1957-12-06

[Stage Direction]
Mr. C. E. Rea (Spadina) presented the fourth and fifth reports of the standing committee on miscellaneous private bills, and moved that the fourth report be concurred in.
Motion agreed to.
Sixth and seventh reports of standing committee on railways, canals and telegraph lines.-Mr. Fraser.


Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, I wish to announce that the federal government and the province of British Columbia have agreed to undertake jointly a low rental housing project in Vancouver, and a project for the development and servicing of residential land in Duncan, British Columbia, under the provisions of section 36 of the National Housing Act.
The housing project in Vancouver is being undertaken at the request of the city. It will consist of approximately 170 low rental units of various types, about 36 of which will be made available to senior citizens. This development is the second federal-provincial low rental housing project in the city. It is anticipated that it will cost about $1-| million. The project will be made available to families with low incomes. The rental should average about $44 or $45 a month. The cost of the project, as well as any operating losses, will be shared 75 per cent by the federal government and 25 per cent by the province, or by the province and the municipality if those two governmental bodies so wish.
This project will serve not only a very useful social need, but will provide as well additional employment opportunities to the construction industry in Vancouver. In the early days of the project it is likely that approximately 350 men will be employed on the site, and employment for a similar number will be provided in mills and plants off the site which manufacture housing equipment.
The project at Duncan, British Columbia, will also be undertaken by the federal-provincial partnership under section 36 of the National Housing Act, and will result in the development of an estimated 162 fully serviced residential lots for sale to prospective home owners. This project is designed to meet a growing shortage of serviced building lots in Duncan. It is estimated to cost approximately a quarter million dollars. As is usual in this type of project, the federal government will bear 75 per cent of the cost, with the remainder being borne by the province of British Columbia. When the services are installed these lots will be offered for sale at prices commensurate with the cost of development.
I wish to announce as well that the federal government has authorized the Central Mortgage and Housing Corporation to make a grant of approximately $7,400 to the city of Trail, British Columbia, to assist it in carrying out an urban renewal study. This grant is being made under part V of the National Housing Act, 1954. It is hoped that the study will assist the city in identifying areas of blight and in developing an orderly program of redevelopment, rehabilitation and conservation.


Hon. George C. Marler (Si. Anloine-Wesl-mouni):: Might I ask the minister whether other projects of like character in other provinces of Canada are now under consideration?


Howard Charles Green: Yes. The hon. member will be interested to know that ten days or two weeks ago we wrote to the city of Montreal concerning the Dozois scheme. I received a letter back from them just a few days ago. We are prepared to do our part to get ahead with that scheme as quickly as possible.


Hon. James Sinclair (Coasi-Capilano):: I am
sure the people of British Columbia will welcome this announcement. I wonder whether the minister can tell us in what area of Vancouver this new development is to be located?


Howard Charles Green: It is on Nanaimo street-


Mr. Winch:: And Forty-first.


Howard Charles Green: I forget the avenue.


James Sinclair: It is in the east end.

Inquiries of the Ministry


Howard Charles Green: Nanaimo street and Forty-first avenue.


Mr. Daniel Mclvor (Fort William):: A supplementary question, Mr. Speaker. Must a city first ask for this housing project before the government takes action and, if so, has Fort William asked for anything?


Howard Charles Green: Mr. Speaker, the cities make the request initially. We could not very well move into a city and start this sort of development without the approval of the city. I am sure the hon. member would not want us to raid Fort William in that way. So far as I know there has not been any such proposal from the city of Fort William, at least in recent weeks.


Daniel (Dan) McIvor: Thank you; there will be.



N.H.A.-PREVENTION OF FORECLOSURE ON HOMES OF UNEMPLOYED VETERANS

[Stage Direction]
On the orders of the day:
Mr. A. B. Macdonald (Vancouver-Kings-way):: I should like to ask the Minister of Public Works a question. Will the Minister of Public Works assure the house that foreclosure proceedings will not be taken on mortgages or agreements held by Central Mortgage and Housing Corporation in veterans' projects such as Renfrew Heights in Vancouver, where purchasers are unable to keep up monthly payments owing to unemployment?


Howard Charles Green: I shall be glad to look into this situation.



FINANCE


[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 Finance. Will the minister give the house an undertaking that any tax changes which he may announce tonight will be presented as motions in the committee of ways and means, with opportunity provided for those motions to be discussed and that the decision on any such motions will be taken at this session of parliament?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I think before my hon. friend attempts to indicate what procedure should be followed it would be well to wait and see what is proposed.
Now, as to the procedure, I can assure hon. members that whatever procedure is followed will certainly provide ample opportunity for discussion. As to the third point the hon.


member raised, I can assure him that any statement I make tonight is made in the hope of action on the part of the house at the earliest possible moment.


Stanley Howard Knowles: Mr. Speaker, may I ask a supplementary question. In view of the repeated assurances given by the Minister of Finance that if he had any budgetary proposals to make the usual kind of notice would be given to the house in advance, does he regard his failure to give notice of his intentions for this evening as an implementation of those assurances?


Donald Methuen Fleming: Mr. Speaker, I have not made the statements attributed to me by the hon. gentleman, so I think his question in the second part requires no answer on my part. My statements are a matter of record-


James Sinclair: They sure are.


Donald Methuen Fleming: and the hon. member may rest assured that whatever has been said will be fully implemented.


Stanley Howard Knowles: Mr. Speaker, on a question of privilege, I would refer the minister to Hansard of November 13, at page 1066. That is a date as well as a page number that might be noted. The Minister of Finance said this in reply to a question of mine concerning budgetary proposals-not a budget, budgetary proposals. He said:
Mr. Speaker, whatever is put before the house in that regard on behalf of the government will be done in due course and the house, in accordance with the usual practice of ministers of finance as I have observed it in the past 12 years, will be notified in due course.
My question of privilege, Mr. Speaker, is that the practice of the past 12 years has been for the minister of finance to announce a few days or several days in advance of the time that any budgetary proposals would be placed before the house. In this case no such announcement was given. We know what is going to happen tonight only because we pulled it out of the house leader last night.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order. I think the hon. member is not correct in trying to anticipate what will be done. I think the proper course for the house is to await the event before criticizing what is to be done, when the house has not been fully informed.


Stanley Howard Knowles: Mr. Speaker-


Donald Methuen Fleming: Mr. Speaker, on the question of privilege, I think in fairness to the facts two things should be said. My friend has referred to the practice. Evidently the practice appears to different members of the house in a somewhat different light. I can

assure my hon. friend there is one practice there will be no intention of following, and that is the introduction of financial proposals by radio.
On the second matter, I can repeat my assurance that there will be ample opportunity afforded for discussion of whatever may be put forward before the house tonight. f' have been asked more than once what would be the proposals of the government of a financial nature. I indicated then that I would be prepared to make a statement on that subject for the information of hon. members when the estimates of the Department of Finance were called. They are being called tonight.
It is quite incorrect and I think utterly unworthy to say that this statement was wrung out of the leader of the house last night. That is quite untrue. The fact is that intimation was given several days ago that the estimates of the Department of Finance would be before the house this week.


James Sinclair: How many days ago?


Donald Methuen Fleming: That was given several days ago. My hon. friend has only to add two and two together and arrive at four to realize on that information that the financial proposals of the government, whatever they might be, would be laid before the house. "


Stanley Howard Knowles: rise on another question of privilege. The Minister of Finance has said that something I said was unworthy of me, when he referred to my statement that we had to pull this out of the Minister of Public Works last night. Hansard for yesterday, at page 1948, records the Minister of Public Works as saying:
. . . and then in the evening we shall take up the estimates of the Department of Finance.
That was all he told us until the hon. member for Laurier (Mr. Chevrier) began to question him, and it was as a result of that questioning that we learned there would be a statement tonight having to do with tax reductions. I submit that my statement was perfectly correct and in accordance with the record. The Minister of Finance has not kept his assurance that he would make an announcement on this matter.


Howard Charles Green: I do not know why I should be dragged into this duel. It certainly was thoroughly well understood by everyone, including the hon. member for Winnipeg North Centre, who I am sure gets all the privileges that anyone gets in this house. It was thoroughly understood that the Minister of Finance was going to make a statement on the financial situation when his estimates were called; and for the hon. member for
Inquiries of the Ministry Winnipeg North Centre to rise in his place and say that he had to drag something out of me last night is just ridiculous.


Mr. Chevrier:: I think I had to do it.


Mr. Speaker:: Perhaps this discussion is ended. I hope I will not have to say what I intended to say. If any other hon. member wishes to pursue the matter I have something to say on the subject.
L Later:]


James Sinclair: Mr. Speaker, I should like to direct a question to the Minister of Finance in the hope that he may be able to clear up the confusion with regard to today's business which is occasioned mainly by the statement he made yesterday as reported at page 1896 of Hansard, half way down the page, in referring to the order of business:
-matters pertaining to the financial policies of the government will be open for consideration when the estimates of the Department of Finance are submitted to the committee of supply.
That was the statement made by the minister. Then we find this:


Stanley Howard Knowles: That is tomorrow?


Donald Methuen Fleming: No. that is not tomorrow.
In view of that categorical statement, how is it that tonight he expects to produce the estimates of the Department of Finance?


Mr. Speaker:: Order. This matter has been discussed at some length already this morning by way of what seemed to be points of order and questions of privilege relating to something that is to happen tonight. It seems to me that the house, in trying to deal with this matter, or in raising points of privilege and order, is anticipating something that is to happen later and it does not seem to me to be in order to do this. Statements have been made as to the business tonight, and I think hon. members should await the event.


James Sinclair: I may not have made my
point quite clear to you, Mr. Speaker. Yesterday the Minister of Finance said we would not be discussing the estimates of the Department of Finance today. That was the point raised by other hon. members as to the lack of notice, the lack of preparation. I think the very least he could have done was to rise on a question of privilege at the opening of the sitting and say he was wrong yesterday when he said that we would not be discussing finance today.


Donald Methuen Fleming: I shall be only too happy to relieve the mind of my hon. friend, and relieve any suspense on this question that may be in the minds of hon. members or even in my own mind.

Inquiries of the Ministry


George Carlyle Marler: That will take some explaining.


Donald Methuen Fleming: It was indicated earlier in the week-if I remember correctly, I think on Tuesday-that the estimates of the Department of Finance were expected to be brought before the house sitting in committee of supply before the end of the present week. On Wednesday night the indication was given to the house by the leader of the house that on Thursday the estimates of the Department of Finance would be brought before the house.


An hon. Member:: Department of defence.


Donald Methuen Fleming: Department of National Defence, I should say. It was not altogether clear at that time as to what on the two following days of the week, namely Friday and Saturday, would be the order of business. He expressly reserved any specific statements about the order beyond that time.


Mr. Benidickson:: Read what he said on Tuesday.


Donald Methuen Fleming: I am speaking from recollection. My hon. friend will recall what I said, when the statement was made yesterday morning by myself, that I did not expect that the estimates of the Department of Finance would be on today-


James Sinclair: You did not use the word "expect".


Donald Methuen Fleming: -I fully expected that the estimates of the Department of Finance would be called tomorrow morning. It so happens as to the estimates of the Department of National Defence that the progress that was expected was not made with them. Consequently it was thought wise last night that there should be a variation in the plans for the business of the house for the balance of the week to this extent, that instead of waiting until Saturday morning for the estimates of the Department of Finance, they would be taken up on Friday evening. That is the extent of the change. As to the estimates of the Department of Trade and Commerce, they are waiting to be called today.
The leader of the house cannot estimate precisely how long the house is going to occupy in committee of supply on the estimates of any one department, and he is doing his very best to give the fullest information to the house on these matters. In view of the fact that requests have been made in relation to the estimates of the Department of Finance, I would have thought that the advance in the introduction of those estimates from Saturday morning at eleven o'clock to Friday night at eight o'clock is not a very serious matter and might have

been welcomed by my hon. friends in the light of some of the things they have been saying earlier in the session.


James Sinclair: I am sure they would have been welcomed if it had been any other department than finance and when instead of item 1 of the estimates we are going to have budget proposals. Normally the opposition have had three or four days' notice of budget proposals.


Mr. Speaker:: I think the house is now fully informed of what is going to take place tonight.


Mr. M. J. Coldwell (Roselown-Biggar):: Mr. Speaker, may I ask the Minister of Finance a question. Since he is going to discuss probable tax and budgetary matters tonight, is he going to place before the house, so that we may have it in our possession, a white paper which is the usual procedure before making tax changes?


Donald Methuen Fleming: Mr. Speaker, I dealt with that subject some days ago and I made it quite clear at that time-


Major James William Coldwell: You have dealt with so many things in so many different ways.


Donald Methuen Fleming: -that there was no intention at this session of tabling a white paper.
I invite my hon. friend to read back in
Hansard-
[Later:!


Lionel Chevrier: Mr. Speaker, may I ask the Minister of Finance a question. I wonder if in view of the point my colleague has just raised about the statement by the minister and the apparent confusion that exists, will the minister not give consideration to putting over his statement on finance until tomorrow so as to give us an opportunity of considering the position that will be brought about by his statement? There are a number of hon. members here who are anxious to speak, and it does not give them very much time in view of the statement that was made by the house leader. I also understand that the Minister of Trade and Commerce is most anxious to get ahead with his estimates because he must return to the United Kingdom. I wonder if in view of all these circumstances the minister would not give consideration to putting over consideration of his estimates until tomorrow?


Donald Methuen Fleming: Mr. Speaker, I am always glad to oblige my hon. friend and other hon. gentlemen opposite, but may I recall to him that there have been repeated requests for a statement on the part of the Minister of Finance about the financial position, and in some cases they have been accompanied by

quite unfounded assertions that there has been delay in making such a statement. Effort has been made to advance this statement for the convenience and information of hon. members.
In the second place, my hon. friend spoke about the desire of hon. members to discuss this subject. I can assure him that there will be ample opportunity afforded for that purpose. There will be just as much opportunity afforded for that purpose if we proceed this evening at eight o'clock as there would be if we were to proceed tomorrow morning at eleven o'clock.


Lionel Chevrier: My only purpose in asking the question was that last night I gave some indication that it was the custom of the house to give notice of these proposals, and I wondered whether in view of that practice and tradition the minister would not accede to my request.


Donald Methuen Fleming: Mr. Speaker, I think there has been frequent and abundant notice given to the house already-


Mr. Pearson:: That it would not be done.


Donald Methuen Fleming: -both as to the time and as to the nature of the statement I have been asked to make on the introduction of my estimates.


Major James William Coldwell: Mr. Speaker, may I ask a supplementary question of the Minister of Finance. Is it not usual when budgetary changes are made that all parties in the opposition are given an opportunity for some hours at least to consider what those changes may involve so that we may adequately prepare to discuss them? Is this not the case, and is it not a reasonable request that the discussion be put off for at least some hours? In fact, I was going to suggest that it be put off for a day or so, which is usual.


Donald Methuen Fleming: Mr. Speaker, I do not think the practice has been at all what my hon. friend has suggested. I take it that it is the duty of all hon. members of the house to prepare themselves in advance for all questions that may arise in the course of a session. There has been a great deal said, not least of all by my hon. friend and those who sit with him, concerning the financial position and asking for a financial statement on the part of the government. I am simply complying with the requests that have been made by the hon. gentleman and others. I have said,
I do not know how many times already, that there would be ample opportunity afforded for discussion.


Major James William Coldwell: May I ask the minister a further question. Is it not a fact that the financial spokesman for the official opposition 96698-124i
Inquiries of the Ministry has invariably asked that the debate on budgetary changes-and we understand something of that kind is going to occur tonight-should be postponed for some hours, in fact usually for two or three days, although I am not asking for that? The minister seems to have a queer way of twisting what individuals in this house have said.


Some hon. Members:: Order.


Mr. A. W. Stuart (Charlotte):: Mr. Speaker, I should like to address a question to the Minister of Finance.


Donald Methuen Fleming: Mr. Speaker, with the permission of my hon. friend I would like to revert to the question asked by the hon. member for Rosetown-Biggar. I think he might have forgone the concluding remark he made this morning.


Major James William Coldwell: Not after the irritation I have suffered this morning.


Donald Methuen Fleming: I do not think the hon. member has suffered anything this morning. He has received answers to his questions. If I understand that instead of asking for advance information he is asking for an adjournment tonight I can assure him that we will be only too happy to accommodate the wishes of hon. members in that respect. It is not the practice of the government to give advance information to the opposition concerning financial proposals. My hon. friend is aware that the practice is simply, if the Minister of Finance is using a text, to hand a copy of that text to the financial critic of the official opposition and I believe to the leaders of the other two parties in opposition during the course of the remarks of the Minister of Finance.
Now, it has been the practice in that event, if whoever happens to follow the Minister of Finance on the part of the official opposition wishes not to conclude his remarks on the same occasion, to make part of his remarks and continue on a later occasion, and adjourn the debate for that purpose. Certainly if it is the wish to follow that course there will be no objection from this part of the house. I said there will be the most ample opportunity afforded for discussion, and if that is what the hon. gentleman is asking I can say there will be no objection on this side of the house to adjourning the discussion tonight, if that is the wish of hon. members.


James Sinclair: I might ask a similar question. In previous budgets it has been the practice to accommodate the press. The gentlemen of the press have been locked up for three hours in advance of the budget

Inquiries of the Ministry proposals, with a copy of those proposals, so they could prepare accurate stories for the benefit of the Canadian people. Has such accommodation been afforded this year to the working members of the press gallery?


Donald Methuen Fleming: My hon. friend keeps talking about a budget. I thought it was made clear to him and to other hon. members on Monday by the Prime Minister that it is not the intention of the government to submit a budget.


Howard Charles Green: With regard to the business,
I think hon. members opposite may not have understood the implications of the finance minister's remarks. If it is the wish that we stop considering the estimates of the Department of Finance after the minister has made his statement, or after someone in the official opposition has commenced a reply,' we would be very glad to do that and for the remainder of the evening deal with the estimates of the Department of Trade and Commerce. If, again, hon. members opposite do not wish to go on with the finance estimates tomorrow, then we will place other estimates before the house.


Lionel Chevrier: That was not my request
nor my question. My request was that the consideration of the estimates be put off until tomorrow.


Howard Charles Green: We cannot agree to that,
Mr. Speaker, but we would be willing to accommodate the opposition parties in the other way I have just mentioned.


Major James William Coldwell: May I say to the Minister
of Public Works that what he has just said is very fair.


Mr. Low:: Mr. Speaker, I would like to
indicate to the house leader that the arrangement just suggested would be agreeable to us. I think it would be a very suitable arrangement.


James Sinclair: Perhaps in my capacity as
financial critic of the opposition I might point out that it is going to be very difficult to decide right now whether we adjourn or not, because we have not the slightest idea what the hon. member is going to say tonight.


Some hon. Members:: Oh, oh.


An hon. Member:: Who has?


Mr. Churchill:: Do you want to write his
speech for him?


Mr. Speaker:: Order. We are discussing
the arrangement of the business of the house. I think it might be limited to the house leader and the spokesmen for the other parties.


Lionel Chevrier: The minister without portfolio is going to settle the problem.


James Sinclair: There is always plenty of
warning.


Howard Charles Green: I see no reason why that decision cannot be made this evening. We could then switch to other estimates, if it is the wish of the members in the other parties.


Hon. J. M. Macdonnell (Minister without Portfolio):: As I have been referred to, I should like to say a word. It was my privilege for several years to follow the Minister of Finance when the budget was delivered; but I received a copy of the budget speech only after the minister had begun to speak.


Lionel Chevrier: You had several days' notice, and you put us to sleep besides that.


Mr. Brooks:: The hon. member has not wakened up yet.


Lionel Chevrier: And he has not wakened up yet. The Minister of Veterans Affairs stated a truism.


Stanley Howard Knowles: If as
a result of what the minister says tonight we find ourselves confronted with actual resolutions that obviously would have to be dealt with in committee of ways and means, would it not be better to go into committee of ways and means so we can have the matter debated properly?


Howard Charles Green: Now I think the hon. member for Winnipeg North Centre is just fishing.


Mr.   Siuari@Charloiie: Mr. Speaker, I should like to direct a question to the Minister of Finance. Will the Minister of Finance follow the usual custom of wearing new shoes when he discloses his budgetary changes tonight, or will it be sufficient on this occasion to get a shine only?


Donald Methuen Fleming: Mr. Speaker, I expect to wear the same shoes that I am wearing now. If I can borrow a dime from my hon. friend perhaps I might even get them polished for tonight.


Mr. Hayden Sianton (Leeds):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Does he not think the members on the opposition side of the house are desperately afraid that there will be something good for the people of Canada announced tonight?



BANK OF CANADA


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: Mr. Speaker, may I direct two questions to the

Minister of Finance. My first question is, can the minister advise the house whether a new policy has been enunciated or adopted by the government in the last two weeks which has had the effect of having the Bank of Canada adjust its loan discount rate, which now stands at 3.92 per cent compared with 3.83 per cent during the past week, as reported in this morning's issue of the Montreal Gazette under the title, "Money Rate Goes Higher Again"? My second question is: -


Mr. Speaker:: Order. Will the hon. member confine himself to one question at a time.


Donald Methuen Fleming: Mr. Speaker, I should think questions of this nature could more properly be asked of the Minister of Finance when the estimates of his department are before the house in committee of supply.
I thought the hon. member was aware that the Bank of Canada rate is established in the light of the current rate from week to week on Dominion of Canada treasury bills sold. The Bank of Canada rate is arrived at by adding one quarter of one per cent to the weekly rate on treasury bills. It happens that after a series of very rapid and almost startling reductions in the rate in recent weeks there was a slight reaction in the past two weeks, fractional in its nature. That was not altogether unexpected, in view of the very rapid reduction of the rate in the preceding weeks.


Hédard-J. Robichaud: In view of the minister's reply I will amend my second question. Does the minister recall that, as recorded on page 597 of Hansard, when asked a similar question by the hon. member for Nanaimo relating to what specific steps the government intended to take to lower the interest rate he replied that that part of the question obviously related to a matter of government policy?


Donald Methuen Fleming: I do not recall the statement.
I will have a look at it. It does not seem to jibe at all with what I have been saying and the answers I have been giving to the question. The fact is that under a decision taken by the Bank of Canada well over a year ago the Bank of Canada rate follows automatically from week to week the rate on treasury bills.


James Sinclair: should like to ask a supplementary question. Does the minister recall that earlier this session, whenever the treasury rate fell, he stood up and proudly said that this was because he was successful in combating inflation? Would he now like to comment on
Inquiries of the Ministry the fact that the rate is rising, and apparently he is unsuccessful in his battle against inflation?


Donald Methuen Fleming: Mr. Speaker, if the hon.
gentleman would only be accurate in his premises there might be some ghost of a hope of his being accurate in his conclusions. He starts out with the wrong premise again. As I pointed out-I had hoped that it might have brought satisfaction to members of the house but apparently it has not brought any satisfaction to the hon. member for Coast-Capilano-interest rates had been dropping and the drop in those interest rates in recent weeks had become very material. I observe the glee with which he greets an increase in the rate being paid in the last nine days on Dominion of Canada treasury bills, and with it the automatic results in the Bank of Canada rate. I may say whatever the government has been able to do has been exerted in the direction of seeking a reduction in interest rates, because the interest rates we found when we came into office five and a half months ago were the highest in a generation, and we think at that height they were detrimental to business in this country.


James Sinclair: Amen.


George Carlyle Marler: Is it the minister's intention only to take credit for reductions?


Donald Methuen Fleming: It will be the minister's intention in all fairness, I hope, to take credit where credit is due, and where we have had to assume as of June 21 the very doubtful legacy left to us by the former administration-


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: -I hope to place the responsibility in that regard where it belongs.


George Carlyle Marler: Mr. Speaker-


Mr. Harkness:: You people even used to take credit for the weather when it was good.


George Carlyle Marler: -would the hon. member not like to have the situation back as at June 21?


An hon. Member:: No, thanks.


Donald Methuen Fleming: I could not wish-


Mr. Speaker:: Order. I take it there is no question before the house that requires an answer. It seems to me this exchange is becoming more of a debate than a search for information.
ILater:]


Donald Methuen Fleming: Mr. Speaker, I was asked two questions a few moments ago by the hon. member for Gloucester. The second question
1960	HOUSE OF
Inquiries of the Ministry which was directed to me struck me, as I said, as a little odd. I did not think his statement of the facts, as I recalled them, rang true. I have now had an opportunity of looking up page 597 in Hansard, upon which the question and the accompanying statement were based, and I see that on that date, which was October 31, 1957, I was asked a two-part question by the hon. member for Nanaimo (Mr. Cameron). The first part of the question, which was addressed to me, was as follows:
To what actions of the previous government does he attribute the rise in interest rates, and what specific steps does his government propose to take to lower the level of the interest rates?
You, Mr. Speaker, intervened to point out that the first part of the question was out of order because the present government could not be expected to answer questions as to something done by the former government; and with respect to the second part of the question you in your ruling said it might, if the minister wished to answer it, involve a matter of policy. My answer was that the second part of the question obviously related to a matter of government policy, and I now draw attention to the fact that the second part of the question was:
What specific steps does his government propose to take to lower the level of the interest rates?
Obviously any steps that might be taken would be a matter of government policy, but that is not the way the hon. member put his question this morning.


George Carlyle Marler: Is government policy a secret?


Hédard-J. Robichaud: My question was addressed to the minister to try to find out if it was due to the policy of the government that interest rates had been lowered. According to the minister's statement, he said the second part of the question obviously refers to a matter of government policy. He took credit then for the lowering of the interest rate, and today he is trying to deny responsibility because the rates are going up again.


Donald Methuen Fleming: There is no need to belabour this point. If my hon. friend will only look at the record at page 597 of Hansard he will see the question was about what specific steps the government would take, and any specific steps the government would take are naturally a matter of policy.


Mr. Peter Slefura (Vegreville):: May I ask a supplementary question of the Minister of Finance. He had said just a few moments ago that any steps taken would definitely be government policy. The question I have is as follows. Has the government taken any steps to have the interest rates reduced?


Donald Methuen Fleming: Mr. Speaker, this matter has been up before, and if my hon. friend wishes a statement on the subject repeating all the things that have been said before, I would be happy to furnish it to him. I think, however, that would probably be a proper matter to be taken up in committee of supply on the estimates of the finance department.



SHIPPING


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, to get back on the rails, may I direct a question to the Minister of Transport. Has H.M.C.S. Labrador been transferred from the Royal Canadian Navy to the Department of Transport? If so, is it now in the hands of shipfitters and are its oceanographic and hydrographic instruments and equipment being removed? Is the vessel being converted for icebreaking solely and, if so, what is the estimated cost of the conversion and is it being done by contract or on a cost-plus basis?


Some hon. Members:: Order paper.


Harold Edward Winch: It is a very simple question, and I made it as short as I could.


Hon. George H. Hees (Minister of Transport):: I wish to thank the hon. member for his courtesy in advising me of his intention to ask the question. I received it only before coming into the house, and I shall give him the answer prepared by my departmental officials, I assume in the order in which they received the questions.
The answer is that the vessel is now undergoing an extensive refit under R.C.N. direction which will take most of the winter; therefore its exact winter operational role cannot be determined as yet.
The Labrador has not yet been transferred to the Department of Transport. Transfer is expected to take place early in the new year, but the nature of any additional conversion work for civil purposes has not been finally determined. The Labrador, however, is to be used as an important unit in the substantial fleet of departmental icebreakers and Arctic convoy and supply vessels that operate in the Arctic each summer and during the winter in the gulf of St. Lawrence and Atlantic waters to aid navigation there.


Lionel Chevrier: May I
ask the minister in what yard the repairs to H.M.C.S. Labrador are being made, and at what. cost?


George Harris Hees: I do not have that figure at my fingertips, but I will endeavour to find out.


Lionel Chevrier: Does the minister not know what yard it is?


George Harris Hees: No, I am not sure.


Harold Edward Winch: May 1 ask a supplementary question. In view of the minister's answer, will he advise the house whether his department has a continuing interest in developing the gulf of St. Lawrence for winter navigation, and if so will the Department of Transport continue the oceanograph surveys in the coming year which were initiated in 1955 by the Royal Canadian Navy and carried through by H.M.C.S. Labrador and the joint Atlantic oceanograph group of the fisheries research board?


George Harris Hees: The answer is yes. Department of Transport vessels have always been available within the limits of their operational tasks to assist other agencies, and the Labrador will be in this category.
ILater:]


George Harris Hees: Mr. Speaker, a few moments ago the hon. member for Laurier asked me a question regarding the refitting of the Labrador. I am pleased to inform him that I now have the information for which he asked. The Labrador is being refitted in the Saint John dry dock and the estimated cost is $150,000. As a former minister of transport I am confident he would be pleased to know that the navy is paying the cost.



CANADIAN NATIONAL STEAMSHIPS


[Stage Direction]
On the orders of the day:
George Harris Hees: I should like to take this opportunity of answering a question of which I took notice yesterday, when the hon. member for St. Antoine-Westmount asked me about the transfer of Canadian National (West Indies) Steamships' vessels to Trinidad registry. I told him I would speak to the chairman of the Canadian maritime commission about this matter and give him further information today.
The chairman of the Canadian maritime commission has advised me that as a normal part of these proceedings, since the time the application was made by Canadian National (West Indies) Steamships, Limited, for transfer of registry he has been engaged in making arrangements to provide that if at any time it should be desired to return these ships to Canadian registry, this could be done
Inquiries of the Ministry along lines similar to the special transfer arrangements which have been in force with the United Kingdom for some years.


George Carlyle Marler: May I ask a supplementary question. I gather, though, at the time the transfer of registry took place no such arrangement had been concluded?


George Harris Hees: At the time Canadian National (West Indies) Steamships initiated the proceedings transferring the vessels, the chairman of the Canadian maritime commission started the arrangements I have just outlined.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. E. G. McCullough (Moose Mouniain):: Mr. Speaker, the urgency of my question arises out of the plight of the farmers caused by the price-cost squeeze. I should like to direct my question to the Minister of Agriculture. Now that the government has been in power for over six months, can the minister inform the house why the government has not seen fit to invoke the authority conferred under the Agricultural Prices Support Act which says, in effect, that this act may be used to endeavour to ensure adequate and stable returns to agriculture, and to endeavour to secure a fair relationship between the returns from agriculture and those from other occupations? Can the minister state why the government has not invoked this authority, rather than waiting for future legislation?


Douglas Scott Harkness: At the outset may I say that the hon. member is, as usual, inaccurate, because the present government has not been in power for six months. So far as making use of the Agricultural Prices Support Act is concerned, we have made very extensive use of it. We have made very large purchases under it and have placed a number of commodities under it, thus providing support for commodities which were not under the act before. As I say, we have bought a large amount of various agricultural commodities in order to support prices, and that refers to commodities which were already under the act and the ones we have brought under the act.


Right Hon. J. G. Gardiner (Melville):: Then may I ask a supplementary question. What are the products that were put under the act which were not under it before?


Douglas Scott Harkness: Mr. Speaker, there were fowl, turkeys-

Inquiries of the Ministry


James Garfield Gardiner: No; fowl had been placed under the act.


Douglas Scott Harkness: Fowl were not under it, Mr. Speaker. It had been provided that they would come under at some future time, but they were not under it at that time. Turkeys, butterfat products, particularly butter oil-


Mr. F. S. Zaplitny (Dauphin):: May I ask
a supplementary question of the Minister of Agriculture. Is the minister prepared to state that the prices which this government has been supporting under this act bear a fair relationship to the general level of prices in Canada?


Douglas Scott Harkness: Mr. Speaker, whether they bear a fair relationship to the general level of prices in Canada or not-and I presume the hon. member is referring to the prices of commodities which are under price support- this is a matter which I think would be capable of a great deal of argument, and I am certainly not going to get into any long discussion on this particular matter at the present moment.



NORTHERN ALBERTA-REQUEST FOR REPORT ON INVESTIGATION INTO HARVEST

[Stage Direction]
On the orders of the day:
Solon Earl Low: I should like to ask the Minister of Agriculture whether he could say this morning what progress has been made in getting Prairie Farm Assistance Act inspectors into the Peace river country to establish the extent of crop damage that has been caused by the unusual, tragic weather conditions in that area.


Douglas Scott Harkness: Mr. Speaker, I have no report within the last two or three days with regard to that matter. As I indicated to the hon. member, I think about a week ago now, arrangements were under way to take on between 40 and 50 inspectors in order to try to get the entire Peace river area inspected in the quickest possible time.


Solon Earl Low: I have a supplementary question; perhaps the minister could answer it. Judging from the reports he has already received, does he feel that the maximum benefits possible under the Prairie Farm Assistance Act will be enough to meet the minimum most urgent needs of the farmers in the stricken Peace river area?


Douglas Scott Harkness: From the numerous letters I have received from individuals, boards of trade and so forth in the Peace river country, it would appear that there will be a relief problem there. That, of course, is the responsibility of the municipalities, and of the


province of Alberta. The only provision of which I know under which we can assist with regard to this disastrous situation in the Peace river country is by Prairie Farm Assistance Act payments.


Mr. H. R. Argue (Assiniboia):: I have a supplementary question. Has the minister given any consideration to making cash advances or money available on unthreshed crops in the Peace river country, as was done by the former administration in 1951.


Douglas Scott Harkness: I think perhaps the hon. member for Assiniboia has forgotten what I said a week ago in connection with this matter. The estimates are that no more than about 10 per cent of the grain that is left up there will ever be threshed. It is therefore hopeless to talk about making cash advances on a crop which is gone.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Stanley Haidasz (Trinity):: I would like to ask a question of the Minister of Public Works, as to whether his department or the crown company, C.M.H.C., has received any proposals from the Toronto development department asking for federal aid to redevelop the Alexandra park and Moss park areas?


Howard Charles Green: Mr. Speaker, may I take this question as notice.



PERMITS FOR VETERANS TO QUALIFY FOR CASH ADVANCES

[Stage Direction]
On the orders of the day:
Mr. G. H. Castleden (Yorklon):: I would like to ask a question of the Minister of Veterans Affairs. Would the minister inform the house what arrangements have been made to provide veterans under the Veterans' Land Act with permits from his department which are necessary to qualify them for cash advances under present regulations?


Alfred Johnson Brooks: Mr. Speaker, I appreciate receiving notice from the hon. member of his intention to ask this question. Veterans established under the Veterans' Land Act may apply for cash advances in the same way as other producers. If the director, the Veterans' Land Act, has been shown on the permit book, the veteran forwards his completed advance payment application form to the district superintendent, Veterans' Land Act, who has

been authorized to sign for the director. The form is then returned to the veteran to proceed with his application in the usual way.


George Hugh Castleden: A supplementary question. Have any arrangements been made to speed up and prevent delays, because many of these veterans are in a very serious condition with regard to cash and it is necessary for them to have these permits as soon as possible. What has been done to prevent delays in this matter?


Alfred Johnson Brooks: I will look into this matter, Mr. Speaker. My information is that arrangements have been made so. that no delays will occur, but I will check up on that.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
James Sinclair: would like to address a question to the Minister of Justice. Now that the management of Britannia mines has announced that the mine is to close in two weeks, would the minister tell the house what proposals, if any, the federal government made to assist in keeping this mine in operation?


Hon. E. D. Fulton (Minister of Justice):: The hon. member will recall, if he will cast his mind back, that I indicated to him and the house yesterday that the information I have from the company officials in New York is to the effect that there is still a possibility that negotiations and discussions may result in partial continuation of operations. Therefore it seems to me it will be obvious to him that until we have had a chance to pursue those negotiations there is nothing I can report.



CANADIAN PACIFIC RAILWAY, WINNIPEG  STATE- MENT ON REPORTED DISMISSAL FOR FAILURE TO CROSS PICKET LINE

[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Minister of Labour):: Mr. Speaker, on November 14 the member for Winnipeg North Centre asked the following question:
Is the minister aware that the members of a Canadian Pacific switching crew in the Winnipeg area who felt that they could not cross a picket line two days ago have been informed by the Canadian Pacific Railway that their services are no longer required?
Will the minister look into this matter to see if there is not some protection for such employees under the national labour code, since these employees do come under federal labour jurisdiction?
Inquiries of the Ministry
My answer is as follows. I have looked into the situation, Mr. Speaker, and I am informed by the management of the Canadian Pacific Railway Company that rather than being told that their services were no longer required, the employees in question were temporarily suspended pending investigation. Following the investigation they were returned to duty.
I am informed that disciplinary action was taken and I quote from the report I received:
Each crew member was returned to duty and assessed 15 demerit marks on the first offence and 25 demerit marks on the second offence.
I understand that such demerit marks are reduced by 20 for each subsequent year's clear service, free of discipline. Accumulation of 60 demerit marks is required for dismissal. At the moment all the men are back at work.
As to the matter of protection under the national labour code, by which term I presume the hon. member means the Industrial Relations and Disputes Investigation Act, for employees who refuse to cross picket lines, I may say that there is a provision in the act which requires the inclusion in every collective agreement of a procedure for the final settlement of grievances arising out of the alleged violation or interpretation of the provisions of the agreement.



STATEMENT ON REQUEST FOR REPORT ON MISSION TO COMMUNIST CHINA

[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, several hon. members have asked me questions with regard to the trip to China made by our trade commissioner, Mr. Forsyth-Smith. He has now returned to Hong Kong and in a preliminary report he tells us he was well received by the various members of the Chinese trading corporations. Until Mr. Forsyth-Smith has completed his studies it is not possible for him to give an accurate appraisal of the trade potential which exists in China for Canadian products. It is his first opinion, however, that there are definite opportunities in certain directions, but that the volume of business which we might expect in the near future must be limited.
As might be expected, there is in China a lack of knowledge of what Canada has to offer, so that efforts must be made by those interested in selling to China to acquaint the Chinese with those items which we wish to sell. Our trade commissioner believes that more Canadian businessmen should endeavour to pay personal visits to that country.

Inquiries of the Ministry Amongst the products in which our trade commissioner thinks reasonably good prospects exist are wood pulp, fertilizer, aluminium, kraft paper, linseed, plastic raw materials, insulin, nylon and rayon yarn and staple fibre, cellophane, and a wide range of industrial chemicals.
I might add that the export-import business in China is exclusively in the hands of some 16 state-owned corporations, and our trade commissioner was able to have discussions with most of them.


Major James William Coldwell: Does the minister not think the knowledge of Canada among the Chinese would be greatly improved if we had a proper diplomatic mission there, after the recognition of the government of that country?


Gordon Minto Churchill: I expect there are many questions on which knowledge of Canada by the Chinese might be improved.


Lester Bowles Pearson: Will the minister not agree that some of the commodities he has just mentioned in his report are also on the list of prohibited exports to China, and that unless that list can be changed to bring it into conformity with the list of prohibited commodities to Russia, trade in those commodities cannot take place?


Gordon Minto Churchill: Agreed.


William Moore Benidickson: I have a supplementary question. The other evening I asked the Minister of Trade and Commerce, when we were debating the bill to amend the Export Credits Insurance Act, whether or not he felt that under present conditions, looking forward to trade with China, he would feel disposed to recommend to his colleagues insurance under section 21 of the act. He did not reply to my question at that time. He simply said that Canada would be glad to sell to any country including China, but he did not say specifically what his views are with respect to the opportunity for insurance.


Gordon Minto Churchill: That is attempting to cross a bridge before you come to it. If negotiations are entered into with regard to the sale of wheat to China, or if there is an offer from China to buy our wheat and the wheat board considers that it is a good proposition, at that point we would then consider the problem raised by my hon. friend.


Mr. W. A. Tucker (Rosthern):: I should like to ask the minister if it is correct that if we are ever to arrange a sale of wheat to China it will have to be arranged through Japanese sources, because there is no way

in which a deal could be made with China or at least these Chinese government corporations directly by the wheat board.


Gordon Minto Churchill: I have no knowledge of that particular matter.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. T. J. Irwin (Burnaby-Richmond):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. I have given him notice of this question, but he may not have had ample time to prepare an answer this morning. Will the minister consider a minimum price for dogfish, to encourage destruction of this predator on the Pacific coast? Will the minister put the present bounty on both livers and carcasses of dogfish to encourage small boat owners to help in destroying this fish? Will regulations be brought down to make present bounties payable to fishermen rather than to fish companies?


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, I want to thank the hon. member for Burnaby-Richmond for his courtesy in sending me notice of this question. Unfortunately I received it just before coming into the house. I might point out to him that yesterday the hon. member for Comox-Alberni asked me a question on the same subject, which I took as notice. I am not yet in a position to answer either question, but I hope to be in a position to do so in the near future; and at such time as it is possible for me to do so I will answer both questions.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. Auguste Maltais (Charlevoix):: Mr. Speaker, I would like to direct a question to the Postmaster General. Since the publication of general order No. 125, amended thereafter by general order No. 169, could the Postmaster General tell the house if instructions have been given for the cancellation of contracts held by rural mail contractors? Is he further aware if instructions have been given that contracts are not to be terminated for no apparent reason?


Hon. W. M. Hamilton (Postmaster General):: Mr. Speaker, I think the hon. member will find in last Wednesday's Hansard certain

observations of mine about detailed questions of this nature which might well be put on the order paper.


George Carlyle Marler: This is not a detailed question.


William McLean Hamilton: the hon. member will read those remarks he will perhaps place the question on the order paper, and I will be able to see to it that he receives an answer.


Auguste Maltais: As a supplementary question, may I ask the Postmaster General if there were new instructions given by himself that if cases were brought to his attention of mail contracts being terminated for no apparent reason he would take action immediately?


William McLean Hamilton: Mr. Speaker, very definitely the Post Office Department is not terminating any rural mail carriers' contracts "for no apparent reason".



REQUEST FOR ISSUANCE OF SPECIAL STAMP DEPICTING ROTARY CLUBS, ETC.

[Stage Direction]
On the orders of the day:
Mr. G. R. McWilliam (Norlhumberland-Miramichi):: Mr. Speaker, I should like to direct a question to the Postmaster General. Will the Postmaster General consider issuing an airmail or regular postage stamp depicting Canada's Rotary clubs, members of Rotary International, the world's largest service club?


William McLean Hamilton: Mr. Speaker, I will be very glad to give consideration to the hon. member's suggestion.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
George Roy McWilliam: Mr. Speaker, may I direct a question to the Secretary of State. When may I expect an answer to my question which appeared as question No. 47 on the order paper of October 23, 52 days ago, and which was made an order for return on October 30?


Hon. Ellen L. Fairclough (Secretary of State):: Mr. Speaker, I had expected to have this answer ready earlier this week but one of the departments concerned has not been able to reply up to now. However, I can assure the hon. member that we are trying to secure an answer to the question as quickly as possible.
36698-125i
Inquiries of the Ministry UNEMPLOYMENT INSURANCE



REQUEST FOR EMERGENCY REGULATION TO COVER PACIFIC COAST FISHERMEN

[Stage Direction]
On the orders of the day:
Thomas James Irwin: Mr. Speaker, I should like to direct a question to the Minister of Labour, of which I sent him notice. What steps, if any, are being taken to meet the request of the united fishermen and allied workers' union in its letter of November 28, 1957, regarding unemployment insurance?


Michael Starr: Mr. Speaker, I wish to thank the hon. member for giving me notice of his intention to ask this question. I have had representations from the united fishermen and allied workers' union requesting a special emergency regulation to permit salmon net fishermen with fewer than 14 weeks' contributions to draw the same benefits as persons with 15 stamps can now obtain under seasonal benefit regulations. As matters now stand, fishermen with 15 stamps will be eligible for seasonal benefits.
The request from the united fishermen involves a further amendment to the seasonal benefit regulations, and it is a matter which would have to be carefully investigated. I have asked the officials of the unemployment insurance commission to obtain the facts in the matter to ascertain what would be the best course to follow.



PENSIONS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Finance. Has the minister had an opportunity to read the brief submitted to him by the civil service association of Ottawa on November 15 regarding civil service pensions? Is the government giving consideration to the suggestions made by the association as to ways and means of restoring and maintaining the real value of the pensions of superannuated civil servants?


Donald Methuen Fleming: Mr. Speaker, all representations that come from the civil service are given consideration. I have no comment to make on this particular brief at present.
1966	HOUSE OF
Inquiries of the Ministry



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, I should like to deal with a question directed to me by the hon. member for Winnipeg North Centre on November 28. He asked me whether I had pursued the representations made to my predecessor and to myself regarding changes made in the pension plan of the Canadian Pacific Railway Company.
Before I deal with this question, Mr. Speaker, I feel I must confess to you and to the house that when the hon. member put his question I was perhaps not following the course of the debate with quite the same degree of critical attention which I normally apply to these matters. Thus when I informed the hon. member that I had not had representations made to me on the matter I was guilty of a misstatement. The misstatement was purely involuntary, and I hope the hon. member will not feel that it was made with any intention of misleading him.


Stanley Howard Knowles: You
are forgiven.


Michael Starr: The matter of certain alleged anomalies in Canadian Pacific Railway pensions had been brought to my attention in letters from a number of individuals, and when the hon. member asked his question I was awaiting a report from my officials on the matter with regard to the course taken by my predecessor when these same representations were made to him. As I understand the matter, certain beneficial changes were made in the pension plan by the company but they applied only to employees retiring after January 1, 1953, the date when the changes became effective. Representations were made to have the new plan made retroactive.
I understand that my predecessor in this office made representations to the company requesting a study and review of the anomalies which had been the subject of complaint, and he was informed that the cost of making the new provisions retroactive to cover 12,500 employees already on pension would be prohibitive, so much so as to make it impossible to bring in the new features for employees who were due to retire in the future. As the hon. member knows, the Minister of Labour has no jurisdiction over the provisions of a pension plan concerning a private company and its employees. However, I shall certainly undertake to bring once more to the attention of the management of the Canadian Pacific Railway the latest representations -which I have received in this regard.


Stanley Howard Knowles: Thank you. You have our best wishes.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. F. G. J. Hahn (New Westminster):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue arising out of the answer he gave me yesterday, in which he indicated that any letter he received from anyone respecting advertising over station CBM would be referred to the officials of the Canadian Broadcasting Corporation for their action. In view of the fact that the C.B.C. originally set out the scale of charges to be used in determining advertising rates, would he consider making representations to that body now to see that they keep their rates on a comparative basis with those charged by private broadcasters?


Hon. G. C. Nowlan (Minister of National Revenue):: Mr. Speaker, I do not think that the minister simply responsible for reporting to parliament respecting the C.B.C. should attempt to interfere with the commercial policy of that corporation. I do not think it has been done. I am willing to give the matter some consideration, but as it is an independent crown corporation which is going to be seeking funds from parliament with which to carry on it would hardly appear to me, to give an off the cuff answer and without giving the matter more careful consideration, to be good policy to suggest to that corporation that it should cease obtaining commercial revenue, when I presume parliament undoubtedly will be telling it that it will perhaps have to do without as much money as it would like to get and therefore should earn more revenue.


Lionel Chevrier: You might give it a hint some day.


Frederick George Hahn: I did not hear all the minister had to say and will have to read it in Hansard. However, if this practice is to continue I would ask if he would see to it that the $37 million subsidy in the estimates for the broadcasting corporation is withdrawn.

The house in committee of supply, Mr. Courtemanche in the chair.
DEPARTMENT OF TRADE AND COMMERCE General administration-
414. Departmental administration, $672,473.


Gordon Minto Churchill: Mr. Chairman, this is the first opportunity I have had to report to the

house with regard to the general trade situation of Canada, and to deal perhaps with other matters. The Department of Trade and Commerce ranges over a very wide field and it will be impossible, without taking too much time, to deal with all the aspects of such a large department. I should like at this stage to express my appreciation to the members of the department who have given me such expert assistance during the last several months. They constitute a very highly trained and competent section of the civil service.
I thought it might be wise to refer chiefly to two main matters; first the trade commissioner service, which is so widely spread throughout the world, and second, the general state of Canadian trade and development in relation to other countries.
The trade commissioner service is responsible for the promotion of Canadian export trade and for the protection of Canadian commercial interests abroad. Hon. members are, I think, well acquainted with the trade commissioner service and the very useful work the service has done in the past. Recently I had occasion to visit a number of our posts in Europe in connection with the sale of Canadian wheat and I must say that this very close contact with our trade commissioners in the field confirmed in my mind the high reputation which these men have acquired for themselves. It also confirmed the opinion which has been expressed to me on so many occasions by our producers, manufacturers and agriculturists that our trade commissioners are making a substantial contribution to Canada's well-being in the export field.
The trade commissioner service now has 57 posts abroad. These are located at strategic centres of trade throughout the world, wherever it is considered that possibilities exist for the further development of Canadian trade. The trade commissioners are constantly on the watch for opportunities to increase Canada's export trade and to safeguard Canadian interests abroad. From these posts reports are constantly received advising of foreign commercial policies and economic trends, on conditions in the territory, and at the same time bringing to the attention of Canadian producers specific opportunities for the development of trade.
While most areas of the world are covered by these 57 posts there are still certain sections which I believe warrant more intensive consideration. We have constantly under review the need for offices in these areas. During the past year, for example, 12 posts have been opened in Hamburg, Vienna, Colombo, Los Angeles, and just recently in
Supply-Trade and Commerce Accra. These new posts will aid considerably in the development of our markets in these countries. There are still, however, a number of areas where I believe we should have offices. The Middle East, in spite of troubled conditions, I think should receive better consideration than it is possible to give with our present offices. Consideration is being given also to new offices in the Far East, which is constantly growing more important to Canadian trade interests, as well as to establishing more offices in the United States.
The trade commissioner service at present comprises 127 offices. A high standard is maintained for entry into the service. Recruiting is by competitive examination held usually once during each year. Candidates must meet rigid standards as to education, physical fitness, age and general suitability, and they are drawn from all sections of Canada. Just last year 10 young men were accepted into the service. After a year's intensive training in Ottawa, during which time they are on probation, they are sent on a tour of Canada to acquaint them first hand with the Canada which they will represent commercially abroad. They are then posted abroad to work under the guidance of more experienced officers. Regular and annual recruiting into the service is essential if we are to maintain a young, virile corps of officers, and I hope nothing will be allowed to interfere with this.
I might add that from my own personal observations and meeting with these officers abroad, I have reason to believe that we are very well served in these stations. In addition to that, I have had quite a number of letters from businessmen who have been active in business interests abroad, reporting to me that they have been thoroughly served by our trade commissioners. I feel that our trade commissioners are a credit to Canada.
I thought I would continue, Mr. Chairman, with some remarks concerning Canada's present trade position. During the past year sales abroad have been subject to conflicting influences. On the one hand there have been extensive additions to capacity in the export industries, including a number of commodities relatively new in Canadian trade. On the other hand, there has been a general softening in world commodity markets and a decline in industrial output in the United States, particularly in durable goods. Renewed measures of restriction in the United Kingdom have been an important factor limiting further expansion in Canada's foreign sales, and in the case of wheat marketing difficulties have arisen from ample world supplies and have been accentuated by the surplus disposal measures of the United States.
1968	HOUSE OF
Supply-Trade and Commerce
In these circumstances the value of Canadian exports for the first ten months of 1957 amounting to $4,026 million, on the basis of preliminary October figures, have been slightly above the corresponding period for the previous year. Items showing substantial gains compared with the previous year include uranium, crude petroleum, primary steel, iron ore, nickel, aluminum and flaxseed. The principal decline occurred in wheat and flour; in lumber, which was adversely affected by less residential construction in the United States and in the early part of the year by high ocean rates; in copper, which has declined substantially in price; and in aircraft following the completion of orders.
Looking at Canada's sales to individual countries, exports to the United States are up moderately while those to the United Kingdom have declined somewhat. There have been significant increases in sales to a number of European and Latin American countries and to Japan. The value of imports into Canada for the first ten months of 1957 amounted to $4,784 million, which remains virtually the same as in the corresponding months of 1956. Examination of the sources of these imports shows a decline in the value of purchases from the United States of more than $60 million or about 2 per cent, and an increase in purchases from the United Kingdom and other commonwealth countries of $46 million, amounting in percentage terms to about 8 per cent.
With total exports up slightly and imports unchanged this year compared with last, Canada's merchandise deficit is slightly lower in the first ten months. In recent months exports have shown a firmer trend than have imports. Whereas in the early part of the year the deficit had increased compared with levels of a year ago, during the last six months it has declined. Continuation of this trend would bring a reduction in the over-all deficit in the period ahead.
Encouraging progress has thus been made toward two of the objectives of the present administration, the reduction of our large deficit on merchandise trade and the expansion of the share of our imports coming from the United Kingdom. We shall continue to pursue both these aims vigorously in the future.
I do not think any government in Canada's history has done so much in such a short time to implement its trade policies. Within a few days of assuming office the Prime Minister put before the prime ministers' conference in London a proposal for a commonwealth trade and economic conference. Then followed the meeting of commonwealth finance ministers at Mont Tremblant, where


there was unanimous agreement to hold such a conference next year. Indicating the importance we attach to our trade with the United States and other non-commonwealth countries, we met with Messrs. Dulles, Benson, Weeks and Anderson of the United States cabinet in Washington in October, and in the latter part of the same month I had the honour to represent the Canadian government at the ministerial meeting of the general agreement on tariffs and trade.
We are hopeful that the commonwealth trade and economic conference next year will bring about a strengthening and broadening of our economic ties with the great family of nations to which we belong. It is not the intention of the government to interfere with the profitable trade we are carrying on with other countries. In fact we believe that the policies we are pursuing will put our relations with all trading partners on a healthier, more stable basis. In the last few years our trade with different countries has been developing in a lopsided and uneven manner. This may be good for some of the people some of the time, but it is bound to bring a reaction in the long run. An orderly and balanced growth of our trade will be beneficial to our entire economy. It will offer plenty of opportunities for other countries to do business with us.
I emphasized our interest in carrying on and increasing trade with all our trading partners when I attended the ministerial meeting of the general agreement on tariffs and trade at Geneva in October. Moreover, I assured the other members of GATT that this country would continue to operate its policies in accordance with the rules and procedures of GATT. At the same time I expressed the concern of Canadians that while Canada had, in the past, gone somewhat beyond its obligations, some of the other countries had followed policies which have had the effect of diverting a larger quantity of imports to our markets than would otherwise have been the case. Ministers were present at this meeting from many important countries, and I was most impressed by the constructive and co-operative spirit in which trade problems were discussed.
The most important matter considered at this session of the contracting parties to GATT was the European common market treaty. The members of this European treaty are at the same time important world traders and important members of GATT. It is essential to ensure that the European common market is developed in a way which will strengthen rather than weaken international trade relations. I expressed the views of

the Canadian government with respect to various aspects of the common market treaty which caused us some concern, and I indicated that the Canadian delegation would participate actively and sympathetically in the detailed consultations being initiated with the six countries concerned.
This session of GATT has already been concluded, and I am sure that the countries of the European common market are now fully aware of the difficulties which could arise through restrictive application of their treaty.
It has now been arranged that the GATT countries will pursue their consultations with respect to the common market-that refers to the common market treaty of next April- and I hope it will then be possible to obtain satisfactory assurances which will provide a basis of confidence and co-operation among all concerned.
I shall conclude my remarks at this time with a brief reference to the Canadian trade mission which is now in the United Kingdom. The reports that I received from that mission yesterday and this morning indicate that it is still having great success in its tour of the British Isles and has now been in England, Wales, Scotland and Northern Ireland. The same enthusiasm on the part of British industrialists and British exporters is still being shown as it was a few days ago when I was there, and an increasing number of British business firms are asking for the opportunity of meeting with members of our trade mission in London next week. I reported when I came back from there a few days ago that 700 firms had asked to have the privilege of meeting face to face with members of our mission. That number has now gone up.
One or two questions have been asked with regard to what are the objectives of the mission. I set them out very clearly before the mission left this country, but it might be well to repeat that the purpose of the mission is twofold. In the first instance, members of the mission-widely drawn from all parts of Canada and representing at least 20 Canadian industries-are now in the British Isles looking at the state of British industry to discover whether or not that industry is in a position to supply the demands of the Canadian market in fields in which Canadian industry is not itself engaged.
The emphasis right from the very start has been in shifting to the United Kingdom some of the purchases that we now make elsewhere. There is no intention whatsoever of doing anything to interfere with Canadian industry. There is a very wide field for expansion of the United Kingdom market in this country, and there is also a very
Supply-Trade and Commerce wide field for the development of Canadian industry. When you consider that $5,700,000,000 worth of imports are brought into this country and that of that amount the United Kingdom enjoys only about 8J per cent or 9 per cent, you can readily see that there is ample opportunity for larger imports from the United Kingdom as well as for an expansion of Canadian industry so we shall no longer have to be too dependent on sources of supply in just one country.
The second purpose of the mission, which we have been stating over and over again in the United Kingdom, is to draw to the attention of the people of that country the advantages which we see here in Canada for trade on their part. We have pointed out to them that the Canadian people now number 17 million; that their per capita buying capacity compared with that of the people of the British Isles or other countries of Europe is equivalent to the buying power of 34 million people in those areas. In other words, our buying capacity per capita is double that of individuals in the United Kingdom and in Europe. We have also pointed out to them that our population is expanding and that as the years go by, and before the turn of the century, there is reason to believe that Canada will have a population of 40 million. We have also indicated to them that we have great natural resources which require development.
So we have set before the businessmen of the United Kingdom a picture of Canada providing a great expanding market. We have said to them whereas in the past your share of imports into Canada was 18 per cent and has now declined to 8J per cent or 9 per cent, we think you can regain your share of the market. We fully understand why you have had difficulties with the Canadian market; you made sacrifices in the war years in respect of your export trade, but now we see you have made a virtually complete recovery, and we are here to tell you that the Canadian market is available to you and we will assist you in any way possible in order that we may again create that triangular trade pattern which proved so beneficial to the United Kingdom, the United States and ourselves in the years prior to the war.
This is the purpose of the trade commission in England. It left here with the blessing of all parties in the House of Commons. The members of the mission are first class, representative Canadians, and they have entered upon their task with great seriousness. Many of them were a bit reluctant to travel abroad in the month of November with the prospect of returning just before Christmas, but when we suggested

Supply-Trade and Commerce to them that this was something they might do on behalf of Canada they responded with great eagerness. Furthermore, my observation of the members of the mission while I was with them was that they are as much interested and just as keen as any member of this house in stimulating trade between the United Kingdom and Canada and reestablishing that pattern of trade I have mentioned. Looking toward the future they see that as imports from the United Kingdom in Canada increase and the dollar earning capacity of the United Kingdom is correspondingly increased, Canada in its turn will benefit, because we have many things in this country which the United Kingdom used to take from us in the past and which we are ready to supply in the future.
The mission will be in the United Kingdom for another 10 days and will then return to this country. I hope that before we leave the United Kingdom arrangements will be made to continue the work of the mission in maintaining close relationships with the members of the government of the United Kingdom, the members of the dollar export council and other businessmen who are now showing so much interest in the work of this mission. I also hope that in the course of next year representatives of British industry will come to Canada to see for themselves what Canada has to offer to energetic and progressive men such as we have met in England, Wales, Scotland and Northern Ireland.
All told, I think Canada can be proud of the representative businessmen who are putting forward in the United Kingdom the situation as they see it and are doing their level best to encourage the expansion of trade between our two countries.


Lionel Chevrier: I wonder if our spokesman, who is the hon. member for Kenora-Rainy River, would allow me to ask a question at this stage.


William Moore Benidickson: Yes.


Lionel Chevrier: I listened with interest to the minister's last comments, and I heard him say that the mission to the United Kingdom was a success. I should like to know from him what he means by that statement. If, as I presume, by success he means the reception the delegation is getting from the United Kingdom, of that there can be no doubt; because the press gives us day to day reports on the tremendous reception the Canadian delegation is receiving.
But I should like to ask him what success, from a practical standpoint, the mission has accomplished thus far in the light of the two objectives he has just given. I should


like to know whether he would be good enough to tell the house what orders, either in number or in value, have been diverted from United States purchases to United Kingdom purchases along the lines, for instance, of those announced by the chairman of the Hydro-Electric Power Commission of Ontario, who said he was purchasing $10 million worth of equipment? Are there any other such orders for commodities that are being purchased? I do not want to labour the matter at any length, but I thought perhaps this would be an appropriate occasion on which to get from the minister what is meant by the success of the mission.


Gordon Minto Churchill: I thank the hon. member for Laurier for his comments. It is not possible at this stage to say that so many dollars' worth in orders have been placed in the United Kingdom, other than one or two which have already been announced. That news will come later. Some of the orders, of course, will not be placed this month. Business is not always done quite in that way. It depends on the type of material that is being supplied and the requirements of the country. If it is some project which is going to commence in Canada next spring, the order might be placed now or it might be deferred until January.
However, I say the mission has been a success for this reason. There was doubt in the minds of some people in Canada when the mission was proposed. There was doubt in the minds of some people in the United Kingdom when the mission was proposed. But over and above the kindly hospitality of the British people, which goes unquestioned and would be there for anyone who went over even on pleasure, the response has surpassed anything that was anticipated either on our part or on the part of those who have been responsible for the activities of the mission in the United Kingdom. The very fact that hundreds upon hundreds of British businessmen have asked to meet members of the mission surely indicates that there is a real interest in the United Kingdom in encouraging trade between our two countries.
It was not possible to estimate that interest before we left here or before the mission arrived in the United Kingdom. Quite frankly I may say that we anticipated a friendly response. You always get that in the United Kingdom. We anticipated a tour.


Lionel Chevrier: Particularly if the minister's name is Churchill.


Gordon Minto Churchill: I beg the hon. member's pardon?


Lionel Chevrier: I say you get a good response particularly if the minister's name is Churchill.


Gordon Minto Churchill: Thank you very much. They have been very kind to me. We anticipated doing some of these things, but nobody foresaw the intense interest that has been aroused in the British Isles. Even when we went to Edinburgh this interest was demonstrated. Granted that television, radio and the press indicated that the Canadians were coming to Edinburgh, and the officials provided what you might expect at Edinburgh, namely the bagpipes to greet us; but when 500 average people of the city of Edinburgh turn out at the station just to see a group of businessmen get off the train it startles you a bit. That type of reception has impressed us and has impressed the officials in England.
The reason I say that the mission up to this date has been successful is based on that intense interest among businessmen; and that surely is going to result in increased trade between our two countries. It cannot possibly just be dropped or fall flat. Many of the businessmen to whom I spoke say they are considering seriously sending out their representatives to Canada very soon. Some of them said, "We thought you did not want to trade with us". We said, "Some people in Canada thought you were not interested in the Canadian market".


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: I am reporting the words I heard. Now that idea has been dispelled. Here they are ready to take part. There is nothing political about it.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: It is just Canadian businessmen meeting United Kingdom businessmen. I think the mission will continue to be a success.


William Moore Benidickson: We have had an interesting expose by the minister of our position at the moment with respect to trade matters. I felt, however, that his remarks were more significant for what he refrained from telling the house than for some of the information that was provided. I think there is no dispute anywhere in the house about the admiration he expressed for the trade commissioner service that has been built up in this country. I believe all of us, particularly in recent years, have had tributes to that service indicated to us by businessmen with whom we were acquainted.
In the second place, the minister made reference to the position of exports and imports for the 10-month period of this year. I noticed particularly that he made the point that exports were slightly above those of last year. However, he is able to make an assertion of that kind only by merging the
Supply-Trade and Commerce trade record of the period of the year in which the former administration conducted the business of this country with that of his own. It just happens that by a fortunate coincidence the trade information for that 10-month period was made available only this morning in the press; and contrary to the trend and situation in the first six months of 1957, it shows that we have much to fear in the declines that are obvious in recent months under the administration of my hon. friend with respect to our export trade.
This report shows that for the month of October alone our exports to the United Kingdom have declined by $12 million as compared with the trade record of the same month a year ago, and indeed for the 10-month period are down some $55 million. Our trade with respect to the United States for the month of Ocober is also down to the extent of $27 million as compared with last year.


Mr. Johnston (Bow River):: What paper is that?


William Moore Benidickson: The Montreal Gazette has trade information this morning for the 10-month period. Furthermore, I do not think my hon. friend is at all justified in taking, as he did, full and complete credit for something in the nature of a change in the trend of the relationship between exports and imports. I find that the trend which he took some pride in describing this morning-that is, a narrowing of the gap between exports and imports-showed up in the first two months prior to the time when I think my hon. friend could take any credit whatsoever for guiding the trade policies of this country.
The figures for the period ending in July -and I am sure my hon. friend would not think he had any influence on trade at least up to that time-indicated that our exports were not going down, as I have indicated they are now going down to our principal markets, but they in fact showed a very advantageous increase. In the two previous months described at the end of July there was a narrowing of the gap between exports and imports because imports were on the decline and exports had continued to rise.
It is perhaps trite to say that Canada lives by trade, but probably that is truer with respect to Canada than with respect to any other country in the world, because Canada's population is not large in relation to the huge international trade volume which we have in this country. I think all hon. members of this committee know from the experience of the depression years just how long it takes

Supply-Trade and Commerce to recover from the effects of bad trade policies. Consequently I believe there will be considerable alarm and anxiety when we find that in recent months our export trade is showing a decline such as was indicated in October and in the examples I gave a few moments ago.
A great number of Canadians, a majority of them perhaps, depend directly or indirectly on export trade. We require exports for at least two-thirds of our normal wheat production. We depend on exports for 95 per cent of our paper production and perhaps about 80 per cent of our aluminum production, to make reference to just some of our notable exports. These are, of course, important items of external trade; but in addition to that Canadians are very concerned with elements of internal trade. While I have indicated that there is a very alarming drop in our exports in international trade, many Canadians are similarly alarmed these days about some very unpleasant differences between trade statistics and business statistics of the present time in relation to the period when the former administration left office.
I could give just a few illustrations. In June the index for stock market industrials was 303. In October, according to the Bank of Canada report, copies of which we all received the other day, that was down to 228. The wholesale price index with respect to grains in June was 171.9. It is now 168.7. The livestock index wholesale in June was 292.9 and is now 285.7. We have already had several indications of what happens when trade volume declines, and we know that the employment picture, the number of persons seeking work and who are without jobs, is also extremely alarming when one compares June with the current situation.
In respect to new orders, also an item dealt with in the Bank of Canada report to which I referred, I find that in the last available period, September of this year, new orders received amounted to $1,692 million as compared with $1,812 million a year ago, and that compares with the June figure of $1,754 million. If one goes to another important aspect of domestic trade-and I refer to the volume of industrial production-one finds that in June when this administration left office the index figure, which is also shown in the Bank of Canada report, was 296.9 and in August it had declined to 286.5. The manufacturing index in June was 296.2 and in August the last available figure showed that there had been a decline to 283.1.
Mr. Chairman, may I call it one o'clock.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
William Moore Benidickson: Mr. Chairman, in resuming the discussion of the estimates of the Minister of Trade and Commerce after the noon adjournment I simply want to say my recollection is that on general statistical information he suggested that never before had the policies of a new government made themselves evident so quickly. Well, in that respect I think I will agree with him. I want to continue with some of the statistics that I was referring to prior to our noontime adjournment. However, these statistics are, I think, ominous.
During the recess I inquired, and I found that on June 1, 1957, the average weekly wage of labour in this country in manufacturing was $65.08. On September 1, which is the latest available statistic, it was $64.60. There is thus a decline and that decline is not normally to be found from June to September. In addition, when we are speaking, as we are in committee, on trade, I cannot think of anything that is more related to the volume of trade than perhaps the figures on railway carloadings. On November 21, 1957, car-loadings were 769,926. A year ago they were 837,749.
Another item that I think is very significant when we speak of trade is the average hours worked per week by our labour force. This is something that had been rising steadily prior to the advent of this administration. On September 1, 1957, the average hours worked per week were 40.5; a year ago they were 41.1. I think most hon. members will agree with me that this figure is significant. I find it so in my own riding. While as yet we have not in Kenora-Rainy River people wholly unemployed in a significant way, perhaps I do find that the take-home pay in the work week is very much reduced from what our workers had experienced previously, and that is one of the ominous features to which I have referred.
In his remarks the minister referred again to the United Kingdom trade mission. I did feel when he introduced the subject on Tuesday that anticipating these estimates, he could very well have made his remarks at this time; but, unlike his predecessors who also have some travelogues to disclose, he chose that particular time to deliver his remarks. I recall that the leader of this group was very gracious, as I think I attempted to be, in a personal phone call to the minister to wish him well on this mission, and I do not propose to quarrel in any respect with the objectives of the mission. My quarrel is simply with the double talk and with what I call the

politics which are being played by the minister with respect to this particular mission.
When I refer to double talk I will give illustrations, but I think hon. members will recall a former correspondent in the press gallery who was one of the severest critics of the previous Liberal administration. He was the correspondent of the Toronto Globe and Mail, George Bain, and is now a resident correspondent in the United Kingdom. On the very day the minister was reporting to this house about the activities of this mission, Mr. Bain had this to say with respect to the tour of this Canadian mission in a dispatch to the Toronto Globe and Mail, which is unusually friendly to the Conservative party: This has been a busy week for the platitude.
If the new trade resulting from the visit of this mission ever reaches the volume of the cliches which have been expended in pursuit of it, there will need to be traffic lights installed in midAtlantic to regulate the traffic.
Another point in connection with the mission-I am not dwelling too much upon it- is simply this. I felt the minister was very evasive this week since his return from the United Kingdom on questions raised by the hon. member for Essex West, the hon. member for Coast-Capilano and the hon. member for Montmagny-L'Islet and others on the types of factories that were visited by this mission. The minister was present in the United Kingdom until the end of last week. He himself, in his statements to this house, has indicated that the first portion at least of the visits arranged to these British factories was arranged by what he described as an official committee, I think a committee acting under the direction of our high commissioner to the United Kingdom, Mr. George Drew. I feel that before we leave these estimates the minister should name the factories and the types of business done in those factories that the visit was officially arranged for by this committee.
I noted with some regret in the minister's remarks on Tuesday that in reference to the portion of the delegation that represented agriculture in this country they seemingly were directed in their travel tour in Britain to visits to their trade and occupation counterparts. Now, this I think is rather a surprise. I believe certainly the agricultural representatives in the house would have expected that their tour would have been directed more to possible purchasers of the products of their trade. Anyway, this has been certainly a very unusual trade mission because, unlike any other trade mission I have ever heard of previously, it seemed to have no thought of sales in mind.
I spoke of double talk, and I am going to give some illustrations to explain why I used
Supply-Trade and Commerce that term. I think it was the Toronto Star which said that in all attitudes toward United Kingdom trade the present administration seems to have-and I quote-"a miracle of exquisite timing". Hon. members will recall that just prior to the arrival of the United Kingdom delegation in September, invited here to discuss expansion of trade, the Minister of Finance referred the textile trade to the tariff board anew.
Another illustration of the double talk of which I accuse the present administration is the fact that while they are flying the flag of British trade, so to speak, most of us know that at this very moment there are representatives of the government at Geneva discussing trade with the governments associated in GATT. Those delegates of Canada are asking for increased tariffs on such things of importance to the United Kingdom as iron and steel, in which the volume of trade amounted to $50 million last year, and pipes and tubes, in which the volume of trade was some $17 million. When we discuss this question of flag waving and sentiment with respect to trade, I simply want to say that I do not think anybody would accuse the former shrewd minister of trade and commerce of anything along these lines.
On the other hand, let us look at the record of trade between this country and the United Kingdom under his regime. In 1955 we bought British-that is what hon. members opposite are always preaching, buy British- to the extent of $401 million of goods from the United Kingdom. In 1956 that figure rose to $485 million. In the first half of 1957, with which the former administration was associated, purchases amounted to $260 million. I think that without talk and without flag waving there has been a very keen recognition of the value of this type of trade, and I question whether that is continuing in any substantial way today so far as actual dollars and cents are concerned.
A conference was held at Mont Tremblant early this fall. I know some of the consequences of that conference were rather shaking and shocking to my hon. friends opposite. I believe they came to learn that there was somewhat of a difference between rhetoric and reality. In any event, I feel that the House of Commons, discussing now the trade estimates of the new government, is entitled to information that so far has been hidden from parliament with respect to the pros and cons of the proposition presented by the British delegation at Mont Tremblant. Surely the minister will be able to tell the committee as we discuss this problem just what the proposition is all about, what the merits are and what the demerits might be.
1974	HOUSE OF
Supply-Trade and Commerce
I think the people of the country generally felt very disappointed with the new administration in this respect. This conference took place some time after they assumed office. I do not think there is any member of the house who will not agree that the Financial Post is most impartial in its criticism either of the former administration or of the present administration, but this paper had the opportunity to do something that we in the opposition have not had the opportunity to do. This paper, the chief paper in the country of this type, had a very competent observer at the conference, and on October 11 the Financial Post had this to say with respect to the Canadian representation at this very important conference:
The unfortunate fact is that the Mont Tremblant conference between Canadian and British officials was a great flop. The whole story of what went on behind the scenes is now available. The British had prepared very thoroughly for the meeting. The Canadians had not.
I think we should expect the minister to make some answer to this indictment. I wish to refer to another publication which I think we also recognize as not being local in distribution, and which has a very experienced parliamentary correspondent. I refer to Macleans magazine. Blair Fraser refers to questions very properly asked the Minister of Finance by the representatives of the press following an outline of the trade proposals at the Mont Tremblant conference from the British delegates, proposals which had very substantial possibilities. Blair Fraser asserted that the Minister of Finance had been everything but frank with the journalists of the country when interviewed with respect to the implications of the British proposal, and went on to say:
None of his stone-walling did much good. Rightly or wrongly, everybody in the room-
He had reference to the large delegation of representatives of the press.
-was convinced that the reason he couldn't talk about Canada's proposals was that Canada had no proposals worth talking about.
Basically discussion of trade at the moment has a relation to diversion of imports from the United States to imports from the United Kingdom. During the present session there have already been very worth-while comments from this side of the house with respect to this possibility. I recall that the hon. member for Algoma East made a very important speech. Mr. Clark Davey, a press observer who is not noted for favouring Liberal assertions made in parliament, had this to say about the speech of the hon. member for Algoma East: "A devastating attack on Conservative trade policies." With


respect to diversion I am in complete agreement with the hon. member for Algoma East when he said:
I am not so much Interested in diversion of trade as I am in building up and increasing trade.
I think that is something that would be supported generally by the members of the party to which I belong. With respect to the matter of double talk, I also point to the strong evidence that the administration has been talking not bilingually but certainly in double talk when it has talked differently to London and to Washington with respect to its intentions in the matter of the diversion of 15 per cent of our purchases from the United States. There is every indication that when they went to Washington they said to the officials there in a very pious manner, ''Oh, dismiss this; this is long term, nothing immediate, not something about which you should get very excited."
That brings me, of course, to the very important discussions that did take place in Washington. A major portion of our trade is with our immediate neighbour. The conduct of Canadian relations with the United States is probably the greatest problem that faces any Canadian administration. It faced the former one. United States relations dominate all economic policy and vitally affect all business, trade and finance in this country to a very important degree.
Again, I think the results of that visit by the four cabinet ministers of the new administration were much less than would have been expected, having regard to the tough talk that we all remember from them during the election campaign. I think the very high expectations are certainly mocked by the very small achievement. In this respect again I cannot, from any personal observations, make any comments as to the result outside the communique that is normally provided after these conferences. But others who were there and who are independent, certainly politically, have made some comments. I do not choose to quote anyone who is known to be unduly critical of my Conservative friends who are sitting opposite to us at this moment. I refer now to Mr. Arthur Blakely, who I think is probably among the foremost noted journalistic critics of the former Liberal administration. With respect to this conference in Washington Mr. Blakely, writing in the Montreal Gazette of October 11, had this to say:
The four Canadian cabinet ministers who went to Washington earlier this week to negotiate with Uncle Sam for the settlement of some mutual economic problems, came back empty handed.
Then he went on to say:
There have been other pilgrimages to Washington which could be said to have produced nothing.

But it's doubtful if there have been any which could be said to have produced less than this one.


The Chairman:: I am sorry to interrupt the hon. member, but I must inform him his time has expired.


William Moore Benidickson: Yes, Mr. Chairman; there will be other opportunities.


Some hon. Members:: Go ahead.


Henri Courtemanche: Has the hon. member
unanimous consent?


Some hon. Members:: Yes, sure.


William Moore Benidickson: I thank the committee. I should like to refer to another report from a Canadian journalist following this Washington conference. I refer to Mr. Ed. Hadley, whom I had the pleasure of meeting myself when I was in a role somewhat similar to that of this delegation when I visited the United States a year previously. Mr. Hadley reports for the Montreal Star. Mr. Hadley said that Mr. Dillon, who is a well known New York investment dealer and who at the present time is assistant to U.S. state secretary Dulles, advising Mr. Dulles on economic affairs, had this to say with respect to the Canadian visit:
There will be no change in United States wheat disposal methods beyond that which halted barter deals last summer.
May I tell the committee that the information with respect to the change in United States policy concerning barter deals was available prior to the last election. I quote further from this press report from the Montreal Star correspondent:
The general climate on the wheat problem was better at the inter-cabinet meeting here than Mr. Dillon himself found it at Ottawa when he was there just before the election.
Mr. Hadley goes on to say:
Prime Minister Diefenbaker's suggestion for a 15 per cent switch of Canadian foreign purchasing from the United States to the United Kingdom was "played down" at the meeting here.
I must conclude my remarks, because I know there will be a further opportunity to speak on the individual items. I simply want to say to the minister, as I said in the beginning, that I felt there was much lacking in the information he gave us in his opening remarks. His department, as he said, is a most important one. It has been led in the past by Mr. Howe, a very distinguished Canadian whose achievements probably make it somewhat difficult for the new minister, but I am sure the new minister will apply to the department also conscientious activity.
I am sure the committee will expect to hear from him, while these estimates are before us, something about the policies of the administration with respect to uranium and
Supply-Trade and Commerce atomic energy, something that I had hoped to deal with in some detail but time has not permitted; and the gas and oil export policy of the government, particularly with respect to possible approval of new pipe lines. I think all of us are very concerned today about any governmental support that might be given to research programs, particularly the sponsorship of students in scientific fields. I feel, too, we shall have to pursue a little beyond the remarks of the minister the references to the European free trade area, particularly now that Great Britain has indicated a likelihood of joining it. I believe there has been some change of attitude in relation to Canada's contribution to the Colombo plan. I should like to see a further review of that.
Perhaps the minister at this time could give us, even on an interim basis, some indication of the public and private investment to which we might look forward in 1958. I realize that this is normally the subject of a white paper that is produced in parliament in July and February of each year, but I am sure his very able staff has already given the future some review. I thought perhaps even an off the cuff prediction relating to this very important matter might come from the minister. I thank the committee for giving me some extra time for these comments respecting trade and commerce.


Frederick Samuel Zaplitny: Mr. Chairman, I found myself in agreement with at least some of the remarks made by the hon. member who just preceded me, particularly with respect to his opinions concerning trade with the United Kingdom. I will not pursue that point at this time, but rather will make some reference to the statement the Minister of Trade and Commerce made in opening his department today. May I at this time, the first opportunity to do so, express my good wishes to the minister for success, inasmuch as he was at one time a resident of the town in which I live.


William Moore Benidickson: I should have made the same comment, being Dauphin-born.


Frederick Samuel Zaplitny: It struck me that the minister had left out a great deal. I am not saying that as any particular criticism, because we all know that this is the first occasion on which the minister has presented his estimates. But it does seem strange that the minister, in introducing the department, seemed to leave out completely one very important wing of his department. That is, he made no reference whatever that I could detect to the agricultural side of his department. It could be said that in the main, matters dealing with agriculture would come

Supply-Trade and Commerce under the Minister of Agriculture. However, when it comes to the wheat board, the marketing of grain, the setting of grain prices, those things come under the jurisdiction of this minister.
I was disappointed that at a time like this, when even members on the government side have recently expressed concern over the continuing crisis in agriculture, the minister had not one word to say as to the government's policy with regard to the wheat board, marketing, agricultural surpluses, or any of these allied subjects.
I will have occasion to refer to that a little later, but first I want to make a comment or two on what the minister did say.
He started off by talking about, and in fact he took some pride in, what this government had done. I am not using his exact words, but the import is the same. He said they had done more in a short time than had been done by any other government in the way of implementing trade policy. Certainly I do not wish to take away from the minister any of his success, but when he speaks about the trade policy of this government I respectfully submit that he is talking about something which has not yet been announced. What is the government's trade policy?
We on this side of the house have been patiently waiting until the opening of this department's estimates in the hope that the Minister of Trade and Commerce would get up and state what the government's trading policy actually is. He failed to do so, but instead told us that he takes credit for having implemented such a trade policy. I hope before this debate ends the minister will take care of that great omission and let this house know what is the trade policy, because at the present time there is a grave doubt in this house and in the country as to the existence of such a thing.
I am saying this out of kindness to the minister. As a colleague from Manitoba I am really concerned about his future in the government-


Gordon Minto Churchill: Let me worry about that.


Frederick Samuel Zaplitny: *-because there is a trend going on which I think holds certain dangers for the minister. In the past his predecessor in office was referred to as the minister of everything, perhaps with some justification, because he had the Department of Defence Production to look after and he had charge of a great many branches and divisions of the government, but I notice that in the new set-up defence production has been handed over to the Minister of Public Works, and the setting of whatever has been set

about trade policy so far has been done by the Minister of Finance. The conference at Mont Tremblant was left to his tender care and was handled with what can only be described as disastrous dexterity, and I am afraid that little by little the Minister of Trade and Commerce will find that his powers and responsibilities are going to be chipped away until he finds he is not going to be the minister of anything.
For this reason I think it would be very desirable for him to discover, first of all, what is the trade policy of his government, if such a thing exists, and to relate this policy to this house and then do his best to bring it into effect.
The minister made reference to the commonwealth conference which is to be held. Well, of course, we cannot debate something which has not taken place, but there has been a preview of what might take place at that conference in the Mont Tremblant conference; and there, as was pointed out by the hon. member who spoke before me, an offer was made by the government of Great Britain, through its representative, and the Canadian government absolutely ignored that offer. In fact the Minister of Finance did worse than that; he threw cold water on it before it had even been properly examined.
I know we may have differences of opinion, perhaps mainly in degree, as to what could be done and how quickly it could be done with regard to the establishment of a free trade area as between the United Kingdom and Canada, and I realize there are many considerations which must be taken into account. However, prior to June 10 the members who support the present government and the ministers of that government were most vocal across the country, and even on many occasions in this house, about the desirability-in fact almost the desperate desirability-of negotiations and trade with the United Kingdom. They had some pretty strong words to say on occasion, although I will not take the time of the committee to repeat them now since they are all on the record and easily found.
However, the impression was left in the country that the present Prime Minister, as soon as possible after the election and provided he was then Prime Minister, was going to make some sensational offer in order to increase trade between the United Kingdom and Canada. Well, the election came and went and the government sat tight, made no offer whatsoever. Then the government of the United Kingdom made its offer, which I still believe was a very statesmanlike one in all the circumstances. Instead of acting on it, instead of even giving some lead

on the principle of that proposal, the government immediately started to scurry for their foxholes. Not only did they scurry for their foxholes, but they pulled the holes in after them. Since then there has been a sort of iron curtain drawn around the whole question with, once in a while, the Minister of Finance coming out with some statement or other, but no clear-cut policy and no statement of principle on this question from the Prime Minister or anyone else.
Here I thought there would be a grand opportunity-and I was sitting here in eager anticipation-for the Minister of Trade and Commerce, having just returned from Great Britain where apparently he was very well received and where he said the response to the trade mission was just out of this world, to rise in his place and place before this house the attitude of the government toward the offer. Instead of that we have a travelogue of what this trade mission was supposed to be doing in Great Britain, so I suppose we will have to confine our remarks to that phase of the matter.
What has he told us about the details of the trade mission to the United Kingdom? He has told us the mission had a twofold purpose; first, they were supposed to check on the supply or potential supply of goods which could be produced; second-and I want the hon. members of this house to mark these words, as they are of great interest-to draw attention to the possibility of trading with Canada. Now, when you compare those words with some of the thunderous phrases heard in this house and throughout this country as to how we were letting down the United Kingdom and how there was almost a question of refusing to trade with that nation, it does seem a little strange. Here we have the minister coming directly from the United Kingdom and saying that one of the purposes of the mission was to draw attention to the possibility of trade with Canada. That, Mr. Chairman, is the understatement of the year.
If all that mission was supposed to do was just draw attention to this possibility, then I respectfully submit that we could have saved a great deal of money and trouble by having the Prime Minister write a letter to the chancellor of the exchequer or the Prime Minister of Great Britain in which he could have drawn attention to it.
I believe there is a very serious omission in this whole business. The minister has repeatedly stated that the chief purpose of the mission was to arrange for purchases by Canada from the United Kingdom. Well, I have no objection to that; I would like to see a great many such purchases made, but
Supply-Trade and Commerce surely the Minister of Trade and Commerce did not head this delagation simply as a sort of glorified purchasing agent for Canadian business. Surely he must have had in mind, or the government must have had in mind, that his was a department of trade and commerce, not just commerce. He must have forgotten the trade part of it. The people who are primary producers in this country, such as those engaged in agriculture, wood products, base metals and many others, certainly expected the Minister of Trade and Commerce to have made at the same time some arrangements for the export of Canadian primary products to Great Britain.
As a matter of fact when he made his report we addressed specific questions to the minister on what was being done in that field and what discussions were held by the members of the trade mission, government officials or the minister himself with respect to increasing the flow of Canadian primary products to Great Britain. His answer in every case was that the chief purpose of the mission was not to sell but to buy. Well, now, I do not think that is good enough. We have a minister and a Department of Trade and Commerce, and we expect some trade and not just commerce.
We expected that the minister should have been a trader and should have taken advantage of his visit to the United Kingdom to enter into negotiations, to have initiated at least preliminary talks about trade agreements that could be entered into-long-term bulk trade agreements-in order to assist the export of primary products from this country, which is one of the essentials in our trade picture.
Then the minister also stated-and that was the only part of his report that I thought contained any reference at all to government policy-that it was the policy of the government that they would not interfere with the trade between Canada and any other country. Of course at that point the minister was really humourous, and I am glad it was he who said that rather than the Minister of Finance. The Minister of Trade and Commerce, being a westerner, at least has a sense of humour; and certainly he must have seen the humour in that statement. When he states that it is the policy of this government, or of any Conservative government for that matter, not to interfere in trade between Canada and any other country, he is stating something that is obviously funny.
When one looks at our tariff structure; when one looks at the elaborate tariff structure that has been built up over the years, chiefly by Conservative administrations, one

Supply-Trade and Commerce certainly can see that is not a policy of noninterference. Every day this government, through its actions and its tariff policy, is seriously and substantially interfering with trade between Canada and all other countries, even with respect to the United Kingdom.
That again points up the humour of the situation, or the irony of it. We send a trade mission over to Great Britain ostensibly to increase purchases in that country for export to Canada; and while the Minister of Trade and Commerce is over there promoting that phase of it, the Minister of Finance here at home is busy trying to find ways and means of preventing imports from Great Britain by making, very obviously, plans to increase tariffs against British-made goods.
Look at our tariff structure today. Are we, on the one hand, going to ask the manufacturers of Britain to send certain articles for sale here in Canada, and at the same time point out that we have a duty of 20 per cent or 25 per cent against those goods? When we are saying to them, "We want to trade with you", on the other hand the Minister of Finance is saying to them, "We are trying our best to keep your products out of Canada". That is supposed to be a policy of non-interference with trade. That is supposed to be the policy of the present administration.
I have quoted figures previously and I want to remind the house of them again. In the last 10-year period alone the consumers of Canada have paid in duties on imports coming into this country from all countries in the world just about $4 billion. That is supposed to be a policy of non-interference on the part of the government.
I believe there is a policy they could follow. I believe the policy of this parliament should be designed to remove, so far as it is possible and practical, the trade barriers between this country and the United Kingdom in the first instance; and having accomplished that, we should continue to do so with all commonwealth countries and with as many other countries in the world as we can.
In other words, as an expanding country engaged in primary production to the extent that we are engaged in it, and that being the basis and foundation of the wealth of this country, I believe our whole policy should be aimed at the removal of trade barriers. But I am very much afraid that the policy of the present government is the very opposite. Their whole proposition of, on the one hand, pretending to be expanding trade with the United Kingdom and other commonwealth countries and on the other hand of doing their best to prevent that trade through

the tariff structure, is one that I think they are going to find will lead to disaster.
It is still fresh in the memories of the Canadian people that the period from 1930 to 1935, when we had the second last Conservative regime in Canada, was the time when we had possibly the highest tariff srtructure in the history of this country and was also the time when we had the greatest number of unemployed, the most disastrous farm prices, and the greatest depression. I am not going to lay at the doorstep of the tariff policy the whole depression, but certainly the two were very closely related.
There are those who sometimes repeat slogans rather than express opinions and who say, "We must see to it that other countries do not export their unemployment to Canada; we must have protection". We must examine slogans of that kind very carefully, because we must always remember that for every dollar's worth of imports that come into this country, eventually we can pay for it only by a dollar's worth of exports. To the extent that we are going to pay for our imports with exports, that in itself is providing employment. Certainly the last flirtation we had with high tariffs in this country in 1930 to 1935 taught us the lesson that you cannot prevent unemployment by raising your tariff structure.
What the hon. member for Kenora-Rainy River pointed out in his speech-and I agree with him heartily-is that we sometimes forget about the internal trade of our country. If you will look at the figures and will look over our economic history for the last 30 or 40 years, I believe you will find that the level of employment or the level of prosperity in this country has been directly related to our internal trade. I am not discounting at all the importance of our external trade, but the level of internal activity as between Canadian and Canadian is still the basis and foundation of our full employment in this country.
I do not want to spend all my time on this particular phase of the matter, Mr. Chairman, but before I leave this question I want to point this out. When some of us in this house suggest that some steps could be taken and taken immediately to begin implementing an area of freer trade between the United Kingdom and Canada, there is a place to begin. I think I can give the minister a clue as to where he could begin to the general advantage of all Canadians, regardless of their occupation.
I should like to refer him to a statement made by the commissioner of the Combines Investigation Act when he was reporting upon his investigation into rubber products. This was in 1952, and is to be found at page

683 of that report. After having described the methods by which companies in that field of production had made use of agreements, had conspired to raise the prices of their products unfairly, and had exploited the public to the extent where they were actually breaking the law of Canada, he had this to say, and this is how it is related to our tariff policy:
Another detrimental aspect of the arrangements is related to tariffs. There is substantial tariff protection on most of the products with which the arrangements are concerned. It was of particular significance in respect of certain mechanical rubber goods and tires and tubes. Now when domestic manufacturers are competing behind a tariff barrier, the tariff is serving its intended purpose of protecting the domestic industry against prices from without the country which the domestic industry, in spite of reasonable efficiency, cannot meet or better; and by force of such domestic competition the cost to the consuming public of the tariff protection is minimized. But when domestic prices are set, behind the tariff barrier, by arrangement, then the safeguard provided by competition is absent; the common price tends to be the largest price which the tariff will permit; the cost of the tariff protection to the consuming public is maximized; and, if it is not true that the tariff protection is higher than is actually necessary to protect the domestic industry, the companies privy to the arrangement have at least given the consuming public strong reason to believe that such is the case.
In a word that means there are certain areas of commerce in this country which have been investigated by the officials of the Combines Investigation Act, and it has been found that behind the tariff protection which has been provided for them-perhaps in some cases legitimate protection-they have used that shield of protection to set up monopolies and combines and have exploited the Canadian public through conspiracy to the point of having broken the Canadian law.
In the past the previous government and this government, when they caught up with some of these law-breakers, have taken them to court and after having found, through investigation, that as a result of their combines they have fleeced the public of several million dollars they have whipped them with a reed, fined them $10,000 and told them to go back home and carry on their conspiracy.
That is how effective the Combines Investigation Act has been, but here is a method by which the government could effectively protect the public interest. Where we find that tariff protection is being used for the purpose of forming combines and monopolies and abusing that protection, there is every justification for the government to take immediate action to remove the protection and expose these law-breakers to the effect of an alternative source of supply. Here is a field in which the government could act immediately toward the building up of a free trade area.
Supply-Trade and Commerce
I would now like to refer to the other phase of what I mentioned earlier. That was the complete lack of any reference in the minister's opening speech to the agricultural aspect of his department. Time will not permit me to go into complete detail on this question, and indeed it will not be necessary because several of my colleagues are more qualified than I to go into much greater detail in discussing that particular field, but I do want to draw attention to at least a few of the things that the farm organizations of this country, not only in western Canada but in eastern Canada as well, have considered important enough to have included in their briefs. They have recently sent delegations to the government to present their views to the minister and the cabinet generally. One of those was the brief submitted to the Prime Minister and members of the cabinet on August 15, 1957 by the interprovincial farm union council, which is the co-ordinating body of farm union organizations in, I believe, five provinces at the present time.
Almost the first if indeed not the very first recommendation in that brief, draws attention to the situation with regard to the price of wheat and other grains; and after pointing out that the producers of grain, as a result of the material increase in the cost of production, have not actually been receiving a price for their grain which would bring it anywhere near parity or anywhere near a fair share of the national income, the interprovincial farm union council, as will be found on page 4 of the brief, recommends the following:
1. (a) An immediate interim adjustment payment of 20 cents per bushel on wheat on the 1956-57 crop year deliveries-
That is to be made by the government or by parliament. The recommendation continues:
(b) A payment on oats and barley to bring the net farm prices to producers to a level bearing the same relationship to parity as 20 cents per bushel on wheat.
In other words what they are asking is to have this parliament recognize the fact that the grain producers of this country for a considerable number of years now have been selling their product to the Canadian public and subsidizing the Canadian public by the fact that they are obtaining for their product less than the fair price relationship as between the prices of their products and all prices. They are asking this government to recommend to the house the establishment of an adjustment price or a deficiency payment of 20 cents per bushel on wheat and a proportionately relative amount on oats and barley.

Supply-Trade and Commerce
This is a clear-cut proposition. This is not tied to any long-range plans with regard to any agricultural products. This does not interfere in any way with the Agricultural Prices Support Act or with the proposed resolution which is still gathering moss on the order paper and which the government once in a while brings out, dusts off and txhibits to the house and puts away in mothballs again. It has nothing to do with these things directly. This is a specific proposal and certainly I thought the Minister of Trade and Commerce, as the minister under whose jurisdiction the Canadian wheat board and therefore the policies of the wheat board come, would have had something to say in connection with this request.
This is a request which concerns many hundreds of thousands of farmers in Canada, but today not a word was said about it. Apparently the minister thought if he ignored it completely perhaps no one else would raise the question and he could quietly get himself out of an awkward spot.


Gordon Minto Churchill: That thought never entered my head.


Frederick Samuel Zaplitny: If that was his intention I can assure him the subject will be discussed loudly and at some length by some of the hon. members who represent agricultural constituencies.
I wish now to refer to something else in the same brief which I consider to be most important and to which the minister made no reference whatsoever. That is the question of marketing boards. There has been a great deal of talk about different methods and means by which we could bring agricultural products including grain up to the level of general prices in this country, or what we generally refer to as a parity price system. One of the methods that has been suggested has been through the payment of adjustment or deficiency payments, or whatever term may be used to describe a payment from the consolidated revenue fund when the prices of farm products fall below parity.
In my opinion, and I am sure that opinion is shared by a great many hon. members in this house, the best method of administering that type of policy if parliament should adopt the parity price policy would be through a system of marketing boards, because there you would have the administrative machinery which would make it possible for this parliament or the treasury to deal with all the farmers who would be part and parcel of the marketing boards, and in that way pay a sufficient amount of money into the funds of the marketing boards when the situation required it so they could

pass it on through what might be called dividends or patronage payments to the farmers Who would sell their products to those boards.
In their proposal concerning this subject the interprovincial farm union council made three or four separate specific recommendations, as will be found on page 16 of their brief, all of which are extremely interesting and important. I regret that the minister had not anything to say about that particular phase of their recommendations today, and I hope he will deal with the subject before this debate is finished.


Henri Courtemanche: Order. I am sorry to interrupt the hon. member, but I must advise him that his time has expired.


Some hon. Members:: Proceed.


Henri Courtemanche: Has the hon. member the unanimous consent of the committee?


Some hon. Members:: Agreed.


Frederick Samuel Zaplitny: Thank you. I was merely going to refer to the last recommendation in connection with the disposal of surplus agricultural products, and of course wheat looms large in that department. In order to telescope what I have to say into a much briefer period than it would otherwise require I can say only this; that the farm organizations in this country-and I agree with them-are daily expressing greater concern over the fact that this administration, with respect to the disposal of surplus agricultural products and particularly grain, seems to be acting almost exactly in the way the previous administration acted. That is to either pretend that the problem does not exist, or when they do recognize the problem to do nothing but complain about what the United States is doing.
I think the minister will agree that it is time this government found a policy of its own, a policy much more constructive and useful than merely crying about what the government of the United States is doing in the disposal of their surpluses. We may even have to eat our pride to some extent and admit that they may have been doing the right things while we have been sitting back and criticizing them. It might be a good idea to adopt some of their policies but, better still, to bring about policies of our own which would be equally effective in our own country and perhaps more successful. Thank you for the privilege you have extended to me.


Mr. Quelch:: Mr. Chairman, at the outset of my remarks I would like to congratulate the minister upon taking over the Department of

Trade and Commerce. I wish him every success because it is essential that he be successful; otherwise there may be serious repercussions throughout the country.
The hon. member for Dauphin expressed concern about the minister's department being whittled down. Personally I think it is a good thing that it is being whittled down. I think it should be whittled down to just trade and commerce, because I think trade and commerce are sufficiently important to justify the full time of the minister. As a matter of fact, I think it would be a good thing if grain were taken from the Department of Trade and Commerce and put under agriculture. There is too much overlapping and I would like to see grain brought under the Agricultural Prices Support Act.
When the minister took office he found wheat piled up over the country. I just want to make a few passing references to grain before going on to the general question of trade. As the minister is aware, during the past 10 years grain growers' costs have gone up by 45 per cent, while the price of grain has dropped by 20 per cent. We feel that the immediate need is for an expansion of storage, terminal and off-site, to enable the farmers to deliver more of their grain and, secondly, to have a satisfactory support price under grain because, after all, the grain grower in Canada is the only grain grower in the world who has to take world market prices for his grain. He has to compete not merely with farmers in other countries, he has actually to compete with the treasuries of other countries, and this puts the grain grower of this country in a very difficult position.
This is why I would like to see grain brought under the Agricultural Prices Support Act so that it might be protected under that general formula. If the price of grain were supported under the formula of the Agricultural Prices Support Act it would be around $2.37 today, according to the bureau of statistics; that is, using the base period 1943 to 1945.
Some of my colleagues will be dealing with this matter at greater length and, therefore, I should just like to leave the question of wheat by emphasizing the fact that the only real solution to our grain-marketing problem is the expansion of markets at fair prices. If you accomplish that practically all of the other problems relating to grain will disappear over a period of time.
We look upon the wheat situation as merely a symptom of the weaknesses in our past trade policies. So long as we had a strong sellers' market everything operated satisfactorily. But just as soon as the situation started to toughen up we ran into
Supply-Trade and Commerce difficulty. We have lost many of our markets and I would say that the loss of those markets was due to the rigidity in our trade policies. We had got ourselves into a groove and we were not prepared to get out of that groove and take the action necessary to meet the changing conditions in the world. For example, we have continued the triangular pattern of trade between Great Britain, the United States and Canada. Hon. members will recall that that was outlined back in 1946 by the then minister of finance, when he said-and it can be found at page 764 of Hansard:
We must be able to use the proceeds of our exports to the United Kingdom and the continent of Europe in paying our own bills and debts in the United States.
And that has, generally speaking, been the policy ever since. The former government was very much interested in selling Britain or Europe more goods, but they showed very little interest in bringing imports from Europe into this country. Therefore from time to time we have had protests from various ministers from Great Britain pointing out that unless Canada was prepared to achieve a greater degree of balance with that country it would not be possible for Britain to expand her imports from this country. For instance, just last year when Sir Anthony Eden was over here he is reported by the Ottawa Journal of February 7, 1956, as follows:
Prime Minister Sir Anthony Eden told a press conference today that the imbalance in trade between Canada and the United Kingdom-two to one in favour of Canada-must be rectified if that trade is to continue growing.
Therefore, Mr. Chairman, we think it is very important to depart from that triangular pattern of trade and recognize the fact that trade is a two-way street. If we want other nations to buy from us we have to buy from them and do everything we can to establish a balance of trade. I think the present situation is one that calls for a good deal of concern. We had an adverse balance of trade with the U.S.A. last year of $1,283 million; with the world, $842 million; with the United Kingdom, a favourable balance of trade of $333 million. We used that $333 million, of course, to help pay the adverse balance of trade with the U.S.A.
There are some people who ask, why should we worry about an imbalance of trade? We have investments from the United States of America, and those investments will pay the losses suffered under the adverse balance of trade. It is interesting to remember that an increase in foreign investment invariably means an increase in your adverse balance of trade. The reason is obvious. Firms
1982	HOUSE OF
Supply-Trade and Commerce in this country, and especially firms with parent companies in the United States, obtain their funds from the United States and they invariably spend a large portion of those funds in the United States to bring goods into this country, and the more investment there is by the United States the greater will be the imbalance of trade.
I was interested in a statement made by the chairman of A. V. Roe (Canada) Limited, as quoted in the Ottawa Journal of October 25, 1957, regarding this adverse balance of trade. He said:
"You have only to glance at Canada's staggering trade deficit with the United States", Sir Roy said in an address to the Roe annual meeting, "to see
where opportunities lie.
This represents a serious problem for Canada but it also offers a rare oportunity to Canadian industry.
In that vast deficit (of more than $1 billion annually) there must be many millions of dollars worth of products that can and should be made in tii s country.
Canada must produce more of the products which she uses and which she now imports. Your population is increasing by 1 million every 30 months

one of the highest rates of growth in the world. If this is to be maintained, and it must be if Canada is to grow, then more and more new jobs must be found".
It is interesting to note that at the very time that statement was made we had around 208,000 unemployed in Canada. I believe the figure is greater than that today.
Of course these unemployed could be used to produce many of the goods to which Sir Roy Dobson has reference in his speech.
I think it is very unfortunate that at the very time when we have this large adverse balance of trade and it is so essential that we should increase the production in Canada of goods which we import from the United States the Bank of Canada decided to impose restrictions on the expansion of credit that had the effect of reducing the rate of our production because there was never a time when we should have expanded our production more than now, at the time we have this large adverse balance of trade. There is good reason to say that we should have used the surplus labour we had to expand the production of those goods which at the present time we are importing from the United States.
I think everybody will agree that the logical solution of the problem of imbalance of trade is either to sell more to the United States or to buy less from them. It is not so easy to sell more unless the United States is willing to buy more, but on the other hand we have control over the other aspect and could buy less. We could either do that, as Sir Roy Dobson suggests, by expanding our production of those things which we are at present buying from the United States, and of course that would be the desirable thing
[Mr. Quelch.j

to do, or otherwise we could buy less by purchasing certain goods we are buying from the United States from countries with which we have a favourable balance of trade.
Therefore I was very glad to see the government send a mission to the United Kingdom to try to expand our purchases in that country, and I am not going to be too critical of it being a buying mission. If we want to sell more to the United Kingdom we have got to buy more. In view of the fact that we have had a substantial favourable balance of trade for a number of years, the first thing is to rectify that by buying more and I believe, as I think the minister has suggested, that if we can create a situation where we buy enough from Britain to bring about a balance of trade then Britain will be willing to buy more from us. When Sir Anthony Eden was in Canada last year he stressed the fact that if Canada would buy more from Britain that country would buy more from us and desires to do so. Therefore I think we are doing the logical thing. We are first of all trying to balance trade with Britain by buying more from them and we have every reason to believe that if we accomplish that Britain will then buy more from us.
We have always insisted that nations should endeavour to bring about the greatest degree of balance in their trade with other nations on a bilateral basis. I recall that every time I suggested that in the house in the past the former minister of trade and commerce used to ridicule the idea. He would say that it was nonsense to suggest having a balance of trade bilaterally, that it had to be on a multilateral basis. It is a fine thing to have a balance on a multilateral basis but if you cannot the first thing to do is to try to achieve the greatest degree of balance on a bilateral basis. I recall that the former deputy minister of trade and commerce emphasized that fact back in 1947. Mr. M. W. Mackenzie in an article in the Foreign Trade magazine of October 9, 1947, had this to say:
Now that the multilateral system of payments has suffered a serious breakdown for the second time, or perhaps one should say for the third time in the last generation, Canada and all other countries that are engaged heavily in international trade are facing a difficult stage in their affairs. The balance of trade between pairs of countries-that is, the bilateral balance-has become a matter of first importance and it will remain so until the mechanism of the multilateral system has once more been placed in good order.
We were never able to convince the former minister of trade and commerce that that was an objective worth trying to achieve but the former deputy minister, who has been spoken of very highly in the house, I know, considered it advisable in these difficult times.

Times were difficult then and so far as our imbalance of trade is concerned they are even more difficult today.
So, as I say, I am very glad to see that the government at least is trying to achieve that degree of balance bilaterally in so far as the United Kingdom is concerned. If by transferring some of our purchases from the) United States to Britain we are able to make it possible for Britain to achieve a balance of trade with us, it will also help us to achieve a greater degree of balance with the United States. In other words, we would be killing two birds with one stone and we would be departing from that triangular pattern of trade that in my opinion has done so much to lose us markets in the United Kingdom.
I think it is time that we raised international trade to its true purpose, the exchange of goods are services between nations of a mutually advantageous character. I think we should be prepared to accept foreign currency in payment for our exports up to the amount of our favourable balance of trade with any nation under a firm agreement to spend it on the nation's goods and services or trade the credit to another nation. Some hon. members will recall that in 1945 we had a prolonged debate on the Bretton Woods agreement. The Bretton Woods agreement gave creditor nations the right to demand payment in their own currency without any obligation whatsoever to accept goods of the importing nation. We stressed then that if that type of policy should continue one of two things was bound to happen. Either the debtor nation, the importing nation, would be forced to go farther and farther into debt to the exporting nation or they would be forced to curtail imports from the creditor nation. At that time when we were debating the bill in the banking and commerce committee I put the matter in these words as found on page 131 of the proceedings of that committee:
What we want in the act mainly is a provision that a debtor nation in order to pay for its imports shall be recognized as paying for them when they establish a credit within their country in favour of a creditor nation and that that credit can be used to buy anything purchased within that country. Then if the creditor nation is not willing to accept goods from a nation with which it has a credit, if it desires to trade on a multilateral basis it may take the credit established on that basis for the credit of another country on a multilateral basis. So I say if the great industrialized nations are really sincere in this matter they should have shown it at this time and been willing to have an article to that effect put in the Bretton Woods agreement.
Unfortunately, however, that was not done. We continued on the basis of the triangular pattern of trade and as a consequence we have lost many of our markets in Europe, not because those nations do not desire to buy
Supply-Trade and Commerce from us but because they lack the dollars for the very simple reason that we insist upon exporting more goods to them than we are willing to buy from them. Once again I say I think we are on the right track when we try to expand our purchases from the sterling area.
No one is suggesting that the Canadian exporter should have to accept sterling. We realize that the individual exporter cannot accept sterling. I should imagine the procedure would be that the exporter would draw bills in sterling on the British importer, discount them with his local bank and the bank would then discount them with the federal agency. The federal agency would then have a claim against sterling and would be able to make that sterling available to Canadian importers of British goods. We have consistently urged in the house the acceptance of inconvertible sterling. It is no good accepting ordinary sterling because if you are going to accept what is known as American account sterling it probably means you will be converting that sterling back into dollars and you might as well have taken dollars in the first place. What we think should be done is that there should be an agreement to accept sterling from Britain under the firm undertaking that that sterling will be used to buy goods of that nation. If that is done, I think we will find Britain is far more interested in our accepting inconvertible sterling than they are in our accepting American account sterling which may be converted at any time or on any day into dollars.
The former minister of trade and commerce and the former minister of finance were very much opposed to the idea of the acceptance of sterling. As a matter of fact, I remember earlier they used to try to ridicule the suggestion. They continued ridiculing the idea until the United States put into force their surplus disposal policy. They were then very critical of the United States for initiating such a program, and criticized it time and again. I understand that the present Minister of Trade and Commerce also is somewhat critical of the United States disposal policy.
I do not believe we really have any grounds for being critical of the United States in putting that policy into force. I feel it is time we broadened our policies out along somewhat similar lines. May I remind the minister of the background of United States surplus disposal programs? The minister may recall that back in 1948 or 1949 surpluses were starting to cause a great deal of concern. This matter had been referred to the Food and Agriculture Organization. The director general of the Food and Agriculture

Supply-Trade and Commerce Organization then appointed a committee of six experts to draft proposals for handling surpluses, and ways and means by which those surpluses might be distributed to other nations. These experts come up with a proposal known as the international commodity clearing house.
I want to draw the minister's attention to the functions of that clearing house because what the United States is doing today is along very similar lines. It is interesting to note that these proposals were rejected by the member nations. They were advised that one of the reasons the proposals should be rejected was that each nation could put the financial proposals into force themselves without having an international commodity clearing house. Let the minister note what the functions of that international commodity clearing house would have been. Mind you, these were proposals drawn up by a committee of experts under the director general of the Food and Agriculture Organization. The functions were:
(1)	Subject to provisions outlined below, the purchase of stocks of commodities that are in surplus in the country in which those stocks appear.
(2)	The negotiation of sales in inconvertible currencies in order to assist in maintaining the flow of trade during periods of exchange disequilibrium; such payments being guaranteed by the buying countries against losses from exchange depreciation.
(3)	The negotiation of sales at special prices below the market to countries in need, under strictly defined conditions of use; for example, for relief purposes, special nutritional programs, or for development projects.
(4)	As a long run function, the holding of stocks acquired in periods of surplus as reserves to protect the interests of consumers in periods of shortage.
(5)	The negotiation of bilateral or multilateral trading agreements, or exchanges of commodities on a barter basis.
The minister will note that these functions outlined for the international commodity clearing house are the very things that the United States today are doing under their disposal program. As I say, at the time this program was turned down by the member nations of FAO they had been advised of a number of reasons why it should be turned down. Under paragraph (d), we find:
That the financial functions proposed for the international commodity clearing house could be performed by the governments directly involved.
The United States was one of the governments involved. The United States are today doing the very thing they were advised could be done by member nations of the Food and Agriculture Organization. I do not feel, therefore, we are in a very good position to criticize the United States for doing what they are doing today. I would suggest that instead of criticizing the United States what we should do is adopt whatever features


there are in that policy that might be advantageous to this country. I believe we could very well accept inconvertible currencies from any nation to the extent necessary to provide for balancing trade with that nation. I am not suggesting we go beyond that. If we are agreed that it should be the purpose of international trading to exchange goods and services upon a basis of mutual advantage, then surely we should be willing either to balance our trade with nations or accept their currency to the extent necessary to provide that balance. We would thus remove a lot of the annoyances that are so often created between nations.
As an alternative to accepting foreign currency or sterling, I think we should be prepared to make advances of credit through the Bank of Canada to purchasing nations for the purchase of Canadian goods. The purchasing nation would be under an obligation to give Canada a prior claim on its exportable production, but should be required only to retire the advance of credit at the rate and to the extent Canada chooses to exercise its claim against the exportable goods. In other words, Canada would not have the right to demand payment in dollars. On the other hand, she would be free to exchange the credits for goods of another nation with which the debtor nation has a favourable balance of trade. Of course, the importing nation should be prepared to guarantee the rate of exchange on their currency.
As I have already stated, I think the government is to be commended for their effort to do something about the serious imbalance of trade by reducing our purchases from the United States and expanding our purchases from the sterling area. But I think most people will agree that probably that is a very long-term program. I noticed one of the British officials says there is no reason why it would not be possible to expand British purchases to $1 billion. This would be getting along pretty close to the objective of the Prime Minister, but it was pointed out that that may take many years. I feel we could expedite this matter by being willing to accept a certain amount of inconvertible sterling.
I hope the minister will not just brush it aside like the former minister. He must realize the people of the United States are good businessmen. They look upon this as good business. They are not doing it because it is philanthropic. They are doing it because they think it is good business for themselves. Let us remember it is having this effect. It is making surplus food available to the hungry people of the world and that, in itself,

is certainly a worth-while objective. At the same time, under the United States program, the farmer who produces that surplus food is getting fair prices. I hope the minister will give greater consideration to that program.


Mr. Stick:: Mr. Chairman, I was very much interested this morning in the statement made by the Minister of Trade and Commerce. I listened to him with a great deal of attention. I regretted that he did not give us the forecasts we used to be given by the former minister of trade and commerce when he outlined the trading position of our country and gave us his views on the expansion of industry, as well as the amount of capital that would be invested. In other words, during the presentation of the estimates of this department we had a forecast of Canadian trade for some considerable time in the future. The minister in his wisdom or otherwise neglected to do that this morning. I regretted it, and I listened with a great deal of attention to his statement. I have not found very much in it that one could take home and think about. As a matter of fact the only commendable thing I could find about this statement was that it was so brief.
There is one part of the statement by the minister with which I agree and that was his tribute paid to the staff of his department, built up I might say by years of Liberal administration. I have had experience with the staff of this department and can readily agree with the minister when he pays tribute to their earnest efforts both at home and abroad. He said in effect that the purpose of the trade commissioners' service is to advance Canadian export trade and he also paid tribute to the personnel of that service. Then if this is correct, and I believe it to be correct as I believe the minister to be sincere in his tribute, why the necessity of sending the trade mission to England since we have such an efficient staff already over there which can inform the trade of Great Britain as to our requirements.
Now I understand statements have been made by the right hon. Prime Minister and other members of the government that it is the intention to transfer 15 per cent of our imports from the United States to Great Britain. Now to be fair I think that is a commendable idea but if the policy of this government is anti-United States to that extent it also raises a great deal of fears in my mind. I have no objection to transferring 15 per cent of this trade from the United States to Great Britain if we are not killing ourselves in the process.
Supply-Trade and Commerce
Let us look at this trade position from a commonsense standpoint. First of all may I say that the people of Great Britain are not going to buy from Canada or anywhere else if they can buy cheaper elsewhere. We in Newfoundland have been trading with Great Britain for hundreds of years and we understand their trading position and know how they trade. I have a situation in my riding which is rather unusual and perhaps may be of interest to the members of this house and to the people of Canada. We had an unusual ice blockade around our coast this year. This does happen once in a while, and because of this tremendous blockade our national industry was interfered with. When I refer to our national industry I mean, of course, our fisheries industry which was affected to such an extent that our lobster fishing failed in large part, our salmon fishing failed and our cod fishing, which is our main fish product, was also interfered with. This brought about a rather serious condition in the fishing industry in a large part of Newfoundland, particularly in my own riding.
Now our fishermen, who usually give up the voyage either in the months of August or September when they go, as we say, into the lumber woods and work through September, October, November and December coming home for Christmas and thereby earning sufficient to provide for their needs and those of their families during the winter, were faced with a different situation. We have been exporting thousands of cords of pulp-wood to Great Britain for the last 20 years and some of us on this side of the house agreed with the Conservative party when they said we should process our own raw material in this country. We have two large paper mills in Newfoundland but we have never begrudged Great Britain buying this material from us because we wanted to help them. This year, just as our fishermen were preparing to go into the lumber woods to earn their daily bread for the winter, we were informed by one of the large paper companies -the larger of the two in Newfoundland- that they had laid off 700 men, thus adding to our rather serious unemployment situation. When they were asked why they were not exporting this pulpwood to Great Britain -let it be understood that we exported this material during the war and at other times to help the paper industry of Great Britain and have made no complaint about it-we were informed that Great Britain was buying the pulpwood elsewhere. When we asked why they were doing so we were promptly told Great Britain could get it cheaper elsewhere.


Mr. L'Heureux:: Mr. Chairman, may I take this opportunity, when the house is taking up the estimates of the Department of Trade and Commerce, to pay particular tribute to Mr. C. D. Howe, that great economist. I can speak out of personal knowledge for when I first went into business, I scrupulously applied his wise counsels to industrialists and Canadian financiers who were promoting the development of their plants or business, either by expanding or by the purchase of equipment, thus automatically furthering the economic expansion of this country. That is why I say that I am indebted to Mr. Howe for at least part of the success I have enjoyed.
I frankly admit that I have always looked upon Mr. Howe's statements as a barometer and a guide when I was planning my course at the beginning of any particular fiscal year. I am sure that a large number of Canadian businessmen set great store by his annual forecast which incidentally, never failed to come true.
How utterly different under this new government. A curious fact is that for all their bombastic statements and confident outlook, the new ministers by no means are inspiring the same degree of confidence as did the leaders of the great Liberal party. Hence the worry, nervousness, uncertainty, restlessness and weariness that grip the people of Canada.
No more striking example of this could be found than in my own constituency where our industrialists have not only expressed

Supply-Trade and Commerce concern but have protested in unequivocal fashion against the attitude of the present government.
Let me name but one large firm in my district, the Bennett Company Limited, of Chambly, which has forwarded a brief to the Department of Trade and Commerce and the Department of Finance in Ottawa setting out its worries and concern. This submission reads as follows:
(Text):
We believe that the government is making a tremendous mistake in not protecting Canadian industry.
"Free trade" cannot be considered with England or any other country when their standard of wages are not comparable with Canadian standards. It is impossible for Canadian companies to pay $1.50 an hour compared to 50 cents an hour in England and have the resulting products competitive in price.
(Translation):
The firm admits that it is all very well to say we should buy British goods but wonders whether Canada can compete with England when wages for the same classes of employment are $1.50 an hour here and 50 cents over there.
Our government must change their attitude and policy as far as our imports from England are concerned. The situation demands a very serious study on the part of Canadian authorities. As suggested by the Bennett Company, if the government want at all cost to promote the employment of Canadian labour, they must take a quite different stand and clearly side with Canadian industry.
When our manufacturers are no longer able to stand the competition of imported goods, an economic depression will set in. Our industries will shut down and our workers will be unemployed. Imported shoes, for instance, will still be available at $4 or $5 a pair, but the worker will not have the money to buy them. I would rather pay ten or twelve dollars for a pair of shoes, and have the money to buy them, and at the same time avoid a depression such as we had in the thirties, under another unlamented and Conservative government.
A further suggestion appears appropriate to me in another field. The government should co-operate with companies such as the Canadian Industries Limited in carrying out a vast program of scientific research.
After all this company, as many others of the same type, spends huge amounts each year on research aimed at finding new markets for new or better products. Those master chemists and scientists contribute to the expansion of our industries and, by their knowledge, can help solve many problems.
Let me make still another suggestion as to how the wheat problem in western Canada might be solved.

This $150,000,000 program put into effect by the present government in seeking to settle the acute problem of the disposal of wheat is designed to provide the western farmer with interest free cash advances.
May I say that this measure can only be a stopgap. True, the cash advances provided to the individual farmer will run as high as $3,000 but this will in no way dispose of the enormous quantities of wheat accumulated in storage.
I would like to bring my modest contribution to the solution of this problem. Why not set up an agency which would undertake research to discover new by-products of wheat? After all, if it has been found that wood can be used to manufacture paper, why should not wheat be used to manufacture new products?
As far as the constituency of Chambly-Rouville is concerned, I would like to bring to the attention of my colleagues the possibilities offered by that federal constituency.
Now don't think this is just another wholly agricultural county of our province. It is, indeed, an agricultural county, but because of its geographical position, it is a district which also occupies a strategic position in the great triangle that is developing as a consequence of the St. Lawrence Seaway project. Situated along the southern bank of our majestic river, and south of the Canadian metropolis of Montreal, the county of Chambly-Rouville is a hive of residential and industrial projects.
This brings me to point out to the Conservative government that those great projects must absolutely be continued, particularly after the Liberal government has set the foundations of unequalled economic development.
When you read the history of the United States,-and you will recall that a former Liberal leader once said that the 20th century "belongs to Canada",-you realize the tremendous development which has occurred in that great country, particularly in that corner of San Francisco which is referred to as "the Golden Gate". Well, Mr. Chairman, the district which I have the honour to represent here will be named the "Golden Triangle of Canada". The district extending from Beauharnois to St. Johns and from St. Johns to Sorel is indeed the "Golden Triangle". This will occur, of course, provided the Liberal party is brought back into power, so that it may keep on giving this country this era of prosperity which used to be ours, because at this time, the Conservative party is merely engaged in electoral overbidding, thus destroying the economy of the country, after having sabotaged national unity. It is most unfortunate that, after dealing a first

nasty blow at national unity by holding that his party can manage the affairs of Canada without the help of the province of Quebec, the hon. Minister of Trade and Commerce (Mr. Churchill) should now get down to sabotaging Canadian economy by clinging to an obsolete imperialistic feeling which would alienate the friendship of the United States, whose economic contribution to our Canadian development has, up to now, been a tremendous asset.
The Canadian people can rightfully regret its old love, the Liberal party.
(Text):


Mr. Smith (Lincoln):: Mr. Chairman, I did not have the opportunity to speak during the debate on the speech from the throne but I think this would be an appropriate time for me to express my opinion on matters which affect Lincoln county, the constituency which I have the honour to represent, and which in a general way affect all parts of Canada.
Canada's most unfavourable trade balance with the United States and other countries coupled with our tremendous surplus of farm produce was one of the main reasons that brought about the change of government on June 10. This condition was created by the disorderly importation into this country of manufactured goods at prices with which our factories could not compete and the dumping of surplus farm products from the United States into Canada at prices below cost. The loss of world markets for our farm products was also a very important factor in this slump in the farming industry. I fully realize that there are many problems the Minister of Trade and Commerce has to solve in order to correct some of those conditions. If we examine the records of trade and commerce we find that imports and exports between Canada and the United States represent the area wherein most of our problems lie.
I firmly believe that at least 15 per cent of our trade with the United States can be diverted to Great Britain in the purchase of heavy machinery and equipment much of which is not made in Canada at the present time. This exchange should be based on Great Britain's purchasing in return a further 15 per cent more in terms of farm products under a trade agreement which I am sure this government can easily negotiate with the British government.
Turning now to the problem that faces Canada's light industries including textiles, small tools, hardware, etc., something must be done in the very near future to offer them assistance. If action is not taken soon there will not be a textile plant left in Ontario. Our chief competitors in textiles are Japan 96698-126J
Supply-Trade and Commerce and West Germany. Both countries purchase a considerable amount of Canadian wheat and therefore we cannot disturb that trade too much. However, their exports to Canada are increasing rapidly and our exports to those countries are not increasing at the same rate. We do not wish to discontinue trading with any country, but in these days, when every country seems to be extending its markets, we do not want to be caught short, which we have been. The only way we can possibly protect ourselves today is by trade agreements.
How can Canada compete with Japan on an almost open market like the Canadian market today? I am told that the pay of semi-skilled and skilled labour is from 50 cents to 60 cents a day. In Ontario people performing the same job are paid from $1.25 to $2.50 an hour, with compensation, unemployment insurance, holiday pay and, in most factories where they are covered by union agreements, they have sick pay, life insurance, hospitalization, Physicians' Services Incorporated and, in some cases, a guaranteed annual wage. We have them all. Most of those measures are unknown in some of those countries I have mentioned.
During the last four years of the Liberal government, Lincoln county, the county I represent, lost four good textile plants with a payroll of some 1,200 people. My opponents in the last election said, "What of it?"


An hon. Member:: Oh, no, they didn't.


John Smith: They said, "The factory buildings have been taken over by other industries." But that is not the solution of this problem. When an industry closes down and the machines are moved away it is a calamity to the community and municipality. The people lose their lifetime jobs and in many instances they find it very difficult to become re-established.
I have checked some of the records and I have found that plywood, which is something that is used a great deal in Canada today, is having a difficult time. I understand that a great many of the plywood mills in British Columbia are shut down. I have noticed in Ontario in the past few years that a great deal of Japanese plywood is being used. I checked the records in the Department of Trade and Commerce and I found that five years ago no plywood was coming into this country from Japan. Four years ago about half a million dollars worth came in and by the end of this year there will be something like $3 million worth of plywood come into Canada from Japan. I do not say that this is very wrong, but I am just citing it as a reason why we have to check into

Supply-Trade and Commerce trade and commerce. Here we find the mills in British Columbia almost shut down and we are bringing plywood into this country from another country. I believe that some of the logs that are used to make plywood in Japan come from British Columbia.
I might say that I was down in the province of Quebec and visited the town of Vic-toriaville where we go quite often. They used to have a very fine plywood mill down there. They have two of the largest furniture factories in Canada and they used the plywood from their own mills. The last time I was down there that factory also was shut down.
Small tools is another item that affects Ontario. We have a number of plants in St. Catharines which are manufacturing small tools. We find today that in order to maintain their sales staff and keep their markets some of those plants are having their products manufactured in West Germany, brought out to this country and sold under their own brand names. That is not a good condition. I do not say that we can cure it all at once but it is just the trend of things today. We are buying too much from abroad and causing unemployment in our own country.
When we were discussing fisheries the other day it was brought out that at the present time we are importing large quantities of salmon from Japan. I checked that and I found that most of that salmon is caught just outside of territorial waters. It is processed in floating canneries and some of it never even sees Japan.
In closing, sir, I must say that our government must approach this whole problem of agriculture and light industry with a realistic and a sympathetic attitude. It must keep in mind the fact that it was Canada's trade deficit of $1,300 million and our depressed agricultural industry that brought so many new members like myself to Ottawa. I have great confidence in our new Minister of Trade and Commerce. I wish him well and I am sure that if he approaches matters, as I say, in a sympathetic and a realistic manner, we shall have success.


Mr. Johnson (Kindersley):: Mr. Chairman, I wish at the outset to join with those who have wished the Minister of Trade and Commerce every success in his office. I think we all realize the importance of this department, since it affects the daily life of every Canadian citizen. It is unfortunate that the minister took office at a time when there is a shadow caused by the problems arising out of the international investment position. There are several suggestions which I should like to make in this regard and in other aspects dealing with the minister's department. I want


to emphasize the international investment position and in doing so I am not putting any blame on the present administration; nor do I think that blame can be put on the former administration because we, as Canadians, are all to blame for allowing the situation to develop.
I would draw to the attention of hon. members a publication put out by the dominion bureau of statistics entitled, "Canada's International Investment Position, 1926-1954". It provides an analysis of the trends which have built up over the years and I think that our immediate responsibility is that of analysing those trends and determining corrective measures which will stop the trend if, in our opinion, we feel it is not in the best interests of the people of this country.
I think it is important to note that two of the measures which this government has already adopted are aimed at correcting the trend. I think the one which came into being first was the commonwealth conference, and we are hopeful that it will achieve its objective of diverting more of our trade from countries where we have an imbalance to countries where we have a credit. The present trade commission, which is currently touring the United Kingdom, can play a very valuable role and we wish it success in achieving that end.
I think it is particularly important that this be given consideration, in view of the developments which are taking place in continental Europe, such as the development of the free-trade area which will in all probability make our trading relations with those countries somewhat more difficult and adjustments must be made on our behalf.
In reference to the imbalance of our international trading position, I should like to quote from the publication to which I referred. It says:
Non-resident ownership of Canadian manufacturing now amounts to about a half of the total capital employed and to well over a half in the case of mining, smelting and petroleum.
I think all hon. members will readily agree that it is a very dangerous trend to have foreign capital taking ownership and control of some of our basic industries. It is understandable, of course, that in the period through which Canada has gone a certain amount of risk capital should come into the country, but I am also certain that we as Canadians must put ourselves in a position to be able to exercise sufficient control over this foreign investment to ensure that in fact we do control the industries that exist in

Canada. The publication goes on to state the following respecting these concerns controlled in the United States:
These larger concerns, with an investment of $1 million or more, accounted for some 30 per cent of Canadian manufacturing production in 1953 and 21 per cent of employment in that field.
There we have an insight into the implications that have developed in the first half of this century through allowing foreign concerns to control in fact many of our Canadian industries. As foreign capital achieves greater control of industry operating in Canada, this in turn makes it more difficult for private individuals to establish themselves in the manufacturing field since they are competing against large concerns with limitless amounts of capital.
This is particularly significant in the automobile industry. Ninety-eight per cent of the Canadian automotive industry is dominated by large United States controlled enterprises. This thought went through my mind last Monday when we were discussing the plight of the industry due to lay-offs resulting from the uncertainty of buyers as to reduction of the excise tax on automobiles. It seemed to me that perhaps these United States concerns were closing down their Canadian plants in an effort to use this action as a lever against the Canadian government to reduce the tax and thus provide the industry with an advantage which they were not prepared to provide for themselves through a reduction in the price of their product.
I should point out too that the rubber industry is another that is largely controlled in the United States, as are the petroleum, iron and machinery industries. I am just mentioning them and I am not going to go into a great amount of detail because it is a very technical subject. However, I wish to draw this very serious trend to the minister's attention, a trend that exists at a time when we have an imbalance of trade with the United States. Of course, the imbalance has been covered over the years by capital inflow, both in direct and indirect investments. The deficiency last year amounted to over $1 billion, and as we continue to import more from the United States than we export to that country this situation is offset by a larger inflow of United States capital which in turn aggravates our problem by creating more and more domination of our industries by a foreign power.
I hope the minister will give these factors serious consideration and do everything possible to halt and reverse this trend. It is important that this be done because of the tremendous changes that have taken place in the whole pattern of international trade since the war.
Supply-Trade and Commerce The hon. member for Acadia, in a very sensible speech as usual, remarked on the change in the trade pattern that had taken place. He pointed out that we no longer have the multilateral trade which existed from the turn of the century up to world war II when Great Britain was the clearing house and trade was channelled in a multilateral way. As an individual country we must now concentrate on unilateral and bilateral trade agreements and, again keeping the emphasis on Canada's international investment position, it will be necessary to establish import-export boards so that our trade will be in useful channels and in commodities which are in fact necessary in Canada.
It has been said many times and should be said many times that we can sell to countries only if we are prepared to buy from them. I think I should again draw attention here to the very serious omission in the opening remarks of the Minister of Trade and Commerce, the complete omission of any reference to what was termed by the Prime Minister during the election campaign as Canada's No. 1 problem, our tremendous wheat surplus. It is part and parcel of the whole problem of trade. For years wheat was our major export commodity. It has dropped in recent years to second or third place but it is still of extreme importance to the people of western Canada and, in fact, all of Canada.
The fact that we have a billion bushels of wheat in public and private storage is indeed an important consideration directly related to international trade. In my opinion it is necessary to follow trade policies that will give consideration to this problem. This will require the importation from countries which are in a position to buy from us of sufficient goods to provide them with funds with which they in turn can purchase our grain. If difficulties do arise, as in fact they do, I think serious consideration should be given to barter arrangements to permit countries that do not have the required amount of dollars to make direct trades with our country.
I recall asking the minister if consideration had been given to having the trade mission currently touring Great Britain discuss this problem and he pointed out that consideration had not been given to barter arrangements because it was not found necessary. When we have a billion bushels of wheat in storage I think it is necessary to give consideration to barter arrangements. It is necessary to give consideration to long-term credit agreements so that this wheat, which is a glut on the Canadian economy, can move into foreign markets.

Supply-Trade and Commerce
This will also require consideration of the acceptance of foreign currencies. Failing the adoption of these programs with respect to international trade, we then have the responsibility of launching domestic programs to take care of the existing situation. If we are not going to have trade policies that will enable our wheat to move freely into the marketing channels of the world, the responsibility must fall on the government to provide policies that will enable the farmers to exist. I know that some of my colleagues will be dealing further with this subject and I do not want to labour the point now because it will be gone into in more detail on the specific items in the minister's estimates.
But I would point out that one solution that could be adopted would be to increase the amount of grain in storage on which storage charges are paid. The previous administration introduced legislation to provide for the payment of storage charges by the federal government on all grain in excess of 178 million bushels. I am completely in the dark as to how the figure of 178 million bushels was arrived at, but I would suggest that they take that figure out and pay the storage charges on all grain which is, in fact, in storage. Consideration must be given also to the application of programs to benefit all farmers, the ones which were mentioned by my colleague the hon. member for Dauphin in the form of deficiency payments; the adoption of the two-price system and the payment of storage to farmers on farm-held grain.
I have dealt, rather hurriedly I must admit, with some of the aspects of the trade of our country. I should like now to make reference to two specific problems relative to the commerce of our country. I am quite certain that the minister will be in a position to more readily correct these problems than ones to which I referred previously. I am the father of three children, and on occasion I have been sent by my wife to buy a pair of jeans for one of the boys. I arrive at the department store and look for a size 6. When I find one that seems to be satisfactory I bring it home. Often I find that it would very easily fit my 8-year old daughter. On the other hand, I may find a similar garment, take it home and I might be lucky if it fits my 4-year old son. Apparently, Mr. Chairman, there is a complete lack of standardization in the quality and style of children's clothes. I am bringing this to the minister's attention because I have received many complaints from mothers across Canada. We can appreciate the difficulty they have in getting away to shop for their families, and I think steps should be taken

to standardize the sizes of children's clothes. All garments marked "Size 6" should be the same size, and then when we hapless fathers are sent out on a shopping errand we would have more guidance in the selection of these articles.
The second item about which I should like to complain and draw to the attention of the house is this miserable practice which has been developing in recent months of pressure merchandising. The practice seems to be to stuff all kinds of toys and objects in these so-called breakfast cereals. I have been out shopping with my children and I have been coerced, cajoled, cried at and commanded to buy certain brands of breakfast cereal just for the purpose of obtaining the marble, jet airplane or toy pistol inside the package. I believe controls could be exercised to prevent this merciless pressure being put on the parents of Canada. It is very difficult for parents who are with their families to turn down the request of the children who want the toys far more than the breakfast cereal. The result is that you have dozens of boxes of breakfast cereal cluttering up the closet which the children do not want. If someone has a secret on how to say no, I wish they would let me in on it.
Equally bad, but not with the same devastating result, is the practice of placing premiums in packaged goods. The best example of this practice might be the packaged soaps. You find a huge box of soap, you buy it and find it is filled with a bath size tea towel or bath size beach towel, with a small quantity of soap at the bottom. I would not mind having a bath size tea towel, at that. I think regulations should be invoked to protect the housewives all across Canada from this type of pressure advertising. I believe that this would come under the jurisdiction of the department of commerce.
I have one final suggestion. I am making a plea on behalf of the small merchants throughout the length and breadth of Canada that we get rid of these premium coupons. This practice may be all right for the large merchants who have the capacity to deal with these coupons, but the small merchant does not have a filing system for keeping these coupons until the salesman happens to come around. What happens is that the small merchant is bearing the cost of the premium which is offered by the soap company or whatever company it may be. If the manufacturers do, in fact, want to provide an incentive, let them reduce the price of their commodity by 5 or 10 cents. In this way the individual merchant will not be saddled with these onerous responsibilities.



B, 1957

[Stage Direction]
I see that it is very nearly five o'clock, Mr. Chairman, but I did want to make these general suggestions, both in dealing with international trade and giving consideration to the burdensome surpluses which we have. I wanted to draw the attention of the minister to these problems which are faced by the mothers, fathers and housewives throughout the length and breadth of Canada. I trust that the minister will give them serious consideration, and I am sure everyone would be grateful if action were taken.
Mr. Schneider:: May I call it five o'clock, Mr. Chairman?
Item stands.
Progress reported.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. 30, respecting Ottawa and New York Railway Company-Mr. Mcllraith-Mr. Rea in the chair.
On clause 1-New York Central Railroad Company liable for claims, etc.
Mr. Bell (Carlelon):: This bill marks the
end of an era. It means the final cessation of New York Central service into the nation's capital. Had the evidence and proceedings of the standing committee on railways, canals and telegraph lines been printed and made available, probably it would not have been necessary for me to ask my genial neighbour, the hon. member for Ottawa West, the questions which occur to me about this bill. Regrettably, the printed evidence of the committee is not yet available and there are one or two matters about which I should like to make some inquiry.
The first is this. Would the hon. gentleman tell the house what the New York Central Railway Company has done for its employees, on the cessation, last spring of freight operations into the city of Ottawa in accordance with the order of the board of transport commissioners?


Lionel Chevrier: Mr. Chairman, I think I am rather familiar with this bill because it arises out of certain expropriations by the St. Lawrence seaway authority during the time when I was president of that corporation. I should like to preface my answer to my hon. friend with a brief statement about the manner in which the bill comes before the house. The New York Central Railway operates from Ottawa to a point near Rooseveltown in the state of New York. The plans of the St. Lawrence seaway authority and the St. Lawrence seaway development corporation, the
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United States entity building the seaway, provided for a loop over Cornwall island at substantial cost.
When the St. Lawrence seaway authority looked at the plans they discovered that instead of following that loop and relocating the railway they could follow a straight line and save a considerable amount of money by purchasing the line from Cornwall to Rooseveltown. It also appeared during the course of the study of these plans that the New York Central railway was considering the abandonment of the line because of the fact there was little or no freight traffic over the line. It is well known that in the last few years there has been no passenger service between either Rooseveltown or Cornwall and the city of Ottawa and just one freight service per week, but what prompted the New York Central railway to give consideration to the whole matter of sale and abandonment was the fact that two companies in the United States had invited the New York Central to give them certain freight concessions if they established themselves on the south shore of the St. Lawrence river.
In view of all the circumstances the St. Lawrence seaway authority and St. Lawrence seaway development corporation decided to purchase this railway from Rooseveltown to Cornwall and an application was then made to the board of transport commissioners. The board thereafter approved of the application to discontinue and abandon the line but not until after a similar application had been made by the New York Central railway before the inter-state commerce commission in the United States, and granted by them.
Now dealing with the question raised by my hon. friend with respect to the employees who were affected I understand that by virtue of a section of the Railway Act it is possible for employees to make certain representations to the board for compensation. The employees did this and the board, by virtue of one of the sections of the act, referred these representations to the Supreme Court of Canada. I understand that the Supreme Court of Canada made a ruling on the question to which the hon. gentleman has referred and which, I am sorry to say, was not favourable to the employees of the New York Central railway.


Mr. Bell (Carleton):: Does that mean then that these employees have been left without any right whatever as a result of the abandonment of this line?


Lionel Chevrier: No it does not mean that, because I understand by virtue of the agreement which they have with the New York Central railway they are entitled to certain

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rights. What those rights are I am not in a position to say but they did demand certain additional rights for compensation which the New York Central was not prepared to give and they appealed to the board of transport commissioners. The matter was then referred to the supreme court.


Thomas Miller Bell: Could the hon. gentleman tell us the nature of the question before the supreme court? On exactly what grounds was this appeal made?


Lionel Chevrier: No I could not answer that question because I have not my file before me at the present time; I have to draw on my memory. When the appeal was heard I was no longer president of the seaway authority but I was when the expropriation was made, and I know that representations were made by the brotherhoods, not only to the New York Central in the United States but also to the Ottawa and New York railway here in this country. What the terms of the agreement were I am not able to say but I do know the employees had every opportunity to submit their claims and their complaints to the board and that the matter was referred, as I have said, to the Supreme Court of Canada.


Thomas Miller Bell: Would the hon. gentleman or the sponsor of the bill tell us how many employees were affected by this ruling?


Lionel Chevrier: There were not many.


Mr. Mcllrailh:: I regret I am unable to give specific answers to the questions of the hon. member for Carleton. We are in the position where he did not follow the usual practice of asking these questions in committee when the witness was available who could have given specific and detailed information. If I had a word of warning I would gladly have had all this information for him today. I would have been very glad to do this if I had been warned at all that he had any interest in asking this type of question.


Richard Albert Bell: Of course, Mr. Chairman, my genial neighbour will realize that I am not a member of that committee so there is a perfectly good reason why I did not ask the question there. I prefaced these questions by saying that it would probably have been unnecessary to make these remarks had the evidence and the proceedings of the committee been available to the house, which is not the case.


Lionel Chevrier: Well the hon. member could attend the committee, notwithstanding; he has the right to do that.


Richard Albert Bell: Oh yes, any hon. member may attend a committee, but I do not

believe it is the right of any member to participate in examination at a committee of which he is not a member.


George James McIlraith: Oh yes.


William Moore Benidickson: He can ask questions.


George James McIlraith: Oh yes, the hon. member for Carleton is not quite right in that. A member may ask questions and I want to assure him that I would have been most happy to have had all this evidence brought out, or to have it here today for him if I had any means of knowing that he would be concerned on that point.


Howard Charles Green: Well now, Mr. Chairman, the hon. member for Ottawa West knows very well that a member who is not a member of a standing committee can only take part in the proceedings with the consent of the committee itself and that it is a very very unusual thing to do. The hon. member for Carleton is today exercising his rights in a proper manner-


George James McIlraith: Oh, quite.


Howard Charles Green: -by asking questions when the house is in committee of the whole.


George James McIlraith: Quite.


Howard Charles Green: And the hon. member for Ottawa West and the hon. member for Laurier should have the answers to these questions. Anyone who is sponsoring a private bill must expect to have questions of this kind asked and I do suggest that they are not helping their case very much by trying to tell the hon. member for Carleton that he should not ask questions.


Lionel Chevrier: On a point of order. No one has said the hon. gentleman has no right to ask questions. On the contrary he has a perfect right to ask any questions he likes. The point I made is this: The hon. member is entitled to attend at any committee meeting; although he may not participate without the consent of the chairman. Now I have been dealing with the railways, canals and telegraphs committee and with the railways and shipping committee for years and I know that members from the other side of the house who were not members of the committee have repeatedly come to those committees. I am just trying to draw on my memory now and I wonder if the hon. member who leads this house did not come on one occasion. However, I know that hon. members on the other side came and asked permission to be heard and if they did not they sat there and listened to the proceedings.


Howard Charles Green: The hon. member for Laurier has been away digging the seaway for the last four years and he has not been attending all these standing committee meetings

in that time. On the other hand I have been attending far more meetings of the standing committee on railways, canals and telegraph lines than he ever attended and I can tell him that it was on a very very rare occasion that any member of this house who was not a member of that committee appeared and asked questions. On each occasion on which it did happen that member had to get the leave of the committee itself or certainly of the chairman before he could do so. For the hon. member for Laurier to now suggest that the hon. member for Carle-ton is doing anything which is not strictly his right-


Lionel Chevrier: On a point of order, I have not suggested anything of the kind and the house leader has no right to say I did suggest that.


Mr. Lafontaine:: He did not do that.


Lionel Chevrier: He knows far better than that. I have not made any such statement and he should not be trying to stall the passage of this bill by interjections of that kind, which are certainly not helping.


Howard Charles Green: I am not trying to stall anything, but when the hon. member for Laurier who has had so many years experience in this house-and the same applies to the hon. member for Ottawa West-has the presumption to lecture a new member of the house on what he can or cannot do in this house I am going to come to the defence of that member every time.


Lionel Chevrier: Let the hon. house leader come to the defence of the member as long as he states the facts correctly and let him not say that any hon. member has been trying to stop the discussion. That is not the case.


Howard Charles Green: The trouble with the hon. member for Laurier and the hon. member for Ottawa West is that they cannot answer these questions which are properly asked. That is their whole difficulty.


George James McIlraith: Far be it from me to lecture the hon. member for Carleton. I hope he did not understand my remarks in that way. I was not trying to do that: far from it. I was trying to explain why I was not able to answer his specific question. It is rarely that I am not able to answer specific questions in this house. I think I ought to put the leader of the house straight on the point he made about the committees. Members who are not members of the committee can come in, take part and ask questions. He is quite wrong. I have had occasion sometimes to sit on committees in the last few years. If 96698-127
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he wants to digress into that subject, which I think is probably irrelevant, there are a good many examples that can be given him. I recall his participation on one occasion as a member of the committee-he was a member of the committee-when that was done at some length. Perhaps it is not relevant to pursue that subject now but I want to make it clear to the hon. member for Carleton that there has been no attempt to lecture him at all as far as I was concerned; far from it. I did not think that he took it in that way.


Howard Charles Green: All you have to do is answer the question.


Richard Albert Bell: I assure you, Mr. Chairman, that I did not take the hon. gentleman's statements as a lecture nor did I take what the house leader said as a defence. I think the hon. member for Carleton is in no need of defence, although he is a new member, and that he will present his opinion on whatever matter may be before the house without any fear whatever of being stopped, provided he keeps within the rules. The only point I was making in respect of the proceedings of a committee was simply that I could go to the committee and ask questions by leave only. With the other meetings which have been taking place, I was not aware of the date upon which this particular bill was posted. Perhaps I should have been. Perhaps, although having other duties to perform, I should have been at that meeting at that time. But I am sure that no one in this house would be more willing to answer questions than either of the hon. gentlemen opposite. Therefore, I hope I may have an opportunity of placing before them two or three more questions which I have in mind.
I observe that the preamble of the bill says that all the assets of the company have been sold. What I should like to ask the hon. member for Ottawa West is what has happened to the right of way between Cornwall and Ottawa. Has it in fact been sold. If so, to whom has it been sold and at what price?


Lionel Chevrier: Perhaps I should give a short history of that matter, if I may. The right of way from Cornwall to Ottawa is, I think, somewhere in the neighbourhood of 57 or 58 miles long. When the seaway authority was faced with the new work concerning the highway bridge and concerning the railway in the international section, it approached the New York Central railway authorities with a view to purchasing the line, the intention being to turn over a portion of the line to the federal district commission and also to try to interest the province of Ontario in

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building a short highway from the centre of the seaway which was Cornwall to the city of Ottawa.
While I personally made no representations to the department of highways in Ontario, others in the federal government did so in an attempt to follow out a suggestion that had been made for many years that a short road be built between Cornwall and the city of Ottawa. The provincial authorities thought it of interest and decided that they would like to make a survey. After a period of some months they made the survey and reported that they were not interested in the purchase of the line either from the New York Central or from any other group. Neither were they interested in constructing a highway from Cornwall to Ottawa. That idea therefore had to be abandoned. After I left, however, I understood that the Canadian National Railways purchased the line from Cornwall to the city of Ottawa. While I am not sure whether or not it is in operation, I know that the southern extremity in the vicinity of Cornwall is being used and operated by the Canadian National Railways as, I understand, is the northern extremity into Ottawa. That part between the two I am told is being abandoned and sold for scrap.


William Moore Benidickson: I am not, I confess, speaking to the bill itself, Mr. Chairman. Probably I should say I am speaking on a point of order. I recall that when I entered the house in 1945 I was on occasion called upon, as a private member, to sponsor bills of this kind. At the time I was told that I was approached for two reasons. One was that bills of this kind require sponsorship by a member of parliament by reason of statutes, and generally it was required that a private member sponsor them; and the solicitors in Ottawa who have this work in their offices had come to believe that bills of this kind should be sponsored by someone sitting on the right of the Speaker. Certainly at that time there was no great majority of one party or the other on the right of the Speaker. I am referring to 1945.
The point I raise is this. Later than 1945 I had the honour of being made a parliamentary assistant and again was asked, because of my legal training, by friends in the profession whether I would do them this courtesy. I then said that I did not think that-although my association with the gov-erment was, as one understands, fairly remote-I was competent or able any longer to do that kind of thing. I know that we have in this parliament a great number of new members and they may not understand

this matter of sponsorship of private bills. I can say that when I sponsored-


Thomas Miller Bell: Is the hon. gentleman under the impression that I am sponsoring this bill?


William Moore Benidickson: No; not at all. May I say immediately that my concern was aroused early this session because I found that one of the new parliamentary assistants, whom I have no desire to name, was sponsoring a private bill of this type during the current session. It was something that I do not think had occurred in recent sessions and certainly was something that I felt I myself should not do. I make no suggestion of wrongdoing on the part of the new member and new parliamentary assistant concerned. I am just raising this matter, on a point of order, as something that I think the house should consider for the purpose of deciding future conduct.
For the benefit of non-lawyers, may I say that when I was asked to sponsor certain of these private bills, and did so because they could not be advanced in the house otherwise, I think two or three of them were bills that involved commerce, as happens today, and that two at least did not involve commerce. One involved the incorporation of the Canadian Arctic Association and the other I think involved the incorporation of the Canadian Nurses' Association. Just to indicate the situation to new members and to the public at large may I say that-it may be coincidence or not-it so happens that I never so much as received a letter of thanks from the solicitors who were sponsoring the commercial bills to which I attached my name.
It happens I sponsored the bill with regard to the Canadian Nurses' Association and after the bill received third reading in this house I found on going to my office a beautiful bouquet of flowers awaiting me there. With respect to the Canadian Arctic Association-


Stanley Howard Knowles: wonder if my hon. friend would somehow relate what he is saying to clause 1 of Bill No. 30 respecting the Ottawa and New York Railway Company?


Thomas Miller Bell: He is busy tossing bouquets at the moment.


Thomas Miller Bell: The hon. member rose on a point of order.


William Moore Benidickson: The other point I wanted to make referred to the other non-commercial bill I sponsored. I am just wondering what the committee that deals with the bill would think of the propriety of parliamentary

assistants sponsoring bills of this kind. Of course, that is not at issue in this particular bill.


Richard Albert Bell: Mr. Chairman, the hon. member has been raising some questions in connection with this bill. My hon. friend who happens to be my predecessor in the role of parliamentary assistant to the Minister of Finance raises a point of order which, with great respect, I submit has no relevance whatever to what has been happening here this afternoon.


The Acting Chairman (Mr. Rea):: I know.


Stanley Howard Knowles: that is the case, Mr. Chairman, why do you permit it to be discussed?


Charles Edward Rea: I think hon. members will agree that the reason I allowed the hon. member to continue was that I thought perhaps the new members might learn something. I will, of course, read from part 2 of Standing Order No. 59 and this will be for the new members.


Stanley Howard Knowles: And
the old.


Charles Edward Rea: Part 2 of Standing Order No. 59 reads:
(2) Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
We are now considering the bill respecting the Ottawa and New York Railway Company, clause 1.


Richard Albert Bell: Mr. Chairman, I
wonder if I might have an answer to the question I asked as to the price at which the right of way of the railway was sold apparently, according to the hon. member for Laurier, partly to the federal district commission and partly to the Canadian National Railways?


George James McIlraith: Mr. Chairman, the total price paid to the railway company was, I believe, $4.5 million but I am not clear as to what was included. I know there was more than the right of way from Cornwall to Ottawa. I know that included in that there was the undertaking of the railway south of highway No. 2 near Cornwall and there were rights on the bridge but I am in the position of not being able to isolate the price for the right of way itself.


Lionel Chevrier: Mr. Chairman, may I answer the question now? I am sorry not to have been able to answer sooner but I had to get the information from certain members of authority, I was in error in one statement I made and I would like to correct it.
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Richard Albert Bell: Which authority was that?


George James McIlraith: The St. Lawrence seaway authority?


Lionel Chevrier: No, it was not the St. Lawrence seaway authority, but another authority. I would not like the committee to think that I can communicate as easily as that with the former members of the St. Lawrence seaway authority.


Richard Albert Bell: I just wanted to be clear.


Stanley Howard Knowles: assume that the hon. member for Laurier is an authority himself.


Mr. Maclnnis:: He wishes he were.


Lionel Chevrier: I am informed that clause 1 of the bill makes it quite clear that the New York Central is liable in respect of all claims, demands, rights, securities, causes, debts or anything owing and that the employees my hon. friend has asked about are not employees of the Ottawa and New York Railway Company concerned in the bill before us but employees of the New York Central.
When the application came before the board to abandon the railway some question was raised about certain rights of compensation of the employees and a second hearing was held-I was given the date but apparently 1 do not have it now,-at which the question of compensation of the employees of the New York Central was considered. The compensation was for moving these employees. For instance, New York Central said it would try and re-establish some of the employees on the United States side of the line and the employees felt that they should be entitled to compensation for moving. For example, some of them resided in Cornwall and others in Ottawa and in cases where the New York Central was able to obtain work for them in Watertown, New York, for instance, the question was whether or not the New York Central would be responsible for the compensation.
The board, as I said, granted the application for abandonment and also after carefully considering for the greater part of a day the question of compensation the board decided against the claim of the brotherhood for compensation and stated the railway company was not liable to pay compensation. The brotherhood has appealed to the supreme court and I was in error when I said a decision had been handed down. The case, in fact, is going to be heard in January. I am now informed that no matter what the compensation is, if the board of transport commissioners should be overruled then the New

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York Central by virtue of clause 1 is obligated and prepared to pay any claim for compensation.


Daniel (Dan) McIvor: Mr. Chairman, I was a member of this committee and I am very proud of that committee. I appreciate the courtesy that has always been extended to me by the chairman of the committee, the hon. member for Peterborough. In this committee I asked if the officials of this branch line were willing to co-operate and I was advised that they are most anxious to co-operate. Then I stated that according to clause 1 the New York Central will meet all obligations. The committee did not take much time in dealing with this bill as it was not necessary because everybody who has a legitimate claim against this company is protected. I think the chairman of this committee did a splendid job.


William Moore Benidickson: Mr. Chairman, you had reason to recognize others who have spoken with respect to this bill since the hon. member for Carleton had some remarks to make about what I had to say on a point of order. I wonder if my successor as parliamentary assistant to the Minister of Finance thinks it is likely or indeed proper that he should sponsor private bills in that role. That was the point I raised and I did not intend to cast aspersion against him.


Richard Albert Bell: Mr. Chairman, on a question of privilege-


Charles Edward Rea: I would advise hon. members that this has nothing to do with this bill respecting the Ottawa and New York Railway Company.


Richard Albert Bell: Mr. Chairman, I rise on a question of personal privilege. The hon. member has put a statement on the record that leaves an inference. I want to say to this committee that it has already been suggested to me on more than three occasions that I should sponsor private bills. I have declined to do so and will continue to decline to do so.


William Moore Benidickson: Mr. Chairman, also on a question of privilege, may I say that I have great admiration for the hon. member for Carleton. I had no desire to cast any aspersion. I was simply endeavouring to secure information so the committee would know the future policy.
May I also point out that I opened my remarks on this subject when the leader of the house was in the committee. He was not here at the time I concluded my remarks and therefore I was not able to ask him as I intended to do whether or not he approved
[Mr. Chevrier.l
of a policy of parliamentary assistants sponsoring bills of this type in the house in the future.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
The house resumed, from Tuesday, November 5, consideration of the motion of Mr. McCullough for the second reading of Bill No. 10, to amend the Canadian Wheat Board Act.
Edward George McCullough: Mr. Speaker,-


Gordon Minto Churchill: Are you closing the debate?


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


Gordon Minto Churchill: Mr. Speaker, this bill
which is now before us for second reading came before the house on October 25, and was introduced by the hon. member for Moose Mountain. It is Bill No. 10, entitled, "An Act to amend the Canadian Wheat Board Act (flax and rye)". The explanatory note says:
The purpose of this bill is to bring flax and rye within the provisions of the Canadian Wheat Board Act and thus eliminate speculation with respect to these grains.
This is a subject, Mr. Speaker, which has been before the House of Commons on other occasions and was before the house last year. I notice that in the introduction of the bill on October 25 the mover gave a comprehensive statement with regard to the question of orderly marketing, and the desire of the farmers of western Canada for that practice. He praised the work of the wheat board and indicated the problems confronting the farmer with regard to the subject matter of his bill, namely flax and rye.
In the course of his remarks he showed how the price trends have varied with regard to these two products, and introduced a graph indicating the prices over a period of years. Then he showed how the acreage has fluctuated for these two grains. With regard to flax, within the last 10 years or so the acreage has doubled. I am not sure whether he indicated that with regard to rye

the acreage has been correspondingly reduced. The acreage for rye is about one-fifth of what it was 10 years ago.
I notice that these two crops in seeded acreage are about one-tenth of the great crops of western Canada, wheat, oats and barley, which are under the wheat board at the present time. There are other seeded crops which the hon. member who has introduced this bill might at some time or other also wish to bring under the wheat board. However, he has concentrated his attention at the present time on these two and has indicated that there is a considerable demand among the farmers of western Canada for the bringing of flax and rye under the wheat board.
However, I notice that in supporting his argument-and I quote now from page 438 of Hansard-he indicated to the house the extent of the interest of the western farmer by these words:
I may say that I wrote to every municipality in the province of Saskatchewan and the replies I received to the question whether or not they were in favour of the inclusion of flax and rye under the jurisdiction of the Canadian wheat board were practically unanimous.
When I heard that, as I listened to the debates and when I read it again I wondered whether the hon. member could be a little more exact in his argument here in order that the argument might be stronger than it appears at the moment. He says that he wrote to every municipality. Well, we accept that. Then, he goes on to say: "The replies I received". He does not indicate whether he had two replies or 100 replies, or whether he heard from every municipality to which he wrote. He says that the replies were practically unanimous, which means that some were opposed. In any case, to whom were these questions addressed? He says he wrote to every municipality. Were they addressed to the secretaries of the municipalities? Did the questions come before the reeve and the councillors and who gave the reply? Did the reply come by way of an indication from the reeve and the council? Were the replies the personal opinions of the secretary-treasurers of the municipalities? Were the actual farmers approached in the matter? I thought that in the course of a very able speech the hon. member for Moose Mountain might have been somewhat more exact with regard to that particular matter if he wished us to accept it as a strong argument in favour of bringing flax and rye under the wheat board.
Now, I do not question for one minute the importance of this subject. But during the course of the summer two presentations were made to the cabinet, one of which was made by the Canadian Federation of Agriculture on
Canadian Wheat Board Act July 31, 1957. I have read this through with care on more than one occasion and, unless my memory is failing me at the moment, I do not recall that the subject matter of flax and rye formed part of that submission of the Canadian Federation of Agriculture. If it is as important to the farmers of western Canada as the hon. member for Moose Mountain suggests to us I would have thought that in the submission made to us by the Canadian Federation of Agriculture some mention would have been made of these two grains. They did deal with the subject of grain and they did deal with the question of wheat, and so on, but I do not see flax and rye mentioned.


Edward George McCullough: May I ask the minister a question?


Gordon Minto Churchill: Yes.


Edward George McCullough: I have in my hand the annual presentation of policy by the Canadian Federation of Agriculture entitled "Farmers Meet the Cabinet", dated February 14, 1956. I should like to direct the minister's attention to the following on page 8:
As it has done in past years, the Canadian Federation of Agriculture would also request that flax and rye be marketed through the Canadian wheat board so that these grains may benefit from the orderly marketing policies and increased price stability that board marketing provides.


Gordon Minto Churchill: Mr. Speaker, that is interesting information but it is 18 months ago. I was quoting from something that is fresh and recent, July 31, 1957.


Mr. Bryce:: They still think the same.


Gordon Minto Churchill: There is a new government in office and the farmers of western Canada presented their suggestions to us in a very able manner. During the course of the summer the interprovincial farm union council appeared before the cabinet. They made their presentation on August 15, 1957, and again I doubt very much if any mention was made of flax and rye in that submission. I am not questioning the importance of the matter which the hon. member has raised but I wonder why flax and rye were not brought to our attention in these two submissions from the organized farmers of Canada. Is it that there is a difference of opinion within the farm organizations or is it not as important to them as it appears to the hon. member? I simply draw that to his attention as an instance of the value of having the farm opinion of the country behind any argument presented in this house in relation to a bill of this nature.


Edward George McCullough: Would the minister permit one more question? Has the minister taken the opportunity to telephone the

Canadian Wheat Board Act Canadian Federation of Agriculture office in this city to determine whether or not they still support this position?


Gordon Minto Churchill: I would be quite prepared to telephone the organization on any occasion, but I would think the hon. member would do that and bring us up to date on these matters. It is hardly an obligation of mine to find out whether or not his statements in the house are backed by these organizations. Surely that is up to him. The general position with regard to flax and rye has been set out by those sponsoring the bill, and I have no quarrel with that at all. The situation is very clear. There has been a sharp fluctuation in the price of these grains and in the acreage seeded. Flax is a temperamental crop and it may well be that for reasons such as that and the size of the crops of flax and rye compared with the size of the crops of wheat, oats and barley there has not been the same intensive desire on the part of the farming community for the wheat board to undertake the marketing of these two grains, or on the part of the board itself.
I understand clearly that it was done in the past. I am not saying that it should not be done now but I do suggest that a much stronger case will have to be made out by the hon. member at this time. Much as we like to accept suggestions from those on the opposition side of the house-many of the suggestions are constructive and remind me of ones I used to make when I sat over there-


An hon. Member:: How about accepting one for a change?


Gordon Minto Churchill: -nevertheless very few of my suggestions were accepted when I was on the opposition side. I thought it was regrettable at the time. However, I am open to suggestions from members in the opposition at the present time and if their suggestions are backed up by sound argument and good support across the country naturally they will receive very serious consideration.
But let us face the facts as they are at the present time. We have a surplus situation with regard to wheat, oats and barley. We think that the time of the Canadian wheat board is rather fully employed in attempting to deal with the problems involving these grains and whether or not the wheat board would like to take on flax and rye in addition 1 do not know. I have not had the opportunity yet to find out. Perhaps the hon. member has consulted the wheat board in regard to the matter. But the elevator system is filled now with wheat, oats and barley and the wheat board has quite a bit to do and is successfully achieving its purpose in disposing of these grains.


I think the operation of the wheat board is impressive. It has been pursuing a policy calculated to move our grain into international channels of trade. This fall the government, recognizing the fact that deliveries would be slow, introduced a cash advance system so that farmers who are unable to deliver their grain would at least have some money to tide them over the intervening period. My hon. friends have been pressing me for statements of policy with regard to wheat marketing and things of that nature. I have answered a great many questions in the house concerning that, but actions speak louder than words and I think the policy of the government is quite clear.
If we are successful with our policy for the disposal of our surplus wheat, as I think we will be, it may well be that we could then recommend to the wheat board that flax and rye be marketed through their channels but that would only be done if farmers generally in western Canada favoured that method of marketing those grains. We have a surplus of 700 million bushels of wheat and a crop this year of approximately 350 million bushels. We anticipate that 300 million bushels will be sold in the export trade and that 150 million bushels will be consumed within the country for flour, feed and seed so that at least 100 million bushels of our surplus will be moved into trade channels and out of the country. That is at least an improvement and our hope is that with increased offers for the purchase of Canadian wheat we may exceed our objective of 300 million bushels.
The general international wheat picture is that large surpluses are being held by the United States and by Canada. The Argentine has some. Australia, with a short crop, is now in a position where she would like to have some Canadian wheat and we are quite prepared to sell to Australia. Various countries of the world have been looking at Canada's wheat surplus with interest and our cash customers are being maintained quite successfully.
England, which on the average takes 100 million bushels of Canadian wheat, will I think take about that quantity during the course of this crop year. Germany and Japan are next in order. Other countries in Europe such as Switzerland, Holland and' Belgium want Canadian wheat. I have mentioned before that I visited the United Kingdom and Europe and those countries in September with representatives of the wheat board and met 200 people actively engaged in the grain trade. I received reports from them as to the situation.
One thing about which they wanted assurance was stability in wheat marketing. They

hoped that Canada would not engage in a price war with regard to wheat. They assured me, without being questioned about the matter, that the top grades of Canadian wheat are at a premium and are not matched by other wheat in the world that is in a marketable position. It was indicated that they will continue to use these top grades. There was very little question about the actual price, but there was much uneasiness concerning the fluctuations of ocean freight rates which, more than price, affected the movement of grain. I feel, therefore, Canada's trading position with regard to wheat is not unsatisfactory and, with other countries than our cash customers I have mentioned putting forward inquiries to Canada with regard to the sale of our wheat, the position is encouraging.
Now some of my friends have suggested, from time to time, that if we could dispose of some of our wheat after the fashion of the United States disposal program it might be very helpful. The only part of the United States disposal program-


Edward George McCullough: On a point of order; I appreciate very much the minister's words concerning our wheat position and our export sales and so forth, but I think at this time this parliament would be more concerned with the government's attitude towards this bill which confines itself to rye and flax, and bringing them under the Canadian wheat board.


Mr. Speaker:: I think the hon. member is correct, and the minister was departing somewhat from the subject under discussion.


Gordon Minto Churchill: I was following the example of the hon. member who introduced this bill. I find that he discussed quite a number of problems with regard to the Canadian wheat board that did not deal directly with flax or rye.


Mr. Olson:: Would the minister permit a question? The minister just mentioned that he considered our trade position with regard to wheat satisfactory. Earlier today the minister stated that there was a decline in wheat and flour sold last year. What does he mean by "satisfactory"?


Gordon Minto Churchill: The report I gave earlier today, of course, referred to the entire year and to date over that period there had been a decline in the sale of our wheat and flour. However, things are improving very rapidly and that is what I was referring to now.
I regret, Mr. Speaker, that the hon. member who introduced this bill is not as concerned as the rest of us with regard to Canada's general trading position with regard to wheat.
Canadian Wheat Board Act


Stanley Howard Knowles: Come, come.


Gordon Minto Churchill: If we are able to dispose of these surpluses about which we have talked, then one of the arguments that have been advanced against including flax and rye under the wheat board, namely that storage facilities were filled to the limit, would not then be of the same consequence. I was endeavouring to point out that we were moving along towards the position where we might have storage facilities available. Then, my hon. friend would be able, with greater success, to advocate bringing flax and rye under the Canadian wheat board. He would be able to say, now you have storage facilities. In years gone by, when the argument was put up that flax and rye should be brought under the wheat board, it was stated that that could not be done because of the lack of storage facilities. If the surplus were moved there would be storage facilities available and the hon. member could say that the board could deal with flax and rye.
However, if my hon. friend is not interested in the export trade-he used the phrases, Mr. Speaker-


Edward George McCullough: On a point of order; it is not that I am not interested in the export sale of wheat. I should like to ask the minister a question at this time. Is it not true that the producers of flax and rye are under a quota during the present crop season? They are restricted in their deliveries, so it is not a question of congestion in the elevators or any place else, it is one of policy. The producer now has not been able to deliver during the early part of the crop year because the government, or the Canadian wheat board, has seen fit to put flax under a quota.


Gordon Minto Churchill: I did not understand the first part of the hon. member's question because of a little unusual noise here.


Thomas Miller Bell: Six o'clock.


Stanley Howard Knowles: Because the minister has his eye on the clock.


Gordon Minto Churchill: There are so many clocks here it is a little confusing. Some say six, and some do not. If the hon. member would care to repeat the first part of his question, I would answer it.


Mr. Speaker:: Order. It being six o'clock, the house will revert to the business which was interrupted at five o'clock. Perhaps the minister would take the question as notice.
2002	HOUSE OF
Supply-Finance SUPPLY
The house in committee of supply, Mr. Rea in the chair.


Charles Edward Rea: It being six o'clock, I do leave the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
DEPARTMENT OF FINANCE General administration-
119. Departmental administration, $2,157,871.
Donald Methuen Fleming: Mr. Chairman, the Department of Finance estimates as printed in the blue book show an increase in the amount to be voted this year over last year of just over $10 million. If the details are examined, however, it will be seen that more than all this increase is covered by two kinds of grants- grants to municipalities in lieu of taxes and grants to universities. Apart from these two sets of grants we are asking parliament to vote slightly less money than was required a year ago for the administration of this department.
I should, however, in this opening statement take into consideration not only the main estimates but also the supplementaries of both years. The principal large item in this year's supplementaries is $32 million for the general salaries vote. This is more than offset however by the $50 million special vote to the superannuation account which was appropriated in last year's final supplementaries. Taking this year's main estimates and supplementaries and comparing them with last year's main estimates and supplementaries, I am asking parliament to vote the Department of Finance about $9 million less than a year ago.
While parliament is not called upon to vote the statutory items I should like to refer to them. In the Department of Finance statutory items constitute more than 95 per cent of total expenditures. In the printed record these items add up to almost $1,100 million and show an increase of $154 million over last year. Of this $154 million increase, $128 million was in increased transfer payments to the provincial governments. After the book of estimates was printed the province of Ontario decided to levy and collect its own corporation income tax. This is the principal reason why our transfer payments to the provincial governments will be


$10 million less rather than $128 million more than a year ago. In total, I expect the statutory expenditures relating to the Department of Finance to be not much more than $40 million over last year and this will be wholly due to the higher cost of the public debt.
Hon. members will not be surprised if 1 say that the Department of Finance, which is not a large operating department, is usually able to estimate its administration expenses quite accurately and that it does not provide much place for operating economies. I shall, however, be able to move a small reduction in vote 121 when we reach that item.
Mr. Chairman, I have been asked several times in the house to give a financial statement. I welcome this opportunity of doing so and not least of all because of some of the things that are currently being said outside this house. The Globe and Mail of December 5 contains a news article from which I read the following:
London, Ontario, December 4-Unless the Conservatives make drastic cuts in expenditures the government will end up with a deficit by the end of the fiscal year next March, former finance minister Walter Harris, predicted here today.
We shall see shortly.
The Toronto Telegram of December 5 ascribes to the hon. member for Winnipeg North Centre a statement made, I believe, in the city of Hamilton the previous night. The article says he accused the government of "hiding the books from parliament until after the next election." I doubt if any of the members of the audience who heard the hon. member make that statement, if he did make it, would be so gullible as to believe it. There will be an opportunity of judging shortly whether that is a responsible or an irresponsible statement.
I would like to make this comment in advance of giving to the house the details of the financial statement. When this government came into office on the 21st day of June the fiscal year was already three months advanced. The programs for the year had largely been undertaken; expenditures and commitments had been entered into. We entered upon our tasks while the government was already in midstream and that fact I think should be borne in mind as we weigh and assess what the government has been able to do.
My predecessor, in presenting the budget for the current fiscal year last March, forecast revenues of $5,170 million; expenditures of $5,018 million and a surplus of $152 million. We have now reasonably complete figures for eight months of the year and thus are able to make revised estimates which

reflect both the changes in economic development and changes in government policies.
On the revenue side of the accounts I am prepared to accept the forecast which was presented to the house last March. At present it seems probable that receipts from income taxes will be somewhat above the forecast and revenues from customs duties and some commodity taxes will be somewhat below the earlier anticipations, but, on balance, I expect that the various increases and decreases will just about cancel each other out, leaving the total revenue figure unchanged at $5,170 million.
On the expenditures side of the accounts my predecessor had forecast a total of $5,018 million. Since then there have been substantial increases in expenditure arising in part out of changing economic developments and in part from new policies which we have recommended and which parliament has approved. For example, we are having to find an additional $25 million for interest and other charges on the public debt as a result of the sharp increase in interest rates which occurred during the spring and summer months. Then I am advised by the management of Canadian National Railways that reduction in the volume of rail traffic and higher costs of operation will mean that we shall have to meet a deficit in the railway's operation of about $28 million.
On the policy side, hon. members will recall that increases in public service salaries and in the defence services pay and allowances have been approved in an amount which will total about $100 million for the 11 months of the fiscal year commencing May 1, including statutory matching payments into the superannuation account. The increase in old age pensions is responsible for most of the increased deficit in the old age security fund of $50 million. Increases in our contributions to old age assistance and to the blind and disabled persons allowances will cost the federal treasury an additional $1 million this year. Increases in veterans benefits will add a further $3 million to this year's expenditures, and the recent agreement with the provinces to eliminate the "threshold" on unemployment assistance will also cost us $3 million in this fiscal year. All these increases add up to $210 million.
Against this large increase in expenditures we have been able to make substantial savings. While the increases in civil service and defence services pay and allowances will cost $100 million the departments have found it possible, by general economies, to absorb part of this increase and, in fact, only $76
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million will be added to this year's expenditures out of the total of $210 million.
In addressing ourselves to the task of eliminating unnecessary expenditure we have been guided by two principles: first that there shall be no reduction in any essential public service and, second, that where items involve construction which means employment, those items are not being reduced. Furthermore, by careful scrutiny and by controlling certain expenditure programs my colleagues have been able to indicate various reductions and savings in estimated expenditure which will add up to almost exactly $40 million. In addition my colleagues have been able to curtail certain loans and advances in the amount of about $6 million.
Finally, I do not propose to adopt the practice of my predecessor to transfer large lump sums of $50 million each into what he called "the reserve against assets" and to reduce the unamortized deficit in the superannuation account. I consider it quite unnecessary to do so.
These savings and reductions in expenditures add up to the very substantial total of $164 million, leaving me with an expected expenditure of $5,064 million and an expected surplus in this fiscal year of $106 million. For the convenience of hon. members and with consent I should like to insert here a table showing the various increases and decreases in expenditure to which I have referred.


Charles Edward Rea: Has the
Minister of Finance permission to insert this table?


Some hon. Members:: Agreed.


Donald Methuen Fleming: The table is as follows: Forecast of Expenditures, 1957-58
(In millions of dollars)
Expenditures as forecast In March, 1957	$5,018
Add:
Increase in debt charges	 $ 25
Expected deficit, C.N.R	 28
Increases in pay and allowances _____ 100
Increases in old age security fund
deficit	 50
Increase in contributions toward old age assistance and blind and disabled persons allowances	 1
Increase in veterans' benefits	 3
Increase in unemployment assistance 3
Total Increases	 $210
Deduct:
Savings and reductions	 $ 64
Provision for general asset reserve ..	50
Provision for reduction in unamortized portion of the deficit in the superannuation account	 50
Total deductions	 $164
Net increase in expenditure	 46
Total expenditures, 1957-58	 $5,064

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I have also been asked at different times as to what is the government's financial program. I should now like to indicate the intentions of the government in the matter of financial and fiscal changes which will be submitted to the house in due course for legislative action.
This, as hon. members do not need to be reminded, is not an ordinary or regular session. It is a session called in the fall of the year under circumstances that limited the duration of the session. Its purposes, as the Leader of the Opposition well indicated a few days ago were, first, to vote the approximately 800 items of supply which had not been voted at the time of dissolution and, second, to afford the government an opportunity of laying before parliament for action this fall that constructive program of legislative action which the electorate of Canada had approved on June 10.
One of the undertakings given to the Canadian people in that campaign by that distinguished man who is today the Prime Minister of Canada was that we would reduce taxes. I am not proposing now nor do I intend to propose at any time in this session any increases of any kind in taxation. That made it quite unnecessary to submit to the house anything resembling a budget. The budget for this year was submitted to the house last spring by the then minister of finance. There will be ample opportunity for every member of the house to express whatever opinions he chooses on any of the matters upon which I am now about to indicate the intentions of the government.
May I in passing point out, Mr. Chairman, that it has been quite impossible in the short space of time the government has been in office to take up those matters which the Minister of Finance normally reviews in preparing a budget. There has been no time in which to deal with the wide range of fiscal matters that come to the Minister of Finance apart from those that relate directly to taxation about which I shall shortly have something to say. But I wish to make it abundantly clear that never have I said that there would be that kind of budget presentation which is characteristic of a normal session of parliament. I have said that we would submit to the house such measures as are required to implement the undertakings which we gave to the public in the campaign; and that, Mr. Chairman, is precisely what we shall do.
There are several matters to which reference must be made which require some remedial legislative action. The bill which I hope to introduce will include a change in

the corporate tax structure which will be, I trust, of benefit to certain small corporations.
But I wish, first of all, to deal with a specific matter affecting construction workers. This is a matter which requires an amendment to the Income Tax Act before the end of this calendar year. It is the matter of certain allowances paid to construction workers by their employers to cover expenses of the worker while he is living away from his normal place of residence for a period of time at a construction site. Hon. members will recall that this problem first was brought to public attention by the publication by the Department of National Revenue of a directive entitled "Information Bulletin No. 10" on July 10, 1956. This directive announced that construction workers must thereafter include for tax purposes certain per diem and other allowances received from their employer, whether paid in cash or in the form of free board and lodging. This matter was debated at some length this spring when income tax amendments were under consideration. Some of us then in opposition protested strongly against the effect of this directive, and finally the then minister of finance stated that the rule contained in Bulletin No. 10 would not apply to incomes in 1956 but that the allowance would be taxed commencing in 1957.
For many years it has been the practice for employers in the construction industry to provide board and lodging for workers at remote sites or to pay them an allowance over and above the going wage as reimbursement for expenses of meals and lodging where those were paid for by the worker himself. It is also customary for the construction employer to bear the expense of transporting employees to distant construction sites and bringing them back to their normal place of residence. Throughout the years this has been normal procedure in this industry, and the construction workers did not include in their income for tax purposes the value of these allowances or expenses paid on their behalf by their employer. Then with the issuance of Bulletin No. 10 in 1956 the previous government made it known that these amounts were taxable under the existing law and employers had been under instruction in 1957 to report those allowances as income of their employees.
It is my intention, Mr. Chairman, to restore the practice which prevailed prior to 1957. In order to put this matter beyond doubt I intend to introduce an appropriate amendment to the Income Tax Act effective from January 1, 1957. This amendment, which is necessarily somewhat technical, will appear in detail in the bill. Briefly it will provide that

if the construction site is so distant that the worker cannot reasonably be expected to return daily to his normal place of residence where he maintains a home in which he lives with his wife or some dependent person, then the construction employee will not be required to include in his income for tax purposes the value of the free board and lodging or reasonable allowances paid to him to cover expenses of meals and lodging, or the value of travelling expenses paid by the employer in transporting him to the site and back home again.
The next matter concerns the corporation tax to be paid by certain corporations earning profits in the province of Ontario. In a normal session a bill to give tax relief measures would be the occasion for dealing with a wide variety of miscellaneous technical changes in the income tax structure. This general review of miscellaneous changes in the law will be undertaken in the course of preparation of the budget for the next session. However, I give public notice now of one particular matter which will be the subject of corrective legislation at the next session.
Under the provisions of section 40 of the Income Tax Act, federal corporation income tax is reduced by nine percentage points on profits earned in a "prescribed" province: that is, in a province that does not rent this tax field to the federal government pursuant to the Federal-Provincial Tax-Sharing Agreements Act. This tax abatement enables a province to impose its own tax up to this nine per cent level without raising the combined tax above the general federal rate.
In the five-year period prior to 1957 the federal tax abatement was only seven percentage points and Quebec was the only province imposing its own corporate tax of seven per cent. For 1957 Ontario became a prescribed province and profits earned in the province from January 1, 1957 onward accordingly became entitled to a reduction of nine percentage points in their federal tax. Inadvertently, however, the law introduced by the former government in granting this reduction for 1957 gave also to Ontario companies whose fiscal year does not coincide with the calendar year abatement in respect of that portion of their profits earned in 1956. This pattern of reduction was, of course, appropriate and necessary for profits in Quebec since Quebec was taxing profits in 1956. The result of this fault in the federal legislation is, however, that relief is given at the rate of seven percentage points for corporations earning profits in Ontario for a period when no Ontario tax was imposed at all. Obviously this error must be corrected, otherwise about $12 mililon of unintended tax relief would
Supply-Finance
go to a particular group of non-calendar year companies earning profits in the province of Ontario at a time when no provincial tax was imposed upon them.
I have already reminded the committee that this government promised if elected to power to reduce taxes. It is our purpose, sir, scrupulously to fulfil this promise. I do not need to tell hon. members that it is one of the more pleasant duties of the Minister of Finance to come before the house and announce some reduction in the heavy burden of taxes that previous governments have imposed on the people of Canada.
The bill which I shall introduce will include a change in the corporate tax structure which would be particularly important for small corporations. At present the low tax rate of 20 per cent is confined to profits up to $20,000 per annum. In future, from January 1 onward, the low tax rate will extend up to profits of $25,000. Of course, every corporation with profits in excess of this figure will enjoy some benefit from this tax concession but the change will be of greatest significance to relatively small corporations. About 2,000 corporations with profits between $20,000 and $25,000 will have the tax on profits within this range reduced from 47 per cent to 20 per cent. This relief measure will cost the treasury about $12 million on a full year basis and about $1 million in the current fiscal year and I believe it will give a stimulus and incentive to business in small corporations.
Mr. Chairman, I wish to table at this point for the convenience of hon. members the table indicating the effect of increasing the bracket of corporation income tax.


Charles Edward Rea: Does the hon. minister wish to put it in Hansard?


Donald Methuen Fleming: Yes.


Charles Edward Rea: Is this agreeable to hon. members of the committee?


Some hon. Members:: Agreed.


Donald Methuen Fleming: The table is as follows:
Effect of increasing the bracket of corporation income subject to the 20% tax rate from $20,000 to $25,000
Income of corporation	Present tax	Proposed tax	Reduction in tax	$	$	$	$	%25,000	6,350	5,000	1,350	21.330,000	8,700	7,350	1,350	15.535,000	11,050	9,700	1,350	12.240,000	13,400	12,050	1,350	10.150,000	18,100	16,750	1,350	7.575,000	29,850	28,500	1,350	4.5100,000	41,600	40,250	1,350	3.2200,000	88,600	87,250	1,350	1.5300,000	135,600	134,250	1,350	1.0500.000	229,600	228,250	1,350	.61,000,000	464,600	463,250	1,350	.3
The old age security tax of 2 per cent is included in the taxes shown above.


Charles Edward Rea: I am sorry to inform the Minister of Finance that his time has expired.


Some hon. Members:: No.


Charles Edward Rea: Has he
permission of the committee to proceed?


Some hon. Members:: Agreed.


Donald Methuen Fleming: I thank the committee for extending that courtesy to me.


James Sinclair: Mr. Chairman,-


Charles Edward Rea: Order.


James Sinclair: -I would point out that the Minister of Finance chose this way to present his budget address in this committee of the whole and the rules of the house and constitutional practice apply equally to himself and they provide that a member can speak for only 30 minutes in committee.


George Clyde Nowlan: That is quite right.


Charles Edward Rea: Order.
When I asked for unanimous consent I did not hear any noes and in my opinion the committee gave unanimous consent.


Major James William Coldwell: I think the committee will give consent. What the hon. member said is perfectly correct. The minister told us that he would abide by the rules of the house. Had the minister introduced this matter in the way it should have been introduced there would be no discussion of this sort. I am not objecting, but I want to remind him that this is contravening the rules of the house.


James Sinclair: That is exactly the position of the official opposition. I want to remind the minister that if he had followed the constitutional practice of doing this on a ways and means resolution he would have had unlimited time and I would have had

unlimited time; but with the consent of the official opposition and of the other parties the hon. member may proceed.


Donald Methuen Fleming: Mr. Chairman, I thank the committee for the courtesy that has been extended to me and I would ask the committee to extend a similar courtesy to the hon. member for Coast-Capilano if he should require it. I hoped, Mr. Chairman, I can assure my hon. friend, to have completed my remarks within the space of 30 minutes. I shall be very brief now in coming to a conclusion.
This reduction will amount in a full year to $86 million, and, together with the increase in allowances for dependants, which I have mentioned, will mean that the personal income tax will be cut by a total of $146 million and, as I have said, 100,000 taxpayers will be freed entirely from the necessity of paying income tax.
May I, Mr. Chairman, for the information of hon. members place on Hansard at this point six tables which will illustrate the effect of the various decreases on personal income taxpayers of various income brackets.


Charles Edward Rea: Has the
minister permission to put these tables on Hansard?


Some hon. Members:: Agreed.


Donald Methuen Fleming: The tables follow:
Effect of Proposed Personal Income Tax Changes Married taxpayer with two dependents not qualified for family allowances
Tax at	Tax at
Income	present rates	new rates	Reduction in tax	$	$	$	$	%3,000	13	13	1003,200	39	11	28	723,500	78	44	34	444,000	145	99	46	325,000	297	236	61	217,500	740	670	70	910,000	1,284	1,206	78	615,000	2,758	2,657	101	420,000	4,763	4,647	116	230,000	9,168	9,042	126	150,000	19,807	19,663	144	.7The old age security tax of 2 per	cent of	taxableincome	(maximum tax	$60) is payable in	additionto the taxes shown above. In calculating the above taxes it has been	
assumed that everyone takes the optional standard deduction of $100 in lieu of claiming deductions for charitable donations, unusual medical expenses and union dues.
In calculating the above taxes it has also been assumed that where incomes are in excess of $30,000 that part of income which is in excess of $30,000 is subject to the 4 per cent investment surtax.
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Effect of Proposed Personal Income Tax Changes
Married taxpayer with two dependent children qualified for family allowances and two dependents not qualified for family allowances
	Tax at	Tax at		
Income	present rates	new rates	Reduction in	$	$	$	$	%3,300	13	-	13	1003,500	39	-	39	1003.700	65	11	54	834.000	104	44	60	585.000	250	166	84	347.500	680	573	107	1610,000	1,212	1,086	126	1015,000	2,654	2,492	162	620.000	4,634	4,432	202	430.000	9,024	8,802	222	250,000	19,636	19,378	258	1
The old age security tax of 2 per cent of taxable income (maximum tax $60) is payable in addition to the taxes shown above.
In calculating the above taxes it has been assumed that everyone takes the optional standard deduction of $100 in lieu of claiming deductions for charitable donations, unusual medical expenses and union dues.
In calculating the above taxes it has also been assumed that where incomes are in excess of
$30,000	that part of income which	is in	excess of$30,000	is subject to the 4 per	cent investment	surtax.	Effect	of Proposed Personal Income Tax	ChangesSingle	taxpayer	Tax at	Tax at	Income	present rates	new rates	Reduction in tax	$	$	$	$	%1.500	52	44	8	152,000	117	99	18	152.500	190	166	24	133,000	265	236	29	113.500	348	318	30	94,000	433	403	30	75,000	603	573	30	57,500	1,116	1,086	30	310,000	1,752	1,722	30	215,000	3,442	3,412	30	120,000	5,537	5,507	30	.530,000	10,032	10,002	30	.350.000	20,781	20,751	30	.1
The old age security tax of 2 per cent of taxable income (maximum tax $60) is payable in addition to the taxes shown above.
In calculating the above taxes it has been assumed that everyone takes the optional standard deduction of $100 in lieu of claiming deductions for charitable donations, unusual medical expenses and union dues.
In calculating the above taxes it has also been assumed that where incomes are in excess of $30,000 that part of income which is in excess of $30,000 is subject to the 4 per cent investment surtax.

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Effect of Proposed Personal Income Tax Changes Married taxpayer with no dependents
	Tax at	Tax at		
Income	present rates	new rates	Reduction in tax	$	$	$	$	%2,500	52	44	8	153,000	117	99	18	153,500	190	166	24	134,000	265	236	29	115,000	433	403	30	77,500	900	870	30	310,000	1,476	1,446	30	215,000	3,062	3,032	30	120,000	5,107	5,077	30	.630,000	9,552	9,522	30	.350,000	20,251	20,221	30	.1
The old age security tax of 2 per cent of taxable income (maximum tax $60) is payable in addition to the taxes shown above.
In calculating the above taxes it has been assumed that everyone takes the optional standard deduction of $100 in lieu of claiming deductions for charitable donations, unusual medical expenses and union dues.
In calculating the above taxes it has also been assumed that where incomes are in excess of $30,000 that part of income which is in excess of $30,000 is subject to the 4 per cent investment surtax.
Effect of Proposed Personal Income Tax Changes Married taxpayer with two dependent children qualified for family allowances
	Tax at	Tax at		
Income	present rates	new rates	Reduction in	$	$	$	$	%2,600	26	-	26	1002,800	52	22	30	583,000	78	44	34	443,500	145	99	46	324,000	220	166	54	255,000	382	318	64	177,500	840	770	70	810,000	1,404	1,326	78	615,000	2,948	2,842	106	420,000	4,978	4,862	116	230,000	9,408	9,282	126	150,000	20,092	19,948	144	
The old age security tax of 2 per cent of taxable income (maximum tax $60) is payable in addition to the taxes shown above.
In calculating the above taxes it has been assumed that everyone takes the optional standard deduction of $100 in lieu of claiming deductions for charitable donations, unusual medical expenses and union dues.
In calculating the above taxes it has also been assumed that where incomes are in excess of $30,000 that part of income which is in excess of $30,000 is subject to the 4 per cent investment surtax.
Effect of Proposed Personal Income Tax Changes Married taxpayer with four dependent children qualified for family allowances
	Tax at	Tax at		
Income	present rates	new rates	Reduction in	$	$	$	$	%2,800	13	-	13	1003,000	39	-	39	1003,200	65	11	54	833,500	104	44	60	584,000	175	99	76	435,000	331	236	95	297,500	780	670	110	1410,000	1,332	1,206	126	915,000	2,834	2,657	177	620,000	4,849	4,647	202	430,000	9,264	9,042	222	250,000 	19,663	258	1
The old age security tax of 2 per cent of taxable income (maximum tax $60) is payable in addition to the taxes shown above.
In calculating the above taxes it has been assumed that everyone takes the optional standard deduction of $100 in lieu of claiming deductions for charitable donations, unusual medical expenses and union dues.
In calculating the above taxes it has also been assumed that where incomes are in excess of $30,000 that part of income which is in excess of $30,000 is subject to the 4 per cent investment surtax.
I have a word to say on the subject of estate tax. I intend forthwith to place on the order paper a resolution to permit the introduction of a new measure to repeal the Succession Duty Act and to replace it with a new estate tax act. The measure will apply the estate tax principle rather than the inheritance or succession principle. In keeping with the policy of the government it will be another tax reduction measure. It will also greatly simplify the taxation of estates. I shall reserve extended comments until I move the resolution in due course.
For the present I point out that in every tax bracket the tax payable under the new law will be less than under the present Succession Duty Act. All estates will be fully exempted up to a minimum of $50,000. No estate of lower aggregate value will pay any estate tax whatever. In the case of an estate passing to a widow there will be an exemption of $60,000 plus $10,000 for each child under 21 years of age. Thus, if a husband dies leaving a widow and one child under 21 years of age there will be no tax payable unless the value of the estate exceeds $70,000. If he leaves a widow and two children under 21 years of age no estate tax will be payable unless the aggregate value of the estate exceeds $80,000. If he leaves a widow and three children under 21 years of age no estate tax will be payable unless the aggregate value of the estate exceeds $90,000. If he leaves a widow and four children under 21 years of age no estate tax will be payable unless the aggregate value of the estate exceeds $100,000.
The annual loss of revenue to the treasury will be $6 to $8 million. About 40 per cent of this reduction will go to the smallest group of taxable estates, namely those between $50,000 and $75,000. For estates of this size the average reduction is approximately 70 per cent.
It is not intended, sir, to ask the house to advance this bill at the present session beyond first reading. It is desirable that the bill be given first reading and be circulated among hon. members and be available to the public, particularly the members of the legal and accountancy professions. Their views

and suggestions on this major measure will be sought and it will be the intention of the government, with the assistance of suggestions from these sources, to ask parliament to enact the measure at the 1958 session.
May I now summarize the effect of the changes on the balance of ways and means for the present fiscal year? The tax changes I shall be proposing will benefit the car buyer immediately, but because of the time required to put new tax deduction tables into effect, the income tax reductions, although applicable to the full calendar year 1958, may not in all cases be reflected in pay envelopes and salary cheques until February; but this work will be done, I assure the committee, with all possible speed.
While the total tax reductions will add up to $178 million in a full year, the Minister of Finance's cash receipts will be affected by only some $26 million prior to March 31. May I at this point, Mr. Chairman, for the convenience of members, place on the record a table indicating the tax reductions in detail?


Charles Edward Rea: Has the
Minister of Finance permission to place this table on Hansard?


Some hon. Members:: Agreed.


Donald Methuen Fleming: The table follows:
Tax Reductions (In millions of dollars)
In a In the current full year	fiscal year
Corporate income tax______	$ 12	$ iPersonal income tax	
146	17Special excise tax	
20	8Total	
$178	$26
Having previously forecast a surplus of revenue over expenditure for the year ending March 31 next of $106 million, we may now expect a surplus of $80 million after giving effect to the tax changes that I have proposed.
In conclusion, sir, may I say that the aim of the government in this program is to create more incentive by relieving the Canadian people, particularly those in the low income brackets, of a portion of the tax burden which they have been bearing. It has not been possible in this one short session and in the first 5i months in office for the government to achieve all the measures of tax reform which it would like to put into effect. We trust that the committee will, however, recognize the boldness of the government's program and the extent to which it will contribute to confidence and prosperity.
In these arduous five and a half months since taking office on the 21st day of June
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the members of the government have been sustained by the example and the leadership of the Prime Minister. Those who have seen finance ministers come and go have informed me that none has faced as heavy a volume of work in the space of five and a half months as has faced this incumbent during the past five and a half months. But, Mr. Chairman, may I say very humbly that 17 to 18 hours' work per day and 100 hours' work per week are an insignificant price to pay for the high privilege of serving Canada.


James Sinclair: Mr. Chairman, it is the custom for the financial critic of the official opposition to start his remarks by paying a few compliments in a friendly way to the finance minister. That of course will be completely unnecessary today because nothing I could say or anyone else in this country could say would cover him with quite the glory with which he has now just covered himself. Hard working he may be-he has told us so himself-but modesty is not one of his qualities.
The present situation, Mr. Chairman, shows very clearly how correct the leader of the C.C.F. party was this morning when he said this was a queer way to do business, and it certainly is unparallelled since confederation. Never before has a Canadian minister of finance, hard-working or otherwise, modest or immodest, ever tried to bring down a budget and tax proposals on item 1 of the finance estimates.


Douglas Scott Harkness: Except by radio.


George Clyde Nowlan: How about radio?


James Sinclair: I am going to come to that. Just content yourselves. This, of course, is in very vivid contrast to the statement made last June 25 to the Canadian Press and the British United Press by the minister, before he put in these 17 hours a day every day that there would be a fall budget with tax reductions and pension boosts. He went on to say that he was going to reduce taxes, increase old age pensions and curb government spending in the budget which he was going to bring down. Well, right after that day a pall of silence fell on the usually very talkative and very voluble minister. The press reported that a telephone call by the Prime Minister told him to stop talking and to start working.


Donald Methuen Fleming: I had no telephone call from the Prime Minister.


James Sinclair: Since the session opened I and other members have tried our best to get him to tell us the date of this budget that he said would be presented. He did not say directly. He did not actually deny what the Canadian Press and the British United Press had

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reported but he left that impression in everyone's mind. He said, of course, that the constitutional practice would be followed. Then we began to suspect there was not going to be a budget so we changed our questioning from when is the budget going to be presented to will there be a budget, and finally after the minister's evasions, we had to turn to the Prime Minister to get an answer. He did answer, as found on page 1710 of Hansard, and told us that there would be no budget this session. He gave a very airy answer saying that he had studied the history of parliament since confederation and had found that in the second sessions of 1873, 1919, 1930 and 1947 no budgets had been presented.
I have checked the four precedents he offered to the house. There is no Hansard for 1873 in the library but there is a scrapbook of accounts of the debates in those days. There was one short session on the railway scandal, the famous Tory railway scandal of 1873. There were no financial proposals made other than the financial proposals made in telegrams from the Tory prime minister at that time to prominent Tories around the country.
In 1919 there was a second session called by Sir Robert Borden and in the speech from the throne only one thing was mentioned, ratification of the Versailles peace treaty which had been signed on June 28. Nobody asked for a budget because no tax measures of any significance were proposed at that session. So there was no precedent there.
Now we roll along to 1930 with a Conservative government again in power. They too pledged a fall session of parliament, and in the throne speech again there was only one subject mentioned, unemployment, a problem which our new Conservative government is certainly having to grapple with. Mr. Bennett declared it was the sole issue of the session. Twenty million dollars was voted for immediate relief and amendments were made to the dumping laws and to the tariff, not for revenue, said Mr. Bennett, but to protect the Canadian workingman. If revenue resulted from these acts the plan would fail because they would not have halted distress selling from other countries. Again no member asked for any budget discussion at that time because obviously neither budgetary nor tax measures were being considered.
I have read those debates with great interest. I was not in the country at the time of the 1930 election. I was a student in Europe. It was very interesting to read and see that that Conservative government, like the present Conservative government,

came to power with a tremendous number of promises, but in fairness to Mr. Bennett
1	must say he ran No. 2 both in number and size of promises to the present Prime Minister. Both, however, made the promise that they would immediately call parliament to carry out their promises. Well, Mr. Bennett made a pretty good fist of that. The election was on July 28 and on September
2	parliament sat. Of course, we heard after June 10 there was going to be an immediate session of parliament but that did not take place until October 14 and today, December 6, we are still waiting for this budget which was promised by the minister last June 25.
We roll along then to 1947. There was no fall session in 1947. The 1948 parliament began in December, 1947, but in that 1947-48 session there was a regular presentation of the budget in the ordinary way. My friend, the Minister of Agriculture, mentioned budget by radio. It is quite true that on November 17 the then minister of finance went on the C.B.C. radio to announce two actions he was taking under two acts of parliament, the Foreign Exchange Control Act and the transitional powers act, in order to stop the drain of our money reserves to the United States, the so-called austerity program.
Our reserves had fallen from over $1,200 million at the beginning of the year to less than $500 million at that time. These two measures, curtailment by quotas of United States imports and an excise tax to discourage the buying of non-essential goods, were announced that night. Parliament met in December and the second order of business was parliamentary approval of these two actions. That is why the minister said then, as Mr. Bennett said in 1930, that there was no budget by radio because these two measures were not designed to increase revenue but rather to restrict the importation of United States goods.
So I say there is no precedent in Canadian parliamentary history for a new session of a new parliament not having a budget. It is especially significant at this time because never before in Canadian history was a party elected on a platform of so many expensive promises, and so many high tax cuts, promises and policies that were obviously going to have a very profound effect on the balance of ways and means. As far as other members of the House of Commons are concerned, as far as the people of the nation are concerned, the only way they will learn the impact of the new proposals made, the many new proposals we are waiting for if their promises are going to be implemented, and also the tax cuts-not the small ones mentioned tonight but the ones I am going to mention which

were promised in the election-is for the people to be given an accounting and a balance sheet. In other words, they want the usual budget debate which characterizes every formal session of parliament.
What does a budget debate entail? First of all, it does entail a fair measure of warning. I looked back in Hansard and over the last 20 years there was a warning of anywhere from five days to two weeks of the actual date on which the budget was going to be produced. Then, there was a white paper produced the day before the budget. Last year it was a document of 90 pages containing many figures. In this way every member would know exactly the up to date figures on the economic state of the nation on gross national product, on trade, on the balance of payments and on the revenues from the various tax fields. We would have that before us when we listened to the minister and before we made our own speeches.
In addition, there was the courtesy extended that the hon. member for Greenwood mentioned earlier, that, as the minister began his speech, and it was generally a long speech, he sent a copy of his proposals across to the leaders of the various groups so that they could read all the figures there and be ready when he concluded his remarks to make some statements on them. Tonight we have had no such information. I understand the press gallery also has had no information. We jot down these figures as best we can as the minister speaks, and will have to wait now until these tables appear in Hansard in the morning before we really understand.
Finally, the minister stood up in his place at eight o'clock on the appointed night, with the Speaker in the chair, and moved a motion for ways and means. By our rule book he is given unlimited time, as he should have, in proposing such an essential statement for the people of this country, and the first speaker replying to him is given the same privilege. This is the constitutional practice, and is the practice which has been followed since confederation. Our new Minister of Finance, however, beat a new trail. He chose to use item 1 of his estimates to make this budget statement. I looked back over the last 12 presentations of finance estimates, which cover the period the hon. member has been in the house, and in 11 out of those 12 years there was no statement whatever made on item 1. In one year the minister of finance, in response to a request from the Social Credit party, gave a short two page statement on fiscal and monetary policy. It is quite true that other ministers in other departments sometimes choose to make a fairly extended statement
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on item 1 outlining the work of their department during the previous year. I, myself, when I was Minister of Fisheries followed that course.
The reason ministers of finance never have followed such a course is that traditionally they have had a very much better opportunity in the budget debate to put before parliament the whole story of the balance sheet of Canada. This, however, has been denied us by the present procedure. Let us just compare that traditional procedure with what has happened today; this queer way of doing business as the hon. member for Rosetown-Biggar rightly calls it. First of all, instead of five days or two weeks warning we had really no warning at all. Yesterday morning, according to Hansard, the Minister of Finance assured this house that the finance estimates would not come before parliament today. At ten o'clock last night, after prodding by the house leader of the official opposition, it was brought out that at eight o'clock tonight, despite the assertions of the Minister of Finance, we would be into finance tonight. We had, therefore, no warning.
Secondly, we have no basic material. There is no white paper produced. There was no white paper produced either by the Minister of National Defence when we started on his estimates a day or two ago, the biggest block of estimates presented to this house. Another weakness at the present time with this procedure is the failure of the minister to make a statement in the house which, in my time, Mr. Ilsley, Mr. Abbott and Mr. Harris have made, inviting members of the opposition to make full use so far as finding factual information is concerned, of the very able officers of the Department of Finance. Having spent four years as assistant to the minister of finance, I have formed a very high opinion of their services. I recall that the hon. member for Greenwood, when he was financial critic, took great advantage of that offer and that staff. These civil servants, after all, are not solely serving the government. We would not expect them to reveal policy to us in the opposition, but it would be very helpful if we could have access to them for factual information.
You might say, why did 1 not approach them anyhow, without invitation? We have heard statements from the Minister of Public Works and others recently about the very high value they place on the civil servants of Canada. These statements are certainly well deserved. However, we also heard rumblings from the patronage-hungry Tories rebuking the Minister of Public Works for saying there was going to be no patronage. The hon. member for Victoria returned to

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British Columbia after a caucus meeting of Conservative members last summer and spoke at a meeting of the Oak Bay Progressive Conservative association on September 17. I shall take this report from the Victoria Colonist because it is the Tory paper. It reads:
Civil Service "Brass" All Grits, Tories find.
The heat is on the top brass of the civil service in Ottawa, A. DeB McPhillips, Victoria MP, told the Oak Bay Progressive Conservative Association last night.
The government now is in the process of breaking down the all-Grit top echelon of the civil service, he said.
"All the top civil servants and the deputy ministers are Grits," he told the meeting.
"Don't be impatient at government action," he said. "After the next election when we have a more secure mandate, more stern action will be taken."
I certainly was not going to embarrass any of the top echelon in the finance department by going to them and asking for factual information, and having them fired.


James MacKerras Macdonnell: Nonsense.


James Sinclair: I would certainly appreciate one of the ministers repudiating the statement which was made after the Tory caucus by the hon. member for Victoria.
Then, even in the ways and means committee, if we finally got there, there would be 48 hours notice given on each of these money resolutions. Instead this new minister chose this unique way of using item 1 of his estimates to make this extraordinarily important statement on finance. He knew that the 30-minute rule on debate applied, and that is why we drew it to his attention and the attention of the nation. He chose a field in which he, himself, would be limited in the account which he gave to the nation. It is for that reason we have had no statement from him on trade, balance of payments gross national production, or any of the many economic aspects which are usually and properly reviewed in such a budget speech.
Of course, this queer way of doing business could have been avoided if he had followed, as he said he would, the constitutional practice of the Canadian parliament; if he had gone ahead with his solemn promise of last summer that there would be a budget; even if he had changed his mind-there is nothing wrong about changing your mind, if he had told us. Today the minister who sits behind him, the Minister of Labour, got up and frankly admitted he had made a mistake. We accepted that without any criticism. We all make mistakes, that is everybody except the Minister of Finance. He would not tell the house he had changed his mind and did not intend to have a budget; he let that pass to the Prime Minister to make such an announcement.
With that explanation of this unusual course, I want now to start touching on some of the remarks the minister just made in this abbreviated budget discussion. I start out by saying that no minister of finance in Canadian history has been quite so lucky as this minister. He has been lucky in the fact that he is blessed with extraordinary talents; he has told us so himself. He is a hard worker; he has told us so himself, and also unlike most previous ministers of finance he started with a $500 million surplus in the kitty. Most new ministers of finance, of course, come in when the exchequer is empty. This minister had a start of $500 million.


Richard Albert Bell: Since when? Where did that come from?


James Sinclair: I shall be very happy to tell you where it came from. Last session the minister of finance did present his estimates of revenues, and he estimated that the surplus was going to be $282 million. But never once did any Tory in this house accept that. The minister himself, at page 2556 of Hansard of last session, said that by his calculations the surplus was going to be $518 million. We corrected that assertion quite often, but hon. members of the Tory party would not listen to us.
Then, they went out during the last election campaign and announced across the country, "You are overtaxed by $500 million." Here is just a sample. The hon. member for Huron probably recognizes these advertisements from the Seaforth Expositor.-"500 million surplus." The hon. member for Hamilton South will perhaps recognize this full page advertisement, "Surplus $500 million; Vote for Bob McDonald." Here is another one mentioning the $500 million surplus that the Liberals had taxed from the people. Night after night the Prime Minister made these great declarations that every Canadian family-there are over four million of them- is overtaxed by $120 and that is $500 million a year.
It is for that reason I say the minister was a lucky man to start off with this great $500 million surplus. He has another favourite figure-


Stanley Howard Knowles: He
is never wrong.


James Sinclair: Oh, he is never wrong, he said that himself. Another great figure we have seen across the nation in relation to these estimates-and we have books of these promises-was that in relation to essential services. He was going to trim an amount of $500 million from the estimates without

affecting essential services. Well, once again he has adopted a queer way of doing business. In tabling the main estimates prepared by the former government at the beginning of the session he said he was tabling them but some of the items he did not stand behind. He was going to remove some and reduce some but did not specify and the Leader of the Opposition and others over here said "Well, give us a list of the items you do not stand behind." But he has refused to do that up to now. So, as each department has come along, we have asked "What part of the $500 million of waste and extravagance have you found in your department?" Well, my hon. friend the Minister of Transport, who is a man who will face up to things said last September he had found no waste or extravagance in his well-run department. The Secretary of State said the same thing-


Ellen Louks Fairclough: I never did.


James Sinclair: And the minister of mines-


Ellen Louks Fairclough: On a point of order, I said no such thing. If the hon. member will read Hansard he will find out exactly what I did say.


Some hon. Members:: Hear, hear.


James Sinclair: I should of course permit the hon. lady to have the last word but if she will read Hansard she will find that her estimates were not reduced by $1-


Ellen Louks Fairclough: And I explained that too.


James Sinclair: That is the whole point of this argument; it is not explanations but reductions that the people were led to expect. The minister of mines said the same thing and it was the same in the case of the ministers of veterans affairs and defence and external affairs. I do not know whether the Minister of Trade and Commerce was asked that same question this morning-


An hon. Member:: And the Solicitor
General.


James Sinclair: Yes, and then today we have at last come to item 1 of the Department of Finance, the second largest department with items totalling almost $1,200 million. A lot of that is statutory, but you would think that probably in his own department that is where he would find a great part of this $500 million of waste and extravagance of which so far we have seen no evidence. He did mention a small saving which he will be able to make on item 121 but he again paid a. sterling tribute to the economy and efficiency with which his department had been run so we cannot expect very much there.
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Now I turn to this matter of tax cuts. I do not want to break the rules of this house by going overtime-


Douglas Scott Harkness: First time you did not want to break them.


James Sinclair: No, no, but that was the promise made. The Prime Minister again and again said there would be a great tax reduction; $120 per family or $500 million all told. The excise tax would be removed by them. I do not need to quote the Prime Minister-


Lionel Chevrier: Go ahead.


Gordon Minto Churchill: It is worth quoting.


James Sinclair: Well this figure of $500 million is so well known, and he said that these were solemn obligations which would be effectuated so we naturally expected in this debate tax cuts totalling $500 million. We expected them to be retroactive. On platform after platform he said $10 a month excess tax was being taken out of every family in Canada by the Liberal government. Well now by their failure to correct this situation after almost six months in office they have put a load of $60 extra taxation on every one of these poor families.
I say that tonight the minister groaned and produced a very small mouse in the way of income tax reductions. The 1949 Tory platform and the proposals of their financial critic, the member for Greenwood, were to raise the basic exemption from $1000 to $1,250 and from $2,000 to $2,500 for married men which would cost $140 million a year. Well the voters did not go for that so in 1953 they raised the ante and there was the Prime Minister with the Conservative platform promising that if they were elected the basic exemption would immediately be raised for the single man from $1,000 to $1,500 and for the married man $2,000 to $3,000 at a cost of $300 million a year. We do not hear anything of that tonight.
Now according to my figures when I was parliamentary assistant that would be equivalent to a cost of $300 million for the latter proposal and $140 million for the former proposal, an amount which the hon. member for Greenwood at that time characterized as a very small amount. Why then, if it is such a small amount, is it not included tonight. It is a pity it was not included for it would be a real help to the men on low incomes. A man earning less than $3,000 of course would be totally exempt from tax if these solemn promises had been honoured.
There were of course other promises made. The sales tax was one of them. The Tory

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whip in his ad. promised this in the Seaforth News which I guess is published in his riding.


Mr. Cardiff:: By my opposition.


James Sinclair: But said by you. Here are some tax items in his ad.; "under a Conservative government the income tax for a married man would be nothing on $3,000 after election". Then he goes on to mention prepaid health insurance, floor prices on farm products and then removal of all sales tax and "anyone spending $300 on clothing, shoes and so on now pays $30 and after the election"-or after he is elected-"will pay nothing".
Well we did not hear of any removal of the sales tax tonight. During the election the Prime Minister promised at Windsor to reduce the excise tax on cars, and at Oshawa to abolish the tax. Well, again, there is an awful difference between abolishing a tax and the 2J per cent reduction in the tax which is now proposed.


Mr. Browne (St. John's West):: On a point of order. The Prime Minister stated here that he did not make any such suggestion and the hon. member must accept that statement.


Some hon. Members:: Oh no.


James Sinclair: The Prime Minister, according to press accounts said, as the hon. member will note if he actually consults Hansard, that he was going to remove the exise tax completely as it was a horse and buggy tax. Then there is my good friend over there the Minister of Transport on the corporation tax-


Howard Charles Green: On a point of order, Mr. Chairman. The Prime Minister said just a few days ago that he had never said he would remove that tax completely and now the hon. member for Coast-Capilano should not try to put words into his mouth.


James Sinclair: Hon. members will recall that I read an actual clipping from the two Tory papers, the Toronto Telegram and the Ottawa Journal and the Ottawa Citizen, the next day which said that he had promised to abolish this tax. I said and would say that the time to deny that was then, and not six months later.
Now my hon. friend the Minister of Transport over there said he wanted a sliding scale with respect to the corporation tax. Not just a little lift of from $20,000 or $25,000 but a real sliding scale, the whole way up to give real savings, with, the reductions in the corporation taxes, to be at least one-third. He smiles now and I think he still hopes one day this solemn promise may be effectuated. Well, we have not got $500

million nor the reductions tonight as was promised last summer, and solemnly promised.
Then in the figures given in his speech tonight by the minister-and this is one of the disadvantages of not having budget papers in the ordinary way-I think he said that in a full year the tax cuts might amount to $178 million; but would amount to less than $40 million for the present year.
We have heard quite a bit about inflation this session but he does not mention that at all in his budget speech. This is another convenience he has found in choosing supply so he would have to shorten his speech so that such things as inflation and the balance of ways and means could not be covered by him. Inflation has been a very serious problem and the previous government two years ago took brave but unpopular and misunderstood actions-misunderstood mainly because of the attempts of the conservatives to mislead the public about the dangers of inflation and what was being done by the then government. Now the Minister of Finance says we have checked inflation and he went all the way down to Hollywood, Florida which I guess is a place which combines both the attractions of Florida and California, to make a speech to the United States investors apparently to tell them that he was not as mad at them as some of his speeches made in Canada might lead them to believe and on page 11 of his speech to American investors he says this:
In recent years the Canadian economy, like that of the United States, has been pursued by the ever-increasing threat of inflation. I confidently say to you that inflation has been checked.
I would say that if it has been checked it was checked through brave action taken by Mr. Harris and the governor of the Bank of Canada over the last two years. I said, "If it has been checked"; because I am going to quote a little better financial authority than the hard-working, ever modest Minister of Finance. I have just finished reading the annual report of the Bank of Montreal, Canada's leading bank. In the president's statement this is what he has to say:
Canada, with its network of close economic and other international ties, would be hiding its head in the sand to assume that the fight against inflation had been won.
Take your choice, the president of the Bank of Montreal speaking to Canadians, or the Minister of Finance speaking to Americans in Florida. But you do not quite have to take your choice because this morning the attention of the house was drawn to the fact that the money rate is going back up. Treasury rates are climbing and of course

the Bank of Canada rate climbs as a consequence. It was very interesting, of course, to note that when the treasury rate was falling the Minister of Finance-nice modest little fellow that he is-gathered all the credit to himself. As reported at page 1564 of Hansard, when he announced a reduction in the bank rates he had this to say:
The government will certainly claim the credit that is its due for a great many things it has done to seek to ease money, credit and interest rates, and is very gratified that its efforts in this regard have borne fruit.
That is when the interest rate goes down. But when the interest rate goes up, like Pontius Pilate he washes his hands of the affair and has nothing to do with it. Again he is such a modest little fellow.
Now I get along to the balance of ways and means. The fact that we have not a white paper makes it exceedingly difficult for any member of the opposition accurately to calculate what is the present balance between revenues and expenditures in this country. We know that some great expenditures have been promised. The Financial Post estimates that the new expenditures already effectuated to date have cost this country another $300 million. I, in my own modest way, have tried to make some calculations of what all the promises of the Tory party would total, and I find that the ones mentioned so far would add about $1,200 million to the annual budget and I am not including some projects. I see my friend the Minister of Public Works smiling at me.


Howard Charles Green: He is laughing, not smiling.


James Sinclair: After he left Vancouver as a minister of the new government he said that the first task of this government was going to be to rebuild the Canadian merchant marine. That is going to cost $250 million at the very minimum. While he promised that, our friend over here the Minister of Transport is busy stripping off the last eight ships of the Canadian merchant navy and putting them under a foreign flag. That is why I did not include that cost in the $1,200 million of my estimate. I am a little bit confused as to which of these ministers is going to have his way in the end.
Then, of course, we have no mention of the dominion-provincial tax agreements. If there is going to be any more money for the ten provinces before the end of the fiscal year, it must be provided now by the minister. Premier Frost is a modest fellow. All he wants now is $100 million a year extra, which means $200 million extra for the other provinces, an extra total of $300 million. Premier Bennett of British Columbia is not a
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modest man; he is like the Minister of Finance. He wants another $960 million to be given to the provinces.


Charles Edward Rea: I am sorry to advise the hon. member that his time has expired.


Some hon. Members:: Go on.


Howard Charles Green: Mr. Chairman, this is all very enjoyable. We should be glad to have some more.


James Sinclair: The house leader knows the rules limiting speeches to thirty minutes. But a member can speak as often as he likes on this item No. 1. I shall have therefore more to say on the next time around but unlike the Minister of Finance I will observe the rules at the present time and sit down.


Major James William Coldwell: Mr. Chairman, my first word is this. There are a large number of new members in the House of Commons who are not familiar with the procedures of parliament as they have been developed over the years. Consequently I can understand that many of them think that this way of introducing tax reductions and discussing what is in effect a small budget is the usual and traditional way of doing something which is of the utmost importance to the people of Canada and by tradition one of the most important things that parliament does during the session.
This is a session of parliament; at least I understood it was. It was opened by Her Majesty the Queen as a session,-


An hon. Member:: Very formally.


Major James William Coldwell: Very formally indeed, as my hon. friend reminds me. Consequently in this session of parliament we had certainly expected that the government would come before us and present the country's balance sheet, the country's budget. I say that failure to do this is something that should be regarded by this house and indeed by the country with utmost seriousness for it is something that has never happened before. Certainly we in this house did not expect that this would be undertaken by a government headed by the Prime Minister. No one in the last parliament talked more often or at greater length or talked more during the election period or at greater length about the supremacy of parliament and the necessity to restore the rights of parliament than did the present Prime Minister of Canada. Yet today we see set aside one of the parliamentary methods of reviewing the work of the government and particularly its financial affairs and the government refusing to bring in a proper balance sheet.

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Tonight we had nothing about the productivity of Canada. We have had no word as to what the gross national product is likely to be. We have some word of what the government expects its receipts and expenditures may be for the year. We are told that there will be a surplus of some $80 million. But when you come to look at that surplus of $80 million, how does the hon. member obtain it? He obtains it by transferring two items of $50 million. Consequently the idea that there will be a surplus of $80 million is altogether wrong.


Stanley Howard Knowles: It
is a bookkeeping trick.


Major James William Coldwell: Yes; it is a bookkeeping trick. It is merely a bookkeeping transfer. That is all it is.
Secondly, we have heard a great deal about the expected surplus outlined by the former minister of finance. I believe that the former minister of finance, when he put before the house the suggestion that he might have a very substantial surplus, believed in his heart that that surplus would not materialize by March 31, 1958. Why? Because he expected during the current year that the federal treasury would have to do something for the health plan that had been adopted in March by this parliament. In the estimates placed before this house tonight by the Minister of Finance no mention has been made of the possibility of the federal government having to contribute to any of the six provinces that have come to agreement with this government and this parliament.


Mr. Monteiih:: They have not signed them yet.


Major James William Coldwell: Yet the Prime Minister has told us, when he has been twitted, that this health plan or this hospitalization plan will come into effect sooner than you think. How soon?


Jay Waldo Monteith: And it will.


Major James William Coldwell: The minister says it will. Very well. Why did not the Minister of Finance, if it is coming in soon, tell us what it is going to cost, and how much of the $80 million will be allocated to the provinces during the next few months because there are provinces with their health plans in operation and ready and anxious to sign and properly entitled to receive the grants under the legislation that we passed in this house last March. Then again, he has told us nothing about what he is going to do for agriculture.
We are going to have an agricultural measure in this house that we hope at least will do something for the farmers of this

country. We are hoping that some provision will be made for deficiency payments. We are hoping that some means will be found to give the farmers something of parity for their products. This legislation is supposed to be brought in. What is it going to cost? The Minister of Finance has had nothing to say about the cost of these worth-while additional expenditures that this parliament will be called upon to make, I hope, within the next few months. There was no mention of agriculture, no mention of a health plan and no mention of the gross national product and what we may expect during the next few months of this current financial year in that regard.


William Moore Benidickson: He is on the skids.


Major James William Coldwell: True, the statement the
minister made tonight does envisage some tax reductions which will be welcome. The reduction of the excise tax from 10 per cent to 74 per cent will be welcomed by the automobile industry and more particularly by the dealers if they are relieved of the loss that they might otherwise have sustained. The people of Canada will welcome this measure if the automobile industry passes on this saving to the people. But even that is not what was expected. We have been told that this tax is a pernicious tax and that it would be wiped out.


James Sinclair: It was described as a horse and buggy tax.


Major James William Coldwell: We were told that it would be cut down to five per cent.


Some hon. Members:: Told by whom?


Major James William Coldwell: Everybody expected it.


Stanley Howard Knowles: There was a leak.


Major James William Coldwell: It was generally stated. My hon. friends criticized that tax in toto.


James Sinclair: Horse and buggy tax.


Major James William Coldwell: Yes, a horse and buggy tax.


An hon. Member:: We agree that it is.


Major James William Coldwell: The government promised it would be wiped out.


Mr. Stewart (Winnipeg North):: Just part of the horse now, that is all you are.


Major James William Coldwell: Members of the government electioneered about the tax and criticized it in toto. They promised if they were elected that it would be reduced more drastically than it was tonight. Why was it not reduced

to a greater extent? Perhaps they did not want the people to give any credence to the leak that was generally supposed to have occurred during the past week or ten days.


Some hon. Members:: Oh, oh.


Major James William Coldwell: My hon. friends can groan as they like but they are going to groan a lot more in the next few years.


Mr. McCleave:: You are groaning now.


Stanley Howard Knowles: And there will be weeping and wailing and gnashing of teeth, too.


Major James William Coldwell: We have had tonight an excuse for a budget.


Thomas Miller Bell: A pretty good excuse.


Major James William Coldwell: The Minister of National Health and Welfare laughs-


Jay Waldo Monteith: That is right.


Major James William Coldwell: -but let him read his Canadian history and his British history and he will find that what has been done tonight is unprecedented in two particulars. The first is that the government has refused to bring down a financial statement, a budget, into this house. The second is that this has been introduced in the house without a motion in committee of ways and means so there can be no real debate on the proposals of the minister.


Thomas Miller Bell: What is going on now?


Major James William Coldwell: This is not a proper debate. The hon. member for Coast-Capilano and I cannot move an amendment. We are only discussing the first item of the estimates.


Hayden Stanton: You would not debate it even if you could.


Thomas Miller Bell: You do not
vote for your amendments.


Alistair McLeod Stewart: Oh yes we
do.


Major James William Coldwell: My hon. friend mentioned the fact that the Prime Minister, last Monday, December 2, attempted to justify this kind of caricature of parliament, as he described something that occurred in the house in June, 1956, by saying that this had been done before. I want to tell you that it has never been done before. My hon. friend quoted the precedents. What were those precedents? Well, he described them to us. The first occurred in the session of 1873. What length of time did the house meet in 1873?


Daniel (Dan) McIvor: That was a long time ago.
Supply-Finance


Major James William Coldwell: Eleven days. As my hon.
friend already said that was the session of the infamous Pacific scandal but what he did not mention-and perhaps my hon. friend forgot to mention it-was that there were no tax changes in those eleven days so there was no need for a budget in that session.
The next example was that of 1919, a slightly longer session. Again the Prime Minister neglected to inform us last Monday that there were no changes in taxation during that short session which lasted less than a month as I recall it. I would not want to say definitely how long it lasted because my memory may be at fault in that particular.
The session of 1930 which was cited as another example lasted twelve days and was looked upon as an emergency session. Unemployment was rampant, farm prices had fallen and even some of our great banks and insurance companies were in a very uncertain position, so uncertain a position my hon. friends may remember that the government of that day passed two orders in council in 1930 or 1931 authorizing the banks and insurance companies to publish balance sheets showing their assets valued not at the end of the year when those orders in council were passed but prior to the depression.
The Hon. Mr. Power who is now in the Senate and the Right Hon. J. L. Ilsley who is now one of our respected judges told this story in the House of Commons two or three years later and you will find it in the records. I have in my files the two orders in council that were passed by the Conservative government at that time covering up the situation that threatened our financial institutions. The emergency session of 1930 lasted twelve days. This, we are told, is a full session of parliament and it was opened, as I said, by Her Majesty the Queen to do the business of the country.
The Prime Minister also referred to December, 1947 when he said there was no budget but that there were extensive fiscal changes. That is perfectly true. I remember that very well and I recall the debate when a budget was presented later in that very session. Hon. members will recall that we met and the session extended over several months and a budget was brought down later in the session. I was really surprised that the minister would quote what he criticized so severely in 1947 as a precedent for doing the thing his government has done tonight. I am equally unable to understand the Minister of Finance doing what he has done in view of his criticism at the same time.


Stanley Howard Knowles: He
is on the record, too.

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Major James William Coldwell: Yes, and I think I may read the record back to him. In the budget debate of March 9, 1948 as recorded at page 2047 of Hansard of that date the present Minister of Finance said:
The minister has invited this house, in a gesture which I say is an insult to the intelligence of the house, to believe that this was done in obedience to necessity.
I believe this has reference to an announcement made over the radio. He continued:
How necessity is always conjured up to serve the ends of tyrants!
It is necessary that we shall not have a budget debate; the necessity is that we get this through this session without it. Indeed, how necessity is always conjured up to serve the ends of tyrants! He went on to say:
Last week I quoted in this house the words of William Pitt:	"Necessity is the plea for every
infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.'' And naturally it was necessity to which the Minister of Finance tonight ascribed the act which, in the name of the government, he embarked upon on November 17.
Necessity! Was there necessity for over-riding the constitution,-
I am quoting the words, of course, of the Minister of Finance.
-for over-riding settled constitutional principles centuries old, principles which have been the bulwark of the rights, not simply of a few but of all citizens?
That is what he has done tonight. I continue:
This is not an issue that affects just a few people; this is an issue that touches every man, woman and child in Canada who values freedom, and who can see, in what this government has been doing in the past three and one-half months, steps toward oligarchical rule and the destruction of our parliamentary institutions.
Was there ever a more apt quotation turned back on the man who made it? The Prime Minister was not to be outdone on that occasion. The same day, March 9, 1948, he spoke, as recorded at page 2029 of Hansard, and he said:
There, sir, is the picture from 1215 to 1947; and, with only one exception, never after the development of parliamentary government either in Britain or in any of the self-governing dominions has taxation been imposed as a result of the simple statement or the fiat of any one minister.
Nor, may I say, has taxation been reduced by the statement or the fiat of a single minister. That is what we have seen tonight.


Donald Methuen Fleming: Tax reduction?


Major James William Coldwell: I could quote in support of that Durell, "On the Function of the Committee of Ways and Means", in which he points out clearly that any taxation imposed such as that would be unconstitutional, uncollectible and unjustifiable.


Thomas Miller Bell: Imposed.


Major James William Coldwell: That was the Prime Minister speaking. I know the lawyer can quibble, but I want to say that it is just exactly in the same category if a minister issues a fiat to impose or reduce or abolish taxation.


Thomas Miller Bell: Oh, no.


Major James William Coldwell: Just a moment; it is still a ministerial announcement that is not a part of a resolution of this house. This house alone can impose and reduce taxes and yet the minister said tonight that the reduction in the excise tax would go into effect at midnight tonight, was it? There you have the reduction made. It may be said that when the budget is brought down we do precisely that. Yes, we do; we do that by custom; we do that by precedents and we do it in the proper constitutional way as part of the budget announcements, but tonight we have not a budget. The minister said that he was not going to introduce a budget. We have not a budget tonight.
I want to say, too, that one very revealing statement of the Minister of Finance tonight was this. He said that the relief, and welcome relief, in the lowest bracket-we are glad to see that relief being given-would affect 100,000 families in Canada in the $2,000 or slightly over bracket, depending on the dependants. That is something of an indictment on our Canadian economy, something of an indictment of the conditions that exist in this country when we are told by the minister that there are in effect 100,000 people in that low income tax bracket who will be relieved of taxation because they were in that bracket; in other words that they among others are living on a level far below the cost of subsistence in this country. That is the admission that we have tonight. They are living on incomes far below the cost of subsistence, and I could not help making a note of it when the Minister of Finance made the statement a short time ago.
We are disappointed that some things have been left out that should have been in. We are glad that there are some things which are going to benefit the people of Canada; but no matter how good something may be and how welcome something may be, if we do something in a manner which is the wrong way of doing it then we are creating precedents perhaps that this government or some other government following them can follow and do a great deal more than has been done tonight in the manner in which it has been done.


Thomas Miller Bell: Will the hon. gentleman permit a question?


Major James William Coldwell: Yes.


Richard Albert Bell: Does the hon. gentleman know that the procedure which has been adopted tonight is in precise accord with the principles governing this type of procedure as set down in the 15th edition of Sir Erskine May's Manual of Parliamentary Procedure?


William Moore Benidickson: Give us the page.


Richard Albert Bell: Page 764. Will the hon. member permit me to read it, because he is one of the most fair-minded gentlemen in the house?


Major James William Coldwell: No, Mr. Chairman. My hon. friend may read this when I sit down. I shall be sitting down in a few minutes because my time is almost up.


Richard Albert Bell: I do not want to interfere with the hon. member for Peace River.


Major James William Coldwell: May I say this? I understand the hon. member is going to quote May. Is that right?


Richard Albert Bell: Yes.


Major James William Coldwell: May is an authority whose writings and authority are accepted by the parliament of Britain. Our procedures regarding the discussion of estimates differ significantly from the manner in which estimates are discussed in the United Kingdom or in the United States. Through the years we in Canada have made our own precedents. This is the Canadian parliament. We have created our own precedents and since our method of doing business in this house is quite distinct from that of Britain, tonight I have relied on the manner in which we have done business in this house, and neither the hon. gentleman nor the Prime Minister can quote any precedents to the contrary. The Prime Minister, as I have said, tried to quote three precedents. Not one of them holds water. Not one of them is a precedent for the present situation.


Douglas Scott Harkness: Do you forget how often the hon. member for Winnipeg North Centre quotes May?


Major James William Coldwell: When he is applicable.


Some hon. Members:: Oh, oh.


Major James William Coldwell: When he is applicable to our own procedures.


Some hon. Members:: Oh, oh.


Major James William Coldwell: Oh, yes. You know, sometimes a loud laugh means a very empty mind.
I say that you cannot find a precedent in Canadian parliamentary history which will support what has been done tonight. Never mind what is done in Britain in another type of discussion of estimates.
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Some hon. Members:: Oh, oh.


Major James William Coldwell: Again that loud laugh shows that the hon. gentleman does not know what I am talking about.


An hon. Member:: Temper.


Stanley Howard Knowles: we want to do things in the way they do them in Britain, appoint a member of the opposition as chairman of the finance committee.


Major James William Coldwell: However we may welcome these changes, some things have been left out that we deplore and the manner of its doing is not in accordance with Canadian parliamentary procedure.


Solon Earl Low: Mr. Chairman, in the few minutes that I have before ten o'clock I should like to make a few general remarks about the most unusual exhibition that we have seen here tonight. I think the method which was taken by the Minister of Finance to announce his tax changes was nothing short of sleight-of-hand and a most unusual method, a method that will make history of a very sorry kind. I say that because unquestionably governments in the future will point to this as a precedent, will attempt to use a similar method and, as the hon. member for Rose-town-Biggar has said, perhaps try to go farther and create financial chaos in the country.
I was hoping that the Minister of Finance would realize how important it is for him and his colleagues to observe meticulously the rules of parliament and to see to it that this parliament is supreme. The representatives of the people gathered in this parliament are supreme over the executive. I heard the Minister of Finance three years ago away off in East Africa in the parliament house of Nairobi give a learned discourse on the manner in which the executive branch of government was arrogating unto itself the powers of the legislative branch of government. For quite some time he inveighed against the practice and convinced a lot of people there that the Canadian parliament, in common with many other parliaments in the commonwealth, was perhaps giving over to the executive branch powers that really belong to the legislative branch of government, parliament.
I can see from his performance tonight that he did not convince himself then that his arguments were sound because he has certainly turned his back on what he said that day and has, as I said, followed a most unusual course in bringing in this budget. I think the method he used tonight can best be likened perhaps to a farmer transporting a load of hay out of a prison yard and

Supply-Finance
secreting a criminal under the hay in order to get him out of jail. There is no other likeness.
Here is a method that I deplore. I think the government should be straightforward. It had every reason to be straightforward, and I cannot for the life of me understand why the minister did not go straight ahead with the declaration he made shortly after he came into office that he would present a budget. I realize that the Prime Minister was said to have taken a different view at the time and whether the Prime Minister told the Minister of Finance that he was not to bring in a budget or what nobody will know. I am not going to accuse him of interfering with the Minister of Finance in any way but I will say that once the Minister of Finance said he was going to present a budget at this session I think he should have carried it through. If he felt he was out of harmony with his leader he should have resigned and let some other person assume the post and take a course that would have been more in keeping with the wishes of the Prime Minister.
Certainly this method did not represent the views of the Minister of Finance at that time. Something happened to change his mind. I do not know what it was and I suppose we shall never know. Why no budget? There should have been a budget presented and I have said so on every occasion. I agree with those who have already spoken. The hon. member for Coast-Capilano presented, I thought, a very reasoned argument for having a budget. Certainly if at any time in Canadian history it was necessary for members of parliament to have a white paper, this is it. In all my experience of nearly 23 years in legislative chambers, this is the year when we most needed to have all the facts and figures concerning the economic affairs of the country. Certainly we should have had a balance sheet before us several days ago, even if it were necessary to work the hard-working minister 20 or 30 hours a day.
I sympathize with him in his difficulty in trying to carry the heavy duties of an office with which he was not familiar, and having had no executive experience in government it certainly must have been a terrible job for him to get accustomed to things. I appreciate that fact, but if he had said that he would produce to the very best of his ability all the facts and figures that are available and have them printed in a white paper, which would not have been a terrific job, then we could have had something before us to follow.

I should have liked to have a copy of his speech that he gave tonight. Other ministers have paid us that courtesy. Just after the budget speech was under way they have always had copies sent to us so that we could mark them and follow very carefully as they went along. That did help us considerably. Why not tonight?


Stanley Howard Knowles: There has been a change.


Solon Earl Low: Yes, there has been a change. I thought that when the people of Canada expressed their desire for a change on the 10th of June it was not just a change from in and out but a change in procedures and attitudes as well.


Major James William Coldwell: There has been a change in attitude.


James Sinclair: From courtesy to discourtesy.


Major James William Coldwell: But for the worse.


Solon Earl Low: Let us say then that the people of Canada expected a change for the better.


An hon. Member:: They got it.


Solon Earl Low: That is a good subject for debate and that is what we are debating at the moment. The fact is that this is one of the best evidences that it is a change for the worse, not for the better. Well, why no budget? That is the big question, the $64,000 question, or is it the $109 million question? Is it because the government is afraid to present a balance sheet? I suggest that a balance sheet would show a whole lot different picture from what we got in the contracted statement made by the minister tonight. For instance, doubtless it would show quite a considerable difference of fact from what we were told concerning the government's so-called or claimed favourable position financially when the Minister of Finance said that they would be able to get through this year even with all the increases they have been making in social security measures and still have a surplus.
Why no balance sheet? A balance sheet would have shown the true facts and I think one of the secrets is the $100 million, which should be shown. It was not shown. It was brought out, of course, in debate, and I think that ought to be emphasized. It looks to me as though the government has been afraid to bring out a balance sheet and I challenge them now to get busy and get one out before the Minister of Finance is finished debating his estimates. I think this house and the people of the country are entitled to it.
Another possibility, of course, as an explanation of no budget is that the government

knew that it could not fulfil all its election promises for tax reduction and therefore it did not want to have too many facts and figures before the people of the country and thought it perhaps could mesmerize the people with the figures presented to us tonight involving small tax reductions in various fields. That may be so. I recall, for example, that the present Prime Minister made a speech in Toronto on April 25-and, by George, this is a very fine looking brochure-in the course of that speech he brought out some interesting things about overtaxation by the high tax party. I judge from what is printed here that he considered the Liberals to be the high tax party. I do not know about that. It could be a very serious question that could be debated. However, in the course of what he had to say he made this statement:
In the session ended last month in Ottawa, and in the budget brought down by Mr. Harris, they made no noticeable reduction in taxes. There was no reduction in the rate of income tax; no reduction in those taxes which contribute to the high cost of goods that you and I have to buy.


Major James William Coldwell: Sales tax.


Solon Earl Low: Sales tax. I recall that all during the election campaign one of the things that the Prime Minister was pressing home every time he spoke to the Canadian people was that these taxes which do contribute to increases in prices ought to be the very first tackled in any reduction program. I agree with him. But what an emptiness, what a vacuum with regard to these taxes that push prices up in the announcement made by my friend the Minister of Finance tonight. There has not been a single word said about the sales tax.
Of course, mind you, it might have been that if they had brought in changes in the sales tax they would have had to bring in a budget. I do not know for certain whether or not that is true. In any event, that may have been another reason, but the fact remains that the government did not come to grips with this very important matter of taxation that does push up prices and cause inflation. I have said in this house before, and I shall repeat now, there is no more inflationary pressure on the economy of the country than that which is exerted by government when it places heavy taxes upon commodities. There is not any question about it. It is those people in the lower income brackets who are not touched by tonight's announced reductions, who would benefit by a reduction in sales taxes. There was nothing for them in these announcements.
Do not think for one moment, Mr. Chairman, that I do not appreciate the things which the Minister of Finance has done. I think we 96698-128J
Supply-Finance
all must acknowledge that what he has done by way of tax reductions is all to the good. I believe that no one can criticize them too severely. But I do say that they are not in keeping with the promises that have been made by the Prime Minister and other speakers in government circles as they moved about the country during the election campaign and afterwards.
I have not yet got at the reason, perhaps, for the failure to produce a budget. I say that it could have been because the government was afraid to present a balance sheet; it could have been because the government could not fulfil all its election promises for tax reductions and therefore chose the unusual method of dragging in the back door these tax changes so they would not loom too large as a budget. They could declare they were not a budget but simply an announcement of tax reductions which accompanied the moving of the first item of the estimates of the finance department.
Another reason, perhaps, is this. Is it because the government wanted to prevent a full scale budget debate? I think perhaps there is a possible good reason. You see, if we had a full scale budget debate it would take about eight full days. By arrangement, I am quite sure the leader of the government could have reduced that for this particular session to about four or maybe five days, if the government had wanted to have a budget debate that did not extend too long. I am sure that by consultation with the leaders of the parties this could have been arranged, and I think should have been arranged. I believe we are reasonable people and would reasonably meet any request of that kind to facilitate the business of this country in what is supposed to be a special session.
There is no excuse for the government not having asked us; not one. It is just one more reason why I say that the biggest complaint against the government today is this flouting of parliament. This is the very thing upon which they went to the country; the very thing they claimed to the Canadian people they would have to restore. Moses coming to lead the children of Israel out of bondage; that is what they were going to do. I have not seen any evidence of it. Parliament has not been recognized during this session as they promised it would be recognized. What took place tonight is just one further example of the way parliament is being treated. I say that that is not the way to gain the confidence of the people of this country, not at all. It is certainly the best way to lead the people to demand that a change be made for the better. They will demand that sort of thing.
2022	HOUSE OF
Business of the House
Perhaps as I am about to change topics, Mr. Chairman, this would be a good time to call it ten o'clock. I see it is only one minute to ten.


Howard Charles Green: May I suggest to Your Honour that you fail to look at the clock until the hon. member has finished?


Some hon. Members:: No.


Major James William Coldwell: Ten o'clock. We were here at ten o'clock this morning.


Charles Edward Rea: Has the
hon. member leave of the committee to continue?


Some hon. Members:: No.


Charles Edward Rea: I
am sorry; it being ten o'clock, shall I rise, report progress and ask leave to sit again?
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the leader what the business is for tomorrow?


Howard Charles Green: Mr. Speaker, tomorrow we shall commence with the estimates of the Department of Trade and Commerce, then the estimates of the Department of National Revenue.


Lionel Chevrier: May I ask what the business will be for Monday and Tuesday of next week?


Howard Charles Green: Monday will be private members' day. It has been arranged between the representatives of the four parties that on Tuesday we shall have a one day debate on a motion to go into supply, with a vote on any amendment at 8.15.


Stanley Howard Knowles: Mr. Speaker, while we are on the business of the house, I wonder if I might put a question to the house leader? Will the Minister of Finance be giving notice in the usual way of ways and means resolutions implementing some of the proposals he made tonight? The reason I ask that question is, I believe, obvious. Will the budget debate be carried on in the committee of supply on the first item of the finance estimates or will it be on resolutions in committee of ways and means? I am sure the government does not want to mix it up or have two debates, so perhaps we could be informed of the plan for further debate of these budgetary proposals.


Donald Methuen Fleming: Mr. Speaker, I am sure my friend does not mean to speak of budgetary proposals. There has been no suggestion it


was a budget that was presented here tonight, in the sense of the word as he used it.


Stanley Howard Knowles: certainly do.


Donald Methuen Fleming: The rule is quite clear, and I should like to give it to my hon. friend. We have heard tonight that it is necessary to proceed by way of presentation of a budget speech on a motion to resolve the house into committee of ways and means. On the contrary, we have proceeded regularly and in accordance with the authorities on this subject. If my friend will refer to Beauchesne's third edition, citation 495, he will see the following:
The consideration of the financial statement of the year, familiarly known as "the budget", is made when the finance minister has completed his estimates of the probable income and expenditure for the year and usually after some progress has been made in voting the main estimates laid on the table. It is usual to make the budget speech on the motion for the house to go into committee of ways and means; but finance ministers have at times found it convenient to make it on the motion for committee of supply.
I cite that to show that the hon. member for Rosetown-Biggar was quite wrong in what he had to say tonight. If a further authority is required on the subject, it is set out in May. I am quoting from May's 15th edition, pages 760 and 764. The following is to be found at page 760:
Matters which are covered by the term "charges upon the people" may be briefly summarized as (1) the imposition of taxation, including the increase in rate, or extension in incidence, of existing taxation, (2) the repeal or reduction of existing alleviations of taxation such as exemptions or drawbacks, (3) the delegation of taxing powers within the United Kingdom, (4) the granting of borrowing powers and (5) provision for the payment into the exchequer of receipts which do not arise from taxation.
Then, on page 764 we find the following:
Provisions for the alleviation of taxation-
May I remind you, sir, there is no suggestion tonight of any increase in taxation. All that has been proposed tonight are measures to alleviate taxation. I quote:
Provisions for the alleviation of taxation are not subject to the rules of financial procedure. The repeal or reduction of a tax, for instance, by the Finance Bill, is sometimes preceded by a specific ways and means resolution. But this procedure is neither necessary nor usual. Thus provisions for the repeal or the reduction of taxation, the granting or extension of exemptions, the creation or increase of drawbacks, etc. can be presented in bills or inserted by amendment without preliminary sanction of the committee of ways and means.
Mr. Speaker, in the face of those unchallengeable authorities and in keeping with the purpose of the government to respect the rights of parliament at all times the government will proceed in the manner indicated. There will be the fullest opportunity given

any member to speak in this committee of supply as often as he wishes-I repeat, as often as he wishes-much more freely than would have been the case if a motion had been offered in the house where every member would have been confined to one speech. Again when the bills are introduced-the bill to amend the Income Tax Act, the bill to amend the Excise Tax Act-hon. members will have their full opportunity to discuss the measures, offer suggestions and move whatever amendments they choose to offer and to oppose those measures if they dare.


James Sinclair: What a man.


Stanley Howard Knowles: Mr. Speaker, if the Minister of Finance is choosing to defend his course of action by pleading certain citations which he contends are unchallengeable authorities so far as the Canadian parliament is concerned, may I point out before I read one or two citations from authorities which refer to the practice of the Canadian parliament that the Minister of Finance has read from May which is a book on the practices of the parliament of the United Kingdom-


Donald Methuen Fleming: It is a pretty good parliament.


James Sinclair: You think we are still a colony; we are a nation.


Stanley Howard Knowles: -where they have certain differences in rules, as the Minister of Finance well knows, and where they have permanent legislation governing taxation practices in between budgets. That is quite different from our situation and I submit that to quote the rules which apply at Westminster is begging the question so far as our Canadian parliament is concerned.


Donald Methuen Fleming: There is no difference in this respect.


Stanley Howard Knowles: Just a minute; I know the minister can never be wrong but let it be clear that there is a difference.


James Sinclair: They have a family compact mentality.


Stanley Howard Knowles: the minister, in quoting citation 495 of Beauchesne's third edition, would like to know where Dr. Beauchesne got that paragraph, I can tell the minister that Beauchesne is simply repeating something that is to be found on page 429 of Bourinot's fourth edition. Bourinot was a distinguished clerk of this House of Commons and his work deals exclusively with the practices of the Canadian House of Commons. I am not going to read
Business of the House
all the paragraph, but it tells of some of the difficulties in the first years of confederation when the ministers of finance and the House of Commons tried to sort out the way in which to present budget proposals. Bourinot says there were instances in 1870 and 1874 and one or two other early years when budget proposals were made in committee- sometimes in committee of ways and means and sometimes in committee of supply- although he says that on the occasion when the budget was presented in the committee of supply, in order to implement it, motions were moved in the committee of ways and means the next day.
However, after describing this early instance, Bourinot says in subsequent years, indeed since 1880, the budget statement has been generally made by the finance minister on the motion to go into committee of ways and means, with the Speaker in the chair. Now, Mr. Speaker, the point is that prior to 1880 there was an instance in the Canadian House of Commons of an action such as the one taken by the minister tonight and it is on that basis that Beauchesne put citation 495 in his third edition but, if you look back to the sources of Beauchesne's citation 495, which is page 429 of Bourinot, you will find that it has not happened since 1880.
May I also draw to the attention of the Minister of Finance other citations-I will not take up the time of the house to read them but I will give him the page numbers -418, 428 and 438 of Bourinot, which make it clear that all propositions-not just increases in taxation-relating to the tariff and taxation of the country must be considered in committee of ways and means. At one of the pages I have given Bourinot says that changes in taxation, whether increases, amendments, reductions or abolitions, must be dealt with in committee of ways and means.
I suggest, Mr. Speaker, that my leader was absolutely correct in what he said as to the impropriety of this way of proceeding in terms of the Canadian practice and that according to Canadian practice and according to our rules there is no question but that these income tax changes have got to be dealt with in the committee of ways and means.
It is also my view-


Mr. Deputy Speaker:: Order. I think this is not the time for debate. I think the Chair has been quite lenient so far.


Stanley Howard Knowles: Mr. Chairman, a point of order was made.


Mr. Deputy Speaker:: A point of order was raised but this is not the time for debate.


George Clyde Nowlan: Order, sit down.

Business of the House


Stanley Howard Knowles: have not had an answer to my question.


George Clyde Nowlan: Sit down; you should not be standing up.


Lionel Chevrier: This debate arose because of a question asked arising out of the order of business and it was followed by a question from the hon. member for Winnipeg North Centre of the Minister of Finance. The minister had a perfect right to make his explanation as he understood the position and to quote certain authorities and now surely the hon. member for Winnipeg North Centre has a right to reply and have his reply put on the record.


An hon. Member:: How long did the
Minister of Finance speak?


Lionel Chevrier: I suggest he is within his rights and should not be interfered with in making his point of order.


Stanley Howard Knowles: Well, I will conclude very briefly with what I have to say. It is my view that the changes we made in our standing orders in 1955, when we separated the rules respecting ways and means from those respecting supply, involved the decision that from then on there was to be only one eight-day debate on the motion to go into committee of ways and means, but there was to be that one debate. Prior to the change in that rule it was possible in one session to have several debates on the motion to go into committee of ways and means and it was agreed in the committee on procedure that maybe that was unnecessary. The change we made in 1955 provided for incidental occasions on which we can go into committee of ways and means without question put, but for the one main budget debate of the session there must be the motion, which is subject to one amendment and one subamendment, and the debate must not exceed eight days.


An hon. Member:: Those were the new rules.


Stanley Howard Knowles: There may be some argument about the interpretation of that rule, Mr. Speaker, for the reason that it has never been tested since it was changed in 1955. I did not think the party across the way would test it. But though there could be a discussion about the requirement that there should be a debate with the Speaker in the chair before we go into committee of ways and means on proposals such as those made tonight, there is no question but that any taxation changes have to be made in committee of ways and means. I consider that our discussion on these taxation measures, taking place in committee of supply, is really out of order, for resolutions will have to be moved in committee of ways and means and it is therefore possible that all the speeches which have been made tonight may be made all over again and nobody could complain.
I submit that when the Minister of Finance and his parliamentary assistant, the hon. member for Carleton (Mr. Bell), start looking to the authorities, they should look to authorities that are valid with respect to our Canadian practices.
Mr. Speaker, I repeat my question. Is the Minister of Finance giving notice of resolutions to be moved in committee of ways and means?


Donald Methuen Fleming: My hon. friend has had his answer.


Some hon. Members:: Ten o'clock.


Stanley Howard Knowles: Mr. Speaker, I rise on a question of privilege. There has been no attempt to answer my question. Is the minister filing resolutions to be moved in committee of ways and means?


Some hon. Members:: Ten o'clock.


Major James William Coldwell: I think it is rude for a minister to sit in his seat and growl some sort of answer.


[Stage Direction]
It being thirteen minutes after ten o'clock the house adjourned, without question put, pursuant to standing order.

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

Mr. Kirk: 1.	How many of the patrol boats in the protection service of the Department of Fisheries are used mainly to enforce the 12-mile fishing limit?
2.	What was the date of the first order in council establishing the 12-mile limit for Canadian trawlers?
Answer by: Hon. J. A. MacLean (Minister of
Fisheries):
1.	No patrol boat is occupied full time in such enforcement. The work is mainly carried on by C.G.S. Cygnus. Assistance is given by six of the department's larger patrol boats.
2.	April 6, 1915.


ELECTRICITY COST, NOVA SCOTIA
Mr. MacEachen: 1.	What is the cost of electricity generated from thermal sources to industrial users in Nova Scotia?
2.	What will be the cost to same users as a result of subvention on coal for power purposes?
Questions
Answer by: Hon. Ellen L. Fairclough (Secretary of State):
1.	This information is not available in the dominion bureau of statistics. A separate breakdown for industrial users is not compiled.
2.	The subvention to be paid on coal for power purposes is part of agreements under negotiation with the authorities in the maritime provinces. Until the agreements are finally concluded, it is not possible to state any figures on the consequent reductions in the cost of power.


PUBLIC WORKS DEPARTMENT RESIGNATIONS
Mr. Pickersgill: 1.	Have any members of the headquarters staff of the trans-Canada highways division of public works, apart from stenographers and clerks, resigned since June 21, 1957? If so, how many?
2.	What is the name and former duty of each?
3.	What reason was given in each case for the resignation?
Answer by:	Mr. Hodgson, Parliamentary
Assistant, for the Minister of Public Works:
1. Yes, two.
2 (a) S. Ferizi, technical officer 3; (b) R. M. Bullock, technical officer 7.
3.	(a) No reason given; (b) resigned as an alternative to carrying out departmental instructions.

Saturday, December 7, 1957


COMMITTEES OF THE HOUSE
[Stage Direction]
Mr. C. E. Rea (Spadina) presented the fourth and fifth reports of the standing committee on miscellaneous private bills, and moved that the fourth report be concurred in.
Motion agreed to.
Sixth and seventh reports of standing committee on railways, canals and telegraph lines.-Mr. Fraser.