1957-02-28

COMMITTEES OF THE HOUSE


[Stage Direction]
Mr. John Hunter (Parkdale) presented the first and second reports of the standing committee on banking and commerce, and moved that the first report be concurred in.
Motion agreed to.
Fourth report of standing committee on miscellaneous private bills.-Mr. Henderson.


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, before motions are proceeded with I should like to make an announcement with regard to the freight assistance on western feed grains.
The present freight assistance policy establishes four main receiving zones, three in eastern Canada and one in British Columbia. The rate of assistance is calculated on a different formula for each zone. In eastern Canada it is arranged so that the ratio of assistance to freight costs increases as the zones move east.
Zone 1 is old Ontario and western Quebec, in which all points have a common rail freight rate from the lakehead, known as the Montreal freight rate zone. Zone 2 is eastern Quebec beyond the Montreal zone, except the Gaspe. Zone 3 is the Atlantic provinces and the Gaspe. Zone 4 is British Columbia.
The present assistance rates are now fixed in relation to the freight rates prevailing on January 26, 1955, the date of the order. As a result of the recent freight rate increase the assistance bears a lower relation to freight costs than formerly. The comparison, for typical points in each zone, is as follows:
Percentage Freight Assistance of Freight Cost Before	After
Freight Increase Freight Increase
Zone 1	
41	per	cent	37 per	centZone 2	
57	per	cent	51 per	centZone 3	
72	per	cent	65 per	centZone 4	
54	per	cent	48 per	cent
It is decided that the rates of assistance be revised so as to restore in each zone approximately the same percentage relation between freight assistance and freight costs as prevailed before the recent freight increase.


Mr. A. J. Brooks (Royal):: May I ask a
question. Am I to understand that the Atlantic provinces constitute the only region that is getting a higher rate than it had before? If I understand the figures correctly, I think it was 48 per cent and 54 per cent.


James Garfield Gardiner: That is zone 3. Before the freight increase it was 72 per cent and after the freight increase, 65 per cent. It will be brought to 72 per cent of the present freight.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, yesterday in answer to a question by the hon. member for Peel I undertook to consider his request that I table in the house the number and titles of books prohibited entry into Canada during the last year. The number of such books was 79.
As to my tabling the titles of those publications, I should like to remind the hon. member and the house that when similar requests have been made in the past the house has appreciated the fact that it has been the continued policy of successive governments to not make public the titles of books classified as immoral, indecent or seditious under tariff item 1201, which has been in the tariff since confederation. It has apparently been felt that the government should not be the supplier of a list of selected books of this character. Furthermore, the publication of such titles could serve as a catalogue for persons interested in the clandestine importation, distribution or sale of this kind of literature.
As I have previously explained in the house, when a publication is classified under this item the importer, exporter and publisher are advised of its classification and of their right of appeal to the tariff board or to the exchequer court. As in the past, I would say to the hon. member for Peel that

Inquiries of the Ministry I would be glad to make the list of titles available to him for such use as he may see fit.
With this explanation I would hope the hon. gentleman would agree that it would not be in the public interest to have the list tabled.


Mr. John Palleit (Peel):: I appreciate the lack of information contained in the minister's answer, and I resent his implication. May I ask if the minister would also indicate to the house how many books have been considered before this embargo was imposed?


James Joseph McCann: They have all been considered.


Mr. Speaker:: May I suggest that it would be more regular to have questions asked at question time.


Mr. H. W. Herridge (Kootenay West):: should like to direct a question to the Minister of National Revenue having regard to the statement he has just made. Has the minister, in his capacity as censor in chief and literary lord high executioner for Canada, read the books he mentioned in his statement, and if not can he tell us who has?


James Joseph McCann: I shall read the hon. member's question in Hansard, and I shall note the designation he has given to me as lord high executioner. He can apply that name closer to home.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a supplementary question to the Minister of National Revenue. In view of his statement to the hon. member for Peel that it has never been the practice of the Canadian government to table lists of books, magazines or other publications forbidden entry into Canada because of the immoral or obscene nature of their content, how does he account for the document which our efficient staff has put into my hands since he made this statement, namely sessional paper No. 187, tabled on May 12, 1952, by the then secretary of state, Hon. Mr. Bradley, which is a document of some 52 pages listing books, magazines or other publications forbidden entry into Canada because of the immoral or obscene nature of their contents, under the provisions of tariff item No. 1201?


An hon. Member:: Another mistake. You misled the house.


James Joseph McCann: Mr. Speaker, I had forgotten that the document was tabled and I will have to look it up; but strictly speaking, what better advertisement could there be

for indecent, immoral or seditious literature than to give to this house the list of titles of such books?


Mr. Dufresne:: Answer the question.


James Joseph McCann: That would be quickly caught up by the press; and if there could be a better advertising medium for some of the rot that attempts to find its way into this country, then I do not know what it could be. I suggest there should not be an hon. member in this house, if he gives due consideration to the import of such an action as publishing such a list, who would feel he should ask that the list be published.
I said to the hon. member for Peel that if he wants it-and there are no motives whatever that are not entirely proper imputed to him, for I consider that he has within himself some justification for making such a request-we are prepared to give him the list so he can examine it privately and make such use of it as he wants to; but the responsibility is his.


Stanley Howard Knowles: In view of what the minister has just said will he explain why Mr. Bradley tabled this paper in 1952? I may say that it was asked for by the then hon. member for St. John's West, Mr. Browne.


Mr. Speaker:: The explanation given by the minister may not be satisfactory to the hon. member, but let us continue with questions, if there are any more questions.


Stanley Howard Knowles: The memory of the hon. gentlemen over there is awfully poor, Mr. Speaker.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: Mr. Speaker, I promised the other day that as soon as I was able to do so I would make a short statement about the proposed airlift for British and French immigrants. Of course in practice the airlift will largely be for British immigrants because, unfortunately, we do not seem to be able to induce very many Frenchmen to come to Canada, a condition I regret.
The Department of Citizenship and Immigration recently approached the intergovernmental committee for European migration, of which Canada is a member, with a view to arranging for the charter of 350 air flights to transport immigrants to Canada from the United Kingdom and France. Implementation of the details of this arrangement is subject,

Inquiries of the Ministry
of course, to the approval of the Canadian air transport board, which is now considering this matter. However, it has been approved in principle, and the first flight will be made about March 15. The reason I am making the announcement today is so the ticketing and other arrangements can be proceeded with.
This is the largest airlift ever undertaken by the Canadian government, at least of this character, and it will be known as "Air Bridge to Canada" or "A.B.C.". That is to make it simpler for everybody to remember. The airlift is designed to add to regular commercial air and steamship transportation which is, or looks like being, booked to capacity during the early spring and summer months. It will provide for the transportation of immigrants who could not otherwise be moved in that period.
It is intended that the flight schedule of "Air Bridge to Canada" will be as follows- and I have a table here, Mr. Speaker, showing where these flights will go. Perhaps I need not read it now, but have permission to insert it in Hansard.


Some hon. Members:: Agreed.


John Whitney Pickersgill: There will be a total of 350 flights: 168 to Toronto, 60 to Winnipeg, 50 to Edmonton and 72 to Vancouver.
No. Flights
March	 5
April	 85
May	 100
June	 90
July	 35
August	 35
Total	 350


Alfred Johnson Brooks: What is the average number of passengers per flight on the A.B.C.?


John Whitney Pickersgill: These planes are of varying sizes, but I think they carry about 70 people.


Mr. G. E. Nixon (Algoma West):: Mr. Speaker, may I ask the Minister of Citizenship and Immigration this question. Have all Canadian air carriers been invited to participate in airlift A.B.C.?


John Whitney Pickersgill: Yes, sir. Every Canadian air carrier that had flown the Atlantic, and every air carrier in Canada we thought might be capable of flying the Atlantic was asked to participate in the airlift, and we are negotiating with other Canadian air carriers at the present time with a view to having them carry additional Hungarians. If they can satisfy the Department of Transport and the air transport board and meet the rates,
The cost of air transport has been fixed at a firm rate of $200 per passenger to any of the four destination points mentioned, and the normal reduction in fare for children under 12 years of age will apply.
I would like to add that in addition, Mr. Speaker, the government is continuing to charter two planes from Maritime Central Airways for the transport of Hungarian refugees from Austria or from the United Kingdom for an indefinite period, and that we have made an arrangement with Canadian Pacific Air Lines for 28 flights for Hungarians to western Canada at rates comparable with sea and rail rates. It was felt that we should do this in order to move the Hungarians whom we have agreed to take from the United Kingdom at as early a date as possible after April 1 so it may be easier for them to get into employment quickly.


Mr. Speaker:: The minister indicated that there was some portion of his statement which he wished to have considered as read. Is it agreed that the portion referred to by the minister be printed in Hansard and taken as read?


Some hon. Members:: Agreed.


John Whitney Pickersgill: The figures are as follows:
Toronto	Winnipeg	Edmonton	Vancouver3	-	-	235	10	20	2045	20	10	2545	20	10	1520	5	5	520	5	5	5168	60	50	72
we still do not have sufficient transport for all the Hungarians we have undertaken to accept.



ANTICIPATED NUMBER OF IMMIGRANTS FROM FRANCE OR FRENCH COLONIES

[Stage Direction]
On the orders of the day:
J.-Wilfrid Dufresne: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. Has the minister any idea and could he inform the house how many of the 200,000 immigrants who are expected to come to this country in 1957 are expected to be French citizens emigrating from France or from the French colonies?


John Whitney Pickersgill: Mr. Speaker, I have been asked similar questions many times and
Inquiries of the Ministry I always give the same answer, politician, not a prophet.


Mr. Caslleden:: That is questionable.


J.-Wilfrid Dufresne: There is nothing funny about this inquiry. There is some doubt about your being bright, though.



REPORTED EXPORT OF U.S. FLOUR UNDER CANADIAN BRAND NAMES

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Leader of ihe Opposition):: Mr. Speaker, I rise to ask a question of the Minister of Trade and Commerce arising out of certain items that have appeared in the United States press in recent days and today appear in our press, relative to an alleged practice on the part of Canadian flour millers of filling their export orders in part by having United States millers mill United States wheat, put it in Canadian bags, and thereby in part fill Canadian export market requirements. Is there any foundation for the statements as to this practice? If so, to what extent is the practice being continued, and is it this practice that has brought about the condition of affairs whereby our flour exports are decreasing while our exports of wheat are increasing?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, the practice has been reported to our department. We do not have all the details. So far as we can learn the flour is being exported under Canadian brand names; not under the "Milled in Canada" label, but certain Canadian brand names are being used to export United States flour. I do not think it would be good policy to go into the reasons for the practice, but we are taking steps which we think will make that policy less attractive. I do not think it is carried on to a great extent but there is a situation affecting exports of flour, particularly to certain flour markets, which requires correction. The correction is being made, and I hope to make an announcement in a day or two.


John George Diefenbaker: Possibly the minister
would say whether or not this has been a general practice. Second, is he in a position to deny that a major reason for this condition, in addition to the subsidy advantages that United States milled wheat has when made available for export, is the fact that the protein value of Canadian wheat is lower than the protein value of low grade United States wheat today?


Clarence Decatur Howe: I would not like to advertise that situation as a fact but I am not denying it.


John George Diefenbaker: I am not asking for advertising. It has been in the press. Is that one of the reasons or is it not? If it is not correct, then it should be denied.


John George Diefenbaker: Further with regard to the question asked of the minister, would he say when his department first became aware of this practice of milling United States wheat to fill Canadian orders, and whether what has happened in this regard has made it almost impossible for Canadian millers milling Canadian wheat to compete on equal terms or even on reasonable terms with United States wheat that is sold as flour under the Canadian brand names?


Clarence Decatur Howe: The situation was called to my attention about two weeks ago. Since then a very active study has been made and meetings have been held between the department and the wheat board. I expect to be able to announce remedial action shortly, probably some time within the next week.


John George Diefenbaker: Will the minister say whether or not-


Some hon. Members:: Oh, oh.


John George Diefenbaker: I am just seeking an answer which I seem to have difficulty in securing. The question is simple. Has this practice been so extensive that it has resulted in Canada losing markets for Canadian flour? I should like to add one further question. Have the Canadian millers who have participated in this practice been communicated with, and what is their answer to this practice which is so detrimental to Canadian export markets for flour?


Clarence Decatur Howe: Canada has not lost markets, for the reason that the millers have been quoting prices below cost of production to hold markets. I doubt if they can do so indefinitely. Remedial action is being studied and will be announced very shortly. This situation arose largely because of the export subsidies granted by the United States on flour, and, as I say, the United States policy was accelerated within the last two weeks and we are preparing to meet the situation.


George Hugh Castleden: Will the Minister of Trade and Commerce inform the house whether or not he has received protests from Canadian millers against the practice of United States millers using Canadian brand names, and what action can be taken to prevent that?

I am a


Clarence Decatur Howe: The United States millers are not themselves using Canadian brand names. Canadian millers have on a few occasions arranged with United States millers to turn out flour made of United States wheat, put it in their bags and ship it to destinations as ordered by Canadian millers.


George Hugh Castleden: And those bags have Canadian brand names on them?


Clarence Decatur Howe: Canadian brand names, but not Canadian sources of origin.



STATEMENT ON REPORTED PRESSURE BY UNITED KINGDOM TO RELAX RESTRICTIONS

[Stage Direction]
On the orders of the day:
Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, the hon. member for Nanaimo (Mr. Cameron) asked me a question about pressure being exerted from week to week by the government of the United Kingdom about trade with China, as supposed to have been stated in the British House of Commons. He referred to' a news item in the Christian Science Monitor and mentioned the date of the issue as February 8. That was an error; it was February 12. But in addition to the error in the date in the hon. gentleman's question, the dispatch itself went rather further than the exchange of questions and answers that took place in the British House of Commons. There was a question asked by Mr. Swingler on February 11:
Mr. Swingler asked the Secretary of State for Foreign Affairs what representations have been made in the last three months by Her Majesty's representatives in Washington and on the Paris committee to secure a relaxation of strategic controls on western trade with China.


Mr. Ian  Harvey@: Her Majesty's Government have made their views on this question abundantly clear to all members of the Consultative Group, but I cannot disclose the details of confidential discussions and representations.
Then there was a supplementary question:


Mr.   Swingler@: Are we to assume from that reply that British Government representatives are pressing week by week for the relaxation of these controls, and may we take it that the Government are not satisfied with the present position and are now pressing for relaxation of these controls?


Mr. Ian  Harvey@: I think it is reasonable to make that assumption.
As a matter of fact there have been no representations made to the government of Canada in the period of three months nor for some considerable time prior to that, nor discussions of the situation with the government of Canada by any of the British representatives.
Inquiries of the Ministry INCOME TAX



APPLICATION TO SHARES PURCHASED UNDER OPTIONS BY EMPLOYEES

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. In the case of employees or executives who exercise options to buy shares in the company by which they are employed, is the gain that results from increases in the price of such shares subsequent to the date on which they are purchased taxable or tax free?


James Joseph McCann: Mr. Speaker, I acknowledge
receipt of the hon. gentleman's question. I would refer him particularly to section 85A of the Income Tax Act, which is headed "Benefits to Employees". It covers three or four pages, so I will not undertake to give him the full gist of the section. However, a short answer to his question is that an employee who receives a stock option by reason of the terms of his employment and subsequently exercises that option is taxable in accordance with the provisions of section 85A of the Income Tax Act.
One would have to know the terms of employment. This is a matter, especially in the case of the new contracts particularly in Alberta having to do with oil production but also in connection with industrial companies, where it very often turns out that the terms of employment are such that included in them there not only is a salary but an option to purchase stock of the company.


Stanley Howard Knowles: May I ask a supplementary question. Does the answer which the minister has given not apply to the gain that arises because of the difference between the price paid for the stock and the value of it at the time of purchase? My question was this. What about the gains that arise after the purchase of the stock? Are they taxable or tax free?


James Joseph McCann: Of course the option is no good unless it is exercised and a sale made. That is where the profit or the benefit of the option would come into effect. The time the option is given is one thing and the time it is taken advantage of is another, and that is taken into consideration in the tax problem.


Stanley Howard Knowles: May I ask the minister whether his unwillingness to answer my question is an admission that these gains are tax free?


Some hon. Members:: Oh, oh.

Inquiries of the Ministry


James Joseph McCann: What gains are you referring to?


Stanley Howard Knowles: The gains that arise from an increase in the price of the shares after they have been purchased.


James Joseph McCann: I gave you a complete answer t'o that question-


Stanley Howard Knowles: Oh, no.


James Joseph McCann: -when I said that employees who receive stock options by reason of the terms of their employment and subsequently exercise that option are taxable in accordance with the provisions of the act.


Stanley Howard Knowles: Only up to that date.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. G. T. Purdy (Colchesier-Hanis):: Mr. Speaker, I should like to direct a question to the Minister of Agriculture. Before I do so, however, I should like, on behalf of the farmers in my constituency specifically and in Nova Scotia generally, to thank him for the announcement he has just made in connection with freight rates on feed grain. My question is this. Are studies going forward with a view to extending the general provisions of the Maritime Marshland Rehabilitation Act to the interval land in our numerous river valleys?


James Garfield Gardiner: Mr. Speaker, I shall have to take the question as notice.



CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Carl O. Nickle (Calgary South):: Mr. Speaker, I should like to direct a question to the Prime Minister. Is the Prime Minister now prepared to take appropriate action at this session of parliament, in response to a resolution passed by the Alberta legislature supported by 12 Liberal M.L.A.'s in addition to members of other parties, calling on the federal government for the repeal of section 12 of the Indian Act of 1951?


Louis Stephen St-Laurent: Mr. Speaker, that question is under consideration and the consideration will not be completed until the courts have dealt with the case that is now before them. In connection with that consideration it is the merits


of the case and not the views stated by members of the legislature of Alberta, of whatever party they may belong, that will be the governing factor when a decision is made.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Paul Hellyer (Parliamentary Assislant fo the Minister of National Defence):: Mr. Speaker, yesterday the hon. member for Oxford asked a question about the disposition of the aircraft of H.M.C.S. Magnificent. I took the question as notice since I was in some doubt as to the aircraft the hon. member had in mind. However, I am now informed that he was referring to the 59 Sabres that were recently returned to Canada aboard the Magnificent.
The aircraft are being distributed to auxiliary fighter squadrons in Toronto, Montreal and Vancouver; some for immediate use, while others will be held in reserve in support of these squadrons.



ROYAL CANADIAN AIR FORCE


[Stage Direction]
On the orders of the day:
Paul Theodore Hellyer: Mr. Speaker, while I am standing I would like to refer to the question raised by the hon. member for Winnipeg South Centre on Tuesday, February 26, with reference to the recent air crash at St. James, Manitoba.
An examination of the aircraft, an R.C.A.F. Mitchell, after the crash revealed that there was no gasoline aboard. However, since the fuel system in this aircraft is a rather complicated, automatic one, an extensive technical examination is required to determine the cause or causes of the aircraft being out of fuel.
As this examination has not yet been completed, I do not feel that I should make any further comment at this time which might anticipate the findings of the official board of inquiry or prejudice any subsequent action that might be required in this matter.



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. F. S. Zaplitny (Dauphin):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce, or the

Minister of Transport, or the Minister of Public Works, or any combination thereof.


An hon. Member:: What a combination.


Frederick Samuel Zaplitny: I assume they will take this as notice, since I have not sent notice of this question. The question is this. Have any steps been taken, as a result of representations from the government of Manitoba, to improve and modernize port facilities at the lakehead?
Right Hon. C. D. Howe (Minister of Trade
and Commerce):	Well, Mr. Speaker, the
question assumes that the facilities at the lakehead require modernization. I would not assume that, but I will discuss the subject with those of my colleagues who are named in the question and see whether an answer is required. I doubt if it is.



THE DUKE OF EDINBURGH


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Prime Minister arising out of certain press dispatches. I would like to ask whether or not the government of Canada was consulted before the title "Prince of the United Kingdom" was awarded to the Duke of Edinburgh, and whether or not the government of Canada was asked to give consent or to give consideration to the Duke of Edinburgh being given the title "Prince of the commonwealth".


Louis Stephen St-Laurent: Mr. Speaker, the suggestion was made by one of the prime ministers attending a prime ministers' conference-although not in the conference and I understand not only to me but to others attending the conference- that we should request Her Majesty to confer upon the Duke of Edinburgh the title of prince of the commonwealth. I told him I felt that would not be a proper designation; that there were no titles for the commonwealth; that the commonwealth was an association of member states but there was no government of the commonwealth and there are no traditions of the members of the commonwealth taking any decision of that character. I understand that I was not alone of that view.
As to the first part of the question, in those conversations it was apparent that we all recognized that on the recommendation of the government of the United Kingdom any title concerning the United Kingdom could appropriately be conferred upon any resident of
Inquiries of the Ministry the United Kingdom; and when it was decided by the present government of the United Kingdom to make that recommendation we were advised in advance and we replied that we were very happy to receive the information. I added that I was sure the government, members of parliament and the whole Canadian public would be quite delighted to hear that recognition was being made of the outstanding services the Duke of Edinburgh had rendered to the crown both in the United Kingdom and in respect of the commonwealth.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I should like to direct a question to the house leader. Will a change in the prayer which Your Honour reads each morning be made at this session in order that the Duke of Edinburgh will be referred to by his proper title?


J.-Wilfrid Dufresne: We will leave that to you.


Hon. W. E. Harris (Minister of Finance):: Mr. Speaker, I think I should answer by saying that consideration will be given to this matter.



PIPE LINES


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. In view of press reports of heavy United States buying in Canada of shares of Trans-Canada Pipe Lines Limited, can the minister say what proportion of the shares of this company, having in mind all the shares of Trans-Canada which have been issued up to the present time, are now held by Canadians?


Clarence Decatur Howe: Mr. Speaker, I had an analysis made at the time the shares were issued, and I found that well over 50 per cent had been sold in Canada. The proportion was considerably over that, but I trusted to my memory a while ago and had to apologize for a mistake, so I will not do it again. I do not remember the figure.


Stanley Howard Knowles: That is the reason I sent the minister notice of my question.


Clarence Decatur Howe: I would say it was
over 60 per cent. Particular care was taken in distributing the shares and every preference was given to small applications. A further precaution was taken in that the common shares were not distributed with the debentures. Therefore I assume that the position today is much the same as it was when the analysis was made.

Export Credits Insurance Act
I might say that since last Tuesday I have not the right to ask tor that information. If my hon. friend wants to see the stock list he can arrange for a stockholder to go through the proper channels and do it, but he cannot do it through me.


Stanley Howard Knowles: May I ask the minister first whether the information he gave in the first part of his reply answered my question about ownership by Canadians? I did not ask how many shares had been sold in Canada, I want to know how many are in the possession of Canadians. With respect to the last part of his answer, may I ask the minister if he is not still interested in the affairs of a company to which the government has agreed to lease a pipe line which is being built at public expense?


Clarence Decatur Howe: I do not know whether we can analyse whether the shares sold in Canada were sold to Canadian citizens, but I think we can assume that they were sold to Canadian residents because great care was taken to make certain that that would be done. Replying to the question as to whether my interest in a company, which will eventually lease a government-owned facility, involves going into the stock lists of the company, then I say "No."


Stanley Howard Knowles: We say "Yes."



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
John Cameron Pallett: Mr. Speaker, may I direct a question to the Minister of Veterans Affairs. Is the minister in position to tell the house if he intends to bring in legislation this session to implement the recommendations contained in the representations made by veterans associations in Canada with respect to adjustment in the war veterans allowances?


Hon. Hugues Lapoinie (Minister of Veterans Affairs):: The matter is still under consideration.



EXPORT CREDITS INSURANCE ACT


[Stage Direction]
The house resumed, from Wednesday, February 27, consideration in committee of Bill No. 46, to amend the Export Credits Insurance Act-Mr. Howe (Port Arthur)-Mr. Robinson (Simcoe East) in the chair.
On clause 2-Deduction, for income tax, of credits to underwriting reserve.
Mr. Dickey:: Mr. Chairman, when the committee rose yesterday the hon. member for

Eglinton and the hon. member for Greenwood had been raising some questions in connection with the setting up of the underwriting reserve of this company, and the provisions of the section in the amending bill which will extend to the corporation the privilege of deducting for income tax purposes the amounts credited to this underwriting reserve until the reserve reaches the statutory maximum of $5 million.
I had explained to the committee that the purpose of this amendment was to place this corporation in a similar position in connection with the payment of income tax on the amounts credited to the reserve fund to that in which privately owned insurance companies are under the legislation applicable to them. In order to make this position clear I would refer hon. members to section 12 (1) (e) of the Income Tax Act, which reads:
(e) an amount transferred or credited to a reserve, contingent account or sinking fund except as expressly permitted by this part.
In other words that section prevents companies from deducting for income tax purposes amounts transferred to reserve or contingent accounts except as expressly permitted. The relevant permission as set out in the act will be found in section 85B (5) which reads:
Paragraph (c) of subsection (1) does not apply to allow a deduction as a reserve in respect of insurance, but an insurance corporation, other than a life insurance corporation, may, in computing its income from its insurance business for a taxation year, deduct as policy reserves such amounts as have been approved for the purposes of this subsection by the superintendent of insurance.
The exemption contained in the Income Tax Act permits the superintendent of insurance to approve policy reserves in such amounts as he may fix, and those are accepted by the Department of National Revenue as deductions from the income of that insurance company for the year for income tax purposes. The superintendent of insurance occupies a position created by the Department of Insurance Act, and his jurisdiction extends only to those companies which come under the act. The Export Credits Insurance Corporation, which is the corporation with which we are concerned in this bill, does not fall within that category and accordingly cannot enjoy the exemptions provided for other insurance companies by the insurance act in so far as approved reserves are concerned.
I am also informed that even if the superintendent of insurance were to feel himself justified, although this corporation does not come under the Department of Insurance Act, to give advice as to the reserves, the fact is that the superintendent of insurance

would not be in a position to give that advice because the business of this corporation does not lend itself to actuarial calculation in the way an ordinary insurance business does, and it would not be practicable to suggest that the superintendent have this particular authority in connection with this corporation.
I am sure all hon. members would agree that this insurance corporation must and should have reserves to provide for possible future losses which cannot be foreseen, and if it were to be required to pay income tax on the present basis I am informed that it would have to increase the rates of premium to cover the payment of income tax and enable it, at the same time, to build up its reserve; and that this would involve a substantially heavier charge upon exporters and would make the insurance available through the corporation non-competitive as compared with the type of insurance which is available to competing exporters in foreign countries. If an increase in premium rates were to be required for this purpose our coverage with regard to Canadian exports would be noncompetitive and would in many cases be found to be too high for Canadian exporters.
The information I have, Mr. Chairman, is that similar government owned and operated insurance corporations in other countries do not pay income tax, but so far as this corporation is concerned it is not trying to avoid the payment of income tax, or the application of the general policy which has been adopted for crown corporations as was indicated in the debate in the committee yesterday afternoon. However, by this amendment it would be placed in a position where it could accumulate a statutory reserve to cover future unknown losses without paying income tax on the amounts put into that reserve, in the same way ordinary insurance companies are permitted to build up their reserves with the approval of the superintendent of insurance for exactly the same purpose without paying income tax on those credits.


Mr. Macdonnell:: Mr. Chairman, when this matter came up yesterday we recalled to the parliamentary assistant the statement made by the Minister of Finance in 1952 with regard to crown corporations paying their income tax like other people. At that time the parliamentary assistant said something which, I confess, shook us a bit. He said at page 1722 of Hansard for yesterday:
Under the Income Tax Act, the fact is that all private insurance companies are entitled to set up reserves free of income tax. The purpose and effect of this clause is simply to extend the same privilege to this company which, under the wording of the Income Tax Act, is not entitled to the privilege which is extended to other insurance companies. It is simply to place this company
Export Credits Insurance Act
under the same requirements with respect to income tax and the setting up of reserves as those which apply to insurance companies generally under the legislation that is applicable to them.
And then at page 1724, the hon. member for St. Paul's raised this question. He said:
I understood the parliamentary assistant to say that the corporation was now in a worse position than is a private insurance company. As I read section 2, it seems to me that it would put the corporation in a better position than a private company, in that it may credit to the underwriting reserve any amount it wishes to credit-
The point I wish to make is that what is now proposed is not going to put the Export Credits Insurance Corporation in the same position as the insurance companies, under the section which the parliamentary assistant read, and which provides for the setting up of "such reserves as have been approved for the purpose of this subsection by the superintendent of insurance". That is as different as chalk from cheese from the present proposal, which is that notwithstanding section 12 of the Income Tax Act, the corporation might, in computing its income from its insurance business for a taxation year-
-deduct any amount credited by it pursuant to subsection 2 of this section to the underwriting reserve at the end of such taxation year.
The explanatory note speaks, and, I think, correctly, of "any excess of revenue over expenditure."
The underwriting reserve is defined under subsection 2 of section 11 A as amended by section 5 of chapter 15, Statutes of Canada 1953-54 as follows:
The corporation shall at the end of each fiscal year, if the amount standing to the credit of the underwriting reserve is less than $5 million, credit to the reserve the excess, if any, of its revenues over its disbursements in that fiscal year or so much of the excess as is required to increase the amount of the reserve to $5 million.
I submit with great confidence to the parliamentary assistant that that is as I said as different as chalk from cheese from what we are doing here. Under this provision of the Income Tax Act the insurance company has the right to set up a reserve to the extent approved by the superintendent of insurance. In this bill what is provided is a straight calculation of the amount of receipts and disbursements as the explanatory note says, to find "the excess of revenues over expenditures in each year."
If the situation had been as the parliamentary assistant stated last night, that the effect of this was merely to put the corporation in the position of a privately owned insurance company, I think we would have been in a rather difficult position because we, at the time, were arguing that it should be put in the same position. But I submit,

Export Credits Insurance Act and my colleague from Perth will underline this, that what is now proposed is vastly different; and I submit with some hope to the parliamentary assistant that unless he is able to convince us that we are wrong- and I think he will have some difficulty in doing that-this clause should not be passed today. And, unless we are convinced otherwise, we shall vote against it.
Notwithstanding what I have said, to do what the parliamentary assistant indicated yesterday was his desire, that is, in some way to put this corporation in a position corresponding to that of a privately owned insurance company, seems to me in one way a lot of pother about nothing. The Minister of Finance pointed out in his speech of a few years ago very sensibly, I think:
I do not expect this change to have appreciable net revenue effects. It will increase our tax receipts and reduce our non-tax revenue. All crown company profits eventually find their way into the treasury, and many of them already remit all or the greater part of their profits year by year.
One final point. I am quite unable to understand why, if what the government proposes is carried out, it should really add to the premiums which the Export Credits Insurance Corporation has to charge. As was said yesterday, the corporation has the whole field to itself. After all, this is bookkeeping, and our point is that if the principle laid down by the minister of finance in 1952 was eminently sound-and we believe it was-then the explanation now given is a very substantial departure from it.


John Horace Dickey: Mr. Chairman, I appreciate
the concern of the hon. member for Greenwood, and I would sincerely like to have him understand the position as I see it. First of all, toward the end of his remarks he said this corporation has the field to itself. What is the real significance of that, Mr. Chairman? The real significance is that this corporation is by itself in this field for the simple reason that the risks and lack of profit involved are such that no commercial company looking for profits is prepared to go into it. That is the simple reason that it has the field to itself.
This is a corporation that was set up to provide a service for Canadian exporters that no private corporation was prepared to give because they were not in a position to underwrite the possibility of loss and cover that possibility of loss with premiums calculated on an actuarial basis, which is the normal way an insurance company calculates its premiums. For that reason this corporation is not enjoying a monopoly field for some advantage to itself. It is working in a monopoly field because of the inherent

risk involved, and to provide a service that otherwise would not be provided to Canadian exporters.
The position, I submit, is as I stated it yesterday, that the purpose of the amendment is to put the corporation' in the same position as private insurance companies by permitting it to credit to its reserve account the excess of its income in a particular year over its disbursements.


James MacKerras Macdonnell: Is any insurance company allowed to do that?


John Horace Dickey: I would ask the hon. member to wait a moment. It is permitted to credit the excess of its income over its disbursements to this fund. The private insurance companies are permitted to do the same thing subject to one exception, that being the approval by the superintendent of insurance of the amount they propose to credit to such fund. I am sure the hon. member agrees that that is the position of the private companies. He does not agree that is the position?


James MacKerras Macdonnell: Not that it is merely a
question of taking in the operating income, but my colleague will deal with that. I will not interrupt.


John Horace Dickey: In any event, that is the way the section reads, that they are permitted to deduct from their income such amounts paid into policy reserves as have been approved for the purpose of the subsection by the superintendent of insurance. Under the law of this country they are required to get the approval of the superintendent of insurance for the amount they propose to credit to their reserve funds. Once they have that approval the Department of National Revenue then accepts that amount as an allowable deduction for income tax purposes.
This corporation does not come under the jurisdiction of the superintendent of insurance, and in my opening remarks I attempted to indicate very briefly why that is so; that the risks involved in this type of business are such that there is no actuarial basis upon which the superintendent of insurance would be able to fix a proper amount to be put into this corporation's reserve. When the corporation was originally set up it provided for this reserve simply a reserve account. It was found by experience that it would be preferable to have a fixed reserve established in the statute and required to be kept available to meet the possibilities of loss.
Therefore the government took the responsibility, on the advice of its officers, of

recommending to the house that an underwriting reserve up to a maximum of $5 million be set up for the corporation, and that the reserve be provided by crediting to it the entire excess of the corporation's receipts over its disbursements in any year until the reserve totalled $5 million and from that time on any amount that was required to bring it up to the maximum, so that if there was an excess of receipts over disbursements sufficient to bring the fund up to $5 million it would be maintained at that level.
The position of the corporation is that the amount it is entitled to credit to the reserve and the amount of reserve it must maintain are not fixed by the superintendent of insurance but by an act of parliament. The intention of this clause is simply to extend to the corporation the same exemption from the payment of income tax on the amounts paid into the underwriting reserve that applies to private insurance companies on the amounts they are permitted to put into similar reserves under the legislation applying to them, which is the Department of Insurance Act, under which act in their case the approval of the superintendent of insurance is required.
The principle applied to this corporation and the principle applied to private insurance companies are exactly the same. They are both given the privilege of setting up reserves, and in the case of the Export Credits Insurance Corporation their reserve and the method of providing it is fixed by statute. In the case of the private corporations the method of setting up their reserves and the amount they are to credit to a reserve in any year are fixed by the superintendent of insurance, and they have to abide by that.
I submit that the effect of the amendment is exactly as I explained it yesterday, and that the corporation should be permitted to enjoy an exemption from income tax for the purpose of setting up their reserve on exactly the same basis in principle that applies to private corporations; and that is the only purpose of this amendment.


Mr. Nicholson:: Mr. Chairman, I could not follow the hon. member for Greenwood too closely but I gathered that he proposes to force a vote on this amendment. Consequently I should like to make a few comments. In the annual report of the Export Credits Insurance Corporation it is set out that the corporation may, for the purpose of facilitating and developing trade between Canada and any other country, enter into a contract of insurance with an exporter to insure him against any risk of loss in connection with the export or an agreement for the export of goods by reason of the failure 82715-110
Export Credits Insurance Act of the exporter, for any cause not avoidable by the exporter, to recover the selling price of the goods.
It would appear to me that with our serious unfavourable trade position, this type of legislation is very important. Yesterday the hon. member for Eglinton put on the record the remarks made by the Minister of Finance in 1952 when the legislation was first passed, and I quote from page 1715 of Hansard:
"Proprietary corporations" are those so designated under the Financial Administration Act, and generally speaking are companies which are carrying on business operations similar to and in competition with private business.
It has been made clear by speakers of all parties that no private insurance companies are prepared to enter this field. I am sorry the hon. member for Simcoe North is not in the chamber. He spoke yesterday as an expert on insurance, but he was very careful to refrain from saying, "My company will go into this business" or that any private insurance company in Canada will go into this field.
The most recent report on Canadian exports by countries ending in October lists nearly $2 million to Arabia, $4.7 million to Argentina, $2.4 million to the Belgian Congo, $3.7 million to China-that is not to Formosa but to China-$15 million to Colombia, and $12 million to Cuba. What private insurance company is in a position to decide whether those who export to China are incurring a risk that it can determine? I think it is significant that the hon. member for St. Paul's, the hon. member for Eglinton, the hon. member for Greenwood and the hon. member for Perth have all gone to bat, one after the other, to try to refuse the crown corporation the same consideration that the laws of Canada give to private corporations.


James MacKerras Macdonnell: Would the hon. member permit a question?


Alexander Malcolm Nicholson: Yes.


James MacKerras Macdonnell: Would he at least admit that we said that was exactly what we were not doing, but that what we were doing was trying to see that it was put in the same position. Would the hon. member be accurate enough to admit that, and to say that the reason we are questioning the way this is drafted is that the parliamentary assistant up to the present time has not satisfied us on that point; that there has been a difference between us. If he satisfies us on that point, that is what we have asked for.


Alexander Malcolm Nicholson: I understand the hon. member for Perth is going to pursue the matter further. But I think the parliamentary assistant stated clearly yesterday and stated

Export Credits Insurance Act clearly again today that this amendment is so designed and so worded as to place the crown corporation in exactly the same position in which the laws of Canada place private corporations. It is hard to understand why there is so much concern about placing this important corporation in that position. The hon. member for Simcoe North is not here. I hope he will be here to vote. I think we should find out-


An hon. Member:: He is here.


Alexander Malcolm Nicholson: I see that the hon. member is now here. Yesterday the hon. member for Simcoe North was asked by the hon. member for Assiniboia:
How are you going to vote on the bill?


Mr. Ferguson:: That is a silly question. It embodies many things. I say to the hon. member I would not be a hypocrite. I feel like telling him why I would not vote for the bill. I would not vote for things I know nothing about. I do know something about this bill. I do know I am sorry to see the government in business.
But, as I said before the hon. member came into the chamber, although he poses as an authority in the insurance field he did not say that his associates are prepared to enter into this highly speculative field and enable the crown corporation to retire because private insurance companies are willing to take the necessary risks. I have an interesting publication here that has been put out by the Polish foreign trade division in French, German, Russian and Spanish. It has a picture of a recent trade fair in Poland, where Massey - Harris - Ferguson apparently had a display. In this picture I see the names of the Standard Motor Company, Massey-Harris-Ferguson and Mercedes-Benz. I am sure Massey-Harris-Ferguson will be interested to know that the official opposition in parliament feels that it is not necessary for us to have a crown corporation that is prepared to undertake the very real risks that are involved in this day and age in getting nearly $4 billion worth of Canadian exports into countries all over the world.


Julian Harcourt Ferguson: May I ask one question?


Alexander Malcolm Nicholson: Certainly.


Julian Harcourt Ferguson: Do you know whether
Massey-Harris insure the commodities shown? Do you know if they do not insure finder their present marine policy which is in effect at the present time?


Alexander Malcolm Nicholson: My hon. friend asks me a question which I cannot answer.


Julian Harcourt Ferguson: As usual.


Alexander Malcolm Nicholson: If he can answer it I shall be very glad to accept his information. But if he cannot answer it, he is in the same position I am in.


Julian Harcourt Ferguson: I hope not. I am a Conservative.


Alexander Malcolm Nicholson: Yesterday the parliamentary assistant gave us information with regard to countries-


James MacKerras Macdonnell: Will the hon. member permit another question?


Alexander Malcolm Nicholson: Certainly.


James MacKerras Macdonnell: The hon. member has allowed himself to suggest that we are against this bill. I should like to read what the hon. member for Eglinton said yesterday, as reported at page 1714 of Hansard:
May I say briefly, however, that with the purpose of the act itself we have been in sympathy so far as it helps, on fair terms, our Canadian exporters to expand their sales abroad.
If the hon. member had taken the trouble to look back he would have found that we have supported this in the past. The only thing we are questioning is this one clause on which we and the parliamentary assistant are trying to come to a mutual understanding. It would be so much simpler if people would stick to the facts.


Alexander Malcolm Nicholson: Mr. Chairman, I said I could not hear the hon. member when he was speaking, but I understood him to say that they were voting against this particular section. I did not say anything about what the hon. member for Eglinton did. However, I said the hon. member for Simcoe North said yesterday that he was against it. He is now in the chamber and he can speak for himself. Yesterday he spoke about a subject of which he knows very little, although he is in the insurance field. He asked the hon. member for Assiniboia about Saskatchewan insurance in Ontario. Surely the hon. member for Simcoe North knows that the Saskatchewan government insurance is not licensed to do business in Ontario. It has never sought a licence. The hon. member should also know-


Julian Harcourt Ferguson: He does know. What are you talking about? Stick to the facts.


Alexander Malcolm Nicholson: He asked a question yesterday if people in Ontario could be expected to buy insurance from Saskatchewan.


Julian Harcourt Ferguson: He never asked such a question. Look up your Hansard.


Alexander Malcolm Nicholson: I have Hansard here.


Julian Harcourt Ferguson: If people should buy Saskatchewan insurance? That is ridiculous.


Alexander Malcolm Nicholson: I wish to read from page 1717 of Hansard:


Julian Harcourt Ferguson: I am sure the hon. member
knows a great deal about the insurance business.

I would ask him one question. How many millions of dollars worth of insurance did Lloyd's write in this country?
And then later.
I am sure they would not insure in a Saskatchewan insurance company. The people of Canada are not crazy.
I am saying that the hon. member tor Simcoe North should know that the Saskatchewan government insurance is not licensed to do business anywhere in Canada but in Saskatchewan.


Julian Harcourt Ferguson: He does know.


Alexander Malcolm Nicholson: He should also know that the insurance underwriters just prior to the election last June sent out notices to their agents to use the same rates in Saskatchewan that they are using in Manitoba, Alberta and British Columbia, less 20 per cent. Hence everybody who insures in the province of Saskatchewan, regardless of whether or not he insures with the government insurance, has direct savings of 20 per cent because there is government insurance. I asked the hon. member yesterday something about automobile insurance. I happen to have a 1952 Pontiac on which my compulsory insurance this year is $16.


Some hon. Members:: Order.


Alexander Malcolm Nicholson: That is less than the hon. member would charge me as commission if I had to take out automobile insurance from him in the province of Ontario.


John Horace Dickey: Mr. Chairman-


Julian Harcourt Ferguson: I only insure good risks. I would not insure him for $61.


John Horace Dickey: Mr. Chairman, I think I should rise on a point of order. Perhaps the hon. member would care to discuss the section with which we are dealing. The argument between himself and his colleague in opposition is very interesting, but I wish we could get back to the bill.


Alexander Malcolm Nicholson: I appreciate very much the point of view expressed by the parliamentary assistant, but I suggest he should have risen yesterday when my friend the hon. member for Simcoe North was discussing a question which was quite as irrelevant as my remarks are now. I admit they are irrelevant, but I submit that since the parliamentary assistant and the Chair permitted a discussion of Saskatchewan government insurance yesterday we should not be called out of order every time we seek an opportunity to put the record straight. We should not be asked to ignore the fact that our province is being misrepresented. I think, in due course, we will have a vote and we shall see how many of the members of the official opposition go along 82715-110i
Export Credits Insurance Act with the hon. member for Simcoe North who says, as recorded on page 1718 of Hansard for February 27, 1957:
I feel like telling him why I would not vote for the bill.
Coming back to the legislation, I wish to thank the parliamentary assistant for his constructive comments of yesterday when we were in committee. I should like to refer particularly the members of the official opposition to what the parliamentary assistant said at page 1718 of Hansard for the same day:
As the hon. member knows and as I am sure all hon. members of the house know, this section has been used substantially over the past few years to facilitate the export of Canadian wheat to a number of markets. I think the satisfactory volume of exports we have had to some extent at least has been as a result of these activities. The hon. member mentioned the current negotiations with representatives of the government of Poland. Those representatives are here and negotiations are proceeding, and I can only assure the hon. member that everything possible will be done to try and work out some arrangement whereby we will sell just as much w'heat as we possibly can to Poland or any other purchaser-
I submit, Mr. Chairman, that these remarks are fundamental. No insurance company in Canada or in the world would underwrite a contract such as the department underwrote last year involving the sale of $20 million worth of wheat to Poland. I am sure the parliamentary assistant will tell the committee that the repayments have come through on schedule. I submit that those who are concerned about the serious plight of agriculture are anxious that this corporation be placed in at least as favourable a position as any private insurance company in Canada.


Herbert Wilfred Herridge: I just rise to express my objection to the implication of the hon. member for Simcoe North that all the people of the province from which his leader comes are crazy.


Julian Harcourt Ferguson: I said a group, and you are not a group.


Mr. Monteilh:: I submit that to free this crown corporation from the payment of income tax might well be the first wedge. In other words, it could well happen that as time goes by some reason could be found to argue that some other crown corporation might be freed from paying income tax. Let it not be said that we do not agree with the purpose of the act, as the last speaker tried to intimate; that is entirely wrong, of course. But I should like to add that I am not as easily convinced as he is that the provisions of this bill will put this corporation on an equal footing with private corporations. Section 85B (5) of the Income Tax Act says:
. . . but an insurance corporation, other than a life insurance corporation, may, in computing its income from its insurance business for a taxation
1740	HOUSE OF
Export Credits Insurance Act
year, deduct as policy reserves such amounts as have been approved for the purposes of this subsection by the superintendent of insurance.
1 should like to mention briefly how that section actually operates in day to day business. The company actually draws up its financial statement and comes to a decision as to what it thinks it should have as a policy reserve. The parliamentary assistant shakes his head, but I am quite positive on this point. A loss is reported some time before the end of the year, and there is naturally some loss to be paid in the future. The company gets these figures from the loss adjuster or some information of that sort, and summarizes all these probable losses that have to be paid. As a consequence it then arrives at its reserves for those losses which have occurred but which have not definitely been determined as to amounts. Subsequent to this the superintendent of insurance does send a man into the company office, I agree. At that time he either agrees or disagrees with the reserve that has been set up. The company pays income tax upon every penny the company earns over and above its required losses and its ordinary expenses of business.
In this case it is proposed to let the company have its gross earnings free of income tax. Now, that is over and above any losses that might have to be met. The parliamentary assistant said it probably would not be difficult to have the superintendent of insurance look into this corporation's business and possibly that is so, but the Auditor General does make a pretty complete examination of all crown corporations as well as all government departments. I cannot see any particular reason why he could not stipulate a sufficient reserve. It would seem reasonable to me that he would be in a position to say what was required as a reserve and not establish some round figure like $5 million.
I do not think the parliamentary assistant has any idea whether or not $5 million is required.
There is another thought in this connection, Mr. Chairman. Let us not forget that when any company in ordinary business suffers a loss in bad debts or anything else, that is automatically written off. Mention was made yesterday of some blocked funds in Turkey, and apparently there is $1 million odd which has not been collected. I understand there is a possibility of some of it being collected, or at least in past years the reports have indicated that very little is entirely written off. While certain losses are expected, and they may be considered losses at that time, eventually quite a bit of these funds are collected. If the company should suffer an 

operating loss because of an excessive financial loss on some particular insurance risk, then it does not pay any income tax. This loss goes back one year; you paid income tax the year before, and the loss applies back and it applies forward. In other words, the company does not pay any income tax until it has made up that loss.
I cannot see why this corporation should be allowed a round figure of $5 million, out of gross earnings after a reasonable loss is incurred. The company is being allowed to set up a straight reserve of $5 million income tax free. There is another thought, Mr. Chairman. I agree that this corporation is doing an excellent service. We want to export goods from Canada. It is assisting exporters in that it guarantees payment under certain conditions; otherwise they would not be able to take the risk.
The parliamentary assistant mentioned that the corporation probably faces a raising of rates which might make the cost prohibitive. I am not in a position to argue that. I am, however, going to advance the thought that actually the person who benefits financially from these exports other than the country as a whole in terms of balance of trade and so on is the exporter or manufacturer; he makes a profit. As a consequence he is paying the insurance premium on which this corporation eventually pays some tax. Now this may seem infinitesimal but I do think we must consider the point that if we release this company from income tax it will mean that the amount of the income tax will be spread among the taxpayers of the country as a whole.
I have been looking over the 1955 statement and I assume that some income tax has been paid and it should be shown in some place as a charge. I wonder if I could be told just where it is to be found in this statement. Is the amount of income tax for that year indicated in the statement?


John Horace Dickey: Mr. Chairman, if the hon. member will look at the auditor's report signed by the Auditor General on page 12, he will see in paragraph 2 a reference to that which I think is perfectly clear and selfexplanatory.


Jay Waldo Monteith: Perhaps I might take a moment to examine this.


John Horace Dickey: Mr. Chairman, if the hon. member has nothing further to add I should like to attempt to indicate to him and to the committee just what is the situation in connection with the questions he raised. Both at the outset of his remarks and at the end the hon. member expressed objection to freeing this corporation from income tax. That

is not the purpose of this amendment and its effect will not be to free this corporation from income tax. I can set the hon. member's mind at rest on that point and I think that what I have to say will indicate to him why this is true.
The hon. member said we were suggesting that this corporation be put on an equal footing with private insurers. I am not sure that that term expresses the exact situation. I believe it is more correct to say that the intention of this amendment is to give this corporation treatment similar to that given to private insurance corporations in connection with the setting up of reserves and the exemption from income tax of payments into that reserve account.
With great respect I submit to the hon. member that the argument he has made respecting reserves of private companies is not quite correct and it is not complete. I am not an insurance counsel nor am I well versed in income tax returns for insurance companies, but my understanding is that private companies under the Income Tax Act set up at least two types of reserves. One is a reserve set up under section 11(e), I think, which is a reasonable amount as a reserve for doubtful debts that have been included in computing the income of the taxpayer for that year or the previous year. As I understand it, that covers the kind of reserve of which the hon. member was speaking in connection with losses that have been sustained which are under adjustment but which have not been paid. As I understand it, those amounts in reserve are set up not under section 85-


Jay Waldo Monteith: This really applies to unpaid premiums.


John Horace Dickey: No. My understanding is-*


Jay Waldo Monteith: Section 11(e) really applies to unpaid premiums. In other words, it is a reserve against assets.


John Horace Dickey: No, my understanding is that when insurance companies have a loss of the type the hon. member describes-when it is under adjustment and they have not paid it; they are sure they will have to pay something but they do not know how much- that is set up in a reserve not under section 85(b) at all but on a different kind of reserve. But under 85(b)-


Jay Waldo Monteith: No, you are wrong.


John Horace Dickey: -they set up actuarial reserves approved by the superintendent of insurance in relation to the amount of total business they have out under risk and not in connection with the actual losses they have sustained which they have not actually paid. The kind
Export Credits Insurance Act of reserve that is provided for in the statute as an underwriting reserve for this corporation is not a reserve against losses which are known to be coming up but the amount of which has not been determined; rather it is to set up a reserve against the possible losses that may at some time in the future be sustained or which may not be sustained.


Jay Waldo Monteith: It should not be free of income tax, then, because it is not in a private corporation.


John Horace Dickey: Well, Mr. Chairman, it very clearly is in a private corporation because the superintendent of insurance fixes the amount that the company can provide for a reserve for that purpose.


James MacKerras Macdonnell: Would the hon. gentleman permit a question?


John Horace Dickey: Yes.


James MacKerras Macdonnell: I understood him to say in the last few minutes that he recognizes that the reserve set up for insurance companies has to do with the expectation of losses incurred. I also understood him to say that subsection 2 of section 5 of the Exports Credit Act which provides for the underwriting reserve is an automatic figure and has nothing to do with any attempted calculation of losses but has to do purely with the operating margin of the year. Did I understand the parliamentary assistant correctly?


John Horace Dickey: I think not. It has nothing to do with the operating margin of the year; it is the amount that the corporation after several years' experience felt was the proper type of reserve which should be maintained in order to permit the corporation to give the kind of coverage that Canadian exporters are requiring to cover export trade, and the difference between this reserve and the kind of reserve the private companies are permitted to set up is that this is fixed by statute but the other reserves are fixed upon the recommendation of the superintendent of insurance.


James MacKerras Macdonnell: But the hon. member has just pointed out that this is fixed on an entirely different basis and that is exactly our point, that what is being done here is not to put this company in the same position as private insurance companies. I think we may have to cover the ground again.
I notice that the parliamentary assistant has changed his words somewhat because yesterday, as reported at page 1722 of Hansard, he said:
The purpose and effect of this clause-

Export Credits Insurance Act
The reference is to clause 2 concerning deduction, for income tax, of credits to underwriting reserve-
-is simply to extend the same privilege to this company which, under the wording of the Income Tax Act, is not entitled to the privilege which is extended to other insurance companies. It is simply to place this company under the same requirements with respect to income tax and the setting up of reserves as those which apply to insurance companies generally under the legislation that is applicable to them.
I observe that he is changing his words and today he speaks of according them "similar treatment". I submit we have come a long way from where we were yesterday. Let me remind him again that if the parliamentary assistant is prepared to bring forward legislation that would put them in the same position I think it would go a long way toward carrying our judgment.


John Horace Dickey: All I can say is that that is the intention and meaning of this amendment and I submit that that will be its result. I admit that my use of the word "same" yesterday may not have been as exact as I would have liked to have it and as the hon. member would have liked to have it. I am sure that sometimes he uses a word which on further explanation is perhaps not as exact as he would have wished to have it. The intention is to give this corporation similar facilities.
I do not think there can be any real dispute that this corporation covers the kind of risk that it does cover at a reasonable premium cost to the exporter. The hon. member who preceded me said that if additional premiums were required they would be paid by the exporters and that that perhaps would be a better situation than having them borne in some way, as he figured it out, by the taxpayers generally. I submit to him that there is no element of cost here which either in the short or long run will be borne by the taxpayers generally.
The point I want to make is that the necessity of keeping these premiums as low as possible is not to benefit the exporter particularly, it is to permit Canadian exports to compete on the best possible grounds with the products of other countries. I can assure the hon. member that every Canadian exporter is meeting tough and persistent cost competition and if this corporation is not in a position to give the kind of protective coverage needed it will bring the Canadian exporter's price to the purchaser in the foreign country out of line and he will just lose the business.


James MacKerras Macdonnell: Might I make a suggestion. There is a good deal of common purpose here. We believe in this act and


we are going to vote for it except in regard to this clause. In another place in this building today where there was a difference of opinion as to construction of a clause it was agreed that the clause should be left over and referred to the law officers to see if there was a possibility of having a redrafting which would be satisfactory to everybody. I am suggesting to the parliamentary assistant that that might happen. He certainly has not convinced us and we certainly have not convinced him. It seems to me that there ought to be a common ground here. He has changed his wording a bit but it seems to me there is still a world of difference between this reserve which is set up for one purpose in the case of insurance companies and this exemption from income tax which is now proposed with which this underwriting reserve should have nothing to do whatever. I submit that there ought to be a meeting of minds there.


John Horace Dickey: There is not only a meeting of minds, I do not think there is any difference between us if this clause is properly understood.


Jay Waldo Monteith: Is it not really a contingency reserve?


John Horace Dickey: It is a reserve for future losses.


Jay Waldo Monteith: A contingency reserve; it has to be.


John Horace Dickey: I am not going to adopt the term my hon. friend wants me to adopt because this is a reserve for future losses, and future losses may or may not be a contingency in his mind. The only difference between the situation with respect to the private insurance company and the situation with respect to this corporation under this amendment is that the amount of reserve is fixed by statute and not by the superintendent of insurance.


James MacKerras Macdonnell: There is a world of difference.


John Horace Dickey: My hon. friend says there is a world of difference and I have tried to explain why that difference exists. The first reason is that this corporation does not come under the Department of Insurance Act. The second reason is that no one, the superintendent of insurance or anyone else, would be able to apply to the business of this corporation the actuarial considerations that could be applied to other companies in order to arrive at a recommendation as to what a reserve should be.


Jay Waldo Monteith: With all due respect to the parliamentary assistant I think he is thinking incorrectly in connection with this reserve. Section 11 (el of the Income Tax Act refers

to a reserve against doubtful assets; it has nothing to do with liabilities. Then we go to section 85B (5). Incidentally, insurance companies are allowed another reserve which is for unexpired premiums. I do not see anything of that mentioned here, but that is a permissible reserve. This has to do with policy reserves, that is, reported losses on claims and losses in the future which are purely contingent. As a consequence they are not deductible for income tax purposes and the superintendent of insurance cannot allow them for income tax purposes in the case of private insurance companies. He will only allow a reserve against an actual loss. Under sound accounting principles an insurance company might set up a reserve or surplus account but would have to pay income tax on it. This is purely a contingency reserve and as such we should understand it.


John Horace Dickey: This is not a contingency reserve. This corporation is in the kind of business which makes it impossible to cover its reserve requirements by any means provided for the covering of reserve requirements of private insurance companies. That is the point I have been trying to make all afternoon. Just look at the experience of this corporation with regard to gross loss payments in various years. The following figures show the variation in these loss payments:
1952		 $ 996,000
1953	  2,185,000
1954	  524,000
1955	  1,843,000
1956	  1,564,000
It has to provide an underwriting reserve to meet losses of that kind which may or may not come in. That has been set up by parliament on the responsibility of the government which recommended that amount as a maximum. The effect of this bill will be to relieve the corporation from the payment of income tax on the amount put into its reserve under exactly the same principle as is applied to private insurance corporations which are permitted to have income tax exemptions on the amounts paid into reserves.
When the underwriting reserve of this corporation stands at $5 million, the corporation will pay full income tax on the entire amount of its profit. There is no intention of relieving this company of the payment of income tax at all. This is simply to let it put money into reserve free of income tax in the same way as private companies are permitted to put money into the reserves which they are now, under the law, permitted to have free of income tax. That is the only purpose.


Jay Waldo Monteith: The parliamentary assistant gave us some figures about losses, and so on. The actual underwriting reserve has been
Export Credits Insurance Act going up until the year 1956. Now, just taking it from the 1st of January, 1953, when it stood at $1,631,600, in that year there was an operating loss of $563,000, bringing it down to $1,068,000. At the end of the next year there was a profit of $1,461,000, bringing it to $2,529,000. In the year ended December 31, 1955, there was a further profit of $290,000, bringing the reserve to $2,819,000.
It occurs to me that there has been a reserve there, with ample funds to look after the situation.
If the time should come when more is required because losses are experienced, then I would say "All right." But why set up a reserve to take care of some future event which we do not know is going to happen at all?


John Horace Dickey: Now we get to the argument that this corporation does not require reserves, and if that is the hon. member's position, then we understand each other.


Jay Waldo Monteith: I did not say that. I was simply saying that the corporation has been getting along.


John Horace Dickey: This corporation is not in a position to make a profit. The intention is to provide the necessary coverage, and to do so without making a profit, keeping as close to the "break-even" point as possible. If this corporation was going to enter the business of making a profit, and was able to build up ample reserves out of profits, that would be another matter. But that is not the way in which the corporation has been operated, as is shown by its annual reports, and the whole purpose of the underwriting reserve is related to the fact that this is not going to be a profit making operation over the years -that a fund should be provided as an underwriting reserve and kept there by statutory authority in order to cover extraordinary losses which might arise.
As I have said before, the purpose of this amendment is to permit this corporation to put money into its reserves free of income tax in just the same way as private insurance companies are permitted to use their money to build up approved reserves without paying income tax.


James MacKerras Macdonnell: I do not think we are getting anywhere. As far as I am concerned I have nothing more to say, except to remind the committee that what the parliamentary assistant set out to do was to persuade us that this Export Credits Insurance Corporation, in which we believe, was to be placed on the same basis as insurance companies. I have just been in despair today. I think it has

Fisheries
been made perfectly clear by my own words, the words of my colleague and of the parliamentary assistant himself, that there is no similarity whatever between that and what is now proposed. You might as reasonably deduct the amount of capital stock for income tax purposes as deduct the amount of operating profit. It seems to me that it has no relation whatsoever to proper deductibility for income tax purposes. But I am not going to pursue that matter any further. I would doubt, myself, if you could find any place in the world where operating profit was allowed to be deducted for income tax purposes. It strikes me as being contrary to all income tax procedure. But, as I say, I do not think there is any purpose served in pursuing the matter.


Jay Waldo Monteith: I would just mention that on page 12 of his report the Auditor General refers, in paragraph 2, to its having been a matter of doubt whether or not the corporation is liable for income tax in respect of portions of the excess of revenues over disbursements in each year which are transferred to underwriting reserve in accordance with the requirement of section 11 A. (2) of the act, no provisions for income tax having been recorded by the corporation in its accounts. Does that mean "since its inception"?


John Horace Dickey: There was no question of taxation applying to this corporation or to any other crown corporation until the amendment to the Income Tax Act of 1952 came into effect, and this, I understand, refers to the situation since that time.


Jay Waldo Monteith: Is it understood, then, that any doubt which exists according to the Auditor General will be cleared up in the mind of the department?


John Horace Dickey: Yes.
Clause 2 agreed to.
Clause 3 agreed to.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.


Hon. James Sinclair (Minister of Fisheries) moved: the second reading of Bill No. 180, to implement a convention between Canada and the United States for the protection, preservation and extension of the sockeye salmon fisheries in the Fraser river system, signed at Washington on the 26th day of May, 1930, and a protocol thereto signed at Ottawa on the 28th day of December, 1956.
(Mr. Macdonnell.l
He said: Mr. Speaker, I made very brief remarks at the resolution stage of the bill but said I would spend some time on second reading in describing to the house the very notable success of the international Pacific salmon commission in restoring the great sockeye salmon fishery of the Fraser river. Fisheries scientists around the world agree that this is one of the most remarkable achievements in fisheries management, and I think also that it is an outstanding example of the value of intelligent international cooperation.
The earliest explorers of the north Pacific almost 200 years ago reported the extraordinarily large runs of salmon which they saw moving towards almost every river on the north Pacific coast. Our Indians in British Columbia were known by other Indians as fish eaters because they were almost completely dependent on either dried or smoked salmon as a staple of their diet and, for that matter, they still are heavily dependent on the salmon both as a source of income and as a staple of their diet.
The earliest commercial use made of these salmon was by the trading posts of the Hudson's Bay Company which sent salt and dried salmon down to California at the time of the great gold rush of 1849 and also across to Asia as food for the Asians. The first salmon cannery of British Columbia working on these salmon stocks came into being in the 1860's. These fish were present in such enormous numbers, the actual methods of catching were primitive, so many people thought that this resource was inexhaustible.
Of the five species of Pacific coast salmon the sockeye has always been regarded as the most valuable. It is a 7 pound fish, very red in colour. The red colour maintains itself after cooking. It is very rich in oil and fat. The other species, pink, chum and cohoe salmon, were not used at all before the turn of the century and, in fact, were used very little in the early years of this century. Spring salmon were used a bit at that time. But our entire fishing operation was concentrated on the sockeye salmon and on the sockeye salmon of the Fraser river especially.
As I explained yesterday, because of the route the salmon take coming in from the sea, passing both through American waters and Canadian waters before reaching the mouth of the Fraser river, it was fished by both American fishing fleets and Canadian fishing fleets. In the years 1911, 1912 and 1913, when the C.N.R. was being constructed through the Fraser river canyon, there was considerable damage done to the natural flow of the river, culminating in a very big slide at Hell's Gate in 1913 which so choked the river as to make the flow through the

narrow defile which was left so fast that the great part of the salmon run at high water simply could not fight their way through.
As a consequence of this damage to the river route and as a consequence too of the very high rate of exploitation by both American fishing fleets and Canadian fishing fleets, the salmon runs began to decline, and this naturally alarmed those who were interested in conservation. The late A1 Hager, who was then head of the Canadian Fishing Company, was the one who took the lead in trying to bring about international action to conserve this fishery before it was too late. He had been one of the sponsors of the first international fish treaty in all the world, the Pacific halibut treaty of 1923, which has done so great a job in restoring this high sea fishery for the benefit of both Canadian fishing fleets and American fishing fleets.
In the late 1920's Mr. Hager worked endlessly to have the Americans and Canadians agree to similar conservation for the sockeye salmon of the Fraser system before it was too late. In 1930 the two governments did negotiate such a treaty and the Canadian parliament approved of it as I am asking this house to approve today of this bill. Unfortunately, it was seven long years before congressional and presidential approval of the treaty were secured in the United States. Of course, no action could be taken until both nations had agreed to a joint program.
The reason for this delay was a fairly obvious one. The American fishermen were very reluctant to take part in a new arrangement which was going to divide the sockeye run equally between the two fishing fleets. During those years they were getting about 70 per cent of the fish and our fishermen just 30 per cent. One of the main reasons that they were enjoying so large a part of the catch was that they employed large stationary traps in Puget sound which intercepted the runs as they made their way to the Fraser. It was the sports fishermen in the state of Washington who used their political power and forced the removal of these fish traps. That, and a more aggressive fishing policy by our own fishermen, began to increase the Canadian share of the catch, and finally in 1937 we secured the necessary concurrent approval from the federal government at Washington.
In this seven year period I think the most ardent advocate of such a treaty, next to Mr. Hager himself, was a former member of this house, Tom Reid, who was then the member of parliament for New Westminster, and is now a member of the Senate. New Westminster, of course, is the main town on the Fraser river and was pretty well 82715-111
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founded on the salmon industry. He was a persistent champion of this treaty, becoming a member of the salmon commission when it was founded in 1937, and has been a very active member ever since. As a matter of fact, he is the only member of the commission, either Canadian or American, who has served on the commission continuously since its inception in 1937, and I think that without question he is today the great authority on the salmon fishery of the Fraser river.
A number of other notable Canadians have served on the commission. Mr. H. R. MacMillan, for example, who headed our largest fishing company in Canada, is an unusual tycoon in that he is a great scholar as well and he has always shown great interest in the fisheries and was a valued member of the commission. Then there is the chief supervisor of our own department on the west coast, Mr. A. J. Whitmore, whom I regard as one of the ablest officers in the entire public service of Canada.
Once the treaty was approved by the two nations, a period of eight years of study, that is, two full sockeye salmon cycles, was requested before any regulation should be brought into effect. This study was undertaken by the scientific staff of the new commission, and in 1945 they were ready to go ahead with their first works and their first control and regulation. The most important work, of course, was to do something about the slide in the Fraser river canyon at Hell's Gate. It was a very unusual problem in fisheries because nowhere in the fishing world had any fishway been constructed under such circumstances. There are many fish ladders on salmon streams by which salmon can by-pass falls or dams by leaping from pool to pool in an artificial ladder built along the side of the stream, but this was a different problem.
The Fraser, one of the great rivers of the world, rushes through this very narrow canyon and in flood time the level of the river can rise as much as 90 feet in a week. Obviously that would flood out any conventional ladder. The scientists devised an unusual solution, two concrete corridors a little over 100 feet high on either side of the narrow defile in Hell's Gate. These corridors had built in them great vertical baffles coming almost across the corridor to the opposite side so that the water swirling down through these corridors is checked in its speed by the baffles, and little eddies are created behind the baffles in which the fish can rest as they dart up from baffle to baffle, bypassing the fast water in Hell's Gate itself.
These corridors work at any height of water, whether the river is five feet high

Fisheries
or ninety feet high at Hell's Gate. These Hell's Gate fishways were constructed and paid for by the salmon commission under the usual 50-50 sharing agreement between our two governments. The commission has done much more than that though. Hell's Gate is their spectacular achievement, but they have many others. In the entire Fraser river watershed they have built a great number of other smaller fishways to by-pass falls and other natural obstructions. They have opened up spawning beds which were inaccessible to salmon in the natural condition of the river. They have restored fished-out runs. Even in the early days before we had much scientific control of these runs we did have closed periods to allow sufficient salmon through to spawn. But these closed periods did not necessarily tie in with the movements of individual runs of salmon because at that time we had not sufficient scientific knowledge to sort out all the various runs going to the many streams of the Fraser river system, each coming in and going out at a different time. Hence it was quite possible to have the open fishing season last long enough to wipe out an entire run going to some stream. Since then our scientists have done a splendid job in breaking down the sockeye salmon of the entire Fraser system into the various runs, heading for all the different spawning areas. They can identify each run as it enters inland waters and can control the fishing seasons to assure that the peak of each run does get through to the spawning ground. I think that the best evidence of what this commission has done can be given in figures. In the big year cycle, 1954, we had the greatest run of sock-eye salmon since the slide in 1913; and when you consider the rather dismal picture in most other fisheries of the world of a continually diminishing catch, that is a spectacular achievement.
What has been the cost of this commission? We share the cost equally with the federal government of the United States. The Canadian share of the cost of operations-that is payment of staff, maintenance of fishways and things like that-in these 20 years has been $1,576,000. Our share of the construction of the Hell's Gate fishway, the biggest single fishway built, was $1,063,000. The total cost to Canada of operation, maintenance and capital construction was $2,640,000.
Let us now look at the results. I think the fairest way in which to do it is to take the four-year cycle just before the salmon commission moved into the field and then the last four years. The sockeye salmon pack for the years 1933 to 1936 inclusive was 441,126 cases of 48 pounds. There are about

ten 7-pound salmon necessary to make a 48-pound case of canned salmon. In the last four years, 1952 to 1955, inclusive, the pack was 1,203,677 cases. That is the Canadian pack. That is roughly three times as great in volume since the commission started work. The increase in market value, not the total increase since the commission first started operations but just the increase in one four-year cycle, the four-year cycle immediately before the commission started to work and the last four-year cycle-is over $29 million. That is quite an income appreciation on a total investment of just $2,640,000. In addition, the salmon commission are confident that they can increase this catch much more in the years ahead.
The key to the success of the commission, I think, is first of all the very high calibre of the members of the commission. The commission consists of six members, three from each nation, our members being nominated by the government here and the United States members being nominated by the president. We have been fortunate in attracting to this commission outstanding men, both in the scientific field of fisheries and in the industrial field of fisheries. These men serve without remuneration. I think their real reward is the very real achievements which they see they have accomplished. We have gathered together a first-class scientific staff headed by Dr. Loyd Royal, men again who are devoted to this very interesting task of restoring these fisheries over this enormous watershed of the Fraser river.
Another very important factor has been the whole-hearted co-operation of the fishing industry, including both the operators and the fishermen. At first the fishermen I must say were dubious about putting this fishery in the hands of these scientists, "long-haired" scholars who had never actually gone out fishing as commercial fishermen and so of course could not be expected to know as much about fishing as men who had spent their whole life catching fish. It was difficult in the earlier years to convince our fishermen, since we had to cut down on the fishing effort in order to make sure that sufficient fish got through to spawn to rebuild depleted runs. But the years rolled by, and the best evidence of all to the fishermen of the success of the program became manifest through increased catches. Since then we have had the warmest co-operation from the fishermen and the fishing industry. The peak run for sockeye is every four years. In the big run in 1954, at the big peak when millions of salmon were on their way up the Fraser, we had of course a closure in order to ensure that adequate spawning stock, which we like to take off the peak of the run, were getting through, and

so we stopped all fishing. We actually did not need to run a single fisheries patrol vessel on that closed river during that period. Twenty years ago we would have had every patrol vessel and every man we had out there to watch for illegal fishing.
The fishermen's union themselves have been the greatest supporters of the work of this commission, and as a consequence they are all sharing bigger catches.
The very success of this sockeye salmon management has led, of course, to the demand for similar management for the pink salmon on the Fraser river. It is also an international fish in that it follows the same route coming in from the sea through outside Canadian waters on the west coast of Vancouver island, then through the American waters of Puget sound and then back into Canadian waters in the gulf of Georgia before going up the Fraser river. It is just a two-year fish. It goes to sea as soon as it is spawned. It is a smaller fish. It averages about five pounds. Before world war I this fish was scarcely used at all in Canada. Our canneries did not accept it. There was some small sale for it locally. Our Canadian people, and especially our British customers, preferred the rich, red sockeye salmon. They thought that the paler pink salmon was not as good a fish, although the food value of the two is almost identical. The Americans used to get 90 per cent of those runs and our fishermen 10 per cent. In good years those runs used to amount to 30 million fish. Since world war I the Canadian catch has slowly increased. After world war II it amounted to about 20 per cent. But there was a great increase in market demand for this fish, and the market for it rose. The fish which used to bring only five cents for a whole fish, last season brought an average price of about nine cents a pound, or 45 cents per fish. However, our fishermen were alarmed because the pink runs seemed to be declining again because of very heavy fishing effort, mainly on the American side. The government of Canada realized that our fishermen have been most anxious for such a pink salmon conservation treaty for some time.
When speaking a couple of days ago on this matter, the hon. member for Esquimalt-Saanich had this to say, as reported at page 1688 of Hansard:
It would seem, however, that for some reason or other the government has been unwilling to take the initiative in introducing such legislation until very recent times.
We have not been unwilling. Unfortunately, it takes two to make such an agreement. He went on to say this:
Of course the United States government was not the least bit interested.
82715-111J
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I think that is not quite fair to the United States government. They have shown interest. It was the United States fishermen who were not the least bit interested for the very simple reason that they were getting 80 per cent of the catch and they could not see much point in an international treaty which would limit them to just 50 per cent of the catch. There was no question, however, that our Canadian fishermen wanted such a treaty.
Not long after I became minister almost five years ago, I attended the annual convention of the fishermen's union in British Columbia and this was one of the questions immediately put to me. What did I intend to do about the pink salmon? I said I intended to do my best to see that a treaty was arrived at, but the question was how? Since the only obstacle seemed to be the fact that the United States fishermen were not enthused because they were getting 80 per cent of the fish and our men 20 per cent of the fish, there was only one way to attack the problem and that was to outfish the United States fishermen. The program which I announced to the union the following year was designed to do that. We could outfish the United States fishermen because of our geographical position. The fish come from the high seas and enter Canadian waters on the outside of Vancouver island before passing through United States waters and then into Canadian waters again in the gulf of Georgia where our fleet normally caught them.
We did not have the boats and gear with which to fish out on the open Pacific Canadian waters and I encouraged our fishing companies and fishermen to purchase 15 big old deep-sea seiners which were available in the United States at a very low cost. I had to persuade my colleague the Minister of Transport (Mr. Marler) to waive the Canada Steamship Regulations which forbid the importation of ships more than five years old. As an incentive my colleague the Minister of National Revenue (Mr. McCann) agreed to remit half of the duty on those ships after the first year's fishing in outside waters and the other half of the duty after the second year's fishing. I, for my part, told the fishermen that all restrictions on the size of the gear they chose to use were off when they fished these outside waters, and the usual weekly closure on Saturday and Sunday would also be removed. I told them to go out there and fish and get our share before the fish entered American waters. I can assure you I kept the United States interests informed of this policy, and assured them also that though we were starting a fishing war we would much rather have a conservation treaty. If we could not have a treaty,

Fisheries
we would try to get a lion's share of what was left of the fishery.
Well, it worked out very well. The big run of pinks came in two years ago and our catch rose to 46 per cent. Instead of the usual 80-20, the United States got 54 per cent and we got 46 per cent. We would have obtained a higher percentage than the United States fishermen except for one little thing. On the west coast our fishermen have long been on the five-day week, long before the five-day week was effective in industrial employment. On the Fraser and these other salmon streams we have always automatically closed on Saturday and Sunday to allow at least two-sevenths of the salmon to pass up to the spawning grounds. And recently we have had to have even longer closures. The fishermen who went outside to catch these pinks by force of habit came in on Saturday and Sunday even though we had opened this area to continuous fishing. Thus for two days a week the American fleet in Puget sound got first crack at the incoming salmon schools.
When I spoke to the fishermen's convention the next spring I reproved them for coming in and giving the Americans two days clear fishing. If I had been home-I was in hospital in Russia at the time-I would have urged them during the fishing season. I told them that next season they were to go out and fish seven days a week. They answered that it was very easy for me to request that because I did not go out on the open Pacific in storms and fog, seven days a week living in cramped quarters handling heavy fishing gear. They said they had to have time off, so I suggested that they arrange a rotation of days off, not necessarily Saturday and Sunday, so that we would always have a Canadian fleet out seven days a week. The union was not very enthused about this at first because they could not see any lasting advantage in a fishing war. However, they became enthused later and I was sure that this coming year with this program we would get the major share of the pink salmon.
At the same time, however, our government made formal representations to the United States government that we would like to engage in a pink salmon treaty under the sockeye salmon protocol. We got a helpful reply from the United States government, and that government then got a good reaction from the fishermen of Washington anfi Oregon. The United States delegation came here last fall and in four days we negotiated this treaty which was then signed in December. The treaty put the pink salmon under the control and administration of the international Pacific salmon commission

which, up to now, has just controlled the sockeye salmon of the Fraser system. The commission will start with a six year study program on the pink salmon and other Fraser species as well, the cohoe, springs and chums. Unlike the first years of the sockeye salmon commission work we are not going to wait six years before we regulate the pink salmon fisheries. Regulation will start immediately and the sharing of the catch will start immediately.
The present salmon commission is, without question, the best body to carry out this work. There was some talk that we should set up a separate commission on pink salmon, but that would be unfortunate because the area of administration for sockeye and pinks is identical. Certainly our fishermen today have great confidence in the staff of the international Pacific salmon commission because of their achievements. A great deal of the work already done for the sockeye salmon has proven very beneficial for the pink salmon. From 1913 on after the slide in Hell's Gate there had been no pink salmon on the Fraser above Hell's Gate. These small salmon simply could not forge their way through the increased speed of the flow of the Fraser river. Soon after the construction of the Hell's Gate fishway the Department of Fisheries noticed pink salmon spawning on the Fraser as far as Lytton and up on the Thompson river. Therefore, some of the work which has been done for the sockeye salmon has improved the pink salmon as well.
So much for the pink salmon: since the act is opened for the first time in 20 years, you will notice that there are one or two other amendments which the commission wanted in view of the experience they have garnered in these 20 years. We are putting this in the same form as other international fisheries treaties signed since that time. Last year, you may remember, I had a difference, the only difference we have ever had with the salmon commission, because I refused to enforce one of their regulations. In the old protocol there was a stipulation that if the salmon commission closed fishing in any part of Canadian waters it had to be closed in all Canadian waters. If fishing were closed in any part of the United States waters, it had to be closed in all United States waters. Last year the salmon commission requested that we close fishing in the outside Canadian waters and maintain it in the inside Canadian waters. This was quite contrary to the protocol which parliament had approved, and I said we could not enforce it. I suggested to them that if

they wanted this change they should put it forward and we would amend the act, as we are now doing.
The commission themselves do not do the enforcing of the regulations. The two governments do that. The state of Washington acts for the federal government since in the United States the states have control over fishing, and our Department of Fisheries acts in our country. These arrangements have worked out very well, but in recent years we have had the feeling that regulations for enforcement should not be left solely to an international commission. The new convention provides that these regulations must be approved by the governments concerned. I think most of the people in parliament will agree that too much authority in law enforcement should not be handed over to even as good a commission as this.
There is just one other thing I should like to mention. A couple of days ago the hon. member for Nanaimo (Mr. Cameron) spoke to me, and in his speech the hon. member for Vancouver-Quadra (Mr. Green) mentioned that all the good work which this commission has done in restoring this extremely valuable British Columbia resource, and all the good work we hope they are going to do in rebuilding the pink salmon fishery, will go out the window if the power interests of British Columbia are permitted to dam the Fraser river. In reply to the observations made by the hon. member for Vancouver-Quadra yesterday at the resolution stage, I outlined the position of the Department of Fisheries and the fishing industry of British Columbia on this matter. It does not matter whether you call the problem fish versus power or fish and power, however you describe it, but we like to think of it as fish and power.
One of the difficulties encountered is the failure of the ordinary layman to understand the very great problems facing the fishing industry in this matter. Not long ago I spoke to the mining institute of western Canada and I was asked to speak on this very subject because power is essential to mining. The miners could not understand why it was so difficult to move an adult salmon up over a dam and then 20 times as many small salmon down over a dam, since much greater transportation problems were quickly solved in their industry. They pointed out that in their industry they move millions of tons of rock and ore from the bowels of the earth to the surface. Moving big things upward relates to moving adult salmon over dams. Moving small things down in the mining industry-the rock and ore which goes through the crushers and on to the screens of the mill, movement of large amounts of
Fisheries
things much more minute than the finger-lings we want to move down over the dams. That seemed to me to be an extremely reasonable observation from a mining point of view.
Today I am going to attempt just briefly to describe to you in layman's language why it is these very brilliant scientists of the fishery nations of the world and our engineers have not as yet been able to solve our transportation problems as easily as the miners have solved their problem.
I think it would be easiest if we were to take the sockeye salmon cycle and discuss its life history because it is the fish most valuable in the Fraser system and which presents the greatest problem. The sockeye salmon has an extraordinary homing instinct. I think it is unequalled by any other animal in the world. Towards the end of the fourth year of its life the adult salmon is out in the north Pacific. Some primeval urge in the early summer turns it toward the strait of Juan de Fuca. It heads for the south end of Vancouver island, around the south end of the island through the waters of Puget sound into the gulf of Georgia where it mills around for two or three days in the estuary of the Fraser river before starting up the Fraser river seeking out in that enormous watershed the little creek in which it was spawned four years before.
As I have said the homing instinct of the sockeye salmon is quite fantastic. Our scientists have found out by tagging that over 95 per cent of the sockeye return to the little creek in which they were spawned despite the fact that the creek may be located 800 miles up the Fraser river.
These salmon stop feeding once they come near fresh water and throughout the course of their long journey up the river to spawn they live on the food and energy stored in their own bodies. The sockeye salmon goes the farthest of all salmon and that is why it is so rich and in such a fat condition. Having sought out-we think mainly by taste *-the little creek in which they were spawned, the male and female spawn and die. In the springtime the little salmon fry emerge from the egg and drift down to the lake below, where they usually spend one year or sometimes two years and in those lakes they grow to the smolt stage. They then pass down the river and reverse the trip travelling around Puget sound, the south end of Vancouver island and out to sea for a three year sojourn.
Well, now, let us consider the effect on this migration of a power dam on the Fraser river. We will consider just one dam on the Fraser river and the effect it would have on this age old cycle of movement of salmon-

Fisheries
are concerned the cost of power from gas must be getting close to the cost of obtaining power from hydro.
Finally, I would say that we are just on the verge of the atomic age as far as the production of electric power for commercial use is concerned. Britain has two commercial plants in operation already. Every British Columbian should remember, too, that the cost of hydro power from a salmon stream is not the same as the cost of hydro power on a non-salmon stream, because the cost of hydro power on a salmon stream must include both the cost of the dam and the necessary installations plus the cost of the fishways which under the Fisheries Act we can oblige the company to build. In the case of the Fraser river, the dams which the B. C. Electric is planning, these fishways would cost, according to our estimate, somewhere around $300 million-not very effective fishways, either.


Mr. Green:: Apart from the cost of the dams themselves?


James Sinclair: Yes, apart from the cost of the dams. And it should be borne in mind, finally, that to this cost must be added the loss of fishery resources which are producing about $50 million on the market, these years, for the people of British Columbia and which, in the years ahead, because of the work of this International Pacific Salmon Commission, will produce much more.


Mr. G. R. Pearkes (Esquimali-Saanich):: am sure the house is indebted to the Minister of Fisheries (Mr. Sinclair) for his very comprehensive review of the background which led up to the introduction of this bill. He gave us considerable historical data regarding the establishment of the International Pacific Salmon Commission which was originally set up in 1930. Then he dealt with the life history of our various species of salmon and then with the work of the commission which I am sure justifies the request that the commission now look after the pink salmon as well as the sockeye. Then he gave us a very full and detailed account of the effect of power developments on the salmon run. All of what was most interesting and is valuable information to have on the record. I hope he will not consider it as carping criticism if I say that perhaps he might have spent a little more time explaining the actual bill itself and the protocol attached to the bill. No doubt when he is summing up at the conclusion of the debate he will be able to give us more information on that point.
As I said when speaking at the resolution stage, we believe that the objects of the bill,

which is intended to implement the convention between Canada and the United States for the protection and preservation of the sockeye salmon and, by extending the provisions of that convention, to cover also the pink salmon, are wholly commendable. It is essential, as I said yesterday, that this great national resource be preserved. A continuation of the fishing war which the minister described this afternoon might have exterminated not only the sockeye but also the pink salmon because, as the minister knows, the runs of the sockeye, the pink and the other species do overlap to a certain extent and in some cases take place simultaneously.
If fishermen are allowed to use indiscriminately in narrow waters the modern equipment which can catch literally tons and tons of fish in a very short time and are allowed to use in narrow waters the type of nets which are used in the ocean, our fish would certainly be exterminated in the not too distant future. It is obvious that if this desirable end, the conservation of our fish, is to be achieved it can only be done by the combined efforts of Canada and the United States, and the bill is intended to bring about that end. The governments of the United States and Canada have intimated that they would like to use the international Pacific fisheries commission as the medium for achieving that end, and from what the minister has told us this afternoon of the excellent work done by that commission I feel he has fully justified the decision to extend the scope of that commission so that it can deal not only with the sockeye but also with the pink salmon.
The minister has explained the value of the pink runs, and I referred to that yesterday afternoon. The total value of the catch amounts to tens of thousands of dollars and it is a very valuable contribution to the economy of the country and the many thousands of fishermen employed in the industry. Therefore we cannot overemphasize the importance of taking these measures.
To come to the actual bill itself and the protocol, the minister referred to one important amendment which is being introduced, a deletion which may have very far-reaching repercussions because, as he said, in article IV of the convention of 1930 the commission is empowered to exercise certain limiting and prohibiting powers with respect to the taking of sockeye in certain territorial waters and in the high seas. That article of the original treaty goes on to refer to the catching of these fish both in Canadian and American waters which have been

previously described in the first article, namely, the Canadians waters of the Fraser river and the waters immediately adjacent to the mouth of the Fraser river and certain American waters.
The article states, as the minister mentioned this afternoon, that when prohibition is applied it must apply to all the waters in question, all the territorial waters, all the Canadian waters or all the American waters. The minister referred to the difficulties which arose a year ago. After a good deal of discussion, I believe, the commission decided to prohibit first of all the catching of sockeye salmon in Canadian waters during a certain period of last year.


James Sinclair: Outside Canadian waters.


George Randolph Pearkes: Outside, yes. May I say in the Canadian portion of the international waters. That resulted in very considerable objections from the Canadian fishermen and I asked some questions in the house last year about the matter. As the result of the objection raised by our own department, I believe, and certainly by the minister and by some of the Canadian members on the commission, that limited prohibition was extended so as to cover all waters, both on the American side and on the Canadian side. I think I should quote the remarks made by the minister when speaking on March 2, 1956. They will be found at page 1747 of Hansard. I must quote at length because I feel this is a very important amendment which is being suggested. At that time the minister said:
One of the proposals made by the salmon commission, and one which was mentioned in a question earlier this session by the hon. member for Esquimalt-Saanich, was the proposal that all fishing be stopped in outside Canadian waters. It is only in recent years that we have actually begun to fish those waters. Before the sockeye would swing around the end of Vancouver island into the strait of Juan de Fuca, where the United States fishermen would get their half of the fish. The sockeye would then go into the gulf of Georgia and up the Fraser river where our fishermen would get their half of the fish. In recent years, especially since the last war, we have encouraged the fishermen to get out to sea and establish historic rights on the high sea fishery, and also to put us in a little better position. In the past, we got the second half of the fish.
The minister confirmed those statements this afternoon. Then later on he went on to say this:
This proposal, X am informed by my legal advisers, is in direct contravention of the commission treaty which was approved by this house in 1937. Article 4 of the treaty says that if any of the Canadian waters are to be closed, all the Canadian waters are to be closed; if any of the United States waters are to be closed, all the United States waters are to be closed. It is quite true that over the years there may have been minor variations in that we did agree upon closing inside areas for week end closures of different lengths, but never have we agreed, in violation of the treaty, to a complete
Fisheries
closure of a very important Canadian fishing area. I have, therefore, written the chairman of the international commission telling him, first of all, that this is in contravention of the treaty approved by this parliament, and while 1 have the power as Minister of Fisheries under the Fisheries Act to order such a closure, I was not given the power by this parliament to exercise it under the terms of the international Pacific salmon convention. I have asked him, therefore, to reconsider the proposal and see whether the same conservation results can be achieved without this precedent of completely closing an important Canadian area, an area which is of very great importance to us in other fisheries as well as in the sockeye salmon fishery at the moment.
It seems to me that the action then taken by the minister was highly commendable. It met with the wishes of my constituents who were vitally concerned as well as the fishermen who came from the mainland and fished off the southern end of Vancouver island. It seems to me that it was wise that the Canadian government should retain that power and deny the commission the right to close certain areas while leaving other areas open. The feeling last year was that the Canadian fishermen were being discriminated against by the ruling of this commission and that the United States fishermen would once again have all the advantages which they enjoyed before the commencement of a fishing war which the minister described this afternoon when the introduction of bigger vessels and better equipment enabled our Canadian fishermen to hold their own with the United States fishermen. I cannot help feeling that we are turning the clock back and that we are surrendering the power which the government had, by saying to the commission that they have full authority to close any part of the conservation area, whether it be on the Canadian side or on the United States side; that they are not obliged to close the whole of the waters concerned; and that we are leaving the matter entirely to the discretion of this international commission.
We have great admiration for the work which the commission has done. That commission is composed half of Americans and half of Canadians or, in other words, three Canadians and three Americans. It does seem to me to be unwise that we should surrender the right of the Canadian government to allow this international commission to close off perhaps part of our waters and not put the same restrictions upon the United States waters. Surely we should insist on a general policy. I mention a general policy because, as the minister said last year, there have been minor changes which are desirable. But at the commencement of the fishing season surely we should insist upon the policy of equal treatment in all areas. That is not written into the protocol. I suppose

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nothing could be written in there. But I should like to have from the minister a definite statement which will show that the rights of the Canadian fishermen can be protected by the Canadian government and that we are not handing all of those rights over entirely to this international commission.
I wish to continue quoting from page 1748 of Hansard of last year. When the minister was speaking last year, afte rmaking the remarks which I have just quoted, he went on to say this:
I told the chairman that the Canadian people are most appreciative of the magnificent job the commission has done in re-establishing this great fishery. I said that if, over the years the commission has found from its experience that certain articles of the convention are hampering its work, then we in this parliament certainly would be very glad to hear its recommendation for change, and that would be the proper way to do it.
I presume that the commission has made certain representations to the government saying that its work has been hampered because of the clause which enunciated the policy of equal treatment in all areas. I hope the minister will be able to give us examples, either when he is replying or at some other time, although I think it should be done here while we are considering second reading because, in my opinion, this is an extremely important amendment. If he would tell us how the commission feel their work has been hampered because of this restriction which I described as enunciating the policy of equal treatment in all areas, we would be grateful.
It may be that the amendment which is suggested to article 6 may be a qualifying clause. I do not know whether it applies to the exact point that I have raised because there it stipulates that the regulations of the commission are subject to the approval of the two governments. That would seem to be wise because we must have the authority. It also deals with the opening fishing periods in the various areas. I am not quite certain whether that refers to the so-called outside waters or whether it refers only to the strictly Canadian or United States waters. However, I want to have the minister's assurance that in that qualifying clause there is ample protection-for the Canadian fishermen and that it will prevent the possibility of this commission's closing off certain areas and leaving other areas open.
Now, that is the main point to which I wanted to refer. I believe there are other points which will have to be discussed when this bill goes to the marine and fisheries committee to which I understand the minister intends to send it. There is just one point which is akin to this policy of equal treatment in all areas, and that really concerns

the equal treatment given to the different kinds of fishing gear. I know that is a very debatable subject both on the west coast amongst fishermen themselves and with the government. If we are having the commission or the department exercise the right to close off certain areas for certain periods, as must be done, then consideration must be given to a fair division of the catch, not only between United States and Canadian fishermen but between the gill net fishermen and the seiners. I believe I am correct in saying that the association of fish boat owners and also the union feel that some steps should be taken to ensure that both the gill net fleet and the seiners have a fair share of the catch.
I understand that some sort of mutual agreement has been worked out on the gulf of Georgia whereby the gill netters fish during the hours of darkness and the seiners commence their operations after daybreak. No such gentlemen's agreement, may I call it, exists in so far as the two fleets are concerned as they get farther out to sea. Certainly, I do not think there is any such agreement as between United States and Canadian fishermen on the basis of the two different types of equipment used. The government has the power to close the various areas. The government has the power to restrict fishing in areas which would be mainly fished by the seiners or mainly fished by the gill netters.
The advantages of the gill net or the seine seem to change from time to time. At one period all the advantages were with the gill netters, and then the pendulum swung and the advantage went to the seiners. It may well be now that the advantage is swinging back to the gill netters owing to the new types of equipment they have. I understand these nylon nets are giving the gill netter quite an advantage. I believe I am correct in saying that there were regulations enforced in 1954 which to a certain extent assured a division between the two. I believe the minister speaking in Vancouver that year indicated he thought some division should be made. There seems to have been a change in that policy in recent years.


James Sinclair: It was the union that worked out this gentlemen's agreement to which the hon. member referred, for one year.


George Randolph Pearkes: It was an agreement worked out then, but now so far as I know the only agreement that there is relates to the hours at which fishing takes place. I feel it is important that the matter be considered because again it is an international problem as between United States gill netters and Canadian seiners and so forth. Perhaps when the minister replies he would refer to that point

and announce the policy of the department in that respect. It would certainly be helpful if he could do that.
I do not think it is necessary for me to go into the question of fish and power developments. The minister went into that quite extensively. As I said yesterday, I am hopeful, and perhaps the minister might be able to elaborate a little more on this, that perhaps the experiments now being carried out with the pinks will go a long way towards solving that problem. The pink will spawn much closer to the ocean than the sockeye. The pink does not have to spend a year or more in a fresh water lake but proceeds right to the ocean. It does seem that if the scientist can overcome this problem of developing artificial spawning beds which will transport the pink to spawn on streams not required for power, and will also develop the pink runs in other streams, perhaps they can ensure a run each year rather than just on the even or odd numbered years.
In closing may I say that I hope the minister will refer to these three points in his remarks, the policy of equal treatment in different areas; the policy of equal treatment between different kinds of fishing equipment; and to what extent the pinks spawning grounds may be transplanted.


Mr. Cameron (Nanaimo):: May I call it six o'clock?
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Colin Cameron: Mr. Speaker, like others who have taken part in this debate, I welcome this particular measure and congratulate the minister on having succeeded finally in getting this convention signed. I may say I was very much struck with his description of what I suppose one could call his pragmatic diplomacy by which he achieved the purposes of his department, and when he was telling us about it I wondered if it was not perhaps an example for our whole Department of External Affairs in dealing with intractable neighbours on all sides. However, it was, as I say, a very sensible piece of diplomacy that enabled us to have this convention signed.
I think also it is significant in another way in that it is a further example of the way in which free nations can co-operate for some specific purpose the value of which is perfectly obvious to all of them. It may
Fisheries
indeed be the foundation for a more wide-reaching and fundamental co-operation in the future.
I was also very relieved to hear the minister tell us his department is determined that there shall be no destruction of the salmon runs on the Fraser river in British Columbia because we have had some very disturbing reports from our province of British Columbia. There have been suggestions that the powers that be in that province are going to make what I think would be an extremely short-sighted choice, the choice between having more aluminum and having salmon. I realize of course that it is coming perilously close to blasphemy to suggest that perhaps the salmon in the streams of British Columbia are of more ultimate value to the human race than more aluminum to build planes that will be obsolete before they come off the assembly line or for any of the other uses to which the power that is being sought might be put. I believe that we have to combat this-I can only describe it as a cheap scale of values that are abroad in the world today.
I have been reading some of the statements made by various people in British Columbia on this question. There are two statements made by two people in which I find an extremely interesting contrast. The author of one of these statements is a professor in British Columbia. I believe his field is geology but he has not hesitated to inform the world at large that it is possible to make the best of both worlds and to have power and salmon. He does not mention any biological eminences who support him but at any rate throughout all his prophecies there steals the viewpoint that it is more important that we should have power for undetermined reasons to produce goods of varying values and that if necessary we should destroy the salmon in the British Columbia streams for that purpose. Set against his comments are the numerous public utterances of an eminent naturalist, a constituent of my friend the hon. member for Comox-Alberni (Mr. Barnett), Mr. Robert Haig Brown.


James Sinclair: Hear, hear.


Colin Cameron: Last fall I had the pleasure of listening to Mr. Haig Brown speak on this very question of the preservation of the salmon runs of British Columbia, and even more fundamentally the preservation of at least some part of the natural background of life on this continent.
Mr. Haig Brown stressed the immensely important psychological values of not destroying all the natural background that we inherited on this continent and I believe that is a matter we are going to have to consider

Fisheries
more and more as time goes on. We are going to have to realize that there are other measurements than production of material goods and there are measurements other than dollars; there are measurements in human satisfactions.
I recall my own boyhood in British Columbia when I lived alongside a small stream that flows into Burrard inlet, which is now of course the harbour of the metropolis of Vancouver, and I remember that every year we used to watch the salmon come swarming up that stream, the miracle of the returning salmon. Of course they do not come now to any extent because it has been destroyed by the process of industrialization, but I think it would be a tragedy if future generations of British Columbians were to be deprived of seeing that astonishing and inspiring natural miracle. You cannot put its value in dollars or cents nor can you measure it by material standards but it has a very real and important value in our society.
I think we are going to have to learn to fit ourselves as human beings into what biologists call our ecology. We have had the curious idea that it is our role as a species to dominate and control all other species and to dominate all natural forces. I suggest that the time is coming when we are going to have to realize that we have to co-operate with all other natural forces if we are going to survive as a species and if we are going to be able to build anything in the way of a worth-while human society.
Some while ago a friend of mine handed me a book that is very appropriate to the discussion we have had today. It is a book by Professor Ashley Montagu whom some of you may recall as the rash man who publicly said what all of the rest of us have the sense to keep quiet about, that women are the superior sex.


Some hon. Members:: Hear, hear.


Colin Cameron: Professor Montagu's book is entitled, "Darwin-Competition and Co-Operation". In it he takes issue with the old Darwinian idea of "nature red in tooth and craw" and "the survival of the fittest" and so forth, and he has this to say part way through his book:
" 'Don't compete!-competition is always injurious to the species, and you have plenty of resources to avoid it!' That is the tendency of nature, not always realized in full, but always present. That is the watchword which comes to us from the bush, the forest, the river, the ocean. 'Therefore combine -practice mutual aid! That is the surest means for giving to each and to all the greatest safety, the best guarantee of existence and progress, bodily, intellectual, and moral.' That is what nature teaches us."
[Mr. Cameron (Nanaimo) .J
I think that when we face a choice such as we seem to have with regard to hydroelectric power and the salmon runs of the British Columbian rivers then this is the point of view we shall have to take into consideration, the fact that man is a part of his environment and he must co-operate with his environment.
If he destroys it, he destroys himself. The minister stated this afternoon, or on Friday, that once destroyed these things can never be brought back again. We can knock down the dams when we find they are useless, we can destroy the factories we have built when we find that we are not particularly interested in the things the factories are making, but the salmon will not come back. The life that was there will be gone for good and when it goes the lives of all those human beings who live in that area will be just that much poorer.
So I trust the minister will continue to oppose any shortsighted moves for immediate gain which will destroy one of the most distinctive features, perhaps the most distinctive, of the natural history of our province, that is the salmon runs on our rivers, and that he will seek to find co-operation, not only among other nations but among our own citizens for the preservation of what is to my mind an absolutely priceless asset.


Mr. F. G. J. Hahn (New Westminster):: Mr. Speaker, it is my intention tonight to deal with one or two aspects of this matter which I either failed to complete yesterday or had just touched upon. Before I do so may I say that I am reminded of what the minister said early in his remarks this afternoon when he paid such a fine compliment to the sockeye salmon commission and the work it has done in past years. He mentioned Senator Tom Reid, who has been associated with the commission since 1937, the only member who represents either Canada or the United States and who has been on that commission continuously to this date.
I agree completely with the minister that possibly the restoration of the sockeye salmon run that we find today is due largely to the ardent work that Senator Reid has done in the past. Certainly it is the foresightedness of men such as Senator Reid and the attitude they have adopted in past years that has not only preserved but brought the sockeye salmon industry to the place where it is today. As the minister said, the key to this success is the membership of the commission. Certainly as long as we have such men on the commission the sockeye salmon will be preserved and probably the pink salmon will receive the same treatment and also increase in number. We shall look forward to the day when that will be the case.

If I did not misinterpret his words, the minister indicated this afternoon that the United States fishermen had been pretty well brought to their senses during the season of 1955 when the division of catch was 54-46 I believe. I do not agree completely with the minister. It so happens that among my notes I find reference to the minutes of a joint conference of fishermen's unions and other fisheries organizations held at the Silver Moon hall, White Rock, British Columbia, on Sunday, April 17, 1955, at 2.00 p.m. I made some reference to this conference yesterday. I think it is only fair to say that at least some of the Americans who were at that conference indicated that they were cognizant of the need of a 50-50 split as far back as April 17, 1955. I think the threat to outfish them had more to do with it than the actual performance.


James Sinclair: That is two years after the program was started.


Frederick George Hahn: I am fully aware that the suggestion about that had been made two years previously, but it was not a matter of waiting until 1955. I find among my notes the following:
Joe Burrows, president of the Puget sound gill-netters' association said his organization had not made any decision as yet but his own personal feeling was in favour of joint control of the fishery. He promised to go back and report the findings of this conference to his membership and he was quite sure his membership would take a favourable stand. He wondered if pinks should be put under international control how this would affect or how it might interrupt the inner Puget sound fishery.
He was concerned that it might hurt the small boat fishermen. Apparently in the United States they have the same problem in connection with gillnetters that we have. The hon. member for Fraser Valley (Mr. Patterson) referred to this problem facing our own gillnet fishermen.
Dick Kink of the Puget sound vessel owners said that as far as conservation was concerned his personal opinion was that there was no question but that this must be supported to the fullest. I could go on quoting. John Brown of the Puget sound reef netters association felt likewise. The minister indicated agreement of this in his speech yesterday. This is agreed to also by the I.L.W.U. and the united fishermen's allied workmen's union. The actual fact is that there has been a growing feeling about this among fishermen on the Pacific coast, Americans as well as Canadians, who have come to realize the true worth of the sockeye salmon commission, of which we have spoken so highly, that they endorse the plan completely.
In so far as fishing on the high seas is concerned, I have only a brief comment to make as I referred to this yesterday. I have
Fisheries
reread what the minister had to say and I think his explanation is a good one. I would urge that we begin now to attempt to establish a limit on the distance offshore that fishing can be done, not just between ourselves and the United States but on an international basis, as has I understand been the case in Iceland to a degree.
The minister agreed yesterday that salmon fisheries on the high seas were made up mostly of smaller fish. Apparently it takes about twice as many fish to complete the same size pack as it would take along the coastline. The preservation of salmon, or any fish for that matter other than deep sea fish, I submit should be encouraged and fishing should be confined to the coastal area. Now that we have reached this point of accomplishment I urge the minister to begin working on an international agreement or convention to limit fishing on the high seas to only fish which might be termed high seas fish, and to provide that those fish that reach complete maturity along the coastline should be permitted to be caught only in those areas.
Yesterday I read a letter from an Alberta resident which was of particular interest to the committee and to the minister, and his remarks were certainly timely. The reason for observations in that letter was brought out definitely by the hon. member for Nanaimo (Mr. Cameron), who has just referred to the false idea of thinking that we can build dams and at the same time have fish. There has been so much loose talk about the ability to carry on power projects on our salmon fishing rivers, such as the Fraser, and at the same time preserve the salmon, that I felt and still feel that it is necessary that the scientists who are connected with the fishing industry, the minister himself and all those in authority should indicate just how they feel about the matter, because the point has not yet been reached where we can carry on power projects and preserve our fishing industry at the same time.
This is particularly true, as the minister himself pointed out with respect to the sockeye salmon industry. I was particularly interested in the viewpoint of the hon. member for Nanaimo (Mr. Cameron) which reminded me of the debate last year in which the hon. member for Burnaby-Coquitlam (Mr. Regier) raised the same question. As I recall it, this year the minister reiterated once again that as far as he and his department were concerned they would not permit any development of power dams along the Fraser river until such time as the fishing industry would not be in jeopardy.

Fisheries
Last year, as recorded at page 1975 of Hansard, for March 9, I find the minister represented by a quotation to which the hon. member for Burnaby-Coquitlam referred, He said:
We feel, first of all, that every non-salmon stream in the province should be developed for power before a salmon stream is touched. In that respect we feel that before the Fraser is touched that part of the Columbia river in Canada should be exploited to the full.
And the minister is still in agreement with his utterance of last year. I am satisfied that every hon. member from British Columbia probably feels in exactly the same way. I do, and the hon. member for Fraser Valley (Mr. Patterson) has indicated the same thing.
On the same page of Hansard, the hon. member for Burnaby-Coquitlam says:
I hope the minister is very keenly aware of the fact that unless the federal government, which last year assumed some responsibility for power development on the Columbia river, undertakes some initiative in the matter of early development of power in the Columbia basin, the federal government may find the provincial government making a deal that will completely frustrate the good intentions of the minister. Because of the failure of initiative on the part of the federal government, we may see the British Columbia government take some action that most Canadians might have reason to regret.
That statement was made shortly after the minister had spoken. I did not have time to re-examine the whole of the minister's remarks in the course of that debate, but I can distinctly remember him saying that the British Columbia government had given an assurance that it was not going to permit any damming of the Fraser river at this time, and it is for that reason that I rise in my place now to draw that fact to the attention of the house. Neither the hon. member for Burnaby-Coquitlam nor any other hon. member should take it upon himself to decide what the government of any province is, possibly, going to do, particularly in the light of what the minister himself said. I view that with a great deal of alarm.
We must remember that the debate I spoke of took place on March 9, 1956. I have in my hand a statement of policy from the Vancouver board of trade dated December 15, 1955, respecting fishery and power resources in British Columbia. In this brief, issued some months before the statement to which I have referred was made by the hon. member for Burnaby-Coquitlam, I find the board has this to say on page 2 of the document:
The industry contends that the fishery should be preserved and expanded through the application of scientific knowledge.
The board of trade's members, as industrialists, realize the value of the fishing industry

to our province. I am sure there is not a single citizen in my province who does not realize the extent of its value, and while there are interests which would like to dam the Fraser river, they realize that in doing so they would deprive us of one of our inheritances and one of the industries which have been with us since the birth of British Columbia, and long before that time, as the minister has pointed out.
The board of trade went on to say:
They (industry) recognize the need for continual increase of power development in this province but have advocated that power requirements he developed where it is available on "non-fish producing" rivers and from other energy sources.
I feel, Mr. Speaker, that it is necessary to put this matter on record if for no other reason than to let the people of Canada know that despite the tremendous growth of industry in my own province today industry still recognizes that we must not dam the Fraser river until such time as we can be assured that the salmon industry will survive.
The statement of policy continues, and has this to say about the provincial government:
The provincial government has also recognized these principles and incorporated them in an amendment to the provincial fisheries act at the last session of the provincial legislature.
Thus, early in 1955, one year before the hon. member for Burnaby-Coquitlam spoke and cast the reflection he did, the government of the province had recognized what the minister recognizes now and had recognized at that time. He recognized it during the debate on Bill No. 3, if I recall it correctly, when we were discussing Canadian rivers.
At this time may I appeal to the minister to use his persuasive powers, since he apparently has them with this government and with certain associates in the United States as well, to see whether we cannot expedite the development which we hope to see on the Columbia river so that we may at least come to some formal agreement with the Americans with regard to responsibility and the delegation thereof. As was indicated by the board of trade, we are very much in need of power. We realize that only too well. However, I wish to draw this to the attention of the house because I do not think it is fair to the people of my province or to the interests within my province to have the impression left abroad which was given a year ago by the hon. member for Burnaby-Coquitlam, namely that certain interests in British Columbia were so power-hungry that they were going to deprive us of our salmon industry.
The minister, who is very alert with regard to the matters in which hon. members from British Columbia are interested, has

been good enough to send me a pamphlet entitled "Downstream Fish Migration Over Dams". Possibly that is one of the reasons why the minister is usually complimented by members of his own province from all parties -because he makes a habit of realizing our interest in certain subjects and passing the information he has along to us so that we can, at least, form certain views with regard to it.
This particular article is by Professor of Engineering C. H. Clay-


James Sinclair: Not "Professor". He is an engineer in our department.


Frederick George Hahn: Is he not a professor of
engineering?


James Sinclair: An engineer. I only say that because there are other professors who, as the hon. member for Nanaimo says, are beclouding the issue.


Stanley Howard Knowles: Be careful.


Frederick George Hahn: I probably will refer to one of those later. The article reads:
The problem of passing fish over dams is as old as the art of dam building itself. As early as 1662 in the province of Bearn, in France, a regulation was made requiring the owner of any dam or weir to construct a passage for both ascent and descent of fish.
I am not going to read any more from the article. It is available to all. But the fact is it bears out what the minister so capably pointed out earlier today with respect to the problem as we have it before us. However, I have an editorial taken from the Vancouver Province of July 13, 1956 which deals with certain remarks made by Dr. Peter A. Larkin, director of U.B.C.'s institute of fisheries. The editorial has this to say:
Dr. Peter A. Larkin, director of U.B.C.'s institute of fisheries, told the rotary club here last week that while there can never be a pat solution to the fish-power argument on the Fraser a workable compromise seems feasible. Dr. Larkin's institute is working on the Fraser problem under a $50,000 grant from B.C. Electric and a preliminary survey report has already been filed.
A report may have been filed. I have not seen it but possibly the minister may have something to say about that matter. The editorial continues:
While the report is still confidential, Dr. Larkin admits that it is impossible to build a dam which won't affect the spawning of fish and that fish elevators and "stairways" will never offer a complete solution.
Possibly the minister may wish to tell us something about the report Dr. Larkin has presented. We may be able to determine better what value there is in some of the irresponsible statements. I probably should say, that you can't have fish and power at this time, although we must not overlook the fact
Fisheries
that with fish farming and under certain circumstances we may some day find a solution.
The minister dealt to a lesser degree with the problem as we see it today in my own province. It has been suggested that since power from gas turbine engines has become just about as cheap as electric power that may be a solution to our problem. It may be for a 25 year period if we can believe all that is told us with respect to the availability of gas for the next few years. However, we have to find a long-term solution to our problem, and while our fishermen and British Columbians generally can appreciate the various means the minister has described of trying to induce fingerlings to go downstream by using light reflection and various other methods, in my opinion we must find a different way in which to get power which will be suitable to the province of British Columbia. Our industrial life depends upon our power resources and we must realize, while it is true that the fishing industry means all that I have suggested to our province and while the people of the province do not ever wish to be without that industry for the various reasons enunciated today, that we must find another way in which power can be made available to the people of the province.
We must induce other government departments having to do with natural resources and power to find as quickly as possible some other source of power. Certainly our scientists should be approached and given all the money they require in order to do the job. I hold in my hand a copy of yesterday's issue of the British Columbian. On the front page I find an article entitled, "Cautious Planning Vital for Hydro, Salmon, Says Expert." The expert is Loyd Royal, with whom I am sure the minister is well acquainted, the director of the international Pacific salmon fisheries commission. The article reads in part:
Neither industrial progress nor the fisheries wealth of British Columbia Is at stake if developments in fish and power are proceeded with on a cautious and sound basis . . .
Then there is a very important statement:
The development of management plans takes time, but the eventual benefits in increased salmon production are as certain as the amount of power produced at a given project, and the amount of industry it will maintain.
I think that this latter statement answers to a major degree what the hon. member for Nanaimo (Mr. Cameron) said a few moments ago, that we must not lose sight of the fact that industry as such can be developed and that there is room for expansion, and bringing forward and endorsing the

Fisheries
legislation before us today will probably be the simplest way of making definite provision for our salmon in the future.


Mr. Elmore Philpoit (Vancouver South):: Mr. Speaker, I have no intention of holding up the debate unduly but there are two points I want to raise. In the first place, I have a specific question for the Minister of Fisheries (Mr. Sinclair) which I hope he will answer either when he winds up this stage of the debate or when we are in committee on the bill. While the whole of the country and certainly the whole of British Columbia are delighted with the successful outcome of the negotiations which have resulted in the agreement respecting the inshore fishermen, will the minister let us know exactly what is the state of affairs with regard to the offshore fishing as between the two countries?
I think that I would be remiss in my duty as a private member of parliament from British Columbia if I did not add my little token of praise of this really great achievement. When we sit here year after year and have so many contentious debates and when we know that a rather hot election is just in the offing, it is certainly a gratifying experience to hear members of all parties get up one after the other and compliment the Minister of Fisheries. I think this is one of the greatest diplomatic achievements on record with respect to the relations between our two countries.
When I thought of what the Minister of Fisheries had actually achieved, for some reason or other I thought of the great seal of the United States on which the American eagle is shown with an olive branch in one hand and a cluster of arrows in the other. I certainly think our Minister of Fisheries is a most ambidextrous person because while I would not say that in the negotiations with the United States he had a two-fisted approach he did have a two-handed approach. He held out one hand offering friendship on a fair and sane basis and while I will not say that he held out a threat with the other hand he certainly held out a challenge to the United States that unless they were willing to make an aboveboard agreement fair to both countries which would conserve this great natural resource we would be forced to take other measures.
It seems to me that one of the greatest tributes that could be paid to the Minister of Fisheries is this. There are some things that a cabinet minister can do by reason of the fact that he is a cabinet minister and can initiate legislation in the house which becomes the law of the country. But it seems to me it is a far greater tribute to any leader in political life when his moral force is

such that he can appeal directly to the citizenry of the country and get them to follow him with respect to a proposal that he regards as good.
If ever there was a case when we had an enlightened leader of the people of Canada giving intelligent leadership to a certain group in Canada, we had that evidence when the Minister of Fisheries appealed directly to the fishermen of British Columbia and told them to go out and out-fish our good cousins, the Americans, with what happy result we all know. Because I think the Minister of Fisheries has had such great and conspicuous success with regard to the future of this great natural resource which is so important to us in British Columbia, I look forward to even greater things in the future along the same line.


Mr. T. S. Barneit (Comox-Alberni):: Mr. Speaker, I had not really intended to participate again at this stage of the debate but in view of some of the remarks which were made by the hon. member for New Westminster (Mr. Hahn) in his speech I should like to point out one or two things. Certainly, I am glad that the hon. member for New Westminster stated his position so clearly and forthrightly in respect of the matter of power and fish as it has been described in this debate.
I also want to make it quite clear that I do not want to see any development of a discussion of what I would call the internal politics of British Columbians in this debate. But in view of the references he made to a speech which was previously made in this house by the hon. member for Burnaby-Coquitlam (Mr. Regier) I think that perhaps I should point out that the hon. member for Burnaby-Coquitlam and some of the rest of us in British Columbia had some considerable concern a time ago about some reported statements which were attributed to a leading minister in the Social Credit cabinet in the province of British Columbia. I am referring to press reports of statements made by Mr. Gaglardi, the minister of highways, which led many of us to believe that the British Columbia government might be prepared to take a position and acquiesce in the sacrifice of our Fraser river salmon resources to the development of power at the Moran dam site. I recognize that to the best of my knowledge the government of British Columbia has clearly taken a position now that, as far as their legislative action is concerned, they will require that proper review and consent be given by the Department of Fisheries before the water rights branch will grant licences. I for one am very glad that they have taken

that position and I hope that they will continue to hold it. But I think that the record should be clear at this point that there was one particular stage when some of us had, in my opinion, real cause for concern in view of reported statements, as I say, by a leading member of the British Columbia cabinet. While I have not those references here with me in the house now, I am quite sure that it was those statements which the hon. member for Burnaby-Coquitlam had in mind when he spoke at the time to which the hon. member for New Westminster refers.
I am not going to continue the discussion further at this stage of the debate, Mr. Speaker. I had an opportunity of saying something at the resolution stage. I think my colleague, the hon. member for Nanaimo (Mr. Cameron), has indicated clearly that we are in full support of the principle of the bill that is now before us. We are looking forward to the meetings that will be held of the marine and fisheries committee on the details of the legislation.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, we had the opportunity this afternoon of listening to an extremely interesting resume of events and negotiations leading up to the signing of the protocol bringing the pink salmon under the terms of the convention existing between Canada and the United States for the preservation and expansion of the sockeye salmon fisheries in the Fraser river system. I agree with the other hon. members who have taken part in this debate that this is a desirable objective that has been achieved and it, of course, will receive the full and enthusiastic support of all the fishermen of British Columbia. In fact, this is something that has been requested by them for some considerable time.
I realize, of course, that the minister has done a commendable piece of work in the carrying through of these negotiations. However, I should also like to give the fishermen themselves just a little bit of credit for this particular achievement. On May 11, 1955, I had the opportunity of participating in a debate with regard to fisheries problems. At that time I referred to a brief that had been sent to Mr. A. J. Whitmore, chief supervisor of fisheries, by one of the fisheries unions of British Columbia, and I gave this quotation as reported at page 3679 of Hansard, of that year:
Certain things stand out like a sore thumb. The Americans are getting 65 per cent of the Fraser pink catch, the Canadian fleet as a whole is getting about 35 per cent. Out of the total run, the fishermen in area 29D are getting about 1 per cent. Out of the Canadian portion, they are only getting about 3 per cent. Even out of the Fraser river area catch they only took about 12 per cent.
Fisheries
Yet it is suggested that closure of this area after September 16th would help solve the difficult problem of pink conservation.
As they submitted this brief, and in commenting on this particular situation, they suggested that one of the alternative proposals to the conservation methods that had been suggested by the minister would be the entering into of a treaty with the United States covering the conservation of the pink runs and the establishment of an equal catch. I just wanted to state that the fishermen themselves have been behind this proposition for some considerable time and that they and the minister, as interested parties working together, have been able to achieve this particular success.
I think the minister this afternoon stated that there was a time when the catch was in the ratio of 90 to 10 in favour of the United States fishermen. That ratio was gradually brought down until, as I have mentioned from a reading of this brief, it was at 65 per cent for the Americans and 35 per cent for the Canadians. So, as the situation developed and as the catch became more nearly equal, we find the United States fishermen and the United States authorities-or perhaps I should say the fishermen especially, in view of what the minister said this afternoon-had come to the place where they were more ready to accede to the request for the signing of a convention in this particular respect. I should like to say how much we appreciate the industry with which the minister pursued this objective. We are happy that the efforts have resulted in the achievement as indicated by this agreement.
My colleague the hon. member for New Westminster (Mr. Hahn) has presented the case very well as far as we in this group are concerned. He raised the question as to the effectiveness or otherwise of the conservation measures which were instituted some time ago by the minister. Now, I am not going to discuss them except to say that there were two factors that were considered in this connection; one was conservation and the other was the quality of the fish that were taken. As I say, I am not going to enter into discussion of those factors, but I should like the minister to make it very clear when he closes the debate on this measure, whether or not he considers that the measures taken have resulted in the achievement of those objectives. I do not think the fishermen are convinced that is so. In fact, I am sure they do not think these measures have brought about the desired result. I should like the minister to make it very clear in this debate whether or not he and his officials consider these results

Fisheries
have been achieved, and also I should like him to submit what proof he has in this particular respect.
We are all agreed that the fishing industry is of vital importance to the economy of British Columbia, to Canada, and of course to the other nations who purchase fish from Canada. None of us has any desire to see the industry reduced or destroyed. There have been suggestions and a little interchange of views between my colleague the hon. member for New Westminster (Mr. Hahn) and one or two of our friends in the C.C.F. group from British Columbia. I think I can assure them that the government of British Columbia is not contemplating any measure at all which will result in the destruction of this vital industry.
I have a clipping from the Vancouver Province of December 9, 1955. It is not new, but I think possibly it fits in about the same stage as some of these other references that have been made this evening. I quote the final paragraph from this report:
In Victoria, Premier Bennett reiterated Thursday that a proposal by the Moran Power Development Company to build a 700 foot hydro power dam on the Fraser, above Lillooet, won't be heard by the government until the fish problem has been resolved.
It seems to me, Mr. Speaker, I remember the Minister of Fisheries (Mr. Sinclair) himself saying on one occasion that the government of British Columbia was in full accord with the policy he held as regards this particular matter. I do not believe it is necessary for me to read tonight from the report of the fisheries association of British Columbia dated January 24, 1956. The Vancouver board of trade submitted a resolution to the provincial government which stated that the board endorsed the policies of the British Columbia government in regard to those matters having to do with power development on the Fraser and other rivers which are important to the fishing industry, and the report sets out quite clearly and positively that they support fully the views of the provincial government.
There has been a little bit of a play on words, Mr. Speaker. I have heard it today and also read it in the newspapers, fish or power and fish and power. I suppose it depends upon which way one looks at the situation. Perhaps a pessimist would take the view that it is fish versus power. I have some statements here which I could read, but I am not going to do that tonight, which present that point of view, that there is no possibility of getting to the place where we can have the fishing industry maintained if we are going to carry on power developments on these streams. On the other hand, the

optimist perhaps would take the other viewpoint that we trust that in the very near future the investigations and studies will reach a point where they are able to tell us that we can have a fishing industry and also the power developments on these particular streams.
Now, that is all I want to say at this time, Mr. Speaker, except to say that we do welcome the signing of this protocol and of course we will support the legislation which is now before us.


Herbert Wilfred Herridge: While I am not directly interested in commercial fishing and I am not one of the members of this group whose duty it is to deal particularly with fisheries affairs, I think, as a British Columbia member and one particularly interested iri the conservation of natural resources, I should like to make a few brief comments concerning this subject. I am sure we were all delighted with the minister's speech and his full explanation of this treaty this afternoon. I thoroughly enjoyed the speech made by the hon. member for Esquimalt-Saanich (Mr. Pearkes). It was quite obvious he had done his homework before he started to speak. I would say the minister's speeches, and his obvious ability, act as a salve at times to heal the wounds caused by his occasional barbed comments iri this house. In any event, I must say I have been particularly pleased with his constructive approach to the problem of fisheries conservation on the Pacific and Atlantic in recent years. I am sure all of us in this group, all members in the house and particularly those from British Columbia, recognized the excellent work that has been done by the sockeye salmon fisheries commission, by the officials of his department and by the research workers iri the various other branches of the government. These ideas are not developed and these decisions are not reached without a great deal of work being done by people behind the scenes who often receive little recognition.
In view of what the minister had to say previously, I must also express my pleasure at the co-operative attitude on the part of the fishermen's union' in British Columbia. Apparently, they have been very concerned about this problem and have extended their co-operation in this respect to the minister and his department. However, I rose particularly to say, as a member who represents a riding that straddles the greatest area of the Columbia river in Canada, I was particularly pleased with the minister's explanation of the power or fish situation'. I was particularly pleased with his definition of his department's policy on this important

issue. It is one of great concern to the people of British Columbia. I want to express my whole-hearted support and the support of this group for the things he had to say with respect to the development of power and the conservation of our fishing industry in British Columbia. I was very happy indeed, because of the great concern to us in the interior, to hear him say that we should develop those rivers first in which fisheries are not involved before we start plans for rivers that will endanger our fishing industry. As a result of this policy, of course, the first development in British Columbia would naturally be the Mica creek dam north of Revelstoke. I have been extremely interested in this debate and I think it is of such great importance to the people of British Columbia that I intend to send a copy of today's Hansard to all the high schools, and other active organizations and to a great many other interested people in my district. I suggest it would be a good idea for British Columbia members generally to do something along that line so that the people who are interested in this vital question will have accurate information concerning the results of the efforts of the minister's department and will have the advantage of reading the minister's complete, thorough and specific explanation which he gave today.


Howard Charles Green: Mr. Speaker, I think practically all of the subjects which could be raised in connection with this bill have already been thoroughly debated, but there is one point concerning which I would ask the minister to offer some clarification when he closes the debate.
In different parts of the bill-both in the operative part and in the schedule which, as the minister knows, consists of the convention between Canada and the United States and the protocol thereto-we find the expression "territorial waters". There is no definition of what is meant by those words. As the minister knows that has been a very difficult question on the west coast for many years. I am wondering how the term "territorial waters" is to be defined under this protocol to the convention and under this new bill.
For a good many years we have been urging that Canada adopt a 12-mile limit as her territorial waters. On the west coast, of course, we have also urged that the line be drawn from the tip of Vancouver island to the southern end of the Queen Charlotte islands and that Hecate strait be considered territorial waters, but that is not material in connection with this debate.
Fisheries
Some time ago a committee was appointed to investigate the whole question under Dean Curtis of the law faculty of the University of British Columbia. His report was submitted to the government in due course and last year in the house the Prime Minister told us that Canada intended to take the stand at the United Nations that she wanted her territorial waters to extend for 12 miles from her shorelines. I believe that stand was actually taken in the United Nations but no conclusion was reached and my own fear is that it will be a great many years before any decision can be reached in the United Nations on this question. Probably most of us here tonight will be in the Senate or in some other happy hunting ground before the United Nations gets around to any agreement. In the meantime because the territorial waters are an important part of the bill and the convention and protocol I hope the minister will explain just what is Canada's stand in connection with this measure in so far as territorial waters are concerned.


The Acting Speaker (Mr. Applewhaite):: Order. If the Minister of Fisheries speaks now he will close the debate.


James Sinclair: Mr. Speaker, needless to say I have been pleased and I know the officers of my department and the officers and scientists and members of the International Pacific Salmon Commission will be very gratified by the very warm praise which has been showered on them by members representing every party in this house for their very considerable achievements in the field of fisheries management.
If I could close this debate by turning to the points raised by individual members I shall commence with the remarks made by the hon. member for Esquimalt-Saanich (Mr. Pearkes). The hon. member reminded us of the fact that last year as Minister of Fisheries I did refuse to have my departmental officers enforce a regulation proposed by the commission which I thought was in conflict with the treaty which had been approved by this house and I am glad to see that the hon. member thinks I was right in that action.
I did tell the commission that if they felt the power given to them was not wide enough to cover the situation which they were trying to handle then instead of trying to by-pass the convention they should ask us to amend the act, which we are now doing.
I may say that I was almost alone in this because the industry-and when I speak of the industry I am referring to the fishing operators and the fishermen-were hoping that there would not be fishing in the outside area that year because it was the year

Fisheries
of the small run and if they had some order to the effect that they should not fish there then they would be saved the expense of sending their boats that long distance. Since we share the catch equally, in the end it would not have increased the Canadian catch.
I was concerned, however, because to me it appeared to be a direct violation of the treaty which had been approved by this house which said that if part of the Canadian area was closed all the Canadian area had to be closed. It also seemed to me that this was going to weaken our efforts in having our fleet out there to out-fish the Americans on the pink salmon fishery. I thought it would be a poor precedent if this geographical advantage, which we have in having the outside fishery where the fish come first, was not to be exploited for even one year. One Canadian member of the commission heartily supported me in that contention.
Now that the pink salmon are included under this treaty this latter objection has of course disappeared. No matter whether we Canadians fish in the outside Canadian waters or the inside Canadian waters we are going to get half of the total catch of sockeye and pinks. It is more expensive to send our fleets to the outside waters since these fish in the end are going to turn up in the estuary of the Fraser river.
I realize that the fishermen of my hon. friend's riding find it more convenient to fish just off their shores as do the fishermen of my own riding, but one of the most attractive features of our modern new British Columbia fishing fleet is that it is extremely mobile. It ranges the whole coast of British Columbia and down off the coast of Washington and Oregon and up off the Alaskan panhandle. The only exception is this very privileged little fishery to which the hon. member for Fraser Valley (Mr. Patterson) referred, who have special rights above the Pattullo bridge, rights which have been measurably restricted in recent years; but I think now that we have the convention amended we can rest assured the Canadian members of the commission will see to it that the fishing effort is arranged to be of maximum advantage to the whole Canadian fishing fleet. We are going to get our full half share in any event.
The hon. member-I think with his tongue in his cheek-tried to lure me into discussing the proper division of catch between different types of gear. I know that the hon. member would never ask my colleague the Minister of Agriculture to decide how much wheat on the prairies should be cut by scythe and sickle, as it was earlier, or as it is now by binders and combines. That
[Mr. Sinclair.!	I
in effect is what sections of our fishing industry would like me as Minister of Fisheries to do. As Minister of Fisheries my job is to protect and conserve and if possible expand the fisheries of Canada. We do that by controlling the size of the fish caught, the size of the gear and the length of the season, but we are not going to arbitrate as between types of gear. We hope there will be the same natural evolution toward better and better and more efficient gear in our fisheries as there has been in every other form of Canadian industry.
There is another field in which the fishermen's unions have always been most anxious for me to intervene, and that is the matter of wages and prices. That again is not the responsibility of the Department of Fisheries, that is a process of collective bargaining under the provincial labour laws of British Columbia. I have resolutely refused to get into that division where a decision would be made whether the fish be caught by gill nets or seines, or to deal with price negotiations.
For the benefit of laymen in the house perhaps I should offer a word of explanation. The gill net is a curtain of net floated by floats on the top and weighted down by weights on the bottom, hanging in the sea and into which the fish stumble and are caught by the gills. It is an ambush, if you like. In the old days it could be used only at night because the fish could see the net in the day time, but with modern nylon nets which are almost invisible it can be used to catch fish by the gills in the day time as well as at night.
The seine is more of an ambush and trap. A school of fish detected, the ship runs around the school very quickly with a very deep net, the bottom of the net is pursed and the fish are trapped in the pursed seine. The hon. member for Esquimalt-Saanich (Mr. Pearkes) pointed out a very interesting thing, the differentiation between the fishing industry and the example I used of the farming industry. We have gone from the scythe and the sickle to the binder and the combine, and the combine will still be on top. We are not going to revert because somebody has invented a way to make the sickle and the scythe more productive than the combine.
In fishing there has been a swing of the pendulum, which I think was the phrase used by my hon. friend. In the early days fishing on the west coast was done from skiffs. The canneries had tugs which each night would tow a long line of skiffs out to the fishing ground. These skiffs were powered only by oars. The men laid out their nets and in the morning the tugs picked them up and brought

them back to the cannery. That was the primitive beginning of gill netting. Then the boats got their own power and were able to go out by themselves.
Then the seiner came on the scene with bigger boats, more efficient boats and more powerful boats and it seemed as though the day of the gill netter was over. However, that is changing too because on our coast now we have big powerful gill net boats which range the whole coast from Oregon up to the Aleutian islands. The boats are well-manned and have efficient mechanical equipment. The net is put out and pulled in by great power drums. Actually today a good gill net boat on the west coast can go anywhere a seiner can go.
We brought in those fifteen deep-sea seiners when we were mounting this fishing offensive, if you might call it that. Today we find that a great number of gill netters are out there upon the Pacific. The gill netters are also beginning to move into another preserve of the seiners, the herring fishing which was almost entirely carried on by the seiners. Our department has been successful in developing a mid-water trawl, a small trawl which can fish at any level and which can pick up a ton or two of herring at a set. With these new large powerful gill netters which are very mobile and the mid-water trawls, we will see the gill netters moving into the herring fishery as well. These developments are brought about by the initiative of our progressive fishermen on the west coast. I certainly do not want to get into any position of deciding on the sort of gear that is going to be used to catch salmon.
A great deal of praise has been given to the Jones creek experiment where we and the B. C. Electric Company have made this artificial river. I do not want hon. members to be carried away with the idea that this is an answer to our problem. It seems to be a little bit of an answer to one of our problems, the problem of the pink salmon, but it is not an answer at all either to the problem of the sockeye salmon or the problem of the spring salmon. We have to do a great deal more work even on this project before we know whether it is going to be really successful with even the pink salmon.
The next project we are contemplating along this line is below the dam on the Cheakamus river in the Squamish valley which is likely to block out a pink salmon run completely. We are going to build a long artificial spawning bed below the dam there in order to create the very best conditions, the best water, the right depth and the
Fisheries
right sized gravel. If that is successful we will have taken quite a considerable stride forward in this matter of what might be called fish farming instead of fish trapping.
The hon. member for Nanaimo (Mr. Cameron), who is a bit of a scholar, expressed some surprise that a professor of geology at the University of British Columbia should suddenly become one of the leading fishing experts in Canada, if you can believe what you read in the press. I must confess that I have developed the same surprise. I know the gentleman very well, having been at engineering college and at Oxford with him. No doubt he is extremely well qualified in the field of geology but he knows no more about fishing than the average fisherman knows about geology. The trouble is that a lot of people who read his pronouncements on the Moran dam think he is speaking as a professor of fisheries because the University of British Columbia has the only institute of fisheries in Canada, an institute which has done good work in the field of fisheries. Many of their science professors have done excellent work over many years in fisheries research.
The hon. member spoke also of something I did not touch upon. Perhaps I was thinking too much in terms of the commercial value of our fisheries. He referred to the aesthetic and educational value of our fisheries. I do not suppose anyone who has ever seen this amazing return to the river, this surging, teeming silver horde pouring back as it has done for millions of years into the streams of British Columbia, who has seen the salmon spawning on our gravel beds, has not been moved by one of the real miracles of nature.
On my last trip to Vancouver I went out to see our new aquarium which was built in conjunction with the provincial government and the parks board in Vancouver. I am always amazed to watch not only the children but the adults as they examine this excellent display of fish in that aquarium. There is a fascination about fish even for people who will not eat fish. I hope we will cure that deficiency as the years go by.
The hon. member for New Westminster (Mr. Hahn) raised the matter of high seas fisheries and expressed the hope that we would ban them. Both the United States and Canada have already banned the high seas exploitation of salmon by the use of factory ships. It is true that the Japanese did use these methods, but they are on the Asian side of the ocean and are working on the Siberian fish. This is a problem which concerns the Russians and last year the Russians and the Japanese-I was going to say worked out

Fisheries
-signed a treaty; the Russians presented a treaty to them to sign. That is a problem affecting that side oi the ocean. We do not have that problem and we do not intend to have that problem because we feel that the fish are much better if we wait to catch them until they come to our shores when they can be handled quickly in shore plants.
The hon. member for Fraser Valley (Mr. Patterson) referred to the attitude of the British Columbia government on this matter of salmon streams. Nobody in public life in British Columbia has ever suggested that I am an admirer of the British Columbia government, but I have to pay them the tribute of saying that they did amend their local fisheries act which strengthened our hand in the matter of dealing with dams and other obstructions on salmon streams. I am aware of the statement made by Premier W. A. C. Bennett which was read by the hon. member for Fraser Valley (Mr. Patterson) that he did not intend to grant any water rights for the construction of the Moran dam or other dams on the Fraser until such time as the Department of Fisheries had solved the problem of passing our salmon runs up and down over these dams.
The hon. member for Vancouver South (Mr. Philpott) mentioned a problem which I had overlooked-the other important problem threatening the existence of salmon fishing in Washington, British Columbia and Alaska, too, for that matter. The hon. member for Vancouver-Quadra (Mr. Green) pointed out that all our good work in conservation could be ended if these great dams were allowed to be constructed. That is true, and I have told hon. members what we are trying to do to avoid that situation. But there is another development of the last year or two which is equally alarming-not high seas fishing, in the sense that we are going to have factory ships on the seas, with catcher boats picking up the fish, but what we call offshore fishing-fishing boats based in Washington or British Columbia or Alaska setting out from Canadian and American ports and going just beyond our territorial waters where they are outside ordinary control. There is the danger of such vessels laying miles of shallow nets in the open Pacific and intercepting the salmon before they come into our territorial or inland waters and rivers. We have two objections to that. The first is the economic point raised by the hon. member for Esqui-malt-Saanich (Mr. Pearkes) the other evening when he asked: Why go to all the expense of sending big boats all that distance to catch fish and then have to transport them in refrigerators, when, if you will only wait,

the fish will find their way in to the river mouths where they can be caught more easily and transported in much better condition? Those who get out there first do, of course, reap a distinct advantage because they are getting in ahead of the other fishermen, but if this practice continues all the fishermen will eventually be out there fishing and all they will have done is to have placed an extra burden on fishing costs. That, however, is a minor reason why we oppose offshore fishing.
The major reason for opposing this type of fishing requires this explanation:	Hon.
members will remember that I spoke of the remarkable job which our scientists have done in identifying the various species of the five kinds of salmon as they come in. They have done even more than that. In this extraordinary Fraser watershed there are various races of fish, and each of the main tributaries of the Fraser, the south Thompson, the north Thompson, the Stewart, the Chilcoe, and a dozen others, has its own race of fish which goes in at different times a week or two apart.
In the earlier days when there was just an over-all closure, we lost entire races of fish because the fishing season was open long enough to wipe out a particular race which was going through at its peak at that time, but now our fishing closures are designed to treat each race of fish separately. In this way we shall get enough of the peak of each particular run through to its proper stream. But we can do that only as long as we have some control of the fish, and so long as they can be watched as they come round through Puget sound to the strait of Georgia. Naturally, we can exercise no such control when the fish are caught 100 miles out at sea and when we cannot distinguish one race from another or know when they intend to move in. The director of the International Pacific Salmon Fishing Commission has said that the scientists will lose control and effective management of each of the races in this watershed if this type of offshore fishing is permitted to continue.
This problem became acute last summer because of the increased mobility of these big gill-net boats which can now cover long distances and trail a mile of gillnet behind them. As Minister of Fisheries I can, under the Canadian Fisheries Act, stop Canadian fishermen from doing that tomorrow by order in council, because fishing in this country is a matter which is solely under the jurisdiction of the federal government. In the United States, however, authority over fisheries rests with the state governments and the federal government is unable to exercise

such control except in Alaska where they have banned offshore fishing. I have told our fishing industry, and I have told the American government, that I will not prevent Canadian fishermen doing this offshore fishing until such time as I know the Americans will ban similar American fishing, because we would be very foolish to stop our fishermen out there while leaving American fishermen to do that damage and get the benefit.
This weekend in Seattle the fishing authorities of the federal government of the United States, the states of Washington, Oregon and California, and our own deputy minister of fisheries are meeting with the regard to this problem which we all consider as an acute one, and we hope that the American state and federal governments will be able to come forward with a plan which will stop American fishermen from engaging in this offshore fishing. The day they come forward with that plan is the day we shall stop Canadian fishing of that type.
The hon. member for Fraser Valley raised once again this matter of the closure on the fishing for chum and pink salmon above Pattullo bridge. As I told the hon. member for New Westminster (Mr. Hahn) a little earlier, it is true I made that closure, but I did so upon the advice of the scientists and advisers of my department who have done such a good job in managing the fisheries. I have explained this closure at great length to the fishermen's union and to the industry at various times. Happily, the responsibility for the closure so far as pink salmon are concerned will now be vested in the International Pacific Salmon Commission, and I think you will find the commission will be far stricter about that closure than I ever attempted to be.
The hon. member for Kootenay West (Mr. Herridge) began very disarmingly and then mentioned that occasionally I made barbed remarks though not on fisheries questions. The hon. member might recall that if my remarks are barbed they are only so when the questions directed to me are barbed. I learned long ago in life that when people are nice to you it is easy to be nice to them, whereas when they are rough with you there is a temptation to be rough with them.
Certainly, everybody has been very kind now in this fisheries debate, so there was no occasion to be barbed. I am flattered that the hon. member is going to send a record of this debate to the high school children in his riding. I think it is very important that our children in British Columbia should learn more and more about this very unusual resource we have in the salmon industry-this 82715-112
Fisheries
very rich resource which, as I said earlier, is going to become more and more valuable as the years roll by. And they should appreciate, above all, that having such resources we should be intelligent enough to work out a policy by means of which we can have both fish and power. In view of the work already done by this International Pacific Salmon Commission in extending the sockeye fishery, we know they are going to do an equally good job in rebuilding the pink salmon industry, and if they can do that I believe it will be all the greater pity if a shortsighted policy because of the present demand for power should result in the end of this great resource.
Mr. Speaker, it is the intention to refer this bill now to the standing committee on fisheries at which I will have the director of the Pacific Salmon Commission and the other officers of my department available for questioning.


Howard Charles Green: Before the minister concludes, may I ask him about the question of territorial waters?


James Sinclair: I am sorry, I did not pick up my last page. The hon. member for Van-couver-Quadra (Mr. Green) asked a very pertinent question about territorial waters. In both the bill and the protocol "waters" is defined as the waters of the high seas between the 48th and 49th parallel extending out to the 175th meridian, then the territorial waters of Canada and the United States and then, of course, the waters of the Fraser river itself. There is no definition given of territorial waters anywhere in the bill. That is given in other acts, both of congress and our parliament.
Whatever the territorial waters are, whether they are three miles out as they are now or 12 miles out as we hope they will be, this convention will apply. As far as the actual operation of the act is concerned, the definition of territorial waters is not too important because no matter where the catch is made on the high seas, in Canadian territorial waters or American territorial waters, it is going to be divided fifty-fifty between the Americans and the Canadians.
The hon. member was quite right in saying that the Prime Minister (Mr. St. Laurent) had said that he had accepted the study made by the special law committee set up under Dean Curtis of U.B.C. and would recommend at the United Nations that our territorial waters be extended out to 12 miles to give us better control over the fisheries resources that we have been conserving. We did advocate that at the United Nations. We encountered very strong opposition from both the United Kingdom and the United States,

Fisheries
the two countries which are our closest triends, the two countries with which we have the greatest trade, even in fisheries products.
Both these countries felt very keenly that this move was not in their interests. That may be but I certainly know that the extension of the territorial waters of Canada from three miles from our shore to 12 miles from our shore on the base lines from headland to headland, which was approved by the international court of justice in the case of Norway against Britain, is something that our whole fishing industry wants.
As far as this legislation is concerned, no matter what the territorial limits are, three miles or 12 miles, the fish caught in that area are going to be divided equally between American and Canadian fishermen.


Howard Charles Green: May I ask the minister a question? Would it not be possible for Canada to declare that she is adopting a 12 mile limit and then have a case taken to the international court of justice? If we got a favourable decision there, would we not have established definitely that our territorial waters extend out 12 miles?


James Sinclair: I am not the best diplomat in the world. I have just been through these negotiations, if you want to call them that, with the Americans by which we got this treaty for the fish, so I am not averse to strong action provided you can see you have reasonable hope of success. But I am afraid that if we arbitrarily extended our limits to 12 miles we would find immediate retaliatory action taken against us by our principal customer, a customer which takes between 60 per cent and 70 per cent of our exports of fish. Fish is not like wheat. You cannot store fish on a farm or in a fisherman's house for two or three years or in elevators. When you have got it you have got to sell it.
It might well be we could take such a case to the international court and wait two or three years while the lawyers argued about it and we might win a great legal victory, but in that period we would have fish coming out of our noses-I was going to say coming out of our ears but coming out of our noses more than our ears-and a completely ruined fishing industry in Canada. The Prime Minister stated, I think, that our position is that there is no use in having an extension of territorial waters unless it is going to be accepted by the nations who claim historic rights, and more so on the east coast than on the west coast.


Howard Charles Green: How far out do the Americans claim on the west coast?


James Sinclair: Just three miles. The Americans have claimed title to the resources below the floor of the ocean out to the edge of the continental shelf. That is the Truman doctrine.


Howard Charles Green: That is several hundred miles.


James Sinclair: Sometimes the continental shelf is a mile off the shore. In the case of Newfoundland the continental shelf is 200 miles off the shore. That is what makes the continental shelf a very difficult boundary to accept in the fishing world because fishermen cannot tell where the continental shelf is below them. That is why a regular measured territorial zone from fixed base lines is much more understandable and enforceable from the point of view of the fishing industry.
We must remember that on the east coast, before there was any white settlement in Canada, there were European nations fishing for cod on the banks off Newfoundland and Nova Scotia. These nations, of course, assert that they have historic rights in these fisheries. I think that the majority of fishing nations of the world today believe firmly in the extension of territorial waters solely in the interests of conservation. At the conference of fishing nations in Rome two years ago the majority of the 55 nations there were certainly strongly in favour of it.
Among the six great fishing nations there is a pretty even division. Japan, the United States and the United Kingdom are what are called freedom of the seas nations. They want the territorial limits to remain at three miles so as to enable their fishing fleets to come as close to the shores of other nations as possible. Then there are what are called the coastal states, nations with great fisheries off their coasts which they want to conserve for their own nation, and of course they want to extend their territorial waters. These nations include Canada, Norway and Russia, the other three great fishing nations.
But as you get down to the smaller nations you find that they are almost all in favour of extension of territorial waters at least to 12 miles. Some of the South American nations have tried to establish their territorial waters 200 miles out.


George Randolph Pearkes: May I ask one question? When the minister referred to the difficulties which occurred last year over the suggestion by the commission that certain sections of our waters should be closed, he did not give assurance that there are safeguards in the new treaty to prevent the same difficulties arising again. When I spoke this afternoon I asked whether the amendment to article VI provided that safeguard which would prevent the possibility of the commission acting

as they intended to act last year, rather to the disadvantage of Canadian fishermen, by prohibiting fishing in Canadian waters. Now we have removed the provision stating that if prohibition is applied to any one section of waters it must apply to all similar waters.


James Sinclair: I never questioned their
recommendation on the ground of its value to the fishing industry. I questioned it solely on the ground that it was beyond the scope of the treaty which had been approved by parliament and if they wanted a change they would have to come before us and explain why they wanted that change. They will be here when the bill is in committee. I had, of course, a second thought in my mind, that since we were conducting this campaign of fishing in outside Canadian waters for pinks and passing the Americans I certainly did not want to see any other type of fishing stopped in that area.
If the salmon commission can put forward a good reason, and I am sure they will be able to, for being given the right to open and close areas within the convention area in exactly the same fashion as our chief supervisor in Vancouver opens and closes areas over the entire British Columbia coast for the rest of the fisheries, then they should have that right. There is, of course, the safeguard by which an enforcement regulation now must secure the approval of the two governments. Under the earlier convention, once the commission had adopted regulations it was our duty and the duty of the state of Washington to use our enforcement staff to enforce them. We now intend to have concurrent approval by Washington and by ourselves before we do. But when Dr. Royal is before the committee he can pursue that matter further.


The Acting Speaker (Mr. Applewhaite):: Is
it the pleasure of the house to adopt the motion?


Some hon. Members:: Carried.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on marine and fisheries.


Hon. Milton F. Gregg (Minister of Labour) moved: 
Mr. Thomas M. Bell (Saint John-Albert):: Mr. Speaker, as the minister has said, this piece of legislation is merely to revise the rates of compensation payable to disabled seamen and their dependents. It perhaps could be a little bit better expressed by saying that it is merely designed to bring the amounts of compensation up to a level where they would be more in line with the compensation paid by the particular provinces. The legislation was first brought in with respect to this Merchant Seamen Compensation Act in 1946. I took the trouble to


look up the debate which took place at that time, Mr. Speaker. It was just after the war and there was a great deal of interest in our merchant seamen and the part which they played in helping to bring victory. They were getting more sympathy and they were more appreciated at that time. We recognized their effort. I remember reading how the then minister of transport, in introducing this legislation, paid great tribute to them and said that there were hopes for the future for our seamen and for our merchant navy in Canada. We know that those dreams have not been fulfilled for various reasons.
We now have a meagre merchant navy with very few trained seamen still following that line of endeavour. We do not know what our future is or where we are going. But I do say, Mr. Speaker, that the few seamen we do have left on the east and west coasts, and the ones who are affected by this act on the great lakes, certainly deserve the very best we can give them.
Naturally, when we see that the various rates are being increased we know that that is good. These seamen are deserving of that. This amendment will be the second amendment to the original act of 1946. When the bill goes to committee we shall still want to inquire into many aspects of this legislation. For example, we will want to know the number of accidents that have been considered and the number of refusals. There is one particular point I happened to notice in the explanatory note which I feel will need clarification. The explanatory note for subsection 6 of section 30 reads:
Formerly, the board had to decide how long compensation would be paid to an invalid child. The proposed subsection 6 provides that compensation in all cases will be paid to an invalid child until he ceases to be an invalid.
The obvious question there, Mr. Speaker, is who is to determine when the child is no longer an invalid? There is no mention of that in the bill.
There is just one other point I should like to mention into which we might inquire in the committee. I refer to the recent accidents in the piloting service which have been experienced in Halifax and Saint John. The house may recall that there was a serious accident in 1940 in Halifax. A few days ago in Saint John we had a pilot accident which concerned an incoming vessel and our No. 1 pilot boat. There were seven lives lost. The other day in the port of Halifax there was an accident concerning the aircraft carrier and a tugboat which resulted in the loss of two men. This brings forward

Merchant Seamen Compensation Act
the whole problem of pilot pensions which are now administered by their own fund. I understand there is some disagreement as to the future method which should be used. These pilots have a fund that would allow them a pension for dependents through the Department of Transport. Perhaps even more pertinently, Mr. Speaker, we might ask about the other men on these vessels. I think they are excluded from the act in some cases, but we should inquire into their situation and see that their families are being looked after in the way we should look after all our seamen.


Mr. Clarence Gillis (Cape Breton South):: In
view of the fact this bill is going to the committee on industrial relations I am not going to make any detailed analysis of it. I am sure the hon. member for Vancouver-Quadra (Mr. Green) and I will recognize that this bill is a long step forward in respect to seamen's compensation. Over the years he and I were the lone advocates in this house of a lot of things for the merchant seamen. In view of the fact we started with nothing, what we have before us represents a lot of progress in that time in this field.
While I was reading the bill it struck me that where the federal government has jurisdiction in matters of this kind they can bring about a lot of progress in a short time. If this had been a matter of dominion-provincial agreement like the national health insurance, and if we had started in 1946 by going to each province to get agreements about the differences that exist in rates, and tried to bring about uniformity in this kind of legislation, I am afraid we would still be waiting for that agreement. I make that observation because there is a lot of this type of legislation which I feel should be in the hands of a government that can enact it, and a government that has the finances to pay the bill.
Generally speaking, the rates in this bill are better than those obtaining in some of the provinces. It appears to me as though there was an attempt to bring about what would be an average if all the provinces were taken into consideration. So far as I am concerned, I am satisfied with the progress we have made in this type of compensation during the period we have been working upon it. No doubt when we go into committee we will be looking for a lot of information and clarification of the different clauses of the bill.


Mr. C. E. Johnston (Bow River):: I shall not take up too much time of the house in what I have to say on this matter. I do think this
is a step in the right direction, and it is one that is deserving of a good deal of consideration. I know that when the bill does go to the committee there will be a greater opportunity to ask more detailed questions of the minister, but it does seem to me it is a good thing in that it provides compensation for those seamen who are not now protected under provincial legislation. There will be some relationship between what compensation will be paid provincially and what will be paid federally. As other speakers have indicated, it is necessary that the seamen have some proper protection.
This is a step in the right direction, and apart from saying that the legislation is good in principle I think we all should wait until the bill reaches us and then we can have a more detailed study of it at that time.


Mr. Deputy Speaker:: If the minister
speaks now, he will close the debate.


Milton Fowler Gregg: I should like to say a word, Mr. Speaker, and it will only take a moment. The hon. member for Saint John-Albert (Mr. Bell) made a reference to a point about which I should like to add a word or two, particularly out of respect for his own service during the war. It was for me a special pleasure to work with my officials in drafting this legislation because of the fact that, even if they are now much fewer in number than we had hoped for, these seamen have upheld in peacetime the high tradition of service which they established during the war. I am glad on that account that this expression of the appreciation of that service will come into effect, judging by the endorsation the bill has received tonight.
The other point I wanted to mention was that we have given very full consideration to the matter of pilots and pilots' assistants. We have had discussions with the Department of Transport and the Department of Justice and when we go into committee I shall be prepared to deal with the subject. In the meantime, I have been assured that if anything can be done in that regard it can be done under regulation or order in council and it may not be necessary to make any amendments in the present legislation.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on industrial relations.

Walter Edward Harris: Tomorrow we shall take the estimates of the Post Office Department and

Business of the House then the estimates of agriculture should the post office be completed. Monday is, I understand, the fifth private members' day and should, for any reason, government orders be reached we shall take the second reading of the Canadian Farm Loan Act and the second reading of the bill in the name of the Minister
of Northern Affairs and National Resources. On Tuesday, we shall start off with these bills and other legislation which I think will be on the order paper in the meantime from the other place.


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

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

Mr. Houck: What amounts have been made available to each of the provinces of Canada by the federal government to assist cancer research and cancer education?


PUBLIC WORKS
Mr. Smith (Battle River-Camrose): 1.	How much did the federal Department of Public Works pay the Sun Publishing Company of Edmonton, Alberta, for publication of legal notices for the years 1952, 1953, 1954, 1955 and 1956?
2.	In what weekly newspapers published by the Sun Publishing Company did legal notices appear?
3.	How much of the total cost mentioned in question (1) was allocated to each of the weekly newspapers published by the Sun Publishing Company?
4.	How much did the following weekly newspapers receive from the federal Department of Public Works for legal advertising during the year 1956: the Camrose Canadian, the Vegreville Observer, the Wainwright Star Chronicle, the Viking News, the Vermilion Standard?
5.	How much did the Department of Public Works pay the Sun Publishing Company for the legal notices published in the February 1 issue of the Mannville Mirror?
Answer by: Hon. Robert H. Winlers (Minister of Public Works):
Revised Answer to that in Hansard, February 26, 1957, page 1694, in reply to question No. 106.	o
1.	Nil. Payments are made direct to the individual newspapers which carry the notices.
2.	Of the papers listed on the letterhead of the Sun Publishing Company legal notices appeared in the following: Edmonton Sun, the Boyle Beacon, Mannville Mirror, Lac la Biche Herald, Smoky River News and Thor-hild Tribune.
3.	Answered by No. 1.
4.	Camrose Canadian, $41.01; Vegreville Observer, nil; Wainwright Star Chronicle, nil; Viking News, nil; Vermilion Standard, nil.
5.	Nil.


DEFENCE PRODUCTION CONTRACTS, AMHERST, N.S.
Mr. Lusby: What is the aggregate value of all contracts awarded by the Department of Defence Production, during the five-year period from January 1, 1952 to December 31, 1956, to the following companies in the town of Amherst, Nova Scotia: Maritime Pant Mfg. Co. Ltd., Enamel & Heating Products Ltd., Wry-Standard Ltd., Robb Engineering Works Ltd., Canadian Assemblies Ltd.?
Answer by:	Mr. Dickey, Parliamentary
Assistant, for the Minister of Defence
Production:
Maritime Pant Mfg. Co. Ltd.$2,045,874.31
Enamel & Heating Products Ltd.	2,428,387.33
Wry-Standard Ltd	 400,156.45
Robb Engineering Works Ltd. ...	1,279,743.46
Canadian Assemblies Ltd	 79,639.21
Answer by: Hon. Paul Martin (Minister of National Health and Welfare):
Since 1948 when the national health program was established, federal assistance to the provinces under the cancer control grant, in support of a shared program of research, health education, and treatment services, has amounted to $17,570,857 as follows:
Newfoundland	$	365,665
Prince Edward Island	 85,907
Nova Scotia	 693,954
New Brunswick	 864,157
Quebec	 6,604,509
Ontario	 2,661,330
Manitoba	 1,031,528
Saskatchewan	 1,970,705
Alberta	 1,995,744
British Columbia	 1,292,809
Northwest Territories	 4,072
Yukon Territory	 477

It is not possible at this time to separate the cancer research and the cancer education aspects of the provincial cancer program which have been supported as above.


ARMED FORCES
[Stage Direction]
Question No. 163
Mr. Hansell:: 1.	How many troops of the Canadian army, air force, navy, are stationed or on service outside Canada?
2.	In what countries are these troops stationed and how many in each country?
Answer by: Mr. Hellyer, Parliamentary Assistant, for the Minister of National Defence:
1.	14,728 (January 31, 1957)
2.	Belgium	 159
Egypt	 861
France	 3,609
Indo-China	 127
India, Pakistan, Kashmir ....	8
Israel	 8
Italy	 180
Japan	 3
Korea	 34
United Kingdom	 1,009
United States	 436
West Germany	 8,294
Note: Since service attaches accredited to foreign governments are considered to be on the staff of the Canadian embassy or legation in the country concerned, they are not included in the above list.

Questions


TOXIC HAZARD PROTECTION
Mr. Houck: What assistance is being given by the Department of National Health and Welfare to agencies concerned with protecting industrial workers from toxic hazards of materials they are exposed to in their work?
Answer by: Hon. Paul Martin (Minister of National Health and Welfare):
The occupational health division of the department has a highly trained group of physicians, chemists, engineers and physicists who, besides carrying out basic research on the health hazards of industry, on request assist provincial, federal and other agencies by surveying hazards caused by light, noise,
dust, vapours, fumes and gases in factories, mines, and other enterprises.
The most up to date equipment for analysing air samples is available. This includes such advanced equipment as the X-ray diffraction spectrometer, the electron microscope, infra-red and ultra-violet spectrometers and gas chromatography. When the hazard in the work situation has been evaluated, engineering staff recommends corrective measures.
Assistance is now being given toward solving the problem of arsenic occurring in connection with gold mining operations. A survey of fluorspar mines is also being carried on at the request of a province to assess the special hazards due to fluoride dust.

Friday, March 1, 1957