1957-04-04

Hon. George C. Marler (Minister of Transport) moved: the first reading of Bill No. 402 (from the Senate), respecting the Buffalo and Fort Erie Public Bridge Company.
Motion agreed to and bill read the first time.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of National Revenue. In view of the limitations on the functions assigned to the minister under the Canadian Broadcasting Act, will he now tell the house whether he thinks it was appropriate for him to make repeated representations to the corporation regarding its programming without obtaining the authority of parliament to do so?


Hon. J. J. McCann (Minister of National Revenue):: My answer, Mr. Speaker, is yes.


Stanley Howard Knowles: I should like to direct a supplementary question to the Prime Minister. Is the Prime Minister aware of the terms of the act and of the order in council appointing Hon. J. J. McCann, a minister of the crown, to carry out the responsibilities set out in the act? Does he not feel that his responsibilities should be only those that are delegated to the minister by parliament rather than any that are given to him by the government?


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, I am sure the minister who reports to parliament in connection with the C.B.C. has been very careful not to exceed the authority he properly has.


Stanley Howard Knowles: May I ask the minister who reports for the C.B.C. to parliament, but who
is not its administrator, to tell us on whose behalf he made his direct representations to the C.B.C.?


James Joseph McCann: Mr. Speaker, that is a rather hard question to answer. If the hon. member means the individuals on whose behalf, I would have to look over the correspondence and see who made the protests.


Stanley Howard Knowles: I was referring to the portion of the minister's reply yesterday where he referred to direct representations, not those he made as an intermediary.


James Joseph McCann: Mr. Speaker, that was the interpretation of my duties to parliament and to the government.


Stanley Howard Knowles: Mr. Speaker, has the minister under the act and under the order in council any duties to the government with respect to this matter? Has he received any authority from parliament to do what he has done?


Mr. Speaker:: I understand the hon. member for Cartier is rising on a point of order.


Mr. Cresfohl:: I respectfully submit to you, Mr. Speaker, that there is a limit to this abuse of cross-examination, which does not fall within the scope of the question period. I urge Your Honour to arrest this crossexamination, which is completely outside the standing orders of the house.


Stanley Howard Knowles: I rise on a question of privilege. My question of privilege is one on behalf of the members of parliament. There is a statute-


Mr. Speaker:: Does the hon. gentleman not think we should deal first with the point of order? Does he have anything to say with respect to the point of order raised by the hon. member for Cartier?


Stanley Howard Knowles: The only thing I have to say is that the witness has not answered the questions properly.


Mr. Speaker:: Well, if hon. members feel that by the very fact they can steer away from the rules, they have been changed, the point of order raised by the hon. member for Cartier is not a proper one; but if the rules in Beauchesne are to be considered as still in existence, there is a good deal of merit in the point raised by the hon. member for Cartier. I have read these rules before, and no matter how unpleasant it is for me to read them again I shall have to do so. If an hon. member
3058	HOUSE OF
Inquiries of the Ministry puts an oral question, that oral question is governed by the same rules which govern a written question. If the hon. member were to put his oral questions on the order paper, would they pass the clerks at the table? That is the test.
Now, in putting a question a member must confine himself to the narrowest limits:
In asking a question, observations which might lead to debate cannot be regarded as coming within the proper limits of a question.
The purpose of a question is to obtain information and not to supply it to the house.
A question oral or written must not:
multiply, with slight variations, a similar question on the same point.
inquire whether statements made in a newspaper are true.
contain an expression of opinion.
be a speech, however short; nor be of unreasonable length.
raise a matter of policy too large to be dealt with in the limits of an answer to a question.
ask the government's opinion on matters of policy.
These are only some of the paragraphs which are found in citation 295.
The current session is one that all hon. members know may be cut short by dissolution. It is because I have taken that into account that I have allowed some latitude at question time.
The obvious remark I should make at this moment-perhaps not particularly at this moment but with regard to many questions that are being asked at this time-would be that some of these questions should wait until the estimates of the department of the minister concerned are before the committee of supply. There may be a chance that we will not reach these various departments in supply, and even if we reach them it may be that we will not have time to deal with any of the matters that will have to be dealt with at that time.
The hon. member for Winnipeg North Centre I think will agree with me that with respect to the latitude that has been given he would be quite entitled to proceed today in the same manner that has been followed at previous sittings in the course of this session and even prior to this session, but in strict accordance with the rules I think there are certain limitations which an hon. member should impose upon himself in pursuing a point at question time.


Stanley Howard Knowles: Mr. Speaker, I accept your ruling but I rise on a question of privilege. As a member of parliament I would point out that parliament by a statute has given to the Canadian Broadcasting Corporation the control of the character of any and all programs broadcast by the corporation on its own or any private stations. In that same statute of this parliament there is provision for a minister


of the crown to be the person through whom the corporation reports to parliament. Parliament has not delegated any other authority over the corporation to a minister; and the point of my question of privilege is that the rights of parliament have been usurped by the minister by virtue of what he told us yesterday, in that he has made repeated representations to the Canadian Broadcasting Corporation.


Mr. Speaker:: That is not a question of privilege. We are now at question time. The hon. member has asked a question and has received a reply. It may be that the minister has an interpretation as to his own duties which is different from that of the hon. member for Winnipeg North Centre.


Stanley Howard Knowles: But there is a statute-


Mr. Speaker:: The hon. member is interpreting the statute in his own way, and he claims that according to his own interpretation the minister does not interpret his duties properly. The minister has indicated by his answer that he has a different understanding of the statute. It seems to me that this is not a matter for debate at this time, and it certainly is not the basis for a question of privilege.



INQUIRY AS TO ASSIGNMENT OF PERSONNEL TO ACCOMPANY MINISTERS ON TOURS

[Stage Direction]
On the orders of the day:
['No, Mr. Speaker; not at the moment.']
Mr. W. B. Nesbitt (Oxford):: I should like to direct a question to the Minister of National Revenue. Did the Canadian Broadcasting Corporation assign special television personnel and equipment to accompany the Minister of National Health and Welfare and the Minister of Mines and Technical Surveys on their recent trips abroad?


James Joseph McCann: Mr. Speaker, I will take the question as notice.



[Stage Direction]
On the orders of the day:
Mr. Alistair Stewart (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Has the minister any comment to make on the tragic event which took place today in Cairo? I refer to the death of Mr. E. H. Norman.


Hon. L. B. Pearson (Secretary of State for External Affairs):: 
Mr. J. G. Diefenbaker (Leader of Ihe Opposition):: Mr. Speaker, may I be permitted to say a word. Wholly desirable as is the objective of preserving freedom, that freedom will not be preserved by adopting the techniques and instruments of communism.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I think all of us in this house cannot but feel a sense of deep sorrow that this man's good name was filched from him by indiscriminately branding him as an enemy, trying him by suspicion and, in the public mind to a great extent, convicting him by innuendo. I think every member of this house will agree that the terrible results in the lives of those subjected to such indiscriminate attacks as were made on this man cannot but lead each of us to determine that we shall not ourselves engage in words which can only destroy the heart and soul of those attacked.
Inquiries of the Ministry while it may be unusual to suggest this, and I doubt that it has ever been done before, I suggest through you, sir, to the Minister of Public Works that parliament show its feelings by having the flag on this building flown at half-mast for one who served well and died in the service of his country.


Alistair McLeod Stewart: Mr. Speaker, may I have the indulgence of this house to say something on this matter. It is obvious that murder has spoken with most miraculous tongue. I believe Mr. Norman was murdered by slander. I believe he was killed as surely as if somebody had put a knife into his back; and those who are responsible unhappily are above the law.
It was with the greatest sense of shock, I am sure, that all of us heard this morning of the death of Mr. Norman; and we in this party certainly associate ourselves with what has been said by the Secretary of State for External Affairs and the Leader of the Opposition.
We regret Mr. Norman's death profoundly, but here surely there is once again a lesson for all of us. I hope very much that when the minister does convey his regrets to Mr. Norman's widow he will include with his expression of sympathy the sympathy of the whole house.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, I do not know that there is anything we can add to what has already been said, except perhaps to say that once again we are face to face with the fact that men in high places have terrific responsibilities, responsibilities which may be far beyond the capacity of the public mind to conceive. Some of us are conscious of the things that can happen under the stress and strain of responsibility, and of what might happen when those responsibilities bring nervous breakdowns.
I am sure we join with others who have spoken in expressing our sympathy with Mr. Norman's widow and his family.


Louis Stephen St-Laurent: Mr. Speaker, on behalf of the whole civil service of Canada I wish to express grateful thanks to hon. members for this recognition of the loyal and devoted service which is rendered by those who are devoting their lives to the administration of the public affairs of their fellow citizens.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I would like to direct a question to the Secretary of State for External Affairs. Will the widow and the family of Mr. Norman be properly taken care of?
This man was a devoted public servant; he is a victim of witch-hunting proclivities; and


Lester Bowles Pearson: Yes, Mr. Speaker; we will do the best we can.

Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Wallace Bickford (Wally) Nesbitt: Mr. Speaker, yesterday I directed a question to the Minister of National Defence or in his absence to his parliamentary assistant. Is the minister in a position to be able to give to the house a statement with regard to the question that was asked yesterday?


Hon. R. O. Campney (Minister of National Defence):: No, Mr. Speaker; not at the moment.



IMMIGRATION


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I would like to direct a question to the Minister of Citizenship and Immigration. Having regard to the degree to which he was subject to misquotation by the press at the coast, will he say whether in view of the decision of the supreme court judge, Mr. Justice Sullivan, allowing Mr. Hanna to remain in Canada, Mr. Hanna might be freed from concern about this aspect of his future by a declaration now on the part of the minister that he will be permitted to stay in Canada?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: I think, perhaps, the hon. gentleman has not read the law recently. I have no power to allow Mr. Hanna to stay permanently in Canada, and neither has any other individual. Mr. Hanna cannot comply with the law as it now stands, and the only way to admit him for permanent residence would be for me to recommend to my colleagues that an order in council be passed making a special law for him.
I stated at the Pacific coast that I thought the proper way to proceed in this case at the present time, in view of the fact that Mr. Hanna was employed and was doing no one any harm, was to allow him to stay in Canada without any action being taken for the time being about his status; and I expressed the hope that he would get on well enough so that, in a few months, I would feel justified in recommending to my colleagues that a special law be made to deal with his case. However, I do not think that would be a proper thing to do now.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I have just returned from British

Columbia, and in consequence I am inspired to direct a question to the Minister of Transport.
Does the minister know that a good number of the employees of his department in British Columbia are in arrears for periods of up to seven months in respect of overtime pay, involving sums amounting in certain cases to over $500; and, in addition, that some of these men are owed up to $150 in expenses, in consequence of which some of the employees are unable to pay their grocery bills and have had their credit cut off?


Mr. Speaker:: Is this not a good example of a question that is supplying information instead of asking for it?


Herbert Wilfred Herridge: Mr. Speaker, I had to raise the question in that way in order to inform the minister. Is the minister aware of this position, and what action does he intend to take?


George Carlyle Marler: All I can say is that I will have to make inquiries, because these are not matters that come to my personal attention.



ORENDA ENGINES LIMITED


[Stage Direction]
On the orders of the day:
Mr. John B. Hamilton (York West):: Mr. Speaker, I should like to direct a question to the Minister of Defence Production in view of the announced lay-off of 225 employees at Orenda Engines Limited. Has the minister any information as to whether this will be the total number laid off at the present time, or can he get that information for the house?


Right Hon. C. D. Howe (Minister of Defence Production):: Mr. Speaker, I saw the official announcement of the Orenda company as, I assume, my hon. friend did. The announcement said that owing to the longer life of the engines between overhauls, work was being reduced owing to the reduction in the volume of maintenance work and as a result 225 members of the staff were laid off. I know of no other reason for laying off men. I assume that the statement put out by the company is correct.



REQUEST FOR ANSWER TO QUESTION ON ORDER PAPER

[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, may I renew my request to the Minister of Citizenship and Immigration that question 170 on the order paper, of which notice was

handed in on February 18, be answered as soon as possible and, in any event, before the end of the session?


John Whitney Pickersgill: Mr. Speaker, I am afraid I can make no promises to the hon. gentleman. His question obviously involves an immense amount of research. While that research is proceeding, I have felt that the most important duty of my department at the present time was to deal with the current flow of immigrants.



PRIVILEGE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I rise on a question of privilege. My question of privilege relates to the correctness of the records of this house. I have in my hand a copy of Votes and Proceedings for yesterday, Wednesday, 3rd April, 1957, which, as is usually the case, is published over Your Honour's signature. I call your attention to the entries on page 376. Part way down the page there appears this entry:
More than five members having risen and asked for a division, Mr. Speaker gave the order to call in the members.
Then there follows the statement which Your Honour made after the members were called in and which consisted of reading certain citations from Campion and May.
May I make it clear, Mr. Speaker, that in this question of privilege I am not arguing about what Your Honour did yesterday. Rather it is my contention that, after the entry as to what Your Honour said at that point, there should be an entry concerning the point of order that was raised by the Leader of the Opposition. If you will refer to page 3010 of Hansard for yesterday you will note that at that point the Leader of the Opposition raised a point of order as to whether it was proper for Your Honour to do what you did after the members had been called in. Your Honour recognized the sincerity of the point of order but contended that, unless you were overridden by the house, you did not agree with it. A moment ago Your Honour had occasion to indicate that Beauchesne was still in effect. As you know, citation 87 in Beauchesne's third edition states as follows:
87. If the Speaker has put the question and has declared that the yeas or the nays had it, it is too late to continue the debate.
The point is that the official record, namely Votes and Proceedings, would seem to indicate that something was done which in
Inquiries of the Ministry my views was in violation of that citation but there is no record of objection having been taken to it.
May I make it as clear as I can that at this point I am not arguing about what Your Honour did yesterday. However, I feel that for the record to be complete there should be after Your Honour's quotations from Campion and May an entry to the effect that a point of order was raised by the Leader of the Opposition and that Your Honour ruled against the point of order.


Mr. Speaker:: The matter the hon. gentleman brings forward today is one which involves the latitude which is given or the discretion which is being exercised, in most cases without my knowledge, by the Clerk at the table.


Stanley Howard Knowles: I object to the Clerk being blamed for what is over the Speaker's signature.


Mr. Speaker:: As long ago I believe as the seventeenth century there was a resolution passed in the United Kingdom, and one was passed in Canada in the early days of confederation, to the effect that Votes and Proceedings be printed by order of the house after having first been perused by Mr. Speaker. I should like hon. members to name one Speaker who has ever read the scroll before it was printed the next day. I have not. The Clerk of the House of Commons, like all his predecessors, is a gentleman who is supposed to know his business. He is a gentleman in whom we should have some confidence. I take the full responsibility for whatever appears over my signature. I am not suggesting to the hon. gentleman that if he is right, if there is an omission, I should blame anybody else but myself for it.
This having been said, it is none the less generally known, and I am sure the hon. gentleman knows it, that the Speaker never reads the scroll. At ten o'clock when the house adjourns the scroll goes down to the journals branch under the Clerk's signature, and it is sent to the printer's office. I do not know what appears in Votes and Proceedings until I see it at the same time the hon. gentleman sees it. Notwithstanding, as I said, that a resolution was passed around 1870, I think, that Votes and Proceedings be printed after first having been perused by Mr. Speaker, I have never perused them. I have not done so since November 12, 1953. So far as I can recall I have never heard of any Speaker first reading the scroll before it was printed the next day.
In certain cases we at the table, the clerks and I, are of the opinion that it might be

Excise Tax Act
worth while to keep certain rulings on record for future reference. In consultation we agree that a certain ruling be printed. But it just happens that, in this instance, there was no such consultation. In many instances the clerk at the table has seen fit, under the general discretion which he uses with the tacit support of the Chair-I do not object to what he has done and I think it is useful- to have the citations I have quoted to the house appear in Votes and Proceedings. I think it is useful to have the citations I quoted yesterday in the records of the house.
I feel that there is something in the point the hon. gentleman has raised, though I am not prepared to say I agree wholeheartedly. Since this statement has been made, and as I say I have great confidence in the Clerk just as the hon. gentleman has, no doubt-


Stanley Howard Knowles: Hear, hear.


Mr. Speaker:: -we will want to discuss it together and see to what extent we can meet the hon. gentleman's desire.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. Ray Thomas (Weiaskiwin):: I should like to direct a question to the Minister of Northern Affairs and National Resources. Has any decision been made by the minister or his department in connection with allowing youth organizations, such as the boy scouts, special rates for travel through the national parks? I believe the question was brought up last year.


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: I believe so, sir, but I shall have to look into it.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Robinson (Simcoe East) in the chair.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Tax Act and to provide, among other things:
1.	That the sales tax on the following goods be repealed:
(a)	certain building materials which are in addition to those already exempted, viz: chimney caps; circulating pumps for use in forced hot water heating systems for the heating of buildings; door and window screens; precast concrete shapes when purchased by municipalities for bridges in public highway systems; septic tanks:	structural steel
when purchased by municipalities for bridges in public highway systems;
(b)	desks and chairs specially designed for use in class rooms when sold to educational institutions;
(c)	printing produced by school or university when for its own use and not for resale;

(d)	gasoline powered self-propelled trucks, mounted on rubber tired wheels, for off-highway use exclusively at mines or quarries, and complete parts thereof;
(e)	seventy-five per cent of the sale price if manufactured in Canada, or seventy-five per cent of the duty paid value if imported, of trailers for use as homes;
(f)	potted, flowering or bedding plants, dormant flower bulbs and cut foliage;
(g)	geophysical surveying precision instruments and equipment as enumerated in customs tariff item 431h;
(h)	goods enumerated in customs tariff item 695d;
(i)	tanks for collecting milk, not including chassis or cabs;
(j)	railway ties;
(k)	certain foodstuffs which are in addition to those already exempted, viz: baking powder; baking soda; bases or concentrates for making beverages other than soft drink beverages; cocoa; cocoanut; dessert powders; edible gelatin; flavouring extract; gravies and meat extracts; meat tenderizers; pickles, relishes, catsups, sauces, olives, horseradish, mustard, and similar goods; pie fillings; prune juice, grape juice; salad oils, mayonnaise and salad dressings; sandwich spreads; spices, condiments and seasoning; tea, coffee and substitutes therefor; vinegar;
2.	That equipment specially designed for use directly in road making, road cleaning or fire fighting, but not including automobiles or motor trucks, when sold to or imported by municipalities for their own use and not for resale, be exempted from the sales tax when the price is in excess of five hundred dollars ($500) per unit, instead of the present exemption for units priced in excess of one thousand dollars ($1,000) per unit.
3.	That the excise tax on the following goods be repealed:
(a)	soft drinks and imitations thereof;
(b)	carbonic acid gas for aerating non-alcoholic beverages;
(c)	candy, chocolate, chewing gum and confectionery;
(d)	motor cycles and all other two- or threewheeled motor driven vehicles including motors for attachment to bicycles;
(e)	ash trays and certain smokers' accessories, not to include tobacco pipes, cigar and cigarette holders and cigarette rolling devices;
(f)	fountain pens; bail-point pens, ink pencils; propelling pencils, desk sets and. all other desk accessories;
(g)	gold-plated or silver-plated ware for the preparation or serving of food or drink;
(h)	articles of cut glassware, crystal glassware, cut or not, etched glassware, or metal decorated glassware;
(i)	articles of china, porcelain, earthenware, marble, stoneware, or other pottery ware;
(j)	Canadian raw leaf tobacco.
4.	That any enactment founded upon this resolution be deemed to have come into force on the 15th day of March, 1957.
Mr. Macdonnell:: Mr. Chairman, I thought
when we adjourned last night there were certain questions before the parliamentary assistant which I hoped he would answer when the committee resumed this morning. I had asked some, and I think perhaps other people had also.


Mr. Benidickson:: I thought they had been
answered. Has my hon. friend something specific in mind he feels was not covered?


James MacKerras Macdonnell: I was out of the house
for a moment or two, but so far as I know the parliamentary assistant made no answer to the two particular questions I asked him about the consideration of the report of the sales tax committee. One question related to the very large number of discretions presently held by the minister, and the other referred to the question of appeals. What I did ask the parliamentary assistant was to give us, if he would, some indication of what the thinking of the department was on the question of this very important report. The report had been asked for by the minister, and as I said last evening the minister's reference to the report at page 2226 of Hansard was a virtual brush-off of it. I asked the parliamentary assistant if he could make comments on the attitude toward the report, and particularly on the two points I specifically mentioned.


William Moore Benidickson: I did say that since this report has come forward officials of the Department of National Revenue, the Department of Finance and the Department of Justice have been working in a most positive way on the details of the recommendations that are involved. I recall that prior to the setting up of the committee the tax foundation, with which my hon. friend is familiar, put out a study on the sales tax, and it is dated November, 1955. I was reading it this morning and I note that they make this comment:
The important findings of the study are that there are two basic weaknesses in the taxing statute and that statutory amendment in respect of these offers hope of substantial improvement in terms of certainty, simplicity, equity and cost of compliance and collection. One of these weaknesses
has to do with the determination of the tax base_
the taxable "sale price"-and the other with the exemption of certain building materials and of equipment and apparatus used directly in the process of manufacture or production.
Then they emphasize this by putting the following sentence in italics.


James MacKerras Macdonnell: What document is the parliamentary assistant reading from?


William Moore Benidickson: I said this was a memo put out by the tax foundation-


James MacKerras Macdonnell: Dated when?


William Moore Benidickson: -analysing the federal sales tax. It is a monthly bulletin dated February, 1955. I am just mentioning what in their view were two of the most serious matters that would have to be considered in any review of the sales tax statute. To emphasize it they put the last sentence in the paragraph in italics, and it reads as follows:
That these two general and basic weaknesses exist is accepted on all sides.
Excise Tax Act
There are many recommendations in this very worth-while report; some have been referred to by my hon. friend. Most of the recommendations are tied in with a substantial overhaul of the statute.


James MacKerras Macdonnell: Will the parliamentary assistant permit a question? Is he bearing in mind that he is referring to a document that is dated a good many months prior to the report I have here, which is dated January 12, 1956?


William Moore Benidickson: I quite recognize that, Mr. Chairman, but my hon. friend will also recognize the value of any comment by the tax foundation. May I say that in their view these two particular problems stand out. I simply wish to say it happens that within the past year, since this report has come from the sales tax committee, both these matters that the tax foundation thought were preeminent in requiring attention have received very careful attention.
The matter of the tax base was referred to by the minister in his budget speech. The matter of tidying up certain exemptions in building materials, and so on, was dealt with last year in the Excise Tax Act amendments. Many of the items that were added last year to schedule III of the act were items that were referred to by the committee. The other recommendations, as I say, generally are so interlocked that a very substantial amendment to the statute would be necessary to implement them.
I can assure my hon. friend that this is receiving the most careful and positive attention of the officials of the various departments to which I have referred, revenue, finance and justice. Some of the recommendations have already been dealt with.


James MacKerras Macdonnell: I do not propose to deal with this matter further, if the parliamentary assistant could just deal with the two matters I raised, and which seem to me to be of importance; one, the question of multitudinous discretion of the minister and, two, the question of appeal. If he can say that these two things are among those that are being seriously considered now I will not press the matter for the moment.


William Moore Benidickson: Very definitely.


The Chairman:: Shall the resolution carry?


James MacKerras Macdonnell: No. My understanding is that we have taken this item by item. When the minister says "the resolution" I presume he means the whole resolution headed "Excise Tax Act".


James Joseph McCann: No; No. 1.

Excise Tax Act


William Moore Benidickson: We have been jumping around up to now, but I think it has been our practice in the past when our general discussion concludes to call briefly the subparagraphs. It is one resolution, but I think the Chairman usually calls the individual paragraphs.


William Alfred Robinson: Is it agreeable to the committee that I call the subparagraphs for purposes of the discussion?


Mr. Leboe:: Will the parliamentary assistant deal with the question I referred to last night regarding the word "finance" in the act?


William Moore Benidickson: Mr. Chairman, that is associated with and part of the general review of the statute that we have just been discussing. It was referred to in the report of the committee, and certainly would be one of the principles involved in an overhaul of the statute.


William Alfred Robinson: I now take it that it is agreeable to the committee that I call the subparagraphs for purposes of discussion: 1(a).


John Borden Hamilton: On 1 (a), would the parliamentary assistant inform us what the loss of revenue will be to the treasury covering the two items, "Precast concrete shapes, when purchased by municipalities, for bridges in public highway systems"; and "Structural steel when purchased by municipalities for bridges in public highway systems". What will be the loss to the treasury because of this exemption?


William Moore Benidickson: The estimate that has been given to me as a result of some study on the part of the officials is roughly about $2 million.
Mr. Pallet!: Mr. Chairman, paragraph 1 (a) begins as follows:
That the sales tax on the following goods be repealed.
I welcome the repeal of any tax. The only thing of a general nature that might be said is that with the exorbitant surplus the government have in hand at the present time they might well have taken the repeal much farther than they have. There are many items which have been omitted from this list and which are significant by their omission.
One major commodity I refer to is the automobile. The tax was originally put on as a sort of luxury tax. Apparently by this government's omission to include the sales tax on automobiles in this list they seem to have the opinion that the automobile is a luxury. Perhaps nothing can be done now about this matter, but I certainly think any

government which is in power at the time should give it very serious consideration on some early future occasion.
With respect to the items that are enumerated, I was very seriously disturbed to hear the parliamentary assistant say last night that foliage did not include cut flowers.


William Alfred Robinson: Order. I wonder whether the hon. member is not under a misapprehension. We are now discussing 1 (a). It will be noticed that the question which the hon. member is now raising has to do with paragraph 1 (f). The committee has agreed to discuss these things paragraph by paragraph.
Mr. Pallet!: Very well, Mr. Chairman; I shall wait.


William Alfred Robinson: Is 1 (a) completed?


John Borden Hamilton: Before we go on, Mr. Chairman, is the parliamentary assistant in a position to inform the committee as to what will be the total amount of exemptions that the municipalities can now take advantage of after this particular act is passed?


James Joseph McCann: Do you mean in dollars?


John Borden Hamilton: We are having a continuing extension of this type of exemption. Have we a calculation as to what that total would be at the present time?


William Moore Benidickson: Is my hon. friend referring to sales tax exemptions that are for the benefit of municipalities as proposed in the resolutions, or is he referring to some calculation of the over-all value of the cumulative exemptions that have been enacted to date?


John Borden Hamilton: I am thinking now of the over-all cumulative exemptions. We already have an exemption similar to what is contained in item 2. On the basis of units in excess of $1,000 what is the cumulative total now that has been exempted for the municipalities on their purchases?


William Moore Benidickson: I am afraid, Mr. Chairman, that I cannot pick up such a figure. My hon. friend will realize that some of these matters are interlocked, in that sometimes municipalities operate hospitals and so on, and hospitals have an exemption under a different section of the schedule. I think it would require a special return to give the total value of the claims for exemptions that have been advanced under the municipal exemptions for equipment of an expensive nature.


John Borden Hamilton: At this stage could the parliamentary assistant inform us what would be the total loss of revenue to the department if all municipal purchases

were exempted, and if all purchases on behalf of boards of education were exempted?


William Moore Benidickson: I have not that information with me. It would again require some form of canvass of all those units as purchasers to find out what their expenditures have been on taxable and non-taxable items. It may be that the Department of Trade and Commerce through its bureau of statistics has some records of municipal spending, but I rather doubt it. We have not got it in the revenue department.


John Borden Hamilton: Mr. Chairman, this is what I would term a hodge-podge method of working out exemptions for municipalities and boards of education. It may be that the exemptions we are getting now are close to the total that might be exempted if the municipalities or boards of education were brought under a sales tax licence procedure.
I think when the department come here they should be in a position to inform us just how much might be lost in revenue if such a procedure were inaugurated. This is a serious matter, because we are all concerned with the position of the municipalities. Perhaps it might be indicated today to these experts who look after these affairs that we are going to expect very good answers from this time forward in connection with this type of legislation.


Mr. Hahn:: Mr. Chairman, I wonder if the parliamentary assistant could define for me what would be the position of a municipality with respect to purchasing material such as structural steel in a case where the province shares with the municipality on a 50-50 basis the cost of building a road, when a bridge for which the steel was purchased happens to be located in that section?


William Moore Benidickson: Well, the purchase is exempt now if made by a provincial government. The provinces in their sales taxes do not assess the federal government on its purchases, and vice versa. From now on, of course, the municipality too will be exempt. Probably in the other instance the purchase may very well have been on provincial government account and would not have been subject to tax.


William Alfred Robinson: Item 1 (a) completed'
Item 1 (b)?


John Borden Hamilton: Mr. Chairman, in connection with item 1 (b) would the parliamentary assistant inform us what would be the total loss of revenue, estimated by his experts in connection with this exemption.
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William Moore Benidickson: Our calculation for
item 1 (b) for desks and chairs for educational institutions is about half a million dollars.


Mr. Fraser (Peterborough):: Mr. Chairman, are blackboards included, or are they exempt at the present time?


William Moore Benidickson: There seems to be some difficulty there in that they are not specifically exempted, but they might very well have been part of the construction of the school. In that way, under the exemption that is provided for most building materials, I have every belief that they usually escape the tax.


Gordon Knapman Fraser: The reason I asked that question is that I know of a school that had to replace its blackboards. They were quite costly, and I was wondering if there was any chance of having the tax taken off.


Clarence Decatur Howe: Mr. Chairman, I was just wondering how desks and chairs specially designed for use in classrooms were defined in item 1 (b). In most high schools today there are laboratories, utility rooms, musjc rooms and even cafeterias which are used as classrooms. Does this mean that the exemption will be given only for the rooms that are designated as straight classrooms, or will it apply to all other types of rooms in high schools that are presently being used as classrooms but designated by some other description?


William Moore Benidickson: I am informed that
generally in matters of this kind the interpretation is reasonably generous, but one would have to look at the nature of the room and the purpose to which the room was usually put. I would think probably the chairs in a lounge room would be subject to tax. I imagine if there was an auditorium chiefly for entertainment purposes chairs there might not escape the tax because they would not be regarded as specially designed for a classroom.


Clarence Decatur Howe: What I am getting at is that practically all these rooms in most high schools are being used as classrooms. Even cafeterias are used as classrooms in many schools. Would the item include the tables and chairs in a cafeteria and the experimental desks in the laboratories, and things like that?


William Moore Benidickson: Certainly the desks in the laboratories. I think with respect to the chairs in the cafeteria one would have to look at the chief purpose for which that particular room was being used.
Mr. Pallet!: Mr. Chairman, on this point the parliamentary assistant's answers seem

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to indicate the general attitude of this government with respect to educational matters. They make a show of giving an exemption and then become niggardly about it. If that is the interpretation which is being put on this section then I suggest it is not going to cost the treasury anything approaching the figure suggested by the parliamentary assistant. Because of the very interpretation put on the exemptions it is going to cost a great deal less than he has suggested. I believe it is high time this government realized the situation confronting education and took some constructive steps to assist.


Daniel (Dan) McIvor: Hear, hear.


Mr. Palleii:: I am certainly glad to hear the hon. member for Fort William agree with me and to know that there is at least some support. If he would only stand up and be counted we would certainly welcome it.
It is high time this government took some constructive steps within their own limits to help in the field of education. The future of this country depends on it. It is not going to take very much out of their own pockets. They have much money in the coffers which they have taken from the very taxpayers who are supporting the educational institutions. I was dismayed to hear the parliamentary assistant say they were giving this section the narrowest interpretation rather than the very widest. This has disturbed me as I am sure it has disturbed many hon. members in this house.


William Moore Benidickson: I said it was normally a generous interpretation.


John Cameron Pallett: But you are giving it a very narrow interpretation.


William Moore Benidickson: You were trying to quote me, or paraphrasing my remarks. That may be your view, not mine.


John Cameron Pallett: You specifically referred to the chairs in an auditorium which may or may not come under the provision. If a school has an auditorium it seems illogical that the chairs should not come under the section. Anything that is purchased for the school building should come within the scope of that section, and should not depend on the interpretation of a minister or a departmental official.
After all the school boards of this country are made up of very responsible people and they are certainly very conscious of not wasting the taxpayers' money.
I suggest that anything that is in a building used as an educational institution should be granted sales tax exemption and that there would be very little administrative difficulty
[Mr. Palfett.l
involved. It is certainly a lot more economical to administer in that way than to send out someone to see whether a chair is in an auditorium or somewhere else.


An hon. Member:: They fold up, you know.


John Cameron Pallett: If this indicates the government attitude to this particular matter then the day of reckoning, I think, will probably soon be at hand.


Frederick George Hahn: This indicates that it must be
a chair especially designed for use in classrooms. The chairs used in cafeterias are not especially designed for use in classrooms; they are designed for use in cafeterias, or just general purpose chairs. The interpretation of course may be a matter of determination by any inspector as to whatever category he wishes to place them in.
I would like to say, along the lines of the hon. gentleman who just spoke, that further consideration should be given to this matter in order to get some more specific ruling. By "more specific" I would say the whole thing should be generalized to cover all materials used in the construction or administration of schools, and that such materials ought to be exempt from tax. The fact is, and I say this as one who has taught in schools for quite a number of years, that we find it necessary and we have found it necessary in the past to use our auditoriums for gymnasium purposes and other classroom meetings in addition to general assembly. Auditoriums are, of course, also used for dances or other community enterprises when the school can make them available for such purposes.
Now, who is going to determine what purpose should be set out in the regulations? The parliamentary assistant, I think, should indicate to the house at this time whether, if the school board indicates that such a room has to be used for school room purposes, that will be sufficient to take advantage of the regulations or the change in the act or both.


John Borden Hamilton: Mr. Chairman, on the same point may I say this. Even if the department is not prepared to go as far as was suggested by the hon. member for New Westminster in dealing with all purchases by schools, surely there could be taken into consideration a change in the wording to read, "Desks and chairs sold to educational institutions for their own use."
It seems to me there is no reason why we should look with particular suspicion on purchases by boards of education. They are not going to go into the business of buying these chairs for resale to someone else; and obviously if it is a chair or desk required for an auditorium or a cafeteria which is involved

it is surely the intention of the government that such articles should be exempt. If that is their intention I am sure this wording could be changed to take care of the matter.


Daniel (Dan) McIvor: Mr. Chairman, my hon. friend is usually very sensible and reasonable, but when I read this item 1(b) referring to desks and chairs especially designed for use in classrooms I cannot understand why he would want chairs in an auditorium, which is often used for public meetings for which the school gets a fee, as well as for plays and meetings held therein, to be exempted.


Clarence Decatur Howe: In my estimation, Mr. Chairman, this is just an indication that this government does not realize the critical situation which exists in education today. As the hon. member for Peel said, we have some very responsible men on the school boards, and they find they have to utilize practically every square inch in the schools. The auditoriums sometimes also have to be used for classroom purposes because there is not enough room in the school. All over this country the same thing is happening, and there are classes being held in churches and other buildings. Therefore why should there be a special indication here that this exemption only applies to desks and chairs especially designed for classrooms?
I believe all these purchases should be exempted, because we just have to look into our municipal affairs a little bit to find how difficult is the work of our school boards in providing proper educational facilities, and how little money they sometimes have to work with. If this exemption were made more general it would certainly relieve some of the pressure on our school boards. As the hon. member for Peel said, the relief of school boards from paying sales tax on any of their purchases of equipment is most desirable.


William Moore Benidickson: Just on this point, Mr. Chairman, may I say I would expect that members of the opposition would minimize the administrative difficulties and the cost of widespread applications for exemptions for this, that and the other thing. Possibly my hon. friend will be more convinced if he will consider the fact that because of the difficulty of doing a lot of paper work on exemptions on particular items, in all the purchases by the federal government the sales tax is paid rather than carry on correspondence back and forth with the suppliers. As far as I know the provinces which impose sales tax-and there are quite a number of them these days- with the exception of the province of Quebec, impose that sales tax on their own departments rather than involve themselves with a great deal of paper work on refunds.
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As far as I know, and I think my facts are up to date, every provincial government imposes sales tax on both municipalities and the school boards. There are five or six such provinces. In addition to that most of them tax the hospitals also but, as my hon. friend knows, the federal government has a special exemption for public hospital institutions.


John Cameron Pallett: Mr. Chairman, the parliamentary assistant does not know what he is talking about in this connection.


Some hon. Members:: Oh, oh.
Mr. Pallet!: Now just attend for a minute. Why would the dominion government, the federal government, give a sales tax rebate in such a case, because they collect it anyway. Further, with respect to provincial governments, they also collect it. It makes no difference to them whether they give a rebate or whether they collect it, because it is in their own pockets in any event.


William Moore Benidickson: Not the tax on the purchases by municipalities and school boards.


John Cameron Pallett: With respect to the provincial tax on municipalities and school boards, there is quite a different principle involved which the parliamentary assistant very carefully omitted to mention. That principle is that the provincial governments give grants to the municipalities and school boards and a very substantial part of the municipalities' money is obtained from provincial grants. The grants given this year by the province of Ontario to the municipalities will in all probability exceed the amount the province will receive back from the federal government under the dominion-provincial tax agreement.
I suggest to the parliamentary assistant that, in all fairness to this house, he should have given the round picture and not just the one down the centre.


William Moore Benidickson: My hon. friend to be
logical should state that the provinces provide both forms of assistance to the municipalities and the school boards.
Mr. Pallet!: Well, then, as to the administrative difficulties they try to do something similar to the one where hospitals are concerned, and quite properly have set up a system which I suggest would not be difficult to carry out. You know the whole thing about this question is that if you want to do something it is very easy to do it. If on the other hand you do not want to do something it is very hard to get it done.
1 suggest, Mr. Chairman, that this is the crux of the matter. If the government really wants to help the boards of education it will find this very easy to do.

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Frederick George Hahn: The parliamentary assistant did not answer my question, and I would like to put it to him again. Whose responsibility is it to determine exactly to what extent these auditoriums and cafeterias must be used as classrooms in order to qualify them for exemption from this tax?


William Moore Benidickson: It is the responsibility of the department which administers the law, the collection department, the Department of National Revenue.


Frederick George Hahn: To what degree does the auditorium or cafeteria have to be used in a school in order to be exempt from tax under the terms of the proposed legislation?


William Moore Benidickson: This is something new, and it will have to be determined by experience as the officials receive these applications for exemption.


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, I am curious
about the wording of section 1 (b). It says "Desks and chairs specially designed for use in classrooms." This question of auditoriums has already been referred to, and the minister suggested that if the chairs were used in auditoriums they would not be free of sales tax. I wish to point out that in a great many municipalities there is a shortage of classrooms at the present time, in consequence of which auditoriums are used as classrooms. Under the present restricted interpretation of the act, as we have heard, chairs used in auditoriums would not be subject to exemption even though the auditoriums were used as classrooms.
Throughout this whole section of the excise tax resolution the wording is very vague. There are many double meanings and, if I may say so, the drafting seems to have been rather hastily done. I cannot see why the parliamentary assistant should take exception to suggestions of changes in the drafting which would clarify the position. Not only section (b) but section (c) is ambiguous, as the discussions which have taken place here have shown. This applies to other sections also.


John Borden Hamilton: I wonder if the parliamentary assistant could tell us what the additional loss of revenue would amount to if he included all types of desks and chairs used in educational institutions? How much greater than the $500,000 set out here would the loss of revenue be?


William Moore Benidickson: We have no figure on that, Mr. Chairman.


John Borden Hamilton: What do we use here when we give these exemptions; a large crystal ball or something?


William Moore Benidickson: No. There is quite a difference in so far as these specially designed desks and chairs are concerned. They are made by certain manufacturers only, and it is much easier to get information on the value of sales of that type than it is to segregate purchases of chairs which may go into a school but which might equally well go into a theatre or some other place.


John Borden Hamilton: Mr. Chairman, I am not sure whether this is in order, but since the parliamentary assistant mentioned that the dominion is continuing to pay sales tax on all its purchases, has he not thought that this might be having a very strong influence on the inflation we are facing in the country at the present time? Would there not be an opportunity to check inflation if some system were worked out whereby sales tax on these purchases, running into enormous sums, was eliminated, in consequence of which there would be no need to collect all the taxes?
I think the tax may be calculated all along the line in the wholesale-retail set-up, and the mark-up is applied to the total amount, including sales tax. Apparently we go on blithely paying it here, and then extracting it from the taxpayers to pay it over again.


Mr. Hodgson:: Mr. Chairman, I have served for over 20 years on school boards and I have some idea of the burden which the cost of education is imposing today on the ordinary municipalities. It has increased year by year for as long as I can remember, and the people who are supporting these schools through municipal taxes are paying more than the traffic will bear at the present time. It must be remembered that this government has taken away practically all the tax concessions from the municipalities and the provinces.
In provincial schools in some of the rural areas grants have to be up to 85 per cent of the total cost of education. Does this government want to tax education? That is what it is doing today. I would like to ask the hon. member for Fort William if he wants education in our municipalities taxed by the dominion government. That is what this does. I think it is about time this government woke up to the fact that they have to help the municipalities and not tax them.


Daniel (Dan) McIvor: Mr. Chairman, I am sticking to the resolution according to its wording. I think a lot has been said that is out of order.


Clarence Decatur Howe: There is an indication in this subsection that desks and chairs are exempt from excise tax. I wonder if the parliamentary assistant could tell us

what purchases, or what types of equipment used in schools at the present time, arc taxed.


William Moore Benidickson: There would be sales tax on all manufactured goods with the exception of those referred to in schedule 3. There is quite a list of exemptions there of building materials, printing, educational materials and so on.


Wallace Bickford (Wally) Nesbitt: I have another question I would like to ask. What is the parliamentary assistant's interpretation of the term "educational institution"? How inclusive is that term?


William Moore Benidickson: I think it would just cover recognized schools. I think practically every educational institution has some relationship with its provincial government through the control the department of education in the province has in respect to education.


Wallace Bickford (Wally) Nesbitt: Could this be interpreted to extend to private schools, such as private business schools which are run for profit? Would it include institutions such as these?


William Moore Benidickson: Is the hon. member
referring to something like a stenographic training school?


Wallace Bickford (Wally) Nesbitt: Yes.


William Moore Benidickson: Frankly that did not
occur to me. I was thinking rather in terms of educational institutions which were aligned directly with the department of education, schools which are supported generally by taxpayers. I certainly think it would apply also to the normal private school which is performing a function similar to that of a high school or a university.


Gordon Knapman Fraser: Would it cover a private high school for boys or girls? The parliamentary assistant did not answer that. He nodded, and I know Hansard did not get it.


William Moore Benidickson: Yes.


Ernest George Hansell: I suppose we have almost exhausted the discussion on a small clause such as this. I wish to say a word, however. I thing the government is quibbling about a lot of little things which are so small as not to be worth bothering about. Here we are in Canada today with a surplus of half a billion dollars, yet the government is whittling away and whittling away, saying it will remove the excise tax from this little thing and from that little thing. Our time is being taken up discussing such subjects as what is a specially designed chair for school use. The minister says that poses a question; he does not know that he can give a definition.
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That is a sort of two-bit thinking; that is the only way I can characterize it. Why not say, "Any furniture that is bought by an educational institution is exempt from the excise tax"? Put a period there and you have it and there is no discussion about it. "Oh, well," you say, "this is whittled away and made to fit into a certain proportionate figure". That would be all right if the government were starving for revenue, but it is not starving for revenue. It has a terrific surplus.
I do not want to go to other clauses. We have decided to remain on that particular clause. But take, for example, clause 1 (k) in which we find "prune juice, grape juice", just two juices. You say, "We will remove the excise tax on them." To my mind that is two-bit thinking. Why not say, "We will remove the excise tax on all fruit juices" and be done with it? "Oh, well," you say, "it must conform with this or that because we have to whittle away and we have to take our pencils out and figure to a fraction of a penny." To me that does not seem to be big thinking at all. Why not take a slice at this so that everyone knows exactly where we stand on it? You are going to lose as much money having excise tax officials determine whether or not this or that sort of chair is suitable for classroom use.
When the school boards go out to buy furniture, usually they go out to see what is the best deal they can get. If it is chairs they want and they are compelled to take kitchen chairs, they will take them. If they are obliged to remain within a certain budget they will get the best deal they can get. Of course if there is going to be quibbling with the departmental officials as to whether the tax is removable on that item, the first thing you know you are going to send two or three civil servants down there to scrutinize the chair. If it has a little arm on it on which you can put a book, we will take the excise tax off but if it has no arm and you can use it somewhere else, it is taxable.
To me that is nonsense. Why not be big in this thing? Why not think big and do things big and say, "We will take the excise tax off any furniture that is bought by education institutions"?


John Borden Hamilton: Mr. Chairman, I certainly like the case just presented. However, from experience I realize that the government does not ordinarily back up quite that much. On the other hand, I think we have very good reason to believe that it was the intention-at least when the Minister of Finance brought in his budget-to include all desks and chairs purchased by school

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institutions. I would refer you to Hansard of March 14 of this year, page 2225, where you will find these words:
In addition to these food items an exemption will he introduced for school desks and chairs when purchased by educational institutions.
I can only understand one thing. Either the minister wanted to give us a little rosier picture on budget night for presentation in the press from one end of the country to the other, or there has been an honest mistake in connection with the mechanics that have been used in coming before the house at this committee stage.


Wallace Bickford (Wally) Nesbitt: Now you see it and now you don't.


John Borden Hamilton: Yes; as the hon. member for Oxford has said, now you see it and now you don't. It is the usual sleight of hand before an election. I would therefore say this. If the government is not prepared at this time to follow up this undertaking, and I do not think you could get the English language any clearer than you will find it at page 2225-


William Moore Benidickson: What about page 2231?


John Borden Hamilton: Page 2231 is in that area of the budget returns where it is surrounded with a mass of documents and is certainly not for public consumption. But if the government is not prepared to do something about the matter I would move:
That clause 1 be amended by deleting subparagraph (b) and substituting therefor:
"desks and chairs when sold to educational institutions for their own use."


William Moore Benidickson: Mr. Chairman, I do not think I need to elaborate on the point of order that my hon. friend would expect me to raise. It is well known that in the committee of ways and means it is not possible for a private member to move a resolution that reduces the revenues of the crown.


James MacKerras Macdonnell: Is it not possible in committee of ways and means for the representative of the government to admit that a valuable suggestion has been made and to accept it himself? That is possible. I would have hoped that the argument which has been made might have brought about that result.


William Moore Benidickson: I scarcely had an opportunity to do that. With respect to item (c) and with respect to item (f), I was going to say that having regard to the discussion of last evening, before the bill is before us on second reading we will give very serious consideration to the suggestions that were made with the possibility of amending the proposals.


Mr. Small:: What about (b)?


William Moore Benidickson: We will do the same with respect to (b); but I am doubtful whether it will be possible to meet my hon. friend with respect to (b) because our experience is that to avoid having a great multiplicity of paper work in applications of this kind one must be fairly precise in one's definition of what type of article is qualified for the exemption. For instance, my friend the hon. member for Macleod used an illustration that sounds plausable. He was referring to fruit juices. Hon. members know that for some years we have had a soft drink tax for the purpose of raising revenue. This has to be done. We have had fairly substantial revenues from soft drinks. If one were simply to drop in a couple of ingredients of so-called fruit juice and our definition was loose and we could call that fruit juice that would be qualified for the tax exemption, I suppose the soft drink lines would not have provided that revenue.
That is why these things must be particularly defined. My hon. friend referred to specific items in these resolutions such as prune juice and so on. I am sure he is aware of the fact that in a general way fruit juices with 95 per cent of pure juice of the fruit are exempt and have been exempt for some time. But the two or three beverage items that are in these resolutions are needed for the purpose of greater clarity.


Clarence Decatur Howe: Does that mean that in an ordinary high school, where there may be 11 or 12 rooms used as classrooms, only the ones that are defined as classrooms by the school board in the construction of that building are going to have an exemption for their chairs and desks? Is that the definition?


William Moore Benidickson: No. I think the word "designed" would be qualifying the words "desks and chairs". It is not the room that is designed. It is the equipment that is designed.


John Borden Hamilton: Mr. Chairman, in view of the assurance of the parliamentary assistant-and I believe he said he would include subparagraph (b) in his reconsideration of the wording of a couple of subsections here-I should like to be permitted to withdraw the amendment I placed before you, reserving the right to bring in such an amendment when the act comes before the house.


The Deputy Chairman:: The amendment proposed was not put to the committee by the chairman. The hon. member has asked permission to withdraw it, a course which, if I may add a word of obiter dicta, saves me at

the moment from making what might have been quite a difficult ruling. Has the discussion concluded on subparagraph (b)?


Mr. Barnett:: I should like to say a few words on this point before the first item carries. We have been listening to this rather extended discussion on the question of removing the excise tax from school desks. So far as I am concerned I should like to say that I find myself in agreement with the proposals that have been put forward for the removal of these tax costs from educational institutions generally. I think this point of view has been put forward on many occasions by members of the C.C.F. group to which I belong.
However, I should like to say that having listened to the rather extended discussion by spokesmen for the official opposition and also some members of the Social Credit group, I would have been more cordially disposed toward agreeing with some of their arguments had they been prepared, as we have been, to suggest to the government that they take action to secure the lost revenue from an alternative source. When we, for example, proposed that this special 20 per cent exemption on income from dividends from Canadian corporations be repealed, which in our contention would provide quite a substantial source of alternative revenue for the government, we did not find ourselves getting very much support from the official opposition.
I feel I should like to make it clear that I am quite prepared to support, and would urge upon the government, consideration of the revamping of this proposal, as has been suggested. At the same time I think it should be understood that so far as we in this group are concerned we recognize that if taxes are taken off in one place they have to be put on in some other field in order to replace the revenue that would be lost. We are prepared, and have been prepared, to make concrete suggestions to the government as to the source from which they could secure that revenue.


An hon. Member:: That is not an answer when you have surplus budgeting.


Thomas Speakman Barnett: All this talk about surplus budgeting, coupled with the statement from the Social Credit group to which my hon. friend belongs that they are prepared to support our proposals to increase old age pensions to $75, just does not add up. I think this is a good place to make that clear.


Edward Turney Applewhaite: Shall we proceed to subparagraph (c>?
82715-194J
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James MacKerras Macdonnell: I just want to say one word on that. I was glad to hear the parliamentary assistant 'say that another look will be given to this. I would just draw attention to the fact that, in view of the explanation given at page 3043 of Hansard by the Minister of National Revenue as to just what the situation is in Toronto, I believe a change in the wording is needed in order to cover the actual situation there where, as it was explained to us, the printing is done by the board of education.


William Moore Benidickson: That was one of the points that appealed to me last night.


John Borden Hamilton: Could the parliamentary assistant inform us what would be the loss of revenue as a result of this exemption?


William Moore Benidickson: I think I said last night we were not in a position to calculate this particular item. There are no statistics. I would not imagine it would be very substantial.
Mr. Pallet!: The parliamentary assistant indicated there would be some consideration given to this section and possibly some changes made. Would he mind telling the house just what the extent of that consideration is?


William Moore Benidickson: I do not know when second reading of the bill will take place, Mr. Chairman. My hon. friend knows that the minister was otherwise engaged last night and he has been attending two cabinet meetings this morning, both before the opening of the house and since. We simply have not had the opportunity of consulting with him, but will do so before second reading of the bill.


John Cameron Pallett: I gather he is not giving any assurance to the house that there will be any particular changes made in that section. If that is the situation I think I should speak on behalf of the small school boards who are forced to purchase printing from sources other than their own. While it does appear that this concession will help those who are printing their own stationery, there are many cases in which it will not apply.
I would urge the government that they seriously consider an exemption right across the board, whether or not these purchases are made from other sources. There are many small printers across the country who are supplying the smaller school boards, and I can see a very serious trend toward centralization here. Local school boards might think they were wise to have the printing done by a central agency, and then they

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would not have to pay the sales tax. I would urge that consideration be given to allowing them to purchase supplies wherever they can without paying sales tax.


John Borden Hamilton: The appeal made by the hon. member for Peel causes me to ask whether this consideration to which the parliamentary assistant has referred is going to be given to the two problems or just the one? One problem as I see it, arises from the answer given by the Minister of National Revenue last night at page 3043 of Hansard, where he says:
Now the printing is done by the board of education for all schools in Toronto which come under its jurisdiction.
This would be one problem facing us, as to whether or not some wording would have to be included in the section dealing with that type of situation. The other problem would be the one referred to by the hon. member for Peel, that is the actual purchase of material from outside institutions. Are both these problems being given consideration?


William Moore Benidickson: I had reference to both problems, both of which were discussed last night.	I


Frederick George Hahn: I raised a question or two last night with respect to the $3,000, and I should like some clarification from the Minister of National Revenue about that. Let us say a small printer does $2,500 worth of printing and he gets an $800 order from a school board which would raise him to $3,300. Would he be eligible? Would he have to pay the tax on the difference between $3,000 and $3,300 or would he have to go back and collect the tax on all of it?


James Joseph McCann: The eligibility for exemption is set at $3,000. If he is doing less business than that he does not have to take out a licence. If he is doing more business than $3,000 he takes out a licence and pays the tax on all the printing that has been done in that year. If he does not collect the tax he will have to pay it himself, because we collect from the printer.


Frederick George Hahn: Is the exemption of $3,000 for all the printing, or is it that at the moment he reaches the $3,000 level he has to pay the department $2 for a licence to collect the tax and collect the tax as well?


James Joseph McCann: That is right.


Frederick George Hahn: What consideration is he being given for having the honour of collecting the tax for you, besides having to pay the $2?


James Joseph McCann: That type of case has not arisen.


Edward Turney Applewhaite: Does that complete paragraph (c)? Paragraph (d).


Clarence Decatur Howe: I notice this item refers to gasoline-powered self-propelled trucks mounted on rubber-tired wheels for off-highway use exclusively at mines or quarries. Would "quarries" include gravel pits in which stone was crushed for road purposes?


William Moore Benidickson: I would doubt that very many trucks would be used exclusively off-highway with respect to gravel quarries. If they should be they would qualify.


Clarence Decatur Howe: I know in my riding there are several men who employ gravel crushers. Usually crushers are mounted on rubber tires and they just operate them within the gravel pit and move them from one place to another. The paragraph also refers to gasoline-powered self-propelled trucks. Many of these are diesel-powered self-propelled trucks.


William Moore Benidickson: Diesel-powered trucks were exempted three or four years ago.


Clarence Decatur Howe: They are being used for the same purpose.


William Moore Benidickson: This is just to put the
gasoline truck on a par with the exemption that was given to the diesel trucks for off-highway use some years ago.


James MacKerras Macdonnell: I have a question, Mr. Chairman. May the restriction prove to be too narrow? It says, "For off-highway use exclusively at mines or quarries." I do not know enough about trucks to know whether there are trucks that are designed wholly for that purpose. I can easily imagine that a truck might be used for other purposes. Has the strict wording, "Exclusively at mines or quarries" been carefully considered, and is it necessary?


William Moore Benidickson: I do not think the
question of special design comes in at all, but the principle that supports an exemption of this kind is, of course, to reduce the basic cost of production at the mine and quarry.


William Alfred Robinson: Subparagraph (e).


Bert Raymond Leboe: I have just one question on this. I was just wondering whether the word "use" would exclude the transportation of the truck itself. Sometimes they have to be brought over a highway for repairs or for some other reason. Would it be taxable if they were transporting a truck?


James Joseph McCann: They are not earning any fee at that time.


William Moore Benidickson: I do not think my hon. friend needs to have any apprehension about anything as technical as that.


James MacKerras Macdonnell: I have a question concerning paragraph (e). I read at the beginning of the section:
That the sales tax on the following goods be repealed.-75 per cent of the sale price if manufactured in Canada.
Does that mean that the tax will fall only on 25 per cent of the sale price, and how is the sale price arrived at?


William Moore Benidickson: The sale price will be subject to tax only with respect to 25 per cent of the price. The reason is that these mobile homes have a number of built-in items that in an ordinary dwelling would be subject to a sales tax.


Edward Turney Applewhaite: Paragraph (e) completed. Paragraph (f)?


Robert Hardy Small: Cut flowers come under this item. Is that one of those matters to which you are going to give consideration?


William Moore Benidickson: I will give no assurance that there might be a change with respect to providing exemption from tax for what I described as relatively a luxury item such as cut flowers, but there was some question about bulbs, the definition of corms and the like, and certain types of leaf material.


Robert Hardy Small: That was because it was not spelled out sufficiently clearly as to give a proper definition and there might be some misunderstanding in the future. It could refer to bulbs, corms, roots or something else.


William Moore Benidickson: Roots was another item I had in mind, yes.


Mr. Michener:: Am I correct in understanding that if cut flowers are retained they would be the only commodity handled by a florist which would still be subject to tax?


William Moore Benidickson: That is correct; and cut flowers grown by a small farmer would continue to be exempt from sales tax if his total production was under $500 a year.


Daniel Roland Michener: In considering this matter further, Mr. Chairman, I would suggest to the parliamentary assistant that if this amendment reduces the florist's problem down to one item of cut flowers-although it is a big item and produces substantial revenue -he ought properly to consider whether the cost and the inconvenience and difficulty of having to deal with sales tax for one item might not be a factor in determining to free the florists entirely of sales tax rather than keep it on one item.
Excise Tax Act


John Cameron Pallett: I was rather astonished to hear that in its consideration of the section the government places the narrow interpretation on the word foliage. I thought in taxation exemptions you took the broad interpretation and took the narrow interpretation when you were levying tax. I speak specifically for the flower growers in my riding. We have many of them, and Brampton is not known as the flower town of Canada by sheer coincidence. Its flowers are known the world over, and there are literally hundreds of people who make their livelihood through the growing of flowers in Peel county. From that industry have sprung many growers throughout the country.
In the matter of the sales tax on flowers, it seems rather an anomaly to put what is essentially a manufacturers' tax on a product that wastes as quickly as a flower. You collect the tax from the producer and the product goes into the florist's shop and often is not sold. There are many flowers which by their very perishable nature are not sold, yet the tax is taken from a commodity that goes to waste. I suggest that is an anomaly and should be considered.
The second point-and I think perhaps this is the more important one-is this. The government offers no practical measures to prevent the dumping of flowers on the Canadian market by United States producers. Some measure should be adopted to assure fair competition by local growers. There are very few flowers, if any, that cannot be grown in this country under glass. This past season was a particular demonstration of how the dumping process in this industry hurts the local market and assists the flow of Canadian dollars to the United States. A very simple measure to assist Canadian growers would be to broaden the interpretation of foliage to include cut flowers.
In the growing of flowers there is certainly a much higher risk than a normal manufacturing risk. You plant seeds and bulbs and your crop depends on weather conditions. Flowers are more of an agricultural product than a manufactured article, and I suggest that a similar skill is involved. The same consideration should be given to this product. It is a question of primary production rather than manufactured goods. That is a line of reasoning which the government should follow in considering that the sales tax should not be levied on cut flowers.
I believe the parliamentary assistant was mistaken in casually referring to flowers as a luxury. I suggest that in 1957 flowers cannot be seriously considered a luxury. They are a matter of everyday living. They are no more a luxury than anything else of beauty to

Excise Tax Act
be found in a home. It is wrong to suggest that flowers are a luxury, as they are now a part of our way of life, so much so that the Minister of Finance on budget night sees fit to put one in his buttonhole. No doubt he chooses one which is red in colour to symbolize the state of the taxpayers of Canada after he has finished with them.
I know the department has received serious and well-worded briefs from associations of flower growers across Canada. This is an important Canadian industry, a perfect example of Canadian enterprise. It is a field that has helped make Canada known across the world. It is one type of industry which could very well be assisted at very little cost to the treasury. I think you would find that very little cost would ensue directly, because such assistance would maintain these people in business and the government would receive income tax from them.
There are many small growers who are encountering grave difficulties. I know a number of green house growers who are producing an excellent product. If the conditions that existed this winter continue to prevail they will not remain in business very long. I say that in all seriousness, because the dumping of United States flowers on the Canadian market has hurt them and the sales tax serves as an added buffer for the United States growers. They have certainly hurt Canadian producers. If the parliamentary assistant will look into the matter carefully he will find that I have described the situation accurately, and for that reason alone I think he should consider removing the sales tax entirely when he brings in the bill.


Mr. Fairey:: Mr. Chairman, I would like to say just a word or two in expressing my disappointment that the exemption of sales tax has not been extended to cut flowers. In my own city of Victoria, which I think I can claim is the garden city of Canada, where flowers are grown extensively outdoors, there is a situation that perhaps does not obtain in other parts of Canada.
I am aware that those who engage in the growing of flowers as a part-time activity and do not do business in excess of $500 a year are not subject to tax and that creates an unfair situation in my own constituency and more particularly in the neighbouring constituency of my friend the hon. member for Esquimalt-Saanich, where there are many hundreds of persons engaged in the growing of flowers as a part-time occupation, selling them to stores in the city of Victoria. These people are not paying the 10 per cent sales tax on their products. On the other hand the three or four large wholesalers who are engaged in the business and grow flowers not
[Mr. Pallett.l
only in greenhouses but outdoors are subject to the 10 per cent sales tax and therefore suffer a business disadvantage.
This situation continues to grow, for the simple reason that since we have the 5-day week many people in our favoured part of the world go into the suburbs, occupy more than a city lot and spend their free time in gardening. They sell their products and have a business advantage over those people who are legitimately engaged in the business of growing flowers.
I would hope the minister would reconsider this item and include cut flowers, making them eligible for exemption from the 10 per cent sales tax.


Edward Turney Applewhaite: If there are no questions on paragraph (g) could we proceed to paragraph (h>?


James MacKerras Macdonnell: Could we be informed as to the items listed in customs tariff item 695(d)?


William Moore Benidickson: Engravings, etchings, lithographic prints, maps and charts, printed prior to January 1, 1900; artists' proof etchings unbound, printed by hand from plates or blocks etched or engraved with hand tools.


Edward Turney Applewhaite: Does that complete that paragraph? Paragraph (i)?


Mr. Howe (Wellington-Huron):: Mr. Chairman, this paragraph concerns tanks for collecting milk, not including chassis or cabs. I understand that these tanks have to be used now for carrying whole milk into the cities due to regulations of the boards of health and one thing and another. I understand that farmers who sell milk to these whole milk plants have to put in cooling tanks of their own. I believe they cost around $3,000. Do they pay sales tax on those?


William Moore Benidickson: I am not familiar with that particular article, Mr. Chairman. I shall make inquiries and let my hon. friend know, probably after the noon recess.


William Marvin Howe: If it is not
there would it be possible to have it included in this item? After all, the change-over to the process of selling whole milk in tanks, which is probably a little more profitable, involves the purchase of these rather expensive items. If there is not an exemption in that case I wonder if the government could see its way clear to granting an exemption. I think it would be of great assistance to farmers selling whole milk to processing plants.


Robert Hardy Small: What is the definition of a tank? Does it mean a large tank on a truck or are there various sizes of tanks?


William Moore Benidickson: This, I recognize, is a new development and a substitution for the milk cans which are already exempt from tax. It is a fairly large tank taking the place of the milk cans which were the general medium of distribution for milk.


Clarence Decatur Howe: They are also quite expensive. I think they run to about $18,000.


Robert Hardy Small: Will that item be given consideration like the others concerning which you have been requested to bring in a proper interpretation and definition?


William Moore Benidickson: I assured my hon. friend that I would inquire about the article the hon. member for Wellington-Huron described. Mr. Chairman, I am now informed that a milk cooler is already exempt.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
William Alfred Robinson: Has the committee completed its discussion on clause l(i)? Clause (j).


James MacKerras Macdonnell: On clause (j) I would like to ask, since this refers specifically to railway ties, if the parliamentary assistant could tell me in a general way what is the case with regard to other railway equipment. Could a general remark be made as to whether this is taxable or not.


William Moore Benidickson: I think most railway equipment is subject to sales tax. This particular exemption has been requested for some time. It does also affect the new railway construction in British Columbia carried out under that provincial government.


William Alfred Robinson: Clause (j) completed.
Clause (k).


William Moore Benidickson: Mr. Chairman, I would ask the Minister of Finance if he would move an amendment to clause (k). After the word "coconut" it is proposed to add "cream of tartar" in alphabetical order.


Mr. Harris:: I think the Secretary of State does that.


Mr. Pinard:: I so move.


Stanley Howard Knowles: Which one is the coconut?


Walter Edward Harris: My hon. friend from Winnipeg North Centre.


William Alfred Robinson: Order. Mr. Pinard moves:
That subparagraph (k) of paragraph 1 of the excise tax resolution be amended by adding after the word "coconut" therein the words "cream of tartar".
Excise Tax Act


James MacKerras Macdonnell: May I ask what are the substitutes for tea and coffee? I think I know something about substitutes for coffee, but I do not know of any substitutes for tea.


William Moore Benidickson: I can think of postum, I can think of some other products that are supposed to be denuded of caffein.


Some hon. Members:: Tea, tea.


James MacKerras Macdonnell: I said I could think of some substitutes for coffee.


William Moore Benidickson: Oh, just tea? I do not know that there are any.


William Alfred Robinson: Paragraph 2.


John Borden Hamilton: I wonder if the parliamentary assistant would let us know what will be the estimated loss of revenue as a result of increasing this exemption.


William Moore Benidickson: We have no statistics on the purchases of the municipalities within this proposed price range.


John Borden Hamilton: Well, Mr. Chairman, this would appear to be the last chance to mention again just how little assistance is being given to the municipalities and the boards of education by this legislation. Under section 1 (a) I think the parliamentary assistant mentioned that there would be a loss of revenue or a saving to the municipalities of approximately $2 million. Under section 1 (b) the figure is $500,000. That is dealing with the educational institutions, but apparently we are not in possession of any information which would indicate the saving under 1 (c) and we appear to be using the same crystal ball under section 2. We are going to provide these exemptions, but the minister and his experts apparently do not have a clue as to how much the loss in revenue will be to the Department of National Revenue.
Now as a matter of fact this seems a little startling. I do not normally use this type of language, but it seems a hit or miss type of financing, and surely this type of legislation is not brought in just because certain people may use pressures on the government in asking for help. I am thinking, of course, more of those cases in connection with commercial institutions than those in connection with municipalities. However, surely it is not just done because there is a little more pressure brought to bear on the department for certain things, and the exemptions are allowed even without the minister or the parliamentary assistant and his experts knowing what is involved in actual dollars and cents.
In total, as far as we are concerned, there is involved $2,500,000. I know what the

Excise Tax Act
general attitude is in connection with municipalities and boards of education. The feeling down here in the ivory tower is, "Oh, well, they can go out and levy some new type of tax or maybe they can increase their sales tax, and they can get their money."
I think we should bring home very clearly today that before we can expect any improvement in the situation, these people should call the provinces together and sit around the table with them in good faith and give them a real chance of working out a tax basis arrangement which will provide the revenues they need. I might mention that here is another exhibition of double taxation, with the home owner paying his tax to the federal government with no allowance for the municipal taxes he must pay. He pays these taxes and this government immediately proceeds to collect its percentage. I think the Minister of National Revenue said the government got its percentage of each dollar collected, no matter whether it is for the municipalities or for education.
Now every time something comes before this house about municipalities or education, everyone raises his hand and says, "Oh, that is a provincial problem; we can do nothing about it." Now, if there were good faith in wanting to do something, then in this particular instance a system of sales tax licences could be arranged for the municipalities and boards of education, and I think what we do want to see here is some evidence of good faith.


Mr. Murphy (Lambton West):: Mr. Chairman, before this clause carries I wonder if the parliamentary assistant would tell the house if this includes health units working in the municipalities. Does it include counties as well as townships, villages, and cities, and are the boards of education specifically covered?


William Moore Benidickson: A county would be regarded as a municipal organization.


Joseph Warner Murphy: What about
health units?


William Moore Benidickson: There is no reference
here to health units. We have a section referring to hospitals and public institutions.


Wallace Bickford (Wally) Nesbitt: On section 3, I would like
to ask the parliamentary assistant what are imitation soft drinks?


William Moore Benidickson: Today there are quite
a number of these powders in packages that go with water to make a drink. There is quite a long list of them.


Wallace Bickford (Wally) Nesbitt: Could the minister also say
what are propelling pencils?
(Mr. Hamilton (York West).]


William Moore Benidickson: I think this refers to
the bail-point type that you press to make the point go out; then it goes back again.


William Alfred Robinson: Is paragraph 3 completed?


William Moore Benidickson: Before we complete
item 3, there is another amendment which I believe the Secretary of State will move. It simply adds a new item (k) and the words "pewter ware".


Roch Pinard: I so move.


William Alfred Robinson: Shall this item carry?


Some hon. Members:: Carried.


Joseph Warner Murphy: I notice
that under item (j) Canadian raw leaf tobacco is mentioned. I wonder if the parliamentary assistant would give us a word of explanation on that.


William Moore Benidickson: The special excise tax
on this item is removed at the relatively small cost to the treasury of $60,000. This is a product purchased in this form largely in the province of Quebec and sold in fairly raw form by the farmer.


Joseph Warner Murphy: I do not
understand that, Mr. Chairman. Would the concession apply to raw leaf tobacco grown, let us say, in Ontario?


William Moore Benidickson: Oh yes. I simply said
that the consumers will be found largely in Quebec.


Joseph Warner Murphy: How is the
excise tax going to be removed from this item before it goes into production?


William Moore Benidickson: We shall be dealing
with another item later on, under the Excise Act, under which I think I can give the hon. member particulars.


Wallace Bickford (Wally) Nesbitt: One more question, Mr. Chairman. Can the parliamentary assistant or the minister tell us what was the purpose of removing the excise tax on gold plated ware for serving food on drink? It seems rather odd. Gold plated ware would be very much of a luxury item, and I am wondering to what extent this type of commodity would be sold. Are there any figures?


William Moore Benidickson: The gold plated and the
silver plated items are linked. The reason they are being treated together is that the extra excise tax was put on them both during the war. They were linked at that time, and the tax is being removed from both at the same time.


Wallace Bickford (Wally) Nesbitt: A gold plated Cadillac instead of a solid gold Cadillac.


James MacKerras Macdonnell: I still wish to question
the parliamentary assistant about this item, and to ask the same question which has just been asked. These are luxury articles. What is the general feeling about the reduction which is being made? Did the parliamentary assistant hear my question? I just asked why these luxury items are picked out.


William Moore Benidickson: The special excise tax
was put on one item at the same time it was put on the other item, and the tax is being removed as from a class or group.


Joseph Warner Murphy: Mr. Chairman, the parliamentary assistant said a moment ago that there is another item-


William Moore Benidickson: The resolution that refers to the Excise Act. This is the Excise Tax Act.


Ernest George Hansell: Mr. Chairman, there is just one over-all question I would like to ask before we conclude discussion on this clause. I am sure the minister in eliminating these excise taxes is doing so in the best interests of the public, in order that the consumer may gain an advantage. I realize that there are some industries-I have in mind the soft drink industry-which find it difficult to keep their heads above water, and that they may be justified in taking advantage of this reduction in the excise tax. But I would like to know what the minister's view is with regard to what can be expected by the consumer in the light of the elimination of this tax.
To my mind that consideration is the most important thing of all, because if this concession is not passed on to the consumer it means that it is of advantage only to the industry and not to the advantage of the buying public. I do not know what method the minister has of arriving at his decisions concerning what should and should not be taxed, or what taxes should be eliminated; but I am wondering whether, for instance, he calls in an industrialist and says to him, "You are in the building business; if we take the excise tax off certain building materials can we have your assurance that prices will go down in consequence?" Does the minister do something like that, or does he just leave the field wide open and allow industry to take advantage of the concessions if they wish to do so?
It seems to me that there should be some co-operation here. This is one way of reducing the cost of living, if the advantages of tax concessions are passed on to the consumer. Perhaps the minister would care to express himself on this subject.


William Moore Benidickson: Well, Mr. Chairman, there is of course no legal right to exercise any control of prices these days. Then again, the
Income Tax Act
amount of the tax must be taken into consideration. The hon. member for Macleod made reference to soft drinks. He will recognize that a 10 per cent special excise tax with respect to this item would not be the equivalent of 1 cent a bottle.
I do remember that several items on this list were advertised since the budget by dealers as being subject immediately to price reductions. I recall in particular fountain pens. I have also seen advertisements with respect to glassware and other items. Moreover, the element of competition should prevail in business just as it prevailed formerly when the tax was included in the selling price. Tea and coffee, as I think the hon. member will recall, were the subject of immediate announcements in the newspapers by grocery people pointing out that retail prices would be reduced because of sales tax exemption.


William Alfred Robinson: Shall the resolution carry?


Some hon. Members:: Carried.


INCOME TAX ACT
William Alfred Robinson: Order. We shall now consider the resolution with respect to the Income Tax Act.


Stanley Howard Knowles: Mr. Chairman, I take it we are now on paragraph 1 of the income tax resolution?


William Alfred Robinson: Is it agreeable to the committee that I call these clauses one by one for purposes of discussion?


Some hon. Members:: Agreed.


William Alfred Robinson: Paragraph 1.


Stanley Howard Knowles: Mr. Chairman, I think it will be obvious that we all welcome the proposal set out in paragraph 1 of this resolution, in that it is a relieving section that will be of some assistance to a great many income taxpayers. At the present time it is possible for a taxpayer to claim deduction for all his contributions to approved charities up to 10 per cent of his income. It is also possible for a taxpayer to claim deduction for his trade union dues or professional membership dues. Those deductions, of course, are without reference to any floor under the taxpayer's income. In addition to that, there is the provision which is well known to all of us for the deductibility of medical expenses to the extent that they exceed 3 per cent of one's net income.
As we have pointed out a good many times in the house in debates on a private member's resolution which I have presented in a number of sessions, and as we have pointed out in previous budget debates, this 3 per cent

Income Tax Act
floor, which used to be at a higher level, prevents many people from receiving any deduction for medical expenses. This change whereby a person will be able to take a blanket exemption of $100 in lieu of medical expenses, trade union dues and charitable donations will, it is true, make it possible for many people in effect to get credit for their medical expenses.
I am sure there are many cases in which a taxpayer has receipts for trade union dues amounting to $25, $30 or $40 a year; in some instances they run even higher. Some of these persons will also have receipts for contributions to approved charities running to similar figures, say $25 or $30. In other words, between those two items they may have receipts for as much as $50, $60 or $70, which they are able to claim as deductions. Those same persons at the present time may have receipts for medical expenses of $40, $50 or $100 which they are not able to claim as deductions because they are not over the 3 per cent floor. It is quite clear to us what this section does. It makes it possible for those people, by claiming a blanket exemption of $100, in effect to get deductibility for their trade union dues and their contributions which they got before, plus a portion of their medical expenses.
The minister knows how anxious we have been to get some change made that would be of help to the little people so far as medical expenses are concerned. This paragraph does it in part, and to the extent that it does, we welcome it. However, I think I should point out to the minister that it probably will not be long until people will begin to note that in effect this is just an addition of $100 to the statutory exemption. In other words, a single person who formerly could claim $1,000 can now claim $1,100, and a married taxpayer who formerly could claim $2,000 will now be able to claim $2,100 whether or not he has any trade union dues to pay, makes any contribution to charitable organizations or has any medical expenses. I am sure the minister will not be surprised if, before long, those who have medical expenses which put them over the $100 figure but not over the 3 per cent floor complain to him that they are not given any better treatment than are the persons who do not belong to a trade union, who do not claim anything for charitable donations, and who have no medical expenses.
I suggest to the minister that this is a welcome change, but that at best it is a stop-gap. Sooner or later he will be obliged to deal more adequately with this whole problem. We agree with the aim to reduce the amount of paper work, both on behalf of

the department and on the part of those filling out their forms. This provision does that for many people, but I stress the point that it does not bring to an end consideration or discussion of these matters, because you will sooner or later find that there are many people in the country who have expenses, who make payments in these various categories which amount to $100 or $150 or $200, but who get no income tax consideration for those expenses that is any different from the over-all $100 consideration that is given to persons who have none of these expenditures whatsoever.
In other words, the minister has been confronted with a popular demand for an increase in the exemption levels to $1,500 and $3,000, and he has been confronted with a popular demand to do something about the medical expense floor. What he has done in this resolution is to compromise with an over-all increase of $100, which is far short of the increases sought in the statutory exemptions and which does not wipe out the 3 per cent floor. It is a stop-gap compromise that is welcome as far as it goes, but the job is not yet finished.


William Alfred Robinson: Have we completed discussion on paragraph 1?


James MacKerras Macdonnell: I want to ask the minister this question. In the budget speech, at page 2254, this is stated:
At present $750 is the limit on income which may be earned by a dependent without being disqualified from that status. It is proposed that in future this figure be raised to $950.
There does not seem to be a resolution covering that point.


Walter Edward Harris: No, Mr. Chairman, that is a regulation defining the word "dependent" as being a person who would earn a certain sum of money.


James MacKerras Macdonnell: May I raise the question as to whether any consideration has been given to the permissible income of a wife?


Walter Edward Harris: We had quite long discussions all during the course of our preparation of the budget. Since no change has been recommended I do not think I ought to launch into a debate about it. I just want to say that we had most serious consideration of the matter, and it is a fact that that consideration will continue.


James MacKerras Macdonnell: I am sorry, but I did not hear what the minister said at the last of his remarks. Would he repeat it?


Walter Edward Harris: We shall continue to consider it, because our discussions were not completed by the time it was necessary to produce the budget.


William Alfred Robinson: Paragraph 1, discussion completed. We now come to paragraph 2.


Mr. Knight:: I should like to ask the
minister what is the position of a person wanting to give a grant or a gift to an institution like a university, having regard to this charitable organization clause in paragraph 2. I have received some requests for information. People would like to give to a university much larger gifts than the 10 per cent would amount to. They feel that they should be allowed to do this without loss to themselves, particularly having regard to the fact that it is going to cost the government a good deal of money for grants to universities from now on. Perhaps we should encourage people who are so minded to get rid of some of their extra money-that is, those who are fortunate enough to have it- in that way.


Walter Edward Harris: This is one of the reasons the recommendation is before the committee. There are cases when individuals and corporations are appealed to for donations not just for the operational expenses of a university or school but in a major campaign to raise money either by way of endowment or for capital outlay.
On such occasions there are some individuals and corporations who are reminded by their lawyers, and also by others, that there are limitations of 10 per cent and 5 per cent respectively on the amount that would be permitted by way of deduction. For that reason we decided we could ease the rule by allowing a donation in one year, to the extent that it was in excess of the 10 per cent or 5 per cent, to be carried forward into the following year for deduction in the second year. I think this will have the effect of permitting larger contributions for charitable purposes of this kind, and in other cases as well, on those special occasions when large sums of money seem to be needed.


Daniel Roland Michener: While this proposal is
remedial in the sense that it will permit a specially large donation to be spread over two years, I do not think it meets the needs of a good many people who are generous givers and who use up their 10 per cent exemption by the middle of the year. I wonder whether the minister would consider again the desirability of meeting this problem in a different way, that is by increasing the exemption from 10 per cent to 15 per cent in the case of individuals and from 5 per cent to 7J per cent in the case of corporations. It is not likely to be a costly item to the treasury, but it would be an encouragement to those generous givers for whose giving there are certainly plenty of worthy objects these days.
Income Tax Act
I have run across many cases, as have other members, where the 10 per cent is exhausted by the middle of the year, and that does restrain the generosity of people who want to help worthy causes. In fact I think a good many people feel that their normal giving to their church accounts for the 10 per cent, and anything they give on top of that of course is beyond the exemption which now exists. I do suggest this is a matter worthy of consideration by the minister.


Ray Thomas: When I attempted to rise just before the previous speaker I had in mind exactly the same points he had. I would urge the minister to consider raising the exemption beyond 10 per cent because, as has been pointed out, many people pledge 10 per cent of their income to their church, and anything they give beyond that is not eligible for deduction. Possibly if the minister is not willing to consider that he might consider permitting a large donation to be spread over something like a five-year period, so those who are extremely generous in their donations would not be discriminated against. It seems to me unfair that someone who gives very little or often nothing is allowed a deduction of $100, whereas someone who is much more generous receives no exemption whatever for a certain portion of his donations.


Daniel (Dan) McIvor: This does not touch the man who overgives every year.


Mr.   Paiterson@: I wonder if the minister could say just what consideration has been given to the matter of raising the exemption in this particular respect. I have urged for three years now that this exemption be raised to at least 20 per cent for the very reasons that have been given, that many feel their contribution to their own church should be a minimum of 10 per cent. Then there is nothing one can contribute to other worthy causes and still keep within the regulations. I think if you want to encourage generosity in regard to these different things, then the government should take into consideration raising the limit on deductions. Can the minister say whether consideration has been given to raising the exemption to 20 per cent or so?


Walter Edward Harris: Mr. Chairman, I have raised the 10 per cent to 20 per cent by the resolution before the house.


Mr. Patterson:: I do not think the minister has, because really it does not affect one who goes beyond that limit. If a person does not give anything he can deduct $100. If he gives 15 per cent of his income, then he can just deduct 10 per cent. It does not mean anything at all to a good many people.

Income Tax Act


William Alfred Robinson: Is paragraph 2 completed? Paragraph 3.


John Borden Hamilton: May I ask the
minister if any representations have been received by his department from professional workers or incorporated business people, asking for some consideration about averaging their incomes?


Walter Edward Harris: Not in my time, if I understand correctly the thought that an ordinary businessman, or in fact anyone who is a taxpayer, would be given the position of a farmer in the sense that there would be an averaging period for his income. I do not think anyone has recommended that, but I shall have to check on it.


John Borden Hamilton: I know we have been moving to take care of special grievances of certain groups of people. We moved one step further to assist the medical profession in connection with deductions covering their expenses for attending conventions outside of Canada. This year I note that the minister has moved another step in connection with setting up retirement plans under which these people will be able to get some benefit. As a result they are in a much different position from the average wage earner who has a stipulated salary and knows pretty well in advance from year to year what he is going to receive.
I thought the department might consider, in all fairness, certain classes of people of that type, businessmen who are not incorporated and cannot take advantage of carrying forward losses, putting them in a position where a system of averaging their income might be arranged.


William Alfred Robinson: Paragraph 3 completed; paragraph 4.


Mr. Brooks:: I should like to ask the
minister, in a case where-


Thomas Speakman Barnett: If I understand correctly, the hon. member for Royal is proceeding to discuss No. 4 and I had one question I should like to ask on No. 3 before it is passed.


William Alfred Robinson: The hon. member for
Comcx-Alberni.


Thomas Speakman Barnett: For the purpose of clarification perhaps I could phrase my question in this way. There is a reference in this paragraph to a taxpayer whose chief source of income is farming or fishing. I have recently had a question raised in connection with someone whose income was earned jointly from farming and fishing. I am

wondering whether my suggestion that the two can be worked together is correct.


Walter Edward Harris: If my hon. friend has a constituent whose income is precisely 50 per cent from farming and 50 per cent from fishing, I suggest that he recommend that his constituent find a dollar extra on one side or the other, and he will be all right.


Alfred Johnson Brooks: I have a question to ask the minister in connection with paragraph 4. In some instances there are two and three brothers, or members of a family, who own shares in a fishing vessel. Does this paragraph apply to a share in a fishing vessel or fishing equipment which is sold, or does it apply to the whole vessel or to the equipment?


Walter Edward Harris: It applies to the vessel, Mr. Chairman. If the sale has been from a parent to his child, then the recommendations will cover that particular case. Perhaps my hon. friend might wait until the bill is before us, and then we shall have more details.


William Alfred Robinson: Paragraphs 4 and 5 are
completed. Paragraph 6.


Herbert Wilfred Herridge: I wish to say a word or two on this paragraph. I am not objecting, but I make my annual protest that these specific provisions are made for those in the business of mining, the production of petroleum or natural gas. Now it is extended to processing. I do not see why some specific provision is not written into the act with respect to the forest industry. I know that if you go to the officials they will tell you that each case is dealt with on its merits. You submit the facts and they deal with the case in question as to whether there has been a certain amount of money spent for fire protection, roads, conservation and so on.
In fairness to the forest industry, provisions similar to these should be specified in the act. There should be detailed regulations, so that many of the small operators who are operating, shall I say, forest farms and timber limits on a perpetual yield basis get some consideration for their concern for future production in this country. They should get consideration for their expenditures with respect to fire protection, management and so on.
As I understand it, at the present time each case is treated on its merits. I have talked to a good number of people in the lumber industry in British Columbia. It is very hard to establish a certain pattern in your mind. I do urge the minister, before the next budget is brought down, to give consideration to this question so there will be some policy that will apply particularly to the small operators in British Columbia, that they will understand and that will render

them some recompense for attempting to carry on sound forest management practices to protect our forest production for years to come.


William Alfred Robinson: Paragraph 6 is carried.
Paragraph 7.


Miss Aitken:: Why does the minister confine this paragraph to wheel chairs? I am sure he will recall that recently there was an appeal to the income tax appeal board. A man's wife was ill, and she was confined to bed for most of the time. When she was up she was able to sit in a rocking chair, and the man lost his appeal because she was not in a wheel chair. Why is a wheel chair singled out?


Walter Edward Harris: Mr. Chairman, I have asked myself that question many times and I always come back with the same answer; that what we are doing here-whether the committee feels it is proper or not I do not know-is providing for a deduction for an expenditure for an attendant under certain conditions, the attendant being one who is required because of the nature of the illness or incapacity of the sick person. A person who is confined to a wheel chair and can get around only in a wheel chair is obviously a person who, unless he is shamming, needs an attendant. Persons who are temporarily ill and can sit at a window in a rocking chair are not persons who, for our purpose, require an attendant. They probably have one at that moment, but they may not have one for 12 months because they are sitting in a rocking chair at the window.
I recognize this is perhaps a fine distinction, but obviously persons who by reason of, shall I say, paralysis or something of that nature are in a wheel chair are in one class; whereas a person who is ill and perhaps not able to get around, but can get around to the extent of sitting up and moving around the house and sitting in a rocking chair, is in a different class. I think the real point is, is the condition such that an attendant is required because of the incapacity of the sick person.


Stanley Howard Knowles: Mr. Chairman, the minister will recall that I drew to his attention the case referred to by the hon. member for York-Humber on the very day he presented his budget. The ruling of the Exchequer Court of Canada had been reported to the press, I believe, that morning, and when I questioned the minister about it he said, as reported at page 2185 of Hansard:
Mr. Speaker, I shall look at the report, I hope, before eight o'clock tonight.
I said, "Thank you". I guess I read too much into the minister's statement. I did
Income Tax Act
dare to hope there would be a correction of the matter in the budget presented that night.
I have not the ruling of the Exchequer Court of Canada before me, but as I recall the case it met the conditions the minister has indicated. It was the case of a taxpayer whose wife was a permanent invalid and who required a full-time attendant. As I recall it, she was in bed most of the time. Only occasionally was it possible for her to get out of bed, and when she was out of bed she was put in a rocking chair instead of in a wheel chair. The judge of the Exchequer Court of Canada, who ruled on the case, actually said he found it difficult to see what difference it made as between a rocking chair and a wheel chair. All the other conditions were met. Well, said the judge, parliament put it that way, so he had no alternative but to go along with the law.
As I read that part of the judgment it seemed to me that if this particular patient had been confined to bed the whole time and was not even able to be out of bed and in a rocking chair, the fact that she had a fulltime attendant would have qualified her. It does seem to me, Mr. Chairman, that the ruling of the judge of the Exchequer Court of Canada on this case was a clear suggestion to parliament that this wording was not what was intended, and I regret very much that the minister has not seen fit to change the wording accordingly. Has the minister no reply to make to the ruling of the judge of the Exchequer Court of Canada?


Walter Edward Harris: Mr. Chairman, when the question is put in that way the answer is no. Hon. members of the house make their representations and judges make their observations, and we have to take all these things into consideration when we recommend changes in the tax law to the house, but I do not feel called upon to make any comment on the judgment any judge may give.


Stanley Howard Knowles: Does the minister think it
is fair to leave the law with its present terminology, which makes it impossible for a person to be allowed a full-time attendant where he or she is confined to bed or to some kind of a chair, and not get that deduction merely because the particular kind of chair is not one with wheels on it?


Walter Edward Harris: Mr. Chairman, that is precisely what laws are made for. They are made for the purpose of trying to determine what parliament wants as a law, and every now and then we run into great difficulty in defining the exemptions that we wish to give to taxpayers. This is a very substantial

Income Tax Act
exemption, as a matter of fact, even though it may be under circumstances which are costly to the taxpayer.
The first rule, I think, as I have said every time I have been on my feet in the course of income tax debates, is that we ought not to grant exemptions unless there were clear requirements for them and they would be publicly understood. That means, I think, they ought to be restrictive unless you feel that you can properly expand them. This judgment which came down, according to my recollection about the middle of February or the middle of March, is one of those judgments which have to be considered together with the results which would ensue if you changed the law as it now is.
I am not satisfied at the moment that I should recommend to the committee a further expansion of this exemption until I know how many other cases there are and what their nature might be that would come within the definition we make.


Mr. Blair:: Some patients are confined to an invalid's chair, a wheel chair or a rocking chair. Should it not be specified?


Walter Edward Harris: If you put in an invalid's chair or a rocking chair or something of that nature the first thing that would happen would be that someone would come along and say, "I haven't got a rocking chair, they are out of date now. A kitchen chair would do."


Stanley Howard Knowles: Why not just say "chair"?


Walter Edward Harris: Why not the floor?


Ray Thomas: What the minister is telling the committee is that if a person can afford to buy a wheel chair then he can get the exemption for exactly the same type of illness or incapacity for which someone who cannot afford to buy a wheel chair cannot charge.


Stanley Howard Knowles: I would like to ask the
minister if there is a definition of wheel chair.


William Alfred Robinson: The	hon.	member	for
Greenwood.


Stanley Howard Knowles: Is it on the same subject?


James MacKerras Macdonnell: I am changing the subject. Perhaps the hon. member could proceed.


William Alfred Robinson: The	hon.	member	for
Greenwood.


Stanley Howard Knowles: I will come back later.


James MacKerras Macdonnell: I am questioning the 12-month period. I am raising the question why the period should be 12 months. It seems to me that is an onerous and unnecessary restriction.


Walter Edward Harris: Well, it may be unnecessary, Mr. Chairman, but it is another example of what I tried to say a moment ago, that a tax exemption ought to be restrictive rather than too broad. At one time in the past-I do not recall when it was-it was decided to recommend this additional exemption for the benefit of the taxpayer who had substantial costs imposed upon him by reason of illness on his part or in his family.
It was decided at that time that an illness which extended for less than a 12-month period was one that ought not to have the advantage of the exemption, but that an illness extending to 12 months was probably so onerous that one ought to allow the cost as an exemption. Why a person should be incapacitated for 12 months and get a tax exemption running to perhaps $2,500-I do not know-while one who is ill 11 months and 29 days may not is just one of those questions in regard to a tax that is levied which remain insoluble.


Daniel Roland Michener: I have a question on that point. Does the present medical expense exemption cover hospitalization? I do not see it here.


Walter Edward Harris: What medical exemption have you in mind?


Daniel Roland Michener: Section 271 (c) of the act I thought covered hospital expenses, but it does not seem to do so. It covers only medical, nursing, drugs and other expenses. In other words, if a taxpayer is confined to a regular hospital and spends substantially more than 3 per cent of his taxable income is he allowed to claim that as a deduction?


Walter Edward Harris: Well, there is quite a long definition here, but it does not include hospitalization.


Daniel Roland Michener: Is it in the act? Could the minister give me the reference? I have not found it.


Walter Edward Harris: I have here a book with which my hon. friend is very familiar, "Canadian Income Tax Act, 1956," 23rd edition. Section 271 (c) on page 59 has quite an extensive list. I am afraid it is not the same edition my hon. friend is looking at.


Stanley Howard Knowles: Is it a government publication you are reading from?


James MacKerras Macdonnell: Is there then a difference in the allowance if the taxpayer is confined in a nursing home or is in a hospital?


Walter Edward Harris: The difference up to the present time, Mr. Chairman, has been that if you have a nursing expense or hospital bill which would include a nursing expense, of course that is your medical expense which can be used in computing your deduction in excess of 3 per cent. There is no change in that. However, a person who is confined to his home or whose spouse or family are confined to his home could have this other additional exemption for a full-time attendant provided the illness extended over 12 months under the conditions mentioned. We are now extending that exemption so that a person who is confined to a nursing home and who may have a full-time attendant there can claim that as a deduction from income tax.


Daniel Roland Michener: Well, it is not limited to an attendant in a nursing home; it simply mentions being kept in a nursing home. I am not clear yet as to what is the distinction. It seems to me that the 3 per cent rule is sufficient protection in the case of expenses of this kind, and if we are to include in medical expense care in a nursing home when that is necessary, then I fail to see why it must be an illness for a period of 12 months in order to qualify, because surely the 3 per cent rule which applies to every other kind of medical expense is sufficient protection against unnecessary and minor claims for illnesses of short duration. After all, people do not go to nursing homes just to save income tax; they go there because they need that kind of service.
I would like to support the view which was put forward by the hon. member for Greenwood that the requirement that the illness extend throughout a 12-month period is onerous. It seems to limit it to chronic cases instead of making it applicable to normal cases.


Stanley Howard Knowles: Mr. Chairman, may I ask the minister if at any place there is a definition of the word "wheel chair" for the purposes of this section?


Walter Edward Harris: I doubt very much if there is, Mr. Chairman. I apprehend that a wheel chair is not necessarily one specially made for the particular kind of invalid, but that it is probably a chair which is on wheels. I do not know whether casters would conform to that, so that if a chair instead of being a rocking chair had been one with four casters on it, it is possible the judge might have found otherwise; but if there is a definition that is applied by the department I will put it on the record.
Income Tax Act


Stanley Howard Knowles: If the taxpayer had put wheels on the rocking chair he might have qualified.


William Alfred Robinson: Paragraph 7 completed. Paragraph 8?


Alfred Johnson Brooks: I have a question regarding paragraph 8, which seems somewhat confusing. I will just read it. It says:
That for the 1956 and subsequent taxation years payments made for the full time care in a nursing home of a dependant of the taxpayer certified by a medical practitioner to be a person who, by reason of lack of normal mental development . . .
I would take that phrase "normal mental development" to mean someone whose development had not been normal since birth. As we know, many people in nursing homes are in poor mental health because of an accident or illness or for some other reason. I was wondering if this was intended to apply only to people who had been of low mental development from birth, or whether it would apply to anyone who has become mentally deficient through illness, an accident or trouble of some kind.


Walter Edward Harris: As my hon. friend has surmised, this covers the case of a child who has not been normal from birth or from his youth; but it also covers those cases where at some period of their development they suddenly contract a disease or something of that nature which retards thir normal growth. In the interests of adding to the best standard that one might be able to achieve for the child, the cost of maintaining the child in a nursing home would be deductible for these purposes. As a matter of fact we had in mind, when we began our thinking on this question, persons whose children required special attention in homes of this kind. However, it may not be restricted completely to that category, depending on each case as we come to it.


Alfred Johnson Brooks: It applies only to children then?


Walter Edward Harris: It says "dependents" but we had in mind children.


Alfred Johnson Brooks: At what age then would they cease to qualify?


Walter Edward Harris: Actually there is no limitation in the resolution. As long as there are good signs of development we feel it ought to continue.


William Alfred Robinson: Paragraph 9.


James MacKerras Macdonnell: Mr. Chairman, I have one question to ask on paragraph 9, as to the "certain corporations" referred to. May we have an explanation?


Walter Edward Harris: Many municipal corporations have what are known as low cost housing

Income Tax Act
schemes for elderly people and in some provinces-perhaps in all-these are municipal corporations which probably have a reversionary right on the property, but there are for the purpose of incorporation certain shareholders, maybe five or six or even more. So that to the extent that there are persons involved it has been found possible to classify a donation made to these people as a donation for charitable purposes, because when the mortgage has been paid off by the rentals over a period of years there could conceivably be a profit accruing to someone who would have the remainder of the building. Since we know that most municipal corporations appeal for donations for these purposes, in order to aid the construction of these buildings, and money is given by the public in addition to the money raised by the corporation by way of Central Mortgage and Housing Corporation or other institutions, it seems that these donations ought to be treated as charitable donations, as indeed they are, even if the form of incorporation is such that there could be, under some conditions, a profit for someone in the distant future.


Gordon Knapman Fraser: May I ask a
question on that point- I take it that donations to service clubs would be all right. You would allow deductions from income in respect of them. With respect to some of the unions which are putting up these low cost houses for the aged, would they also be exempt?


Walter Edward Harris: We have discussed before the possibilities of donations having been made to the Red Cross and thence to housing corporations, because the service clubs themselves are not treated as charitable organizations-


Gordon Knapman Fraser: They are not profit-making organizations.


Walter Edward Harris: All right, that is the distinction. So that if a service club embarked upon a scheme of building houses of this kind we would have to take a look at them to see if they conformed to what we think is the very remote possibility of income in the future.


Gordon Knapman Fraser: They would have to come to you before starting to build and get your ideas as to whether or not they would be exempt?


Walter Edward Harris: Yes.


Gordon Knapman Fraser: For instance, if the Canadian Legion were putting up such housing.


Thomas Speakman Barnett: I have a question which I think may have been answered at least in part by

the last reply of the minister. However, I would like to be perfectly clear that I understand correctly that he has said this exemption is not to apply necessarily only to agencies set up by municipal corporations. The minister will recall last year we had some discussion about the various agencies and their building developments in British Columbia and the specific question I would like to ask now is this: If organizations are set up, as are now found in British Columbia, under the societies act, for the specific purposes set out in the section, even though they are not an official agency of a municipal corporation, could the donations to such an organization qualify for exemption provided the manner in which the organization is conducting its affairs meets with the general conditions as laid down.


Walter Edward Harris: That is correct.


William Alfred Robinson: Paragraph 10. If there are no questions then, proceed to paragraph 11.


Daniel Roland Michener: Mr. Chairman, the resolution in this paragraph to my way of thinking is the most important of the resolutions with which we have been dealing under the Income Tax Act. I would indeed be unmannerly if I failed to recognize its virtue after having asked for it in each of the four sessions of parliament during which it has been my privilege to be here. This could affect some 400,000 taxpayers who are self-employed; in fact it could go beyond that as framed because it is open to the employees who are not already contributors to an approved pension fund.
I recall that my first plea on behalf of the self-employed described them as being discriminated against by the legislation as it stood in May of 1953 when Mr. Abbott was finance minister. Again in each subsequent year I spoke on this question, as did many other members of the house. I further believe representations have been made to the government, perhaps over a period of ten years, by different associations of self-employed persons, who find themselves in the invidious position of not being able to save for their retirement money which had not been taxed as would have been the case had they been contributing to approved plans.
I do not propose to labour the point but this provision seems to be relatively simple and I compliment the department on devising a scheme of such simplicity to meet this problem. I recall that Mr. Abbott said in 1953 on page 3704 of Hansard, after an argument was over: "I have not taken a final position but the difficulties-the inequities- still appal me." He then listed in the course of his address some eight or nine reasons which appealed to him as good reasons for not

proceeding, one of which was the technical and practical difficulty of finding a means for devising the machinery by which the selfemployed could be given the advantages enjoyed by those in employment for others.
As I recall it in each year since then, the present minister has made that his only reason for not acting at the particular time.
I say now that when this scheme is presented to us with this relatively simple and clear program of annuities and of trust funds for the provision of retirement annuities it appears to me that the reason why we have had to wait was something other than the difficulty of devising the machinery for putting this policy into effect. It is not necessary to suggest what the reason may be for the appearance of this in the budget this year, because, as I say, it does affect a large number of people and is likely to commend itself to them. Moreover, this is a very opportune time at which to bring it in.
In concluding my remarks, and expressing my gratification at what is now being done, I do not wish to detract from the appreciation I have extended to the minister except to this extent: that it is too late, and that it is obviously designed for a purpose which I expect to expose in the course of the next two months.


Herbert Wilfred Herridge: Mr. Chairman, this interesting provision will be to the advantage of possibly, I understand, half a million Canadians, mainly professional and business people. It will, I think, give those people a measure of fair play which has been denied to them in the past, and as one who has sat here and heard the former minister of finance state the many reasons why such a plan could not be adopted, and announce all the difficulties in connection with carrying through such action, I can only say that the government moves in a mysterious way its wonders to perform.
Anyway I do hope that this recognition of the need to be fair in this respect to half a million or more Canadians indicates that the [DOT] minister is beginning to think in terms of the benefit which would be derived by all Canadians from a national industrial pension scheme. I have spoken on this subject at some length in the past. I am going to be quite brief now, but I cannot resist bringing the wishes of my constituents and the policy of this group once more to the attention of the minister, because we feel that such a scheme is necessary if industrial workers are to have a measure of security on retirement, and the mobility which is their right in a modern democratic civilization so that that they may move from one company to another and not be chained to one area;
Income Tax Act
in other words, the right to the full security that would be provided by such a national scheme.
I think that in view of the large public investment in pension schemes-and a much greater investment still will result from the present changes in the Income Tax Act- the government has a direct responsibility for taking some action with respect to a national industrial pension scheme in this country. I recall that last year we were told that over $30 million was lost to the federal treasury owing to pension schemes, and that sum will probably increase rapidly in the future. Future contributions, deductions and so on will make for even faster growth than in the past and I think that the present occasion is a splendid opportunity for the minister, in the words of Winston Churchill, to "bring the magic of the law of averages to the rescue of millions who need it at this time."
I do urge that this matter be given immediate consideration, and that it be referred to the committee on industrial relations for study during the course of the next parliament; and I am one who trusts I will be back here to hear the minister make such an announcement.
Before resuming my seat I will draw to the minister's attention the fact that some days ago the Minister of National Revenue, in reply to a question I had asked, said that a committee of his department was studying and revising the booklet that contains the rules with respect to registered pension plans. I do urge that he should give consideration to the representations made by various labour organizations in this country and hon. members on both sides of the house, and make sure that pension vesting rights are maintained under the rules, and that provision is made to enforce the regulations.
The Consolidated Mining and Smelting Company of Trail, British Columbia recognizes its responsibility as a company in this respect, and has given its employees a letter which, in effect, guarantees vesting rights. This was done during the last negotiations with the union for the contract. I urge that pending introduction by the minister of a national industrial pension scheme he should provide this greater security to all industrial workers in Canada by enforcing the law on a national scale, and by enforcing provisions which at the present time are given to its employees by one farsighted company in Canada.


Walter Edward Harris: Mr. Chairman, I do not want the hon. member for Kootenay West to take it from me that we accept the thesis that we have the responsibility for seeing that there is such a plan, because in saying that one

Customs Tariff
would probably be interpreted as having committed the government to an expenditure of money.
On the other hand, there is no question at all in my mind but that stability of income and security for the future do work out to the advantage of the taxpayers of Canada generally, because such security minimizes the number of occasions on which emergency measures might have to be taken here in order to look after persons who otherwise might have been able to look after themselves through the kind of pension program the hon. member has in mind.
I merely say this to indicate that the Minister of Finance is not disinterested about seeing that adequate security and income is provided at all times.
May I turn for a moment to the hon. member for St. Paul's, only to say this: that he was so kindly in his reference to the progress the government has made that I anticipate that as he goes about during the next two months he will say that I brought this legislation before the house solely because of the impending events of the next two months. I will also follow him about and say I am sure he has been an upright and just statesman in recommending this course for the last four years and that at no time did he have in mind the events of the next two months.


Edward Turney Applewhaite: Shall the resolution carry?


Some hon. Members:: Carried.


Edward Turney Applewhaite: I think that completes the paragraphs.


CUSTOMS TARIFF
James MacKerras Macdonnell: Mr. Chairman, I want to make one or two comments about this. I am going to flatter the minister by reading a paragraph from his own speech at page 2225 of Hansard. My point is that I want to ask the minister to tell us, if he can and will, whether there is any principle at work behind these customs changes or whether it is a matter of just plugging a hole here and there. I want to read briefly from the minister's speech in which he says:
Since my last budget there has been a new and important development in the field of international tariff arrangements.
And then he said:
This month. I understand, six leading countries on the continent of Europe are signing an agreement to recast their tariff and trade policies.
I was a little surprised by those words "I understand". I suppose he was merely playing the thing down because the minister, of all people, should have had accurate and up

to the minute information about what was taking place. If he had not, I would have had grave doubts about his competency for his job, but I know he did know all about that and that this was just a manner of speaking.
And then he went on to say:
Canadian trade will undoubtedly be affected by these developments. It is too early to forecast what the effects may be. The government is. however, following these events with very active interest through our diplomatic and trade missions-
And by other means. The minister reminds us that we are one of the contracting parties to the general agreement on tariffs and trade and of the organization for European economic co-operation, and that we are also keeping in close touch with other commonwealth countries.
I hope the minister will say a few words about this. I think that tariffs, from which we have been happily free for so long, may not be content to remain as far in the background as they have. I just happened across a speech delivered by an American congressman from West Virginia in the publication Vital Speeches for February 15, and without reading from it at any length I will just give the committee the tenor of what he had to say. He said that congress alone has the power to regulate foreign commerce. He is very suspicious of the action taken by the executive under powers given by congress and in the course of his speech he remarks that he is very much against having anything to do with the International Trade Organization and so on. I need not take the time of the committee to read this. He complains that the state department, in spite of the warning they have had from congress, has not relinquished its goal which, I take it, he believes is to try to do something to liberalize trade. As I have said,-and as has often been said before in this house-we have every reason to believe that just as soon as the United States regards itself as being pinched in any way, we may And them taking strong tariff action against us.
That brings us back to the European situation. I wish the minister would say a word on that matter. In a publication I have here entitled, "The Department of State Bulletin" the United States have pious hopes to express about the European movement to which the minister has referred. They say:
.	.	. It is our hope and expectation that the
negotiations on the common market and free trade area will be carried forward and concluded in such a manner that from these European initiatives will come a new contribution to the unity and prosperity of Europe and the Atlantic community and to the welfare of the entire free world.
When I say they are pious sentiments, I do not want to say it in a cynical way. I think those are the real sentiments of the United States administration. But as we

know, they are at the opposite extreme. Here the executive has all power and there the executive sometimes has very little power. If we could only find a half-way house whereby the executive could have enough power but not too much here and the legislative could have enough power but not too much there, we should be in a happier position in both cases.
But the other point I wish to make is this. As we have said on other occasions, and as I wish to say again, I think we are constantly disappointed, in spite of the comfortable references made, in the fact that the government does not seem to be wholehearted or even halfhearted in pursuing to the utmost the possibilities which though not illimitable are not insubstantial in the way of commonwealth trade. I realize that for a government that is, shall we say, almost inebriated with surpluses and easy money these last many months, which has been seeing a boom at work, it is hard perhaps to take these questions as seriously as we should. Particularly with this situation in Europe facing us, I believe it could become a very serious matter. I think it is at least a significant matter. I hope that the minister may have a few remarks to make to us about our trade situation and about the considerations which he had in mind in recommending the tariff changes which he is recommending.


Walter Edward Harris: Mr. Chairman, this is, of course, a matter that should have been covered in the budget debate itself and on which I had thought to say something the other night. However, I do not think it would be proper to make any extended remarks at all at this time about tariff matters generally at the resolution stage preceding a bill. However, I note what my hon. friend has said. I want to point out to him that perhaps he cannot be satisfied no matter what the conditions may be. The executive in the United States has much greater power for making tariff changes than have we in the sense that the executive may do certain things by executive order with or without the consent of congress at that particular time whereas we are obliged to come forward once a year and submit tariff changes at that time and seek the approval of parliament for them, though we make them effective when they are announced.
With respect to the situation in Europe, I was not either uninformed or intentionally vague in my use of the words "I understand". Rather I used them out of not an abundance of caution but merely out of proper caution, I think, because the date for supposed signing of the agreement was still some ten days ahead and I knew that the parties concerned
Customs Tariff
were still negotiating. All we had was a date on which it was expected that certain agreements would be reached. We were not, of course, parties to the agreement. We were fully informed about the progress of the negotiation through the organizations of the general agreement on tariffs and trade but not to the extent that we could have influenced the result because we did not feel at that time that representations ought to be made since it was a purely domestic matter with the six nations concerned.
On the other hand, to say that we were indifferent to the result would be far from the truth because this is perhaps the beginning of a much larger movement which will end with a much greater agreement with respect to tariffs and trade within the western world. I am quite sure that all of us would hope that the results of these agreements would be freer rather than more restricted exchange of goods and that in the remote sense there could not be the restricted results which have led in the past to serious friction between nations. On the other hand we also hope that the result of this agreement that is presently made and those that might be made in the future would result in more profit for the persons concerned because a prosperous nation is less likely to be subject to the pressures which would result in envy of what the neighbour might have.
On that latter point may I say that I think the time is coming in the not too distant future when there will have to be discussions with respect to the free trade area, if I may use that phrase for lack of a better description, in western Europe. There is no question at all that the Canadian government is vitally interested in the results which might ensue from those negotiations. We have been informed about them and have been studying the consequences to Canadian trade in some detail for several months. When the matter has reached a point where more direct consultations are being held we shall, of course, have our say not only within GATT but no doubt through other more direct methods. My understanding is that there will be just a preliminary meeting of GATT for the purpose of preparing for the negotiations leading to the extension of the present agreements as of July 1 next year and that there will be fairly extensive tariff discussions beginning in late September or October and running no doubt throughout the whole of the winter.
We as formerly firmly believe that these agreements have been to the great advantage of Canada, not only to the government, in the sense that they have kept the tariff out of our problems from day to day, but indeed

Customs Tariff
in the maintenance of trading relations on an even keel so that traders, exporters and importers particularly, may have fairly firm ideas not only from day to day but for months ahead as to what costs they might have to bear in order to carry out the trade they have in mind. I assure my hon. friend that we will hope to continue the present agreements with whatever changes circumstances may require, as we see them and as our co-signers may feel are warranted and that in the discussion on the other matter- that is the western European approach to a freer trade area-we shall do what we can to preserve our present trading arrangements and our outlet for Canadian goods while seeking to extend them of course under proper terms that might be called for by those with whom we are obliged to negotiate. I do not feel that I should go further than that at the moment.
I want to say one other thing about this resolution, if my hon. friend will forgive me. I should like the committee to understand that I may find it necessary to undertake amendments to the customs tariff bill at a later time during this session. I would suggest that if we find it possible we should pass the resolution now so the bill could be printed and circulated in the normal way, and that I be permitted unanimous consent at that time to move amendments rather than having to table resolutions which would precede that. This would be in the interest of saving time. I think if I find I have to do that, when the time comes I will probably get fairly widespread support for what I have in mind. I would not want to give notice now as to what the particular item might be.


Gordon Knapman Fraser: Under tariff item 423, dental chairs, there is a notation that it is in effect since January 10, 1957 by virtue of an administrative ruling. Would this also cover chiropodists' chairs? I asked the minister many months ago about chiropodists' chairs.


William Moore Benidickson: If we are going to the individual items, I wonder if perhaps the chairman could call the items one by one as has been our practice in the past. I might say that in about 50 items in the list there is no change of any substance. It is simply a re-wording and re-arranging. I think that in about 18 items we are converting into statutory form existing tariff rates that have been in effect by reason of order in council. I think that another 15 items involve reduction in rates.


Alfred Johnson Brooks: The minister spoke about certain amendments which he thought he might introduce later on in connection with the

tariff. I wonder if I might ask him whether the item the minister had in mind had anything to do with agriculture?


Walter Edward Harris: I think that is a very broad term and probably the answer would be yes.


James MacKerras Macdonnell: I want to ask a general question. In a good many cases here we find apparently no change. Take for instance the item for olives, it shows no change. Could the minister tell us the reason why these items are in there?


William Moore Benidickson: It is one of the items I mentioned that has been in effect under order in council authority but is now becoming statutory.


James MacKerras Macdonnell: That leads me to ask what is the exact provision of the law which gives power through an order in council-


William Moore Benidickson: Section 233 of the Customs Act, and the GATT items which have become operative by order in council, and I refer to section 10 of the Customs Tariff Act.


Daniel Roland Michener: May I ask a general question? Are any of these items which we are going through being changed by reason of a recommendation of the tariff board?


William Moore Benidickson: Not this year. The Minister of Finance in his budget speech referred to several references to the tariff board that are under review at the moment.


Daniel Roland Michener: Were there any recommendations of that board which came forward to the government in the course of the year?


William Moore Benidickson: No, there had not been.


Edward Turney Applewhaite: With the consent of the committee, I shall call for discussion the various tariff items. Hon. members will please stop me or back me up if I go too fast.
Items 9, 9e, 99d, 99e, 105c, 105j, 123, 124, 124a, 124b, 125, 125a, 126, 127, 128, 128a, 129, 130 agreed to.
Customs tariff-131. Turtles; leeches; British preferential tariff, free; most-favoured-nation tariff, free; general tariff, free.


Stanley Howard Knowles: How many turtles and leeches are imported into Canada?


William Moore Benidickson: The officials tell me they have not got the figures here. If my hon. friend wants the information I shall send it to him. All of these items from 123 to 132 are referring to various fish items and there is no change in the rate of duty. It is simply a re-arrangement in the schedule.


[Stage Direction]
Item agreed to.
Items 132, 137a agreed to.

Customs tariff-147. Ale, beer, porter and stout, per gallon: British preferential tariff, 15 cents; most-favoured-nation tariff, 15 cents; general tariff, 35 cents. And in addition thereto, under all tariffs, 38 cents per gallon.
Daniel Roland Michener: Could I ask what is the purpose which is met here with respect to ale, beer, porter and stout? I take it is just a reduction?


William Moore Benidickson: This makes statutory certain rates that were negotiated under the GATT agreement last year.


Daniel Roland Michener: Could the hon. member say whether the effect of this will be to make it economic for United States brews to be imported into Canada? I read some time ago certain speculation on that subject that a reduction of 12 cents a gallon would be enough to permit United States brews to come into Canada in competition with Canadian beer.


William Moore Benidickson: The negotiation was with the United States, and I too recall reading about an experimental import but I do not think the economics of the matter have yet been determined.


Daniel Roland Michener: This is the result of an
agreement with the United States government arrived at in Geneva.


William Moore Benidickson: Yes.


Mr. Nicholson:: Has the parliamentary assistant any information as to what difference this might make in the revenues? Could he explain the difference between this ale, beer, porter and stout?


William Moore Benidickson: No, I cannot say definitely what effect it would have on the revenues, but the changes this year are all relatively minor and the minister when he gave his budget speech indicated the effect on revenues would be very insignificant.


Stanley Howard Knowles: What other effects do these items have?


[Stage Direction]
Item agreed to.
Items 173, 180 agreed to.
Customs tariff-180c. (1) Decalcomania transfers of all kinds, n.o.p.: British preferential tariff, 12J per cent; most-favoured-nation tariff, 20 per cent; general tariff, 22J per cent.
(2) Decalcomania transfers for use in the manufacture of vitreous enamelled products or of tableware of china, porcelain or semi-porcelain: British preferential tariff, free; most-favourednation tariff, free; general tariff, 12J per cent.
James MacKerras Macdonnell: Could I ask for information what kind of mania is decalcomania?


William Moore Benidickson: I, too, asked that question. The best example I can give is the kind of
Customs Tariff
sticker that might be pasted inside your car to indicate authority to park in a certain portion of the grounds.


[Stage Direction]
Item agreed to.
Items 180f, 187c, 197g, 264, 296b agreed to.
Customs tariff-312a. Asbestos in any form other than crude, and all manufactures thereof, when made from crude asbestos of British Commonwealth origin, n.o.p.: British preferential tariff, free; most-favoured-nation tariff, 12J per cent; general tariff. 25 per cent.
James MacKerras Macdonnell: This item refers to asbestos in any form other than crude and all manufactures thereof when made from crude asbestos of British Commonwealth origin.


William Moore Benidickson: The only change here is substituting the words "British Commonwealth" for the word "empire" which was formerly in this item.


[Stage Direction]
Item agreed to.
Items 348f, 350a, 355b, 405d, 409e, 409f, 409g, 409t, 410m, 410n agreed to.
Customs tariff-414b. Dictating, transcribing and cylinder shaving machines, and cylinders, disks, dictating belts, and unfinished wax blanks for use therewith; parts of the foregoing; British preferential tariff, 10 per cent; most-favoured-nation tariff, 12) per cent; general tariff, 25 per cent.
James MacKerras Macdonnell: This item refers to dictating, transcribing and cylinder shaving machines; I take it that is not for shaving human beings. Could we have a further explanation?


William Moore Benidickson: This, of course, refers to dictating machines. My hon. friend will recall the old cylinders that were used in the original dictaphone type of machine. Today, the more modern machines have disks and dictating belts.


[Stage Direction]
Item agreed to.
Items 414f, 414g, 415f, 415g, 415h, agreed to.
Customs tariff-423. Dental chairs; dental units; electric dental engines; dental cuspidors; parts of the foregoing:	British preferential tariff, free;
most-favoured-nation tariff, free; general tariff', 35 per cent.
Gordon Knapman Fraser: Does this item of dental chairs also cover chairs made especially for chiropodists?


William Moore Benidickson: No, it would not, Mr. Chairman.


Gordon Knapman Fraser: Why would they not be allowed in in the same way as dental chairs? Chiropodists' chairs are not made in Canada.


Walter Edward Harris: Mr. Chairman, if I may be permitted to answer that; my parliamentary assistant was not in the house when my hon. friend made his own representations

Customs Tariff
earlier in this session. I have been looking into that. I do not recall that we had any representations from others than my friend, but that is not a reason why it should not be done. What I am saying is that having taken the step last year to exempt dental chairs we thought we were doing something which was desired by quite a large profession. When my hon. friend raised the question of the other chairs I felt we ought then to go through the whole list of them and see whether or not they ought not all to be exempt, having in mind the question whether they are manufactured in Canada or not. I was not able to complete my studies up to the time the budget came along. I want to assure him we still have it under consideration. This is not a rejection of the proposal he made.


Gordon Knapman Fraser: Mr. Chairman, chiropodists' chairs are of a kind that are not made in Canada. I made representations to the minister over a year ago on this for the chiropodists' association of Canada. They represent chiropodists in practically every city and town in Canada. I took it up with the customs division and they said the chiropodists would be able to bring in a dental chair and use it but it is not suitable for their purposes. I really do not see why a dentist is permitted to bring his chair in and the chiropodist is not, because they both pay taxes.


Walter Edward Harris: Oh, yes, Mr. Chairman, but, as I say, there are a great many more. For one thing, a dental chair is far costlier than a chiropodist's chair. That may not sound correct to my hon. friend in the sense that because there is a difference in price there ought to be a tax reduction in one case and not in the other; but there are a great many kinds of chairs. We would have to consider barbers' chairs and many others, and that is what we are doing. There is no more logic in exempting dental chairs than chiropodists' chairs; there is no logic in exempting any but, as I say, I would like to have a look at the whole question of the various kinds of chairs not made in Canada and see what the exemption should be.


Gordon Knapman Fraser: Suppose a
chiropodist discovered that it would be cheaper for him to bring in a dental chair than a chiropodist's chair and pay the duty, would he be allowed to bring in a dental chair for his own use free of duty?


Walter Edward Harris: I am quite sure that I could buy a dental chair and have it brought in at the lower duty. I do not think there is any

inspection made of the destination of the chairs. The tax, as I recall it, is not on the purchaser.


Gordon Knapman Fraser: Perhaps the reason is that the minister has been pulling my leg on more than one occasion.


Mr. Green:: May I point out to the minister that I have had representations also concerning those chiropodists' chairs. I hope that something can be done to remedy the situation.


[Stage Direction]
Item agreed to.
Items 429, 431, 431(a), agreed to.
Customs tariff-431d. Engineers', surveyors' and draftsmen's precision instruments and apparatus, namely:	alidades; altazimuth surveying instruments; aneroid barometers, engineering, military and surveying; boards, military sketching; clinometers; compasses; cross staff heads; curves, adjustable, irregular, railroad and ship; curvimeters; dipping needles; drafting instruments of all kinds, including fitted cases containing the same; drafting machines; geodimaters; heliographs; integrators; levels, tripod and hand or pocket types; liners, section; meters, portable for hydraulic engineering; pantographs; parallel rules; parallel ruling attachments; pedometers and paceometers; plane tables, military and topographic; planimeters; poles, ranging; prisms, angle; protractors; rods, levelling; scales, flat and triangular; sextants, box; slide rules; splines; straight edges, steel or wooden; tacheometers; tallying machines, pocket; tee squares, steel or wooden; telemeters; theodolites; transits, tripod and hand or pocket types; triangles of all types; tripods for use with any of the foregoing instruments; parts of all the foregoing, finished or not: British preferential tariff, free; most-favoured-nation tariff, 9 per cent; general tariff, 10 per cent.
Daniel Roland Michener: Item 431d seems to cover a fairly wide range of articles. Is there anything in the resolution before us dealing with precision small parts, I mean finer machined small parts, such as screws, bolts and things of that kind?


William Moore Benidickson: Yes, we are-


Daniel Roland Michener: Finely tooled small precision parts such as those used in electronics and so on. Are they in any way affected or dealt with? The reason I ask is that a case came to my attention last year of a manufacturer of these things in Canada who was entering into trade in the United States and who found that he was met there by a very substantial duty on those articles when made in Canada, and that our own customs duty was not in any sense reciprocal. It struck me as being something that might have received attention. I wonder whether there is anything-


William Moore Benidickson: There is no change on that kind of item in this proposed resolution; but the friend of the hon. member, of course, can make known at any time to the department the nature of the articles that he is now making and the quantities, and so on. They

are always given the greatest respect. My hon. friend mentioned the great number of items in this section. I point out that the section itself, under our practice, is repealed and this is simply a substitution. The part of the section that is new consists of the italicized items.


Daniel Roland Michener: One further general question, Mr. Chairman, if I may; is there anything in the tariff which deals with the rate of duty applicable to imported automobile parts? I remember last year that the trade in automobile parts had achieved very substantial proportions.


William Moore Benidickson: No change.


[Stage Direction]
Item agreed to.
Customs tariff-436. Locomotives and railway passenger, baggage and freight cars, being the property or under the control of railway companies in the United States, running upon any line or road crossing the frontier, so long as Canadian locomotives and cars are admitted free under similar circumstances into the United States, under regulations prescribed by the minister:	Mostfavoured-nation tariff, free; general tariff, free.
If such locomotives and railway rolling stock are used temporarily in the transportation of goods from a place in Canada to another place in Canada they are not entitled to free entry but are subject to duty on the rental value or charge made by the United States owner for their use in Canada, or equivalent thereof as determined by regulations prescribed by the minister.
Notwithstanding the foregoing, duty shall not be assessed against a railway company operating in Canada in respect of any particular class of foreign freight car in any calendar year when the total use of foreign cars of that class by such company on railway lines in Canada is less than the total use of Canadian cars of that class owned by such company on railway lines outside of Canada; should such use of foreign cars exceed such use of Canadian cars, duty shall not be assessed on a greater number of cars than is represented by the excess.
Gordon Knapman Fraser: What is the reason for this; is this a new item?


William Moore Benidickson: Yes, Mr. Chairman. The last paragraph in italics would indicate the new policy relating to the tariff on the rental value that applies to this equipment. The fact is that the tariff on rental will apply only to the net import. As my hon. friend knows, there are a number of cars of our railways in the United States at various times and there are a number of cars from the United States here, and with respect to these various railroads we simply will look henceforth at the net quantity rather than the gross.


Gordon Knapman Fraser: Would this be owing to the fact that Canada had too many cars in the United States and they had too many over here? Did United States ask for this?
Customs Tariff


William Moore Benidickson: That was generally the basis of the representations of the Canadian roads.


Gordon Knapman Fraser: This is to try to make it so that the railways will have something to bite on so that they can get the cars moving out? Is that it?


James MacKerras Macdonnell: I have a question on the same point. I understand this is new. I presume the records are so kept that this does not look as if it were administratively impossible, as it would to a layman. I want to ask one question about the class of foreign trade cars. Does that mean the ordinary freight cars, coal cars, and so on? Is that what is referred to in the class?


William Moore Benidickson: Different classes, Mr. Chairman.


James MacKerras Macdonnell: Then this is a new
provision?


William Moore Benidickson: No; the only thing that is new is the reference to the net position vis-a-vis the cars of the railroad that are outside the country.


James MacKerras Macdonnell: You say the only thing that is new is the record of the net position? How was it done before?


William Moore Benidickson: They all paid duty relative to the portion of time that the foreign car was in Canada.


James MacKerras Macdonnell: Did they pay to the various railways and not to the Canadian government, or was it to the Canadian government?


William Moore Benidickson: The Canadian roads paid the duty for the utilization of those foreign cars within Canada. The formula was applied with regard to the gross imports and now they will be given credit for their equipment that is used outside of Canada.


Gordon Knapman Fraser: Balance one against the other.


[Stage Direction]
Item agreed to.
Items 4403 , 441e, 442d, 453a, 462a agreed to.
The Depuiy Chairman: Item 462(c)?
Customs tariff-462(c). Cameras and parts thereof for making negatives or positives three and one-quarter inches by four and one-quarter inches or larger, including carrying cases therefor: British preferential tariff, free; most-favoured-nation tariff, free; general tariff, 10 per cent.
Gordon Knapman Fraser: May I ask the
parliamentary assistant if there are any cameras made in Canada which are three and one-quarter inches by four and one-quarter inches in size or larger?

Customs Tariff


William Moore Benidickson: We do not believe there are, Mr. Chairman. With regard to items 462(a) to 462(h) it is basically a question of rearranging. The item of change of any substance is item 462(h). Printers, power driven, for photofinishing are being added. They are not made in Canada.
I must advise the committee that there is an error in printing. The former rate is indicated as being free and it should read 7i per cent.


[Stage Direction]
Item agreed to.
Customs tariff-462d. Cinematograph and motion picture cameras for use by professional motion picture producers having studios in Canada equipped for motion picture production; parts of the foregoing: British preferential tariff, free; mostfavoured-nation tariff, 9 per cent; general tariff, 15 per cent.
Gordon Knapman Fraser: That would
refer just to 36 millimetre cameras?


William Moore Benidickson: Yes.


[Stage Direction]
Item agreed to.
Items 462e, 462f, 462g, 462h, 463, 463a, 506e, 513, 517, 567b, 569b, 580, 595 and 596 agreed to.
Customs tariff-597d. Musical instruments, namely: autoharps, clavichords, harpsichords, recorders, xylophones: British preferential tariff, free; mostfavoured-nation tariff, free; general tariff, 30 per cent.
Mrs. Fairclough:: Mr. Chairman, the parliamentary assistant may recall that I asked a question a couple of years ago with reference to electronic organs. As I recall it the minister was going to look into the matter and I wonder if he has anything to report on it.


William Moore Benidickson: All these items in 597(d) are items which we believe are not made in Canada.


Ellen Louks Fairclough: I do not believe that electronic organs are made here.


William Moore Benidickson: Our advisors believe they are either made here or assembled here.


Ellen Louks Fairclough: The last time I raised this question I was told they were not made here and the same remark was made. I inquired into it. I wonder if the department has any real reason for imposing a tax on them?


Herbert Wilfred Herridge: Is the parliamentary assistant quite certain that autoharps and xylophones are not made in Canada?


William Moore Benidickson: I am so informed. The officials of both the Department of National Revenue and the Department of Finance who deal with these matters tell me that that is the case.


Ellen Louks Fairclough: I wonder if the minister will look into this question of electronic organs. They are used extensively in churches and if they do not provide any competition to organs made here they should be exempt.


William Moore Benidickson: I will see that it is looked
into again.


Ellen Louks Fairclough: Very well, thank you. Item agreed to.
Items 669, 682, 682a, 695d and 696e agreed to.


Edward Turney Applewhaite: Shall resolution No.
1	carry?


Some hon. Members:: Agreed.


Edward Turney Applewhaite: Shall resolution No.
2	carry?


Some hon. Members:: Agreed.


Walter Edward Harris: I just want to remind the committee that I did take it that I had unanimous consent on another occasion to introduce an amendment to the bill without preceding it with a resolution.


Edward Turney Applewhaite: Resolution No. 3?


Alfred Johnson Brooks: Before the next resolution carries, in view of the fact the minister has told us there would be an amendment to the bill I wonder if one might express a hope. I think it would be in order since the minister mentioned the amendment. I would hope it would include the tariff on potatoes in the maritime provinces. I do not think there is any tariff which should receive more consideration than that imposed on the importation of potatoes from the United States. I know that very strong representations have been made to the government for an increase in that tariff, and I express the hope on behalf of the potato growers in the maritime provinces and other parts of Canada that this will be given first priority by the government and the minister when these amendments are being considered.


Stanley Howard Knowles: The minister said he was sure he would have unanimous consent. I am sure that as far as we are concerned he will find us quite co-operative. I think it should be pointed out however, that we are now in committee of ways and means. The committee of ways and means can hardly speak for the house or for the committee of the whole but the minister will have our cooperation at whatever stage the request might be made.


Edward Turney Applewhaite: Shall resolution No. 3 carry?


Some hon. Members:: Agreed.


Edward Turney Applewhaite: Shall resolution No. 4 carry?


Gordon Knapman Fraser: What control has the customs department over firearms that are brought into Canada by immigrants and other people visiting this country?


William Moore Benidickson: There has been an order in council giving control over firearms. The terms of this order in council will now become a part of the tariff schedule.


Gordon Knapman Fraser: In the control of firearms do the police and the Royal Canadian Mounted Police make a check on those firearms and the registered serial numbers and so on?


William Moore Benidickson: I am sure if the inspectors noted the article at the time of entry they would draw the provisions of the Canadian law to the attention of the immigrant or other person entering through a customs port.


Gordon Knapman Fraser: It is not lawful under Canadian law to carry firearms and in particular revolvers and I just wondered if the customs officials inform a person coming into Canada that he must have a permit to carry such weapons in this country.


William Moore Benidickson: If it were noted I am sure they would.


Edward Turney Applewhaite: Shall resolution No.
4	carry?


Some hon. Members:: Agreed.


Edward Turney Applewhaite: Shall resolution No.
5	carry?


Some hon. Members:: Agreed.


Edward Turney Applewhaite: That completes the customs tariff resolutions.
Resolutions reported and concurred in.


Edward Turney Applewhaite: Which item does the committee wish to take next?


Walter Edward Harris: The Excise Act.


Edward Turney Applewhaite: Mr. Harris moves the resolution under the Excise Act. Shall this resolution carry?


EXCISE ACT
[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Act and to provide, among other things:
1.	That the excise duty on Canadian raw leaf tobacco be reduced from twenty cents per pound to ten cents per pound.
2.	That any enactment founded upon this resolution be deemed to have come into force on the 15th day of March, 1957.
Excise Act
Joseph Warner Murphy: Mr. Chairman, when we were on another item a few minutes ago the parliamentary assistant said he would deal with it when we came to the Excise Act. I think he quoted a figure of some $60,000 odd. Was that the revenue collected by the government?


Walter Edward Harris: The revenue that will be lost by the proposed amendment is approximately $100,000.


Joseph Warner Murphy: Well, Mr. Chairman, I would like to have this straight in my mind. Is this a duty imposed on tobacco that is sold by the farmer to the packer? I do not mean an ordinary packer who does packing and sells the product to the manufacturer. When it is sold to the packer who puts on an excise stamp for resale when it is to be resold by the packer?


Walter Edward Harris: Mr. Chairman, as my hon. friend, I think, understands, this is a farmer selling the raw leaf tobacco, so to speak, or what is known as Canadian twist. This is an occupation in which few, if any, tobacco farmers in Ontario indulge. There may be the odd one, but I have not heard of one. It is largely down in the province of Quebec and represents a particular kind of long rope of leaves rolled together for certain purposes and has nothing to do with the ordinary sale of tobacco for the manufacture of cigarettes and so on.


Joseph Warner Murphy: I have just one more question to clear up any doubts I might have. Was this tax originally ten cents per pound and was it increased to twenty cents during the war, or whenever it was, and is now being reduced to the former tax?


Walter Edward Harris: Yes it was at ten cents at one time and it went up with all such things during the war; it is now being brought down again.


Joseph Warner Murphy: And is the
packer licensed by the government for this purpose?


Walter Edward Harris: Yes, there can only be a sale if there is a licence.
Resolutions reported and concurred in.


DOMINION SUCCESSION DUTY ACT
[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Dominion Succession Duty Act and to provide:
1. That in determining the aggregate net value of property subject to duty under the Dominion Succession Duty Act upon the death, after the 31st
[Stage Direction]
Dominion Succession Duty Act day of March, 1957, of a predecessor, there shall be deducted the dutiable value of any succession to a charitable organization in Canada operated exclusively as such and not for the benefit, gain or profit of any person, member or shareholder thereof.
2. That where provincial duties have been paid in respect of property subject to duty under the Dominion Succession Duty Act upon the death, after the 31st day of March, 1957, of a predecessor, the successor to that property may deduct from the duty otherwise payable under the Dominion Succession Duty Act in respect of that propertv, one-half of the duty otherwise so payable in respect thereof.
Gordon Knapman Fraser: Mr. Chairman, under the succession duty act an estate under $50,000 is free from tax but if it should be $50,001 the whole thing then becomes taxable. Now would it not be wise-and I know the minister has had a lot of correspondence on this subject and many organizations have asked him questions to the same effect-if the government would allow the first $50,000 of any estate to be free of tax and then, after that, to be treated in the same way as it is at present.


Walter Edward Harris: As I indicated in my budget speech, a revision of the succession duty act will be ready, I hope, in the fall. It can be taken for granted that it will be ready at that time.


Gordon Knapman Fraser: I hope that provision will be considered.


Walter Edward Harris: This is a simple question and the simple answer is that if you did that you would have to either reduce your revenue by so many millions of dollars or you would have to increase the rate so as to retain your present revenue. It is just a question of how much money you want to take out of this tax, whether you leave it at the original exemption or do as my hon. friend suggests. If we are to get the $60 million or $70 million that we expect to get in the coming year we must leave the present rates to take care of that or to make it, as my hon. friend suggests, a real exemption with the tax rate starting higher.


Gordon Knapman Fraser: Does not the minister feel that some of the first $50,000 should be exempt? Take for instance an estate of $45,000, the government inspectors would come around and revalue it, and before you know it you are over $50,000.


Walter Edward Harris: But the tax would never reduce the estate below $50,000.


Herbert Wilfred Herridge: I would like to follow up something which my hon. friend the member for Peterborough said. I have had a large

number of letters on this question because I happen to represent a riding where there are a great many very active and intelligent women who work in organizations and they very frequently put their problems in my lap, collectively and individually. I do suggest that there is some merit in their argument, although I can appreciate the argument of the minister today in answer to my hon. friend's question. However, I think there could be a fairer way of applying succession duty tax with a very little reduction in the revenue to the exchequer and I do urge the minister to give consideration to these representations from women and from women's organizations who feel that they have a definite grievance in the present circumstances and conditions.


Gordon Knapman Fraser: But when this act was put in the dollar was worth a great deal more than it is today. The dollar is worth only about 50 cents today, or at least it only buys about 50 per cent of what it would have bought in 1940. This makes a great deal of difference to a person who is left with a small estate of say $60,000 and who has to pay tax on the whole works.


Alexander Malcolm Nicholson: Mr. Chairman, I wonder if the minister could give us a calculation with respect to a particular estate. I am sure all the hon. members have had representations of this sort; could the minister give us what would be the difference in the revenue to the treasury on an estate of $100,000 if the succession duty tax were changed so that there would be $50,000 deductible. Some of the representations I have had were to the effect that there should be an extra $25,000. Perhaps the minister could give us a rough estimate of the difference this would make in loss of revenue, if this recommendation were to be adopted.


Walter Edward Harris: I would rather that the resolution were passed and I will answer that question on the bill.


Ray Thomas: Mr. Chairman, like the hon. member for Kootenay West I have received a good many representations from these women's organizations throughout my riding and they have been unanimous in the request that the $50,000 be a true exemption for the purpose of the act. They have, however, gone a lot further and in this regard I think they have made a pretty logical request, which is to the effect that half of the estate be considered as having been earned and accumulated by the wife.

It has been pointed out in other debates, during this session particularly, that in the case of a farm wife she has worked equally as hard as the man in building up the estate and the farm. She has milked the cows and fed the chickens and been up early in the morning. I feel that these women, particularly on the farms-although this is also applicable to almost any other case; and indeed how many of us would get anywhere without our wives -for the purpose of this act should be considered as having earned and accumulated these moneys. Therefore there would be no succession duty chargeable on this amount of $50,000.


James MacKerras Macdonnell: I had intended to reproach the minister for the delay in dealing with succession duty but he has really drawn my fire by explaining that work is now going forward steadily. Of course I do hope he will not have the burden of making the decisions himself later in the year.


Walter Edward Harris: I am in complete agreement but from a different standpoint.


James MacKerras Macdonnell: I do want to make a suggestion, however. I fully realize what the minister says to the effect that the money has to come from somewhere, but it would seem to be fairer not to have this arbitrary throwback of the $50,000 into the tax field but rather whatever increase in rate is necessary. That it would be far preferable to having this benefit suddenly taken away by reason of having $1 over the $50,000.


Mr. Rowe:: It seems to me that the minister should take into more careful consideration the proposals that have been made. In view of the decreased value of the dollar during the last few years it does seem to me that it would be only fair to what might be termed reasonably small estates because after all an estate of $50,000 today is nothing like as large an estate as it was a few years ago. The value of the dollar comes into the picture and while the minister says that he would have to increase the rates on the larger estates, it does seem to me that it would be only fair in relation to these other estates-


Walter Edward Harris: I didn't say that.


William Earl Rowe: Oh, well I understood you to say that you would have to increase the rates accordingly, all along the line if you gave the exemption up to $50,000. Perhaps I didn't get it right, but was it only on the large estates that you would increase the rates, or
Dominion Succession Duty Act would you increase the rates on all if you wanted to maintain the same rate?


James Joseph McCann: The same aggregate collection.


William Earl Rowe: Yes. I am speaking of the size of the surplus you have. I don't know why you need to increase that at all, and when a more economical government is here in October it might not be considered necessary to maintain the rates which apply now.
But let that be as it may, I do feel that it would be only fair to extend this limit of $50,000. If a limit of $50,000 was right a few years ago, it is not right now, and, after all if it is extended and if it is necessary, as has been suggested, to increase the rate in order to maintain the present level of revenue, then it would be much easier and cause less hardship to our people if the increase were applied to the larger estates. I hope the minister will give some consideration to this. As the hon. member for Peterborough has said, to have an estate which just goes one dollar over the $50,000, and then to take the whole $50,000


Walter Edward Harris: But the levy is only on a dollar. No amount of tax will reduce the estate below the $50,000.


Gordon Knapman Fraser: The excess is taxed; if it is $60,000, the $10,000 is taxed.


William Earl Rowe: Even so, in relation to the value of the dollar it seems to me it should be paid on a basis which is in relation to the decreased value of our dollar, which I am not prepared at the moment to define exactly, but I think a reasonable figure would be $65,000 or $70,000. The value of the dollar has been decreasing steadily in purchasing power. Someone has mentioned $75,000 and it appears to me that $75,000 would be a reasonable amount. If we were right about the figure we fixed before, we are certainly wrong now; and if we are correct now we were certainly wrong at that time, and I submit that the minister should seriously consider such an amendment as has been suggested.


Walter Edward Harris: We are giving consideration to all these matters in the study of the revisions which, as I say, is almost ready.


Wallace Bickford (Wally) Nesbitt: I have just one comment to make. Last year when the estimates of the Department of National Revenue were before the special committee on estimates I and

Dominion Succession Duty Act other members of that committee had an opportunity of going into this matter. I was rather hoping, as were one or two other members, that a remission would be made when a wife had contributed to the extent of one half of the estate. I realize that certain considerations would naturally have to be borne in mind by the minister before making any drastic change, even next fall, in the succession duty act, but I do feel he might consider taking at least one step in this direction at the present time, a step which, I think, would be quite logical.
I would like to point out that a great many Canadians, particularly new Canadians who are on farms, have wives who work in the fields and in the orchards just as hard as their husbands. This is the case in the tobacco industry and it is also true in certain other specialized branches of agriculture such as fruit growing and market gardening. I think some alteration in the act at the present time, before the new act comes out next fall, or whenever it does come out, would be very helpful in assisting in cases where a wife has in actual fact made a contribution during a lifetime of labour to the building up of the estate.
I repeat that there are specialized branches of agriculture in which, very often, some of our new citizens are employed where there is the sort of arrangement I have described. It would not be difficult for the act to be altered along these lines at the present time. The minister and his officials would then have more time in which to consider the more general plan of allowing all women to have the advantage of half the estate. As I say, I do think the widows of farmers- women who have actually contributed to the building up of an estate-should be the subject of special consideration at this time.
Resolutions reported and concurred in.


EXCISE TAX ACT
Walter Edward Harris: for leave to introduce Bill No. 406, to amend the Excise Tax Act.
Motion agreed to and bill read the first time.


INCOME TAX ACT
Walter Edward Harris: for leave to introduce Bill No. 407, to amend the Income Tax Act.


Motion agreed to and bill read the first time.


CUSTOMS TARIFF
Walter Edward Harris: for leave to introduce Bill No. 408, to amend the Customs Tariff.
Motion agreed to and bill read the first time.


EXCISE ACT
Walter Edward Harris: for leave to introduce Bill No. 409, to amend the Excise Act.
Motion agreed to and bill read the first time.


DOMINION SUCCESSION DUTY ACT
Walter Edward Harris: for leave to introduce Bill No. 410, to amend the Dominion Succession Duty Act.
Motion agreed to and bill read the first time.


MISCELLANEOUS PRIVATE BILLS
[Stage Direction]
FOURTEENTH REPORT OF STANDING COMMITTEE Mr. W. J. Henderson (Kingston):	Mr. Speaker, by leave, I ask that the house should revert to routine proceedings for the purpose of presenting a report.
The Acting Speaker (Mr. Applewhaite):: Is
that agreed?


Some hon. Members:: Agreed.


Mr. Henderson:: Mr. Speaker, I have the honour to present the fourteenth report of the standing committee on miscellaneous private bills.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, the order of business now will be the consideration of the second reading of the bill with respect to hospital insurance, followed by consideration of the estimates of the Post Office Department.



HEALTH INSURANCE


Hon. Paul Martin (Minister of National Health and Welfare) moved: the second reading of Bill No. 320, to authorize contributions by Canada in respect of programs adminis-

tered by the provinces, providing hospital insurance and laboratory and other services in aid of diagnosis.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
On section 1-Short Title.
Stanley Howard Knowles: Mr. Chairman, the house will have noted the unanimity of the approval given to second reading of this bill by all parties in this house. It is significant that the proposal put forward by the government is one that, though we have debated it at the resolution stage, did not require to be debated today on second reading. However, before we proceed further with the discussion in the committee I think we should remind the minister of a few of the facts of life with regard to this whole matter.
As we have said on previous occasions, we welcome the steps now being taken by the government to put on our statute books a piece of legislation having to do with hospital insurance. Across the years we have contended that Canada should have at the federal level, in co-operation with the provinces, something more than hospital insurance. Indeed, it is our contention that we should have a broad, comprehensive program of health insurance. Nevertheless, this measure is a step in that direction and for that reason it is welcome.
I am reminded of the fact that in 1948, when Mr. King announced the health grants program, he stated amongst other things that the program was being initiated to lay the foundation for a nation-wide program of health insurance. I emphasize the point that on that occasion Mr. King did not make the suggestion that only hospital insurance was the goal. Rather he repeated what had been stated across the years, namely that the goal in this field is a nation-wide program of health insurance. In other words, it is our view that the day must come-and we feel that it should come soon-when we arrange for the payment of the medical bills of our people, including hospital, doctors, dentists, nurses and other care, on an insurance basis. As I say, it is because this bill is a step in that direction that we welcome it. It is because of that welcome that it has received the unanimous support of the house as indicated a few minutes ago.
We recognize the desirability of a program such as that envisaged in this bill being
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put on a joint federal-provincial basis. We go along with the minister in the statements he has made from time to time as to the desirability of the utmost of co-operation between the federal government and the provinces. It seems to us, though, that the federal government is not fully measuring up to its responsibility in the field of health insurance so far as the terms of this legislation are concerned.
We feel that the percentage of the cost of hospitalization to be paid by the federal government should be higher than the figure of roughly 50 per cent which is proposed under this bill. As I indicated at the resolution stage, we of the C.C.F. feel that that proportion should be 80 per cent. The reason that we contend that a larger proportion of the cost should be paid out of the moneys that Canadians pay in to the federal treasury is that the revenue of the federal treasury is collected more nearly on the basis of ability to pay than are the revenues of any other jurisdiction in this country.
We are not suggesting that hospital care can be had for nothing any more than any one would agree that free education is had for nothing. These things must be paid for. But what happens when you pay for them on a community or national basis is that you arrange for the payment on some other basis than that of the actual cost to each individual. Rather you arrange to pay for them on a social basis.
We have long since accepted the principle in this country that education is something that our people are entitled to regardless of the financial circumstances of the homes into which our children are born. I am sure that the Minister of National Health and Welfare agrees with me that the day must come when we apply the same principle to hospital care and to health care across the board, that these are things to which our people are entitled and that therefore they should receive them not according to the length of one's purse but according to one's need for them.
As to paying for them, we should pay for them as we pay for other services that we recognize as being important to the community as a whole, namely on the basis of the ability to pay. It is for that reason that we contend that the proportion of hospital costs paid for by the federal government should be much higher than the 50 per cent set out in this bill. We say again, as we have

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indicated at previous stages of this discussion -at the resolution stage and in questions on the orders of the day, and also in previous sessions-that the government in our view should include as shareable costs one or two items that are not yet included. I am thinking in particular of capital depreciation and one or two other items such as administrative costs.
We also feel that sufficient consideration has not yet been given to the claims of a number of the provinces that the care of tubercular patients and those who are mentally ill in hospitals should also be included in the plan. So long as you exclude those types of illness from the coverage provided in this bill it really works out that the federal government will be paying, not 50 per cent of the total hospital bills of the nation but rather some lesser figure, perhaps 30 per cent or 35 per cent at the most. We hope that even yet consideration will be given to extending the coverage under this bill to include these categories of illness.
I recognize the fact that once a government bill is in printed form the chances of getting many changes in a current session are not the best. But it is also our experience across the years that by hammering away at these things we get some ideas into the heads of hon. gentlemen opposite. The minister and all hon. members know that though we want to see this bill passed and put upon the statute books before this session ends, even if its ending is only a few days away, nevertheless by the terms of the bill it will not become effective for some months-perhaps a year and a half-after it is passed. In other words, there is time to reconsider the question of the cost of hospitalization of tubercular patients and those who are mentally ill.
We hope that in the interval between the date when this bill is passed and the time when it is put into effect in terms of the agreements being signed and payment made to the provinces that further consideration will be given to including these other types of illness.
We also press as strongly as we can, the point that the government should reconsider its formula concerning the time when payments under this bill will start. As the minister knows, when the Prime Minister made his statement in January 1956, the proposal was that this legislation would be introduced when a majority of the provinces representing a

majority of the population of Canada had indicated their agreement, and that it would be put into effect when that same number of provinces representing that same majority of the population of Canada had their plans in actual operation.
I am glad to note that some modification of that formula has been made. The very fact that we have this bill before us is evidence of one change in the formula. The original proposal was that no legislation would be even introduced into parliament until six provinces had agreed. At the moment, only five provinces have agreed, unless the Minister of National Health and Welfare has yet found an answer to the question I put to him about the Northwest Territories-


Paul Joseph James Martin: Wait until we get to that section of the bill.


Stanley Howard Knowles: When we were on the resolution, the minister asked us to wait until we got the bill. When we were on second reading, the minister wanted us to wait until we get into committee. Now we are in committee, he wants us to wait for the other clauses. No doubt then he will want us to wait until third reading. Then on third reading the minister will say he would like us to wait until we get out in the election campaign. This is as good a place as any to have this discussion.


Jean Lesage: That is not fair.


Stanley Howard Knowles: I quite agree with the Minister of Northern Affairs and National Resources in that respect, but it is quite surprising to hear the minister make that comment about his colleague.


Jean Lesage: That is worse.


Stanley Howard Knowles: There does seem to be some question as to whether or not the Northwest Territories is a province. The minister said the other day that for certain purposes it is. Then, if that is the case, the federal government could easily arrange for agreement to this proposal by the governing body of the Northwest Territories and then we would have our six provinces. However, even without any consideration of that point, I stress the fact that the five provinces whose governments have already indicated their willingness to agree to this plan represent 56.3 per cent of the total population of Canada. When I say, "the total population of Canada," I am including the Yukon and Northwest Territories as well as the 10 provinces and that percentage

is based on figures from the census of 1956. I submit that to insist that the population percentage should be any higher than that before further steps are taken is really ridiculous.
As I said the other day, if the province of Prince Edward Island were to agree that would make the sixth province. Were the population of Prince Edward Island added to the population of the five provinces that have agreed it would bring the total percentage up from 56.3 to 56.9. Surely a difference of that amount is not sufficient to delay putting this legislation into effect.
There has been one other change made with regard to the formula as to when the legislation will come into effect. We welcome this other change. It is that instead of the six provinces having to have their plans in actual operation it will be sufficient, according to the terms of this bill, if those provinces have their laws respecting their hospital plans in force. Provincial laws can come into force by virtue of a bill being assented to in the legislature or they can come into force by virtue of a proclamation. I believe that is an improvement over the former requirement that the six provinces had to have their plans in actual operation. I commend the government on the progress that it has made.
The government had taken a rather firm position and when the government takes a firm position, and particularly when it is hammered at by the opposition, it does not like to retreat from that position. The government has done so in these two respects; first, by introducing legislation when only five provinces have agreed and, secondly, by changing from the stipulation that plans must be in operation to the requirement that the appropriate provincial laws must be in force. I commend the government for what it has done.
I say to the government that, in all common sense, it ought to make this one further change. Surely, five provinces representing 56.3 per cent of the population of Canada are sufficient to get this great project launched. I hope consideration will be given to that point by the government while we are dealing with this bill. I emphasize that now because the requirement that a majority of the provinces representing a majority of the population in Canada have their plans enacted is written right into the bill itself. In our view, this is one of the changes that ought to be made before this legislation is put on the statute books at this session.
Health Insurance
One of the reasons I emphasize this-I say this quite frankly-is to reduce the extent to which this matter will be kicked around in the election campaign that is coming up in a matter of a week or 10 days.
The minister knows that if the requirement for six provinces stays in the bill it will look as though that is the basis for still further delay in the actual coming into force of this plan. But if he were to change the bill to make five provinces sufficient bearing in mind the fact that five provinces, namely British Columbia, Alberta, Saskatchewan, Ontario and Newfoundland have agreed, then that element would be removed so far as the election campaign is concerned. I say, for our part, and I say it quite clearly, we will still contend in the election campaign that we should have comprehensive health insurance rather than just hospital insurance. But surely we can get this point settled, namely that this legislation is not just something that is to be put on the statute books now without any chance, under its present terms, of being put into effect for a year and a half. Surely, we can have it changed so it can come into effect in a matter of a few months at the latest.
There will be other remarks that we will want to make on some of the sections as we reach them. We did feel however, that the house having shown its full support of this subject and having co-operated by giving unanimous approval to the bill on second reading, that these remarks should be made at this time on clause 1 of the bill.


William Gourlay Blair: It is not our intention to hold up this bill in any way. We have been in agreement so far as the bill is concerned. At the resolution stage, I pointed out certain things with which we were not in agreement. However, we do welcome this bill and we want to see it in operation. It is not our purpose, therefore, to hold up the bill by prolonged discussion. I intend to repeat some of the matters with which we are not in agreement. One of these is the question of depreciation. At the resolution stage I pointed out that depreciation should be allowed as a cost of these hospitals. I am aware of a hospital which lately wrote off some of their depreciation costs and this became a debt. Once this bill is passed, as I pointed out at the resolution stage, it is going to be very difficult for the organizations concerned with hospitals to go out to the public and seek donations, or try to raise money by the various means used by hospital committees.

Health Insurance
It is very apparent, and has been for years, that there is a need for a bill of this kind. I cited figures at the time of the resolution stage showing the high cost of hospitalization. The cost per patient per day, as I indicated at that time, has gone up from $7 and some odd cents to $14 and $15, a cost that makes it imperative that some measure of relief should be given to people who find it necessary to go to hospital. Such a cost is beyond the means of the average person in this country. When there is added to the cost of a severe illness, laboratory fees and fees for special nurses and the like, the fees of the medical man or the surgeon, sickness becomes a terribly expensive proposition.
I do draw your attention again to the fact that depreciation costs are something which should receive consideration in this bill on account of the difficulty of raising money, because the public feeling will be that once this bill is put through the federal or the provincial government in some way will be responsible for hospitals.
Another thing I do want to point out is that we should make very clear that this is a hospital insurance bill. Since the time that the resolution was brought in I have heard it discussed as health insurance. This is a hospital insurance bill.
The other matter that I brought up at the resolution stage was the question of tuberculosis and mental patients. It is true that tuberculosis is being well taken care of at the present time. Indeed the lists are going down. The number of cases is rapidly being reduced, and we are coming to a position that has not been common for a good many years. It is possible to get a patient into a sanitarium because we are arriving at the place where beds are available. That is owing to the fact that the measures which have been taken by the provincial departments of health, especially in Ontario, are cutting down the incidence of this disease year by year. The mass surveys conducted by the province have done a great deal in the cutting down of tuberculosis; but at the same time, those people who remain in hospitals are still hospital patients; they are still afflicted with an illness, sometimes a long-term illness. They are sick people. The same thing applies to mental diseases. There are some other things that I wish to say, in a consideration of mental disease, while we are on this bill.
In the estimates committee last year the minister gave his reasons for not recognizing mental disease. He agreed to accept mental disease while the individuals were patients in hospitals; that is, in the psychiatric wards of general hospitals; but his argument from there on was that mental disease patients, if accepted under this plan, would raise the cost

so that it would more or less defeat the plan and raise the cost of the insurance to the person wishing to obtain it. I point out to you, sir, that we have a problem in mental disease in Canada that we will have to cope with some place somehow. I do not like the fact that mental disease is not recognized because I feel it is a backward step. It is a backward step for this reason. Mental disease may occur just as you may have pneumonia or any other disease in the categories of diseases that are treated in hospitals at the present time.
The very fact that the statistics of Canada show there must be something done about this beyond the amounts that are given in the health grants for certain clinics and research proves my point. The number of people, as I pointed out the other day, suffering in mental hospitals is 10,000 more than the people who are occupying beds in all the other general hospitals put together. Something has to be done about this.
There was one bright spot brought out the other day. I noticed in statistics issued about a week ago that there were some signs of a letting-up of mental disease in Canada. We hope the percentages shown there will continue to grow, and that we may feel we are adequately dealing with this disease. We require more than what is laid down in the health grants for the treatment of mental disease.
I am sorry that some place in this bill the minister cannot go a step farther and give further financial help to the mental hospitals. It would be of great assistance. We need something more than the fact that under this scheme, when they are patients in general hospitals in this country, they qualify.
It is true that this bill is only the beginning. From time to time certain changes will be made in this legislation. I think that certain conditions laid down in the legislation at the present time may even have to be changed by legislation in the future. But in discussing this hospital situation, there is one point that I wish to bring to the attention of the minister. He did not say it the other day when he was speaking on the resolution but I have noted his remarks in the press. I have read his speeches and I have heard him say that the health grants were responsible for the addition of 70,000 beds in Canada. May I say to the minister again, as I have said on previous occasions, and for the benefit of the committee, we ought to look at it in this way. Suppose we were building a hospital in the Ottawa valley-and I think the cost would run around $12,000 per bed-under the health grants the dominion government would give $1,000 for each new bed

and the province would give a matching grant. The donation of the federal government would be $1,000. If you took the $1,000 that is added by the province, and if the cost of the hospital bed in this year would be $12,000, it would leave $10,000. That money would have to be put up either by the municipality or by the various organizations interested in building hospital beds.
I feel very jealous on behalf of those people who have worked and are working to produce the $10,000. Therefore I think it is not altogether fair to say that the program has been responsible for 70,000 hospital beds. It is helping. Certainly, the assurance of $1,000 by the federal government and $1,000 by the provincial government is an incentive, but it is a long way from producing the 70,000 hospital beds.
The hon. member for Winnipeg North Centre spoke of this as an election argument. I have said before in this house that in dealing with health I hope this matter will never become a political football. One must realize that every party in this house has been committed to some form of health or hospital insurance, and has been saying it over the years. I do not know how many speeches I have made on behalf of this party-the minister will agree with this-asking that something like this be done. I hope that when we go to the country we will not have any supporter of the government, any cabinet minister or anyone else, spreading his chest and saying, "I brought in health insurance". We have been asking for it; we want it. We are not going to delay this bill in spite of the fact we do think it has imperfections. We are going to vote for this bill. We want it passed and we want it passed as soon as possible.
The other day I brought in an amendment regarding the required six provinces and a majority of the people. The amendment was thrown out; it was not in order. We did express our opinion at that time regarding the number of provinces necessary to bring this bill into effect.
If this bill is necessary at the present time, if it is going to help people, let there be as little delay as possible. Again I point out it is not necessary to have the six provinces, or a majority of the people agreeing to it to bring it into effect.
Under these conditions the sooner we get this bill into operation in any province the better it will be. It is possible that when the bill is being discussed in the house we will make suggestions from time to time but we want to see this bill passed and the plan put in operation as soon as possible.
Health Insurance


Ernest George Hansell: Mr. Chairman, we have pronounced ourselves on this measure, particularly when it was in the resolution stage, and as has already been said, I think, all parties in the house are agreeable to having some form of hospital insurance provided for all the people in Canada if that is possible and we hope the day will come when all the provinces will strike some sort of agreement with the federal government so that it can truly be known as a national hospital insurance plan. I doubt very much whether the present bill can be called a national hospital insurance plan. It is only national to the extent that the provinces agree to enter the plan and sign a consequent agreement with the federal government.
I look upon the bill as one that will enable the provinces to better pay for hospitalization for their citizens. I cannot see that it really goes much farther than that. Perhaps that is a good thing after all, because it must be recognized that according to our constitution health is a matter which comes under the jurisdiction of the provinces. Since the subject of health constitutionally falls within the jurisdiction of the provinces I would suggest that they should have all the freedom possible in the administration of their own plans within the agreement that is struck with the federal government.


Paul Joseph James Martin: Hear, hear.


Ernest George Hansell: I see that the minister nods his head and I am sure he will do his best to see that this is done.
I suppose we all like to boast about our own provincial hospital scheme. My colleagues to my right frequently boast about the plan operating in Saskatchewan. That is perfectly all right and I think perhaps the people of Saskatchewan might think their plan is the best.
I am equally sure that the government of British Columbia feels that their plan is the best. The government in British Columbia, of course, inherited their hospitalization scheme. However, at the time they inherited it I think it can be said that the plan was in a terrible mess. It was based on the principle of the payment of premiums many of which had lapsed and the former government had a difficult time collecting premiums and making ends meet. A new government was elected there and they began to straighten out the complications of the scheme they inherited and I think today the people there are fairly well satisfied with it and perhaps think their plan is the best one.
Coming now to my own province of Alberta, we think we have a scheme which is the best. Because I come from that province I think I might be permitted to place on the

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record an outline of our scheme. The provincial government will enter into a contract with any municipality or city for the purpose of granting hospitalization to the citizens of Alberta at an extremely low rate. I think the rate throughout the province would presently average approximately $1.50 or $1.60 a day. Not many years ago it was known as the "dollar a day" hospitalization scheme. Of course, under the agreement that is struck with the municipalities the province gives grants under a certain formula and the municipalities make up the balance. They must include their contribution in the over-all municipal taxes they levy because they must get the money from some source.
If I may be permitted to cite a personal illustration I will tell you what happened in my own particular case. I took ill with sciatica in my left leg. I visited the doctor on a number of occasions and despite the fact that my leg was punctured with a needle a good many times the sciatica reached the point where I could not move. My wife said, "Well now, you have had it, I am going to call an ambulance." I was taken to the hospital in an ambulance and aside from the fact that I had sciatica there was nothing organically wrong with me and I was a hungry man.
I ate three square meals a day and I might say they were very good meals. Our local hospital is small but it is a highly efficient one. While there I received some shortwave treatments approximately every two or three days and I had a few small doses of medicine, a blood transfusion and an intravenous. I remained in the hospital for 30 days and on the thirtieth day I walked out and collected my bill at the desk. The total of my bill was exactly $30. I was very pleased at this and one cannot blame me if I walked out of the hospital feeling that we in Alberta had one of the best possible hospital schemes. In fact, I went home and in a jocular vein told my wife that I thought I would go back to the hospital because I could live there more cheaply than I could at home.
Of course, I did not get hospitalization for a dollar a day because there was an amount included in the annual tax bill on my home which represented my contribution to the scheme. However, I have my tax bill which I carry around in my brief case and the proportion of my taxes that went for hospitalization was $23.
One does not mind paying a little sum like that through taxes and one does not mind paying a moderate daily rate at the hospital either. It gives one an element of choice, a feeling that one is helping to pay for one's treatment. We in Alberta think we have one of the best hospitalization schemes.

I was in the hospital because of sciatica but they are able to give other patients much better treatment than that financially. The maternity cases are free; hospitalization is free; the old age pensioner accommodation is free and some other things of that nature.
Now I said that we would welcome the bill and the minister will not find opposition here in respect to it, but I would like to say something else and in so doing I do not want to say anything against the bill or the principle of hospitalization or insurance therefor. I do however believe that the government itself must look at these things in a much broader sense. I will pose this question: Why is it that hospitalization insurance schemes are necessary? Now the very moment I pose that question I think it is obvious that there can only be one answer to it and that is that the over-all picture shows that there are people in the country who cannot afford to pay for hospitalization.
We will grant that there will always be some people who cannot afford to pay their own hospital bills; that is natural. The poor are always with us, but I do believe that in the over-all picture the responsibility of the government is clear. I have said this before and I say it now, the best welfare state is a state where the income of all the people is sufficient for them to live on a very high standard of living where the production, not only of material wealth but of skills and services of the country, are at their disposal. In this way they are completely free to choose their own hospital, to choose their own doctor and to feel that they are financially able to take care of themselves when, unfortunate circumstances arise and they must be hospitalized. Now I think the responsibility of government must go that far and that is my main criticism of government policy on many other things as well as in matters of this kind.
There is one other point I would like to mention which was put forward by the hon. member for Winnipeg North Centre and that is that this issue may be kicked around in an election campaign. I do not know whether that would be so in his particular constituency or province or indeed in any other part of the country-perhaps it will be. I am going to say this, however, that I have passed through a good many elections personally and have fought quite a number of them but, do you know, the strange thing about it is that I have never fought a federal election when I have had to answer one question in respect to a national health or hospitalization scheme. Never have I been asked whether or not we support it; never

have I been asked whether or not the people can expect it. It may be that the people in my province and in my constituency are well satisfied with the scheme they have and therefore have no reason to ask the question.
However this does pose a question in my mind as to whether or not the people themselves really want it. From some quarters you would imagine that people would be clamouring for this thing; well, I do not know whether they are. I am not saying it is not a good thing, perhaps it is, but I have not personally witnessed any great clamour for it. I know there are organizations the officials of which will embody in their briefs certain proposals and urge the government to put in the plan because there are so many people who cannot afford hospitalization. Why can they not? That in my personal view is because there is something wrong somewhere else.
I do not think I need to say anything else along that line. The minister is going to receive our support and I do urge that the provinces should have every freedom. I will sit down now with just this last question to the minister so that when he gets up to reply to all he might answer whether or not the provinces who have agreed to come into this scheme-or all of them as far as that goes-have now seen this bill.


Paul Joseph James Martin: Yes.


Ernest George Hansell: The minister says yes; I am very happy to know that because otherwise we would be passing a bill which the provinces had not seen. We are therefore very glad to have that assurance.


Mr. Ellis:: Mr. Chairman, like my colleagues, I am most anxious to see this bill passed.


An hon. Member:: Then sit down.


Alfred Claude Ellis: But I would like the opportunity of saying how disappointed I am that the government has seen fit to water down its original proposal of a comprehensive health insurance program to that of a program covering hospital care only.
I appreciate the argument that might be put forward by the minister, that this is part of an over-all program, but I think that the need in this country for a comprehensive scheme is so urgent at the present time that I do not think too many Canadians relish the idea of waiting as long for the next step as the period of time we have had to wait for this step to be taken.
I think that surveys have indicated that there is roughly twice as much being spent by the average Canadian on doctor bills, 82715-196J
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medical bills than on hospital bills, and consequently it would seem to me that the provision of some assistance in the field of medical care is long overdue.
I do not know when the government decided to stop talking in terms of health insurance and to emphasize the words "hospital care". This is of fairly recent origin. We used to hear speeches by supporters of the government referring to health insurance up until a few years ago and then gradually it has been a watering down process. Now I am sure that just as we are not satisfied that the legislation has gone far enough there are other groups in the country who are equally as dissatisfied. The Canadian Labour Congress in its submission to the federal cabinet made rather specific recommendations regarding health insurance and pointed out that health insurance should have the highest priority and that there should be an early implementation of a nation-wide program of health care.
You will note that they did not merely ask for hospitalization. They asked for something which has been promised for many years. They asked for over-all health care. They went on to point out that this should include preventive, diagnostic, curative and rehabilitation service rendered by physicians, dentists, surgeons and other health agencies. They recommended that such a comprehensive program should be initiated on a nation wide basis either by the government of Canada or jointly in co-operation with the provinces as a complete health insurance plan.
The step taken by the government of Canada in offering to pay a share of the cost of hospital care in the six provinces is worthy of commendation. It is a move in the right direction, but the Canadian Labour Congress does not take the view that a comprehensive nation wide health insurance plan cannot be implemented without further delay. The last sentence in these recommendations outlines their position quite clearly-that while they agree with the proposals advanced by the government as far as they go, the Canadian Labour Congress is not satisfied that the government has gone as far as it could go at the present time.
There are a number of other shortcomings in the legislation. I was rather disappointed in the comments made by the minister when he introduced this legislation at the resolution stage, and turned his thumbs down on what I thought was a reasonable proposal that the federal government should be prepared to provide for the care of those who are in mental hospitals and t.b. sanatoria. The fact that some of the provincial governments have undertaken to provide full care is no reason why this should be used as an excuse

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to the disadvantage of the provinces. It is no reason why the federal government should discriminate against such provinces with respect to the care of patients in mental hospitals or in t.b. sanatoria.
I agree with our mental health officials who say that one of the most important things we must do is eliminate the artificial distinction between illness of what might be called a physical nature on one hand, and illness of a mental nature on the other. We must erase from the public mind the attitude that there is something different between a patient who is in a mental hospital and one who is in an ordinary general hospital. I think we could go a long way toward doing that if we included all sick people who require hospitalization	within the	scope	of	this
legislation.
The government has not	seen fit to do
this, yet statistics reveal that a very high percentage of	hospitalized	people	in	this
country are in mental institutions.
I think the government should be prepared to go a long way in an effort to build up a better attitude of mind among the general public with regard to mental illness. One way of doing	that would	be, as	I	have
suggested, to include all hospital patients within one over-all hospitalization scheme.
It seems to me, that there are a number of other grave shortcomings in the legislation. Some of them have been noticed by newspapers which normally support the government. I have here a copy of an editorial from the Saskatoon Star-Phoenix of March 29 of this year entitled: "Two Glaring Omissions" and it has to do with this present measure. The editorial states, among other things:
One matter in particular has not attracted the public attention we think it deserves. We refer to the federal government's omission of two legitimate and familiar expense items from the list of shareable hospital costs on which calculations of Ottawa's proposed contributions to provincial plans depend. These two items are annual depreciation charges and annual interest charges on capital debt. Depreciation charges are the amounts set aside each year by a hospital for the day when expensive renovation and expansion programs will have to be undertaken. Interest charges are the annual payments an institution must make on outstanding capital debt.
Ottawa ignores both these cost items in calculating per capita hospitalization costs. As a result its percapita cost figures do not give a true account of the operating costs of the nation's hospitals. Consequently, Ottawa will not be contributing an average "50 per cent towards the national cost of standard public ward care and the normal services that go with it," as health minister Martin is so fond of saying.
I think it is significant that this quite valid criticism of the legislation should come from a newspaper which over the years has consistently supported the Liberal party. I was

not too greatly impressed by the minister's presentation when he introduced this measure, because it seems to me that after many years of waiting the minister sought to take too much credit for himself and for the government for having at last brought forth a part of a program, a program which should have been instituted a great many years ago.
I know that before the last general election whenever we raised the question of health insurance we were told, in my constituency at least, that we already had a health insurance program. The rather tortuous argument was used that since some of the grants had been provided by the government, that because this amounted to, perhaps, one-twentieth of a program, that constituted a health insurance scheme. I think the man in the street is not going to judge a program on that basis. He is going to look for results, and I think we have long passed the time when we can allow this business to continue as it has done in the past.
Good health is essential to the nation's well-being, and a comprehensive health insurance plan should not be measured merely in terms of dollars and cents. The amount of money which it is going to cost should be considered in terms of how the expenditure will affect the well-being of the Canadian people. I think it is shortsighted to take the attitude that we must regard this program merely in terms of money spent.
There are a number of other matters I would like to mention at this time but it is not my intention to hold up the legislation. I want to see it go through and I want to see my own province in a position where it can apply for and obtain some benefit from the measure now before us.
Reference has been made to the hospitalization programs in the various provinces. As a citizen of Saskatchewan, I want to say that I have always been proud of our own scheme. I am very proud of the fact that Saskatchewan has pioneered in this field, and I think the hospitalization legislation brought in by the C.C.F. government immediately after that government went into office has set the pace for other provinces. As is well known, several other provinces have followed suit.
However, I do wish to draw this to the attention of the committee-that when we were elected to office we immediately began to implement the commitments we had made regarding hospital care. We got down to the job. We did not wait around for 10 or 12 years. In the first session of the legislature when the C.C.F. were in charge legislation was brought down to institute a hospitalization plan and I would say that largely as a

result of the initiative shown by our government at that time the province of British Columbia followed suit a few years later.
I feel that record of hospitalization in Saskatchewan was of sufficient importance to have hastened the type of legislation now before us. What I find so difficult to understand, in view of the example set by our provincial government, is why the minister took so long to bring down these particular proposals.
I should like to get some information from the minister as to when we may expect the next step in this proposal. How long are we going to have to wait until the federal government brings down proposals dealing with medical costs? In other words, I wonder whether the minister would indicate how many years we might be expected to wait until the government-if it is in power after this next election-decides to keep the commitment made originally to bring down a comprehensive health insurance scheme.


Alexander Malcolm Nicholson: Mr. Chairman, I thought by the signals I was getting from the minister that if I would sit down he would indicate that he would give sympathetic consideration to the representations that have been made.


Paul Joseph James Martin: I am suggesting that on the appropriate section I can deal with this question.


Alexander Malcolm Nicholson: There are a few remarks which might not be in order when we come to the next section and which I should like to make at this stage. I was reading the debates in connection with the introduction of old age pensions back in 1926; that is nearly 31 years ago. I was surprised to find at that time that although there was a suggestion that the government of the day wait until six or seven provinces were prepared to go along with the federal government in sharing the cost of old age pensions, the then prime minister, Mr. Mackenzie King, at that time felt that the government of Canada had the responsibility of deciding what was good and what was not good for Canada, and the old age pension legislation was put on the statute books.
I am greatly disappointed that the Minister of National Health and Welfare has not had more influence on his colleagues in the cabinet and has not been in a position to say to the committee today that having decided that this step should be taken the government of Canada is now prepared to enter into agreements with the five provinces which have over 50 per cent of the population and start immediately to use up some of the surplus that his colleague the Minister of Finance has available. I am also greatly disappointed that the minister has not reconsidered his unwise decision that more than half of the sick people
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in Canada are to be barred from this legislation. I am referring to the people who are in the mental and tubercular hospitals day after day. Since I spoke on March 25 I have been to a penitentiary-


Some hon. Members:: Oh, oh.


Alexander Malcolm Nicholson: I was surprised to find what good meals they served in the penitentiary; they are much better meals than the Minister of National Health and Welfare makes available for the old age pensioners on $46 a month. But I find that we spend about $6 per day for every person in the penitentiary down at the federal training centre in Quebec. The amounts spent in some of the other penitentiaries are not quite so high. But when you consider the $2.70 per patient per day in the mental hospitals, the $6.29 per patient per day in the T.B. hospitals and the $7.77 per day in the public hospitals, it is not surprising that patients in the mental hospitals are not getting better treatment.
I have also visited the institution out at Smiths Falls in the constituency of the hon. member for Lanark. The Minister of National Health and Welfare has a financial interest in this place. I understand that the federal government has put in about a dollar for every $10 or $12 invested by the province of Ontario. The average cost is $2.70 per patient per day in these large institutions. Even at this stage I hope the minister will change his stubborn position and recommend to his colleagues that all Canadians, regardless of whether they are in mental hospitals or in tubercular hospitals, should share in the benefits of this legislation.


William Alfred Robinson: Shall the clause carry?


Robert Hardy Small: I should like to speak on this clause, Mr. Chairman, but it is six o'clock. Can we take the adjournment?


Paul Joseph James Martin: Would my hon. friend not find it possible to proceed with the clauses of the bill so that we might get on.


Some hon. Members:: Six o'clock.


Robert Hardy Small: Let us call it six o'clock.


William Alfred Robinson: Shall the clause carry?


Howard Charles Green: Six o'clock.


William Alfred Robinson: It is not yet six o'clock.


Edmund Davie Fulton: Just say a word or two. Stop sharp at six o'clock.


Robert Hardy Small: Mr. Chairman, as has been said by the hon. member for Lanark and most of the other members, there is no intention of trying to delay the passage of this bill. However, there are a few things that should be said about it. I suppose one could start off by saying that for 40 long years we have wandered through the wilderness. Now I suppose

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we can presume that our pilgrimage is at an end. Following up the long-heralded health plan of the Liberal party the government has now seen fit to come to life and produce something tangible. While it is in this intangible state, I should like to call for the adjournment.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Robert Hardy Small: Mr. Chairman, just before
adjournment time I had this hospital bill in a state of intangibility, and now probably I should bring it into tangible form. Prior to the recess I had mentioned the long time it had taken this government to introduce this health plan. In fact, however, it is not a health plan, as I stated, because it has now evolved into a hospitalization plan. Time after time during election campaigns this health plan has been held out as an alluring proposition by the government in order to aid its return to office. I might say that many times it accomplished its purpose.
The plan had been forgotten in the early years. They said it was going to cost a considerable amount of money to introduce it. During some election campaigns the Conservative party was upbraided because they said it was going to be very costly. We were accused of trying to frustrate the plan because of the cost. Gradually the government came around to the idea that it was going to cost quite a bit. The people became tired of waiting for this plan. Medical costs and hospital costs began to mount. During the war these costs became prohibitive; the people could not afford them. They took matters into their own hands and got insurance of their own which would help them stand the strain of long illnesses in their families. Then these hospital plans became quite the fashion and there were various plans by which people were able to insure themselves against hospital costs. This caused a great demand to be made upon hospital accommodation.
It was just about that time the war started and the hospitals were subjected to the extra burden of war casualties being returned to Canada. The government was hard pressed to find accommodation. I know that the government did grant sufficient money to help build a wing on the Toronto East general hospital, which is adjacent to my riding, in order to take care of the soldiers. I am sure the same thing was done for other hospitals. After the war was over there was
TMr. Small.]
an increased number of beds available, but even that did not meet the demand for hospital beds.
The demand for hospital plans continued at such a rate that the provinces themselves had to do something about it. The provinces of British Columbia and Saskatchewan adopted their own hospital plan. These provinces gained a lot of experience and found what it costs to run hospitals. One after another the provinces entertained the idea that they should have such plans. In fact, the adoption of health plans continued at such a tempo the federal government was afraid it would be faced with such a hodgepodge of medical care plans in the provinces that the dominion government would not be able to introduce its own plans.
Then confronted with this phenomenal expansion in hospitals the Ontario government came up with their per bed allowance of $1,000 to aid hospital construction. The federal government matched this allowance, some two years later. The dominion government then came up with what I term their Rip Van Winkle plan. After sleeping for nearly 40 years they introduced a plan at the dominion provincial conference. The conditions that were set out as the prerequisites for the implementation of the plan, such as the six provinces having to participate, and the insufficiency of the federal government contributions were not acceptable so the Ontario government objected. It was stated that 50 per cent of the people would have to enter such a plan. The provinces said they could not meet these conditions. Then it began to dawn upon them that perhaps these conditions had been submitted for bargaining purposes or for the purpose of delaying the introduction of the government's health plan. However, later the number of people needed to make this plan work was agreed upon and the provinces indicated their agreement, so these impediments to the adoption of the plan were removed.
Last year, after the plan had been submitted, we heard from Ontario, through its premier, that Ontario had some objections. What then was the province of Ontario going to do? Because the province would not accept the federal plan holus-bolus it was placed in the light of frustrating the government's plans. The truth of the matter is that Ontario had always been in favour of having a national health plan. The people of that province could see that such a plan was necessary in this country, but this government was reluctant to move. Time after time in the house you could hear them say, "What is Ontario going to do about this?" This plan could not work under the conditions set down

by the federal government unless Ontario was in it. Quebec, for reasons best known to itself, is not going to participate in it and Ontario is the only other province with a population large enough to make this plan work. If Ontario were taken out of the picture, all the other provinces from coast to coast could not operate it. It was, therefore, necessary to have Ontario in the plan.
They started to bargain, and I will say that there were compromises made on both sides. The premier of Ontario, in a spirit of compromise and a desire to see this plan work, gave some very vital concessions. If this plan is adopted, and I hope it will be, it will be as the result of one thing; I want the members on the government side of the house to understand this. If this bill goes through and the plan is put in force, it will be as a result of one thing and that is that the premier of Ontario made concessions in order that we would have this plan.


An hon. Member:: Under public grants.


Robert Hardy Small: There are no public grants involved. Ontario will always be paying more than its fair share. When this question was brought up last year I said that you did not need to worry about what Ontario would do. If the deal were not jug-handled or onesided, as most of the government's propositions are, you would find that Ontario would give effective leadership to the plan.


William Alfred Robinson: Shall clause 1 carry?


Mr. Casileden:: No, Mr. Chairman. I am sure that the minister's requests that we wait for the bill have been met. The fact second reading of the bill was given so rapidly indicates the general readiness of the house to see some progress made along these lines.
I had hoped that not only a hospital insurance scheme but a health insurance scheme would soon be part of the statutes of the Dominion of Canada. We are glad that this legislation has finally come to the house and is to be enacted. We only question why it was that the government waited so long, and why it was that they waited just three months before a general election to bring the legislation before the house. If it was needed as badly as it was needed three years ago, that was the time to bring it in. One can only conclude, perhaps, that the political side of the question was more in the mind of the minister and the government than the health problem.
There is one very serious fault with this legislation, which I am sure is going to be aired by those who speak on behalf of a great number of people in Canada. I refer particularly to the mentally ill. This legislation should include all persons who are sick.
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I suggest to the minister that some day Canada will have insurance legislation which will cover everyone who is ill. To discriminate in this way is a very serious thing for a large number of people in Canada who become ill. It is the very type of discrimination which is bad in all kinds of illness; it suggests segregation.
Experiments and practice have shown- and I recommend to the minister that he study what the government of Saskatchewan has done in the way of treatment of the mentally ill-that much can be done for the mentally ill. The progress made in Saskatchewan has shown that where adequate staff and modern facilities are provided about 85 per cent of the people who become mentally ill can be returned to their homes as useful citizens. That is a great revelation. The terrible record of the mentally ill in this country, the treatment of them in the past, is really a condemnation, when proper treatment and facilities could have cured so many. We now know that 85 per cent of those who become mentally ill can be returned to a useful life merely by the provision of adequate staff, modern facilities and modern practice. When we think of that, why should we discriminate against them in legislation such as this?
In his statement to the house I hope the minister will explain exactly what will be done, because those who are excluded under this legislation are those who suffer from tuberculosis in sanitaria, and also those who are mentally ill in mental institutions. What about the hospital which has one wing in which psychiatric patients are treated? That type of hospital and that type of treatment are really the best. That is the kind of treatment which has been found to be one of the important factors in recovery.
I had the rather fortunate experience of being a patient in the university hospital in Saskatoon last fall for nine or ten days with a gallstone operation. I had the opportunity to see what they were doing there, where the facilities were so good, where the staff was adequate and where the medical staff could be interchanged with those of the psychiatric ward. The records of recovery in that institution are an indication that this kind of legislation is much too slow and much too late. Surely if our object is to keep in step with the advances that are being made today, to keep in step with what scientific knowledge demands as being important, why should the present government, which the Minister of National Health and Welfare is so ready to praise as always in the forefront, always being in the advance -and we listen to it daily-be so slow and so hesitant in this case?

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I plead with him to reconsider the exclusion of the tubercular and mentally ill patients. The Canadian mental health association refers to this as being a most vicious and most immoral type of discrimination against the sick, and particularly against helpless people, 85 per cent of whom could be restored if adequate help were provided. I am sure that on the very grounds of economy it would be good to include these people in this insurance plan. In the end it would be cheaper; in the end it would be more effective and it would save thousands of good Canadians, who are today in fairly good health, from being condemned to a life of uselessness and misery in the type of institutions which are a disgrace to any nation which considers it is in the forefront and a leader in the treatment of the ill.
I give the minister those thoughts and I say to him that I shall have more to say when we come to the clauses of the bill. I conclude by saying I hope the minister will make a statement to the house when we are discussing the clauses of the bill, indicating the readiness of the government to go forward. Perhaps he would indicate also some of the latest figures that his research department has with regard to the cures that are being effected among the mentally ill of Canada. He might also give some of the figures that have been revealed in this country of the large increase in the number of people who are becoming mentally ill. It is a major problem in our country.
I am not saying that the government has done nothing. The people have been glad to receive the grants from the federal government for the treatment of the mentally ill; but here is a chance to do something progressive. I think it is a terrible flaw in this legislation to exclude the tubercular and mentally ill people. It means segregation, which is the very opposite of what it should do.
(Translation):


Mr. Poulin:: Mr. Chairman, I wish to assure the Minister of National Health and Welfare (Mr. Martin) that I will not prolong this debate more than three or four minutes.
I have no intention of opposing the adoption of the hospital insurance proposition which is now before the committee and which was given so quickly second reading this afternoon. I fully realize how useless my opposition would be. Nevertheless, I would like to establish my position clearly with respect to this problem.
State assistance is obviously indispensable to hospitalization and research services for poorer patients. Going even further I
[Mr. Castleden.l
might add that, according to the terms of this present plan, medical costs themselves should be included. For a number of reasons, medical costs, and especially hospital costs have reached a prohibitive level for people of low income. None the less, if there is one thing which concerns the individual personally and engages his full responsibility, it is indeed his health and the means of maintaining it or recovering it if it has been impaired. The responsibility of the state in that field, as in that of education for instance, can only be complementary. I therefore feel certain misgivings about the interference of the state, whether federal or provincial, in a field which concerns the personal life of the individual.
I have already dealt with that question here more than once and at some length. I might merely add today that citizens conscious of their own responsibility could very well leave it to private companies to carry the financial risks of illness that will befall the individual, often at some unexpected moment of his life. I refer of course to insurance companies and to health insurance companies operated on the principle of mutual benefit. Quite clearly, on the other hand, many people of low income cannot afford the premium charged by those companies to cover the care to individuals, and particularly to families. It is then that the government must step into the picture and play the complementary part 1 have just mentioned, by assuming the cost of this premium. In that way, the individual and the family keep their independence and full freedom.
It may be objected that insurance companies might take undue advantage of the situation. That is possible; but then it would again be a government responsibility to safeguard public interest and investigate to uncover and repress any such abuses.
Then too, the complementary part of the state should belong to the provinces, and not to the central government. I will not labour the point, because my views are well known here, as well as in the riding I represent.
However, since a majority of the provinces seem to prefer sharing their responsibilities with the central government in that field, I do not see why the federal government should not seek a way of meeting the request of the province of Quebec particularly, since a great majority of its taxpayers do share, I think, my humble opinion on that matter.
Would it not be possible, for example, to raise the level of exemption authorized in the case of provincial personal income tax in any province which so wishes so that such

provinces may collect an additional amount roughly equivalent to the contribution which the federal government would pay to such provinces in connection with the proposed scheme of hospital insurance?
I make this suggestion in all earnestness and in all humility, and I ask the hon. Minister of National Health and Welfare, as well as the government, to give it serious consideration.
(Text):


[Stage Direction]
Clause agreed to.
On clause 2-Interpretation.
Stanley Howard Knowles: Mr. Chairman, clause 2 defines a number of important terms in this legislation. I believe this is one of the clauses the minister has been anxious to get to so that he might break his silence and discuss some of the points that have been raised thus far in the debate today.
Perhaps it would be most appropriate for me to raise just one question at a time. Could we start with the various definitions under the word "costs" and refer in particular to the exclusion of items such as depreciation and capital costs? Could the minister say whether further consideration has been given to the inclusion of some of these items in the shareable costs since representations on this point were made by some of the provinces?


Mr. Marlin:: Mr. Chairman, naturally the government has given consideration to the representations that have been made but it is not the government's intention to abandon the character of the proposal that is made and these items which are excluded in the bill will remain so.
With regard to depreciation I might say that under the insurance schemes operating in British Columbia and Saskatchewan they do take care of the question of depreciation and capital debt, not fully but in part. The federal government does not propose to share these items for the simple reason that the proposal which the government has made to the provinces is a very generous one dollar-wise, much more generous than the proposal of 1945. These are costs which undoubtedly have to be considered by hospital boards, but it is not our intention, for the reasons among others that I have mentioned, to include them as part of shareable costs.


Stanley Howard Knowles: Mr. Chairman, we all recognize that dollar-wise the federal government is proposing to put up more under this plan than was suggested in 1945. However quite a few years have gone by since then and hospital costs have increased tremendously 82715-197
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since that time. Not only have hospital costs gone up in terms of what it might cost to provide the same extent of facilities one had in mind in 1945, but society's concept of our responsibilities and what we can do in this field have gone ahead. We feel that the government should not continue to live in 1945 or some earlier year but since it has taken so long to get into this field it should measure up to today's approach to this matter.
Every time the minister makes a speech concerning any of the fields covered by his department he likes to tell us how generous the government is. After all, it is not a case of the government handing out its money; it is a case of planning as a nation what is the best way to meet the costs which it is desirable to meet on a social basis.
What has happened across the years is that people have come to realize that care of our health is somewhat like education in that we should pay for it on the basis of our ability to pay and should make it available to those who need it. To the extent that we give the provinces only 50 per cent of the shareable costs, to the extent that we cut down those shareable costs by excluding various items, and to the extent that we cut down what would be paid for out of the federal treasury by excluding tubercular and mental patients, we reduce the portion that is being paid for out of the treasury which derives its revenue more than any other treasury on the basis of ability to pay.
We in this group say that the government should reconsider these many ways I have indicated in the last minute or two in which it is cutting down the proportion that the government is paying in this important matter. I know there are those who take the other side of the question. Despite the unanimity of the four parties in this house behind the minister's proposal so far as it goes I am aware that there are those outside the house who are critical. I realize there are forces that do not like to see us entering this field and talk about the money it is going to cost and about the whole change that will come when the state becomes involved in this field.
Let it be admitted that when we get a hospital scheme operating and when we get a health insurance scheme operating more money will be spent on these things but we will have better care of our health and that is one of the things we think is worth while. And I know that this is a growing view in society as a whole.
I think the minister should at least give an answer to every one of the points that we have raised. We have, for example, the item

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which I raised concerning depreciation which is a recognized part of hospital costs and, as my friend from Regina city pointed out earlier today, the government was criticized with regard to this in no less a Liberal paper than the Saskatoon Star-Phoenix. I hope that this will receive consideration together with the other points that have been raised.


Mr. McMillan:: Mr. Chairman, I congratulate the Minister of National Health and Welfare and the government for bringing forward this bill, a bill by which they can pay a great share of the national hospital insurance costs. I feel that the necessary six provinces will come into this scheme and that this will eliminate once and for all the fear and the dread which our people have of high hospital expenses. Such bills are often contracted at a time when people are getting along in life and their earning power is small. I understand that the bill will provide for one-half of the cost of ordinary sicknesses and non-compensatory accidents, as well as one-half of the cost of the diagnostic procedures incidental to good medical and surgical treatment.
In looking over section 4, and I may be a little out of order here, I do think this section contains a most ingenious formula. I think it tends to keep down the high cost of hospitalization in the high-cost provinces and that it will also tend to increase the standard of hospital treatment in the low-cost provinces. Furthermore it provides a mathematical control only, and I think this is very important because otherwise we would have direct interference on the part of the Department of National Health and Welfare in matters which come under provincial jurisdiction.
Each province has to bear the cost of administration. Now I think this is wise particularly since, as there are different collection costs in each of the different provinces, it would not be fair for one province to be raising money by taxation and another by premiums, for example. I can conceive of no better scheme; I think it is most generous to the provinces and I feel sure the people will take it up very readily.
I believe further that the national health insurance scheme would be difficult of attainment without the national health program which has been in vogue for nine years in Canada. We have spent something over $220 million; we have provided or helped to provide many hospital beds in new hospitals and in hospital extensions; we have spent much money on the control of diseases such as tuberculosis, venereal diseases, cancer and have also spent much money in the training of professional people. One recent

example of such spending which has turned out very well indeed was given by the Minister of National Health and Welfare when he reported not long ago on the results of the immunization against polio in Canada. The preliminary reports for 1956 showed that the incidence of polio was only 15 per cent of the last five year average and that only ten cases of paralysis occurred where the victim had received vaccination and no cases of paralysis had occurred in cases where the full complement of three doses had been given.
We have spent $3 million on this service and this will be returned to us many fold, not only in that we will not have handicapped children but also that we will not have them in hospitals for long periods undergoing remedial surgery.
There are many features in this hospital plan that I like very much, particularly the fact that it is going to be available to all. I would like the compulsory feature since all Canadians will be paying into this scheme in their federal taxes. There is no time limit as to hospitalization and we know that in certain very severe accidents involving multiple fractures and in terminal illnesses people are often in hospital much longer than they could be under the present insurance schemes now in vogue and still have their bills paid for them.
Hospitals should be able to budget and not have large deficits; they should be able to get away from the different drives that are put on to raise money to cover these deficits.
Furthermore there will now be no exclusions. I have had patients in hospital recovering from surgery, for example, who have looked over their policy and found that they have been excluded, particularly when they read the fine print in the policy. This puts me in mind of an Amos and Andy story, where Andy had had his taxicab smashed up in an automobile accident and he went down to collect his insurance and his attention was called to the fine print. Someone produced a magnifying glass and he said that he had been magnified right out of his insurance.
Now I do know that most insurance companies have provided good protection, but certainly some other insurance companies have sold cheap policies and people have not been able to collect when they needed the money.
I think one point was missed in discussing the different pensions which have been brought before the house recently in connection with the budget and that is that the municipalities and provinces will be saved a great deal of money when this bill comes into effect. A great number of our civil pensioners, old age pensioners and those who

come under the Old Age Assistance Act, blind pensioners and disabled pensioners, when they go into hospital, become direct charges on the provinces and on the municipalities for their hospitalization. Now in the future if the provinces assume their half of the cost and the dominion assumes its part, the municipalities will be relieved completely from this indigent cost. If on the other hand these costs are carried forward in the same proportion that they are carried forward today, the municipalities will have very much less to pay.
I am often asked what this plan might be expected to cost and that is a very hard thing to say, but I think the cost should be very moderate unless the provinces-any of the provinces-decide to include in their hospitalization bills the tubercular and mental hospitalization costs, which naturally would be different in each province.
Then they would not need to take that money to run these hospitals out of consolidated revenue. In my opinion this is a great humanitarian act on the part of the Minister of National Health and Welfare, the Prime Minister and of this government. The one feature about this bill which appeals to me most is the fact that it makes hospitalization available to all, rich and poor alike.


Edmund Davie Fulton: Mr. Chairman, I would like to return to the problem which was being discussed earlier under section 2 in connection with the exclusion of any amounts in respect of interest on capital debt, and of any amount for depreciation in the value of lands, buildings, or physical plant.
I appreciate this matter has been the subject of intensive discussion between interested parties and the minister and his department, and I have just heard the minister's answer to the member for Winnipeg North Centre that to date the government has decided not to change its proposal and not to include these amounts. That decision can only be received with regret by people who are interested in the welfare of hospitals, particularly of private hospitals.
I know the minister has received recommendations from the Canadian Hospital Association. It is my understanding that the background of these representations was largely the position taken up by the Catholic hospital associations, but, of course, the position does not affect exclusively the Catholic hospitals; it affects all private hospitals whether they be operated by a religious order or by any other voluntary organization. The cause of these hospitals was felt to be so sound that the Canadian Hospital Association representing 17 hospital associations and Catholic hospital conferences made a further 82715-197i
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strenuous effort to get the minister to change his mind in the month of February of this year.
The minister told us a moment ago that some provinces which have hospital insurance schemes did include in the compensation they paid to the hospital a rate which is expected to cover the cost of depreciation. The point made in a brief presented by the Canadian Hospital Association is that there is absolutely no assurance that all provinces will be either willing or able to include such an arrangement in whatever scheme they bring about. This would mean, of course, that the costs of these private hospitals with respect to depreciation or the repayment of capital would have to be met by private subscription or else they would simply have to close down.
This is the national Hospital Insurance and Diagnostic Services Act. I find that word "national" is not included in the short title, but I think the minister will agree with me that it is a proper description of the nature and intent of the bill. Surely, then, a national hospital insurance scheme should provide for hospital costs to be met on a national basis, on a uniform basis. Otherwise, how could it be described as a national scheme? Surely the minister cannot and will not deny that part of the cost of hospitals is represented by the depreciation of their plant and equipment and interest on borrowed money. To leave this problem to be met, if it is to be met at all, in some provinces but not in others only means that it is not a national or uniform scheme. It means that to a large extent the whole proposal may be self-defeating because there may be some hospitals which will simply not be able to operate.
At a time, when, as I understand it, this government and all provincial governments in which privately operated hospitals exist are happy to have them, and, indeed, would like, to some extent, to increase the scope of those operations because of the relief afforded to municipal taxpayers, it seems to me to be unwise-indeed, I would say it is folly- to write into a national insurance bill a provision which I think will inevitably result in the closing of private hospitals. That is not my opinion alone; it is the considered opinion of the Canadian Hospital Association. They point out it is reasonable to assume that after this bill comes into effect the public generally will be under the impression that hospital costs are not met by the joint contribution of the provincial and dominion governments, and that the public will therefore not be willing to contribute as in the past to fund-raising drives on behalf of private hospitals.

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They point out, further, that those who ignore depreciation are not administering their hospitals in an orderly and realistic fashion. The inevitable result of this was drawn to my attention by a member of the Catholic Hospital Association in these words: If the dominion government will not contribute either to the payment of interest on capital debt or to depreciation, then all the Catholic and private hospitals	must
eventually be driven to the wall.	I can
only say that the minister's answer, given in a reasonable tone, that the government has decided not to change its mind on this point does not meet the criticisms which have been made and the dangers which have been pointed out in the brief of the Canadian Hospital Association.
I, personally, would not be satisfied by a mere promise by the minister to reconsider the matter, even if he were prepared to give that undertaking and I do not know whether he is. I think the situation requires that the minister must answer some questions, and I would therefore ask him, first, how does he say these costs, namely the cost of depreciation and of interest on borrowed money and the repayment of borrowed money, should be met after the bill comes into effect?


Paul Joseph James Martin: Mr. Chairman, I will be glad to answer that. May I, first of all, say with regard to the representations which the hon. gentleman has mentioned that I have seen various members of the association, and I would suggest to him that if he has seen them recently he will have found that there has been a considerable modification in their point of view after the situation was explained to them.


Edmund Davie Fulton: Oh no, I just had a letter today.


Paul Joseph James Martin: We discussed this matter
when I spoke on this bill the other day, and when I indicate to the house the extent of the federal contribution in terms of dollars I think the hon. member will see this matter in a different light.
The federal government is bearing roughly 50 per cent of the cost of individual hospital care, based upon shareable costs as defined in this bill. The formula is 25 per cent of the national per capita cost plus 25 per cent of the provincial per capita cost. The result is that in the maritime provinces the contribution of the federal government is in all instances on the basis of 1956 figures over 57 per cent; in the case of Newfoundland, on the 1956 figures, it is some 72 per cent. If we examine what this means in terms of the contribution of new moneys which will be made by the federal government to each province it will be found that the federal

government is bearing a much greater load than even these percentages indicate.
The province of Ontario would be a good example. This province will generally be able to take advantage of moneys now paid under Blue Cross, under private contract schemes and under rural co-operative arrangements so that the net economic position is that the burden on provincial general tax revenue in any one province will be considerably less than that assumed by the federal government. We estimate that our total contribution in the province of Ontario in the first year, on the basis of present cost figures, would be about $62 million. The total contribution of the province of Ontario in terms of new money, over and above what the province and municipalities are now contributing would be about $36 million. This kind of comparative ratio in the degree of responsibility assumed by the two senior levels of government is maintained all the way through. So we say that as we are bearing the much greater burden, as we cannot take into account towards our share moneys now paid under Blue Cross or under the private schemes, it is not unreasonable to ask the provinces themselves to take the main responsibility for considering ways and means for carrying this additional burden.
I may say that no province, other than Ontario, of those who thus far have indicated their intention to join the scheme, has made any serious representation to us on this point. I have suggested to the hospital associations that the argument they put forward is one that I recognize but, having pointed out the financial situation that I have now indicated, I have suggested to them it is not unreasonable for them to look to the provincial governments for that kind of assistance. The provinces will not have to bear the same economic load that will be imposed upon the Canadian taxpayer as a result of policies recommended and adopted in this house.
Of course it is noteworthy that the cost of equipment and other expendable items will be dealt with as part of the operating costs and will be shareable and because of the various cost figures to be calculated in accordance with our proposal and the wide variety of contingencies in connection therewith, the calculation of costs is as we are prescribing in the regulations. However, in general the cost of hospital services, both inpatient and out-patient, will be the total cost of the actual expenditures incurred by a hospital in providing such services less certain specified revenues and other items which should not be considered as part of normal operating costs.

From my discussions with the provinces I am satisfied there is no provincial government that would want to take any step that would in any way interfere with the integrity or the existence of the voluntary hospitals which do so much for our country. We share agreement in what my hon. friend has said in that particular but we just say that we should not be asked to pay the depreciation and the cost of capital debt when our contribution is in the generous terms in which it is.
We anticipate that in the first year of operation, assuming that ten provinces participate, the total cost will be a little bit under $200 million. That amount must be found by the government and this parliament out of the taxes paid in by the people of Canada and imposed on them by this parliament. While the total net portion of the cost which will have to be found by the provinces, will be roughly half the net economic burden on the provinces taking into consideration the moneys now paid by way of premium, will be nothing like that. It is not unreasonable therefore that the practices now maintained in the province of Alberta, the province of British Columbia and the province of Saskatchewan should be continued by those provinces.


Edmund Davie Fulton: With regard to what the minister has said, it seems to me that his argument that the provinces generally will not be paying in fact an equivalent amount out of provincial taxpayers' revenue or tax funds to that which the federal government will be paying applies really only to those provinces which are intending to continue Blue Cross or similar hospital schemes as an integral part of the national scheme.


Murdo William Martin: That is right.


Edmund Davie Fulton: But that applies particularly and really specifically only to those provinces where that will be the case.


Murdo William Martin: That is right.


Edmund Davie Fulton: It does not apply in a province such as British Columbia where under the provincial scheme all private hospital insurance agencies have ceased operations.


Murdo William Martin: In the hospital scheme in
British Columbia now, the government there has been subrogated into the position formerly occupied by voluntary and commercial insurance companies to whom premium holders formerly paid the premiums which they now pay directly to the government.


Edmund Davie Fulton: No; there is no premium.


Murdo William Martin: Yes; and as a result the total burden of the province is considerably less
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whereas in the case of the federal government we will not be able to take advantage of moneys now paid in by private individuals under private voluntary insurance schemes.


Edmund Davie Fulton: I cannot go along with the minister all the way in what he says as far as the province of British Columbia is concerned, but there is probably no point in getting into that argument. It seems to me that the argument he has made on that basis is much more applicable to some provinces than to others and that therefore it should not be used as a general answer to the whole problem. But from the answers that the minister has given me thus far, am I not correct in assuming that the short way of putting the situation is that the minister is looking to the provincial governments to assume the full cost of depreciation and of interest on and repayment of borrowed money with respect to private voluntary hospitals? Is that not the case?


Paul Joseph James Martin: Generally speaking, that is the case.


Edmund Davie Fulton: Then the question that arises is this: What is going to happen if a province says: "No; we will not assume that cost"? What does that do to your national hospital insurance scheme? Since in the long run this situation must be equalized and probably will be equalized over-all, why does the federal government not recognize as a part of hospital cost to which it says it will contribute 50 per cent what is one of the actual heads of cost of administering or running a hospital? What happens in the case of a province that says:	"We cannot assume this
obligation; we regard this as part of actual cost of running a hospital." If you say you are going to contribute 50 per cent, then you should contribute 50 per cent of that. We cannot go into the scheme unless you do so."? Or alternatively what happens in the case of a province which comes into a scheme but refuses to recognize or reimburse the hospitals in the province for that portion of the cost?


Paul Joseph James Martin: I am sure my hon. friend
would recognize the great danger incurred by assuming full depreciation costs. My hon. friend in that way would be giving some encouragement to doing the very thing which he properly wants to avoid and that is the destruction of the voluntary hospital.


Edmund Davie Fulton: I do not see the applicability of the minister's answer.


Paul Joseph James Martin: The voluntary hospitals in
Canada have been operating, not only on the

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assistance they have received from the government, they have been relying upon voluntary donations, upon the hard work of the sisters and of the Salvation Army and of others who run these institutions. In our kind of society it is one thing I am sure none of us wants to see dry up.


Edmund Davie Fulton: But the minister must recognize that the very introduction of a national scheme is going to go a long way towards drying it up. That is not to cast any reflection upon those who have in the past been contributing. But now they are going to have to contribute substantially through their tax money.


Murdo William Martin: As they are doing under their insurance.


Edmund Davie Fulton: It is inevitable therefore that what they contribute through their tax money, coupled with the fact that it is generally understood that these hospitals are now supported on the basis of a national scheme, will dry up these contributions.
It is useless for the minister to argue there because experience in British Columbia has shown that once the provincial hospital insurance came into being the interest in and support of local and private hospitals by hospital auxiliaries greatly diminished.


Murdo William Martin: No, I submit my hon. friend is quite wrong. There has never been as much endowment of hospitals as we have had all over Canada, and in particular in British Columbia, in the past decade.


Edmund Davie Fulton: The minister will have to produce more than a general statement to convince me of that because I know the situation with regard to one hospital. It is not operated by a religious order; it is a municipally operated hospital, and it is extremely difficult to get interest in that hospital. I come back to the fact that the minister has not answered this question: What happens where a province comes into the scheme but does not recognize and contribute to these costs?


Murdo William Martin: I cannot add anything to what has already been said.


Edmund Davie Fulton: What happens?


Murdo William Martin: What happens in Saskatchewan? What happens in British Columbia? What happens in Alberta?


Edmund Davie Fulton: The minister points out that these provinces of British Columbia and Saskatchewan do recognize this as part of the cost of hospital operation.


Murdo William Martin: So will the other provinces, I trust.


Edmund Davie Fulton: The minister says that very confidently, but he has no way of knowing.


Murdo William Martin: I have talked with the
provinces.


Edmund Davie Fulton: Is the answer that all the provinces that are going to come into the scheme will recognize the problem?


Murdo William Martin: I am sure no province will escape this responsibility.


Edmund Davie Fulton: What provinces have agreed so far?


Murdo William Martin: We have no agreement with the provinces; we have had discussions. I did not ask the provinces to agree on this particular matter. I just indicated what our policy on it was and I know from their general attitude what their position is.


Edmund Davie Fulton: Which provinces?


Murdo William Martin: The provinces that have indicated their acceptance of this plan and two others.


Edmund Davie Fulton: That would make a total of seven provinces that have indicated they would assume this as a provincial responsibility?


Murdo William Martin: They have not indicated they would not.


Edmund Davie Fulton: That is a very different thing. I should like to be clear upon it.


Murdo William Martin: I cannot make my position any clearer than that. I have no authority to tell the provinces what they should do. I am hopeful from my discussions that a responsibility which they have recognized as theirs they will continue to recognize.


Edmund Davie Fulton: It is not a case as the minister says of being able to tell them, but is it fair to say that in the case of seven provinces that will be the case?


Paul Joseph James Martin: I am satisfied.


Stanley Howard Knowles: Mr. Chairman, I think before we go much farther with this we should get it straight as to what proportion of the total cost of hospitalization in Canada will be paid out of the federal treasury if this plan goes into effect, as we hope it will. I confess that we get a bit impatient with the Minister of National Health and Welfare many times when he endeavours to create the impression that the federal government is paying much more than its share, is being unduly generous and so on. Whenever we remonstrate because he talks about the amount the health grants program pays for hospital beds without telling what the provinces and other authorities pay he comes right back and tells us. But that is the thing; he prefers to tell us only what

the federal government is doing even to the point of creating the impression that the federal government is doing everything. He is trying to tell us that the federal government is going to pay in some provinces as high as 70 per cent, as in the case of Newfoundland.


Murdo William Martin: 72 per cent.


Stanley Howard Knowles: There it is; it is going to pay 72 per cent of the cost of hospitalization. But he knows that in some provinces it will be less than 50 per cent.


Murdo William Martin: In Saskatchewan it will be 47 per cent.


Stanley Howard Knowles: The minister is proving my point. He tells us things the federal government is doing that are on the federal government's side, and when we chide him of course he tells the rest of the story.


Murdo William Martin: May I give you the complete picture? When I said-


Stanley Howard Knowles: That is what the minister says-


Murdo William Martin: -that, the national per capita in Saskatchewan will be $12.22 as compared with the individual per capita contribution in Newfoundland of $8.77.


Stanley Howard Knowles: The minister is just proving what I was saying. When we check him up for giving a partial picture, he is of course ready to give us the rest of the picture. Tonight he has been emphasizing the fact that the government is paying 50 per cent or more, in some instances, of the cost of hospitalization and he has emphasized again the idea that as a result of this plan when it comes into effect, the provinces will be in a net economic position which is better than that of the federal government. He arrives at that conclusion on the basis of the fact that at the moment the federal government is paying nothing into hospitalization and therefore it will be paying out a great deal more once this plan goes into effect.


Murdo William Martin: No, what I said-


Stanley Howard Knowles: Just a minute; on the other hand, the provinces, which in some instances are now carrying the full load of health plans, when they start receiving this money they will have less to pay. In this way the minister tries to build up the picture that the federal government pays the lion's share and the provinces get off easy. I think it is time the Minister of National Health and Welfare got the figures for us. He has a staff that can produce them; he has one of the best research staffs in the whole federal government. He agrees with me on that, by the way. Give us the figures as to-


Murdo William Martin: I did not say anything.
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Stanley Howard Knowles: Silence gave consent, though.


Murdo William Martin: I am always afraid to agree with my hon. friend.


Stanley Howard Knowles: Give us the total cost of hospitalization in Canada and let us set against that figure the $180 million which the federal government will be paying towards hospitalization under this plan if it comes into effect in all 10 provinces. Then we will see what that $180 million is by way of percentage of the total cost of hospitalization in Canada, and it will be a lot less than 50 per cent. Let us have the total cost; what it costs on a national basis to maintain our general hospitals-


Murdo William Martin: About $400 million.


Stanley Howard Knowles: -mental hospitals, tubercular hospitals, depreciation, administration and what is paid by individuals or Blue Cross or insurance plans for people who go into these hospitals. Let us have the total cost, and when we have that total without any items left out we can set against it the $180 million that the federal government is going to pay if all provinces are going to come into the plan. I think we will have a much more accurate picture of what is being done by the federal government than we get from this rosy Paul Martin picture that we get from the Minister of National Health and Welfare.


Mr. Harkness:: I presume this is the time to bring up the questions which the minister failed to answer when we were dealing with this legislation at the resolution stage. You will perhaps remember that at that time I asked a considerable number of questions concerning what the position would be of the people in the Northwest Territories and the Yukon in so far as this hospitalization plan was concerned.


Paul Joseph James Martin: Would the hon. member mind asking that question under clause 6?


Douglas Scott Harkness: The minister refused to answer those questions at that time.


Paul Joseph James Martin: I think my hon. friend is asking a question now which should properly be asked under section 6.


Douglas Scott Harkness: I presume that is because section 6 refers to payments contributions. Under this section, I see subsection (j) which says, "participating province". I would take it that unless these territories are considered as participating provinces they could not come under this legislation, and therefore I maintain I am quite in order in raising this question under this particular section.
As a matter of fact, some of the questions that I should like to raise I think the minister

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might quite properly say were out of order if I tried to raise them under section 6.
I suspect that the minister failed to answer those questions at the resolution stage because he did not know the answers. I would hope that since there has now been a lapse of some 10 days or two weeks he would have found the answers by this time.


Paul Joseph James Martin: There were no questions put by my hon. friend that I could not answer.


Douglas Scott Harkness: It did not appear that that was the situation.


Paul Joseph James Martin: I bow to my hon. friend's greater talents.


Douglas Scott Harkness: I am not quite sure what my hon. friend from Windsor means. I have always been a quite plain-speaking member of the house, and I know that the Minister of National Health and Welfare perhaps is not in a very good position to appreciate that, because I also suspect that he does not come in the same category from that point of view. To come back to my very forthright language, I say that he has enormous capacity for skating around the subject and avoiding giving one a definite answer. The first question to which I should like an answer is what is the exact position of the Northwest Territories and the Yukon Territory in so far as this legislation is concerned. When I asked these questions, at the resolution stage, the minister said that it had been held that as far as legislation of this sort was concerned the Northwest Territories or the Yukon Territory would be considered as a province. Whereupon my friend from Winnipeg North Centre immediately rose to his feet and said, if they are considered as provinces do they constitute the sixth or seventh province coming into this scheme?


Stanley Howard Knowles: What was the minister's answer?


Douglas Scott Harkness: Once more the minister did not have a forthright answer. As I said before, he evaded that question. The first question I should like an answer to is, what is the exact position of these two territories as far as this legislation is concerned? Second, what is the position of the white people in those territories if those territories are taken in under this legislation on the basis of their being provinces? I have some other questions following the answers to these.


Murdo William Martin: The hon. member for Mackenzie River had asked me-


Douglas Scott Harkness: Again?


Murdo William Martin: Again. He is an alert member. He asked me at eight o'clock when he could

deal with this question, and I told him I thought it would be more appropriate under section 6, and that is why I directed the attention of the house, Mr. Chairman, to what I thought was a more appropriate way in which to discuss the questions now put. However,
I have no objection to dealing with them now, but I do want to have associated with them the questions intended to be put to me by the member for Mackenzie River who, after all, represents that area. I am sure my hon. friend would be the first to acknowledge the member's prior right to be interested in this matter.


Douglas Scott Harkness: I am very glad to acknowledge it.


Murdo William Martin: I thank my hon. friend for his gallantry in the matter. In reply, I would say that an interdepartmental committee, consisting of officers of the departments of Northern Affairs and National Resources and National Health and Welfare, is studying the hospital insurance program in relation to the Northwest Territories and the Yukon Territory. There are circumstances and conditions peculiar to the territories which require special study. The populations are relatively small: in the Northwest Territories, 19,313; in the Yukon, 12,190. These are 1956 figures. And this population, of course, is spread over a wide area. The people live under varying social and economic conditions and a high percentage of them are not wage earners. Moreover, there is a large number of transients in the north. Because of the sparsity of the population, the great distances and the high cost of travel, the imposition of special taxes by the territorial government must be viewed with care to ensure that administrative costs are not out of proportion to the revenue received.
Much progress has been made in the past few years by the federal and territorial governments in the provision of health services and facilities in the north. A new hospital is now being constructed by the federal government at Whitehorse, in co-operation with the government of the Yukon Territory, and a new hospital is planned for Aklavik in the Northwest Territories. And, of course, in the Northwest Territories, under our Indian health services division in the Department of National Health and Welfare a number of nursing stations have been provided. A northern health service division has been established in the department which I have the responsibility of administering for the purpose of co-ordinating all federal responsibilities in the field of health in the north, and, on request, to perform similar functions for the territorial governments at cost. The territorial governments are taking over

increasingly the advantages of this new service, and all these functions and operations must be considered now in conjunction with the hospital insurance scheme.
Our studies of this problem are continuing, and ultimately the whole question will become a matter for negotiation between the territorial and federal governments in the same manner as federal negotiations with the other provinces are now being carried out.


Douglas Scott Harkness: I must compliment the minister on reading so well the statement which he undoubtedly prepared at the instigation of the questions of the hon. member for Mackenzie River. The fact that the minister read that statement so well, however, does not cause me to believe that there was anything in it whatsoever except what I mentioned at the beginning that the minister was a master of, and that was the evasion of the questions which were asked.


Edmund Davie Fulton: Circumlocution.


Douglas Scott Harkness: What did the minister say in this statement? He said that the Department of National Health and Welfare and the Department of Northern Affairs and National Resources are studying the plan. My God, Mr. Chairman, I would have thought they would have been studying the plan ever since the plan was first brought under consideration and by this time they would have some definite proposals to bring forward and to write into a bill, if that was necessary or otherwise, to lay before this committee or the house as to what they were going to do in regard to a plan for the Northwest Territories and the Yukon.
Second, the minister said there are problems peculiar to these particular territories and they require special studies. Is that not a profound thought? I am sure the minister must have cudgelled his brains, when he was dictating this message, in order to get down these nicely rounded phrases which mean absolutely nothing.
Then he went on to say that much progress has been made in the provision of health services. I have never heard the minister either make a speech in this house since he has been minister of this department or answer a question when he has not said that much progress has been made in the provision of health services. As a matter of fact, the minister ended up with a note that I thought was not doing himself justice. He was getting too repetitive altogether.


Paul Joseph James Martin: Modesty in my old age.


Douglas Scott Harkness: As a matter of fact a little modesty might be becoming to the Minister of National Health and Welfare. So far I have
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seen no indication of it. The fact that he included this stock phrase of his, that progress has been made in the provision of health services, I think merely indicates that he has been slipping.


Stanley Howard Knowles: Great progress.


Douglas Scott Harkness: I think probably that having taken this long trip around the world the minister has forgotten he has been using that phrase so frequently and simply included it again from habit of long standing. The next part of the statement was to the effect that new hospitals are planned. How often have we heard that?


Murdo William Martin: I said they had been built.


Douglas Scott Harkness: The minister said that one was built.


Murdo William Martin: No, I referred to six altogether.


Douglas Scott Harkness: I am not a shorthand writer and I just jotted down a few brief notes but I believe the minister said that new hospitals are planned and are needed all across Canada. That statement means absolutely nothing. Then the minister concluded this stupendous announcement of his by saying that studies are continuing with regard to what may be done in connection with this very special problem involving the limited number of people in the Northwest Territories.
I submit that everything the minister has said constitutes in effect an insult to the intelligence of hon. members of this house and is an insult to the people in the Northwest Territories and the Yukon. I would once more ask the minister to disregard any prepared statement and basing his answers on the information in his possession, if any, answer the two questions I have asked.
What exactly is the position of the Northwest Territories and the Yukon with regard to this health insurance bill and are these two territories to be included under the terms of the legislation? I would also like him to tell me what would be the position of the white people in these territories in the matter of contributions.


Jean Lesage: What is the difference between white people and the others? Do you have segregation in mind?


Douglas Scott Harkness: If the Minister of Northern Affairs and National Resources is asking me that question I must say I am surprised because he of all people should know the difference. He is the minister of northern affairs and presumably knows something about conditions in that area.


Edmund Davie Fulton: It is the Minister of Citizenship and Immigration who knows the difference.

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Douglas Scott Harkness: I will tell him that the difference is this: At the present time the Indians and Eskimos in the territories are the full responsibility of the federal government as far as health is concerned. They are already being given a certain amount of treatment. Whenever they are hospitalized it is entirely at the expense of the federal government. That is what constitutes the difference between them and the white people in the territories as far as the question of health is concerned.


Jean Lesage: May I be permitted to say just a word. I simply want to point out to the hon. member that we do not use terms such as he has been using any longer because we avoid segregation.


Some hon. Members:: Oh, oh.


Jean Lesage: We do not refer to the people in those territories who are non-Eskimo or non-Indian as "whites"; we refer to them as citizens of Canada.


Edmund Davie Fulton: What are you going to do
about their hospitalization?


Douglas Scott Harkness: The Minister of Northern Affairs and National Resources might like to get up in this house and indulge in a certain amount of cant but apparently as far as the actual situation is concerned as his remarks indicate everybody but he is aware that the Eskimos and Indians resident there are the full responsibility of the federal government as far as health is concerned. That is what constitutes the difference between them and the white people in these territories in relation to the bill we are considering.
I wonder if I could receive from the Minister of National Health and Welfare a direct answer to the specific questions which I have raised and which he has not answered.


Alfred Johnson Brooks: I doubt it.


Mr. Hardie:: May I ask a supplementary question? My question does not have reference to the Northwest Territories but I am wondering what will happen under this legislation to the Indians in the province of Alberta?


Edmund Davie Fulton: There are three questions for you.


Douglas Scott Harkness: That makes three questions, but answer my two first.


Paul Joseph James Martin: If my hon. friend does not mind I would like to give priority of attention at the moment to the question raised by the hon. member for Mackenzie River.


Edmund Davie Fulton: He knows the answer to that one.


Alfred Johnson Brooks: Yes, take the easy one first.


Paul Joseph James Martin: Indians will be included under the provisions of the proposal embodied in the bill which says that the scheme must be universally available to all residents of the province.
With regard to my friend the hon. member for Calgary North I must compliment him because I have never heard him in such good form. His cynicism is such that he deserves our commendation at least tonight.


Douglas Scott Harkness: You know that I am always in good form.


Paul Joseph James Martin: My hon. friend is not always in good form and he is not always in good humour but tonight he is in very good humour and in excellent form even though he was off the point so badly.
The situation is briefly this. Under the Interpretation Act, as I said the other day when my hon. friend asked this question, the Northwest Territories and the Yukon are equivalent to provinces for the purpose of status in relation to the federal government or in terms of their own particular position. They pass ordinances and under the Interpretation Act these are likewise regarded as laws and consequently they are brought within the purport of the bill that is before us at this time.
There is a duly constituted government in the territories. That government is in the same position as any provincial government and when it considers this situation in the light of its responsibility it can, like any other provincial government, enter into negotiations with the federal government toward inclusion, having in mind the problems that especially apply toward inclusion of the individuals concerned under this hospital insurance scheme.


Douglas Scott Harkness: Mr. Chairman, may I ask the minister what actually has been done? He knows as well as I do that the head of the council of the Northwest Territories is the deputy minister of the Department of Northern Affairs and National Resources and the majority of the members of that council are members appointed by this government of which the minister himself is a member and the minority are elected members. In other words, what it comes down to is that if the government wants to include the Northwest Territories in this scheme all they have to do is to make that decision and because the appointed members on the council are in the majority they can proceed to sign the necessary agreements and so forth. Has anything been done?


Murdo William Martin: I know my hon. friend would be the last to suggest that the federal government should dictate to the government of the territories. The fact that the deputy minister of a particular department is an important member of the council does not alter the situation.


Douglas Scott Harkness: But who are the other
appointed members?


Murdo William Martin: I know; but they are the government of the territory. They have their responsibility to that territory just as a provincial government has a responsibility under its own people. The situation is analogous to that which arose under the Old Age Assistance Act and other social welfare measures. After consideration of all the problems involved the territories have participated in the scheme and it is not for me, nor is it for the federal government, to say what the government of the territories shall do. All I can say is that the government of the territories has the power to consider this plan and it has the opportunity of entering into negotiation with the federal government and beyond that my hon. friend cannot expect me to go.


Douglas Scott Harkness: I can and I do expect the minister to go farther. The minister is adroitly side-stepping the question. My information is that the elected members of this council would like to see the white people in the territories brought in under the provision of this hospital scheme but they do not know what is their situation. As far as I recall it offhand, the population of the territories is something in the neighbourhood of 16,000. The Minister of Northern Affairs and National Resources can correct me if I am wrong but it runs in my mind that the total population of the Northwest Territories is in the neighbourhood of 16,000.


Jean Lesage: It is 19,000.


Douglas Scott Harkness: The minister says it is 19,000. I understand there are between six and seven thousand Eskimos resident there.


Paul Joseph James Martin: No, there are only 7,000 Eskimos altogether.


William Earl Rowe: Who counted them?


Douglas Scott Harkness: Let the Minister of Northern Affairs and National Resources deny that the figure I cited is not correct. I think there are around 6,000 Eskimos resident there. I believe the Minister of Northern Affairs and National Resources said I was right.


Paul Joseph James Martin: No, he said I was right.


Stanley Howard Knowles: Did he say the hon. member for Calgary North was wrong?
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Douglas Scott Harkness: He did not say it was wrong. Let us not quarrel over 100 or 200 one way or the other. There are approximately 6,000 Eskimos and there are approximately 6,000 Indians; there are also approximately 6,000 white people, or at any rate people who are not Indians or Eskimos under the act. Some of these people may be of mixed blood but as I say there are approximately 6,000 who are not either Indians or Eskimos under the various acts.
Now these 6,000 people who are neither legally Indians or Eskimos are concerned in regard to this legislation as to whether the provision which we find in section 3 of this act is going to apply to them. This section makes provision for the furnishing by hospitals of insured services upon uniform terms and conditions to residents of the province under the conditions specified in this act and the regulations. In other words, if the nonIndian and non-Eskimo population constituting about one-third of the total population were to be called upon to come into this scheme on the same basis as people of other provinces and would have placed upon them as a responsibility 50 per cent of the hospital costs for the 12,000 Indians and Eskimos, it would be a hopeless proposition. It just would not be a practical or workable proposition and that is the particular point upon which the non-Indian and non-Eskimo population in the Northwest Territories wish to have their situation clarified. They want to know where they stand and the minister has completely refused so far to make any statement with regard to this problem.


Howard Charles Green: What about the Yukon?


Mervyn Arthur Hardie: The member for Calgary North has mentioned the feelings of the white population in the Northwest Territories in regard to the passing of the bill. The minister has to remember that the revenue of the Northwest Territories paid into the territorial funds is not the same or as extensive as the revenues which are gathered in the provinces. I am sure that the minister and the government will take into consideration that fact, and when the large portion of the revenues are collected by the federal government I am sure that we will be given consideration in that regard. As far as the department and what they have been doing up to now is concerned in the way of nursing stations -I think the hon. member for Calgary North said something like one or two nursing stations-I would like to say that the government now has in the Northwest Territories nursing stations at Fort Good Hope, Fort Norman, Fort Providence and a number of other places.

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An hon. Member:: Coppermine.


Mervyn Arthur Hardie: Coppermine, that is right, Cambridge Bay and there are many others. They have assisted the Anglican and Roman Catholic Missions by granting moneys tor their hospitals. The results of this have been in the last four years that in Fort Smith we have a 100-bed hospital in which we have 35 beds in use and at Fort Resolution we have a 60-bed hospital with 15 beds in use. These are results of the work done by this government in co-operation with the missions in this country.


An hon. Member:: Hallelujah!


Mervyn Arthur Hardie: The result has been that the incidence of tuberculosis has dropped and there is no need for extra beds, except in places where there are no hospitals. We need the national hospital plan and we need to be brought into this scheme but I am sure that the Minister of National Health and Welfare and the Minister of Northern Affairs and National Resources or his deputy would not allow the territorial council to come into an agreement with this government on a national hospital plan where 5,000 or 6,000 white people in that area were providing the revenues for the total population.
If my hon. friend from Calgary North is worried about this, I say he has nothing to worry about. This government will look after that problem. If this bill is passed, then I imagine this proposal will be discussed by the territorial council when it meets in June of this year.


Douglas Scott Harkness: Mr. Chairman, I would just like to say to the member for Mackenzie River that I did not make any mention whatever of nursing station services or anything along that line. Where he got that from I do not know but, of course, he has an active imagination and so I presume that that is the answer. As far as the statement he has just made is concerned, I am sure that the people in the Northwest Territories would be much more comforted in their minds by an assurance from the Minister of National Health and Welfare as to what is the definite policy of the government as far as this health measure is concerned, than the panegyric of the member for Mackenzie River in regard to the present government and the health services it has or may provide in the Northwest Territories. I wonder if the minister would now answer these two very definite questions which I have asked him four times tonight as well as two or three times the last time the subject was brought up.


Alexander Malcolm Nicholson: Mr. Chairman-


An hon. Member:: No, no.


Douglas Scott Harkness: I think the minister was on the point of getting up, Mr. Chairman, and again I would like an answer.


Paul Joseph James Martin: I will give you the answer now for the third time. The government policy is to treat the Northwest Territories exactly as it is treating the other provinces of Canada and it will be up to the territorial government to make the decision, as it is up to each provincial government to decide whether it is prepared to enter into negotiations with the federal government.


Douglas Scott Harkness: Mr. Chairman, the minister has misapprehended my question. I asked him what would be the plan in regard to the Northwest Territories and what would be the position of the people of these territories in regard to the contributions made by the white population. Are the Indians and Eskimos to continue, if the Northwest Territories come under this plan, to be the sole responsibility of the dominion government or are they not?


Paul Joseph James Martin: My hon. friend obviously has not read the act.


Douglas Scott Harkness: Oh no.


Paul Joseph James Martin: The principle of universal availability must apply; the Indians are properly included in the phrase universal availability.


Douglas Scott Harkness: Mr. Chairman, do I take it from that then that if the Northwest Territories come in, the white population, who would be the only taxpaying part of the population, would have to pay the entire costs or 50 per cent of the cost-whatever it may be-for the hospitalization for the two-thirds of the population which are now the sole responsibility of the dominion government? In other words, is the minister's interpretation of this matter that if they get the territories to come into the scheme they will get rid of a certain proportion of the federal responsibility for taking care of the Indians and Eskimos, or is the minister not prepared to answer the question?


Stanley Howard Knowles: If that province of the Northwest Territories agrees will it be the sixth province under the Prime Minister's formula?


Paul Joseph James Martin: That must follow.


Stanley Howard Knowles: In other words, the answer is yes.


Paul Joseph James Martin: I answered that several times the other day in the affirmative.


Stanley Howard Knowles: I suppose the affirmative means "yes".


Edward Turney Applewhaite: I would like to draw the attention of the committee to the fact that the hon. member for Mackenzie has been trying to rise for some time, but about five hon. members have preceded him. I have given him the floor.


Alexander Malcolm Nicholson: I yielded to my hon. friend because he had a particular interest in this territory. It would seem to me that the answer to this discussion would be for the Minister of Northern Affairs and National Resources and his colleague the Minister of National Health and Welfare to agree that the Northwest Territories and the Yukon and the Mackenzie river district should be the sixth province, as a result of which this national hospital program could be introduced immediately.


Paul Joseph James Martin: I take it the hon. member is not suggesting that the ministers of the federal government should interfere with the government of the Northwest Territories. Is he saying that? That is a serious thing to suggest, because we do not believe in dictatorship.


Alexander Malcolm Nicholson: I am quite sure that there will be no objection whatever from the people in that area if the appropriate authorities decide that those living there may qualify for the benefits which the minister has outlined in this great national hospital program.
I notice that the hon. member for Moose Jaw-Lake Centre has not been taking part in the discussion. The minister will recall that a year ago when this matter was being considered in the estimates committee the hon. member for Moose Jaw-Lake Centre was concerned about the cost; this proposal was to be a tremendous cross on the shoulders of the Canadian people. My colleague the hon. member for Winnipeg North Centre made a good case, I think, when he pointed out that the Canadian people are now spending a very large amount on hospital care, and while this program will no doubt increase the cost it will certainly result in improved hospital services if the record is anything like our record in Saskatchewan.
The minister has a very efficient research department. In endorsing what my colleague has said I draw to the committee's attention the fact that this same department did some research work prior to the publication of the green book in 1945, and it was estimated in 1945 that $3.60 per person per year would be sufficient to provide hospital care. That figure was arrived at by taking into account the number of Canadians who went to hospital each year and the cost which prevailed
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at that time. We set a $5 figure in Saskatchewan and, of course, we found that this has not been adequate because of rising costs.
But there has been another important factor which entered into this picture. Prior to the introduction of our hospital service program in Saskatchewan only a small percentage of women counted on going to hospital to have their babies. But today that practice is changed, and it is rare that babies are born outside hospitals. People are getting better care, and we find that infant mortality and maternal mortality have decreased; the situation has changed dramatically since this program was introduced.
I would like to ask the minister whether he has done anything in the past year to bring to the attention of provinces such as Manitoba, New Brunswick and Nova Scotia the fact that they are losing money by failing to agree to go along with this plan? The minister himself placed on record a very interesting table on page 192 of the report of the estimates committee a year ago-


Paul Joseph James Martin: If I may reply, I certainly have. I appreciate now what the hon. gentleman is saying, because he recognizes the generosity of our proposal.


Alexander Malcolm Nicholson: Let me point out that the province of Manitoba, for example, according to the information given by the minister a year ago, would have to raise $5,700,000. But the minister also advised us that in Manitoba they are now paying $3,347,000 to the Blue Cross and $691,000 to private insurance companies, and that individuals were themselves contributing $3,762,000. In other words, the people of Manitoba are now paying $7,800,000 for hospital care, and if they came under this program they would only be paying $5 million.
In the province of Nova Scotia, the minister told us, they would have to raise $2,400,000. But they are now paying $1,085,000 to the Blue Cross, half a million dollars to private insurance companies, and $1,719,000 which individuals are contributing for hospital care. So in Nova Scotia they would save about $900,000 if they came into the plan.
New Brunswick would be able to save about $2 million.
The province of Prince Edward Island was not able to provide an estimate of what they now pay, except to the Blue Cross and the private insurance companies; but it would appear to me that if the minister had been doing an active job during the past year he

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would make some progress toward persuading a province such as Manitoba, which will save nearly $1 million, to enter the scheme when it comes into effect.
The people of Manitoba are citizens of Canada. The federal treasury does not get money in a mysterious way. The federal government is prepared to roll on and introduce a national hospital program which will become available as soon as we have six provinces in it, and all the minister has to do now I think, is to convince his colleague the Minister of Northern Affairs and National Resources and his friend the premier of Manitoba that they are putting brakes on progress in Canada by holding up this scheme.


Daniel Roland Michener: Following the questions
asked by the hon. member for Calgary North, I seem to recall that in past sessions we have voted $18 million or $20 million for hospital services to Indians, and reading the bill which is before us I do not see anything which would relieve the federal government of that responsibility. Without raising the question of whether the Northwest Territories are a province, or whether they could enter into an agreement or not under this bill-I assume they could-I would like to ask whether there is anything in the bill which would relieve the Department of National Health and Welfare of the responsibility which it now exercises toward the Indians with regard to hospitalization if the Northwest Territories themselves entered into an agreement?


Paul Joseph James Martin: Even if they did we would have to continue our responsibility toward the Indians as far as care for tuberculosis and mental illness is concerned. All that we are asking is that there be no discrimination as to residents in a province for the purpose of hospital insurance for general ward care in general hospitals. Our responsibility continues.


Daniel Roland Michener: I am not satisfied that the terms of this legislation are broad enough to affect the status of an Indian under the treaty obligations. If the minister has an answer to that question I think that if he would produce it it would save a lot of discussion.


Paul Joseph James Martin: When we come to section 6-


Daniel Roland Michener: I have not read section 6.


Paul Joseph James Martin: When we come to section 5 (2)(a).


Douglas Scott Harkness: When we get to section 5 you will say it is out of order.


George Hugh Castleden: Mr. Chairman, when I was discussing this matter earlier the minister nodded his head in assent. There was very little record of that in Hansard-not very much to depend on-with regard to the people who are included under this act. I was further confused by the hon. member for Welland, a respected medical practitioner, whose answer was to the effect that this hospital insurance plan would cover everyone who is sick.


An hon. Member:: That is all he knows about it.


George Hugh Castleden: I would be pleased if the minister would endorse that. If he will, it would mean that subsections (1) and (2) in clause 2 would have to be deleted. Would the minister put this matter straight? One of his colleagues has said that this covers everyone who is sick in Canada. As I interpret clause 2, it does not. Will the minister straighten this out and let us know what hope there is of making this scheme universal so that it will include everyone who is sick?
Will the minister put us straight on this matter? One of his colleagues has said that this legislation takes in everyone who is sick in Canada. As I interpret clause 2, it does not do so. Will he set us straight and let us know what hope there is of making it universal so that it will take in everyone who is sick?


Paul Joseph James Martin: As to universality, that is one of the covenants to which the province must agree and that is covered in a later section. This bill provides for the federal government's sharing in the kind of treatment provided for under the Blue Cross arrangement and under private insurance schemes, with additional supplementary benefits for those persons in general hospitals as defined under the interpretation section of the act and in accordance with the provincial licensing provisions. This bill covers people who are suffering from mental illness and it includes those suffering from tuberculosis, where their treatment is provided for them in general hospitals and where they have to pay. We are not including those in tuberculosis sanatoria or mental health institutions which are operated by the province for the simple reason that that is a responsibility accepted by the province. We are simply following the pattern that exists in the province of Saskatchewan where tubercular patients and mentally ill patients are not covered by the hospital insurance scheme which, as my hon. friend knows, is basically on premium; but they are covered under a separate account for tubercular people and mentally ill people. The same practice is observed in the province of British Columbia

and everywhere else except in one other country that we have been able to examine. But let it be clear that mentally ill people and tubercularly ill people in general hospitals, where the individual is responsible for the care, will be and are covered by this act.


Douglas Scott Harkness: A little while ago the minister was complimenting me on my good humour. However, I must say that his unwonted reticence has been trying me sorely since that time. It is not usual for the minister to be so reticent. As a matter of fact, he is usually one of the most eloquent and long-winded members we have in this house. The fact that he has continued stubbornly to sit in his seat instead of getting up to answer the questions I have asked makes me doubly suspicious.
In replying to the hon. member for York-ton, I think it was, the minister said that as far as tubercular cases and mental cases are concerned among Indians and Eskimos, the department will continue to look after them. But the point is this: At the present time the department is responsible for all health matters as far as Indians and Eskimos are concerned. The very fact that he said they would continue to look after tubercular cases and mental cases only leads me to suspect very strongly that they hope to have the territories council, if it comes into the scheme, assume the responsibility as far as other health and hospitalization care of the Indians and the Eskimos is concerned. In effect, that would mean that it would be assumed by that third of the population which would be subject to taxes and which is particularly concerned as to whether they are going to come in under this scheme or whether they are not going to come into it and the terms under which they are going to come into it.
If the minister is not prepared-as he has not been prepared so far-to say anything further than he has said, I think the only assumption we can draw is that if the Northwest Territories come under this scheme, the white population is going to be saddled with the ordinary hospitalization and health care of the entire population. In effect this means that a third or less than a third of the population is going to be obliged to assume the financial burden for that care. In other words, if the minister has nothing further to say on the matter than what he has said so far, it would appear that so far as the Northwest Territories are concerned the idea of the government is to "get out from under" with regard to a certain amount of the medical and health expenses which they have for Indians and Eskimos at the present time.


Mr. Hees:: Is the minister going to answer?
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Douglas Scott Harkness: I see the minister shaking his head up and down. I assume that is the situation. Under these circumstances, I would hope most sincerely that the government, apart from the fact that it controls the territorial council, will not force the Northwest Territories into this scheme and thereby place upon the shoulders of the non-Indian and non-Eskimo population in that area part of the burden of health and hospitalization care which the dominion government, under the treaty with the Indians and under the entire set-up we have had so far, has carried.


Ray Thomas: I just want to ask the minister one question in this regard. Under the definition of "hospital" there are mentioned three special types that are not included under the act. I wonder whether a specialized clinic or a hospital privately owned would be included under the act. At the moment I am thinking of something in the line of the Banff arthritis clinic.


Paul Joseph James Martin: If it is licensed by the province as a hospital it could be so regarded.


William Gourlay Blair: Is a nursing home licensed by the province a hospital?


Paul Joseph James Martin: Yes, it is a hospital if it is licensed by the province. If a nursing home is licensed by the province, it is a hospital for the purposes of this act.


William Gourlay Blair: A nursing home becomes a hospital if it is licensed by the province and therefore is eligible?


Paul Joseph James Martin: That is right.


Daniel Roland Michener: On that same point may I ask this question? I have not heard the entire discussion. In Ontario private hospitals licensed by the province would be eligible but it does not say for public ward cases. I assume that under the arrangement public ward rates would be paid to the private hospitals.


Paul Joseph James Martin: Public ward rates.


Daniel Roland Michener: Public ward rates for the care of patients. The thing that bothers me about private hospitals-and there are some very good private hospitals, as the minister knows-is that no element of the cost takes into account the provision of their buildings and the maintenance of them. Is there any possibility of a different arrangement for private hospitals which do not receive funds from this government or from the provincial government to maintain their building at their expense?


Paul Joseph James Martin: No.

Business of the House


Daniel Roland Michener: In that respect they will not be in an equal position as compared with the general hospitals under the agreement?


Murdo William Martin: No.


Some hon. Members:: Ten o'clock.


Edward Turney Applewhaite: It being ten o'clock shall I report progress and ask leave to sit again?


Daniel Roland Michener: I hope the reporter has indicated that the minister says no because that seems to be an important point.
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, tomorrow we shall start with the budgetary bills. Then we shall take the resolution with respect to

the Canadian National Railways financing; then the estimates of the Post Office Department; then legislation on the order paper in the order in which I will indicate before we reach it some time tomorrow.


Howard Charles Green: Can the minister tell us the order in which the budget bills will be debated?


Walter Edward Harris: I am entirely in the hands of the opposition with respect to that matter. We will take them in any order that might be desired.


Stanley Howard Knowles: Which opposition?


Walter Edward Harris: I am sure you could all agree.


William Earl Rowe: There is only one opposition anyway.


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