1957-04-05

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates (1) for the financial year ending March 31, 1958, was presented by Hon. W. E. Harris (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.


Hon. W. E. Harris (Minister of Finance):: Mr. Speaker, in my budget speech on March 14 I referred to the tariff on potatoes, and to procedures which the government had initiated under the general agreement on tariffs and trade looking toward an upward adjustment in the present bound rate of duty.
In this connection we have been carrying on negotiations with the United States. I am happy to inform the house that these negotiations have been successfully completed, and that we are now in a position to implement the results. Later, when the Customs Tariff bill is before the house, I shall be moving an amendment as I indicated yesterday I might. This amendment relates to the potato item and I think I should give a brief explanation of the action being taken.
Since 1939 there has been no Canadian duty on table stock potatoes imported from the United States except for a seasonal tariff of 37J cents per hundredweight from June 15 to July 31. These rates were established by the Canada-United States trade agreement of 1938, and they were bound under the general agreement on tariffs and trade. During the same period there has been no Canadian duty on seed potatoes, but imports of seed have been negligible. The effect of the proposed amendment will be to apply, as of midnight tonight, a year-round duty of 37\ cents per hundredweight on all seed and table stock potatoes imported into Canada, except that new potatoes imported during the period from January 1 to June 14 each year will continue to be free.
In reaching a decision on this matter the government took account of the expert testimony and the conclusions available to it through the tariff board hearing on potatoes, and we attempted to weigh the over-all interests of Canadian producers and consumers.
In regard to our producers, we had to take into consideration not only their views expressed to the tariff board but also the fact that in our negotiations with the United States we were informed that, in so far as we found it necessary to increase our tariff applying to United States potatoes, they would consider it necessary to increase their tariff applying to Canadian potatoes. Our growers still attach importance to the maintenance of export outlets in the United States for a substantial volume of Canadian potatoes.
In regard to new potatoes, the tariff board pointed out that these are imported into this country during the spring and early summer months. The board concluded that they "command a premium because they are new; and probably would enter whether or not they faced a customs duty at the border". In such circumstances a tariff on new potatoes would not be of great benefit to Canadian potato producers, and would operate chiefly as a tax on consumers. There was a further point we had in mind during our discussions with the United States; producers in Florida, California and other southern areas attach a high value to their Canadian market for new potatoes.
The trade agreements to which I have referred provided for certain concessions to Canada on potatoes by way of reductions from the United States statutory tariff rate of 75 cents per hundredweight. Under GATT the United States has been obligated to admit at least 3J million bushels at a reduced rate of 37J cents per hundredweight; this has been made up of 1 million bushels of table stock and 2 % million bushels of seed.
Under the new agreement, and as a condition of getting freedom of action to make the tariff changes which I am proposing, the United States is reducing the present tariff quotas by 1 million bushels; 400,000 bushels will be taken off the table stock quota and 600,000 bushels will come off the seed quota. For the current crop year it appears unlikely that we will be able to take full advantage of either the seed or table stock quota.
It was against a background of reduced exports and increased imports, and following urgent representations from Canadian producers and an inquiry by the tariff board, that the government came to the conclusion that the potato situation was a special one which justified special action. Accordingly we took the exceptional course of renegotiating a tariff commitment under the special procedures provided for in article XXVIII of the general

Potatoes-Tariff Changes agreement on tariffs and trade. We took this course so that it would be possible to implement the results of the renegotiation during the current potato marketing season.


Hon. W. Earl Rowe (Dufferin-Simcoe):: Mr. Speaker, would the minister give consideration to similar tariff adjustments on other vegetables which are coming in from the United States and being dumped here?


Walter Edward Harris: Representations were made, Mr. Speaker, within the last three or four months by the Canadian Horticultural Council and the association of vegetable producers, and on the occasion when we were discussing this particular matter with them I suggested that it would be desirable for us to continue our negotiations with respect to potatoes and not to muddy the waters of these negotiations. The representatives who were present at that meeting agreed that this would be the proper course to take. We have now concluded these negotiations so that we will be able, of course, to consider the representations which they make with respect to other vegetables.


Mr. E. D. Fulton (Kamloops):: Mr. Speaker, may I ask the minister whether that would include soft fruits covered by the fruitgrowing section of the community.


Walter Edward Harris: Yes; they were represented at the meeting I referred to.


Edmund Davie Fulton: Will the negotiations include
soft fruits? I am sorry; I did not hear the minister's answer.


Walter Edward Harris: I said that the representation included those from the fruit-growing community in Canada; they were part of the group making representations which I have just described.


Mr. A. J. Brooks (Royal):: May I inquire, Mr. Speaker, if the minister can give us any information with regard to new potatoes and other potatoes imported from the United States?


Walter Edward Harris: I will do so this afternoon, or whenever we come to the Customs Tariff bill.


Edmund Davie Fulton: I do not think the record will clearly show whether or not the question I put to the minister has been answered. My question was, will the negotiations referred to include the question of tariffs on soft fruits? I realize that this group was represented at the meeting with the horticultural council, but it is the negotiations that I am asking about.


Walter Edward Harris: What I said, Mr. Speaker, was that now that these negotiations have been
[Mr. Harris.l
completed satisfactorily we would give consideration to the representations of the Canadian Horticultural Council, including the representations of the vegetable and soft fruit groups, with respect to negotiations on a change in the tariff.



NATIONAL CAPITAL PLAN


Right Hon. L. S. St. Laurent (Prime Minister) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure respecting the development and improvement of the national capital region and in relation thereto,-
1.	To provide for the constitution of a national capital commission and to repeal the Federal District Commission Act;
2.	To provide for the objects, purposes and powers of the commission; and
3.	To enact such financial provisions as may be necessary to accomplish the purposes of the act.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. Howard C. Green (Vancouver-Quadra):: Mr. Speaker, may I ask a question of the Prime Minister. Press dispatches within the last week have indicated that the United States is planning to send a fleet of naval and coastguard vessels, numbering 96, into Arctic waters, some of which at least are Canadian territorial waters.
The dispatch says, I think, that 46 are to go from the Pacific side and 50 from the Atlantic side. Could the Prime Minister tell the house whether or not the Canadian government was consulted about this proposed expedition, and, if so, whether the government consented?


Louis Stephen St-Laurent: Mr. Speaker, my understanding is that the government was consulted about the usual movement of supply ships for United States requirements in that area. I am not sure about the number of ships. However, I will consider the question the hon. gentleman has asked and see whether the exact numbers he has mentioned were specifically referred to in the discussion between the United States government and the Canadian government.


Howard Charles Green: The dispatch said the main purpose, apparently, was not to supply United States D.E.W. line stations but to discover a new or a better northwest passage. Does the

Prime Minister not think that, in view of the fact that this exploration is taking place in Canadian territorial waters, Canada should at least have some ships of her own attached to each of these fleets going in from the Pacific and the Atlantic?


Louis Stephen St-Laurent: Well, Mr. Speaker, I will be much more confident about the kind of answer to make to the hon. gentleman when I can rely on the exchanges which have taken place and not on possible dispatches that have been reported in the press.


Howard Charles Green: Perhaps the Prime Minister
could give us a further explanation tomorrow?


Louis Stephen St-Laurent: As soon as I can get accurate information I shall be glad to communicate it to the house.


REQUEST FOR STATEMENT ON POSITION OF PALESTINIAN POLICE FORCE
[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, on April 2 I directed a question to the Secretary of State for External Affairs concerning the position of the Palestinian police force, and in particular whether it was still under Egyptian control. He said he would require time to obtain an answer. Then on April 3 he asked for further time. Is the Acting Secretary of State for External Affairs in a position to give an answer today?


Hon. Paul Martin (Acting Secretary of State for External Affairs):: Mr. Speaker, before he left the city the Secretary of State for External Affairs mentioned to me that he had promised to give my hon. friend a reply today.
I can say in answer that the Palestinian police force of Gaza is, according to the Israeli-Egyptian armistice arrangements, normally under Egyptian control. Detailed discussions are proceeding, however, at the present time with a view to developing arrangements as to the requirements of the United Nations emergency force for adequate power to stop infiltration and incursions across the demarcation line. The general officer commanding the United Nations emergency force is satisfied with the progress of these discussions.
Information has also been received that the United Nations emergency force will now have full operational responsibility for preventive action at the demarcation line, and that it is not now the intention to employ joint or mixed patrols for this purpose at the line.


UNITED NATIONS EMERGENCY FORCE
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Is the minister yet
Inquiries of the Ministry in a position to answer the question that I asked a couple of days ago regarding conditions of service in the United Nations emergency force?
Hon. R. O. Campney (Minister of National
Defence): Mr. Speaker, the hon. member will appreciate that when his question was asked it was necessary to refer the matter to our forces in Egypt. I may say that the press report to which he referred appeared to me to represent a rather isolated view entirely in disagreement with the reports we have had from time to time from our forces in the Middle East. Our reports indicate that conditions are good and that morale is high. Having asked his question I hope the hon. member will realize that in order to make a proper answer I must secure information from our forces in the Middle East.



IRRIGATION


[Stage Direction]
On the orders of the day:
Mr. R. R. Knight (Saskatoon):: Mr. Speaker, I would like to address to the Prime Minister a question of which I have given him notice. Are the reports correct that the government has indicated its readiness to take action on the South Saskatchewan river project if the provincial government meets three conditions recently stipulated by the Prime Minister?
In view of reports that Premier Douglas has agreed to these three points, will there be an early announcement by the government?


Louis Stephen St-Laurent: Mr. Speaker, I have not seen such reports, and if they are as summarized in the hon. gentleman's question they are quite inaccurate. The situation remains the same as I stated it to be in answer to questions by the Leader of the Opposition and the hon. member for Assiniboia on March 28, as reported at page 2767 of Hansard of that day.
There had been a letter from me to the premier of Saskatchewan dated, I think, March 21, in which I informed him that we were still not in a position to make a recommendation to parliament about that project, and that in view of the newspaper reports we had seen concerning a change in the attitude of the government of Saskatchewan, if that change really existed and he chose to inform us about it, as the matter frequently came up for discussion, that information would be a new factor which would be part of the consideration and would indicate the importance the government of Saskatchewan attached to the project. But the answer I received from the premier does not constitute

Inquiries of the Ministry an agreement to three conditions as would apparently be indicated in this report to which the question refers.


Mr. H. R. Argue (Assiniboia):: May I ask a
supplementary question. Is the Prime Minister prepared to reconsider the government's decision as far as the building of penstocks is concerned?


Louis Stephen St-Laurent: That would be a matter which would be dealt with subsequently to the decision that we could recommend this to parliament as a project that would return more to the national economy than it would require in interest and amortization costs. After that undoubtedly both governments would wish to have the best kind of dam provided under the most economical conditions possible.


Hazen Robert Argue: Has the Prime Minister replied to Premier Douglas' most recent letter?


Louis Stephen St-Laurent: Pardon?


Hazen Robert Argue: Has the Prime Minister replied to the letter received by him a few days ago from Premier Douglas?


Louis Stephen St-Laurent: I dictated an answer this morning which is now being prepared. I will wish to discuss it with some of my colleagues before it is dispatched, but it is being prepared.



POLIOMYELITIS


[Stage Direction]
On the orders of the day:
Mr. Carl O. Nickle (Calgary South):: I should like to direct a question to the Minister of National Health and Welfare, of which I have given notice. It is based upon an article in the Calgary Albertan reporting a serious shortage of Salk anti-polio vaccine in the Calgary area.
In view of the shortage of Salk vaccine in southern Alberta for use by private practitioners, caused by curtailment of exports of vaccine by the United States, will the government now make available a portion of the Canadian-produced vaccine currently earmarked for public health in order that the medical profession may resume service with this vaccine to Canadians not covered by the public health program?


Paul Joseph James Martin: My hon. friend was kind enough to give me notice of his intention to ask this question. In reply I would say that the current supply and anticipated production of the Salk vaccine in Canada at the Connaught laboratories,
[Mr. St. Laurent (Quebec East) .1
which at the present time is the sole Canadian source, is such as to allow a broadening of the use of the vaccine on a country-wide basis.
On March 22 the Canadian Pharmaceutical Association, the Canadian Medical Association and the deputy ministers of health of all the provinces were notified that under the arrangements we had made with the director of the Connaught laboratories the vaccine would be supplied on request through normal channels to medical practitioners. This will be done without any modification in the delivery schedules by the Connaught laboratories to provincial health departments, in accordance with their respective requirements. All orders thus far received have been filled, and up to April 2 some 50,000 doses of the vaccine have been sent out to all parts of Canada. There is no reason, therefore, why any practising physician should be denied vaccine for his patients.
The distributors for the Connaught laboratories are located in Winnipeg and Vancouver, and vaccine may be procured by retail pharmacists in the usual manner or on direct order by doctors and pharmacists to the Connaught laboratories. In the case of the province of Alberta I have learned this morning that three deliveries of vaccine have been made in Edmonton and one in Calgary.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Koolenay Wesl):: I wish to direct a question to the Minister of Citizenship and Immigration. Has the minister's department received an application from the notorious Mr. Hoffa of the teamsters' union of the United States for entry into Canada as a landed immigrant? If the minister did receive an application, would he permit this man to enter this country?


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: I have no knowledge of any such application having been received, and I doubt if it would be within the rules for me to answer the hon. gentleman's hypothetical question.



EXCLUSION OF ADOPTED SONS OF CANADIANS OF CHINESE ORIGIN

[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration. Has the minister had sufficient time to think

it over since his reported meeting with Mr. Foon Sien, national president of the Chinese benevolent association? If so, is he in a position to announce any change in the present policy of excluding the adopted sons of Canadians of Chinese origin?


John Whitney Pickersgill: Mr. Speaker, since there is probably a good deal of interest all over the country in any change that might be made in the policy with respect to the admission of Chinese immigrants to Canada, I might say that when Mr. Foon Sien and the Minister of National Defence called on me the other day I did say that, not as a change in the regulations but as an experiment, since the previous experiment seems to have been working very well, we would be prepared to recommend the admission of the female fiancees of Chinese and also of Japanese residents of Canada after they have been here two years, so they no longer will have to wait until they become citizens.
About the other points that were raised, including the one mentioned by the hon. gentleman, I said that consideration would be given to some of them but that, at the present time, in view of the rather large volume of immigration and the difficulties in dealing with existing applications, I doubted the wisdom of enlarging the categories of persons who would have to be dealt with by the Hong Kong office, when it would simply mean making longer queues. In view of the great burden of immigration in other parts of the world where we are actively recruiting immigrants it would be quite impossible to increase the staff at Hong Kong at the present time with competent people, and there is no use sending people who are not trained to a difficult post like that.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. G. H. Caslleden (Yorkion):: I wish to direct a question to the Minister of National Health and Welfare, of which I have given him notice. First, will the minister inform the house whether or not the research division of his department has found any possibility of dangerous radiation in (a) television sets and (b) X-ray or fluoroscope machines used in some retail shoe stores in Canada? Second, if there is any indication of such radiation, what steps have been taken by the minister's department to protect the Canadian public?
Inquiries of the Ministry Hon. Paul Marlin (Minister of National Health and Welfare): My hon. friend did give me notice the day before yesterday. In answer to the first part of his question I may say that representative types of Canadian television sets have been investigated to determine if radiation from them presents a health hazard. No radiation could be detected emerging from the sets that were studied. My technical officers in the environmental health division are confident that the sets being used in Canadian homes present no health hazard from radiation. This confirms the statement of the British medical research council in their report of June, 1956, when they observed that nuclear and allied radiations did not in this context constitute either a personal or significant genetic hazard to man. In the course of the continuing studies being made by our department of the effects of radiation, my hon. friend may be sure that this matter is under continuous surveillance.
With regard to the second question may I say this. At the end of last session I referred to the report of the technical committee of the United Nations on radiation with special regard to fluoroscopes. In consequence I pointed out that it was desirable that the use of fluoroscopes should be made only in accordance with careful standard medical procedures. It is not within the authority of the federal government to eliminate these fluoroscopes. That is a matter which under our constitution comes under the authority of the provinces. They have been advised of this situation, and I think we may assume that they are taking necessary steps if the situation in Ottawa is an indication of what has resulted. I am informed that at the present time, for instance, 14 of the 21 machines examined a year ago in Ottawa have been discontinued. I would assume that the provinces are taking vigilant action in other communities.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. Ray Thomas (Wetaskiwin):: Mr. Speaker,
I should like to ask the Minister of Northern Affairs and National Resources whether he is now able to enlarge upon the answer he gave me yesterday regarding the passage of organized tours of youth organizations through the national parks.


Hon. Jean Lesage (Minister of Northern Affairs and National Resources):: Mr. Speaker,
the answer to the question asked yesterday is yes. The national parks highway traffic regulations have been amended by order in council

Inquiries of the Ministry P.C. 1957/378, dated March 21. That amendment provides tor a reduction from the normal rate ot halt a cent per passenger mile to a quarter of a cent with a maximum fee for any single trip of $10, in certain cases and under certain conditions determined in the order in council.



ST. LAWRENCE SEAWAY REPORTED INCREASE IN COST OF CONSTRUCTION

[Stage Direction]
On the orders of the day:
Mr. John B. Hamilton (York West):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Would he comment on the report from Washington that it is indicated that our estimated share of the St. Lawrence seaway construction costs, already large, has now risen from $176 million to $285 million?


Hon. George C. Marler (Minister of Transport):: Mr. Speaker, I would answer by referring the hon. gentleman to the budget of the St. Lawrence seaway authority, which was recently tabled in parliament.


John Borden Hamilton: I wonder
whether the minister would care to indicate to the house whether this is a final estimate for these costs or whether he expects further increases.


George Carlyle Marler: I would not attempt to read the future. All I can say is that it is the latest estimate but not necessarily a final estimate.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. W. M. Hamilion (Notre Dame de Grace):: Mr. Speaker, I have a question for the Minister of Transport. Since construction work on the new terminal facilities building at Dorval airport is substantially behind schedule owing to delays by subcontractors, will the Minister of Transport inform the house what steps are being taken to correct this situation?


George Carlyle Marler: Mr. Speaker, I would not accept the premises which the hon. gentleman has just laid for his question. So far as I know, there is nothing in connection with the construction that requires further intervention by the Department of Transport.


William McLean Hamilton: have a supplementary question. Will the minister ascertain and inform the house whether construction is not behind schedule

and whether subcontractors are not also encountering undue delays? May I have an answer to my question?


George Carlyle Marler: I do not think any answer is required, Mr. Speaker.


William McLean Hamilton: May
I have the courtesy of some action by the minister, Mr. Speaker?


Howard Charles Green: May I ask the Minister of Transport whether he cannot give an answer to these questions? He was asked a perfectly reasonable question by the hon. member for Notre Dame de Grace. The minister has acted in the same way on many previous occasions. I suggest to him that, like other ministers, he give decent answers when questions are placed before him.


John Whitney Pickersgill: I suggest that the hon. member read the rules.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the minister of the crown through whom the C.B.C. reports to parliament. That is his designation, according to the order in council. In view of the fact that Mr. Dunton has released to the press copies of letters exchanged with Premier Frost, on the ground that Premier Frost had given out part of that correspondence, will the minister ask Mr. Dunton to release to the press copies of the letters exchanged with Prime Minister St. Laurent, on the same ground?


Hon. J. J. McCann (Minister of National Revenue):: Mr. Speaker, I shall convey the hon. gentleman's request to Mr. Dunton.



CUSTOMS TARIFF


[Stage Direction]
On the orders of the day:
James Joseph McCann: I wish to answer the question asked on Tuesday, April 2, by the hon. member for Vancouver East, which is recorded on page 2958 of Hansard. It has to do with the importation of drugs from the Hoxsey clinic at Dallas, Texas, for the treatment of cancer. The question is with reference to the prohibition of entry of these drugs into Canada. A matter such as this is referred to the Department of National Health and

Welfare, and our instructions are that these drugs referred to in this question are prohibited under the Food and Drugs Act.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Solon E. Low (Peace River):: Mr. Speaker, I should like to direct a question to the Minister of Finance. Has he had time to consider the case of Premium Iron Ores, which I raised in the house the other night, as to whether or not it would be advisable now for Canada to lodge a direct protest with the United States government on their unilateral action in rewriting, or attempting to rewrite, the tax agreement between the two countries?


Walter Edward Harris: Mr. Speaker, we have had, of course, the representations that my hon. friend has made in the house and rather considerable correspondence about this. At the present time I think it would be correct to say that as Minister of Finance I have not felt that we ought to take any action other than that which has already been taken. I know there have been some recent developments. I shall have to look at them to see whether the terms of our tax treaties are such that we ought to make further representations.



ALLEGED BOOTLEGGING IN ALBERTA

[Stage Direction]
On the orders of the day:
Carl Olof Nickle: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Has the minister received a letter from the farmers' union of Alberta, based upon studies of the special committee of that union, alleging that there is at the present time a very serious situation involving the bootlegging of grain in southern Alberta? If this letter has been received, what action is contemplated by the government, or by the wheat board, to correct the situation?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, the bootlegging of grain in Alberta is a matter for the province to police. The federal government has control of grain crossing a provincial boundary, or the international boundary, but traffic within a province is not within our jurisdiction.


Solon Earl Low: May I direct a supplementary question to the minister. What would bootlegging of grain be?
Inquiries of the Ministry


Clarence Decatur Howe: I am sure we would both have to ask the reporter of an Alberta newspaper. I saw a clipping from the paper. I did not know what bootlegging of grain meant, either.


Carl Olof Nickle: May I ask a supplementary question. Perhaps before doing that I ought to give an explanation of the bootlegging of grain as defined by the president of the farmers' union of Alberta. This is taken from the report of the special committee of that union:
Some irrigation farmers or ranchers who have no grain of their own to sell to the wheat board find a straight grain farmer who is short of dollars and buy a readily saleable grade of wheat at a price considerably less than the legal initial payment price at the elevator, and deliver the grain on their own producer's permit.
In some cases this type of transaction is facilitated by the elevator agent who may do it as a service to his customer or take a cut from both producer and the seller in the transaction.
I believe, sir, the rather serious charge involved here is a matter that would certainly come under the jurisdiction of the Canadian wheat board.


Clarence Decatur Howe: Mr. Speaker, it
is quite legal for one farmer to sell grain to another farmer in the same province; but it is quite illegal for the second farmer to deliver that grain to the wheat board. The country elevator agents are also agents of the wheat board, and I would assume they would be vigilant in stopping that second transaction.
As I say, the policing of grain within a province, when there is a violation of the act, passes to the province in relation to oats and barley. As far as wheat is concerned, I am sure the wheat board endeavours to prevent farmers from delivering grain that was not produced within the area to which their quota applies.


Edmund Davie Fulton: May I ask
the minister a question. There is nothing illegal about one farmer in Alberta selling and delivering grain to another farmer in Alberta for the purpose of feeding that grain to the second farmer's cattle, is there?


Clarence Decatur Howe: No.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: I should
like to address a question to the Minister of National Defence. In view of the report in this morning's paper about the reorientation of British defence policy, involving quite heavy cuts in expenditure, is the minister

Income Tax Act
contemplating a review of Canada's defence policy to secure a reduction in our defence expenditures?


Hon. R. O. Campney (Minister of National Defence):: Mr. Speaker, the defence forces
of Canada are continually under review and are being altered in some particulars from time to time. I think the situation with respect to our defence forces is not comparable with the situation of the British forces, and the problems are not always the same.



ROYAL CANADIAN AIR FORCE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I ask the Minister of National Defence if it is yet possible to answer my question of April 3, as to whether the report has been completed with reference to the recent crash of a Mitchell bomber near Manotick?


Ralph Osborne Campney: No, Mr. Speaker, the inquiry is not quite completed. I believe the conclusions are being formulated, but they have not yet been communicated to me.



INCOME TAX ACT

Walter Edward Harris: the second reading of Bill No. 407, to amend the Income Tax Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-
Mr. Monteith:: Mr. Chairman, this clause starts with the following words:
All that portion of section 5 of the Income Tax Act following paragraph (b) . . .
I just do not understand how that applies, because there is nothing following paragraph (b) as far as I can see.


Walter Edward Harris: Well, Mr. Chairman, I am not sure whether my hon. friend has the same edition of the Income Tax Act that I have, but paragraph (b) has a great many items in it-seven, to be exact-and the concluding words of section 5 are:
. . . minus the deductions permitted by paragraphs (i), (1) and (q) of subsections (1) of section 11 and by subsections (5) to (11), inclusive, of section 11 but without any other deductions whatsoever.
Those words are being struck out and the words of the amending bill substituted therefor. The difference is that we now refer to a (qa) of subsection 1 of section 11. This

has to do with alimony and is necessary having in mind the amendment which is proposed in clause 2 of the present bill.


Mr. Fraser (Peterborough):: Mr. Chairman, the minister said he was not certain if the hon. member for Perth had the same edition of the Income Tax Act that he was using. Perhaps that is the reason some income tax offices make assessments which are different from those made by other offices.


Walter Edward Harris: I do not think so.


Howard Charles Green: Mr. Chairman, before this clause carries may I ask the Minister of Finance what conclusion, if any, has been reached by himself and the Minister of National Revenue concerning exempting from income tax the living expenses of construction workers who go to jobs away from their home centres. We had a discussion on this point at the resolution stage preceding the bill. If the minister will remember I suggested at that time that he should consider the question with his fellow minister.
Since that discussion took place I have received a copy of the submission made to the federal government by the Canadian Construction Association a few weeks ago. I find that the attitude of the construction industry itself, as distinguished from the union's was not brought to the minister's attention the other day.


The Chairman:: Order. May I remind the hon. member that we are discussing clause 1, and as far as I can see it has nothing to do with the construction industry.


Howard Charles Green: Well, Mr. Chairman, as Your Honour knows the practice on clause 1 of the bill is to have a fairly wide discussion. This same question was discussed on the first paragraph of the income tax resolutions, and I submit that I am in order in raising the question today because it follows directly the discussion which took place the other day. I merely wish to point out to the minister that the construction association had this to say:
The issue of "Bulletin No. 10" by the Department of National Revenue last summer concerning transportation and living allowances for construction workers sent to out of town job sites has also been the subject of widespread concern in the industry and a number of meetings with the ministers and senior officials of the departments of national revenue, finance and labour. The treatment of transportation allowances has been settled satisfactorily but it is recommended that the Income Tax Act be amended so that construction workers who, because, of the peculiar nature of the industry's operations, are often sent temporarily away from the location where they maintain their home, will not have these extra living expenses considered as taxable earnings.

I do not want to take up any more time of the committee on this question, but can the minister give us any further statement with regard to this problem today?


Walter Edward Harris: Mr. Chairman, I was aware of the representation; indeed, I think I was present when the brief to which the hon. member referred was presented. This was only one more element in our study of the problem, because quite obviously the construction industry as such wants to have the friendliest relations with the union members they hire. On the other hand they appreciated the fact that their permanent employees are permitted this deduction and I think they understand why that would be so. The presentation indicates that they would like the exemption extended.
I have not been able to discuss the matter with my colleague the Minister of National Revenue since our discussion the other night, but if hon. members attach some importance to it, as I assume they do, perhaps what I intend to say could be put this way. I would not want the details of the present bill to be held up or to discuss this on any unrelated subject, but I will discuss the matter with my colleague before third reading of the bill, and perhaps I could say something at that time.


George Hugh Castleden: I would like to ask the Minister of Finance if these expenses were permitted in the 1955 tax returns.


Walter Edward Harris: Yes.


George Hugh Castleden: How was the alteration made; was the act changed or were the regulations changed?


Walter Edward Harris: No; it was by a bulletin issued under the authority of the Minister of National Revenue to his officers throughout Canada.


George Hugh Castleden: Was this done in consultation with the Minister of Finance and with his agreement?


Walter Edward Harris: I do not think we acknowledge either yes or no to that question.


George Hugh Castleden: Well, it makes it very difficult for an employee in the construction crew of a company when one year he is allowed these deductions, and then when he takes employment with a company on the understanding that these expenses will be allowed he finds at the end of the year, after the work has been completed and his returns sent in, that they are not allowed. What steps were taken to inform the employee of the changes in the regulations? I think the minister will realize that it puts the employee in a very disadvantageous
Income Tax Act
position, and really takes from him taxes for which he was under the impression he was not liable.
Could the minister give any explanation to the house, or say whether any consideration might be given this matter to see that notice would be given to these people so they would not take employment expecting to have certain exemptions, and then find the following year, when they send in their returns, that these exemptions are not allowed.


Walter Edward Harris: Any income tax law change, either by statute or regulation, naturally comes as a surprise to some people who are affected by it. Sometimes it is a pleasant surprise, sometimes it is not.


Howard Charles Green: Not very often pleasant.


Walter Edward Harris: There is no need or there is no point in sending out notices saying that we intend to change the law six months from now or something of that kind. We do not usually do that, though some of our changes take effect at a future date. I am sure there is no person in the construction industry, however, who is not aware of the present circumstances, because every organized group of workers, in whatever trade it may be, has considered this information bulletin. Their senior body or union or whatever it may be has made representations. Therefore there can be no question at all about anyone taking employment at the present time while under a misapprehension as to what the situation may be if this bulletin remains in effect.


George Hugh Castleden: I would like to ask the
minister to consider a case which I have had drawn to my attention. A man in this case was granted several hundred dollars in exemption in 1955. He took employment in 1956 completely unaware that there was going to be any change, and he continued that employment under the impression that this exemption would still be granted to him in 1956. I would like to ask the minister when notification was given by the Minister of National Revenue as to the change in the regulations.


Walter Edward Harris: My recollection is that it was September, 1956, but I shall find out and, as I say, I would be glad if we did not take the time of the committee on this point which is not in the bill. I will say something about it on third reading.


George Hugh Castleden: I would just like to ask whether the bulletin which was sent out in September, 1956, referring to the earnings in 1956, would apply to all the earnings in 1956?

Income Tax Act


Howard Charles Green: I would not like to answer the question for the minister-


Walter Edward Harris: I thought you were going to.


Howard Charles Green: But I have a copy of the bulletin here, and it is not dated in September at all. It is dated July 10, 1956, which was in the middle of the summer and after most of these men would have gone out to work.


Walter Edward Harris: That just shows how my memory does not stand up to dates with reference to bulletins issued by another department of the government. I find now that the date should be July 10.


George Hugh Castleden: But the taxable year starts January 1, 1956.


Walter Edward Harris: That is correct.


George Hugh Castleden: Well, then, any person so employed would be working under the impression that such expenses would be allowed as deductions for income tax purposes and would take employment on that basis. There was no change in the regulations until July, and this affected him retroactively for at least six months. Is that not so?


Some hon. Members:: Carried.


George Hugh Castleden: I would like to ask the minister whether he could say anything about this. Does he say or does he not say that he considers it fair for a person to take employment believing that he is going to have this exemption and then, as the result of some order issued by a department of the government, find that taxes are imposed upon him for the six months prior to his having taken on that job?


Walter Edward Harris: Well, it all depends. As I say, I do not want to go on discussing a matter which I am going to have to discuss on another occasion and thereby double the time the house takes on this sort of thing. However, if my friend uses the word "fair", all I can say is that any change is unfair to somebody at some time. I know my hon. friend wants changes, though he does not want one under these particular conditions. However, the change in the tax law must affect somebody at a time when he did not think he was going to be affected.
Now, you may very well say that notice should be given on July 10 saying it will apply to the forthcoming construction season in 1958, if you like; but that is a matter, as I have said, that I will discuss on third reading.


George Hugh Castleden: But this is to be retroactive, and it is the retroactive feature that I am discussing.


Walter Edward Harris: My hon. friend does not seem to appreciate the fact that we have a timetable to meet, and I have said that I will discuss this matter. Will he not take my word for it? If he will not take my word I will ask him this question. Would you apply this law to those who are working after July 10 for the first time; would you feel that we should tax those people but not those people who were working before July 10?


George Hugh Castleden: No, I would not think it
would be quite fair to tax them from July 10 arid then for notice to be given afterwards. I do think at least a little notice should be given. If his tax had been implemented as of July 10 it would not be too bad, if he could know before that he was going to be taxed; but to tax him on July 10 for work performed six months previously is not fair or just, and I do not think the Minister of Finance has answered me. However, if he is going to give us an opportunity to discuss the matter-


Walter Edward Harris: Well, I have already discussed it; that is the trouble.


John Borden Hamilton: On clause 1,
Mr. Chairman, I would like to ask a question dealing with the specific clause itself. Would the minister explain once more what we are attempting to accomplish in this clause, because I do not even understand the wording of the explanation.


Walter Edward Harris: Well, I have not been asked
for an explanation; I was merely asked where the words were in the act, and I did not attempt to explain the amendment. The amendment is quite a simple one if you have time to follow it through.


John Borden Hamilton: I am likely
to feel sorry for myself if we get more complicated.


Walter Edward Harris: Well, I suppose that is a matter for my hon. friend, although I do not think his law practice extends very much to alimony, as I recall it.


John Borden Hamilton: That is right.


An hon. Member:: Does the minister's?


Walter Edward Harris: This means that we are
providing for the husband, and I use him as an example, who has an income which is an earned income and an investment income. Up to the present time, for reasons which I think would commend themselves to my hon. friend, the Income Tax Act has defined earned income and all the rest as investment income, so to speak. This change is necessary in order that the husband may calculate the 10 per cent he could pay with

respect to a retirement fund that is, a contribution to a self-employed retirement fund -on his total income, rather than total income after taking off alimony payments, which is the situation at the moment.


[Stage Direction]
Clause agreed to.
On clause 2-Alimony.
Walter Edward Harris: Mr. Chairman, I would like to amend clause 2 in a manner which is purely technical. In the seventeenth line I would like to strike out the word "separation". A similar amendment will be moved later on with regard to clause 4, to delete the word "separation" at the same place.


Stanley Howard Knowles: May I ask who is moving the amendment?


Walter Edward Harris: Oh, I can. There is an interpretation in Beauchesne which says that a minister in committee can move an amendment. I so move.


William Alfred Robinson: Shall the amendment carry?


Some hon. Members:: Carried.


[Stage Direction]
Amendment agreed to.
John Borden Hamilton: On clause 2 would the minister tell me this. Is the separated spouse entitled not only to claim a married person's exemption but to deduct the payment of alimony as well?


Walter Edward Harris: Not unless there is remarriage.


John Borden Hamilton: I see. In those circumstances there would be two exemptions.


Walter Edward Harris: Yes.
Clause as amended agreed to.
On clause 3-Service pension or allowance.


Alfred Johnson Brooks: On clause 3, Mr. Chairman, I note that according to the explanation this means that allowances under the War Veterans Allowance Act will no longer have to be included in computing income. Does this really mean anything at all, since with the present ceiling a single veteran is not allowed to have an income of more than $1,000 and a married veteran's total income must not exceed $1,620.
I would ask the minister whether this clause has been inserted in contemplation of raising the ceiling, as has been requested on a good many occasions, for both single and married veterans under the War Veterans Allowance Act. If it is not, then there is really no object that I can see in putting this in the act at the present time.


Walter Edward Harris: I will point out an object which the hon. member has not thought of. This is for the purpose of saying that a person drawing war veterans allowance payments shall not have to compute them in his income. Thus if he is dependent on another person his 82715-199
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income will not be brought above a certain amount-it is $950 at the present time- thereby rendering him a non-dependent.


Gordon Knapman Fraser: This would also help a war veteran's widow, would it not?


Walter Edward Harris: I am not sure. The main purpose is the one I have given; that if the person drawing an allowance is dependent on another person, and if by reason of the allowance his income went above the permissible limit and he would cease to be a dependent, we are saying that in computing his income his payment under the War Veterans Allowance Act shall not be considered. In effect we are establishing a higher ceiling.


Alfred Johnson Brooks: I wonder if the minister will give us an example. Would it be a child he would be considering?


Walter Edward Harris: It could be a child, or it could be any person claimed for by a taxpayer. But a situation would arise where A would claim for B as a dependent. If B were in receipt of war veterans allowance, and if by adding that to other income, if any, his total income exceeded $950, he would cease to be a dependent. We say we are not going to use the war veterans allowance in computing B's total income. So it would be $950 for all purposes other than war veterans allowance.


Stanley Howard Knowles: Might it apply in the case of someone having a parent or relative in his home?


Walter Edward Harris: Oh, yes, there would be cases where one would find, shall I say, middle-aged children who have parents who are drawing war veterans allowance and who are dependent on them in the sense that they live with them and have no other means of support.


[Stage Direction]
Clause agreed to.
On clause 4-Capital element of annuities.
William Alfred Robinson: At the same time that clause 1 was amended the minister sent me a further amendment to clause 4, that line 22 on page 2 of the bill be amended by striking out the word "separation". Is that amendment carried?


Some hon. Members:: Carried.


[Stage Direction]
Amendment agreed to.
John Borden Hamilton: On clause 4 as amended, Mr. Chairman, I am not trying to give a short course on this particular act because I do not intend to extend my practice along these lines, but I have had representations from constituents in connection with this matter. With respect to a separated wife who receives alimony payments the husband, if remarried, can claim a married

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man's reduction or exemption. He can also claim in respect of payments made to the first wife. In the wife's hands, is that classified as income; and second, if so, is she entitled to a married exemption as far as her tax is concerned?


Walter Edward Harris: First of all, it is income and taxable income in her hands, any payment of alimony. Second, if she has a self-contained establishment and supports a dependent she can claim the exemption.


Mr.   Johnsion@Bow River: Mr. Chairman, how does this work in with the $1,500 which is being allowed to be applied on annuities? Does this section affect that in any way, whereby the capital and interest on this new $1,500 allowance introduced this year would both be taxable when received?
I do not know whether I have made myself clear. I am wondering this. The minister will recall that this year he announced that there would be $1,500 allowed from income to be put into annuities or pension plans- lay-away plans, as it were-and that the capital should not be taxed as of now, but that later on it would be.
If a person applies that to an existing annuity, supposing he has a government annuity, would there have to be a new contract, and would this section affect that?


Walter Edward Harris: Mr. Chairman, perhaps we could leave that until we reach the clause which deals with the retirement allowance, on page 9. In the meantime, as I understand the question, someone has a government annuity on which he has been paying. In the past that payment has been subject, when it was withdrawn, to tax only on the interest portion. Commencing with the change in the law the payment on that annuity becomes deductible for income tax purposes, and I think my hon. friend wants to know whether the whole proceeds of the annuity ultimately received become subject to income tax for that reason. I think the answer is no, with some qualifications. When we come to this other clause we will discuss that.


Mr. Johnston (Bow River):: This clause does not pertain to that.


Walter Edward Harris: Only in an indirect way. It has to do with something else.


Jay Waldo Monteith: Apparently subclause 6 of clause 4 has to do with exempting the cost of installing services such as electricity and so on. I do not quite understand the words "to the extent that the amount so paid was not paid (a) to acquire property of the taxpayer." Does that mean if it is a capital purchase? Is that what it is meant to mean?


Walter Edward Harris: This is to exclude the application of the benefit of the section where property actually changed title. If it did change title, then it is an ordinary capital purchase and would be subject to the normal laws in that regard. This is to cover the case where a company or a person has to pay to get something, though he does not get anything in return but a service for which he pays rental of some kind in the future.


[Stage Direction]
Clause agreed to.
Clauses 5 and 6 agreed to.
On clause 7-Charitable donations.
Carl Olof Nickle: Having regard to the amendment proposed to section 27 of the Income Tax Act, I think most members of the house will agree that this is a step in the right direction; but I am forced to the conclusion that it does not go nearly far enough in resolving an increasing problem in Canada. I refer to the providing of capital, whether it be private capital or moneys from governments, to take care of the rapidly expanding requirements for educational facilities, bursaries, scholarships and aids to education for young Canadians. It does not go nearly far enough to make available a sufficient flow of private money from individual Canadians or corporations for the adequate support of organizations like the Red Cross, the Boy Scouts and a host of charitable organizations which are contributing to the building of a better nation.
The amendment suggested here perhaps will stimulate to some extent in the current or in future years the provision of private money through donations to various Canadian charities by allowing any excess of donations this year to be added to the deductions in the coming year. But where donations of corporations may have exceeded 5 per cent in one year or those of individuals may have exceeded 10 per cent, I am sure it would have the effect in the coming year of reducing the donations which the company or individual might be willing to make in that future year so they might take advantage of the excess they are now allowed to write off in the following year.
I suggest that there be an additional amendment to section 27 and that section 27, subsection 1, paragraph (a), subparagraph (i), now reading "in the case of a corporation, 5 per cent of its income for the year" should be amended by striking out "5 per cent" and replacing it with "7J per cent", and that section 27, subsection 1, paragraph (a), subparagraph (i), now reading "in the

case of an individual, 10 per cent of his income for the year" should be amended by striking out "10 per cent" and replacing it with "15 per cent."
While comparisons perhaps are not too wise at times, especially comparisons with the laws of another country, under United States income tax laws a corporation may make donations for charitable purposes up to 10 per cent of its income and an individual may make donations up to 20 per cent of his income. It may well be that these percentages are too large for Canadians to accept at this time. Certainly in the case of most corporations or individuals these percentages go beyond the portion of their incomes they would be willing or able to contribute to charitable organizations.
For some years Canada has maintained its limits on donations at 5 per cent for corporations and 10 per cent for individuals. I feel, sir, that we have now reached a state in our country where the demands for funds are so great that Canada would be well advised at least to split the difference between our present levels of allowable donations and the levels now prevailing in the case of our neighbour to the south. I suggest that we can achieve that splitting of the difference by revising the maximum which any corporation may give to recognized charitable organizations in any year to 7-| per cent, and in the case of individuals to 15 per cent.
Before I go any further, would the minister indicate whether this matter has been considered by the government and, if so, what are the government's views on the amendments I now propose.


Walter Edward Harris: 
Carl Olof Nickle: Mr. Chairman, I should not like to leave the impression that by suggesting this amendment I am trying to get something by way of tax concession for any individual or any corporation.


Walter Edward Harris: I did not suggest that.


Carl Olof Nickle: I think the minister is quite aware, as are other members of this house, that donations to any charitable organization cost the taxpayer money and involve to some extent a loss in revenue to the government.
However, my point is this. As indicated by such recent federal actions as the setting up of the Canada Council, our grants to universities and the increase in various welfare payments, the government of Canada recognizes the fact that there is a need which must be met either by private capital or by government capital, the capital of all the


Walter Edward Harris: No, I am not prepared to do that, for the reasons I have given. There are perfectly acceptable reasons why corporations or individuals should feel that they might contribute to charitable organizations which will do a great deal of good work and in particular, as my hon. friend has mentioned, for scholarships and the kind of investment that returns money in the long run. On the other hand, these corporations and individuals are, I think, obliged to contribute to the cost of government, the cost of maintaining essential services here, including our cost of defence and indeed our cost of charitable donations in the sense of the exemptions that we now grant in particular cases. It may well be that these persons or corporations would feel that they were doing more for the people of Canada by these donations than they would be doing by paying the money in to the revenues of the federal government. However, that would be a matter of opinion.
All I can say is that the amount of tax reduction we gave this year, as of recent date on tea and coffee, was about the amount of $10 million we have spoken of here this morning. If there were $10 million more to be used by way of tax reductions one would wonder whether it ought to come in a further reduction of sales tax on an item that is in common use by the public, or whether it would be better to allow the tax reduction for the particular charitable purposes my hon. friend has in mind.
I only say that as at present advised I think we ought not to extend this exemption. Indeed I think we ought to look forward to a time when the government will be spending more on these things itself. There is a great increase in the amount being spent this coming year by the government on projects which have a long-term value, such as the Canada Council and additional sums in the estimates for research and the matter of scholarships also. Whether or not this is going to be another case of finding that when the government invades a field private donors leave it, I do not know. But certainly the need is there, and between us we ought to be able to meet it somehow. Nevertheless I feel that for the moment we cannot go beyond what we have done.


Carl Olof Nickle: I should like to make one further comment. Under an amendment to the succession duty act which we shall be considering later today the government is going a further step along the way of encouraging Canadians to turn over a portion of their estates to charitable causes in Canada, by giving some relief from succession duties on the amounts which are contributed to charities on the death of the owner of the estate.
By making further concessions by way of reduction in succession duties it seems to me we encourage Canadians to give up part of their estates or all of their estates to charity on their death. Why not go one step further and recognize that it is better to encourage Canadians during their lifetime to give more liberally to charitable organizations and to educational causes in Canada? If we are prepared to give up some federal government revenue derived from succession duties by making concessions in the succession duty act-in other words, if we are willing to give Canadians concessions if they are prepared to give parts of their estates to charities on their death-why should we not encourage them to do the same thing during their lifetime by accepting the recommendation I have just made?


William Alfred Robinson: Shall clause 7 carry?


Stanley Howard Knowles: I wish to say something about subparagraph 2 of clause 7 along the lines of the discussion yesterday. This is the subparagraph that has to do with the allowance for the expense of a full-time attendant for a person who is necessarily confined by reason of illness, injury or affliction to a bed or wheel chair.
As the minister knows, and as all hon. members know, we have discussed this on previous occasions, as the result of a ruling of the Exchequer Court of Canada denying a taxpayer the right to claim deductibility because his wife was confined by reason of illness, injury or affliction for most of the time to a bed, but part of the time to a chair that did not happen to be a wheel chair.
I have given further thought to the matter since the minister spoke on it yesterday, and it does seem to me he should consider changing the word "wheel" to the word "invalid". I draw his attention to the fact that he does not narrow the definition of "bed". He does not say it has to be a particular kind of bed. He does not rule out a person who might be confined to a couch. Anything that is a bed meets the condition of the subclause. Yet when it comes to the chair he insists on a wheel chair.
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I appreciate the point he made yesterday that one does not want to open up this clause too widely, but surely the point is not the construction of the bed or the chair to which a person is confined; surely the point is that the person is a permanent invalid, is permanently ill, or at least in that condition for a full 12-months period. I plead with the minister once again to consider changing the words "wheel chair" to "invalid chair". We suggested yesterday that it might read just a bed or chair. The minister thinks that goes too far. Surely my suggestion that it should read "invalid chair" or "invalid's chair" is reasonable.
I have considered again the wording of the judgment which was handed down in the case to which reference has been made, and it is clear that the judge himself was surprised that the wording was there. He admitted he had to stick to the strict letter of the law in making his decision. It does seem to me that the judge was inviting parliament to be sensible on this point and change this wording from "wheel chair" to something that would take care of the kind of case which was recently considered by the Exchequer Court of Canada.
Has the minister given further consideration to this matter since yesterday, and is he now prepared to respond to the suggestion of the judge that parliament should be sensible on this point?


Walter Edward Harris: Yes, Mr. Chairman, I have given consideration to it and I am not prepared to make a recommendation because, as I understand the evidence in this particular case, while the comments the judge made with respect to "wheel chair" were made no doubt for the purpose of drawing attention to what might appear to be an oddity in the law, the evidence before the judge was that the lady was outside the house. That might well have been the reason she should not get the benefit of this particular deduction; that she went for drives, and that while he was commenting on her sitting in a rocking chair, he was drawing attention to that phase of the case. Whether or not he rested the judgment on that alone and ignored the other evidence I do not know, but I am told that the woman in the particular case was not confined to her bed or to the chair; she was outside the house during the time.


Stanley Howard Knowles: Mr. Chairman, surely the minister is now going beyond the problem that confronts parliament. I quite agree that if a person claims deduction and does not meet the conditions of that deduction, the department in the first instance and the income tax appeal board and the Exchequer

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Court of Canada can govern themselves accordingly. Surely we have an obligation to make sure that the definition in the act is a sensible one.


Walter Edward Harris: I agree with that, and I can quite understand that someone might feel that this additional advantage ought to be granted to anyone who is confined to a house by reason of illness. But if you are going to make it go that far-


Stanley Howard Knowles: And the requirement of a full-time attendant.


Walter Edward Harris: And the requirement of a fulltime attendant-we have never thought that we ought to go that far. When this amendment was introduced not so long ago it was on the plea of a great many hon. members that we ought to consider the extreme cases, not the ordinary illnesses but the extreme cases. And the extremity determined was if you were confined to a wheel chair or to your bed for a period of 12 months.
As I said yesterday, one might make the remark that that is being too extreme; that it ought to be six months, or less than that. I am not prepared at this moment, until I am far better acquainted with the kinds of cases on which claims are made and granted, to extend the advantage, recognizing as I do that it does seem a little strange that we would not put in any type of chair. The wheel chair was put in for a particular purpose. It defined right away a great many people who could take advantage of this as being persons who were confined to wheel chairs.


Stanley Howard Knowles: May I ask the minister this question. Surely in what he said earlier he was not objecting to persons who are permanent invalids, confined for most of the time to their beds and their homes, being taken for a ride once in a while?


Walter Edward Harris: Well, this is just the kind of remark I would expect from my hon. friend when he-


Stanley Howard Knowles: It is the minister's remark I am commenting on.


Walter Edward Harris: My remark was that one does not object to sick people getting out in an effort to get well, or even to spending some pleasant hours outside, but the purpose of the original advantage was to cover the person who is confined, not one who is out. Now, I am not going to suggest that because a doctor finds that his patient in 11 months has progressed so well that fresh air and a new interest in life would be of advantage should say to this person, "No, you stay in bed for another 24 days and you will qualify for the tax deduction and then I will let you out." But these are the kinds of things you
TMr. Knowles.]
ought to have in mind when you make your laws, and the very reason I have said it does not take on a large but a clearly defined group, before you move on to another one.


John Borden Hamilton: Mr. Chairman, I am trying to cut through some of the arguments I have heard on both sides now on this particular question, and it seems to me that the minister and his department are fully protected by the restricting nature of the other provisions in the same subclause. It refers to "full-time care in a nursing home of the taxpayer, his spouse or any such dependent". Then it says, "throughout the whole of a 12-month period". Surely these first two requirements pretty well take away any possibility of persons attempting to take advantage of any small loophole in the rest of this Clause.
I read the case in question, Mr. Chairman. I think the judge very definitely did point out this particular feature, perhaps not as a deciding issue in connection with the case but as a very definite warning that conflict was going to arise in the future over this very thing. As I read the clause now I can see someone who, say, is well enough to be lifted from a bed and placed in a wheel chair, otherwise complying with all the other requirements, and taken out along the street in a wheel chair in the sun, or whatever is necessary or whatever can be done. On reading this section I see the case of a person who has to be lifted from bed and placed in a stationary chair in a room where there may not be a wheel chair, and complying in all other respects with this clause; yet there is no provision to cover that case or if there is a provision it is a discriminatory one.
I think in view of the two other restrictive parts of this clause the words "wheel chair" might well be deleted, or certainly something along the line suggested by the hon. member for Winnipeg North Centre substituted.


Mr. Blair:: Mr. Chairman, I think this
clause could be rewritten in some manner and still meet the objective of the minister. There are some people who when placed in a wheel chair outside can go all over the garden lot. There are others who have to be lifted into a chair. It may be a morris chair or an arm chair or something of that nature. They cannot move or propel themselves or anything of that nature, but can be lifted into a morris chair, wheel chair or rocking chair for a short time in order to rest out of bed. Perhaps after an hour or two they must be placed back in bed.
I know what the minister is trying to accomplish and I think it is quite right, but I believe if the wording were different he

could accomplish what he is attempting to do and still meet what the hon. member has just spoken about. I just point out that the wheel chair is not a limitation, because those who occupy them can go any place they like. In many cases they can propel themselves and are infinitely better off than a person who has to be lifted out of bed and placed in an arm chair. I think the minister should consider rewriting that clause.


Walter Edward Harris: I am very grateful for the
comments of the hon. gentlemen. It seems to me that what really happened here was that the lady got out of the bed. The judge went one step further and said that getting out of bed in itself vitiates the advantage of the tax concessions, but it would not have done so had she got into a wheel chair. If the original premise is correct; namely if parliament intended to allow an exemption to two groups of persons, the first being persons who have been confined to bed for 12 months-and I do mean confined to bed, because that is what the section says-then unless there have been administrative regulations with which I am not familiar this lady would not have lost the advantage by getting out of bed.
There is another group of quite obviously paralysed persons or disabled persons who do not have to stay in bed but can get around with a chair, so we said we would give that group the advantage of this also because primarily they require an attendant, so there is nothing unusual about this judgment. The judge says in effect, "If you had been fortunate enough to be able to get into a wheel chair I might have been able to find in your favour," though I do not know how many of these Sunday afternoon drives or other things would have to take place before the judge would have felt he could not grant the exemption.
Let us leave it this way. I think the hon. member for Lanark has agreed with me that it must be a genuine benefit for a very needy group of people, and that if we are too restrictive, if we should not have these groups just confined to a wheel chair because they are paralysed and need an attendant or are in bed and need an attendant, if there is an in-between course we will try and find what it is.


John Borden Hamilton: Mr. Chairman, I intended to ask a question about the first part of this clause. How does the minister define, "housing corporations resident in Canada"? Does that mean that the buildings which the corporation constructs are in Canada or does it mean the corporation must hold a charter from one of the governmental agencies?
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Walter Edward Harris: I could explain that when we reach clause 14. It is the same group.


Mr. Hansell:: Mr. Chairman, I think perhaps the point I want to raise was referred to on a previous occasion. If that is the case I shall have to go through Hansard and look it up. I want to refer to the $100 deduction for charitable donations. It occurs to me there is an unfairness about this in one respect. A person is allowed a deduction of $100 for charitable donations to start with, and he can claim that $100 even though he has not given a dollar. This means that the person who is generous and gives, let us say, $500 is really credited with only $400 compared to the other person who claims $100 and has not given anything. I think this provision is unfair in that respect.
I am not saying that the person who gives $500 should be credited with a donation of $600, but I think it is unfair that the person who is a mean man can claim $100 even though he has not given a nickel. The generous person who gives $500 to his church or to the Red Cross or some other charitable organization is given $100 less credit than the man who does not give a thing. It seems to me there should be some balance of fairness there.
Why should not the man who does give to charitable institutions be allowed $100 the same as the mean man, plus credit for any other amount in excess of that which he might give? Perhaps it would be fairer if it were provided that a person cannot claim $100 without supporting his claim with receipts. That would solve the problem. However, that is not what I understand is going to be the case. I understand that a man can claim $100 even though he has not given a nickel, and he is not required to produce any receipt, while the fellow who does donate generously to charitable institutions does not receive credit for that $100. Does the minister not agree that there is an element of unfairness in this provision?


Walter Edward Harris: Yes, Mr. Chairman. That is one of the considerations we had against doing this. It is quite obvious that a citizen who considers that his contributions to charitable organizations or religious bodies or his union dues ought to be more than $100 will feel that this provision is an advantage to someone who not only does not contribute proportionately as much as he does to these desired objects but does not even contribute the $100, and takes a slight tax advantage to the extent of his tax rate on the difference between his total donations and the $100.
However, when we looked over the tax returns, as I indicated in my budget speech,

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we found that in the group who would be affected by this we had, X think, 70 per cent of the persons filing tax returns. There would have been some who had no contributions of any kind but there were a great many, I think, who had contributions almost up to the $100, so there was a real advantage from the standpoint of the efficiency of the department and the cost of operating the department, not to speak of the convenience to the public in providing this exemption.
I can only say that we could not think of any step to take to add to the advantage of the citizen who makes generous donations except the one we have passed just now, providing that if he gives above his limit he may carry the balance forward to the following year. I can only say that those of us who are paying the $100 will feel that some persons are having something from the government. As my hon. friend the member for Winnipeg North Centre said yesterday, this is in effect a further exemption of $100 added at the bottom for a group of people and not for the whole of the taxpaying public.
However, on the medical side you may well find a person who perhaps does not pay the full $100 for other purposes but does need it for his medical expenses; and we thought on balance that this would help considerably in the busy months of April to July or something like that, as well as the year round, and that even if we were granting a straight tax exemption to some persons we were at least reducing the tax load. I might add that we also were aware that there would be argument made by the hon. member for Winnipeg North Centre and others that this ought to be recognized as a true exemption, and that these donations should be treated as further deductions over and above the $100.


Thomas Speakman Barnett: Will the minister tell the house whether any person who has not paid $100 in charitable donations is compelled by this change to collect the $100 if he has only contributed perhaps $50.


John Borden Hamilton: There is a high sense of morality there.


Walter Edward Harris: I am not sure how the form will be made up, but I fancy it will provide for a standard deduction worded in such a manner that there will be no offense to one's conscience for taking advantage of it.


Stanley Howard Knowles: Mr. Chairman, usually when words are put into one's mouth by someone else a complaint is registered. I register no complaint; I accept the words which the minister has put in my mouth and which indeed are based on what I said yesterday while we were on the income tax resolutions.

I feel that the government should have given consideration to the two requests that have been made in parliament and outside of parliament; namely that the statutory exemptions should be increased and also that something should be done relating to the 3 per cent floor under medical expenses so far as income tax deductibility is concerned.
The minister in our view tried to effect a compromise between these two requests, and in effect he has met neither of them. So far as the change being an increase in the statutory exemption of only $100 is concerned, that hardly meets the increased cost of living or the reduction in the value of the dollar since the present figures of $1,000 and $2,000 were set for single and married taxpayers respectively. I hope still further consideration will be given to the need for a greater increase in the statutory exemptions than $100, and I hope, too, that consideration will still be given to the justification that people have for expecting tax consideration for the three types of expenses or contributions which are mentioned in this section.
As my hon. friend the member for Macleod said, in line with what I said yesterday, there are those who make heavy contributions to approved charities and who will not be given preferential treatment as against those who make no contributions. The same point has to be made regarding trade union dues and also dues to professional organizations. When the amendment was made in 1951 or 1952, I believe it was, to provide for trade union dues to be allowed deductibility, that was a recognition of the part that is played in our national life by those who contribute membership dues to trade unions and to professional organizations. That recognition and that consideration of what these people do by keeping going these voluntary and democratic organizations is now more or less wiped out, because everybody will get $100 covering this kind of thing anyway; and I think this is, in a sense, defeating the recognition which was accorded by the previous decision.
As I said yesterday, we cannot but welcome tax relief of any kind which is given to our people, but it seems to me that this proposal, rather than meeting the proper request for consideration of the medical expense matter and the proper request for some amendment to the trade union dues clause, to cover all trade union dues, is really just a little token toward the demand for an increase in the statutory exemptions. All sorts of bodies and organizations are suggesting that the statutory exemptions should be raised from $1,000 single and $2,000 married to such figures as $1,500

single and $3,000 married. The minister has tried to meet these requests and these demands by an increase to $1,100 and $2,100. This may be typical of my hon. friend, but it is not good enough.


John Borden Hamilton: Could the minister inform us how much loss of revenue the department will suffer by the blanket use of the $100 exemption?


Walter Edward Harris: Do you mean the standard
deduction of $100?


John Borden Hamilton: In other words the department, I assume, has calculated what the difference will be between the situation had they continued on the old course of allowing small individual receipts to be filed with them and deductions permitted, and the amount they will now collect allowing an across the board exemption of the additional amount.


Walter Edward Harris: The figure we considered was $32 million as a minimum and $38 million as a maximum.


[Stage Direction]
Clause agreed to.
On clause 8-Dividends received by corporation.
William Alfred Robinson: It being one o'clock, shall we adjourn?


Walter Edward Harris: Mr. Chairman, would you be good enough to call clause 8, as I would like to explain this clause before we adjourn and I shall only take a very few minutes. Clause 8 is a very complicated one; it has to do with a situation which has arisen and may arise again.


Mr. Macdonnell:: Would the minister permit me to interrupt for one second to make a request to him. We just had the resolutions yesterday, and in the bill we have had this morning we have three divisions; first, the division which carries through; second, certain consequential resolutions which we are all in favour of passing; and third, as the minister has already said, certain new resolutions, one of which is very complicated.
I do ask the minister very earnestly if he would save these, particularly Nos. 8, 9, 10, 11 and 21, until next Tuesday. The reason I am asking this, though the minister well knows that we have no desire to drag our feet and postpone things-far from it-is that, and I am glad the minister used the word, these are very complicated resolutions in this section. We will need to give them a lot of study before we can appreciate their significance, and I do hope the minister will believe that I am making this request in good faith. I think perhaps if we had known prior to this it would have been better, but there was an
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unfortunate mistake in the distribution-the bills got into the Senate boxes, I am told- and in any event there was not time to fathom the real significance. I trust the minister will regard this as a reasonable request.


Walter Edward Harris: Well, if as we go through there are some things which the hon. member feels we should allow to stand over I will be quite agreeable, because I recognize the difficulties. While I thought we would be able to get the bill distributed last evening we were not able to do so in some cases. However, I would just like to make a brief explanation about clause 8 and then we could adjourn, and my hon. friend could think it over during the lunch hour.
This is a case of two non-resident corporations, each of which owns a subsidiary in Canada, and the two non-resident corporations are merged, or amalgamated, or what you will, so that one non-resident company then has two subsidiary companies in Canada. Under those conditions the present law does not provide for that tax relief on the designated surplus which it would if they had not merged. All this does is provide that a single company taking the place of two parent companies should have the same advantage as if the merger had not taken place.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
William Alfred Robinson: Shall clause 8 carry?


James MacKerras Macdonnell: I made a request to the minister with regard to clauses 8, 9, 10, 11 and 21, and I had some hope that he was going to grant it.


Walter Edward Harris: I will of course grant the request if my hon. friend feels after my explanation that it is still desirable to have a postponement.


James MacKerras Macdonnell: My answer is that the minister's explanation was very clear and convincing, but with regard to complicated matters of this kind I have the feeling that when one has time to reflect on them and really study them they sometimes present other aspects which do not appear at first blush. As I said just before we rose for lunch, due to various circumstances we had no time to study these new clauses. I put the situation very earnestly to the minister and he was quite receptive to the suggestion that there might be a chance of these particular clauses being left over until Tuesday.


Walter Edward Harris: Then clause 8 will stand. What are the others?

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James MacKerras Macdonnell: The others are 9, 10, 11
and 21.


Walter Edward Harris: Those will stand, Mr. Chairman.


James MacKerras Macdonnell: I should like to express my gratitude to the minister.
Clauses 8 to 11 inclusive stand.
Clauses 12 and 13 agreed to.
On clause 14-Certain housing corporations.


James MacKerras Macdonnell: Could we have a word of explanation about clause 14 and the two new paragraphs? The explanatory note says that they are to provide for the exemption from income tax of the organizations described therein. Perhaps it is self-explanatory. We understand what is involved in the case of the national conference of Canadian universities, but when it comes to low cost housing accommodation are these non-profit organizations?


Walter Edward Harris: This is to provide that there will not be income tax payable on the income of a corporation providing low cost housing accommodation for the aged. That was the group we were talking about the other day with respect to donations for charitable purposes. Paragraph (gb) provides that the income of the national conference of Canadian universities shall also be deemed non-taxable.


Mr. Hahn:: I believe the minister has had certain representations requesting that the discount taken on mortgages involved in the financing of low cost housing be deductible for income tax purposes. Frequently in the selling of mortgages one has to take a substantial discount in order to secure money. Has the minister received any such request and, if so, what consideration has been given to it?


Walter Edward Harris: I am afraid I do not quite understand the relationship of the tax element to the mortgage financing of the construction. If we make the revenue nontaxable it would not matter whether the revenue was small or large, depending on the cost of the money that was used in doing the building. Perhaps I have not understood my hon. friend.


Frederick George Hahn: Possibly I am working under a misapprehension, but I was given to understand that the minister had received a certain request from a group or from individuals with regard to this matter. It is my understanding that the builders of these low cost homes sometimes find it necessary to sell a second mortgage or other mortgage and take a substantial discount, and I understood the

request was that the loss incurred on account of the brokerage fees and the discount should not be subject to income tax. I hope I have made myself clear.


Walter Edward Harris: I do not think that has been the case. This is a provision whereby, no matter what the cost of the money may have been or whether or not there was a discount attached to it, in the balance the net revenue, whatever it may be, becomes non-taxable.


[Stage Direction]
Clause agreed to.
Clause 15 agreed to.
On clause 16-"Supplementary unemployment benefit plan" defined.
Stanley Howard Knowles: Would the minister say a word on clause 16? Does it impose any limitation that did not exist previously so far as these supplementary benefits are concerned?


Walter Edward Harris: It limits what was passed last year and in a manner that we would have followed last year had we realized the possibility of there being a loophole in the amendment then proposed. Briefly, this is the result of experience gained in the last year. We found that under the amendment presented then persons who would not properly be included in the group who would enjoy the benefits of supplementary payments by reason of being laid off were able to benefit although not laid off in the sense that the plan was intended to cover. We are excluding such people by the use of the word "exclusively". They have not been excluded up to the present time, but in our opinion they are not persons to whom would be paid a supplementary payment such as the supplementary annual payments that it was intended to cover.


[Stage Direction]
Clause agreed to.
On clause 17-Definitions.
James MacKerras Macdonnell: Is the minister going to make a statement?


Walter Edward Harris: Before my hon. friend begins, I should like to present an amendment to clause 17 which I shall explain later. I do not think it is necessary that I should read it.


James Joseph McCann: I move:
That bill 407, an act to amend the Income Tax Act, be amended by striking out lines 1 to 7 on page 10 thereof and substituting therefor the following:
(ii) an arrangement under which payment is made by an individual
(A)	in trust to a corporation resident in Canada, of any periodic or other amount as a contribution under the trust, or
(B)	to a corporation approved by the governor in council for the purposes of this section that is licensed or otherwise authorized under the laws of Canada or a province to issue investment

contracts providing for the payment to or to the credit of the holder thereof of a fixed or determinable amount at maturity, of any periodic or other amount as a contribution under any such contract between the individual and that investment corporation, to be used, invested or otherwise applied by that corporation resident in Canada or that investment corporation, as the case may be, for the purpose of providing to the individual, commencing at maturity, an annuity for life.


Walter Edward Harris: May I make a brief explanation, Mr. Chairman. This is to bring within the scope of the amendment institutions known as investors' security institutions which in return for a contract under which a periodic sum of money would be paid to them, similar to payments on annuities and the like, would at some future date repay a fixed sum of money either with or without additional benefit by reason of the investment of these funds. We have found this seems to conform to all the requirements in the proposal with respect to retirement allowances, and we felt that we ought to include them in it.
I did not intend to make any general statement on this matter. I covered the intention of the plan in the budgetary speech at greater length than normally one would deal with it on the budget. I did so for the purpose of informing the public and the house as to what we were trying to achieve. The pages which follow page 9 are our first effort at it. I have no doubt whatever that improvements can be made in the drafting and in the plan as we go along. However, we have presented that basic plan on which no doubt there will be refinements in the future. If hon. members have questions, of course, I shall be glad to answer them and to accept for study any suggestions to improve the minimum plan that we have presented here.


James MacKerras Macdonnell: There are one or two basic questions I should like to ask. First of all, as I read the section and inform myself as far as I have been able to do so about similar plans elsewhere, it would appear that from a practical point of view this will be primarily carried out through arrangements with insurance companies. That is, as I understand it, the way it has been done in Britain and possibly elsewhere. That leads me to ask one or two questions with that thought particularly in mind. On page 9, as I read down the page I come to the word "premium", the definition of "premium", and I find this language:
(e) "premium'' means any periodic or other amount paid or payable under a retirement savings plan, ...
Would that apply to a single premium insurance policy?
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Walter Edward Harris: Yes. That would apply to any payment, even if it is not a periodic payment; so that theoretically a person may buy an annuity with a lump sum payment, but of course that payment would not be wholly deductible. It would be deductible only to the extent I mentioned, namely 10 per cent or $2,500.


James MacKerras Macdonnell: As I come down further I come to paragraph (h) on page 9, "retirement savings plan" and I find this:
(h)	"retirement savings plan" means
(i)	a contract between an individual and a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, under which, in consideration of payment by the individual of any periodic or other amount as consideration under the contract. that person agrees to pay to the individual, commencing at maturity, an annuity for life, or . . .
I should like to read the next subparagraph:
(ii) an arrangement under which payment is made by an individual in trust to a corporation resident in Canada of any periodic or other amount as a contribution under the trust, to be used, invested or otherwise applied by that corporation as trustee for the purpose of providing to the individual, commencing at maturity, an annuity for life.
Reading those two paragraphs together and adding to them the amendment the minister has moved, may I ask how wide a range of corporations that would involve. For instance, would it include trust companies or banks, or would it include any corporation as well as the kind mentioned by the minister a few moments ago? Would it really include any corporation with which an arrangement is made and which comes within the scope of the act?


Walter Edward Harris: We are going to try to carry out the plan in the broad sense rather than the narrow sense. If any company or trust company can show that they conform with the intentions we have tried to describe, of course their plan will come within the ambit of the act. But it seems to me there are three rather obvious groups. There is the life insurance company; there is the government annuity; and then there is the investors' syndicate that I mentioned a few moments ago, which in fact issues a written agreement which on the face of it is an agreement to refund a certain sum of money at a fixed date, and so on.
I should say there is a fourth group, namely the professional groups which were referred to in the budgetary speech and which, because of the nature of their association, could act as trustees for the members of the association in accepting these payments and investing them for the purposes that we have in mind.

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These appear to be relatively obvious and simple. But then when we move into the trust companies which today, as I understand it, make a practice of issuing guarantee certificates which are only a guarantee of the repayment of the money at a future date and some specified interest rate in the meantime, we find that these companies would not conform to our requirements. If the trust company then found it possible within its charter or by amendment to it under the provincial legislation and subject to any condition that the provincial government might impose, and chose to sell contracts similar to those which I happen to know are now being sold by the investors' syndicates, for example, I am quite satisfied that we should accept that as conforming to the requirements of the bill. I think it is obvious that some trust companies may feel that this would be a desirable branch of their business and may take steps to do it. But at the moment I am not aware of any that have such a plan in existence, though they are making inquiries and will no doubt consider whether or not it is in their interest to do so.


James MacKerras Macdonnell: The minister used the phrase "payment of a sum of money". I imagine he meant by that payment of a sum by way of annuity.


Walter Edward Harris: Oh, yes.


James MacKerras Macdonnell: Then my next question is this. Suppose any individual trust agreement were entered into, let us say, with a bank or trust company whereby that institution undertook to take money, to invest it and, at the end of a certain time, contracted to pay an annuity. Would that not come within the ambit of the clauses the minister has read?


Walter Edward Harris: Yes. The purpose is that at a fixed period of time, at a certain age of the individual, he would then begin to receive an annuity for life. I think we would be fairly careful in authorizing, if I may put it that way, particular plans, having in mind the trustee concerned. I think you will find that anyone who could set up a business that appeared to be responsible to do this would come within our requirements.
As I understand it, the banks are not now in a position to do this. They accept money for deposit and in some cases it is not withdrawable except on certain notice, and in other cases there is a checking account that can be used all the time. But if they were to accept money which could not be withdrawn but which could be used in that manner for investment, and were to make a contract for the payment by way of annuity at a future date, I see no reason why we

could not accept it. That is why I say I do not know of any bank that is capable of doing that at the moment, though there have been inquiries from them as well.


James MacKerras Macdonnell: Is the person who accepts the money and enters into the contract necessarily a corporation?


Walter Edward Harris: Those that we think at the moment can do so are corporations, but it is conceivable that the professions might prefer not to have their own guild, so to speak, act as trustee and might appoint someone for that purpose. If so, there would be no objection to that.


James MacKerras Macdonnell: In his speech the minister said, as I understood it, that an annuity of this kind would not be assignable. I draw the minister's attention to line 12 on page 11. I take it that the reason for the annuity being assignable, apparenly, is when it is assignable by will?


Walter Edward Harris: Yes, I think the words are "by will", not "at will".


Stanley Howard Knowles: Can the minister make a few comments with regard to government annuities in relation to this addition to the Income Tax Act, and say whether this change effects any change in the income tax treatment accorded government annuities at both ends? Perhaps I might be permitted to say we are glad to note that the rate of interest applied to government annuities has at last gone up to 4 per cent.


Walter Edward Harris: May I thank my hon. friend. As I said the other day, if he stays here longer he will find that we go on doing things in the proper manner.


Stanley Howard Knowles: And as I said, how long, O Lord, how long?


Walter Edward Harris: Oh, yes; but there has to be, along with the genuine desire to do something, the capability of doing it.
To answer the first question, Mr. Chairman, the present annuity will not be interfered with in any way. Payments which may be made on it in the future may be deductible for the purposes of these provisions; but to the extent of that payment, and the claim for deduction that may be made for it, there would be an alteration in the taxation when the annuity is paid. I think that is logical, and I think my hon. friend agrees.


Stanley Howard Knowles: May I ask if that is optional. Does the taxpayer decide at which time he wants the deduction?


Walter Edward Harris: At the moment he has his contract which provides for income tax on interest when it is paid. He can now opt

to claim deduction subject to the conditions I have mentioned, which will be spelled out in the regulations, or he may buy a new annuity which would come wholly within this and would not have to be divided.


Stanley Howard Knowles: In other words, if a person who has had a government annuity for some time and has not been claiming, or been entitled to claim, deduction for the payments he has made in, now chooses to do so, he can claim deduction for those payments from now on? I note the minister is agreeing. Does it follow that there will have to be some complicated formula to determine what the rate of tax will be when that person draws his annuity benefits later on?


Walter Edward Harris: Yes. I am not an accountant and I really have not explored this very much, but it would seem to me that when the annuity became payable there would be several ways of doing it. A simple calculation would be to take the total amount paid in by way of premium and pro rate the amounts paid out by the claim for deduction as against those for which there was no claim for deduction. On the other hand, there may be other means, and I have in mind the proportion from year to year that the person claimed by way of deduction of that particular payment. I am not in position to say which is the formula, but it will be a very complicated one.


Stanley Howard Knowles: May I ask whether that right to choose either way would apply to annuities purchased under the amendment now before the committee?


Walter Edward Harris: As I said in my budget speech, this would apply to any payments made since the beginning of this year, and we have not been able to work out a formula to apply to existing contracts other than government annuities. In fact, as I say, we have not the formula for that either, but we have our thinking completed on it. The insurance companies have been of great assistance in this and in other points on the various kinds of endowment policies, annuities, and the like, which they have issued, and we are consulting with them to find a suitable formula.
Now, the purpose is to encourage savings and to that extent go back beyond this year. If we do not adopt as deductible in the future some payments on existing contracts, it will not be because we do not approve of them as a means of savings but only that we find it difficult to work out a formula that would be fair to those who from now on might buy new contracts and therefore come wholly within the terms of the contract.
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John Borden Hamilton: In clause 2 (a) (i) I find the following:
The plan does not provide for the payment of any benefit before maturity, except by way of a refund of premiums.
If a plan should be devised which provided not only for an annuity payment for a stipulated number of years but for a payment in case of total disability to commence at that time, which might be five years or 10 years before the ordinary annuity payments might begin, would it mean that such a plan could not be worked out because of these provisions, or would that be considered as a maturity date if such a plan were worked out? I think what we are all interested in here is to see a plan by which people ordinarily can do something about looking after themselves. If there is no such plan in existence at the moment I am sure the companies which would be involved in this type of thing will be striving to cover every conceivable circumstance as they go along. I am wondering whether this would prevent the working out of such a disability provision in an annuity contract.


Walter Edward Harris: I think I understand my hon. friend to suggest that if there is an annuity contract which provides for the commencement of the annuity payment at, say, 20 years from the date of the contract, and if total disability ensued in the meantime we should permit a deduction not only of the premium but of the accumulated benefits of the plan up to the time of total disability.


John Borden Hamilton: No; the minister may have misunderstood my question. What I am asking is this. If such a plan is devised and benefits are started under such a plan not at the end of the 20-year period but at the time total disability arises, would this clause prevent such a plan being approved?


Walter Edward Harris: Well, the purpose, of course, is to provide annuities and not to provide some kind of insurance.


John Borden Hamilton: I understand that.


Walter Edward Harris: And, as I take it now, if a contract has been purchased from an insurance company which provides for a form of savings plus an insurance against disability and the contract matures upon disability, would we permit it within the terms of this provision rather than saying that because the disability occurred earlier than the fixed period that we have in mind, therefore it does not qualify. I must say that this is one of those details the insurance companies are preparing for us, and while I would not

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want to suggest that we can agree to it, yet, as I said before, there is a great deal of detail to work out.


Stanley Howard Knowles: There is one other suggestion I should like to make arising out of the minister's assurance, if I understood him correctly, that generally speaking the purchaser of a government annuity will now have the choice as to the tax treatment of which he wishes to take advantage.
My suggestion arises from the fact that I have noticed some of the insurance companies are already advertising contracts under which they purport to pass on to prospective purchasers the benefit of this portion of my hon. friend's budget.
Might I suggest that the minister suggest to his colleague the Minister of Labour that the advertising of government annuities include reference to the fact that in addition to the new 4 per cent figure there is this choice of tax treatment, which it seems to me is an advantage. The income of most people is certainly greater during their working years, during the years when they are making payments into a fund, than it is during the years when they are drawing out. Accordingly, although one does not know what the tax rates will be in future decades, generally speaking it is a greater advantage to be able to claim tax deductibility when one is paying in to a pension or an annuity than when one is drawing out.
I would hope that this improvement, for that is what it is, with respect to government annuities will be given the proper advertising and publicity it deserves. If my hon. friend the Minister of Labour is a little shy about doing that sort of thing he could take some lessons from my hon. friend the Minister of National Health and Welfare.


Walter Edward Harris: I am sure the Minister of Labour will read my hon. friend's remarks; I will even suggest that he might do so. However, I would not want to recommend to him that he follow the advice given, because I am in the unfortunate position of always urging my colleagues not to spend as much money as they do and I would not want to be inconsistent.


Stanley Howard Knowles: Now, now; the minister
checks a few dollars but spends the millions.


James MacKerras Macdonnell: Mr. Chairman, am I correct in understanding that it will be possible for the department to work out a situation where you have an insurance policy which is mixed insurance and annuity. Can the department break that situation down?
I do not want to go into more detail on this but I have noted here some questions as to the effect, let us say, on an endowment policy

of an insured member under the present plan. For instance, what effect will it have on the right to surrender the contract for its cash value? Will that be abrogated?


Walter Edward Harris: I think the clause we have just been discussing covers that. We shall accept the plan if-line 11 on page 10-"it does not provide for the payment of any benefit before maturity, except by way of a refund of premiums." The repayment or cash surrender value would have the effect of obtaining a benefit from the policy, or the annuity if you will, before maturity and we do not contemplate that happening here.


James MacKerras Macdonnell: It would not be possible to do that and have a readjustment. I presume the same would be true with regard to a loan on the policy?


Walter Edward Harris: Yes.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 18-Processing corporation.
Walter Edward Harris: There is an amendment to clause 18, Mr. Chairman, which is rather lengthy.


James Joseph McCann: Mr. Chairman, I move:
That Bill 407, an act to amend the Income Tax Act, be amended
1.	By striking out lines 7 to 9 on page 14 thereof and substituting therefor the following:
18.(1) All that portion of subsection (8a) of section 83A of the said act following paragraph (b) thereof and preceding paragraph (c) thereof is repealed and the following substituted therefor:
"has, at any time after 1954, acquired from a corporation (hereinafter in this subsection referred to as the "predecessor corporation") whose principal business was production, refining or marketing of petroleum, petroleum products or natural gas, exploring or drilling for petroleum or natural gas, or mining or exploring for minerals, all or substantially all of the property of the predecessor corporation used by it in carrying on that business in Canada."
(2)	Section 83A of the said act is further amended by adding thereto, immediately after subsection (8a) thereof, the following subsection:
2.	By striking out lines 29 and 30 on page 14 thereof and substituting therefor the following:
(3)	Subsection (1) is applicable in respect of property of a corporation acquired after 1954, except that in computing the income of a successor corporation for a taxation year prior to the 1957 taxation year, no amount is deductible under subsection (8a) of section 83A of the said act as amended by subsection (1).
(4)	Subsection (2) is applicable in computing a deduction from income for the 1957 and subsequent taxation years.


Ernest George Hansell: Mr. Chairman, I wonder if the minister has another copy of this amendment. I might suggest that when copies are being made it could perhaps be borne in mind that there is a group of 15 men in this corner of the house who would like to have one, and we frequently miss out on them.


Walter Edward Harris: I am extremely sorry. I thought I provided a copy for each party in the house.


Ernest George Hansell: This has happened on other occasions, and I do not blame the Minister of Finance any more than some of the others.


Carl Olof Nickle: Mr. Chairman, by way of general comment on this clause I might say I do not think any hon. member of the house could disagree with the purpose of this particular amendment to the Income Tax Act. That purpose appears to be the encouraging by every possible means of exploration of the mineral resources of this country, this particular measure of encouragement being extended to those companies now engaged in the processing of mineral ores in Canada.
I gather from the comments of the industry in regard to this amendment that its probable immediate value will be to further encourage such projects as the aerial survey which is now getting under way in the Ungava area of northern Quebec and Labrador, and also to encourage certain of the mining or processing companies who have engaged in exploration work and expect to expand this activity in Ontario, northern Manitoba, Saskatchewan, Alberta, British Columbia, the Northwest Territories and the Yukon.
Inasmuch as this amendment extends to those companies now processing mineral ores in Canada the same right to charge off against their taxable income the actual costs incurred in the exploration for minerals, in addition to other forms of liquid or gaseous minerals such as oil and natural gas, I and my colleagues in this party certainly agree wholeheartedly with the extension to our processing companies of the concession which has been applied to oil refining companies and certain other mineral processing companies over recent years.
However, I would like to say again, as I have in previous years, that I do not think the concessions provided under the Income Tax Act and the regulations pertaining thereto which are designed to encourage the exploration and development of mineral and other resources in Canada by Canadian companies go far enough.
In discussing this clause I cannot deal in detail with the particular so-called concessions, except to say that the recent report of the Gordon commission did go a long way toward endorsing certain of the recommendations which have been made in this house by representatives of my party over the last few years, designed to encourage more Canadian investment in Canada's resource development.
Income Tax Act
This particular development does take one big step forward along that road. I only hope that before the Minister of Finance brings in another budget, if he has the right to bring in another budget in his present capacity a year from now, he or the next minister of finance will adopt more of the suggestions made in this house by members of my party, and will also adopt the recommendations made by the Gordon commission in order to give far greater encouragement to a faster development of Canadian natural resources by Canadian companies and Canadian individuals.


Walter Edward Harris: I do not want to talk out my own bill, but I do want to say that we were aware of the fact that the Gordon commission was going to look into this particular problem, and that is why last year I postponed discussion of this particular matter, which has been raised regularly since I have been Minister of Finance.
The taxation and depreciation allowances and things of that nature for persons who are engaged in exploring for our natural resources in order to produce them for the benefit of Canadians, and for that matter for the benefit of the world, apply to an industry in which all Canadians are greatly interested, not only for the profit which it may bring and the improved standard of living which will follow, but because it is proper that our resources be used for mankind. Now, in the case of persons who explore for these natural resources, especially in the western provinces, there exists, according to their views, an inequity. I have been deeply conscious of this and if I can make the same answer to my hon. friend as I did this morning-and I notice he rather carefully did not mention the United States laws in this connection during the last few minutes-


Carl Olof Nickle: I would be happy to mention certain United States laws if the minister wishes.


Walter Edward Harris: All right; but the Gordon commission has made certain recommendations, some of which at first reading perhaps could not be adopted, others of which might be, and we have been paying particular attention to this part of the report. We have been studying it ourselves and using persons who are well-trained in accounting and things of that nature to see if there could be an improvement made in the present law, so that if there is no discrimination against Canadian companies it will be made clear to them why there is no alternative, and if there is, we might find a solution which would make it less difficult for them to conduct their explorations in competition with companies which, in the main, have more money

Income Tax Act
to begin with and through the operation of some of the present laws may appear to have more money left out of these years of operations for future exploration.


John Borden Hamilton: Mr. Chairman, I know there may be very few companies in this category, but if we had the situation where a foreign corporation, under our tax laws, was considered as doing business in Canada-and there may be a few in that situation-would it be entitled in computing its tax for these purposes to take advantage of this regulation?


Walter Edward Harris: We did not have them in mind in presenting this amendment; we had in mind Canadian companies.


John Borden Hamilton: Canadian corporations?


Walter Edward Harris: Yes. I do not know that we had so defined them, but I am under the impression that that is so.


John Borden Hamilton: Yes. I think, Mr. Chairman, I would like at this time to subscribe to the views expressed by the hon. member for Calgary South and to say that this is certainly a step in the right direction, especially since we are dealing with a concession perhaps not in connection with the actual fabrication of goods, but certainly the term "processing" is applicable. That is a situation which we have been stressing for some time. It seems to us that the more we can process the natural resources which we dig out of our soil, the very much greater is going to be the benefit to our economy.
I do not like to get into the same class as my hon. friend to the left to whom the minister has already referred in reference to the taking of an extra step at each concession along the road, but I assume there are very many more ways open to us to assist Canadian companies to ensure that the whole processing and fabricating of these natural resources takes place in Canada. I think if we keep this in front of us each year as these budget resolutions come along and legislation follows, it will help everyone.


Carl Olof Nickle: There was one question I
would like to put to the minister in respect of part of his answer to my previous comments. He said that serious study has been given to the Gordon commission report and recommendations to the government on the tax laws as they affect the national resource development. I mentioned something along this line a year ago in this house, and I recall that in answering my speech at the time, dealing specifically with the so-called tax concessions on natural resources, the minister said that since the Gordon commission was sitting

at that time it might not be advisable to make any change in the regulations or in the act until after the Gordon commission findings had been submitted.
Now that the preliminary report is out, and I presume the detailed follow-up report will be available shortly, can we take it that the government will in the very near future be giving detailed consideration to the Gordon commission recommendations with regard to natural resource development and particularly the tax laws applying thereto? May I also take it that the government may be counted upon in the next parliament to bring forward specific recommendations and further amendments to the Income Tax Act to achieve the things which I am sure the government will agree are highly desirable; a greater rate of natural resource development of all types in Canada for the benefit of our country as well as all the world, and a greater proportion of the development being undertaken by Canadian companies who are given at least as great a measure of encouragement as is now provided to foreign capital under foreign tax laws.


Walter Edward Harris: Well, as my hon. friend said in his earlier remarks, there is of course no certainty that I will be Minister of Finance in the fall, but I can assure him that a Liberal minister of finance will consider the Gordon commission report through the summer and fall, and will discuss it in parliament.


An hon. Member:: Twenty years from now.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Clause 19 agreed to.
On clause 20-Sale of depreciable farm and other property.
James MacKerras Macdonnell: I would like to ask a question with regard to section 2. This reads as follows:
This section is applicable in determining, at any time alter 1955, the capital cost of depreciable property in the case of any such property sold after 1948.
Now, Mr. Chairman, does that mean that it will be possible to reopen transactions between 1955 and the present?


Walter Edward Harris: No, Mr. Chairman, this does not permit the reopening of any accounts prior to 1955, including 1955. It begins with 1956.


[Stage Direction]
Clause agreed to.
William Alfred Robinson: I understand that clause 21 is to stand.


Some hon. Members:: Yes.
Clause 21 stands.
Clause 22 agreed to.
Progress reported.



DOMINION SUCCESSION DUTY ACT

Walter Edward Harris: the second reading of Bill No. 410, to amend the Dominion Succession Duty Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Aggregate net value.
John Borden Hamilton: On this clause, do I understand that bequests to charitable insitutions are now being deducted from the gross value of the estate for the purpose of the calculation?


Walter Edward Harris: That is right.


John Borden Hamilton: Is that an entirely new change?


Walter Edward Harris: Yes, entirely new.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On clause 4-Definitions.
James MacKerras Macdonnell: I have not really had a chance to explore this. Would the minister make any necessary explanation about this clause?


Walter Edward Harris: Mr. Chairman, at the present time the law provides, or did up to March 31, that we would remit half of our succession duty tax or an amount up to the whole of the provincial succession duty tax, whichever was the lesser. It is now provided in subparagraph 2 that where provincial duties have been paid in respect of property the succession to which is subject to duty under this act upon the death of a predecessor, the successor may deduct from the duty otherwise payable by him under this act in respect of the succession to that property, one-half of the amount of that duty.


James MacKerras Macdonnell: And this carries out the understanding with the provinces?


Walter Edward Harris: This carries out the understanding with the provinces in those provinces where there is an agreement.
Clauses 4 and 5 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall this bill be read the third time? Now?
Dominion Succession Duty Act Mr. Knowles: By leave.


Walter Edward Harris: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



CUSTOMS TARIFF

Walter Edward Harris: the second reading of Bill No. 408, to amend the Customs Tariff.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Robinson (Simcoe East) in the chair.
On clause 1-Schedule A amended.
Walter Edward Harris: Might I at this point present an amendment, as I indicated earlier I would. I have a rather lengthy amendment, but what it does is insert a new schedule for potatoes in the manner I outlined this morning.


Stanley Howard Knowles: This amendment is to the schedule, is it not?


Walter Edward Harris: Yes, but it is in the form of an amendment to the bill plus the schedule.


William Alfred Robinson: Mr. McCann moves the following proposed amendment to this bill:
1.	Insert the following clause immediately after clause 1 as clause 2:
"2. Schedule A to the said act is further amended by striking out tariff items 71d and 83, and the enumerations of goods and the rates of duty set opposite each of those items, and by inserting therein the items, enumerations of goods and rates of duty specified in Schedule B to this act."
2.	Renumber clause 2 as clause 3 and substitute "Schedule C" for "Schedule B" in line 20 on page 1.
3.	Renumber clause 3 as clause 4 and substitute "Schedule D" for "Schedule C" in line 26 on page 1.
4.	Renumber clause 4 as clause 5 and substitute "Schedule E" for "Schedule D" in line 29 on page 1.
5.	Renumber clause 5 as clause 6(1) and substitute "Sections 1, 3, 4 and 5" for "This Act" in line 1 on page 2.
6.	Add the following subclause to clause 6:
" (2) Section 2 shall be deemed to have come into force on the 6th day of April, 1957, and to have applied to all goods mentioned therein imported or taken out of warehouse for consumption on or after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day."
7.	Reletter Schedules B, C and D as Schedules C, D and E respectively.
8.	Insert the following as Schedule B:
Customs Tariff

Schedule B
Tariff
Item
71d Seed potatoes for propagating purposes, under such regulations as the minister may
prescribe, per one hundred pounds	
83a Potatoes, in their natural state, n.o.p., per
one hundred pounds	
83b New potatoes harvested between January 1 and June 14 (excluding mature potatoes which have been stored in the ground and harvested during that period): January 1 to June 14, inclusive, per one hundred pounds .. 83c Sweet potatoes and yams, in their natural
state, per one hundred pounds	
83d Sweet potatoes, n.o.p., per pound	
83e Potatoes, dried, desiccated or dehydrated, per pound	
British Preferential Tariff	Most- Favoured- Nation Tariff	General Tariff371 cts.	37] cts.	75 cts.37] cts.	37] cts.	75 cts.Free	Free	75 cts.Free Free	Free 11 cts.	15 cts. 21 cts.Free	Free	2| cts.


Stanley Howard Knowles: I wonder if the minister
would tell us just how we are going to handle this in terms of procedure. We are in committee of the whole on clause 1 of the bill. If I understood what has been read out correctly it was entitled an amendment to the bill. But we do not amend a bill; we amend a clause at a time. It seems to me as though this is a series of seven or eight amendments.


Walter Edward Harris: Well, this was the difficulty I foresaw yesterday when I said I would prefer in the interests of time to proceed with the resolution and have the bill read the first time; that it might then come up for second reading today, and that in the committee of the whole a further amendment might be introduced with respect to potatoes. I did not mention that word, but my "parliamentary assistant" from Royal helped me out in that respect.
This bill as presented to the committee could have been reprinted overnight with what has been read contained in it, and the hon. member for Winnipeg North Centre could have made the objection that it had not been preceded by a resolution, had he so desired, though I know he does not intend to do this.
The printed bill is before the committee. This is for the purpose of inserting in the bill an appropriate clause referring to the schedule, and in the schedule the new rates on potatoes are set out in detail in the manner I indicated this morning. They have been passed around, I understand, and I do not think I need read them. They make substitutions in the rates in a manner that I think is generally agreeable to those who are concerned with the matter.


James MacKerras Macdonnell: Would the minister allow an interruption? I have no desire to delay matters at all but I did not get this at the
[The Chairman.]
very outset and it is hard to piece it together in a second or wo. I wonder whether it would be too much to ask the minister to go through this and relate it to the sections because at the present time it does not seem to be related very closely.


Walter Edward Harris: I was going to suggest that we do somewhat differently, that we go ahead with the bill as printed and dispose of it. During that time those who are interested in the potato item could be looking at the amendment and then we can come back to it. I presented it at the beginning for that purpose, so there would be time.


Alfred Johnson Brooks: Are there copies of the amendment for all?


Walter Edward Harris: Yes.


James MacKerras Macdonnell: The bill is complicated by the fact that some of the printing is upside down. Schedules B, C and D are standing on their heads.


Stanley Howard Knowles: That should suit a Progressive Conservative.
Clause 1 agreed to.
On clause 2-Schedule A to French version amended.


William Alfred Robinson: The new clause 2 will stand for the moment. Shall clause 2 as amended carry? Carried. Clause 3.


James MacKerras Macdonnell: I am sorry, but you have left me behind. I heard you say a moment ago that clause 2 stands but then you have carried clause 2 as amended.


William Alfred Robinson: I actually said "new clause 2." The amendment calls for the insertion of a new clause after clause 1 in the bill. The amendment also calls for the renumbering of each of the subsequent clauses in the bill as it is before hon. members.


James MacKerras Macdonnell: As I say, this is slightly complicated by the fact that some of the pages are standing on their heads and we also have this amendment. Can we ask one or two questions? Can the minister assure us that apart from the items that are changed we have in the bill the items that we had before us in the resolution yesterday? We have not had time to check them. Second, I would ask you, Mr. Chairman, to clear up the matter with regard to clause 2.


Walter Edward Harris: There is no change in the printed bill from the resolutions which were passed yesterday with the exception of the amendment now proposed.


William Alfred Robinson: Shall clause 2 carry? I am referring to the numbers in the bill as printed, of course.
Clause 2 agreed to.
Clauses 3 to 5 inclusive agreed to.
Schedule A agreed to.
On schedule B-


Mr. Montgomery:: Is schedule B not the one involved in the potato amendment?


Walter Edward Harris: I am afraid I cannot hear my hon. friend.


Gage Workman Montgomery: Does schedule B not have to do with the amendment dealing with potatoes?


Walter Edward Harris: No.


William Alfred Robinson: I am calling the numbers of the clauses and the letters of the schedules as they appear in the printed bill.
Schedule B agreed to.
Schedules C and D agreed to.


William Alfred Robinson: We come now to the proposed clause 2. Shall this amendment carry?


Gage Workman Montgomery: Is this the one about potatoes?


Mr. Nowlan:: Yes.


Gage Workman Montgomery: I should like to say a few words on the amendment. I am very pleased with the amendment and I know that the potato producers and my people generally are. This is one time when I feel that the government really took over things and got something done. I should like to ask the minister whether the most-favoured-nation tariff is the one that includes the United States?


Walter Edward Harris: That is correct.


Gage Workman Montgomery: There is reference to
potatoes harvested between January 1 and June 14 and to potatoes in storage in the
Customs Tariff
ground. In the latter case it would mean that those potatoes could not enter Canada duty free.


Walter Edward Harris: That is true.


Gage Workman Montgomery: I believe that the trade made with the United States is a very good one. I think the people of my province are going to be quite happy about it. While they have lost some of their quota, the one thing which the potato producers of New Brunswick and throughout Canada generally have wanted, and for which I have been pressing, is a tariff, and there will now be a tariff of 37i cents. I take it that is the one and only tariff that the Americans will have to pay. I understand there will be no quota on the entry of United States potatoes into Canada and they will never have to pay 75 cents a hundred. Is that right?


Walter Edward Harris: I do not know; I am dealing only with the year 1957. I would not want to say what might be the case in some other year. We are talking about the present.


Gage Workman Montgomery: I am too. Under the schedule there will be only one duty on potatoes coming into Canada from the United States while there will, of course, be two rates of duty on Canadian potatoes going to the United States. If Canadian producers go over the quota-


Walter Edward Harris: If the quota is exceeded there is an increased duty.


Gage Workman Montgomery: But that does not apply on potatoes coming into Canada.


Walter Edward Harris: No, it does not.


Frederick George Hahn: Is the additional tariff on potatoes entering the United States applicable to seed potatoes as well?


Walter Edward Harris: Yes. My understanding is that the quota was 2 J million bushels on seed potatoes and 1 million bushels on table stock. That is now cut down to 1.9 million bushels on seed potatoes and 600,000 bushels on table stock.


Frederick George Hahn: Then anything over 1.9 million bushels-


William Alfred Robinson: The hon. member for Vic-toria-Carleton.


Gage Workman Montgomery: I had not finished but I will give way if the hon. member wishes to continue.


Frederick George Hahn: I just wanted to ask one question. So far as seed potatoes are concerned, any excess sent to the United States over the 1.9 million quota will be subject to the additional tariff.


Walter Edward Harris: Yes.

Customs Tariff


Gage Workman Montgomery: I want to say another
word or two because this matter affects my constituency and neighbouring constituencies in the province of New Brunswick. It also affects the province of Prince Edward Island. We may suffer to some extent so far as the quota on seed potatoes is concerned, but I think it is well worth while to try out this plan. We had arrived at the point where we were being flooded with United States potatoes, but when the minister and the government really got down to business in my opinion they did a very good job. I hope that the results will be as favourable as the changes would seem to indicate. It looks like a very good move. I may have said some harsh words with respect to this matter in the past but they may have had some weight in bringing the fact before the government that this was really a serious problem to the people of my constituency and New Brunswick generally and had reached a very critical stage this spring. Without wasting any more time may I say that I am sure they will be pleased, and I hope that it works out in practice as well as it looks at the moment.


Mr. MacNaughi:: I too wish to join with the hon. member for Victoria-Carleton in expressing the appreciation of the growers of Prince Edward Island to the Minister of Finance and his officials for working out such a satisfactory solution to this vexed problem. It is one which has been annoying the potato growers of Prince Edward Island and New Brunswick for two or three years now and I am indeed happy that it has had this very fine conclusion.


Frederick George Hahn: May I be associated with those in our group who have spoken in respect to the recognition that the minister has given to this particular problem. I well recall in 1953 when I first came to this house raising this question and saying that it looked like a rather difficult task at that time. I think the minister has done an excellent job. I am satisfied that the people of the country will recognize it as such. I have not had an opportunity to study the schedule as it is set out, but I expect that it will fairly well meet with the desires that the potato men in the country have expressed. Certainly it should help the industry on the Pacific coast. While I realize that we are bound possibly to lose in the decrease of the amount of potatoes we sell in respect to the seed quantity, nevertheless I feel as I did last year. When I spoke then to this question I think I suggested that if the Americans really want good seed potatoes they are still going to buy them in spite of the additional tariff they will have to pay.


George Clyde Nowlan: It is rather difficult to follow this schedule. We were handed a typewritten sheet about five minutes ago and it is rather difficult to follow the matter and to know exactly just what has happened. I am wondering about seed potatoes, item 7Id. Can the minister tell us what change is made there in the tariff and also what change was made in the quota in order to achieve this tariff change?


Walter Edward Harris: Item 71d was formerly free under the British preferential tariff; free under the most-favoured-nation tariff; and free under the general tariff. The change now is to 37J cents, 37J cents and 75 cents per hundred pounds.


George Clyde Nowlan: Thank you.


Walter Edward Harris: This is a real gain in the negotiations in return for which, however, we were obliged to agree-as has been indicated-to a reduction in the total quota from 3,500,000 to 2,500,000 bushels. I should say that the horticultural council and those who represented the potato growers agreed with us at the beginning that they could not expect to obtain the benefit of a tariff without some concession being given; and it was agreed that in the long run the best way to do that was in the reduction of the quota. Although I have not spoken to them in recent days I think the figures that we have negotiated were agreeable to them. At any rate they said so when they were here early in December and I have been working on that assumption since then.


Gage Workman Montgomery: May I ask the minister one question? It may be that he cannot give this information but has he any idea how many bushels of new potatoes were imported from the United States? Has he any statistics on the number of new potatoes that were imported into Canada from the United States, such as those coming under item 83b?


Walter Edward Harris: The last year for which we have figures is 1954-55; that is for the crop year 1954-55. Total imports were 4,846,243 bushels of which new potatoes represented 1,523,714 bushels.


George Clyde Nowlan: What about seed potatoes; have you the figures on the importation of seed potatoes?


Walter Edward Harris: Yes. About 100,000 bushels.


Alfred Johnson Brooks: I just wanted to say a word on this matter. I listened to the hon. member for Victoria-Carleton who has more interest in this matter than those in my section of New Brunswick. However, we are all interested because it is the big agricultural crop in New Brunswick. I cannot say

that I am as optimistic as is the hon. member for Victoria-Carleton. I am more willing to wait and see just what will happen. As the minister knows and as does everyone else, a very abnormal situation exists at the present time with regard to potatoes. We have the exchange situation which makes the United States sale in Canada more profitable for the United States farmer. Also I believe the price in Canada has been higher than that in the United States, something which does not occur very often. This year is an exceptional year. Compared with the situation we have had before, of course this is an improvement. But the situation was so weighted against Canadian potatoes in the past that almost any change in the tariff at all would be an improvement as far as the Canadian farmer was concerned.
I should like to ask the minister this question. He mentioned the quantity of new potatoes which came in, I think, in 1954 and 1955. I wonder whether he could give us a breakdown of the quantity that came in each month from January until June. Also, what is the situation with regard to what we might term old potatoes-I just forget what term is used here; I think it is "mature potatoes" -after June 14. We have had a tariff against our potatoes in the United States for the whole year except from June 14 until the end of July. Under this new schedule there is a tariff in favour of United States new potatoes from January 1 to June 14; it is against the mature potatoes. After June 14 will mature potatoes from the United States come in at the same rate as that at which they came in previously? According to the statement which was given to us by the minister mature potatoes coming in from the United States I think would be in the proportion of about two to one with respect to new potatoes. I would just ask the minister whether he could clear up that situation and let us know what we could expect.


Walter Edward Harris: 
Alfred Johnson Brooks: The same as it was before; no change.


Walter Edward Harris: The exception is for new potatoes during the period January 1 to June 14. My hon. friend has said, "the same as they were before". That is not so. They were not subject to tariff before and they now become subject to tariff.


Alfred Johnson Brooks: I was asking if that were true.


Walter Edward Harris: It is true that the tariff has gone up on mature potatoes during that time. I have a very complicated statement
Customs Tariff
on imports of potatoes which I understand is published year by year in one of the trade periodicals. Rather than read the statement I suggest that I could refer my hon. friend to that document and in fact provide him with one in order to show the imports. I think it is fair to say that in the last three or four years there have been evidences, as the tariff board found, that there has been a shift in the potato trade between the United States and Canada. In fact, this is what prompted the potato growers to ask for protection. They had formerly felt that the United States market, particularly the seed market, was so attractive to them that the terms of the agreement which was negotiated in 1938, as I recall it, were to their advantage.
It continued to be so certainly during the period of price support control in the United States after the war and during the period when production had not yet caught up with consumption; but beginning sometime- perhaps if I said 1948, 1949 or perhaps 1950 I would not be too far out-it does appear that production methods in the United States and the demand for potatoes there, with the consequent surplus that occurs from time to time, made the Canadian market more attractive and excited more interest in the United States exporter than formerly was the case, so that in recent years the Canadian producer has had to reassess his market. That was one of the striking features of the representations which were made by the producers, namely that they now feel that the Canadian market was more important to them than the United States market to the extent that at any rate they could not afford to have the Canadian market taken from them to the extent that it had been on occasions. They said quite frankly that they wished to have this protection even though it meant the possibility of their not being able to take advantage of the United States market to the extent that they had heretofore.


Alfred Johnson Brooks: The United States exporter can export new potatoes to Canada from January 1 to June 14. Does that period not cover practically all the time that the United States would be producing new potatoes? So far as that is concerned he has not lost anything and Canada has not gained anything; it is practically the same as it was.


Walter Edward Harris: All I can say is that none of the potato representatives suggested that that was so.


Alfred Johnson Brooks: The minister has the record of the imports of new potatoes by months. Would it not indicate that on the schedule the minister has before him?

Customs Tariff


Walter Edward Harris: It does indicate, of course, that Canadians have a taste for new potatoes later in the year and during the winter under some conditions; but the real threat to the Canadian market is not the new potato problem at all, it is the accumulation of the mature potatoes which come on the market any time from December until the present time. Perhaps some of this is caused by anticipation of what may happen. The weight on the Canadian market has been most noticeable since February 1 and it resulted from mature potatoes that were harvested in the fall, not the new potato that comes forward during the winter months.


Thomas Speakman Barnett: In relation to the last question asked by the hon. member for Royal, am I correct in assuming that item 83 (a) which refers to potatoes in their natural state, covers new potatoes except during the period January 1 to June 14? That is to say, if a United States shipper wanted to send new potatoes into British Columbia after June 14 when our local new potatoes would be coming on the market, the new potatoes from the United States would be subject to a duty of 37J cents? Is that a correct understanding of the matter?


Walter Edward Harris: That is quite correct. There are just two kinds of potatoes, namely those in 83 (a) and those in 83 (b). The class in 83 (a) is the class which catches all potatoes in their natural state. Item 83 (b) exempts all new potatoes that come in during that period of time. Perhaps by way of elaboration of what I said I should add that Canadian new potatoes rarely come on the market until late in June.


Thomas Speakman Barnett: The essential point of 83 (b) would be to make available to the Canadian consumer during the period January to June 14, if they wished, new potatoes that could not be produced on Canadian soil.


Walter Edward Harris: That is right.


Thomas Speakman Barnett: Just one further question, if I may. I wonder whether the minister would give us a few words of explanation as to why potatoes, dried, desiccated or dehydrated, are to be admitted duty-free on a year round basis, as I understand the item at the bottom of the schedule amendments to read. Is there any particular reason for that?


Walter Edward Harris: The obvious answer I could make is that we were not asked for it, but that probably would not satisfy my hon. friend. All I can say is that it does not seem to have been a problem to the Canadian producer, either the potato producer or the chap who would turn it into a manufactured product such as described in 83 (e).


Thomas Speakman Barnett: The point I had in mind was whether generally speaking potatoes were not processed in that manner in Canada?


Walter Edward Harris: If they are, they are not having any difficulty with competition.


Gage Workman Montgomery: The amendment reads:
Section 2 shall be deemed to have come into force on the 6th day of April, 1957, and to have applied to all goods mentioned therein imported or taken out of warehouse for consumption on or after that day and to have applied to goods previously imported for which no entry for consumption was made before that day.
That would be tomorrow. Will this apply to potatoes that come in now, or are in the wholesalers' warehouse or are in the retail stores?


Walter Edward Harris: First of all, this is a little
unusual because I think for the first time, in my memory anyway, a change in the custom tariff has been made in the daytime so that something could happen today that otherwise might not happen until tomorrow had the announcement been made at eight o'clock at night. This means if potatoes have come into warehouses in Canada or are here but have not been cleared by customs, they will be subject then to the duty tomorrow or at whatever time they are cleared for customs.


Gage Workman Montgomery: That is what the minister intends, "no entry for consumption" to mean? It means entry for duty purposes?


Walter Edward Harris: That is right.


George Clyde Nowlan: One word with respect to
71 (d). I can understand the point which the minister made and the fact that there had to be a certain amount of give and take in arranging any deal such as this. In the constituency from which I came originally we were one of the largest seed potato-producing areas in the Dominion of Canada. That, of course, has altered to some extent during the last few years because of production problems; but nevertheless the certified seed potato industry is still an important one there and we now have the protection. We also have a reduction in the quota. Time alone will tell how this works out. I hope, and apparently the industry hopes, that it will be of substantial assistance to them. I welcome this because I think it is a step in the right direction in providing more protection for the primary producer. If one had time and the circumstances were different one could elaborate on that to a very great extent.
The minister referred to the treaty of 1938 and there were subsequent treaties after that, whereby the protection at one time accorded to the Canadian farmer has been pretty well

whittled away. As the minister knows, the horticultural council made representations this winter, not only with respect to potatoes, which is a specialized field, but with respect to the whole problem of the marketing of fruit and vegetable products and the distress selling which goes on in this country. It is a very easy thing for the United States producer to do selling in the United States behind tariff barriers and get a fairly good price for the great majority of the products, and then to dump the end product on the United States market, which technically is not dumping in our market, and our markets are wrecked by this distress selling of potatoes and other primary products which come in here at the end of the United States season and the very beginning of our own. I think that sooner or later, and I believe soon, the government of Canada will have to reconsider this problem and will have to fix a value for duty purposes of these United States products which are brought in here and which I say technically are not being dumped under the impact of the act, and yet actually are being sold at distress prices.
Of course this is not the same type of duty but because it does represent a beginning of recognition of the problem I am sure it is welcomed by all. We believe and hope it will be of material assistance to the potato industry itself.


[Stage Direction]
Amendment agreed to.
Title agreed to.
Bill reported.
Mr. Depuiy Speaker:: When shall this bill be read the third time? Now?


Stanley Howard Knowles: By leave.


Walter Edward Harris: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



EXCISE TAX ACT

Walter Edward Harris: the second reading of Bill No. 406, to amend the Excise Tax Act.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair.
Clauses 1 and 2 agreed to.
On clause 3-When tax on automobiles payable.
James MacKerras Macdonnell: I want to ask a question about clause 3. The legislation referred to here was announced or forecast in the House of Commons on February 7 last. Would the minister say just when this actually came into effect?
Excise Tax Act


Mr. Benidickson:: It just comes into effect under the terms of this bill. As my hon. friend knows, there are representations each year from the automobile trade concerned about any revision of the Excise Tax Act which would affect that industry. It sometimes happened that dealers refrained from purchasing cars in expectation of some change in the tax. The minister simply gave the assurance on February 7 that if any change did take place a certain change would be made with respect to the impost of the tax.


James MacKerras Macdonnell: Did the minister at that time indicate it would have effect from the first day of February, 1957?


William Moore Benidickson: No, it would relate to the tax.


James MacKerras Macdonnell: Clause 7 says:
Section 3 of this act shall be deemed to have come into force on the first day of February 1957.
Is there an explanation for that?


William Moore Benidickson: But it has no effect because there is no change in that particular tax this year.


John Borden Hamilton: Where is this tax ordinarily collected, at the wholesale level, the dealer level or the retail level?


William Moore Benidickson: At the manufacturer's level.


John Borden Hamilton: Does that mean that while the tax itself may be calculated at that level it will be payable when the retail sale is made?


William Moore Benidickson: No, when there is an effective purchase by the dealer.


John Borden Hamilton: Of what particular benefit will it be to the dealer? Will he not still be in a position where he may have to postpone his purchases if he is worried about this tax?


William Moore Benidickson: No, it improves the form of storage arrangements between the time the dealer might actually have to turn an automobile over to a customer and the time the car was in his vicinity and probably was brought there at his suggestion but he had not taken delivery.


John Borden Hamilton: What I am trying to get is this. A dealer may purchase a car and pay for it but he is still not going to pay tax on it until such time as delivery has been taken?


William Moore Benidickson: No, if he has paid for the car and taken delivery of it the tax would apply.

Excise Tax Act


John Borden Hamilton: Let me put it
this way. Is it the usual custom in the trade that they take delivery of the cars but do not pay for them until some later date?


William Moore Benidickson: Yes, they can make arrangements now for a shipment on a consignment arrangement.


[Stage Direction]
Clause agreed to.
Clauses 4 and 5 agreed to.
On clause 6.
James MacKerras Macdonnell: This is the clause which embodies the resolution which was before the committee yesterday and I think there were three points in that resolution which the parliamentary assistant told us were going to have further consideration.


William Moore Benidickson: Yes, Mr. Chairman. I have here suggested amendments with respect to two items, both affecting schedule 3. One would add to the flower item, corms, roots and tubers. It does not meet the point some hon. members requested of adding the words "cut flowers".


The Deputy Chairman:: This amendment has been outlined to the committee. We will not put it to the committee until schedule 3 is reached.


William Moore Benidickson: On the same point, there is another amendment to schedule 3.


Edward Turney Applewhaite: Shall the clause carry?


James MacKerras Macdonnell: May I just interrupt for a moment? Surely clause 6 will not be carried while we are debating certain items in it. We are now debating certain items in the schedule and therefore I take it that it will not carry.


Edward Turney Applewhaite: I am sorry, I
thought the committee had completed its discussion.


Howard Charles Green: Would you read that amendment, Mr. Chairman?


Edward Turney Applewhaite: The proposed
amendment to the bill to amend the Excise Tax Act is as follows:
That schedule 3 of this bill be amended by substituting for the words "potted, flowering or bedding plants, dormant flower bulbs and cut foliage" appearing under the heading "Farm and Forest", the following:
"Potted, flowering, or bedding plants; dormant flower bulbs, corms, roots and tubers; cut foliage;"


Howard Charles Green: Does that mean everything is allowed except cut flowers?


William Moore Benidickson: That is correct. Everything that was spoken of by name the other

night particularly in the bulb line has been added specifically with the exception of the phrase, "cut flowers".


Howard Charles Green: In other words, the ferns that you get in a bouquet of flowers are exempt from the sales tax but the flowers themselves are not. What is the basis for making that distinction? Is there not far more wastage in the flowers than there is in the foliage? After all, this question of wastage is a very serious one. On the west coast there are a great many flowers produced. For example, at the present time there would be a great many daffodils for sale. They are even sent back here to cheer up some of the unfortunate easterners. Why should that exemption not be allowed on these daffodils?


William Moore Benidickson: This subject underwent considerable debate the other night and I do not think I can add very much to the explanation that was made then to the effect that cut flowers were not regarded as an item that prior to other things which continue to bear sales tax should have such a tax taken off.
The cost to revenue is of consequence; I understand it is considerably more than all the other items referred to combined and it was not felt, as I say, that in advance of a tax reduction on some other items which are not in the schedule it should be recommended at this time.
Mr. Pallet!: How much would it involve if that were taken off? It is a very small amount, I understand.


William Moore Benidickson: We estimated that it would be well over $1 million.
Mr. Pallet!: Well, there was an expression made famous in this house a few years ago about that very same figure, and having regard to the benefit that would accrue to the flower growers and the like, I do not think you have given this matter full consideration. Certainly it seems to me to be rank discrimination when you apply a tax for only a part of one type of business and I believe that your cost of levying it is going to exceed the amount of money you collect. I certainly foresee many cases where the growers will refuse to pay the tax and there will be some nice litigation arising out of this use of the word "foliage". The litigation, in my opinion, will cost the government more than the money they say they would not collect and I think it is a very ill-considered recommendation.


William Moore Benidickson: I think my hon. friend will recognize that the growers will benefit from the tax exemption that is being provided on all these other items and I take

it from his remarks that there is an assumption that the growers would not pass on to the consumer the benefit of this exemption if the sales tax was taken off this item.


John Borden Hamilton: They may need the help.


Mr. Palletl:: The parliamentary assistant
may take anything he likes-I cannot account for his misunderstanding of my words.


George Clyde Nowlan: I am sure we appreciate the amendment as far as it goes. It does clear up some of the difficulties with respect to potted flowers and bedding plants with which perhaps the parliamentary assistant knows we have had some particular experience and a great deal of discussion, as between the Department of Agriculture and the Department of National Revenue, as to what was nursery stock and what was not, with a two to one split down the line. However, that has now been resolved, thank goodness, and the corms and other bulbs taken care of by the proposed amendment, which is a most distinct improvement in that situation. However, I certainly want to agree with the hon. member for Peel and the other hon. member and say that I do not for the life of me see why we are sticking to the cut flowers. The parliamentary assistant says the estimated revenue is something over $1 million; I realize that is a substantial amount, but I have also been advised by the industry itself that according to their estimates the revenue is quite a bit under $1 million and the expense of administration and the problems connected therewith are going to be very great indeed.
You have, I believe, an exemption now for everyone selling less than $500 worth, but how are you going to control that? I am sure we are all very glad to see the small producers get an exemption, but when you get to these borderline cases, one of $475 and another of $525-I suppose they will all be $475 because I do not think many of them will be reporting $525-the cost of collecting this money will be out of proportion. From the income tax angle I suppose you will be getting something because the income would be that much more.


James Joseph McCann: It has nothing to do with income tax.


George Clyde Nowlan: But it is not a net loss of $1 million or anything like it. Also I do not know what is the meaning of "cut foliage". In connection with this bill the other night I looked in four dictionaries including some standard ones-


William Moore Benidickson: I have one on my table and I will read it to you in a minute.
Excise Tax Act


George Clyde Nowlan: But the definition which was set forth in both the English and American dictionaries for cut shubbery and so on and so forth, refers to leaves of flowers. If you can get a cut flower without a leaf it is going to be a pretty bare and desolate looking flower.


James Joseph McCann: Well, that is the reason for putting in cut foliage because there are no leaves on flowers.


George Clyde Nowlan: Well, roses have leaves on them.


James Joseph McCann: Yes, but daffodils do not.


George Clyde Nowlan: And glads have leaves on them. Perhaps the minister will be able to conjure up one or two that have no leaves.


James Joseph McCann: Lots of them.


George Clyde Nowlan: And then what are you going to do? We are now apparently going to have two different kinds of cut flowers, those with leaves on them are not going to pay the tax, according to the minister, and those without leaves are going to pay the tax. I presume the inspectors are going to come along and shake the plants and see if the leaves fall off and then it is taxable, and if they do not fall off then it is not taxable.
I think it is nonsense when you reach a situation such as that, and I believe the matter should be cleared up today. If it is not I can see where, as my hon. friend said, the department will find themselves faced with more headaches than they have anticipated up to the moment and in another year this matter will have to be cleared up if it has not already been dealt with by the courts.


Thomas Speakman Barnett: I would like to ask the parliamentary assistant whether the term "cut foliage" is interpreted as including Christmas trees?


William Moore Benidickson: They are not taxable anyway, I believe.


Thomas Speakman Barnett: They have not been taxable before?


William Moore Benidickson: No.
Clause 6 refers to an item under printing and educational, printing for schools and universities. It is being recommended that we add the words "school boards", which entered the debate the other night. In addition it is suggested that the wording be "printing for school boards, schools and universities, for use by such institutions and not for resale." That of course would permit these institutions to purchase and not necessarily to have the articles produced on their own premises.

Excise Tax Act


James Joseph McCann: I move:
That schedule III of this bill be amended by substituting for the words "printing produced by a school or university when for its own use and not for resale" appearing under the heading "Printing and Educational", the following:
"printing for school boards, schools and universities, for use by such institutions and not for resale;"


John Borden Hamilton: Mr. Chairman,
I had better take a look at this for a moment.
I think this amendment certainly meets the arguments that were put forth the other night in connection with this item. As I understand the meaning of the amendment, now it will enable not only the school boards to print and distribute to their schools without sales tax on the material, but it will also enable outside printing plants, not connected with schools, who provide printing material to the schools or school boards also to have this material exempted from the sales tax provision. With that understanding I think that this amendment certainly meets the objections raised.
Before the clause carries I think we also raised the other night, on the budget resolutions, some rather serious objections concerning questions of the descriptive words used in connection with desks and chairs. I think I should say I believe the parliamentary assistant included the wording of that particular clause in his undertaking to reconsider what he might do on this argument.


William Moore Benidickson: Yes, Mr. Chairman, that, too, was given consideration but it was not felt it would be advisable to depart from the words "specially designed desks and chairs" contained in the original resolution.


John Borden Hamilton: Can the parliamentary assistant inform the house just what consideration was given to the change, and what arguments were used which prevented him from making some change in the clause?


William Moore Benidickson: For one thing, Mr. Chairman, they are quite special articles in the majority of cases, articles which are distinct from normal chairs and desks which might be used somewhere else. The items which come under this definition can be controlled and administered with much greater convenience. Moreover, the number of manufacturers with whom one has to deal with regard to specially designed chairs and desks is somewhat restricted.
Clause 6 agreed to.
Clause 7 agreed to.
Schedules I and II agreed to.
On schedule III-


Edward Turney Applewhaite: On schedule III Mr. McCann moves the following amendment:
That Schedule III of this bill be amended by substituting for the words "potted, flowering or

bedding plants, dormant flower bulbs and cut foliage" appearing under the heading "Farm and Forest", the following:
"Potted, flowering, or bedding plants; dormant flower bulbs, corms, roots and tubers; cut foliage,"


James Joseph McCann: I so move.


[Stage Direction]
Amendment agreed to.
Edward Turney Applewhaite: On schedule III Mr. McCann moves a further amendment:
That Schedule III of this bill be amended by substituting for the words "printing produced by a school or university when for its own use and not for resale" appearing under the heading "Printing and Educational", the following:
"printing for school boards, schools and universities, for use by such institutions and not for resale;"


James Joseph McCann: I so move.


[Stage Direction]
Amendment agreed to.
John Borden Hamilton: Mr. Chairman, I would like to ask a question on the schedule as amended, although I may not be able to get any help here. Just about a year ago I remember that in connection with building materials there was a discussion in the house concerning the sales tax on soil pipes. Cast iron soil pipes were mentioned, and I think someone suggested there was no other type; but I understand that copper is being used now. The minister was to give some further consideration to an appropriate designation in order that copper pipes might be included. Has anything been done about that since last year?


William Moore Benidickson: I think not, Mr. Chairman. I understand there have been no representations within the year with regard to the copper item.


John Borden Hamilton: Do I understand there has been no correspondence with the people involved since this matter was discussed here a year ago?


William Moore Benidickson: The reference in the exemption list is to cast iron soil pipe, and my officials advise me that there have been no representations during the past year relating to copper soil pipes.


John Borden Hamilton: Let me say that it may be no representations have been heard from these people because I believe there was -perhaps I should not use the word "undertaking"-an understanding that the department would consider working out some wording which would satisfactorily cover other materials. It may be that the people involved have taken it for granted that this would be done, and I would ask the parliamentary assistant to see whether this might not be accomplished before we come back here again.
Schedule as amended agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Applewhaite):: Shall these amendments be read the second time and concurred in?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Applewhaite):: Shall this bill be read the third time?


Stanley Howard Knowles: By leave.
Bill read the third time and passed.



EXCISE ACT

James Joseph McCann: the second reading of Bill No. 409, to amend the Excise Act.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.

[Stage Direction]
Canadian National Railways amount of *$91,500,000. The third part authorizes the railway company to enter into contracts for new equipment and for general additions and betterments in the amount of *$80 million.
To summarize, parliament is being asked to approve financing, either by way of the issue of new securities guaranteed by the government or by way of direct loan, in the amount of $248,107,000.
As has been done in other years, I would ask permission to place on Hansard for the convenience of the house a table giving the details of these amounts.
Edward Turney Applewhaite: Is it agreed?


Some hon. Members:: Agreed.


William Moore Benidickson: The details of the amounts required are as follows:
Year 1957



PROVISION FOR CAPITAL EXPENDITURES, ISSUE OF SECURITIES, ETC.

[Stage Direction]
The house resumed, from March 30, consideration in committee of the following resolution-Mr. Harris-Mr. Applewhaite in the chair:
That it is expedient to bring in a measure to authorize the Canadian National Railway Company to make capital expenditures in the year 1957 not exceeding $318,707,000 and to make certain capital expenditures and enter into certain contracts prior to July 1, 1958; to authorize the National Company to issue securities to provide amounts required for the authorized expenditures; to provide that except as expressly provided, the aggregate principal amount of securities outstanding at any time shall not exceed $248,107,000; to authorize the governor in council to guarantee the principal and interest of securities issued by the company for me purpose aforesaid; to authorize the Minister of
t0 mak.e, loans to the said company secured by such securities and not exceeding $248,107 000 m principal amount to enable the said company to
fbfon iUiCh ?*pendltures and with authority to give finandai aid and assistance to other companies of the national system.	p
William Moore Benidickson: Mr. Chairman, this is the annual resolution that precedes the introduction of the Canadian National Railways Financing and Guarantee Act.
Hon. members will recall that in 1952 the form of this legislation was changed so as to include the financing of all capital expenditures whether authorized in that act or in earlier financing and guarantee acts. This procedure has been followed again this year.
The bill to be founded on this resolution is divided into three specific parts. The first part is to authorize the Canadian National Railways to incur capital expenditures up to $282,707,000. The second part authorizes the railway company to make capital expenditures prior to July 1, 1958, to discharge obligations incurred under this act which become due and payable after January 1, 1958, in the
82715-200$
Road property	 $ 82,605,000
Branch lines	 9,445,000
Hotels	 12,631,000
Equipment	 147,569,000
_	.	$252,250,000
Investment in affiliated
companies	 16,457,000
Additional working capital .. 14,000,000
_	$282,707,000
Less: Depreciation accruals . 84,600,000	198,107,000
Year 1958
Interim financing authority January 1 to June 30, 1958 required with respect to capital projects authorized in 1957 and prior years .. $ 92,000,000 Less: Depreciation accruals . 42,000,000	50,000,000

The usual authority is provided for the making of temporary loans to the railway company and to Trans-Canada Air Lines to
^neet,n?QerS defidtS' if they occur- to 30, 1958. While the budget of the railway
company contemplates a surplus of $7,700 000 for the calendar year 1957, deficits sometimes do occur in the early months of the year The amount outstanding at the present time authorized by financing and guarantee acts of the past is $146,991,117.11. These were authorizations by the 1954, 1955 and 1956 acts.


John Borden Hamilton: Mr. Chairman as the parliamentary assistant has said, this is the usual type of resolution that has* been received each year since 1952 when the capital structure of the company was changed. As a matter of fact, I am impressed again, as I always have been, by the amount of money required to be spent to carry out
* See correction of figures at page 3198, column 1.

Canadian National Railways the operations of both our national railway and our national air line. I think what we should note, however, is that we have had a profit position with regard to the past year's operations of both the railway and the air line and that we are looking forward to a profit position during the coming year. I think the officers and the employees of the companies should be commended for the efforts they have made in bringing about this happy situation.
That does not mean, of course, that we may not have a few criticisms to offer in connection with the situation as we find it. Personally, I would have liked very much to see the Minister of Transport in the house at the moment because I am thinking of the Questions I asked him about the St. Lawrence seaway a few hours ago during the question period and I recall the very short shrift I got when I requested certain information about the estimates and about a few million dollars that we were expending. I have no intention of taking advantage of the very one-sided opportunity to debate during the question period at which time the dice are all loaded very much in favour of the cabinet, but it seems to me that when we are being asked to vote these large amounts we should at the same time have a fair amount of openness with respect to answers when we request -information from time to time about where ithe money is going and why the estimates may not be quite as they were when the minister came before the house to get his money.
There are a few things with regard to the operations of the railway and the air line which I think might be pointed out. I said last year, and I think it bears repetition, that the railway finds itself almost continually in a rather severe price squeeze. During the committee hearings this year I was very much impressed by Mr. Gordon's statement that the applications for freight rate increases always seemed to be about one step behind the cost spiral with which the railway, in concert with all other types of industry, is faced these days. As found at page 61 of the minutes of proceedings and evidence of the committee on railways and shipping, I asked Mr. Gordon a question about this matter. This was my query:
On the basis of the interim increase you have been allowed, are you running ahead of your increases with your wage contracts, or are you already behind?
Mr. Gordon replied:
I have said in the report somewhere that- where is that paragraph-that the increase in our wage costs was more than in the freight increase we have.
Then he went on to quote the paragraph which is in these words:
[Mr. Hamilton (York West) .1
The additional revenue which these rate increases produced in 1956 fell substantially short of meeting the additional costs of higher wages and other benefits and Increased material prices incurred during the year.
There is an indication here that so far as the requirements of the railway are concerned, there is no opportunity to anticipate with respect to wage costs. As a matter of fact, I think Mr. Gordon's answer was very intelligent. He said that they could not very well anticipate or the costs might be even more than they would be as the result of a straight, open negotiating and bargaining session. The situation might be disclosed and there would be no great benefit to the railway if it were done that way.
Here is one handicap under which the railway is operating. It operates under a system whereby it has a fixed price for its product but the costs in making up the product vary from day to day. At the same time, the railway has an additional handicap. Mr. Gordon has pointed out that it is most difficult for the railway to finance in the same way as ordinary business companies. He has referred to the source of funds and has pointed out that the Canadian Pacific railway has a much greater opportunity to finance additional undertakings by retained earnings. Of course, in the case of the Canadian National the legislation provides that all money arising out of a return on equity must be turned over to the government each year, no matter whether the amount is large or small, and the railway must come back here as the source from which to obtain its funds.
We must also realize that the railway is an amalgamation of a large group of companies which were bankrupt and at the commencement of the operations of the company that fact certainly placed a handicap on the officers and employees in attempting to get the company into a proper position. However, we should note one very encouraging thing. The lines of the company being in a more northerly area than those of the Canadian Pacific it was thought for a great many years that they would be non-productive lines to a great extent, but Mr. Gordon now suggests that the pendulum may be swinging the other way and with the opening up of the northern areas of the country I think everybody is looking forward to the time when the Canadian National may begin to be a most profitable railway operation. In the whole report of the minutes of proceedings and evidence of the committee I think that is the most encouraging statement to be found there.
In that connection there is only one thing I should like to say. With that prospect before us and with the hope that the line will now become really profitable, I hope we will not attempt to saddle the railway with

a lot of extensions and branch lines necessitated by political pressure and political interest. It seems to me that Mr. Gordon has come forward very strongly and has said that the officials of the railway can assess whether a line is going to be profitable and a self-liquidating venture and that if they find that to be so they can come here as prudent men and say, "Give us the money for this job and we will do it." But if there are going to be lines of the other type, those that are required to satisfy pressure groups, then I say that surely such people are the people who should be putting their signatures on the line as guarantors that in the future it will be a profitable operation. If we ever again embark on a system of building lines not on the basis of sound economic policy, we are going to remove the chance that in the future this may be one of the best paying railway operations that you will find.
One of the things that we in my area, and I suppose those in the greater metropolitan area of Toronto, are hoping for is that some of the new developments in railway operation we read about may become more beneficial in solving these problems of commuter service. I was most interested to read that the type of traffic control which has now been designed will make possible a great deal more use of the present roadbed or the present rails of the company. I am not going to read the evidence but I notice at page 157 Mr. Gordon at least went as far as to say that this new type of traffic control would make possible a greater use of the trackage. He was not going so far as to say that the stations in the present metropolitan areas were large enough to take care of the additional volume; but if all of these new automatic systems came in it might be possible that the position might change.
At the present time I think the answer is that there is no room or there is no track space available for the operation of commuter services on a large scale. With the new system of control it may be that we shall reach the position where there is room for that type of service, provided the actual depots themselves could be enlarged to take care of the additional volume of traffic. This consideration may be more important when we keep in mind the fact that he has indicated as well that the future for a considerable amount of passenger traffic may be not too bright. From the standpoint of the actual economic operation of the company, I do not think that he probably is going to complain too much about that because I think it is well known that the freight operations generally are the operations of the company which keep the over-all financial picture in the black. But when we have a combination
Canadian National Railways of those two factors, namely the new type of automatic controls enabling greater use of trackage in metropolitan areas and perhaps a falling off of the general line of passenger traffic that we have seen, it may be that in the larger metropolitan areas we may look for some relief for the commuter travelling public.
One other thing which it is most difficult for us to understand, I think, is that we have this continuation of financing of the national air line by means of a general omnibus resolution dealing with the national railway. It seems to me that some consideration should be given at an early date to seeing that the national air line is separated entirely in its financial responsibility from the railway company. We have heard that there are certain benefits in this type of operation; that there are certain departments where there can be a cutting down of personnel and where there may be a renting out of certain services, secretarial, legal and things like that. But it seems to me that we may be getting into the position in the over-all direction of the company where there could be a conflict of interest between the best course to be taken on behalf of the railway from the financing standpoint and the best course to be taken for the air line company. As a matter of fact, although I have not the figures before me, I believe that while the financing required now for Trans-Canada Air Lines is on a large scale, it will increase in the future because of the greater utilization of jet aircraft, bringing with it much greater expenditures. I believe that the financing of T.C.A. is going to be on a large enough scale that there will be no particular advantage or cost saving in continuing to have it included in this type of legislation.
I might say that perhaps this is a time when we might think of other methods of financing T.C.A. in any case. I notice that according to its statement they have about $20 million of debenture debt, $20 million of long-term loan from the national railway- these figures may not be exact-and about $6 million or $7 million of equity stock held by the railway company. It seems to me that there certainly might be an opportunity here for the people to see this company made into a large public corporation, but not on the basis of its being a national institution. If the people of Canada were given the opportunity perhaps to buy stock in the air line on the basis of a unit including a debenture and common stock, I do not think there would be the least bit of trouble in seeing that the whole capital requirements of T.C.A. were taken care of on a separate basis, with the people of Canada becoming equity shareholders on the basis of a common stock issue

Canadian National Railways along with the purchase of a debenture issue; maybe it might be five shares of common stock for every $100 bond that would be acquired. I think there would be great interest among the people of this country. I think there would be just as much interest as or more than that which my friend the Minister of Trade and Commerce had in the purchase of units of Trans-Canada Pipe Lines Limited.


Clarence Decatur Howe: They got it in spite of you.


John Borden Hamilton: I might say to the minister that if we had been given that first $150 million, almost anybody could go out and get the rest of it. But I believe there is here an opportunity to complete the financial set-up of this company. I think it is one that might be dealt with in a manner a little bit similar to the methods used in Alberta in connection with their gas distribution company, in which the public were given an opportunity to invest on a shareholder basis. Perhaps if the government wished to retain some control over this enterprise they could ensure, as they did out there, that a number of members of the board of directors should be of the government itself. As I say, I think it would create a renewed interest in the company and it would remove it from all the problems that may arise in dealing with it regularly in the House of Commons.
If there is any worry in connection with this particular problem from the standpoint of outsiders being in control of the company, I do not think we need to worry because, as I recall it, the Aeronautics Act provides that no more than 40 per cent of a company engaged in air transport in Canada may be owned by anyone of foreign nationality. Hence there would be here an opportunity of spreading the ownership on a businesslike basis and of making this company operate as does any other company in this business. These are things that I think should be said. We shall have more to say along these lines when the bill is presented to the house.


Edward Turney Applewhaite: Shall the resolution carry?


Some hon. Members:: Carried.
Resolution reported and concurred in.
Mr. Harris thereupon moved for leave to introduce Bill No. 411, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system during the calendar year 1957, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company.
Motion agreed to and bill read the first time.


The Acting Speaker (Mr. Applewhaite):: When shall the bill be read a second time? Now?


Howard Charles Green: No.


The Acting Speaker (Mr. Applewhaite):: Next sitting of the house.

The house in committee of supply, Mr. Applewhaite in the chair.



POST OFFICE DEPARTMENT

[Stage Direction]
335. Transportation-movement of mail by land, air and water, including administration, and to authorize and provide for the adjustment, as of October 1, 1956, of rural mail delivery contracts in effect on that date or entered into by way of renewal after that date, under the provisions of subsection (2) of section 33 of the Post Office Act, notwithstanding paragraphs (b) and (c) thereof, $51,940,991.
Howard Charles Green: Will the Postmaster General explain to the committee the practice followed by the post office with regard to c.o.d. mail? Within the last day or two I have had a very bitter complaint from a constituent to the effect that a postman came to his home with a c.o.d. letter on which the sum of $1 was required. His wife paid the $1. It was a large brown envelope and when it was opened it was found to contain a copy of one of the Canadian magazines. I will not give the name of the magazine, although I shall be glad to show the minister the letter. By this time his wife had paid the $1 and it is apparently taken as constituting a subscription to this particular magazine. That seems to be a high-handed way to get new subscriptions, and I do not believe the post office should allow itself to be used for a purpose of that kind. The woman had no idea what was in the envelope, but the post office collected the $1 from her and now the family find themselves subscribing to a magazine they do not want. I do not think it is right for the post office to be used in that way.


Hon. Hugues Lapointe (Postmaster General):: My hon. friend is quite right, and whenever publishing firms, for instance like the one he mentions, make use of that practice and a complaint is filed with the Post Office Department we immediately investigate the situation. If the complaint is found to be justified we follow it up with the publishing firm and ask them to make an adjustment to the person from whom they have collected unsolicited subscriptions to a publication.


Howard Charles Green: Is there not some way in which the post office can protect itself against being used in this way? Surely the post office does not just accept a closed envelope and then go

Private Bills
and collect $1 on that envelope without hav- five o'clock. Shall I report progress and ask ing some idea of the nature of the leave to sit again later this day or next transaction?	sitting of the house?


Hugues Lapointe: Well, the difficulty there is that we have no means of knowing what is in the parcel, or what is in the envelope, or whether what is in the envelope or parcel is something that has been ordered by the addressee which he expects to receive and for which he expects to pay his $1 in this case. But all publishing firms know that the post office services cannot be used for that purpose, and whenever such a complaint is made to the postal authorities we see to it that an adjustment is made.
We have no means, as my hon. friend realizes, of knowing what is the content of a parcel which is being sent c.o.d.


Howard Charles Green: No; here is a family that has been victimized. It is true it is a small amount of money. I have no doubt the same thing has happened to a great many other people. Are the officials of the post office not able to tell when a magazine is being sent out on that basis?


Hugues Lapointe: The postal authorities have no authority to open parcels to find out what is in them, and my hon. friend realizes that. The only means we have of rectifying the situation is to take it up with the one who has sent the parcel and see that reimbursement is made. This we do when a complaint is filed with the post office authorities.


Howard Charles Green: This was not a private letter; this was an envelope.


Hugues Lapointe: If it is mail in a sealed envelope it is still the same thing. In other words, postal employees do not open envelopes to find out what is the content.


Mr. Mclvor:: Mr. Chairman, this is receiving money under false pretences. Is the only punishment the repayment of the $1? Is there no other punishment?


Howard Charles Green: Why should the innocent person be punished? The innocent person is victimized by having to pay the $1 and the post office is being used to carry out that practice. That is what I am complaining about. The post office should not allow itself to be placed in the position where it is used for a fraud of this kind; and that is all it is; it is a straight fraud.


Edward Turney Applewhaite: Order. May I point out two things to the committee? First, there is before us a resolution having to do with payment for the movement of mail by land and water, including administration, and so forth. The second is that it is now
Progress reported.



PRIVATE BILLS

The Acting Speaker (Mr. Applewhaite):: There are a large number of bills on the order paper for reference to committee of the whole. Is it agreed that they all be committed under standing order 54 (D?


Some hon. Members:: Agreed.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. 343, respecting Progressive Insurance Company of Canada.

Mr. Mitchell (London).
Bill No. 344, respecting the Baptist Convention of Ontario and Quebec.-Mr. Fleming.
Edward Turney Applewhaite: There are a number of divorce bills referred to the committee of the whole. I see the hon. member for Winnipeg North Centre rising. I was going to ask whether they might be committed as one?


Stanley Howard Knowles: Mr. Chairman, there are some bills concerning which we wish to ask a few questions. Perhaps the simplest way to proceed would be for me to indicate that as far as we are concerned you could call orders numbers 51 all the way down to 132, both inclusive, as one group.


Edward Turney Applewhaite: Is it agreed that the divorce bills under orders numbers 51 to 132 both inclusive be committed as one?


Some hon. Members:: Agreed.




[Stage Direction]
Bill No. 211, for the relief of Joseph Adelard Gerard Leclaire.-Mr. Henderson.
Bill No. 234, for the relief of Jeanne D'Arc Ouellette Martin.-Mr. Henderson.
Bill No. 248, for the relief of Mary Bol-dovitch Mogil, otherwise known as Mary Boldovitch Mogilesky.-Mr. Henderson.
Bill No. 249, for the relief of Doris Irwin Phillips.-Mr. Henderson.
Bill No. 250, for the relief of Kathleen O'Malley Romandini.-Mr. Henderson.
Bill No. 251, for the relief of Lillian Yochalas Ostroff.-Mr. Henderson.
Bill No. 252, for the relief of Gladys Catherine McCluskey MacFarlane.-Mr. Henderson.
Bill No. 253, for the relief of Mary Kathleen Pineault Miller.-Mr. Henderson.
Bill No. 254, for the relief of Terez Lazar Jankovicz.-Mr. Henderson.
3172	HOUSE OF
Private Bills-Divorce
Bill No. 255, for the relief of Winona Beryl Buzan Maynard.-Mr. Henderson.
Bill No. 256, for the relief of Rose Marie Hops Zinman.-Mr. Henderson.
Bill No. 257, for the relief of Doris Velma Gardner Briggs.-Mr. Henderson.
Bill No. 258, for the relief of Pinck Kemp-inski.-Mr. Henderson.
Bill No. 259, for the relief of Margaret Lukis Lambert.-Mr. Henderson.
Bill No. 260, for the relief of June Angela Duyvewaardt Corse-Scott.-Mr. Henderson.
Bill No. 261, for the relief of Frank Maun James.-Mr. Henderson.
Bill No. 262, for the relief of Doris Louise Richardson Turner.-Mr. Henderson.
Bill No. 267, for the relief of Jacques Piche. -Mr. Henderson.
Bill No. 268, for the relief of Ruby Ivy Jewell Daniel.-Mr. Henderson.
Bill No. 269, for the relief of Clara Soloway Ruby Sazant.-Mr. Henderson.
Bill No. 270, for the relief of Jean Houde. -Mr. Henderson.
Bill No. 271, for the relief of Gisele Comtois Brodeur.-Mr. Henderson.
Bill No. 272, for the relief of Mitzi Arono-vitch Bezonsky.

Mr. Henderson.
Bill No. 273, for the relief of Miriam Brodish Silverman.-Mr. Henderson.
Bill No. 274, for the relief of Paule Chaput Mongeau.-Mr. Henderson.
Bill No. 275, for the relief of George William Ellis.-Mr. Henderson.
Bill No. 276, for the relief of Joseph Gagne. -Mr. Henderson.
Bill No. 277, for the relief of Lois Altena Robertson Meade.-Mr. Henderson.
Bill No. 278, for the relief of Ethelynne Joan Ratcliff Gauvreau.-Mr. Henderson.
Bill No. 279, for the relief of Mary Flatman Tardif.-Mr. Henderson.
Bill No. 345, for the relief of Romeo Cadieux.-Mr. Henderson.
Bill No. 346, for the relief of Albert George Mugford.-Mr. Henderson.
Bill No. 347, for the relief of Andree Duquette Mathieu.-Mr. Henderson.
Bill No. 348, for the relief of Hans Leth. -Mr. Henderson.
Bill No. 349, for the relief of Roland Leclair. -Mr. Henderson.
Bill No. 350, for the relief of Mary Shirley Mortimer Hogan.-Mr. Henderson.
Bill No. 351, for the relief of Magda Kadar Niederhoffer.-Mr. Henderson.
[The Deputy Chairman.]
[Stage Direction]
Bill No. 352, for the relief of Edith Joyce Hawkes Balogh.-Mr. Henderson.
Bill No. 353, for the relief of Dieter Heinrich Karl Hellmann.-Mr. Henderson.
Bill No. 354, for the relief of Marion Don-nithorne McAlear.-Mr. Henderson.
Bill No. 355, for the relief of Noella Lauzon Dinelle.-Mr. Henderson.
Bill No. 356, for the relief of Gloria Helen King Fletcher.-Mr. Henderson.
Bill No. 357, for the relief of Ronald Edward Parker.-Mr. Henderson.
Bill No. 358, for the relief of Elizabeth Maidie Davies Jones.-Mr. Henderson.
Bill No. 359, for the relief of Irene Grace Weir Robertson.-Mr. Henderson.
Bill No. 247, for the relief of Pauline Margaret Patricia Sylvester McLean.-Mr. Henderson.
Bill No. 283, for the relief of Margaret Chapman Ramsay.-Mr. Henderson.
Bill No. 284, for the relief of Victorie Bergeron Rougeau.-Mr. Henderson.
Bill No. 285, for the relief of Paul Emile Doucet.-Mr. Henderson.
Bill No. 286, for the relief of Andre Michel Allard.-Mr. Henderson.
Bill No. 287, for the relief of Tekla Stefura Lawrentowycz, otherwise known as Tillie Stefura Lorentowich.-Mr. Henderson.
Bill No. 288, for the relief of Joseph Fernand Gerard Mallette.-Mr. Henderson.
Bill No. 289, for the relief of Mary Helen Joyce Lamberg Elfstrom.-Mr. Henderson.
Bill No. 290, for the relief of Joan Gertrude Mitchell Sams.-Mr. Henderson.
Bill No. 291, for the relief of Eileen Madeleine Conroy Wettlaufer Sobie.-Mr. Henderson.
Bill No. 292, for the relief of Esther Kahn Colomay.-Mr. Henderson.
Bill No. 293, for the relief of Doris Jean Lussier Strike.-Mr. Henderson.
Bill No. 294, for the relief of Mary Freeman Kurtaz, otherwise known as Mary Freeman Curtis.-Mr. Henderson.
Bill	No. 295,	for the	relief	of	Gilbert
Jacques Lafontaine.-Mr. Henderson.
Bill	No. 296,	for the	relief	of	Shirley
Chernofsky Rynd.-Mr. Henderson.
Bill No. 297, for the relief of Roy Porter.- Mr. Henderson.
Bill No. 298, for the relief of Miloslawa Zaleska Boski.-Mr. Henderson.
Bill No. 299, for the relief of Marie Mar-celle Therese Dagenais Chesnel.-Mr. Henderson.

Bill No. 300, for the relief of Marie Louise Armand Josephine Wouters Haire.-Mr. Henderson.
Bill No. 301, for the relief of Robert Car-ruthers Burnside.-Mr. Henderson.
Bill No. 302, for the relief of Leon Gass Estabrooks.-Mr. Henderson.
Bill No. 303, for the relief of Irene Myra Cohen Auerback.-Mr. Henderson.
Bill No. 304, for the relief of Brenda Iris Gibson Dunbrack.-Mr. Henderson.
Bill No. 305, for the relief of Geraldine Lenore Dowd Costigan.-Mr. Henderson.
Bill No. 306, for the relief of Eugenia Liontos Anderson.-Mr. Henderson.
Bill No. 307, for the relief of Molly Leibo-vitch Beane.-Mr. Henderson.
Bill No. 308, for the relief of Doris Katz Moscovitch.-Mr. Henderson.
Bill No. 309, for the relief of Jean Denis. -Mr. Henderson.
Bill	No.	310,	for	the	relief of	Grayce
Marion Mack Campbell.-Mr. Henderson.
Bill No. 311, for the relief of Genowefa Tkaczyk Janeczek.-Mr. Henderson.
Bill	No.	312,	for	the	relief of	Marion
Stewart Whitehouse	McCormick.-Mr. Henderson.
Bill No. 313, for the relief of Shirley Jean Weir Villeneuve.-Mr. Henderson.
Bill	No.	314,	for	the	relief of	Herbert
Marshall Connell.-Mr. Henderson.
Bill No. 315, for the relief of Earl Morrison.-Mr. Henderson.
Bill No. 316, for the relief of Joseph Roger Fernand Masse.-Mr. Henderson.
Bill No. 317, for the relief of Anita Bernice Rosnick Joseph.-Mr. Henderson.
Bill No. 318, for the relief of Harry Nut-brown.-Mr. Henderson.

[Stage Direction]
The house in committee on Bill No. 321, for the relief of Jack Stevenson Chalmers-Mr. Henderson-Mr. Applewhaite in the chair.
On clause 1-Marriage dissolved.
Stanley Howard Knowles: Mr. Chairman, before you proceed with clause 1 of this bill I believe from looking at the evidence that there was considerable delay in connection with the proceedings in relation to this bill. I wonder if the sponsor could give the reasons for this delay or make any comments he might care to offer with respect to this bill.


Mr. Henderson:: Mr. Chairman, the printed evidence of the senate committee shows that the petition was first heard on January 16, 1957, at which time the hearing before the 82715-201
Private Bills-Divorce
senate committee was unopposed. The committee recommended that the divorce be granted and its report was adopted by the senate. The bill was given first reading on January 24. I agree with my hon. friend that there was considerable delay from the time it was agreed on the evidence that the divorce should be granted on January 16 to the time the bill reached the house.
After the evidence had been heard I was informed by those responsible for these bills in the other place that a letter was received from the respondent on January 25 in which she stated that she objected to the accusations contained in the petition but lacked money to defend herself. Steps were then taken which halted the progress of the bill and it was referred back to the committee. On January 31 the respondent was advised by registered letter that she would be given until February 15 to file a notice of objection and to make application for funds for the conduct of her defence.
No reply was received to the letter of January 31. The respondent was again advised by registered letter on February 18 that she would be given a further extension until February 25 to file her notice of objection. On February 27 the respondent acknowledged the letter of February 18 stating she wished to contest the matter and requesting funds for her defence.
On February 27 an order was made by the chairman of the said committee requiring the petitioner to pay the respondent $100. The Ottawa agent for the petitioner, the solicitors for the petitioner and the respondent were so advised and proof of the payment of the money to the respondent personally on March 9 was filed with the committees branch of the other place.
On March 14 the respondent was advised by telegram that the case would proceed if she did not file formal notice of opposition by March 18. As of March 19, the day after the time would have expired for her to file her notice of objection, no acknowledgment of the telegram or further indication of intention to oppose the petition was received by the committee branch of the other place.
I might summarize the situation by saying that this was a case that went before the Senate committee dealing with divorce and the bill was passed without any notice of objection having been filed. After it had been passed the respondent requested that she be given further time in which to file a notice of objection. As a matter of fact she was given several extensions of time. An order was put through under which the petitioner was to pay the respondent the sum of $100 and this was done.

Private Bills-Divorce
The committee branch was advised that she never did file a notice of objection before the Senate committee and the Senate naturally proceeded to refer the bill to the House of Commons.
I might say from my own investigation it has been revealed to those charged with the responsibility for procedure in this house in relation to the divorce committee that no notice of objection has been filed to date and therefore this bill has been allowed to proceed in the normal course.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Bill reported, read the third time and passed.
Edward Turney Applewhaite: Is it the wish of the committee that the succeeding bills be called one at a time?


Stanley Howard Knowles: Not quite yet, Mr. Chairman. Perhaps you would now like to call in one batch the bills under orders Nos. 134 to 143 both inclusive.


Edward Turney Applewhaite: Is it agreed that the divorce bills under orders Nos. 134 to 143 both inclusive be committed as one.


Some hon. Members:: Agreed.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. 322, for the relief of Jeanette Goldman Baskin.-Mr. Henderson.
Bill No. 323, for the relief of Henry John Bushby.-Mr. Henderson.
Bill No. 324, for the relief of Yvette Roby Pinard, otherwise known as Yvette Roby Beauchemin.-Mr. Henderson.
Bill	No.	325,	for	the	relief	of	Marion
Augusta Butler Thomas.-Mr. Henderson.
Bill No. 326, for the relief of Frederick William Cummings.-Mr. Henderson.
Bill No. 327, for the relief of Lucy Lavinia Munford Macdonald.-Mr. Henderson.
Bill	No.	328,	for	the	relief	of	Dorothy
Eileen Worsdell Cantlie.-Mr. Henderson.
Bill No. 329, for the relief of Aurora Josephine Moretti Guimond.-Mr. Henderson.
Bill	No.	330,	for	the	relief	of	Samuel
Goulding.-Mr. Henderson.
Bill No. 331, for the relief of Elizabeth Harris Bobula.-Mr. Henderson.

[Stage Direction]
The house in committee on Bill No. 361, for the relief of Jacques Petel-Mr. Henderson- Mr. Applewhaite in the chair.

On clause 1-Marriage dissolved.
Mr. Nicholson:: Mr. Chairman, this is one of the contested cases which required a good deal of time before the senate committee. I find that the petitioner and his wife are Roman Catholics. In the course of the examination the petitioner's counsel made some enquiries about the wedding dowry. Apparently the husband was supposed to give his wife $100 a month plus $25 on the $5,000 promised to her in the wedding contract. His Honour Senator Roebuck asked the following question:
Are you still doing so?
His Honour was referring to the payment of $25 a month. The answer was as follows:
I am paying more than that because when the action was rendered by the judge my lawyer was in prison.
It was not brought out in evidence whether the lawyer referred to was the lawyer who was appearing for him who was in prison at the time. It is unfortunate that this matter was not followed up but it was left at that point. The following questions were asked of Mr. Petel:
Q. You did not defend yourself?
A. No, I didn't defend myself.
Q. Why not?
A. My lawyer told me not to defend myself in this case and to continue to try and watch her to have evidence and then proceed with something else.
Q. How much are you paying now?
A. Right now, sir, I am paying $132 a month.
Then there was some questioning about the petitioner leaving home for three months, after they had been married for three years. He was then asked:
Q. After those three months is is not true that you went back to the place where your wife was living to ask her to come back to start living together?
A. It is not exactly that way. I went on Christmas day to pay a visit to my son and I had a gift for him. When I came in that house she jumped at me crying, and then took me to her room and made me all kinds of promises that she would do well and she was willing to come back with me. I asked her to give me a little time to consider, maybe 15 days or three weeks; after we talked, we decided to go back together. I did not know any adultery had been committed at that time; I thought it was normal for me to do that.
Q. At the time you had no suspicion of adultery on your wife's part?
A. No I did not. That was three years after my marriage.
Then there is some cross-examination here:
Q. With your permission, Mr. Chairman; Was the purpose for you to get a divorce to save the allowance you are paying to your wife?
Petitioner's counsel then says:
Do not answer that at the present time.


William Alfred Robinson: The question itself is rather objectionable. What do you mean by it? Did you not close your cross-examination?

Then counsel for the corespondent says: I asked permission.
And then a little later on:
Q. Is it true that the purpose of your divorce is to save the obligations you have to your wife and child?


William Alfred Robinson: Yes, that is a little different from the way I was understanding it. Is the purpose of your divorce to save the expense that you are now under in making remittance to your wife and child.
And the petitioner's counsel withdrew his objection and the questions asked continue: Q. Go ahead witness.
A. My answer to that, sir, is that that is the reason for asking my divorce-that is one of the reasons.
Q. That is one of the reasons?
A. Yes.
And then there is a great deal more of examination and cross-examination and I wish to draw the attention of the committee to the fact that a 16-year old boy was called to the committee and he gave evidence to try to clear his mother's name:
Q. Tell me your full name.
And he gave it.
Q. What is your age?

Q. Where do you live?
And he gave his address.
Q. What is your occupation?
A. Office boy.
And the chairman then said:
I suppose you know the significance of an oath, do you witness?
And the little lad said yes.
Q. During the time your mother and father were living together was there something wrong between them?
A. Things were not getting along too nicely.
Q. Why?
A. They had many wrangles at home.
Q. About what?
A. About almost everything under the sun.
Q. Was there any discussion about the conduct of your mother?
A. No.
Q. Has your father in front of you made some reproach to his wife regarding her conduct?
A. No.
And again:
Q. Did you ever meet Mr. Parent at your home?
He is the corespondent.
A. Yes.
And then the young lad gave evidence to contradict the charges brought against his mother. In discussing the other cases we have taken the position that it is not our responsibility to present facts and figures to establish that these individuals appearing before the Senate and the Commons committee to get a divorce are perfect individuals, but it would appear to me that since this is a contested case and since relief 82715-201i
Private Bills-Divorce
is being given to a man of something over $5,000, this seems to be an important factor in this particular divorce and this committee and the house should not approve the divorce.
Clause 1 agreed to.


William James Henderson: On clause 1, 1 have noted the hon. member who has just spoken mentioned this particular bill and I might say that I think it should be on the record that there is no objection registered with the committee branch of this house.


Alexander Malcolm Nicholson: I wonder if the hon. member would speak a little louder.


William James Henderson: I may say that there is no objection registered with the committee branch of this house that it should be opposed before the committee of this house.


Alexander Malcolm Nicholson: I wonder if I may ask the sponsor of this bill if it is generally known that the respondents engaged in these cases have the privilege of presenting their grievances to the House of Commons committee which the hon. member chairs.


William James Henderson: I would presume that if the respondent in this case was represented by counsel before the committee of the upper house that we should not assume the responsibility of counsel and, if she did not know, her counsel should have known. At any rate, there was no objection registered with the house, as I have pointed out, and therefore I recommend its passing by this committee.
Clause 2 agreed to.
Bill reported.


William Alfred Robinson: Is it the wish of the committee that the bills remaining in the committee be considered as one?


Some hon. Members:: Agreed.


William Alfred Robinson: The remaining divorce bills, orders Nos. 145 to 165 inclusive.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. 362, for the relief of Cairlan Lawrence Earle Gagnon.-Mr. Henderson.
Bill No. 363, for the relief of Julio Donato Cianci.-Mr. Henderson.
Bill No. 364, for the relief of Mimi Frances Aberback Sherback.-Mr. Henderson.
Bill No. 365, for the relief of Alphonsine Alain Lachance.-Mr. Henderson.
Bill No. 366, for the relief of Mary Patricia Pierrette Brisebois McGuire.-Mr. Henderson.
Bill No. 367, for the relief of Marjorie Alice Ridout Collett-White.-Mr. Henderson.
Bill No. 368, for the relief of Mary Elizabeth Catherine Russell Morgan.-Mr. Henderson.
[Stage Direction]
Private Bills-Divorce Bill No. 369, for the relief of Anne Glassberg Craft.-Mr. Henderson.
Bill No. 370, for the relief of Joseph Napoleon Hyacinthe Romeo Cote.-Mr. Henderson.
Bill No. 371, for the relief of Agathe Rose Alma Bisson Taillefer.-Mr. Henderson.
Bill No. 372, for the relief of Nick John Oncescu.-Mr. Henderson.
Bill	No. 373,	for the	relief of	Richard
Supple.-Mr. Henderson.
Bill No. 374, for the relief of Joan Dorothy Beaver Mavor.-Mr. Henderson.
Bill No. 375, for the relief of Barbara Bennett Roach.-Mr. Henderson.
Bill	No. 376,	for the	relief of	William
George Walker.-Mr. Henderson.
Bill No. 377, for the relief of Mary Ghetler Feldman.-Mr. Henderson.
Bill No. 378, for the relief of Joseph Bernard Guy Locas.-Mr. Henderson.
Bill	No. 379,	for the	relief of	Andreas
Erdelyi.-Mr. Henderson.
Bill No. 380, for the relief of Theresa Alice Cain Martin.-Mr. Henderson.
Bill No. 381, for the relief of Millicent Felicite Dawson Stairs.-Mr. Henderson.
Bill No. 382, for the relief of Philippa Hazel Martin Foster Hill.-Mr. Henderson.
Mr.	Stanley	Knowles	(Winnipeg NorthCentre): Mr. Speaker, would you separate from the group of divorce bills you have before you for third reading Bill No. 361 which	appears	under order 144.	In other
words, we will not object if you put the question for third reading on the others in one motion.
The Acting Speaker (Mr. Applewhaite):: no other member wishes any other bills dealt with separately we will proceed. With reference to the bills left, reported from the committee of the whole, it is moved by Mr. Henderson and seconded by Mr. Brown (Essex West) that all these bills with the exception of Bill No. 361, an act for the relief of Jacques Petel, be now read the third time. Is it the wish of the house to adopt the motion? Motion agreed to.



JACQUES PETEL

William James Henderson: the third reading of Bill No. 361, for the relief of Jacques Petel.


Stanley Howard Knowles: Mr. Speaker, before this bill is read the third time I would like to suggest to the sponsor of the bill that it might be referred back to the standing committee on [The Chairman.]
miscellaneous private bills. We recognize that the sponsor pointed out to us that no notice of contestation was filed with the House of Commons, but in view of the fact that it was contested in the other place we think it would be appropriate for it to be considered again in our committee so that if the respondent does wish to appeal she can do so.
It is not our intention to divide the house on the appropriate amendment which would achieve this result. We hope the sponsor will accept it.
I therefore move, seconded by my colleague the hon. member for Yorkton (Mr. Castleden): That Bill No. 361 he not read the third time but that it be referred back to the standing committee on miscellaneous private bills.


William James Henderson: In view of the representations made by the hon. member, and also to leave no doubt that this lady did not have the information that she could have filed a further notice, I would have no objection to that course being followed.


[Stage Direction]
Amendment agreed to, and bill referred to standing committee on miscellaneous private bills.
The Acting Speaker (Mr. Applewhaite):: I notice that Bills Nos. 333 to 342 inclusive are divorce bills for second reading. Is it agreeable that these be presented in one motion?


Some hon. Members:: Agreed.



SECOND READINGS-SENATE BILLS

[Stage Direction]
Bill No. 333, for the relief of Pauline Ver-doni Di Fruscia.-Mr. Henderson.
Bill No. 334, for the relief of Lawrence Robson Moore.-Mr. Henderson.
Bill No. 335, for the relief of Jadwiga Uzar Ziomko, otherwise known as Hedwig Uzar Ziomko-Mr. Henderson.
Bill No. 336, for the relief of Eleonor But-kieviciute Springeliene Springelis.-Mr. Henderson.
Bill No. 337, for the relief of Harry Edward Beard.-Mr. Henderson.
Bill No. 338, for the relief of Shirley Ann Doris Hobbs Cleary.-Mr. Henderson.
Bill No. 339, for the relief of Charles Richard Allen.-Mr. Henderson.
Bill No. 340, for the relief of Eveline Dora Giroux Gunhouse.-Mr. Henderson.
Bill No. 341, for the relief of Mary Weiner Brown.-Mr. Henderson.
Bill No. 342, for the relief of Simone Habel Tanguay.-Mr. Henderson.
William James Henderson: In view of the fact that the next bill appearing on the order paper as No. 176 might be a contentious bill, and

that there appear on the order paper 21 bills sponsored by myself which might, possibly, be referred to the committee on miscellaneous and private bills; and also bearing in mind that one or two of these are bills with regard to which the committee may find it necessary to clear the evidence, I would ask that the sponsor of Bill No. 15, appearing on the order paper as item 176, should allow it to stand until later this day.


The Acting Speaker (Mr. Applewhaile):: Would that be agreeable? Very well. Orders 177 to 197 inclusive are divorce bills for second reading-


Alexander Malcolm Nicholson: Let us take order No. 177 first.


The Acting Speaker (Mr. Applewhaile):: I will just put the question on order 177.



WILFRID LANOUETTE

William James Henderson: the second reading of Bill No. 383, for the relief of Wilfrid Lanouette.


Alexander Malcolm Nicholson: Mr. Speaker, I must confess that I have not read all the evidence in connection with this case. The report which deals with it appears to be the longest report I have ever seen since I came to parliament many years ago. The last page is numbered 143.
I am sure hon. members may be excused if they have not been able to read carefully the whole of this evidence, especially since it is getting rather late in the session. However, there are one or two matters which I would like to draw to the attention of the house. As hon. members might expect, this is a contested case and it seems fairly clear to me that this is a case where there is a "frame-up". I do not have the dictionary definition of what constitutes a frame-up, but it would appear to me that this woman who is trying to prevent a divorce being granted was looking after a store and generally supplying the wherewithal to keep herself and her son while her husband was looking after himself.
There was a good deal of contradiction in connection with the evidence, as might have been expected. It is stated on page 103 that the husband wanted a divorce very badly. But the wife apparently was not agreeable to a divorce being granted. I find that the hon. senators who dealt with this matter followed the case very closely and appeared to have a good deal of sympathy with the wife. One hon. senator, for example, told the witness that he was going to ask her a question because he thought she needed "a little bit of help".
Q. You went out with this strange man and then you felt yourself in a compromising position?
A. That is right.
Private Bills-Divorce


William James Henderson: What page is that one?


Alexander Malcolm Nicholson: Page 111. Then on page 114 there are some questions and answers in connection with drinking. Apparently this strange man came into the store on a number of occasions. He was driving a valuable car and made a date to take the lady in question to a place where drinks were served. It appears they had a couple of martinis. I am not sure just what they are, but that appears in the record here somewhere. After having these martinis the strange man suggested that he had a bottle of rye in his car, and eventually they did make their way to a motel and apparently they had a drink of this rye in the motel. Almost at that point the husband's spies came down on them.
According to the information the respondent gives she had not been in the habit of going out to these places, but she had lived quite a lonely life for a number of years, keeping her little store open from 6.30 in the morning to eleven o'clock at night. I submit, that hon. members of this house should really not be expected to be familiar with the 143 pages of evidence presented in connection with a domestic problem of this sort and be able to reach a decision as to whether or not an act of parliament should be passed to grant the husband relief.


William James Henderson: I might say just a few words in reply-


The Acting Speaker (Mr. Applewhaile):: If the hon. member for Kingston speaks now he will close the debate.


William James Henderson: In replying to the hon. member I might say that before this bill came up I took special steps to determine whether any notice of objection had been filed to this bill. None has been filed to date. I would think that there was very little excuse for any delay in this case.
The committee of the other place, with Senator Roebuck as chairman, heard the evidence in this case and was qualified to hear evidence of any court action. I also notice that counsel representing the respondent was Mr. Jacques Bonneau, barrister at law of the city of Ottawa, who has appeared before our committee on several occasions. He is an outstanding counsel and knows the rules of procedure very well. If there had been any request or objection I am sure that in the first place he would have advised his client correctly and in the second place notice of objection would have been filed. The evidence in support of the petition is some 143 pages in length. There was very extensive examination and cross-examination throughout, and although no notice of objection was

Private Bills-Divorce
filed and possibly no witness appeared I believe that if the members of the committee would read the evidence they would be in a very strong position to consider it because of its detail. I would feel that this case should be left to the committee so that they can deal with it as soon as possible.


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


Stanley Howard Knowles: On division.
Motion agreed to and bill read the second time.


The Acting Speaker (Mr. Applewhaile):: Is
it the pleasure of the house that the remaining divorce bills, other than those that are adjourned debates, be put in one motion?


Stanley Howard Knowles: No, Mr. Speaker. Perhaps you might take the bills under orders 178 to 186, both inclusive.



SECOND READINGS-SENATE BILLS

[Stage Direction]
Bill No. 384, for the relief of Fanny Faye Fox Cohen.-Mr. Henderson.
Bill No. 385, for the relief of Ronald Pike.- Mr. Henderson.
Bill No. 386, for the relief of Micheline Bourdon Russell.-Mr. Henderson.
Bill No. 387, for the relief of Rose Marie Bremmer Middleton,-Mr. Henderson.
Bill No. 388, for the relief of Donalda Ruth MacCrimmon Belak.-Mr. Henderson.
Bill No. 389, for the relief of Joseph Laureat Pierre Valois.-Mr. Henderson.
Bill No. 390, for the relief of Mary Patricia Happy Sullivan.-Mr. Henderson.
Bill No. 391, for the relief of Frances Ellison Schnebley Pattee.-Mr. Henderson.
Bill No. 392, for the relief of Sylvia Rapp Snider.-Mr. Henderson.

William James Henderson: the second reading of Bill No. 393, for the relief of Barbara Fay Howard Goulet.


Stanley Howard Knowles: Mr. Speaker, in looking over the printed evidence in connection with this case it does appear that something must be missing. I wondered at the time whether it was the fault of the printer but I do not think that is the case except that there are one or two striking errors. However, the evidence does not seem to be complete. It seems to me there is something missing. Has the sponsor any explanation to offer?


William James Henderson: Mr. Speaker-
IMr. Henderson.]


The Acting Speaker (Mr. Applewhaile):: the hon. member for Kingston speaks now he will close the debate.


William James Henderson: I wish to congratulate the hon. member on his industry and diligence on noting this omission. I have looked up his record and I find that he is highly qualified as a printer himself.


Stanley Howard Knowles: Thank you.


William James Henderson: I noticed that he stated that possibly it was not a mistake of the printer, and I am quite sure that he, being of that profession, would say that in any case. However, I find that he is also a good proofreader and there is a mistake in the printing. As a matter of fact one and a half pages of the evidence, and a very important part of the evidence, were omitted. Unfortunately, in the minutes of evidence sent to this house the last one and a half pages were left out. It was too late for a revised printing. Although this petition was unopposed and not a contentious one, nevertheless the committee branch of the Senate noted the error and tried to correct it in order that this house would be justified in dealing with the bill.
The committee branch has provided me with several typewritten copies of the questions and answers omitted and I will see that they are distributed to the hon. member or some of his colleagues and that they are available for Monday in order to deal with the bill if it is given second reading and referred to the standing committee.
I hesitate to read the evidence into the record at this time. It is the main part of the evidence which set out the adulterous act of the respondent. As I say, I will see that the hon. member and his colleagues are provided with copies before the case is considered by the committee at its next sitting. They will then be able to review it and make up their minds as to the sufficiency of the evidence.


Stanley Howard Knowles: May I ask the hon. gentleman a question before he sits down? Is it understood that whatever certified permanent copy of this evidence there is, so far as the records of parliament are concerned, will be complete.


William James Henderson: I will do my best to comply with the hon. member's request.
Motion agreed to and bill read the second time.


The Acting Speaker (Mr. Applewhaile):: Would hon. members care to indicate whether we have reached the state where the balance of divorce bills can be placed before the house in one motion?


Stanley Howard Knowles: Mr. Speaker, you will note that there is a slight difference in that order No. 195 is an order for resuming an adjourned debate.


The Acting Speaker (Mr. Applewhaite):: I was going to suggest that we take down to and including order No. 194.


Stanley Howard Knowles: It would be appropriate to take orders 188 to 194, both inclusive.



SECOND READINGS


[Stage Direction]
Bill No. 394, for the relief of Bernice Clyke Brown.-Mr. Henderson.
Bill No. 395, for the relief of Harry Payne Ward.-Mr. Henderson.
Bill	No.	396,	for	the	relief	of Roman
Krastins.-Mr. Henderson.
Bill No. 397, for the relief of Sam Essner.- Mr. Henderson.
Bill	No.	398,	for	the	relief	of Georges
Henri Durocher.-Mr. Henderson.
Bill	No.	399,	for	the	relief	of Pauline
Jarowyj Krymlak-Mr. Henderson.
Bill No. 401, for the relief of Florence Rhoda Cohen Denbow.-Mr. Henderson.

[Stage Direction]
The house resumed, from Tuesday, April 2, consideration of the motion of Mr. Henderson for the second reading of Bill No. 332, for the relief of Georges-Etienne Cartier, and the amendment thereto of Mr. Knowles.
Mr.	Stanley	Knowles	(Winnipeg North
Centre): Mr. Speaker, I wonder whether I might have the indulgence of the house to say just a word by way of correction of something I said the last time this bill was debated. I moved an amendment and took my seat so I doubt whether I have the right to speak.
The Acting Speaker (Mr. Applewhaite):: The hon. member has already spoken to the amendment which he moved. Has he leave of the house to make the suggested correction?


Some hon. Members:: Agreed.


Stanley Howard Knowles: The last time I spoke to this bill I said that Mr. Cartier had been before the Senate and the House of Commons two years ago and that this time the case was not re-heard in the other place. That statement is incorrect. A new hearing was conducted in the other place. What I should have said was that in the new hearing no reference was made to the fact that Mr. Cartier had been here two years ago.


Alexander Malcolm Nicholson: Mr. Speaker, I moved the adjournment of the debate the last time this matter was before the house. To oblige members interested in this
Private Bills-Divorce
case we propose to have it go by on division but before it does I should like to say a few things. I should like to remind the house that in the Journals of the house for Friday, July 15, 1955 there is the following:
Mr. Hosking, from the standing committee on miscellaneous private bills, presented the tenth report of the said committee, which is as follows:
Pursuant to the order of the house of July 5, 1S55, your committee has reconsidered Bill No. 492 (letter S-16 of the Senate), intituled: "An act for the relief of Georges-Etienne Cartier", and has agreed to report the preamble thereof not proven on the grounds that they are not satisfied that adultery on the part of the respondent has been proven.
Some hon. members will recall that the appropriate committee of this house heard the evidence. I happen to have a copy of the evidence which was available at that time. I find that counsel for the petitioner were a well known Ottawa barrister, Mr. A. H. Lieff and Mr. Nat. W. Jacobs, barrister-at-law, of Montreal. I find that the detectives were Mr. Paquette, Mr. Brault, and Mr. Pichette of the Reliable or Fidelity detective agency. These detectives were in the news at that particular time for having fabricated evidence, but as apparently it was not illegal to fabricate evidence at that time with a view to granting this divorce, these men won their appeal and they were quite within their rights in coming before our committee to give evidence in this particular case.
I find that the petitioner has changed counsel. The counsel in this particular case is Mr. Hume, barrister, of Montreal. Apparently Mr. Lieff is still interested in this case. At this point I should like to register my objection to having representations made to me as a free member of parliament by counsel who have been or are interested in particular divorce cases before parliament. I think the members of this house should be free to discuss these cases and to draw their own conclusions without being influenced by people outside the house who had or still have some interest in connection with these particular cases. I find that this matter was before parliament two years ago. I took a little bit of the time of the house to review again the record of the detectives who gave evidence. In summing up, the learned judge who heard the particular case said this:
In my opinion, therefore, however contemptible the conduct of the appellants may be considered, they have not been proved guilty of the offence charged, and effect must be given to the legal position taken by their counsel. The point which has been raised in the instant case, apparently for the first time, would appear now to be academic, because the legislation is entirely changed in the new Criminal Code, . . .
At that time I quoted from the evidence which was placed before the Senate committee. I am reading from page 5595 of

Private Bills-Divorce
Hansard of 1955. I am referring to the evidence given by the two children, first of all that of Jean-Pierre, 13 years of age. That is two years ago. He would now be 15. I say this:
I find the following in the proceedings of the committee:
Then I read from the proceedings as follows:
Q. What would happen to you if you did not tell the truth?
A. I would commit perjury.
Q. What would happen to you if you did commit perjury?
A. I would go to prison.
Q. What would happen to your soul?
A. I would lose my soul.
Q. What is your name?
A. Jean-Pierre Cartier.
Q. What is your age?
A. Thirteen.
Q. Where do you live?
And he gives the address.
Q. What is your occupation?
A. Student.
Q. Who lives in the house with you, Jean-Pierre?
A. Myself, Suzanne, Mr. Bernier and my mother.
Q. And you said "Louis"?


Mr.   Jacobs@: No, he did not.
Then the interpreter said, "I did not hear 'Louis'
Then one of the counsel said: "He counted the names on his fingers and he said 'Louis'
The interpreter: Yes, Louis.
Then there was a question about where all the people sleep.
A. I sleep with Louis in my bedroom, Suzanne sleeps with my mother, and Mr. Bernier sleeps on the chesterfield in the living room.
Q. Does Suzanne go to bed before you?
A. We go to bed approximately at the same time, but sometimes earlier because she is younger.
Q. Have you seen her in bed' before you go to bed at any time?
A. It has happened.
Q. Where was she sleeping?
A. In my mother's bed.
Q. That is all.
Then the petitioner's lawyer said: "No questions".
Then I refer to the evidence of Suzanne Cartier.
Q. What is your name?
A. Suzanne Cartier.
Q. What is your age?
A. Nine.
Q. Where do you live?
And she gives the address.
Q. What is your occupation?
A. Student.
Q. Where do you sleep?
And that answer was given.
Then the petitioner's lawyer said "No questions".
Then the petitioner was recalled, and there is the following passage:
Q. How much do you make per month?
A. $250 or $260.
Q. And you are paying your wife $100 a month?



A. $100.

[Stage Direction]
Q. Do you have anything else other than your salary?
A. No; I sometimes work overtime.
I should like to draw to the attention of the committee the fact that the detectives who have been retained in this particular

case have also been reprimanded in connection with the evidence they supplied. My colleague, the hon. member for Vancouver East (Mr. Winch) had occasion to discuss in the house the evidence of the detectives who came here in connection with this particular case. I understand that the chairman of the standing committee on miscellaneous private bills now has from the respondent a request to be heard. I think it is only right that hon. members should have a chance to hear whether there have been some developments in the last two years and that they should have a chance to examine these two detectives who gave the evidence on which the divorce is being recommended.
William James Henderson: I should like to say a couple of words on this bill. Dealing with the first part of the statement made by the hon. member for Mackenzie (Mr. Nicholson) may I say that I am quite sure he in his own mind, with his directly responsible reasoning, could not be changed or altered by any discussion of counsel on the facts.
As to the second part of it I am pleased that the hon. member for Winnipeg North Centre (Mr. Knowles) corrected his statement appearing in Hansard of April 2 at page 2983. But in order that there may be no mistake in the minds of the members of the committee, I might say that a perusal of the 1957 printed evidence discloses no reference to the 1955 evidence having been taken into consideration by the Senate committee on the hearing of the petition. It appears that the 1957 hearing was based on the alleged offence stated to have been committed after the former petition of 1955 had been disposed of and that the suspected co-respondent and the address at which the alleged offence was stated to have been committed were both the same as in the earlier petition. The witnesses appearing in 1957 were different from those appearing in 1955, except of course for the petitioner herself.
I have not seen any notice of objection that has been filed opposing this bill; it went through the Senate committee unopposed.
That is the situation at present. Unless something takes place after the reference of the bill by this house to the standing committee on miscellaneous private bills, I presume that there will be no objection on behalf of the respondent in this matter.


Mr. Deputy Speaker:: Is the house ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: The question is the following: Mr. Henderson, seconded by Mr. Weir, moved that Bill No. 332 entitled "an

act for the relief of Georges-Etienne Cartier" be now read the second time. Mr. Knowles, seconded by Mr. Nicholson moved in amendment thereto that Bill No. 332 be not now read a second time but that it be read a second time this day six months hence. The question is on the amendment to the main motion. Those in favour of the amendment to the main motion will kindly say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: Those opposed to the amendment to the main motion will kindly say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it. I declare the amendment lost. Shall the main motion carry?


Stanley Howard Knowles: On division.


Mr. Deputy Speaker:: Main motion carried on division.
Motion agreed to on division, bill read the second time and referred to the standing committee on miscellaneous private bills.



SECOND READING


[Stage Direction]
Bill No. 404, for the relief of Samuel Jack Goldberg.-Mr. Henderson.

William James Henderson: the second reading of Bill No. 405, for the relief of Jack Crystal, otherwise known as John Anthony Connor.


Stanley Howard Knowles: I believe this is a contested case. Will the sponsor of the bill assure us that it will be heard in the committee?


William James Henderson: Mr. Speaker, in reply to
the hon. member for Winnipeg North Centre, I might say that, complying with the request of the respondent's counsel, Messrs. Greenberg and Wright, wrote a letter dated April 3, 1957, to Mr. Arsenault, chief of the committees branch, stating that in effect she wished to oppose this bill before the committee, and I quote from the letter:
The purpose of this letter is to advise you that the respondent, Mrs. Crystal, requests an opportunity to indicate her reasons for opposition, to the miscellaneous private bills committee of the House of Commons.
Her counsel goes farther and says:
She does not particularly enjoy this description and wishes merely to have the right to appear before the appropriate committee of the House of Commons so that the committee may hear her evidence and so that the committee may see and hear the witnesses who alleged that she had committed adultery.
Private Bills
These are two extracts from the letter from her counsel addressed to Mr. Arsenault. In all fairness to both the petitioner and the respondent, and particularly since she has made the request to have her petition heard before the committee, I would think that the best thing we could do would be to refer it to the committee.
With respect to the undertaking which my hon. friend has asked me to make, I might say that if the bill receives second reading, I have requested, through Mr. Arsenault, the calling of witnesses for Monday, if this committee sits on Monday, in order that the petition might be heard and disposed of as the committee sees fit.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on miscellaneous private bills.

[Stage Direction]
The house resumed, from Friday, March 29, consideration in committee of Bill No. 15, respecting Trans Mountain Oil Pipe Line Company-Mr. Fairey-Mr. Robinson (Sim-coe East) in the chair.
Stanley Howard Knowles: Mr. Chairman, when this bill was being considered by the committee on railways, canals and telegraph lines, quite a bit was said about the desire for good public relations. It is our view that the relations between the promoters of this bill and the House of Commons would have been much better if the witnesses had been more forthright in the answers they gave to questions and if they had been better supplied with the information members had a right to seek. I find, for example, on page 63 of the minutes of proceedings and evidence of the committee that Mr. Morrison was asked by the member for Nanaimo as to what was said in the notice to the shareholders concerning the proposal that there be the stock split which is the subject of this bill. Mr. Morrison's reply on page 63 reads as follows:
If we had known that question was going to arise, we could have brought the notice.
The next entry on that page is attributed to Mr. McQuarrie, who was also before the committee. This is what Mr. McQuarrie said:
I wish we had brought the notice. A letter went out to each shareholder, along with the notice. I have not got a copy of that letter with me.
We think it most unfortunate that that letter or notice to the shareholders was not brought to the committee by the witnesses. We think it is particularly unfortunate, in view of other questions which were asked in the committee concerning the number of shares owned by the directors of the company.

Business of the House
I am turning back now to pages 54 and 55 where questions were asked by the hon. member for Bow River, the hon. member for Mackenzie and others, as to the number of shares held by individuals. Mr. Morrison, the president of the company, seemed to be terribly lacking in information as to how many shares the various directors held. He knew that each one had two shares because he had to have two shares in order to be a director, but he did not know anything more than that. However, McQuarrie-


William Alfred Robinson: It being six o'clock, shall I rise, report progress and request leave to sit again?
Progress reported.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow, Mr. Speaker, we shall start with the estimates of the Post Office Department. I understand the Postmaster General will not be able to be here after one o'clock so that after that we shall turn to the following bills: the second reading of the Canadian National Railways financing bill; the Prairie Grain Producers Interim Financing Act; the Windsor harbour commissioners; the north Pacific seal resolution; the eastern rocky mountain bill; the Senate amendments with respect to the Exchequer Court Act; and the Territorial Lands Act and the Currency, Mint and Exchange Fund Act. If they are completed then other items of legislation will be taken up in whatever manner might be indicated at that time.
May I also say that we have been asked on several occasions how much of this the government feels ought to be passed before prorogation and I should like to express my views on that so that hon. members may consider what I have to say. There is no reason why all the items on the order paper cannot be disposed of in the time we have left.


Stanley Howard Knowles: How much time have we left?


Walter Edward Harris: We have the time left between now and prorogation; but I should point out that still on the order paper after what I have listed there will be the hospitalization bill, the farm marketing legislation and the Prairie Farm Assistance Act, the three of which ought certainly to be put through, in our view, together with other legislation. I should add to that the Income Tax Act which has not yet been disposed of. Then it would be

desirable to clear up everything that is on the order paper, including an amendment to the Judges Act, notice of which, I think, has been given in Votes and Proceedings. May I also say that there are two or three tax conventions which have been signed in the last few days and which are available and while I realize they are not urgent in the sense that they must go through before the end of this session I think there are matters which are routine now and might very well be passed.
It seems to me that between now and prorogation we should dispose of the order paper and the estimates of the Post Office Department and interim supply in order that when we come back in the fall there will not be anything left over that could be disposed of now. I would suggest therefore that consideration be given to this and if it is the desire of hon. gentlemen opposite to have a supply motion which would be available to them to move a want of confidence motion on we would have to dispose of these matters before that could be done; or at any rate before we call it we would want to be reasonably certain we could dispose of the business I have mentioned.
This can take two forms, as I understand it. Under the rules as they are now a supply motion would have to be called on Monday and conclude on Tuesday night. I do not think there is any possibility that the house could devote two days to a supply motion. On the other hand we could supply a motion which by consent would be limited to one day, or alternately it could be agreed that perhaps the motion for interim supply when it comes could be subject to amendment, although it is not under the rules and Your Honour would stay in the chair while that motion was being discussed for some period of time, part of a day perhaps, but at any rate not exceeding a day.
I have placed the alternatives as I see them before the house. I think perhaps these alternatives might be considered so that even if we are not able to call a supply motion on Monday because of the uncertainty of getting the legislation through we might find it possible to meet the wishes of hon. gentlemen at a later time during next week.


[Stage Direction]
It being five minutes past six o'clock the house adjourned, without question put, pursuant to standing order.

Question

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

Mr. Dinsdale: 1.	How many films produced by the national film board were purchased by Canadian Broadcasting Corporation T.V., during each year since 1953, and how many of these were (a) entertainment: (b) documentary; (c) commercial films?
2.	What was the total cost of these films?
3.	How many films produced by private Canadian studios were purchased by Canadian Broadcasting Corporation T.V., during this period, and how many of these were (a) entertainment; (b) documentary; (c) commercial films?
4.	What was the total cost of these films?
5.	How many films produced by Tf.S.A. studios were purchased by Canadian Broadcasting Corporation T.V., during this period, and how many of these were (a) entertainment; (b) documentary; (c) commercial films?
6.	What was the total cost of these films?
Answer by: Hon. J. J. McCann (Minister of
National Revenue):
1,	3 and 5. Information regarding different categories of film and footage would be difficult and costly to compile and it is understood that the hon. member will accept information based on costs.
2,	4 and 6. The C.B.C. advises the following payments were made in the periods indicated for the purchase, rental, production, and
processing of film:
April 1, 1953-March 31, 1954:
National film board of Canada.. .$	25,341
Canadian private film industry ..	151,013
United States	films	 244,356
April 1, 1954-March 31, 1955:
National film board of Canada . .$ 117,584 Canadian private film industry ..	624,074
United States	films	 638,016
April 1, 1955-March 31, 1956:
National film board of Canada . .$ 152,515 Canadian private film industry.. 1,046,751
United States	films	
1,204,8859 months: April 1, 1956-Jan. 31, 1957: National film board of Canada.. .$ 236,144 Canadian private film industry .. 1,517,831 United States	films	
853,966
Saturday, April 6, 1957



SUPPLEMENTARY ESTIMATES, 1957-58

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates (1) for the financial year ending March 31, 1958, was presented by Hon. W. E. Harris (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.