather than a resolution. In a resolution one can ask for consideration of a general proposition and not have to take the responsibility of spelling out the details but these resolutions that state general propositions seem to take much longer to reach the statute books than an actual bill. It is also true that by means of a bill one can get debate in this hour from five to six that cannot be had in the case of resolutions. Nevertheless, Mr. Speaker, I urge upon hon. members to realize that when we are dealing with the second reading of a bill we are dealing with its principle.
Now, if there are some details of the bill that some hon. members think go a little too far, or not far enough, or which they think should be changed, let it be clear that those changes could be considered and effected in the industrial relations committee to which, after second reading, I would move that this bill be referred. For example, I am sure there will be differences of opinion in this house as to the rate of overtime pay to be provided for those who are required to work on statutory holidays so as to keep essential services in operation. The rate I suggest is in the bill. At this moment I refrain even from mentioning it although I suppose I should not because it is a detail in one of the clauses but my main reason for refraining from mentioning it is to urge that hon. members not

Industrial Relations
oppose the bill because they consider that this particular rate is too high or too low. That is one of the details that could be considered, discussed and amended if necessary in the committee. What is before us at this time on second reading is not the details of the bill but the broad general principle and that broad general principle is one that the Canadian Labour Congress has placed before the government in its submissions in October. It is a principle which I believe commends itself generally to members of this house and I hope the house will approve it. That principle is a very simple one, that the workers of this country who come under federal labour jurisdiction should be granted by legislation of this parliament at least eight statutory holidays a year with pay. I urge the house to adopt this bill.


Mr. R. H. Small (Danforih):: Mr. Speaker, I do not think there will be much disagreement with the principle of this bill as outlined by the hon. member for Winnipeg North Centre with regard to the granting of eight statutory holidays a year with pay to those who come under federal labour jurisdiction. It has been admitted by the hon. member who introduced the bill that there is a certain conflict of jurisdiction, perhaps an overlapping, between the governments of the provinces and the federal government but I think if one surveys the pertinent legislation on the statute books of the provinces from coast to coast one will find that the bill proposed by the hon. member does not interfere to any significant degree with the broad general principle laid down in this bill that there be at least eight statutory holidays in the year.
My personal feeling is that the suggested holidays are not spaced as well as they could be. In fact, I would go much further than the hon. member for Winnipeg North Centre (Mr. Knowles) who suggested eight statutory holidays and I would propose that we endeavour to arrange to have one statutory holiday occur in each month of the year.
At the present time we have one in January and then there is a hiatus until we come to Good Friday. Then we have Victoria day and Dominion day. Many municipalities hold a civic holiday on the first Monday in August. After that we have Labour day followed by Thanksgiving day. We have made a provision for Remembrance day to be observed as a statutory holiday although it is very seldom observed. Finally, in the last month of the year, we have Christmas day.
Perhaps it could be arranged to have a statutory holiday occur in February and St. Valentine's day would probably be acceptable to everyone as a suggestion. We could also

arrange to have one in March and probably my good friend who sits smiling on the other side of the house would agree that there is a certain day in March that would be highly acceptable to Irishmen. I am thinking, of course, of St. Patrick's day the patron saint of the Irish. This would serve to place a holiday in each month with the exception of June and I do not think there would be much difficulty involved in selecting a suitable holiday in that month.


An hon. Member:: The 10th.


Jean Lesage: The 24th, St. Jean Baptiste day.


Robert Hardy Small: Yes, probably everyone would be agreeable to accepting St. Jean Baptiste day and surely no one could disagree if we were to find a day in July to honour the other group of Irishmen, the Orangemen, and transfer the holiday from July 1 to July 12 in order that they might be included in the picture. The civic holiday in August to which I have already referred would serve to round out the picture as far as observing a holiday in every month of the year is concerned. I think both labour and management would be satisfied to accept the principle I have outlined.
In my working days there never was any difficulty in securing these holidays off from work. We were always given these holidays whether or not we had a union but although it was recognized that we would have these statutory holidays we experienced difficulty in getting paid for them. When it was decided that we should be paid for them the question arose as to what basis of pay we would receive. In the first instance we received normal pay, then time and a quarter, then time and a half, and finally double time. At present if a statutory holiday occurs while you are enjoying a regular vacation with pay and you are required to work on that day you receive normal pay plus double time and in effect you receive three days' pay for one day's work. Some workers regardless of how genuine their identification with the union is are quite eager to work on a holiday in those circumstances where they can receive three days' pay for one day's work. That is the picture of statutory holidays in this country in the future as I see it. If we work toward that end I think we will attain it.
There is also the problem that we found during the war. There was a considerable abuse of statutory holidays. The problem was this. When you gave a statutory holiday and they are paid for it they want to take the following day off to finish up the celebration, or probably the day before. Then a rule was brought in at the suggestion of

the union in an attempt to defeat absenteeism or prevent it. A rule was laid down that the employee would have to be at work the day before and the day after. There was not too much difficulty about it. When they got paid for the holiday I suppose they thought they could take one for themselves. When the war was on, absenteeism of that kind cut down production, and it was made part and parcel of the union agreement, and I think rightly so. Anyone who has had any dealings with the unions, as I have had for a good many years, knows that there has to be production in order to pay the wages. If we have a five-day week and a statutory holiday comes within that week, that reduces the week to four days, and if you have an employee who takes a holiday on his own, that cuts his week's work down to three days. That is all the work you will get out of him in that week. I think my good friend from Winnipeg North Centre would agree with me on that.
Paragraph (b) of section 2 reads:
"full time employee" means any employee who, in a week in which a statutory holiday occurs, works or is required to be at the disposal of his employer not less than 28 hours exclusive of overtime and any time the employee works or is required to be at the disposal of the employer on that holiday.
This paragraph can be interpreted in this way. The 28 hours that he has to work in a week could be four 7-hour days in that week, or it could be three 8-hour days and a half. If the latter were applied to statutory holidays it would defeat the purpose that the union had in mind that a man must work the day before or the day after. There is not too much trouble with that particular phase of it because most of the holidays are now arranged so that they come on Monday in order to give the employees a longer weekend. There is no difficulty with the day before the holiday. It is the day after that causes the difficulty. There has been quite a shemozzle over that one. If the employee does not turn up the day after he still thinks he should be paid for the holiday regardless of union agreement. An equitable arrangement was worked out whereby employees would be paid for the statutory holiday if they appeared the day after. In other words, if they appeared at nine or ten o'clock in the morning the day following, they would receive the same for the holiday. That was a compromise.
These are the difficulties that are encountered in ordinary industry, but probably they would not apply so much here with union employees because they are more or less on a contract basis and would turn up to work the next day. Nevertheless, industry as a
Industrial Relations
whole has probably solved this. It is not what you might call a pressing problem with labour now because it is generally recognized by employers that employees get these statutory holidays and the other holidays such as Christmas day or New Year's day and probably July 1, which is Dominion day, would be problem ones. Those are movable holidays; they may come at the beginning, in the middle or at the end of the week. Holidays such as Good Friday create no difficulty whatever. Labour day is a holiday which comes on Monday and so does Thanksgiving day. The civic holiday in August is generally on a Monday. Therefore, what is involved here is the day after. There is no difficulty here. This bill is to take care of federal employees.
The hon. member for Winnipeg North Centre has advanced his arguments and is bringing this matter to the attention of those who work for the federal government. There are some difficulties involved in the arrangements for the taking of those holidays, and I have mentioned a very important one. It is going to create a certain amount of hardship in government work, and is something that should have been considered.
Industry all over the dominion has accepted the suggestions which have been put forward by the unions in this respect, but nurses and doctors who work in hospitals controlled by the government have no set time during which they shall work. They do not even have an 8-hour day. They are working on an extended program, and something along this line will be a Godsend to them. It is a very beneficial piece of legislation so far as they are concerned and will impose a further strain on the economy, whether it is the dominion government or the provincial government that is concerned because the hospitals are hard pressed now to get sufficient doctors and nurses.
If this bill becomes law, it will have a beneficial effect so far as they are concerned, there will have to be an arrangement under which they will get an 8-hour day and a 40-hour week in order to get the advantages which are long overdue. The hon. member for Winnipeg North Centre probably overlooked this. This is one of the benefits that will be derived from the statutory holidays, but it will also affect and be related to the 40-hour week.
There is also one other matter with regard to statutory holidays which is causing a little trouble in industry. When the statutory holiday falls on a Saturday the employees want Saturday to be considered as part of the week, and they want to get paid for that Saturday. Saturday has been a holiday down through the years. The employees have a 40-hour

Industrial Relations
week and therefore they do not get paid for Saturday when the holiday falls on that day. They have just lost it. One of the difficulties we find with a Saturday holiday and also a statutory holiday is that in our business, particularly, where we have to go on lots where there is a lot of car parking, we find that the only time we can get on is a Saturday or a statutory holiday because there are no cars on the lot at that time. That is the only time they will let you work there. You have to pay a man triple pay for a job that you find yourself legislated into because of the demands of the union.


Stanley Howard Knowles: Will the hon. member permit a question?


Robert Hardy Small: Yes.


Stanley Howard Knowles: wonder whether he is aware of the fact that the question he raises about Saturdays is covered in my bill?


Robert Hardy Small: Yes, it is covered in the hon. member's bill, but the way it is going to work it is going to cause a problem to the small man in business. It is all right for the big industry or the firm that hires a considerable number of employees, but the small man has to try to meet the labour conditions he is encountering. I appreciate the fact that the hon. member has it in the bill but I think there is a most glaring omission with regard to one important group that should be covered. I refer to nurses and other employees of hospitals as well as doctors who do not have a 40-hour week or the benefit of statutory holidays. The bill would place a strain on the supply of nurses and doctors.
I bring up these things because the general purpose of the bill is admirable but, as I pointed out, there are certain things I should like to see added to it. There are certain employees who should be covered by it and provision should be made to take care of those who work in hospitals performing very hard and essential work which in most cases is not appreciated.


Stanley Howard Knowles: Those, of course, come under provincial jurisdiction.


Robert Hardy Small: Sunnybrook hospital and all the other military hospitals come under federal jurisdiction. I think that the bill, having in mind the premise on which it is based, is a good and sound one but if these little things could be worked out I think it would make a better bill.


Stanley Howard Knowles: We
can do that in committee.


James Allen (Jim) Byrne: Mr. Speaker, the hon. member has left me just about enough time to say that I am in favour of the principle of the bill and if it should pass I should certainly like to see it go to the commitee on industrial relations for further study. I think the hon. member who has just taken his seat has probably strained his imagination more than the bill would strain the economy. His arguments are arguments I have heard many years ago, of course.


Robert Hardy Small: You are still hearing them, too.


James Allen (Jim) Byrne: I have heard the argument about the strain on the economy and the related arguments that employers use when discussing this question. But the hon. member has overlooked the fact that particularly when these matters are being negotiated between labour unions and employers they are in the final result written into an over-all package agreement that is the net result of negotiations. The principle of having pay for statutory holidays involves recognition of the fact that almost 100 per cent of those who are on wages and salaries do their budgeting from month to month and the fact statutory holidays may dislocate their budget has resulted in the wage bill being spread more evenly and including statutory holidays.
Again, the principle of punitive pay for statutory holidays is to prevent employers using the services of employees on a statutory holiday and while it is necessary for certain categories to remain at work the purpose is to ensure that no persons are required to work on a day considered to be either a religious or national holiday in order that they may be free to enjoy the holiday with the rest of their fellow citizens. The punitive aspect was introduced for that purpose.
The hon. member was concerned that the punitive measures might be too harsh when workers pay is doubled. If the pay is only doubled it simply means that the employer may work an employee on a statutory holiday and it costs him no more than to work him on any other day because he must pay him in any case for the statutory holiday should he remain at home. Therefore, to be consistent, double time or triple time are the only figures that may be used.
I have made some inquiries about legislation in the provinces. I find that in Saskatchewan this fact is recognized but they also provide there for the payment of double time and a half for certain employees who are not required to work because of the public service which they perform while those in performance of public service receive double time or straight time and a day off.


Robert Hardy Small: If the work is urgent they do not mind the triple pay.


James Allen (Jim) Byrne: No, I think triple time should be paid. I had much more to say in favour of the legislation but I would not want to talk it out so I will take my seat.


Mr. R. J. McCleave (Halifax):: Mr. Speaker, I too should like to speak on the excellent bill introduced by the hon. member for Winnipeg North Centre (Mr. Knowles). I presume I now have 30 seconds left to speak on it before something happens and the house adjourns for supper. There is one point in the bill that I think should be looked into particularly by the hon. member when at some future time he brings it before the house. I refer to the obligation it places upon employees, that is, workingmen, to do certain things, that is, to be paid or in the alternative to face 30 days in jail or a fine of $200.
On motion of Mr. McCleave the debate was adjourned.



BUSINESS OF THE HOUSE

Howard Charles Green: On a question of privilege, last night I named the resolution preceding the bill to provide a loan to the province of New Brunswick as being called for today. It is not the intention of the government to go ahead with that today and I thought hon. members would like to know.


Stanley Howard Knowles: Will we be going on with the income tax bill at eight o'clock?


Howard Charles Green: Yes.


Stanley Howard Knowles: May we inquire who will be piloting it tonight?


Howard Charles Green: The Minister of Finance.


Mr. Speaker:: The hour for private and public bills having expired, the house will revert to the business which was interrupted at five o'clock.



INCOME TAX ACT

[Stage Direction]
The house resumed consideration in committee of Bill No. 232, to amend the Income Tax Act-Mr. Fleming-Mr. Courtemanche in the chair.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at eight o'clock.
Stanley Howard Knowles: In
view of the fact that we were denied the opportunity to test the committee by a vote
Income Tax Act
on our contention as to what should be done with regard to these exemption levels, may I ask the minister if he will make a statement as to the consideration given to this matter by the government? Does he think that $250 is a sufficient exemption level for a child of school age in this day? Does he think that $500 is a sufficient exemption level for children 16 years and over, particularly when they are attending college or university? Is he prepared even now to suggest to the committee that these figures might be raised? After all, by the provision of the last subsection in this clause these changes do not become effective until the calendar year 1958. If that is the case, that they are put off until next year, would it not be possible to raise these figures to higher levels than those suggested in clause 2?


Donald Methuen Fleming: Income Tax Act
in respect of the income tax we have concentrated the benefit on persons in the low income groups.
In the light of the amendment that was introduced by the official opposition to the last budget last March, this is in keeping with the position that we took at that time and the position that we have for years taken that there should be reductions in the income tax and that principally the benefit of those reductions should be concentrated in favour of persons in the low income bracket. That is what this proposal and the others contained in the present bill accomplish. I trust that the committee will see fit to give enthusiastic endorsement to the clause.


Stanley Howard Knowles: May I say we will give endorsement to the proposal, but it would be much more enthusiastic if the figures were more nearly related to what the minister asked for when he was on this side of the house.


John Whitney Pickersgill: I do not think the Minister of Finance should be allowed to get away with the statement he has just made, namely that the government came into office in the middle of the year with everything set. Only three months of the fiscal year had gone by on June 21. A government with any real energy could have brought in new proposals if they had wanted to do so.


Thomas Speakman Barnett: There may very well be something in what has just been said by the hon. member for Bonavista-Twillingate. In the reply he has just given to the hon. member for Winnipeg North Centre the minister spoke about having to deal with existing conditions and said that this proposed amount was all that he felt those conditions warranted. A good many times in these discussions about financial proposals the minister has sought refuge in the fact that he was working within the framework of a budgetary pattern that was set by the previous administration. He has just done so. That contention might or might not have validity in respect of certain matters. But what the hon. member for Winnipeg North Centre has pointed out is that this is a proposal that comes into effect in the next taxation year when we assume the minister, if he is still in office, will be giving us something in the nature of a real budget which will represent entirely his own thinking and the government's own thinking on this question. In view of that fact it seems to me that the argument he has been using in connection with the suggestion of the hon. member for Winnipeg North Centre hardly applies in connection with this question. I think that

is particularly true when we consider that we had no indication whatsoever from the government since it took office that it had intentions to increase the basic exemption of married and single persons without dependents with respect to the application of income tax.


Frederick George Hahn: Before clause 2 carries may I ask the minister this question. Can the minister give us any idea how much it would have cost the treasury if they had doubled these figures to $500 and $1,000?


Donald Methuen Fleming: Is my friend asking for double the proposed new rate or double the existing rate?


Frederick George Hahn: The proposed new rate.


Donald Methuen Fleming: That is to say, raising from $250 to $500 the exemption in respect of each child eligible for family allowance and raising from $500 to $1,000 the exemption in respect of each dependent not eligible for family allowance?


Frederick George Hahn: That is right.


Donald Methuen Fleming: I will have an answer in a moment. According to the best estimate we can make in reply to my hon. friend's question, it would probably cost in addition to the present increase between $200 million and $225 million per annum.
(Translation):


Georges Villeneuve: Mr. Chairman, I wish to express my disappointment with clause 2 of this bill whereby the government proposes to increase the dependant's exemption by only $100 which, moreover, will apply only to the taxation year 1958.
In the light of the Conservatives' glowing campaign promises, we are inevitably led to the conclusion that their Niagara of promises is being doled out through a medicine dropper.
What the people of Canada were expecting was a complete review of exemptions, one which would have meant substantial exemptions for the ordinary wage earner, for instance a basic exemption of $1,250 for single people and $2,500 or $3,000 for married people, over and above the normal exemptions for dependants, whether or not family allowances are received.
The best way to help large families share in the wealth of this country is to raise the rate of family allowances, as was done by the Liberal government but which the present Conservative administration, so far, has failed to do in its unawareness that human values are still our greatest asset.

A student of dentistry, whose parents live in my constituency, was telling me recently how hard it is for him to get by financially because of the income tax. It's all he can do to earn a wage which does not even cover his tuition fees, food and board, and though he passes up well-deserved holidays so as to keep his job, he has to pay out $200.00 a year in income tax. His parents, in poor circumstances, are unable to help put him through dental school. It seems to me it is high time that generous exemptions be allowed to students who find it so hard to pay for their tuition and where parents pay for a son or daughter's college education, special exemptions like these should be allowed so that children of parents of modest means will not be debarred from higher learning because of financial difficulties.
I know of this through personal experience of financial instability during my own university years, and you may rest assured, Mr. Chairman, that this group of students in modest circumstances, caught between a legitimate ideal and the dictates of primo viver, have my fullest sympathy.
I am making this suggestion while the bill is being introduced, hoping that the legislators may soon give consideration to students who are bleeding themselves white to pursue an ideal which will soon benefit society as a whole. It is therefore a duty for society to make it as easy as possible for these young people to reach their goal. There is no better way of brightening the future than by lessening today's burden.
(Text):


[Stage Direction]
Clause agreed to.
On clause 3.
Stanley Howard Knowles: Clause 3 of this bill is the clause that makes a change in the rates of taxation under the Income Tax Act. Let me point out at the outset that in making these changes the minister is doing something which I am happy to commend. He so seldom draws a commendation from me that he might put this one down in the book.


Frederick George Hahn: You have not finished, have you?


Stanley Howard Knowles: No
my hon. friend from New Westminster is right, I have not finished. I will come to the other aspects of the matter in due course. What is good about this change is that the minister made it in such a way that those in the upper brackets do not get a greater reduction than those in the lower brackets. Oftentimes when reductions in income tax have been made they have been effected on a percentage basis so that for the few crumbs which were handed to those in the 96698-149J
Income Tax Act
lower brackets quite substantial reductions were given to those in the upper brackets. The way the minister has done it, by reducing the rate of taxation on the first $1,000 by 2 percentage points and on the second $1,000 by 1 percentage point and then carrying only that same reduction through to the upper levels, has meant that the result is that those in the higher brackets save only $30 a year under this provision and that is also the case with those in the lower brackets, except, of course, those who have no income beyond that in the first bracket. In their case they do not have quite so much.
Nevertheless, we think this is a poor substitute for the belief which this country had that the Conservative party would raise the exemption levels. As has already been pointed out, this was very definitely promised by the Minister of Transport in a speech made in Gananoque on May 23. It was argued in the House of Commons by the Conservatives in other sessions and, generally speaking, the country thought that was what the Conservative party stood for. Now the Minister of Finance comes before us with a budget, the provisions of which cover the calendar year 1958, and no change has been made in the exemptions.
Therefore, it seems to me that we have to try to improve the situation as best we can. This is a bill which proposes reductions in taxes and as was established by a ruling made in this house yesterday, a ruling made by the hon. gentleman who was in the chair this afternoon in pursuance of a ruling made by Mr. Speaker last Monday, we have the right to move amendments reducing still further any taxes which are reduced by this bill.
There is no way under the provisions of this bill whereby we can move any amendment raising the exemption levels of $1,000 for single persons and $2,000 for married persons. If there were such a way we would avail ourselves of it. However, since there is no such way, we feel a move in that direction could be made by reducing still further the rate of tax that applies to the first $1,000 of taxable income. That is what I rise to suggest now. I shall do more than suggest it, I shall move an amendment to that effect.
Our suggestion is that the rate of tax on the first $1,000 of taxable income, which is at present 13 per cent and is a reduction from the 15 per cent at which it stood a few years ago and which the minister now seeks to reduce to 11 per cent, should be reduced to 8 per cent.
We do not suggest any other change of the tax rate under these various brackets. The minister's proposal was to reduce the first rate

Income Tax Act
by 2 per cent and the rate on the second $1,000 by 1 per cent and that meant that for all of the brackets from there up there will be a reduction of $30. Our proposal for a further reduction in the first bracket of 3 per cent and no other reduction takes another $30 off each of the amounts of tax specified in the clauses of this bill.


Mr. Benidickson:: Do you propose to save $30 for the millionaire?


Stanley Howard Knowles: Yes, we give the millionaire another $30, the same $30 as is given to those in the lower brackets. My hon. friend will realize that $30 to a person with an income of $3,000 or $4,000 means a lot more than it would to his millionaire.


William Moore Benidickson: Quite so.


Stanley Howard Knowles: To achieve this change which we feel is desirable as a means of further relief to those in the lower income brackets I move, Mr. Chairman:
That clause 3 be amended by deleting the rate "11 per cent" from paragraph (a) and by substituting therefor the rate "8 per cent", also by deleting the figure "$110" from paragraph (b) and by substituting therefor the figure "$80" and also by reducing the corresponding figure in each paragraph from (c) to (p), both inclusive, by $30.
I believe, Mr. Chairman, that the effect of this amendment which I move on behalf of this group is quite clear. It provides this further $30 reduction so far as the first thousand dollars of taxable income is concerned and provides the same $30, but no more, to each one of the taxpayers in all the other brackets. May I repeat, in view of the interjection of the hon. member for Kenora-Rainy River, that the millionaire will get a further $30 reduction as a result of this amendment but no more. The income tax payer whose taxable income is only $1,000 will also get the full $30 reduction proposed by this amendment.
Mr. Chairman, if by any chance any point of order arises in respect of this amendment, I know the Minister of Finance, recalling what happened on May 24 and 25 and May 31 and June 1 of last year, will support my right to be heard on such point of order.


The Chairman:: I am sure the hon.
member-


Stanley Howard Knowles: Are you proposing to make a ruling?


Henri Courtemanche: I was reading the
amendment.


Stanley Howard Knowles: I thought you had finished reading the amendment. If you have any thought of making a ruling, I ask to be heard first.


An hon. Member:: Who is running the house?


Henri Courtemanche: I am sure the hon. member will anticipate my ruling in this regard.


Stanley Howard Knowles: Thank you sir for giving me the privilege to speak to the ruling which you suggest I may anticipate. As I indicated before I sat down after moving my amendment, I was sure that the Minister of Finance would support my right to be heard on this point of order.
I mentioned certain dates the significance of which I am sure will not be lost upon the minister. On May 24 of last year he had difficulty in being heard on a point of order. On May 25 he had difficulty in being heard on a point of procedure, and he knows what happened as a result of his insistence that he had the right to be heard. He knows how in due course he was led out of this house although we voted solidly against the course of action proposed at that time.


William Moore Benidickson: Was that with the Union Jack?


Stanley Howard Knowles: Mr. Chairman, this amendment is on all fours with the amendment moved yesterday. Indeed, it is more closely akin to the one moved yesterday than it is to the one moved this afternoon, although there is a great similarity to that one. The amendment moved this afternoon which the hon. member for Spadina, who was then occupying the Chair, ruled in order sought to increase the level of exemptions in the case of allowances for dependants. This amendment is slightly different; it proposes directly a reduction in the rate of tax. That is exactly what the amendment did yesterday. It proposed a reduction in a rate of tax. I submit, Mr. Chairman, that if the amendment yesterday was in order this amendment is also in order.
It is not necessary for me to go over the citations which we read yesterday going back a century or more to prove our right to move an amendment of this kind when there is before the house a bill reducing taxation prior to which there was no ways and means resolution. Mr. Speaker accepted that proposition so far as this bill is concerned under the ruling he made last Monday. The hon. member for Spadina accepted it yesterday, and he accepted it again this afternoon. The position is as clear as that. This is a bill which by the government's own action was

brought in apart from the regular rules of financial procedure. Therefore it must be handled according to the provisions laid down in the chapter in May which has to do with bills that do not impose taxation. The hon. member for Spadina, when he ruled last night on yesterday's amendment, added to the citations which had already been placed on the record by giving an excellent one from Campion, and on the basis of Campion and May and the other authorities he ruled that that amendment was in order.
Mr. Chairman, I will take no further time to argue the right to put this amendment on the basis of all that has happened in the past because I imagine the problem which confronts you is what to do in view of the fact that the committee this afternoon by a vote of 72 to 60 set aside the ruling of the then occupant of the Chair that our amendment on clause 2 was in order.
On one occasion, Mr. Chairman, one who was occupying your position found himself in a similar situation. It was on May 24, 1956. The occupant of the chair at that time was confronted with the fact that he was being asked to rule on a matter concerning which in his opinion there had already been a ruling that day. We were dealing with Mr. Howe's closure within closure. We were dealing with Mr. Howe's desire that we not debate clause 1 of the pipe line bill but go on to clause 2 and then when we got to clause 2 he moved that further consideration be postponed and that we go on to clause 3. Those who were here will remember that incident.


Daniel (Dan) McIvor: We do.


Stanley Howard Knowles: When we raised the point of order against Mr. Howe's right to move that motion on clause 1 it was debated and a ruling was made. The ruling was appealed and the house sustained the ruling of the Chair. When we got to clause 2, and Mr. Howe sought to do the same thing over again we again raised a point of order. When I say "we" I admit it includes the member for Winnipeg North Centre but it also includes the present Prime Minister and the Minister of Finance. We with others, the Minister of Justice, for example, contended that we had the right to bring in new evidence and to decide again as a committee whether or not Mr. Howe could apply this form of closure.
The chairman on that occasion endeavoured to say that he was bound by a ruling which had already been made that day. He stated no authority, no citation on which to base that contention. There was strong objection, and by whom? The hon. member for Eglin-ton, the present. Minister of Finance, who
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insisted that there were new facts to be brought to light and that the former decision did not bind the Chair. Indeed, when the chairman cut off debate and reported the matter to the Speaker the then member for Eglinton asked that it be included in the report that he had been denied the right to speak to that point of order. That was not the day the hon. member for Eglinton was named but it was the beginning of the heat that developed and the next day in a similar situation having to do with a matter of privilege the hon. member for Eglinton again being denied the right to speak was named and put out of the house for the balance of that day.


Donald Methuen Fleming: Not named, suspended on a government motion.


Stanley Howard Knowles: the Minister of Finance wants to have it on the record that he was not named but was suspended on a government motion he can have it that way if he wishes.


William Moore Benidickson: He would not obey the rules of the house.


Stanley Howard Knowles: My
point is that the right of the house to review a decision, the right not to be be bound by a decision already taken the same day, was asserted last year on May 24 by no less a person than the minister who is now sponsoring the bill that is before the committee. We did have debate on that point of order and the Chair ruled against us. We again appealed the ruling; as a matter of fact, we went on doing it for several days as hon. members to my right will recall and will admit. We did the same thing on clause 3 and on clause 4 of the pipe-line bill.
In other words it has been established that a ruling made by the Chair appealed to the house and settled by the house does not preclude the house from reconsidering the whole matter. It is on the basis of what my hon. friends who are now on the government side did in that debate on May 24 and 25 of last year that I insist Your Honour must consider this point afresh.
May I also point out that the last time in my memory that a government member appealed a chairman's ruling was in 1948. The Honourable Senator Golding as he is now was then in the chair and, oddly enough, we were dealing with a taxation matter. Hon. members will recall that the issue arose because the opposition had out-voted the government on a taxation measure. The government, trying to get out of the difficulty, raised a point of order to the effect that the vote had been improperly taken. Mr. Golding stood his ground and ruled that he had

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properly put the question and that the vote was in order. The point of order raised by Mr. Abbott, supported by Mr. Mackenzie, was to the effect that it was not proper to deal with the individual paragraphs, of a ways and means resolution seriatim, that they had to be taken as one. The ruling of the chairman on that occasion was overruled by the majority of the house but I draw the attention of this committee to the fact that though although for a year or two the effect of that ruling bound the house in an iron-clad fashion so that we were required to discuss ways and means resolutions in their entirety, gradually the effect of that ruling made by a decision of the house has been worn down. Who helped to wear it down? The Minister of Finance and the hon. member for Greenwood.


William Moore Benidickson: They now stand for might against right.


Mr. Bell (Carleton):: Why don't you smile when you say that?


Stanley Howard Knowles: Time and time again when we got into committee of ways and means on the budget resolutions presented by the late Liberal government these gentlemen and others, and we too, insisted that we should apply common sense and deal with the paragraphs of the ways and means resolutions seriatim. The result is that by 1956 if one looks into the Hansard record of the debate on the ways and means resolutions he will find, thanks to the insistence of the hon. member for Greenwood and the Minister of Finance, that these resolutions were called paragraph by paragraph and the discussion carried on in an orderly way. In other words, despite the seemingly iron-clad nature of a vote of the house in 1948, common sense has prevailed. We have for all practical purposes got back to the same way of doing things that was in vogue before the government of 1948 appealed against a ruling of the chairman.
I submit with all deference, Mr. Chairman, that the house at this moment is still the master of its own proceedings. The house at this moment is still a group of intelligent members who have the right to decide what is a proper course of procedure.
I realize the difficult position in which you find yourself. You know of the ruling that Mr. Speaker made on Monday, you know of the ruling that the hon. member for Spadina made in the chair at eight o'clock last night and you know that to be consistent with those two rulings you have to rule that the amendment I have now placed before you is in order. What you are confronted with is

the vote of the house this afternoon which seems to have the effect of changing the decision made by Mr. Speaker on Monday and the decision made by the hon. member for Spadina both last night at eight o'clock and this afternoon.
I know of nothing more damaging to the rule of law, nothing more destructive of the integrity of the Chair, nothing more crushing to an occupant of the Chair than to be called upon to make decisions that represent a change from decisions previously taken, to be called upon to make decisions not consistent with those already given.
Let me call a witness on this point. I turn to Hansard of June 7, 1956, at page 4796.
Members have a right to know that the rules of the house will be observed and not be dependent upon the caprice of the majority. They have the right to know that the rules will not be reversed by the demands of expediency.
I hope, Mr. Chairman, you will not reverse Monday's decision and yesterday's decision by any demand of expediency such as I suggest we saw this afternoon. I continue:
They have a right to ask that the decisions of today shall not be reversed tomorrow by the presiding officer, whatever the consequences may be to the majority in this house.
I realize that in the present house the government is not in the majority, but it seemed to muster a majority vote this afternoon. To all intents and purposes the government is in the same position as was the government to which this speaker was referring.


Mr. Broome:: No; come off that.


Stanley Howard Knowles: Does anyone have any doubt as to whom I am quoting? I am quoting the then member for Prince Albert, now the Prime Minister. I continue with the quotation:
They have a right to ask-
This is the Prime Minister speaking in the House of Commons on June 7, 1956.


Ernest James Broome: We have no majority.


Stanley Howard Knowles: There is something else you have not got as well.
They have a right to ask that the decisions of today shall not be reversed tomorrow by the presiding officer, whatever the consequences may be to the majority in this house. We have the right to demand that in the future frustrated ministers-
Whether they be the Minister of Finance, the Minister of Public Works or the Prime Minister-
-will think of the consequences to Mr. Speaker-
And I interject that no government has the right to crush the heart out of a Speaker by seeking to override his attempt to be fair

and impartial, and that has been our experience at this session with all the occupants of the chair.
-if at any time by overt demand or subtle compulsion-
I hope you have not been put in that position, Mr. Chairman.
-they place him-


Ernest James Broome: What insinuations are you making? I think you should be a bit more careful.


Major James William Coldwell: Talk about insinuations; this is what the Prime Minister said.


Stanley Howard Knowles: This is what the Prime Minister said.


William Moore Benidickson: A straight quotation.


Major James William Coldwell: The Prime Minister said this.


Stanley Howard Knowles: continue:
We have the right to demand that in the future frustrated ministers will think of the consequences to Mr. Speaker if at any time by overt demand or subtle compulsion they place him in a position where he must depart from what, on the basis of his wide experience, he had determined was the right course to follow. Sir, if the rules under which parliament operates, if the decisions of today in a deliberative, orderly assembly, are to be reversed tomorrow by the presiding officer who made an earlier decision, then we shall have chaos.
I agree that these were great words from the lips of the present Prime Minister when he was in the opposition. I go on with the quotation:
If the accumulated usages and precedents of the past can be set aside when they are detrimental to the government of the day, then parliament will be placed where respect and dignity will be supplanted by disrespect and disorder.
Those are words from the then member for Prince Albert who, when he became Prime Minister, put these words into the mouth of Her Majesty the Queen:
Parliamentary government has been fashioned by the wisdom of many centuries. Its justice, authority and dignity are cherished by men of good will. It will be the high purpose of my ministers not only to preserve these qualities but to take steps to make both houses of this parliament more effective in the discharge of their responsibilities to the people of Canada.


William Moore Benidickson: What a farce.


Stanley Howard Knowles: Mr. Chairman, the government does not do that. The government does not achieve the dignity of parliament; the government does not achieve the maintenance of the rule of law; the government does not achieve respect and order, and all these things that the Prime Minister has so much to say about, when the first time it finds itself frustrated, faced with necessity, it appeals the decision of one of the presiding officers of the house after the officers
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as a group have tried, as they have during this session, to give impartial decisions.
The decision that was made yesterday, Mr. Chairman, when the hon. member for Spa-dina was in the chair, I recognize was a difficult and important one for him to make. He made it properly; he made it in complete consistency with the decision taken by Mr. Speaker last Monday. I throw in only this sentence in parenthesis, that everyone knows that I did not agree with the ruling that Mr. Speaker made on Monday. But once he made it we accepted it, and it was our contention that we should stay on the ground which was established by that ruling. We stayed on it yesterday, we stayed on it this afternoon in the ruling that the member for Spadina made on the amendment to clause 2, moved by my friend the member for Assiniboia. But we got off that ground when the government, in utter disrespect for the integrity of the Chair,-


William Moore Benidickson: Their own chairman.


Stanley Howard Knowles: The
government seemingly forgot that cartoon in the Globe and Mail of 1956 about the destruction of the Chair. We got off that ground when the government, in utter disrespect for the integrity of the Chair, chose to appeal that ruling and forced him to come back into the chair and say: My ruling has been overruled; the amendment which I said was in order, on the basis of the great amount of study I gave to the matter, I must now declare to be out of order. Mr. Chairman, it was the immediate response of mine-and I know it is on Hansard-when the Minister of Public Works did what he did this afternoon: "I never thought I would hear that from my hon. friend", and that was the way I felt about it. I say this to the committee. We are witnessing today something every bit as serious as what took place during those tumultuous days of 1956. Does the rule of law mean anything, or does it not? Are we going to be consistent or not?


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: My
hon. friends may groan over there if they wish.


Ernest James Broome: Can you change the budget as you wish?


Mr. Stuart (Charlotte):: Wise guy.


John Whitney Pickersgill: What budget?


William Moore Benidickson: Change the rules as you wish.


Stanley Howard Knowles: My
hon. friend from Vancouver South is here in this house-maybe the hon. gentleman whom

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he defeated is somewhere around this building, for that matter-because the country did not like the way the Liberal government set aside the rules of parliament during the pipe line debate. Now, tonight, he is sitting over there jeering at us for insisting on proper procedure in this house.


Ernest James Broome: I am not jeering. We have a minority government.


Stanley Howard Knowles: He
is jeering at us because we want the rule of law to be maintained. There is one point I want to make, Mr. Chairman.


Ernest James Broome: To maintain the hon. member for Winnipeg North Centre.


Stanley Howard Knowles: There is one point I want to make clear, Mr. Chairman. I never felt more strongly-


Ernest James Broome: You never made anything clear.


Stanley Howard Knowles: hear some interjections over there but I will pay no attention to them. I never felt more strongly about a point of order than I feel about this one, and I felt pretty strongly about some of those that we had during the closure experience. Mr. Chairman, here we have not the chair running into difficulty because members of the opposition disagree with a decision that has been taken; we have the chair running into difficulty because the government is frustrated,-


William Moore Benidickson: Overruled by their own friends.


Stanley Howard Knowles: -because expediency requires that a ruling be set aside. I want to say to you, Mr. Chairman, that I am making this appeal just as strongly as I can that you stand where the member for Spadina stood yesterday and today, that you stand where Mr. Speaker stood when he made his ruling last Monday. I say to you that if because of the difficulty of the position in which you find yourself, and this is up to you, sir, you find you have to rule against my amendment, I shall not do to you what the Minister of Public Works did to the member for Spadina this afternoon. You are not making a ruling under any threat of an appeal from this side of the house. So far as we are concerned, you are free to give this matter your best thought and to make the decision that you believe should be made.
But I submit to you that in view of the rulings on Monday, yesterday and today there is only one ruling that can now be made. I submit to you that the demands of those to your right in the last parliament-you,

sir, were not here but you must know all about what happened in 1956-for reconsideration set aside any thought that this afternoon's vote of the house binds you now. Indeed, I submit that just as the Prime Minister used these words-


An hon. Member:: Quit stalling.


Stanley Howard Knowles: I hear some Conservative say "quit stalling". I think, Mr. Chairman, of how the Prime Minister has had so much to say about the rights and the supremacy of parliament, of how words to that effect grace the pages of this blue document that the Tories spread around the country in the last election, and then my hon. friends opposite say "quit stalling" when we are talking about this very issue. This is what the Prime Minister had to say on this matter when he was the private member for Prince Albert:
To me, parliament and the maintenance of its supremacy, its authority, its dignity, are above the fortunes of a pipe line.
To us on this side of the house, Mr. Chairman, to us in this corner anyway, parliament and the maintenance of its supremacy, its authority, its dignity, are above the frustrations and the embarrassments of a government, of a minister who has failed to bring his legislation before us in the proper way and is now trying to have set aside fair and impartial rulings that have been made by those who occupy the chair of the house.
I repeat, Mr. Chairman, that I have the highest regard and respect for those who have occupied the chair during this session, not only Mr. Speaker, but you, sir, and the deputy chairman of committees and the hon. member for Spadina who has taken your place so often. In my view the respect that we hold for you should not be attacked by the government by asking you to change your position but that just as we leave you free of any threat of appeal so the government should leave you free of any threat of appeal -how they can do it after what they did this afternoon I do not know-and leave you free of any notion that because you happen to be a member of the government party you are bound that way. You are the chairman of the house. The dignity, the supremacy of parliament rest in your hands as you make this decision.


Edmund Davie Fulton: Mr. Chairman, something of what the hon. member for Winnipeg North Centre has just said requires a reply. I think my reply can be summarized by reminding the hon. member of the fact that there is no majority in control here. The appeal

that was taken this afternoon was taken to the House of Commons in which there is no majority party.


Stanley Howard Knowles: Taken by whom?


Edmund Davie Fulton: Taken by the government, yes.


Major James William Coldwell: Why?


Edmund Davie Fulton: Because we felt that the ruling that was made was wrong.


William Moore Benidickson: Against your own nominee.


Edmund Davie Fulton: It was taken to the House of Commons and the appeal was upheld by the House of Commons in which there is no majority party. I heard some of my hon. friends of the Liberal party applauding statements and sentiments of the hon. member for Winnipeg North Centre, as they are entitled to do, and applauding him particularly when he was critical of the vote taken this afternoon. But I remind them that among the majority who voted against the ruling this afternoon was every Liberal who voted here this afternoon.


John Whitney Pickersgill: On a question of privilege, sir, every Liberal who voted voted to sustain the Chair.


William Moore Benidickson: Your own nominee.


Edmund Davie Fulton: I admit the correctness of what the hon. gentleman has said. I should have said, voted against the appeal.


An hon. Member:: He is labouring now.


Edmund Davie Fulton: No, I am not. My point is that had hon, members opposite felt that we were wrong this afternoon as strongly as they appear to feel it tonight they should all have been here and voted; because I remind them that no party has an absolute majority in the house, and we knew that when we took the appeal this afternoon. We took it because we believed that the position we had taken was correct, and we knew we were submitting it to the judgment of a house which could overrule us if the majority felt we were wrong.


James Garfield Gardiner: You only had 72 votes here.


Some hon. Members:: Oh, oh!


Henri Courtemanche: Order.


Edmund Davie Fulton: It is true that most of the members of the C.C.F. party were here and voted in support of what they said were their convictions and I respect them for it. But I think they should respect us for the fact that when we submitted this point to the judgment of the house we knew we were 96698-150
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submiting it to a house in which we did not command a majority and we were prepared to abide by the results.


James Garfield Gardiner: You wanted us to become the government, eh?


Edmund Davie Fulton: Mr. Chairman, may I remind the hon. member for Melville that that decision does not rest with us. It rested with the people and it will rest with the people again whenever that decision is sought.
This point of order is a question upon which there are honest divisions of opinion, and I wish we could deal with it on that basis because there is no majority here which can force its will upon others at all. Last night we made a submission and I argued in support of that submission. I argued sincerely on the basis that I felt it was not in order for a private member to make a specific motion with regard to the rates of taxation and I still hold that view tonight. What we have asked is recognition of the fact that that is one of the rules of parliament and that as a rule of parliament and, if the hon. member for Winnipeg North Centre likes to put it that way, as a rule of law, it should be upheld. That is what we are asking.
I think the hon. member for Winnipeg North Centre has been very incomplete, for him unusually incomplete, in his argument and his appeal to the principle of the rule of law because he forgets that the rule of law contemplates appeals.


Stanley Howard Knowles: Why
did you not appeal yesterday?


Edmund Davie Fulton: I will come to that.


Stanley Howard Knowles: You
accepted that ruling.


Edmund Davie Fulton: We appealed this afternoon. Is my hon. friend objecting because we appealed a little late? Is he saying that because we did not appeal last night we have no right to appeal ever? I do not think my hon. friend would say that. What we did this afternoon was to appeal on the basis of a rule which we felt should be sustained.


John Whitney Pickersgill: What rule?


Edmund Davie Fulton: If my hon. friend has not paid attention or perhaps has not been able to follow the arguments advanced, I am not going to repeat all the arguments made last night by the Minister of Finance and myself. We put those arguments forward and this afternoon we followed the rule of law which contemplates an appeal. It was not an easy matter for us to say that the member who was acting as chairman and was a member of the same party as ours had made a mistake.

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But we felt that he had, and that the repetition of the mistake and the grafting of the precedent that would have been set by the ruling made, if that ruling had not been appealed, would have been damaging to parliament. As I submitted last night-


An hon. Member:: What about yesterday?


Edmund Davie Fulton: I am talking about yesterday. As I submitted last night, and as I state again now, it is an elementary rule of parliament that only the government can make specific submissions or motions with regard to the rates of taxation. We talk and properly so; we talk about the rule of law and the rules of the house and say that they must be maintained. So they must and in my submission the government is seeking to maintain an elementary rule. But in addition to the rules written into the rule book, I have always understood that we are governed by the rule of common sense and that the rules of parliament are themselves based on common sense. It is a common sense rule that no private member should be allowed to move specific amendments with regard to the rates of taxation. That is an elementary protection to other private members. What kind of a position would you be in, Mr. Chairman, if that were allowed? I should go back a moment in order to anticipate an objection I know will be made.


Stanley Howard Knowles: What about the common sense of having brought in a ways and means resolution?


Edmund Davie Fulton: My hon. friend bases his position here on the fact that we ourselves said that we do not need' a budget on this occasion and that we are bringing in a bill that does not require a ways and means resolution. That being the case and that procedure having been ruled to be in order by the Speaker, he therefore says all the ordinary rules of common sense and all . the ordinary rules that govern the dealing with taxation measures are suspended and private members can make specific amendments. But, Mr. Chairman, what kind of position do you get into if you follow that argument? Last night or yesterday afternoon a relatively- and I use the word deliberately-minor amendment was moved by the hon. member for Assiniboia.


Stanley Howard Knowles: By
the member for Winnipeg North Centre.


Edmund Davie Fulton: I think the hon. member for Assiniboia moved the one on the excise tax.


Stanley Howard Knowles: No.


Edmund Davie Fulton: Very well; the hon. member for Winnipeg North Centre, if he made that

motion. That amendment would have involved a comparatively small amount.


An hon. Member:: What is $20 million?


Edmund Davie Fulton: It would have caused a comparatively small upset or readjustment in the taxation proposal submitted by the government, namely only $20 million.


John Whitney Pickersgill: What is $20 million?


An hon. Member:: What is a million?


Edmund Davie Fulton: That is what my hon. friends
are saying.


John Whitney Pickersgill: What is $20 million, they
say.


An hon. Member:: You said that.


Edmund Davie Fulton: It was comparatively small
in the light of the fact that today we had an amendment moved that would have involved $150 million. That is exactly my point. Once you admit-and in my submission erroneously as was done by the ruling made last night-the right of a private member to move amendments which would involve reductions in taxation or variation in taxation, you open the door. Last night we had a $20 million amendment. This afternoon we had an amendment moved that would have involved a variation of $150 million. From there I know perfectly well that my hon. friends would take it further and say, "We could do that on the taxation bill in the fall of 1957. Why can we not do it in the budget bill in the spring of 1958?"


Stanley Howard Knowles: Are
you not going to bring in a budget in the proper way next year?


Edmund Davie Fulton: That is exactly why the
principle has been laid down and maintained that private members may not move specific amendments to the amounts of taxation, because it places other private members in an absolutely impossible position. That is the rule of common sense, reinforced by the rules of this house from the beginning of our procedures and the beginning of our rules. Yesterday evening the Chairman made a ruling that the amendment moved was in order. We did not believe that the chairman was correct but we were prepared to see whether my hon. friends would be reasonable as they asserted they were being. Today it became perfectly apparent that they were not being reasonable and that they were taking-


Stanley Howard Knowles: Advantage of our rights.


Edmund Davie Fulton: -advantage of the opening
made by the incorrect ruling last night to repeat what in our view was an error and

one which, if left unchallenged, would graft upon the rules and procedure of this house a fundamentally wrong system.


John Whitney Pickersgill: Started by the Minister
of Finance in this so-called budget.


Edmund Davie Fulton: I have heard my hon. friend
previously but I have already heard him to worse effect than in the remark he has just now made.


An hon. Member:: He can get worse than
that.


Edmund Davie Fulton: An appeal was taken this
afternoon without any pleasure on the part of the government.


John Whitney Pickersgill: That was evident.


Edmund Davie Fulton: That appeal was taken because we felt it was necessary to prevent repetition of the error made last night. That ruling was appealed to the house. The House of Commons, in which there is no party majority, upheld the appeal. I submit to you, Mr. Chairman, and to my hon. friends opposite including the hon. member for Winnipeg North Centre, that it would be a violation of common sense, in the face of the decision of the house taken this afternoon, to ask you-as he is asking- to say, "I defy the House of Commons and, notwithstanding the decision of the House of Commons, I am going to agree that only the hon. member for Winnipeg North Centre can be right in this house". '


Stanley Howard Knowles: Mr
Chairman, I rise on a question of privilege.


William Moore Benidickson: Might does not make right.


Stanley Howard Knowles: rise on a question of privilege. I am not asking you to say that only I am right; I am asking you to go by the precedents of 100 years.


Edmund Davie Fulton: I submit, Mr. Chairman, that the hon. member is asking you to go by his interpretations of the precedents of 100 years. We have placed before the house our interpretation of the precedents of 100 years and the House of Commons sustained us this afternoon. For the hon. member to compare the situation today with the situation in 1956 is for him to indulge in a type of argument that I have seldom known him to be guilty of previously.


An hon. Member:: Guilty?


Edmund Davie Fulton: Or perhaps I should say that I have seldom known him to partake in previously.
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Edmund Davie Fulton: When the hon. member talks about black Friday and when he quotes what was said on the occasion of the pipe line debate, he forgets what was the substance of the complaint. The complaint then made by him and by us was against the abuse of the Chair by an absolute majority.


John Whitney Pickersgill: Was there not a majority today?


An hon. Member:: No.


Edmund Davie Fulton: There was a majority in favour; a majority upheld the appeal against the ruling, yes. A majority upheld the appeal from the Chairman's ruling because the party of my hon. friend who just interrupted did not have the interest-or lacked some other quality-to vote for it; for there were-


John Whitney Pickersgill: What about the 40 Tories?


Edmund Davie Fulton: -only a very small scattering of that party in the house, and I am informed that there were others of them behind the curtains and in the lobby who deliberately stayed out.


John Whitney Pickersgill: There is not an honest man on that side.


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: My hon. friend is so carried away by his embarrassment, which I perfectly understand, that I am going to overlook the impropriety of his remark and the resentment that I might otherwise feel because of it. On reflection I know that my hon. friend will realize that what he is saying is not only out of order but entirely unjustified I therefore think, Mr. Chairman, that the matter must rest there. If the House of Commons, in which there is no party majority, does not agree with us in our submission and our interpretation of the rules, and does not agree with us that it is a sound principle that only members of the government should be able to move specific amendments with regard to the rates of taxation, then the remedy lies in the hands of the present house. But I must say, I think it ill-becomes an hon. member who says that he believes in the supremacy of this house to criticize a government which has submitted its judgment and its opinion to the hands of the house in which it does not command a majority.


Major James William Coldwell: Let me say first of all that the genesis of all this is because the government set aside the rules.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: Just Mr. Coldwell: Because the government wait a few minutes and you will get the brought in what is, in effect, a budget in a answer to that.	manner which is not in accordance with the
96698-150J	[DOT]

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procedures and rules of this house and, having found themselves in a position where the members of the opposition could do that which they could not do if this measure had been brought in under the rules of the house, in a proper manner, when we took advantage of it and they were frustrated, what did they do?


An hon. Member:: Used their common sense.


Major James William Coldwell: They endeavoured to set aside the rules under which we are operating, even as we are operating now. The Minister of Justice says that common sense must prevail. I think the experience of the ages written into our rule books was the experience brought about by the common sense of members of parliament throughout the ages.


Edmund Davie Fulton: That is my whole point.


Major James William Coldwell: And in order to serve their hour and their minutes of power they have set aside the common sense, the accumulated common sense, of the ages. I felt badly in 1956 and I expressed myself very keenly about it; I feel just as badly tonight-just as badly-because I see a government in power tonight which during the campaign which resulted in their election went across this country denouncing what had been done in 1956 and telling us that if they were in power they would do two things, they would restore the supremacy of parliament and would restore respect to the Chair. And what have they done today?


William Moore Benidickson: Overruled the Chair.


Major James William Coldwell: We have a Speaker whom we all respect; we have chairmen who have given us what we consider to be fair rulings, and what have these people opposite done? They have undermined the Chair in this House of Commons at the very beginning of the first session of this parliament.
Yesterday we had a ruling; last Monday we had a ruling; that ruling is there. It was a black Friday in June 1956; this is Friday the 13th, another Friday. Might I quote something that was said at page 4856 of the debates of 1956:
We saw the culmination of this thing on Friday morning when a decision arrived at the previous night-an important decision-was reversed in the most calculated, brutal and callous manner and under the most calculated, brutal and callous pressure.
Who said that?


Edmund Davie Fulton: By a majority party.


Major James William Coldwell: The Minister of Justice said that, those are his words.


Edmund Davie Fulton: Yes, by a majority party.


Major James William Coldwell: We say the same position-


Edmund Davie Fulton: By a majority party in 1956.


An hon. Member:: What is the difference?


Stanley Howard Knowles: It
was the same; it is dictation by the government.


Major James William Coldwell: You know, my hon. friends when they were on this side of the house and the followers of the government on that side stood up and voted, as they said, without knowing what they were doing or voting about as hon. members did today, they called them trained seals. I am not going to inflict that jibe on the members opposite.


Mr. Vivian:: You had better not.


Major James William Coldwell: Who is telling me I had better not?


Stanley Howard Knowles: That is what they are, unless they are untrained seals.


Major James William Coldwell: I would say the gentlemen are so untrained that they did not know what they were doing this afternoon.


Ernest James Broome: What about your own
members?


Major James William Coldwell: I think this exhibition on the part of the government is something the people of Canada should know about and the people of Canada should remember and as far as I am concerned, just as I felt on that other night, that I should expose what I considered to be the wrongs done to parliament and to the chair by the late government when it was in power, so I shall do with this government to the very best of my ability.


Some hon. Members:: Hear, hear.


Major James William Coldwell: I think this is nothing short of a disgrace. 1 say to the Minister of Finance, why did he not get the Secretary of State to bring in the flag tonight and hang it upside down?


An hon. Member:: Shame.


Major James William Coldwell: Upside down-a signal of distress or sorrow; that is the way it should be done tonight.


An hon. Member:: Are you talking on a point of order?


Major James William Coldwell: I do not mind your interruptions; go ahead and interrupt all you like; it does not upset me a bit. I am just expressing some of the feelings I have in my heart tonight. I have respected this institution of parliament; I have respected the Chair, and I want to say that this afternoon I felt heartsick and I feel tonight

just as I did 18 months ago. For the sake of expediency you brought in the measure in the wrong way; for the sake of expediency you did what you did this afternoon, and to boast that you got a majority in this house in the circumstances that existed here this afternoon-


William Moore Benidickson: Careful, they will throw you out and you will have to have your own flag.


Major James William Coldwell: -is no excuse at all for what is being done. I want to say to the Minister of Justice, the Minister of Finance, the Minister of Public Works-I wish the Prime Minister were here,-to recall what they said about the undermining of parliament 18 months ago. They should read again their remarks because they have done in a different way precisely what was done in May and June of 1956.


James Garfield Gardiner: Mr. Chairman, I understand that the matter before the committee at present is a matter of order and that we have had decisions made by the chair on the point on two or three occasions within the last 48 hours. I understand further that those decisions have been in accordance with the practice of this house during the 25 sessions which I have attended and they have also been in accordance with the decisions made in 25 sessions of the legislature of the province which I attended before I came here. I have listened to some of the discussions earlier in this session and have even said to persons on this side of the house that the idea which has been expressed by the chairman of the committee in the last few days is in accordance with the long-time practice of an institution of this kind. That is, generally speaking, in dealing with matters having to do with money a private member has no right to stand up in his place and move for a further expenditure of money or for any action which might result in further expenditures of money, but he has a perfect right to get up and move that any expenditure of money which is proposed be cut down and reduced. Of course, one does not need to depend upon even the decisions of the chairmen in order to appreciate that that is true. I have here Hansard for July 26, 1956.
Now it is true it was the voting of money or the utilization of money that was under discussion, but the principle is the same no matter whether it has to do with that or whether it has to do with what we have been discussing. The present Minister of
Income Tax Act
Finance, speaking as the private member for Eglinton, said this as reported at page 6487:
I should like to point out that last year the department asked for and obtained a vote of $8,250,000 for this item. The minister reported yesterday that the department actually expended during the last fiscal year $2,084,615 on this item. It is quite clear, therefore, that the amount that was voted that was proven not to be necessary was over $6,150,000.
And then, going on down the page, and taking up the argument all the way he ends by moving an amendment:
That item 87, be reduced by the sum of $5 million to $2,500,000.
Now there was some considerable discussion on the question between the present Minister of Finance and the former minister of trade and commerce since the item concerned defence production also under the minister of trade and commerce. The discussion went on for a page or so, and then the hon. member for Eglinton proposed to withdraw his motion and asked for the consent of the house to withdraw it. The house refused to give consent, and the vote was taken. The vote as finally recorded was: yeas, nil, and nays, 48.
In other words, it was demonstrated in this house at the time that when you are talking about a reduction of expenditure on the part of the government it is possible for a private member to move such a reduction; it always has been. It was on the basis of that principle, as I understand it, that decisions were given by the chairman in this committee within the last day or two. That is the matter which has been under discussion, and the committee has a perfect right to deal with a motion of that kind.
This was stated by the chairman when he ruled this afternoon that the hon. member for Winnipeg North Centre was within his rights when he made the motion he did. The supporters of the government-those particularly concerned-had only one thing to do if they wanted to follow the practice of this house, and that was to allow the question then to go to a vote. If my hon. friends wished to know what hon. members on this side of the house thought with regard to the motion then all they had to do was let it go to a vote, and if it had gone to a vote, members on this side of the house would have voted in a certain way and demonstrated what they thought of the motion.
But when a minister of the government gets up and appeals the decision of the Chair -a chairman chosen from his own side of the house-and after the vote hon. members get up on the other side of the house and start finding fault with some members for staying out behind the curtains when the

Income Tax Act
vote was taken, it should be borne in mind that it is the members of the government who are over-riding the long-standing practice of this house, and if they are not doing anything other than that, and if they were counting the members on this side of the house for the purpose of stirring up the kind of argument they are making tonight, they are doing it for political reasons and no other reasons.
The practice of the house has always been the practice which was upheld by the Chair this afternoon.


Douglas Scott Harkness: Political reasons are the
only ones you would understand. I know that.


James Garfield Gardiner: I understand that well
enough to have been elected for 44 years to parliaments in this country. The people of this country do not vote for members 13 times in a row in any constituency because they believe that that particular candidate has only political reasons for what he does. They vote for him because they believe that whatever he may do he is capable of safeguarding the rights of parliament.


Henri Courtemanche: Order. I should like to
ask the hon. member to discuss matters relevant to the subject under consideration.


James Garfield Gardiner: Well, this is relevant to
what the hon. member for Calgary North is saying.


Douglas Scott Harkness: It is not relevant to the
point of order.


James Garfield Gardiner: As a matter of fact, if Your Honour wants to call order he should have called it when the hon. member for Calgary North introduced the subject. There was no reason for him interjecting what he did interject, and since he has interjected it I have a perfect right to reply to what he said. After that, I may be out of order.
We have been discussing this question this afternoon, and out of this discussion have come a number of things which would be out or order were every hon. member to be held strictly to the matter before this committee at the present time. It was said, not very many minutes ago, that there was not a majority in this house. Well, there was not a majority of the members sitting behind the government, but ever since this discussion first took place with regard to consideration of the rules of the house the debate has always gone back to the pipe line debate.
What was the underlying principle in the pipe line debate? It was that some people said outside this house that they had the right to come in here and put on a filibuster to prevent this house passing a measure which was desired by the majority. They took that

position outside the house, and came into the house to put it over. Certain things happened in connection with it-


Howard Charles Green: On a point of order, Mr. Chairman. I submit that the hon. member for Melville is not in order in following this line.


James Garfield Gardiner: Well, two speakers who preceded me have discussed it, and two of the members who took a very prominent part on the other side of the question to the one I took at the time that debate was on have been allowed to speak with regard to it. I am quite satisfied to agree with the last speaker, who was not speaking any more eulogistically of what took place at that time than I am doing. As a matter of fact the position taken at that time was that a minority in this house were demanding the right to hold up the majority for an indefinite period of time in order to make it impossible for a certain piece of legislation to go through, and that the government at that time was obliged to utilize the only rules that were on the statute books-


An hon. Member:: Before the debate even took place.


James Garfield Gardiner: The government of that time-


Henri Courtemanche: I have listened to a lot of argument from both sides, and I can tell the committee that I am ready to make my ruling.


Ernest George Hansell: Mr. Chairman, you have not heard from this corner of the house. I have just a word to say.


Henri Courtemanche: I will listen briefly to you.


James Garfield Gardiner: If Your Honour is not ready to put the question or make a ruling I have the floor. We have been discussing this question for some little time and I want to repeat that we have been twitted on this side of the house for not all being here in order to vote, and I want to say what has been repeated once or twice previously, that we had a very considerable number in the house, and if we had had a dozen more in the house it is true that the motion would not have carried-


Douglas Scott Harkness: You had them right behind the curtain.


James Garfield Gardiner: And we could have brought them in and trimmed you to a frazzle.


Henri Courtemanche: Order.


James Garfield Gardiner: Mr. Chairman-


Ernest George Hansell: Mr. Chairman, I am going to take only a few minutes-


Henri Courtemanche: Order.


Mr. Quelch:: Mr. Chairman, on a point of order, we have a right to be heard from this

corner of the house. You have heard a spokesman from the Liberal party and the C.C.F. party and I strongly object to your trying to shut off any debate from this corner of the house at this time.


Henri Courtemanche: I will listen to you.


James Garfield Gardiner: Well, Mr. Chairman, I still have the floor.


Henri Courtemanche: Order. I will ask the hon. member to discuss matters relevant to the discussion.


James Garfield Gardiner: I am discussing matters
relevant to all that has been said here tonight.


Henri Courtemanche: I do not address that remark specifically to the hon. member for Melville. I am saying that to all hon. members.


Andrew Wesley Stuart: It is a little late.


James Garfield Gardiner: The matters that have been discussed in connection with this debate up to now are of course all relevant to the discussion which was permitted to take place and I think these things should be discussed to their logical conclusion. When hon. members opposite say to the group on this side of the house, "If you had had all your members in today we would have been defeated at this time," I must comment that I have never heard of a government wanting to be defeated in any house. Why did they want us to defeat them this afternoon?


Henri Courtemanche: Order. The hon. member will understand that he is not discussing a matter relevant to the discussion.


James Garfield Gardiner: The hon. member for Kamloops discussed the same question for ten minutes only a few moments ago.


Hazen Robert Argue: That is right.


James Garfield Gardiner: Since I am talking in favour of abiding by the Chairman's ruling I will accept his ruling and agree that, so long as he keeps the others in line in the same way in connection with this discussion I will have nothing more to say until we take the vote.


Henri Courtemanche: Thank you very much. The hon. member for Macleod.


Ernest George Hansell: Mr. Chairman, I am not going to take much time this evening but I do think a point should be covered here from this corner of the house. In speaking to the point of order may I just point out that there is quite a difference in the debate on this point of order today and the debate that we have heard take place on similar points of order during the last session of parliament. The difference is this: The Minister of Justice, when he sat on the other side of the house,
Income Tax Act
and the hon. member for Winnipeg North Centre seemed to be bosom pals.


Edmund Davie Fulton: We still are.


Ernest George Hansell: They argued points of order much more intricate than this one and they were in 100 per cent agreement. The change of position appears to have changed their attitude.


Alfred Claude Ellis: You are bedfellows of the Liberals.


Ernest George Hansell: Let me proceed. The Minister of Justice rose a little while ago and said that members of the government challenged the Chairman's ruling because they thought the ruling was wrong. That is their privilege, of course, but I would like to know why they did not do that yesterday. That is a question I cannot resolve in the realm of common sense which my hon. friend the Minister of Justice has mentioned so frequently of late. Why was this not done yesterday? The arguments presented by the hon. member for Winnipeg North Centre this evening were the same arguments he raised yesterday and yet no protest was made at that time.
I want to compliment the Minister of Finance, however, on the way in which he handled this question yesterday. He rose in the house after the Chairman had made a ruling and explained that the government could not vote for the amendment, the reason being that if such an amendment were allowed to carry it would upset the balance of ways and means and it would only mean chaos as far as responsible government is concerned.


Mr. Lewry:: Now we have irresponsible government.


Ernest George Hansell: He explained that this was the way to look at it and so the government permitted the motion to be put and the motion was defeated on its merits. Why change the process today? Why change the process now?


Stanley Howard Knowles: Who
made the decision?


Ernest George Hansell: The same thing is happening now as happened yesterday. Why could the government not have permitted the motion to go before the house in the same way as the Minister of Finance permitted it to go before the house last night?


Alfred Claude Ellis: They are opposed to the amendment.


Ernest George Hansell: That would have been the solution to the problem; but no, they could not do that. I suspect they began to think the matter over and we can guess what it was they began to think over. They doubtless began to think that it was a bad political

Income Tax Act
move to let these motions be put before the house because someone would go out in the country and say, "The Conservatives voted against a reduction in taxation." That is what someone surely would have said and knowing this the government brought the Chair into what I claim to be disrespect and in doing this they have done the very thing they accused the previous administration of doing just a few months ago.


Henri Courtemanche: As hon. members are aware, in this sitting on an appeal to the house from the decision of the Chairman of the committee of the whole this house decided that it was not in order for a private member to propose a reduction in taxation. As I am bound by that decision I must rule this amendment out of order for that reason. In due deference to the views expressed I do not believe I can ignore a decision of the house made in this regard earlier this day. I would like to quote Mr. Speaker Lemieux as recorded at page 632 of Beauchesne's third edition in these words:
The best authority for the Speaker is the judgment of the house. The Speaker merely voices the opinion of the house. The house, having declared out of order an amendment framed precisely as the one now under discussion, I am bound, in accordance with that decision and irrespective of the authorities, to rule the present motion also out of order.
Shall clause 3 carry?


Stanley Howard Knowles: Mr. Chairman, will the minister comment further with regard to the rates set by clause 3 for the purposes of the Income Tax Act? He will recall that I expressed approval of the way in which this reduction, if it was the only reduction that could be made, was to be put into effect in that it does not pyramid into the upper brackets, but specifically was consideration given to the proposition which hon. members of the government party advanced from time to time that the exemption levels should be increased, for example to $1,500 for a single person and $3,000 for a married person?
As the minister knows these exemption levels were established a long time ago. The cost of living has gone up a great deal since these levels were established. Is it not time that these levels were raised? We all recognize when we are discussing income tax that it is the fairest method of obtaining revenue from the people of the country but it is also the basic principle of income tax that you should not start taxing those dollars that are absolutely essential to an ordinary existence.
We claim that that is what is happening. We oppose income tax on income just over $1,000 for a single person and just over $2,000 for a married person. It seems to me that

is not a good substitute for the implementation of that other idea that the Conservatives have had. I should like to hear from the minister on this point.


Donald Methuen Fleming: Mr. Chairman, the Prime Minister did not make any promise to the Canadian people in the campaign that if he were elected to office he would bring about a reduction in the tax through the medium of an increase of exemptions to $1,500 for single persons and $3,000 for married persons. Mr. Chairman, nothing would please the present Minister of Finance more than to be able to introduce responsibly such a proposal; but I come back to the point I have made already several times, that we were under very severe limitations coming into office now and having to function within the scope of an existing budget. The fact is, sir, that to put into effect an increase to $1,500 in the basic exemption for single persons and $3,000 for married persons would cost the treasury of this country approximately $530 million, and that kind of money was not available in the balance of ways and means within the scope of the budget that was passed at the last session of the house before dissolution.


John Whitney Pickersgill: Why did you say that during the election?


Donald Methuen Fleming: We did not say that.


John Whitney Pickersgill: You did, all over the country.


Donald Methuen Fleming: We talked about the overtaxation in the last fiscal year. The hon. member for Billingsgate knows that, he knows it very well. He should not go on mouthing things that he knows were applied to last year in the face of the huge overtaxation last year. I do not intend to be turned aside by those senseless interruptions of the hon. member.


John Whitney Pickersgill: On a question of privilege, sir, I am not sure whether the hon. gentleman was referring to me. If he was, he seems to have got the name of my constituency wrong. I would like to ask the hon. gentleman if he denies ever talking about $500 million surplus in the last election?


Jean Lesage: Overtaxation.


John Whitney Pickersgill: Overtaxation of half a billion dollars. Does he deny that?


Henri Courtemanche: Order. I ask the hon member to stay with the matter under discussion.


John Whitney Pickersgill: He doesn't deny it.


William Moore Benidickson: Saved by the chair.


Donald Methuen Fleming: May I proceed, Mr. Chairman? If the hon. member can just hold himself for only a moment he will get his answer.


Henri Courtemanche: Order. I would ask the minister to discuss the matter before the chair.


Donald Methuen Fleming: That matter was discussed at the last session as applying to the last fiscal year, and a good deal was said about it, and a good deal more could be said about it yet.
Let me deal with the question raised by the hon. member for Winnipeg North Centre, Mr. Chairman. I have pointed out what the proposal that he now inquires about would have cost in terms of loss of revenue to the treasury in a year and, faced with the limitations we were under, we looked about for a place where we thought reductions could be most effectively made. The conclusion we reached was that by concentrating our reduction on the income tax the two methods that would best achieve the concentration of the benefit of the reduction in income tax in favour of persons in the low income brackets were (a) an increase in the exemption now in respect of dependants; and (b) reductions in the rates in the lowest brackets of taxation.
That is why, Mr. Chairman, we have recommended to the house the reductions that appear in clause 3 of this bill, a reduction of two points from 13 per cent to 11 per cent on the first $1,000 of taxable income and a reduction of one point in the rate on the second $1,000 of taxable income. The net result of these two reductions is to reduce the load of income tax carried by the income taxpayers of Canada, 4J million of them, by $146 million in a full year.


Stanley Howard Knowles: Mr. Chairman, I have not kept a record-I have not the secretarial staff to keep this the way the Prime Minister can in regard to time spent on questions-of the number of times the Minister of Finance has pleaded that his government cannot do certain things because they are working within the framework of the budget of the former government.
Mr. Chairman, there are several facts about the clause that we are now discussing. First of all, it relates to the calendar year 1958 and to that period only. Nine months of that calendar year will be in a period presumably to be covered by a budget that may yet be brought in by this government. Even the first three months are the last three months of a period of more than nine months out of this fiscal year that this government will have been in office. This government, its
Income Tax Act
spokesmen, talked about the huge overtaxation, the huge surplus on the basis of which they would be able to implement their promises.
I have no defence of the former government, but it seems to me that this excuse has been worn thin, that the government has to keep telling us it cannot do the things it promised to do because of the limitations imposed upon it by Mr. Harris' budget. I repeat, these provisions are for the calendar year 1958, and if the Conservatives thought it was possible to do this kind of thing but now when they are on their own that they now find they cannot do them, why do they not honestly stand up and say they were wrong?
I recognize that even with such research as I have been able to carry on I have not been able to find a direct quotation that I can attribute to the Prime Minister to the effect that he would raise the exemption levels to $1,500 and $3,000. In fact, it is very interesting to go through the Prime Minister's speeches in the recent election campaign and see how he creates impressions, without putting things down in plain language. The Minister of Finance knows that in former years in this House of Commons in budget debates the members of the Progressive Conservative party did urge, and on occasion did move an amendment to the effect that the exemption levels should be raised. They created the impression, not just in the election campaign but across the years, that whereas the Liberals were stubborn and were unwilling to raise those exemption levels, the Conservatives would do it.
My contention is that clause 3, by the terms of subparagraph 2 thereof, relates to a period of time that is wholly within the control of this government. It relates to the calendar year 1958, the first three months of which are part of the present fiscal year and part of the nine months period that they will have been in office. The other nine months are entirely their own, if they are still there and if we do not have a change for the better in the meantime. In view of that, Mr. Chairman, the excuses given by the Minister of Finance are entirely inadequate.


William Moore Benidickson: Mr. Chairman, this unprecedented budget advanced in committee on the estimates of the minister to me, I think, brings to the attention of the house the desirability of following some recommendations that the minister himself made when he was sitting on this side, namely that of allowing members of parliament to meet and question officials of the government and examine the questions as to ways and means.

Income Tax Act
I am sure in my mind that the reason we have not got a white paper, as we should have at this time having regard to the big changes brought about by the new administration, is that the minister is advancing to the house his own off the cuff financial estimate. He is not prepared to advance a white paper that would have behind it the authority of the large number of people in the Bank of Canada, in his department, and elsewhere in whom the country has a great deal of confidence.
In the almost six months that the government has been in office circumstances have changed and, as I said in my remarks last Friday, they have changed for the worse. But based on the new declining levels of prosperity I think the Minister of Finance is not being frank with the house when he brings forward in an off the cuff speech last Friday night a statement of estimates of income and outgo involving millions and millions of dollars. I do not think these estimates have the imprimatur of the official level of government in this country in which we have had reason to have confidence.
In my opinion, this is a prime example if there ever was one of justification for referring the estimates of the department of the new minister to an estimates committee so that we could examine, as he himself has so often asked, some of the major economists and experts in the Department of Finance who could give us some idea as to the likely balance of ways and means as the result of some of these new proposals this session.


Donald Methuen Fleming: There is not one word of truth in the charge just made by the hon. gentleman.


William Moore Benidickson: Would my hon. friend, in the knowledge that the session will continue after the new year, not agree that there might be some advantage in allowing the estimates committee to examine the whole set-up of ways and means in so far as our finances are concerned?


Donald Methuen Fleming: Mr. Chairman, the hon. member never was more mixed up in his life than he is in the statement he just made. Never did anybody suggest that the estimates committee should do anything more than review estimates. He is talking now about an estimates committee that will review financial proposals in relation to taxation. The hon. member is completely mixed up. It is unfortunate.


William Moore Benidickson: Mr. Chairman, the Minister of Finance chose the introduction of his own estimates to offer the equivalent of a new budget and there was much complaint that the usual procedures, traditional for more

than 80 years, had not been utilized. I simply say to him, does that not justify more than ever directing to a committee of the house, and I think the estimates committee would be the proper one, estimates of the finance department so that we could have an opportunity to discuss with some of the senior officials of his department the opinions that they might have now as to the new levels of income and outgo of the government? No answer from the minister.


Thomas Speakman Barnett: Mr. Chairman, earlier when the minister was discussing this clause he placed some emphasis on the idea that the intent of the government in these tax reduction proposals, even though he admitted they are relatively minor, was to give relief to those in the lower tax brackets. In view of the remarks he made about the limitations with which he was confronted in his efforts to reduce taxes, the question I should like to ask him relates to the fact that the reductions in taxes, as I understand the figures in the clause of the bill, carry through right up to the person whose taxable income is $400,000 a year or more.
The minister can correct me if I am wrong, but I think I am correct in suggesting that for the people whose taxable income amounts to more than $2,000 right up to those whose taxable income is $400,000 or more the tax reduction amounts to $30 a year. I remember somebody suggesting earlier in the debate today that $30 a year to the person who is in receipt of an income of $400,000 is a good deal smaller consideration than it is to the person who comes barely within the tax level as far as income is concerned.
Can the minister indicate to us what the total amount will be which he does not expect to receive as the result of carrying out the $30 reduction in the case of all those who have a taxable income above the level suggested in subsections (a) and (b)? Those are the two sections in the lower income tax group for which he is suggesting a special reduction in rate. Has he any figures which will indicate to the committee the loss of revenue to the treasury as the result of providing the $30 reduction from that point right through to those in the highest income brackets?


Donald Methuen Fleming: Mr. Chairman, it would be an entirely new theory of progressive taxation to say that when you get above the level of $2,000 of taxable income you are not going to tax everybody in the same way on his initial $2,000 of taxable income. That would be an entirely new theory. You start everybody in the same way. The graduated rates apply to everybody and the reduction

is uniform as to amount. That is because we have started in the lowest brackets.


Some hon. Members:: Ten o'clock.


Henri Courtemanche: Shall the clause carry?


Stanley Howard Knowles: No, ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Can the hon. gentleman tell us what the business will be for tomorrow?
Business of the House Mr. Green: Mr. Speaker, tomorrow we shall commence with the bill having to do with the bridge over the Niagara. It was reported back from committee today. We will then continue with the debate on the amendments to the Income Tax Act; then we will take the Export Credits Insurance Act; then the resolution dealing with guaranteed prices for agricultural commodities; and then the estimates of the Department of Justice.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on December 2, 1957.
[Stage Direction]
Questions
ANSWERS TO QUESTIONS	citizenship revocations
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:

Mr. Gardiner: 1.	How many bushels of wheat, oats and barley were in storage in (a) country elevators; (b) other elevators in Canada; (c) on farms on December 1, 1955, 1956 and 1957?
2.	How many bushels of wheat, oats and barley were (a) in cars for shipment by railways; (b) in ships for shipment on December 1, 1955, 1956 and 1957?
Answer by: Hon. Gordon Churchill (Minister of Trade and Commerce):
Comparative grain stocks specified position and dates 1955 to 1957
1.
(a) In store in western
country elevators
Wheat	Oats	Barleym's bu.	m's bu.	m's bu.November	30,	1955..	214.3	18.0	33.5November	28,	1956..	217.1	35.5	25.6November	27,	1957..	208.9	36.2	33.7(b) In store in other	Canadian i	elevators	November	30,	1955..	133.1	6.8	13.6November	28,	1956..	116.1	17.7	30.2November	27,	1957..	134.0	13.3	27.6
(c) On farms
Statistics are not available showing the exact quantities of grain on Canadian farms at December 1 of any one year. The dominion bureau of statistics surveys of farm stocks are made with respect to quantities remaining on farms at July 31 with a supplementary estimate of quantities at March 31.
2.
(a) In transit by rail east and west
November	30,	1955. .	7.8	1.2	2.2November	28,	1956..	12.5	1.2	1.7November	27,	1957..	13.9	3.0	4.0(b) In transit by lake November 30, 1955..	vessel 8.1	1.5	2.5November	28,	1956..	6.7	2.5	3.6November	27,	1957..	9.3	2.6	2.5
Question No. 269-Mr. Pickersgill:
1.	How many citizens if any have had their citizenship revoked since January 1, 1947?
2.	(a) How many citizens if any have had their citizenship revoked since January 1, 1936, (b) what was the reason for the revocation in each case?
Answer by: Hon. E. D. Fulion (Acting Minister of Citizenship and Immigration):
1.	1509.
2.	(a) 45; (b) (i) absence from Canada (section 19 (1) (c) and (d)), 41; (ii) renunciation of Canadian citizenship (section 19 (2) (c*, 4.



POSTAL CONVENTION


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Question No. 278
Mr. Leduc (Verdun):: 1.	When the international postal convention took place in the House of Commons last summer, did the authorities responsible for the organization of the simultaneous translation system hire translators for translation from French to English and from English to French?
2.	If so, how many Canadian translators were hired and how many other than Canadians?
3.	How much did the temporary system cost the government?
Answer by: Hon. W. M. Hamilion (Postmaster General):
1.	Yes. Translators were hired by the international bureau of the universal postal union, Berne, Switzerland.
2.	No Canadians-17 other than Canadians to provide translation to English, French, Russian and Spanish.
3.	Translators were paid by the international bureau. Details of cost of installation and maintenance of simultaneous translation system were previously supplied. See House of Commons debates No. 7, October 22, 1957, page 303.



VANCOUVER-TUNNEL FROM STATION TO POST OFFICE

Mr. Irwin: 1.	Has the tunnel from the C.P.R. station to the new post office in Vancouver been completed?
2.	If so, what was the actual cost?
3.	Will it be used for any purpose other than taking mail to and from the post office and the C.P.R. station?
Answer by:	Mr. Hodgson, Parliamentary
Assistant, for the Minister of Public Works:
1.	No.
2.	Estimated for completion-$1,191,930.
3.	No.

Saturday, December 14, 1957



RAILWAYS, CANALS AND TELEGRAPH LINES

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Ninth report of standing committee on railways, canals and telegraph lines.-Mr. Fraser.