1957-02-15

AIR TRANSPORT


Hon. George C. Marler (Minister of Transport):: Mr. Speaker, I wish to make an announcement regarding the further development of international scheduled air line services by Canadian carriers.
Recently Canadian Pacific Air Lines company applied to the government for authorization to operate a scheduled service from Montreal to Lisbon, Portugal, under the existing bilateral air agreement between Canada and Portugal, and for authorization to extend this service to Madrid if and when appropriate arrangements with the Spanish government can be made. The new service would be operated in conjunction with the present C.P.A. service from Mexico and South America to Toronto but would not carry local traffic between Toronto and Montreal.
As has been indicated in previous statements of government policy, Trans-Canada Air Lines is the Canadian air carrier designated by the government to operate transAtlantic air services to European points. Trans-Canada Air Lines also has had before the government proposals for the extension of its trans-Atlantic services to additional points in Europe.
The government, after considering these matters, has taken the following action: (1) C.P.A. has been designated by the governor in council as the Canadian carrier to operate international scheduled air services from Montreal to Lisbon and also to Madrid if and when the necessary arrangements can be made with the Spanish government; and <2) the government has reaffirmed its policy that T.C.A. is and is to be the Canadian air carrier for service to other European points not at present served by a Canadian air carrier. T.C.A. at present provides service to London, Paris and Dusseldorf, and existing bilateral air agreements authorize a Canadian service to Brussels, Copenhagen, Oslo and Stockholm. It is expected that negotiations with the government of Switzerland will be initiated shortly looking to the conclusion of a bilateral agreement with that country.
I am not in a position to state when the carriers concerned will initiate the new services, and any announcement on these matters will be made by the air lines themselves.
During the discussions concerning the proposed service to Lisbon, C.P.A. indicated to the government that upon being licenced to operate over this new route it would apply to the air transport board for permission to give up its present domestic licence for service between Winnipeg and Churchill. The selection of a carrier to operate the Winnipeg-Churchill service will, of course, be a matter for determination in the usual manner by the air transport board.


Mr. Green:: I did not hear whether the
minister included in these new routes a route from Winnipeg to Europe. Was there any such indication?


George Carlyle Marler: No, there is no such indication.


Howard Charles Green: There is to be no such service?


George Carlyle Marler: No.



WINNIPEG-CHURCHILL    INQUIRY AS TO APPLICATIONS FOR PRESENT C.P.A. SERVICE

[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 Transport arising out of his statement regarding changes in air services? Have any applications been received by other carriers to operate the service between Winnipeg and Churchill which Canadian Pacific Air Lines intends to give up? May I ask whether consideration will be given to designating Trans-Canada Air Lines to operate this service?


George Carlyle Marler: As I think my announcement
made clear, it is the intention of Canadian Pacific Air Lines to apply for permission to give up its licence on receiving authorization to operate this new route between Toronto, Montreal and Lisbon, but it has not yet made application to give up its licence between Winnipeg and Churchill. It would be much too early for me to make any statement as to what carrier is likely to receive the licence to operate that service in place of C.P.A.

Inquiries of the Ministry CANADA ELECTIONS ACT



AMENDMENT RESPECTING PRINTING OF BALLOT PAPERS

Mr. Ray Thomas (Weiaskiwin) moved: for leave to introduce Bill No. 138, to amend the Canada Elections Act (ballot papers).


Some hon. Members:: Explain.


Ray Thomas: Mr. Speaker, the purpose of this bill is to have the political affiliation of the candidate printed on the ballot papers used in federal elections.
Motion agreed to and bill read the first time.



QUEBEC SAVINGS BANKS ACT


Hon. W. E. Harris (Minister of Finance) moved: the first reading of Bill No. 106 (from the Senate), to amend the Quebec Savings Banks Act.
Motion agreed to and bill read the first time.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, on Monday last, in my absence in western Canada, the hon. member for Mackenzie asked me the following two questions:
I wonder whether the minister could inform the house whether or not he has received a report from the restrictive trade practices commission in connection with the recent increases in the prices of gasoline and fuel oil?
The answer to that question is no, I have not received such a report.
His next question was:
In view of the fact that a probe has been ordered in the United States to investigate price-fixing collusion by the major oil companies, will the minister consider again ordering an inquiry under the Combines Investigation Act?
In reply to a very similar question which the hon. member had asked on January 29 I gave a fairly long answer. To that answer I have nothing to add at the present time.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Stuart Sinclair Garson: Mr. Speaker, on Wednesday last the hon. member for Quebec West asked me to offer some comment upon the newspaper article which he quoted and I am now glad to do so. [Mr. Marler.l
I have read the statement made by Mr. George Nagy, general secretary of the Hungarian federation of Canada, which appeared in the Toronto Telegram of February 12, 1957. My comments upon ti are as follows: It may be that there are amongst the Hungarian refugees arriving in Canada some who are security risks. At the present time, only a limited screening is possible although a certain number of refugees are being checked where circumstances point to the need for that action.
Speed in processing the Hungarian refugees is all important and I am sure that to attempt to do more than we are now doing in the way of screening would only delay the forward movement and thus impede the over-all plan for facilitating the flow of these people to Canada.
Canadian residents who have reason to believe that there are any subversive elements among the Hungarian refugees will, we feel sure, make it their duty to come forward with this information. As and when they do, they may be certain that what they have to tell will be welcomed by the Royal Canadian Mounted Police and other authorities and that it will be carefully studied and if necessary acted upon.
On the whole we are satisfied that there is only a slight security risk and it is more than counter-balanced by the worth of the many good citizens we are getting. I think that most of these refugees will recognize communist agitation for what it really is and will not be misled by it; for I do not know of any group of people less likely to be influenced by communist propaganda than exiles who have been driven from their homes as the victims of communist oppression. Advice, hospitality and a helpful hand by loyal Canadians with whom the refugees are in contact will, I feel, more than neutralize any harmful propaganda to which they may be subjected. Canadian citizens of Hungarian descent can be particularly helpful in this respect and Mr. Nagy's statement shows they are alive to the situation.


Mr. J. Wilfrid Dufresne (Quebec Wesi):: should like to ask a supplementary question of the Minister of Justice arising out of the answer he gave the house a few minutes ago. When the minister says that if some Hungarian refugees are found to be communist agents the necessary action will be taken, does he mean that these communist agents will be deported to their native country?


Stuart Sinclair Garson: Mr. Speaker, all the appropriate actions will be taken as disclosed by the facts of the particular case with which we deal.

Inquiries of the Ministry



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, on Wednesday, February 13, the hon. member for Nanaimo (Mr. Cameron) asked me to take notice of a question which appears at page 1245 of Hansard of that date:
Has the Prime Minister's attention been called to the report of the exchange between the governments of Japan and the United Kingdom on the suspension of nuclear tests in the Pacific, and can the Prime Minister inform the house if he and the Prime Minister of the United Kingdom at their forthcoming meeting in Bermuda will discuss the suspension of these tests, which are described by every reputable scientist as dangerous and useless?
I have made inquiries and we have not had the exchanges between the governments of Japan and the United Kingdom formally drawn to our attention by either party. I doubt if we have any more information than the information which the hon. gentleman himself has and which has been public for some time. We have been aware for some months of the intention of the United Kingdom government to conduct a series of nuclear tests in the Pacific this year and I think that has been common knowledge since last spring. We have not contemplated suggesting to the United Kingdom authorities that this part of their program for the development of nuclear weapons should be suspended.
I would remind the house that we in Canada are to a large extent dependent upon the nuclear arsenals of the United Kingdom and the United States to provide a deterrent to aggression. It is in our interest that the deterrent be as effective as it can be and this is obviously the essential purpose of these tests.
I might add that we are very much alive to the possible hazards of radiation generated by nuclear explosions and this matter is under constant surveillance. Hon. members will recall that my colleague the Minister of National Health and Welfare (Mr. Martin) recently made a statement in the house in this regard. It is our hope that measures can be agreed upon internationally to set bounds to whatever hazards may arise out of tests, and my colleagues, the Secretary of State for External Affairs (Mr. Pearson) and the Secretary of State (Mr. Pinard), during the course of the present session of the United Nations general assembly have emphasized
our hope that limitations on nuclear test explosions can be achieved. Together with Japan and Norway, Canada sponsored a proposal for the establishment, as a preliminary step, of a system for advance registration with the United Nations of nuclear test explosions. This proposal has been referred to the subcommittee of the disarmament commission of which Canada is a member and which is to meet in London beginning on March 18.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, may I direct a question to the Prime Minister. The C.B.C. news report this morning indicated that arrangements are being made for the return of the Polish treasures to the government of Poland. Could the Prime Minister tell the house whether that report is accurate and let us know what the situation is at the present time with respect to these treasures?


Louis Stephen St-Laurent: As far as I know that report is entirely inaccurate and arises out of pure speculation by someone who is anxious to publish a story about it. The situation has not changed. The major part of those treasures are, I understand, in the custody of the curator of the Quebec museum in Quebec city. The Polish authorities have from time to time been informed that access to our courts is open to them to assert title to whatever treasures may be there. But the Polish authorities have not up to the present time chosen to have recourse to our courts. The government of Canada has no title under which it could resort to the courts to have the matter determined. I have not heard of any just recently, but there have been conversations from time to time between representatives of the Polish government in Canada and the Department of External Affairs. These representatives of the Polish government have been told constantly that this government has no authority to take disputed property and deliver it to the one it might think was the rightful owner.



CANADIAN REPRESENTATION AT LONDON


[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Esquimali-Saanich):: May I ask the Prime Minister if Canada will be represented by a member of the government at the London conference on February 26, when the foreign ministers of the NATO

Inquiries of the Ministry
countries are meeting to discuss the reorganization of their forces in western Europe?


Louis Stephen St-Laurent: No decision in this regard has yet been reached.


George Randolph Pearkes: Are any changes in the
strength and composition of the Canadian forces in western Europe contemplated in consequence of the announced streamlining of the United Kingdom and French NATO contingents?


Louis Stephen St-Laurent: Mr. Speaker, the Minister of National Defence answered a somewhat similar question yesterday, and I am not in a position to add anything to the answer he gave then.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I would like to direct a question to the Minister of Finance. I was not able to give him notice of this question and perhaps he will take it as notice. In view of the reports of a projected massive development program in British Columbia estimated at $1 billion in the next few years, would the minister care to comment on the possible effects of such a large capital investment on the present inflationary situation on the Canadian economy?


Walter Edward Harris: Mr. Speaker, I have no knowledge other than what appeared in the newspapers, as was the case in respect to my colleagues who answered questions yesterday about this subject, as to whether or not there is anything very substantial in the report on the proposed development in British Columbia. All of us know that in British Columbia, as in other parts of Canada, there is a good deal of untapped wealth. We do welcome foreign capital for developing our own resources, as well as Canadian capital. The effect on the economy would depend on the rate of expenditure of the $1.5 billion. Until we know when it is proposed to proceed with the development one could not express any intelligent opinion as to the possible effect on the economy. Whether or not there is anything in this story, it is just one more indication of the confidence which foreign investors have in the political stability of this country.



REPORTED DISCOVERY OF NEW METHOD OF GASIFYING

[Stage Direction]
On the orders of the day:
Mr. A. R. Lusby (Cumberland):: May I
address a question to the Minister of Mines and Technical Surveys. Can the minister give the house any information regarding recent progress in the U.S.S.R. or elsewhere in using coal by gasifying it underground?


Hon. George Prudham (Minister of Mines and Technical Surveys):: Mr. Speaker, I wish to thank the hon. member for having given notice of his intention to ask this question. Men of the fuels division of the Department of Mines and Technical Surveys-the fuels division in the mines branch-have been closely following experiments on the gasification of coal that are taking place in various parts of the world, including Russia. For some time there has been an exchange of technical information on coal experiments and other projects between Canada and Russia, and the officers of the mines branch informed me this morning that the technical literature received from Russia does not reflect the optimistic type of announcement which was made by the Russian embassy. However, every effort will be made to ascertain details.



REPORTED STATEMENT BY MINISTER ON UNITED STATES IMPORTS

[Stage Direction]
On the orders of the day:
Mr. J. A. Charlton (Brani-Haldimand):: would like to direct a question to the Minister of Agriculture.	In view of the
statement made by the minister as reported in the Ottawa Journal recently regarding the importation of pork from the United States, is the government changing the present regulations intended to prevent the possible entry of the disease vesicular exanthema into Canada?


Right Hon. J. G. Gardiner (Minister of Agriculture):: Mr. Speaker, I will have to take the question as notice. I do not recall what was in the newspaper.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, I wish to ask a question of the Minister of Labour. In view of the many complaints we are receiving

concerning unemployment insurance matters, in relation to time lost due to the recent railway strike, as well as other complaints, will the minister consider making an appropriate reference to the committee on industrial relations so that these complaints might be investigated?


Hon. Milton F. Gregg (Minister of Labour):: Mr. Speaker, I will be glad to take the suggestion contained in the hon. member's question into consideration. I would like to say to him, however, in answering this question, that I am sure he and other hon. members of the house will realize that the sudden influx of some 70,000 railway workers' claims in the middle of winter did place an unusual strain upon the already busy staffs of local offices. But I will be glad to look into the implications of the question, and reply later.



ALLEGED DELAYS IN PAYMENT OF CLAIMS

[Stage Direction]
On the orders of the day:
Mr. J. C. Van Horne (Resiigouche-Mada-waska):: Mr. Speaker-


Some hon. Members:: Oh, oh.


Ralph Byron Horner: -I should like to direct
a question to the Minister of Labour. Is the minister taking the same means this year as he took last year to And out about delays in unemployment insurance claims? He will recall that last year-


Some hon. Members:: Order.


Mr. Speaker:: Order.


Some hon. Members:: Question.


Mr. Speaker:: Order. I shall have to deal
with the hon. member. When he rises to ask a question he must ask a question.


Ralph Byron Horner: Which I did.


Mr. Speaker:: The hon. gentleman should
also notice that I now have the floor and am speaking and he should not interrupt. When the Speaker rises to call him to order all he has to do is resume his seat.


Ralph Byron Horner: Which I did.


Mr. Speaker:: Which the hon. gentleman
did after he tried to put a great number of words on the record which, because of other cries of "order" together with mine, could not have been heard. I should like him to take notice of that. This is our procedure and it has been so for many years.


Ralph Byron Horner: What about the answer?


Ralph Byron Horner: I should like to direct
a question to the Minister of Labour. Does
Inquiries of the Ministry the minister intend to fool the house this year as he did last year?


Mr. Speaker:: Order. Have hon. members
ever heard of the theory of Mr. Speaker turning a blind eye to an hon. member? I am afraid this probably will be the only policy I will have to follow with respect to the hon. gentleman.



BANK OF CANADA


[Stage Direction]
On the orders of the day:
Hon. W. Earl Rowe (Dufferin-Simcoe):: Mr. Speaker, in view of the tight money policy of the Bank of Canada being in such conspicuous contrast to the loose money policy of the government, will the Minister of Finance agree to meet with the head of the Bank of Canada to review the possible serious dangers inherent in such a conflict to our economy?


Walter Edward Harris: I meet with the governor of the Bank of Canada regularly to review all questions of economic and monetary policy in Canada, and all I can say is that I will continue to do so. But I do not agree that the inherent dangers are greater under the present policy than they would be without any policy at all.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. E. D. Fulion (Kamloops):: May I ask
the Minister of Labour whether, in view of a number of press reports across the country which certainly give the impression that unemployment this year is greater than at the same time last year, he will consider giving the house at the earliest date the most recent figures in the possession of his department as to the over-all situation?


Milton Fowler Gregg: Yes, Mr. Speaker, I will be very glad to do that.



CITIZENSHIP AND IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. G. H. Casileden (Yorkton):: I should like to direct a question to the Minister of Citizenship and Immigration. Does the Canadian government accept the responsibility for carrying out the terms of the Indian treaties signed in good faith by the Indians of Canada and the representatives of the queen at that time?

Inquiries of the Ministry


Hon. J. W. Pickersgill (Minister of Citizenship and Immigration):: Mr. Speaker, there has never been at any time the slightest question about that in the mind of any responsible person.


George Hugh Castleden: We enjoy the minister's amusing pomposity, but there are a great many responsible people who hold a different view.


Some hon. Members:: Order.


George Hugh Castleden: I should like the minister to answer the question because these Indians feel-


Mr. Speaker:: Order.


George Hugh Castleden: Does the Canadian government accept the responsibility of fulfilling the terms of the treaties? If not, to whom may the Indians appeal?


John Whitney Pickersgill: The answer to the first part of the question is yes, and therefore the second part of the question is irrelevant.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
John Alpheus Charlton: should like to direct a question to the Minister of Citizenship and Immigration. Is he now prepared to give a further statement in answer to the question I asked him on February 8 at page 1099 of Hansard for that date?


John Whitney Pickersgill: Yes, sir, I think I am in possession of the facts in this case. They relate to the private affairs of one particular individual and I really wonder, sir, whether the time of the house should be taken up with that. However, since it has been asked probably it would be simpler to give an answer.
The answer is that the marriage in question was performed by someone who was not licensed to perform marriages in the province of Ontario, and the provincial government alone has the right to give such a licence. We would be, therefore, disregarding the laws of Ontario if we regarded it as a legal marriage. However, so far as the practical effects of the matter are concerned both parties to the marriage were Indians and the child of this union is an Indian and is treated as such.


John Alpheus Charlton: May I ask a supplementary question? Is the minister aware that the marriage is considered legal by the province of Ontario?


John Whitney Pickersgill: My information, sir, is that it is not.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I should like to address a question to the Minister of Agriculture. I apologize for giving him such brief notice but as a matter of fact the question only dawned on me recently.


An hon. Member:: Put it on the order paper.


Herbert Wilfred Herridge: In view of the minister's assurance that he would do all he could to assist the royal commission on the tree fruit industry of British Columbia in any way he could with its investigation into the problems of the tree fruit industry, will the minister inform the house what he has done to date in this direction or what he proposes to do?


James Garfield Gardiner: Mr. Speaker, I do not know whether we have been asked to do anything up to date, but if we have we have done it.


Mr. Macdonnell:: Will that have to be changed in Hansard?



FINANCE


[Stage Direction]
On the orders of the day:
Mr. F. G. J. Hahn (New Westminster):: should like to direct a question to the Minister of Finance. I regret that I was not able to give him notice, but the question stems out of a statement he made yesterday in the house respecting loans to municipalities in which he said that the reason municipalities were going to the United States was that they could get lower rates there than they can in Canada. I notice in today's British Columbian an article headed "Credit failure stalls hospital".
My question is, would the minister comment on the claim by the Surrey municipal officials to the effect that hospital bonds or any other large municipal debenture issues cannot be sold on the Canadian market and that in order to sell these bonds or debentures municipalities must go to the United States money market and pay 6J per cent interest plus 4J per cent bonus rate for United States funds?


Mr. Speaker:: It would seem to me that whenever I intervene with respect to other hon. members asking lengthy questions, that

should serve notice to others who may have the intention of asking similar questions, but it seems sometimes that whatever intervention I make is of no consequence so far as other members are concerned.


Walter Edward Harris: I think I can answer the question by saying that the facts that appear to be put on the record are not known to me. If my hon. friend will write me a letter, I shall answer it promptly.



PARLIAMENT BUILDINGS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Public Works. Can the minister say whether the press report is correct that his department plans to tear down the west block and replace it with a new edifice?


Hon. Robert H. Winters (Minister of Public Works):: The press report to which I presume the hon. member refers is the one appearing in the Ottawa Citizen of three days ago. This press report is not a correct interpretation of the writer's interview with me on the subject. I told him no decision had been made. That is the situation. How it appeared in the terms it did is beyond my knowledge.



CANADIAN FARM LOAN ACT


Walter Edward Harris: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Canadian Farm Loan Act to increase the authorized capital of the board from $3 million to $4 million.
Motion agreed to and the house went into committee, Mr. Robinson (Simcoe East) in the chair.


Mr. Benidickson:: In the amendment to the Canadian Farm Loan Act assented to last year the capital of the board was fixed at $3 million and authority was vested in the Minister of Finance to loan to the board from time to time up to twenty times the par value of the outstanding capital stock of the board. This would amount to $60 million. One of the purposes of last year's bill was that the board should, through the Minister of Finance, come to parliament periodically to increase its borrowing power. Previously the
82715-84J
Canadian Farm Loan Act capital of the board was increased automatically with an increase of its lending, in the ratio of 5 per cent of the total principal amount of loans outstanding, and it was mandatory for the Minister of Finance to subscribe to, and pay for, any increase in capital stock thus issued. The Minister of Finance was in turn authorized to lend to the board an amount not to exceed 20 times such outstanding capital stock of the board.
At the time of the last amendment to the Canadian Farm Loan Act it was anticipated that it would not be necessary to ask parliament for a further amendment until perhaps 1958 for the purpose of increasing the board's capital and thus increasing the Minister of Finance's lending authority to the board.
As of December 31, 1956, outstanding borrowings from the Minister of Finance totalled $43,300,000 leaving a balance of lending authorization to the Minister of Finance of $16,700,000. It is expected that the accelerated rate of lending will continue, and that the board's commitments for the period January 1, 1957 to March 31, 1958, will be as follows: loans now in solicitors' hands for disbursement, $4,100,000; loan approvals on hand pending acceptance by applicants, $4,700,000; unappraised applications on hand, $750,000; anticipated new business April 1, 1957 to March 31, 1958, $15,000,000. These items all total $24,550,000.
Now, on the other side there is a balance of lending authorization of the minister as of January 1, 1957, as I have previously described, of $16,700,000. It is estimated that the board will receive by principal repayments from January 1, 1957 to March 31, 1958, $6,000,000. These items would come to $22,700,000. In other words, there is a probable excess of commitments over present lending authority, if we look forward to March 31, 1958, of $1,850,000. Therefore, in the interests of the board's prospective borrowers, it seems desirable that the Canadian Farm Loan Act be amended at this time to increase the lending authority automatically of the Minister of Finance.


James MacKerras Macdonnell: Mr. Chairman, I think everyone who is interested in the operations of this board-and who is not-will be in sympathy with the desire to give whatever additional powers to the board are necessary in order to expand their operations to the furthest degree that is wise. The thing that I am not still quite clear about is how the present amount has been arrived at. In a way it almost seems like taking two bites at the cherry. If the requirements have grown as rapidly as they have, is the parliamentary assistant satisfied that the increase of $1 million from $3 million to $4 million, which

Canadian Farm Loan Act gives an additional borrowing power of $20 million, will reasonably provide for several years in advance? I would think that would be the sensible thing to do. Perhaps the parliamentary assistant will answer that.


William Moore Benidickson: The increase in dollars for capital stock is not relatively a large one; it is from $3 million to $4 million. It is true that that by itself does increase substantially the opportunity of the board to expand its operations because of that large ratio of 20 to one; but I think if the act is to be amended it is not unreasonable to think that one would step up the capital by at least $1 million.


James MacKerras Macdonnell: After all, iit is only a matter of opinion, and I imagine there will be general agreement that the increase is desirable. But again let me ask, can the minister say anything as to the estimate of how long it will cover the situation? For instance, it would not be sensible to make it only $1 million if we are going to have to come back next year and ask for another increase. Can we take it, then, that this will cover several years? If so, how is it arrived at?


William Moore Benidickson: Well, I do confess, Mr. Chairman, that last year it was expected that the capital stock as approved by parliament, and with lending authority that that automatically brought into play, would probably suffice to 1958. There has been an accelerated rate of demand on the board and a fairly high percentage of those demands have been met in new loans. I would think this increased authority should be adequate for another two or three years, yes. But, on the other hand we were not able as recently as six months ago to anticipate the increased rate of application for this form of loan. I would hesitate to look too far into the future.


James MacKerras Macdonnell: Has the parliamentary assistant the figures over the last several years showing the increases from year to year for several years?


William Moore Benidickson: I have not that information with me, Mr. Chairman, but I can make sure that it is available when we come to the bill. I have only the annual report for the year ended March 31, 1956.


James MacKerras Macdonnell: I am going to leave questions of the administration of the act to others better qualified than myself, but I should like to make just this comment. If, in fact, during the discussion which I hope will ensue it turns out that there is a good deal of feeling that more may be required I would like then perhaps to come back and

ask the parliamentary assistant whether in the light of the discussion this $1 million seems to be enough.


William Moore Benidickson: The loans outstanding I think amount to about $106 million and therefore the increase in the amount of $20 million is a fairly good proportion which I think should assure the hon. member that we should not be back next year asking for the same thing.


Mr. Johnson (Kindersley):: I should say at the outset that we in this group are pleased that this move is taking place to satisfy the need for credit among Canadian farmers. The very fact that the government has seen it necessary to increase the capitalization of the Canadian farm loan board from $3 million to $4 million shows the need for credit that exists in Canada today.
However, I should like to point out to the parliamentary assistant that this need for credit will not be exerted unless the general policy of the Canadian farm loan board is altered to allow farmers the ability to get more readily, this credit which they so direly need. The increase in the capitalization from $3 million to $4 million will be of little value unless the regulations which the Canadian farm loan board is following at the present time are relaxed.
The parliamentary assistant will recall that last year before the banking and commerce committee the Canadian federation of agriculture made certain recommendations and I should like to make this point. If some of these regulations are followed the increase in the capitalization will fall far short of the need in the very near future.
One of the points advocated by the Canadian federation of agriculture was an increase in the length of time for the repayment of the loan, and the insertion of more flexibility into the repayment to allow farmers to repay as their capabilities allow them. The contention there was the one that is generally advocated by farmers, that as they have good crops they are in a position to repay loans, and as they have crop failures they are not financially able to repay. The request was to have the organization of the farm loan board geared to this so that the farmers would not be required to make payments in years of crop failure. This, of course, would require an increase in the capitalization because it would need more working capital for the Canadian farm loan board.
Another factor which, if adopted, would certainly have an effect on this would be a change in the maximum percentage of the appraised value. Last year the act was amended to change it to 65 per cent of the

appraised value. But suppose the government should follow the recommendations of the Canadian federation of agriculture and other farm organizations and increase the appraised value to 80 per cent on the sum of $8,000, with a sliding scale for greater amounts which that organization has recommended, I think again we would find that the capitalization would fall far short of the need.
If we were to follow another recommendation which is made and reduce the interest rates to the cost of the money, plus the cost of the reserve, with the government bearing the interest charges, it would have the effect of increasing the availability of loans, or at least it would make an increased demand for the loans so that there would be a greater use for them. It was pointed out by Dr. Hope, the economist for the Canadian federation of agriculture, that although we have $4,500 million worth of agricultural land in Canada, only $40 million, or one-tenth of one per cent of the land value was covered by loans. This has increased this year, as the parliamentary assistant has pointed out, to $43 million. I would like to interject a point that a lot of this increased demand is resulting from the inflationary tendencies which are present in Canada today.
The chairman of the Canadian farm loan board, Mr. Chester, pointed out that 25 per cent of the loans of the Canadian farm loan board were made for the consolidation of debts, and he intimated that it had increased in significant amounts in the last two or three years. In the report of the Canadian farm loan board there is an indication that 30.1 per cent of the total lendings of the board have gone into consolidation of debt. Now we are getting into another very important aspect of the functions of the Canadian farm loan board. It is apparent that the primary purpose of the farm loan board is to allow the farmers to purchase more land so that they may be operating on an economic unit.
If agricultural circumstances in Canada demand that in order to survive the farmers are forced to borrow from the Canadian farm loan board for the consolidation of debt it is certainly limiting the amount they are able to get from the land. I noticed an article in the Globe and Mail on February 11 headed, "Consumer Debt Total has Bankers Worried". I do not think the bankers are nearly as worried as are those individuals who are in debt. The article points out that at the end of 1950 Canadians owed $1,034 million for the things they bought on time and in 1956 the total had leaped to $2,395 million.
I am injecting those figures into this debate because farmers are also in the category of
Canadian Farm Loan Act those who must incur consumer indebtedness. If consumer indebtedness has increased by this staggering amount in six years there is going to be a greatly increased demand for loans under the Canadian Farm Loan Act to consolidate the debt. This is one of the functions of the farm loan board and as I have pointed out more and more of the board's money is going toward the consolidation of debt all the time. If this tendency continues to increase we will eventually find that 40 or 50 per cent of the funds of the board are being used for the consolidation of debt.
I think the proportion that is used for the consolidation of debt has increased because of the reluctance of the board to loan money for agricultural purposes. Apparently this is done in carrying out the policy of the government but I think it is part and parcel of the problem of inflation. Inflation has always caused serious increases in the valuation of land and since the board makes loans on 65 per cent of the appraised value for production purposes of land it is going to be impossible for farmers to obtain loans as the actual land value increases. In some areas land values have doubled and nearly trebled in the last few years. It is not that the value of land has gone up, it is just that the value of the dollar has gone down. We therefore have the situation that the farmer is unable to borrow enough money in terms of the appraised value to pay for his lands.
I had an instance drawn to my attention where a farmer applied for a loan slightly in excess of $5,000 on the security of three-quarter sections of land but it was turned down because it was inadequate security on the basis of the productivity of that land and yet at the same time the land is selling for that amount of money per quarter section. It is part and parcel of this niggardly approach of the Canadian frrm loan board in failing to supply the real need for credit in Canada as far as land is concerned. The demand for credit for the purchase of farms and for the expansion of farms into economic units is going to increase very greatly during the next few years.
It has been pointed out in this house that the agricultural population in Canada is declining. The impact of this is quite readily visible and it will mean that available land will be established in larger areas. In turn this will mean that farmers will need funds to purchase land which is available in their proximity in order to have an economic holding for themselves. With the congested grain conditions and the low delivery quotas in western Canada it is extremely difficult for farmers to purchase land on terms with the finances they can obtain from any agency other than the Canadian farm loan board. If

Canadian Farm Loan Act the government were to follow the policy of liberalizing the loans and accept the recommendations of farm organizations by actively going out and obtaining as many loans as possible so that the cost of each loan would be reduced, I am convinced that the amount the parliamentary assistant has pointed out as the increase in capitalization from $3 million to $4 million would be quite inadequate to meet the need for credit for agricultural purposes and would fall far short of the demand. The policy should be geared to provide the maximum number of loans rather than the minimum. We have altogether too many instances where some technicality has prevented a farmer from obtaining a loan and some of these technicalities should be ironed out.
I recall another case where a farmer was unable to get a loan from the board because he did not in effect reside on the land. This, I might point out, does not make him a suitcase farmer. In many areas in western Canada the trend has developed where farmers reside in villages or towns where they have ready access to schools, hospitals, and other social services and travel 10 miles or so to farm their land. Under the present regulations they are denied a loan unless they actually reside on the farm or at least have some buildings on the farm. This is handicapping the granting of loans by the board and preventing it from developing into a credit agency.
My general comments with regard to this resolution would be to ask the assurance of the minister that this increase in capitalization will be sufficient, in view of the changes in the legislation which have been requested by the board, to make it a truly effective credit agency. It has been pointed out in previous debates how effective the Veterans' Land Act is in serving as a credit agency and assisting young farmers to establish themselves. The minister is well aware of this and he will have a realization of how changes could be made in the Canadian Farm Loan Act to render it effective in filling the role of providing credit to farmers so that they may become established with a good chance of being able to succeed even in the face of economic adversity. The government should go one step further and have the Canadian farm loan board follow the pattern of the farmers' home administration in the United States which, as the parliamentary assistant is aware, lends up to 100 per cent of the appraised value of the land and the loans are given the same degree of supervision as loans under the Veterans' Land Act. In other words under this policy the loan is made to establish the farmer. He has value as a human being and when his energy and
IMr. Johnson (Klndersley).]

resources are applied to sufficient land he has a good chance of succeeding. As long as we are going to follow the policy of being as stingy as possible in making these loans, so stingy that only one-tenth of 1 per cent of all the land value in Canada has loans made against it, we are not going to be successful in achieving this objective.
I should like some clarification on these points and an indication from the parliamentary assistant as to whether, in view of these recommendations, the amount will in effect be sufficient to provide a true credit policy that will meet the crying need for credit among Canadian farmers.


Mr. Smith (Battle River-Camrose):: Mr. Chairman, we are very pleased to see this resolution brought before us again this year. We had a rather lengthy discussion last session regarding the Canadian farm loan board. About the only thing we gained from that lengthy discussion was an improvement in the application form that is used in applying for loans. I wish to commend the parliamentary assistant for this new type of application form which is simplified and more convenient for farmers to use.
Last year we advanced certain suggestions to the minister regarding the Canadian farm loan board. For example, we feel that there are several weaknesses in the regulations under which the act is administered. We felt last year and we still feel that the present maximum of 65 per cent of the appraised valuation of the land is too small. We asked last year and we are asking again that that 65 per cent maximum be increased to 80 per cent.
We feel that the appraisers of the Canadian farm loan board are definitely very conservative; they do not reflect one bit of liberal thought when they hand out their appraisals as far as the worth of the farmers' property is concerned. I have reason to know that this is true because I have had the opportunity to compare an appraisal given by a representative of the Veterans' Land Act on a certain piece of property with that given by a representative of the Canadian farm loan board and found that the appraisal given by the representative of the Veterans' Land Act was far more liberal than that in the case of the farm loan board.
We feel that the maximum amount of loan is far too low if we are to expect young people to buy farms. The maximum amount that can be borrowed from the Canadian farm loan board is $15,000, and these days $15,000 will not go very far in buying and equipping an efficient farm unit in western Canada. We are hoping that our young men will stay on

the farm and if they are to do that they must have some assistance. These days a farmer cannot afford to turn over his farm to his son for nothing because he needs the money on which to live. I suggest to the minister that he give serious consideration to increasing the maximum of the loan under the farm loan board from $15,000 to $20,000.
I submit that the farm loan board is charging a very high rate of interest as far as its loans are concerned. Surely this government should be able to provide the Canadian farm loan board with money to lend to farmers at less than 5 per cent.
We in this group feel that the term of the loan is too short and we would like to see it increased from 30 to 40 years. If that were done the annual instalments or payments would be cut down considerably.
In our part of Canada there is much concern with regard to the Canadian farm loan board. The farmers of Alberta particularly feel that this board is not offering the service it could offer. For example, the Alberta wheat pool has this to say about the farm loan board:
If the federal government wants to aid the farm economy, in ways that encourage real improvement in efficiency, it could become as generous in extending credit to the farmers as to the urban dwellers.
That is from the Wheat Pool Budget which contained an article from the Winnipeg Free Press which pointed out that the ordinary citizen of Canada can borrow from 70 per cent to 90 per cent of the cost of building a new home under the National Housing Act whereas a farmer can borrow only 65 per cent of the appraised value of the land up to $15,000 under the Canadian Farm Loan Act. In order to buy a $15,000 farm a farmer can borrow only $9,750, but a man building a $15,000 house can borrow $12,800. I suggest that that is just another example of this government not giving the farmers of Canada that to which they are rightly entitled, which is the same deal as is being given to other people in Canada. I trust that the minister and the government will soon start considering putting the farmer on an equal basis with the rest of the people living in Canada.
The Alberta Federation of Agriculture are much interested in improving the farm loan board. On January 31 of this year it appealed to the provincial government of Alberta for assistance in this regard, and I should like to quote now from an article in the Edmonton Journal of January 31. On that date a delegation representing the Alberta Federation of Agriculture met with the provincial cabinet in Edmonton, and according to the following report requested:
Action in support of a request to the federal government for long-term farm credit was urged
Canadian Farm Loan Act when a delegation from the Alberta Federation of Agriculture submitted resolutions passed at the recent provincial convention to the Alberta cabinet Tuesday.
And again:
The resolution on farm credit requested "the support and co-operation of the government of Alberta in urging the federal government to meet this credit need".
I do not think we need to spend too much time convincing anyone that there is a need in Canada for long-term agricultural credit. In its preliminary report the Gordon commission had this to say on page 28:
We believe that, in terms of farm income and the ability to service loans, the long-run prospects are favourable. Under these circumstances, farm credit agencies-
That would apply to the Canadian farm loan board.
-could appropriately extend the period of repayment up to 40 years for long-term loans-
In conclusion I should like to emphasize again what we in this group feel is necessary if the farm loan board is to serve the purpose it should. We feel that the amount of loan should be based on an increase from 65 per cent to 80 per cent of the appraised valuation. We feel also that the maximum amount of the loan should be increased from $15,000 to $20,000. We would ask the government to give serious consideration to reducing the interest rate charged on these loans.
Finally, we are asking for a new deal in connection with the appraisers of the farm loan board. We are asking that they become more liberal when appraising a property upon which a loan is being requested. We are asking also that the appraisals be uniform throughout western Canada.


Mr. Cardiff:: Mr. Chairman, the parliamentary assistant to the minister stated a few minutes ago that the rate of loans had been accelerated, and I feel that that will continue to be the case. The government now finds itself in the lending business and that being the case the man who would ordinarily lend money to a farmer will not lend it. He will tell the farmer to go to the farm loan board. In the few years I have been here I have done my best to assist the farm loan board.
When an applicant comes to me to see what I can do to help him get a loan, I try to help him. More than that, I go to the farm in question and value it myself. I find that the difficulty lies not so much in the fact that the percentage allowed is not high enough 

65 per cent is plenty in my opinion-but because very often the appraiser does not value the farm as he should. The appraiser goes along and puts the valuation on the farm that suits him, and I think there should be a tribunal set up so that in certain cases an
1328	HOUSE OF
Canadian Farm Loan Act applicant may call in someone else and find what the farm is really worth. It is not the selling value of the farm that the appraiser takes into consideration, but his own valuation.
For example, just over a month ago I had a request from a man who had a mortgage on his farm of $2,500, secured on 100 acres of land with stock and buildings. As I understand it, he had borrowed this money from an old lady and she had reached the point where she needed the capital; the interest was not enough. The interest was paid up, but she wanted to close the mortgage. The farmer went to the farm loan board, but the valuer refused to give him a loan. All he asked for was $2,500 on 100 acres of land with stock and good buildings on it. The board, in this case, would have been taking no chance at all; the sum asked for was nowhere near the value of the property. I went to the loan board myself, but I have not heard what was done about the matter. This farmer could not get the money from a private lender. He had to go to the loan board as his only resort.
I think, also, that the government would be well advised to correct the form which applicants for loans are obliged to use. The forms are so complicated at present that the ordinary man does not understand them; it is necessary, almost, to have a lawyer in order to figure out what they mean. Farmers are dependent on this farm loan board, and the government might just as well acknowledge that if they are in the lending field they should look after these activities. If they are going to make the economy such that farmers are not allowed to make any money, they will have to do something else for them and make money a little easier to get.
I do not believe in mortgaging a farm for all it is worth; a man will only go down, that way. But after all there have been many cases where the board has refused to make loans it could have made to farmers who were not asking too much. Some of them are not asking for even half the price of their farms, and yet loans have been refused. I have interceded, myself, on behalf of some of these men, sometimes unsuccessfully. I think all of us should try to help these farm loan applicants because they cannot get help anywhere else, and I think the government should either get a little more liberal with their money or else change the name of their party.


Herbert Wilfred Herridge: Mr. Chairman, I propose to intervene only briefly in this discussion because I have to leave in a few minutes. I want to express my support of the views put forward by the hon. member for Kindersley. Those views represent the sentiments of all


hon. members of this group. I particularly wish to stress one point he raised, and that was that the board does not lend money to farmers to develop land upon which they do not reside. The hon. member explained the situation as it prevails in the prairie provinces, where farmers who are now living in villages and, in some cases, in towns, are quite suc-cesfully and efficiently farming land some distance away. I suppose that on the prairies they do that because of the greater convenience and the greater comfort gained.
The farmers in my constituency have frequently applied for loans on land on which they do not reside. In the case of the farmers whom I represent it is not a question of living in a village or in a small town; it is a question, usually, of living on one plot of land and farming one or more pieces of land at some distance from their homes. That, very often happens on account of local topography. To introduce a personal reference, I may say that I live at one spot and own various areas some miles away which are used for grazing cattle, and so on. But on the basis of the board's ruling in recent years, if I were to ask for a loan on a distant piece of property it would be refused because I do not reside on that property. That situation very frequently exists in our neighbourhood where, for instance, a farmer has a plot of land in the valley suitable for mixed farming and owns in addition a large hay-field on the uplands. I know one farmer who has such a field at 12 miles from his home; as a matter of fact it would be much better security for a loan than the land on which he actually resides and I do think that the present approach by officials of the board is an unfair one.
I urge that consideration should be given to granting applications for loans to farmers who wish to use those loans in the development of properties upon which they do not reside. I am not here to criticize the officials of the board as an organization or its officials in the provinces. I think that on the whole they are trying to do the best they can to administer the act efficiently and according to the terms of the legislation. However, I do think we must use a bit more imagination in the administration of farm credit in this country if it is going to fulfil its purpose-the development of an efficient agriculture and the development of the full potentiality of agriculture in Canada.
Some time during this session, if I remember correctly, the Prime Minister mentioned that there were large numbers of farmers in his province who were farming sub-marginal land. I would point out that this act does not provide any method by

which a farmer can transfer from submarginal land to good marginal land. I think we are bound to have an agricultural loan policy related to agriculture-a policy which co-ordinates the general policy of the government in respect to both agriculture and agricultural credit. The first aim should be to provide for loans for the efficient re-development of settled areas; second, the provision of loans for the development of new areas; and, third, for the lending of money for the purpose of transferring farmers now working marginal land to land upon which they could make a satisfactory living.
This would mean a considerable re-drafting of the act. In addition, I think something has to be done along the lines of the Veterans' Land Act. A young man with experience, often the son of a lifetime farmer, a man with good character but without capital should have the opportunity either to transfer from marginal land to good land, or to develop his older property, or to occupy unsettled land. I think there has to be a great deal more co-ordination between the various branches of the Department of Agriculture and also between the various branches of government with regard to agricultural credit in this country if it is to fulfil its purpose. There has to be co-ordination within the Department of Agriculture itself, and that department will have to co-ordinate its activities, in some cases with the forestry officials to get their opinion as to whether a certain farm may be situated on land which is sub-marginal and which would be better suited for the growing of trees, and so on; and provision made for transferring that farmer to suitable land elsewhere.
From the Atlantic to the Pacific in Canada we run into endless examples of people wasting their lives and their efforts on submarginal lands. We run into other cases where there could be a much more satisfactory redevelopment of good, occupied land. We also run into other cases where a lot of other first-rate agricultural land remains undeveloped because of the lack of co-ordination between various departments of government.
I shall never forget one occasion when I was fortunate enough to get a grant for clearing a river in my constituency involving the moving of log jams and things of that sort which caused the water level to rise in the spring and when it rose some 15,000 acres of land adjacent to the river were flooded. While the application was made in the first place to remove these log jams so as to improve navigation, the greater economic effect of their removal was to make it possible for the farmers to get on their land 82715-85
Canadian Farm Loan Act about three weeks earlier every spring. That was of great advantage to the farmers. But I was told that I must on no account mention the advantage obtained by the farmers in question or the public works department would not have the right to remove the log jams because the primary purpose of the removal of the log jams must be for navigation.
I mention that to indicate the lack of coordination at this time between various departments. Therefore I suggest that the time is approaching when we have got to face the question of agricultural credit with imagination if we are going to meet the needs of the people of Canada, particularly the young people who wish to farm, and if we are going to develop an efficient agriculture in this country.


Mr. Quelch:: The hon. member for Battle River-Camrose has set forth the stand of our group regarding the bill but I have one or two questions I should like to ask the minister. I understand he has prepared a statement for the hon. member for Greenwood showing the expansion in loans made by the farm loan board during the past few years. I wonder whether he could give me a statement at the same time showing the decrease in loans by private mortgage companies during the same period. At one time a lot of loans were made by private mortgage companies in the west but I understand that today they are practically out of business in that regard. I do not know whether any at all are being made. For that reason farmers today are practically dependent upon the farm loan board for any mortgages they may take on their lands. Apparently they cannot get any help from the private mortgage companies.
That being the case, it is well to note the fact that all farm organizations are complaining that the farm loan board is too conservative in its estimates of the value of land. The member for Battle River-Camrose mentioned the fact that he had found that the officials of the board were far more conservative than the Veterans' Land Act officials. In my district there have been strong complaints against the Veterans' Land Act officials that they were too conservative. If the farm loan board officials are even more conservative than the Veterans' Land Act officials, then they must indeed be very conservative.
I know that in my area, where land is of quite a high value, the Veterans' Land Act officials have been very conservative. There have been cases where, in the opinion of the farmers there based on what they could sell land for, $4,000 a quarter could have

Canadian Farm Loan Act been obtained for land but when it came to getting a loan the Veterans' Land Act officials only valued the land at around $2,000, or about 50 per cent of its actual value.
The hon. member for Battle River-Camrose pointed out that the application forms had been improved and simplified. That is true, but even so may I say that personally as a farmer I would refuse to sign such a form. I maintain there are certain things in the form that should not be there. No farmer should be asked to sign such a form and I will explain why. First of all, on page 1 the applicant is told to read page 4 before making out the application form. I think that is very good advice because if you have got any sense you will not sign the form after reading page 4. On page 4 there is the following.
I make this application for loan subject to the following conditions:
1.	That the application fee will be refunded if an appraisal is not made but will be retained by the board if an appraisal is made whether or not my application is approved.
I have no objection to that. Then we come to No. 2, and I take strong exception to it. It reads:
2.	That I will execute a mortgage on the board's form as a first charge on said lands as security for the amount of loan granted by the board, and if required a chattel mortgage on all or such of my goods, chattels, livestock and machinery as may be specified by the board as additional security for such loan and will pay all fees and disbursements incurred by the board in the investigation of title and the perfecting thereof, and I hereby charge the said lands with the payment of such costs. I hereby agree that, notwithstanding the execution or registration of the mortgage or mortgages, the advancing of the money or any part thereof shall at all times be in the absolute discretion of the board.
It is charged by farm organizations and, I think, by everyone who is familiar with the act, that the board is too conservative in the valuation of land. But, not content with that, the board has the right to demand that the farmer sign a chattel mortgage on everything else that he possesses.


Mr. Bryce:: Everything but his wife.


Victor Quelch: Everything except his wife. I do not know whether or not they have gone that far. I hope not. I would ask the minister what would be the credit position of a farmer if he agreed to sign a chattel mortgage on everything else that he possessed. What would be his credit standing at the bank if he wanted a short term loan and if, when asked by the bank manager to give a statement, he indicated that everything he had was covered by a chattel mortgage to the farm loan board? I think hon. members will agree that his


credit standing would be nil. The only chance he would have to get any loan at all would be entirely upon the basis of his character. A man's character is not sufficient for him to get a loan if conditions are bad and there is not much chance of his being able to repay the loan, not because he does not desire to do so, not because he is not honest but just because he has signed over everything to the farm loan board. I think that provision certainly should be limited.
You may say that this is merely an application and if at the time the loan is to be disbursed he refuses to sign the form he is still no worse off because he does not have to take the loan. But look at section 4. It reads:
4. That if after approval of this application I fail upon request after notification of such approval to execute any documents deemed necessary by the board to complete the security, I will pay all expenses incurred by the board in the consideration of the application and in the investigation of title.
So he signs the application form and then is told later that he has got to give a chattel mortgage on everything he possesses. Naturally if the farmer has any sense at all he will refuse to do so. But then he has to pay any expenses incurred even though he is not going to get the loan. I should like the minister to tell us on how many occasions farmers have been required to sign chattel mortgages. Maybe the minister can say that it has never been done. If it has never been done, I think that is pretty good evidence it is really not necessary to have that provision in there and I think the minister certainly should give consideration to modifying it.
There is one other thing I do not like in the form. Section 7 reads:
7. I hereby authorize and request the board to remit the balance of loan or loans granted to me by cheque, payable to the order of myself ... by mail at my risk . . .
Why should it be at the applicant's risk? If I owe somebody a debt and mail that person a cheque and the cheque is lost, I am the one who has to stand the loss or straighten out the matter. The person to whom I send the cheque does not have to stand the loss, so why should the farmer stand the loss if he never gets the cheque? It seems to me that if the farm loan board took proper precautions there would be no risk involved of the farmer not receiving the money, and I fail to understand why the words "at my risk" should be inserted in there. It is just one other thing that may scare off the farmers. I hope the minister can give us a satisfactory explanation with regard to section 2.


William Earl Rowe: Mr. Chairman, it seems to me that the farm loan board has not kept pace

with general developments in agriculture. I find myself very much in agreement with much that has been said today, and in particular what the hon. member for Huron has said is so true. The man on the farm today has to spend a lot more money in setting up his farm. Young men starting farms today are spending many times what was spent a few years ago. The cost of machinery, the cost of livestock, the cost of operation of the farm has very little in common with the cost of 25 or 30 years ago. Perhaps this farm loan board has been directed by the government to be careful and it would be only recklessness to suggest that they should make loans to 90 per cent of the value of the farm, but, on the other hand, I do not think the function of this lending body should be to be so careful that they have a large surplus every year.
As the hon. member for Huron has said, you are in the lending business and the fact you have a Canadian farm loan board makes it almost impossible for a young farmer to get money anywhere else. This is especially true in view of the tight money policy the government now has, and when the banks are told not only to increase interest rates to unprecedented heights but to restrict the credit of a farmer who wants to build a barn in spite of the fact he may have good collateral. There never has been a time when farmers were more hampered in their production plans than they are now. I am not going to review the number of farmers who are operating under great difficulties. I know, Mr. Chairman, that almost every hon. member in this house who is familiar with rural conditions in Canada is well aware that there are a great many farmers who are finding it difficult now. Even the Prime Minister has been talking about marginal farms, and when he gets into that field he will find the marginal area is pretty wide today.
In connection with the limiting of the value of a farm to $15,000, I might point out to the parliamentary assistant that that sounded like a lot of money a few years ago. At that time the government was spending only around $500 million and now it is spending $5,000 million. In those days a farmer knew he could buy a binder for $125, but today he pays $800 for one. These are two different eras.


An hon. Member:: And not the same
binder.


William Earl Rowe: Not the same dollars, either.
The same thing could be said of almost every aspect of farm equipment. He has more money invested in his livestock, his 82715-85J
Canadian Farm Loan Act dairy cattle; everything on the farm is costing a lot more money. I do not believe this factor has been taken into account by the farm loan board.
Another factor that is not taken into account by the board is the replacement cost of farm buildings. Buildings do not have to burn down to need replacement. They need repair, such as new roofs and so forth. You know very well that it costs as much today to put a roof on a barn as it did to build the barn 30 years ago. These are factors the farmer is up against. As the hon. member for Huron has so well said, the farmer cannot go and borrow as he could years ago. There are some who might say when your party was in power you had the Farmers' Creditors Arrangement Act and that hurt credit to a certain amount in those difficult days. The fact is, however, that we must be up to date if we are going to do business. The farm loan board should keep up with the times and pay attention to these essential factors. They should realize that the farmer has not got the same opportunity of borrowing money he used to have. He does not go to the old retired farmer who had $10,000 or $15,000 that he was glad to put out in mortgages at 5 per cent. The retired farmer would say now, why don't you go to the farm loan board; we have a Canadian farm loan board. Well, I have been to them and I cannot get it. If you only need that much money, you have a lot of stock and implements so why don't you go to the bank? The bank has been told by the head of the Bank of Canada that they are not to lend any more.
I know of cases where banks have refused to lend a farmer money, even though in my opinion his collateral looked good. If you want to help in this inflationary period, I think it is just as important to encourage production as it is to try to restrict credit. Certainly this is more important in helping inflation than increasing the handouts from the government which do not result in production. Often the valuator comes and tells the farmer he is not doing this or that right. He looks at the farmer, sizes him up to see-whether he shaved that day or the day before^ whether he has a smart looking wife who is a good housekeeper; whether things look shipshape and painted, and then he says this looks pretty good. He goes to another place where the farmer has been too busy to shave for two or three days but who is making, more money than the first fellow and often the investigator does not know whether he is looking at a Jersey cow or a Holstein, but he refuses the farmer a loan. I know of cases in which a farmer has wanted a loan of 65 per cent of the value of a good farm. The

Canadian Farm Loan Act valuator has said they could not give that much on that farm; he did not believe it was worth that much. The farmer says, I was offered $12,000 for it and all I am asking is 65 per cent of $10,000 but you say it is not worth that much. I wish I had sold it. These may be extreme cases, but we have all heard of them.
The objective of the farm loan board seems to be not to get into trouble, not to lend too much for fear they might lose a little. I do not like to see the government acting recklessly in any department, but the lack of caution I see in some of the expenditures by this government amazes me when it is contrasted with the caution exhibited by the farm loan board. I know that in my own county many farmers have been refused loans which appear to be within the close range of good security for the farm loan board. They were refused merely because the owner of the farm, a young man, was energetic enough to try to supplement his income at a period when costs are rising and prices falling; at a time when agriculture is getting a smaller share of the national income per capita than any other industry in Canada. The farmer is refused a loan because he is energetic enough to go for two or three months a year and earn a salary at Camp Borden or Malton airport. The inspector tells him he can make more money at home. This government tries to tell you how to spend your own money. You are supposed to spend less yourself while they spend more all the time.
The inspector tells this young farmer he could make more money at home. The farmer says, doing what? I have not enough money to buy more milk cows. The tight money policy of the government will not allow the bank to lend me money to supplement my production by purchasing four or five more cows at a cost of $1,200. He has a choice then. He can either let the farm go and take his wife and family into town, quit farming altogether, or he can continue to take his job. Often he finds that with good wages he can afford to choose the latter. I would suggest, Mr. Chairman, therefore, that good administration by the board would not be so greatly concerned with the letter of the law.
I hope the government will urge the farm loan board to be a little more lenient. I am not blaming the personnel of the farm loan board. I think it is a lack of appreciation by the government itself of the real problems of agriculture at this time. I think they should risk a little more. If you are in the lending business and getting good interest you should lend money.
Another feature is this, Mr. Chairman. The sum of $15,000 may seem to some who talk

about farms being worth $8,000, $10,000 and $12,000 per 100 acres of land to be a lot of money; but there is another factor that every member who is familiar at all with agricultural problems is conscious of. Today, in very many instances, it is much more econom-i-al to run a large farm than a small one. In other words, the machinery involved in modern agriculture today is so costly that the farmer decides the larger unit is more important and more economical. I think it is. In many instances he is farming in an area near to a large city such as the suburban areas of Toronto or Montreal, or any of the large cities throughout Canada, and the large industrial centres and suburban districts. The farms in those districts are worth a lot more money. I think the farm loan board should be given leeway to lend more than $15,000.
I should like to know who is afraid of the farm loan board losing our dollars which this government takes from us so freely and handles so recklessly. Who is there amongst us who thinks that you could not lend more than $15,000 on some of the 100-acre farms within say 25 miles or 30 miles of Toronto or Montreal, if it is good producing land? If it is 300 or 400 miles back from those districts its production value would be just as good as far as the soil is concerned but its actual value would be less. Because land is close to the Toronto or Montreal markets its earning capacity is greater. Regardless of that, Mr. Chairman, if a farmer's loan is increased and he should fail the farm loan board would not lose any money.
As the parliamentary assistant knows, good land in proximity to those big cities is selling from $300 to $500 an acre. Therefore, in my opinion, the $15,000 limit is outmoded. To raise the $15,000 limit does not mean that the farm loan board is going to be reckless and that they will lend it in a different way from what they are doing now. But, there are extreme cases. I think the farm loan board could be a good deal more use than it is.
I notice that they have not lost much money but they have not lent much money. Today the farmers are up against great difficulties. Their costs are rising and their income is lower. Land values have increased, the cost of machinery has increased and replacement costs have increased. If a roof blows off a barn, if a barn blows down, if it does not burn, very often the cost of replacement is a great deal more than it used to be. The whole administration of the farm loan board should be encouraged to give more loans and increase the limit under these changing conditions and either be in the lending business or not. Because of the tight



IS, 1957

[Stage Direction]
money policy of the government at this time there never was a time when the farm loan board was challenged to do more than they have had to do in the past. We hope that agricultural conditions will improve. Nevertheless, I believe there are many farmers who have gone out of business because of the tight-money planning of the farm loan board. I believe they could have taken a little more risk and they would have lost very little if anything, and our national economy could have been more usefully served.
Mr. Thatcher:: Mr. Chairman, I should like to say one or two words on this particular act. This morning the parliamentary assistant pointed out that the main purpose of the bill is to increase the scope and facilities of the Canadian farm loan board. I am sure that hon. members of all parties will be in sympathy with this objective, because many of the troubles facing agriculture today can certainly be traced to the lack of long-term farm credit. I feel that this lack has caused real trouble in most of our farming communities.
In the first place, many of our young farmers who would like to stay on the land, have been forced to go into the cities, because they cannot find enough money to establish themselves on the land.
In the second place, the lack of farm credit is causing a concentration of farms in the hands of wealthier people, because they, after all, are the ones who can most easily obtain any credit that is available. In the third place, I think the lack of adequate farm credit today in Canada is lowering the productivity of Canadian farms.
The reason for this undesirable situation is not very hard to find. Today private lenders, whether they be banks, mortgage companies or insurance companies, can find more lucrative and less risky fields in which to put their money. As a result, in latter years those companies have been placing an ever smaller amount of their investment funds into farm mortgages. I think the recent actions of the Bank of Canada have aggravated the farm credit problem, and thus, as never before, we are in the position today where the farmers must depend upon the Canadian farm loan board to give them long-term credit.
There are two special and additional reasons, Mr. Chairman, why today the farmers of Saskatchewan need some kind of additional assistance. Back in the depression years we had a great many farm foreclosures by mortgage companies. A lot of us felt that many of these foreclosures were unwarranted. In 1944 the Saskatchewan C.C.F.
Canadian Farm Loan Act government introduced a bill called the Saskatchewan moratorium act. I think it was introduced in good faith. The effect of the legislation was to prevent foreclosure on the home quarter. I admit quite frankly that I supported this legislation at the time, because I thought it was a good thing for the farmers. Unfortunately it has not worked out that way, in my opinion. The mortgage companies, feeling that they no longer had any security of investment in the province of Saskatchewan after that act was passed, pulled out lock, stock and barrel. Thus in my opinion, this legislation has had the-effect of virtually ruining farm credit in the province of Saskatchewan; because even though the Supreme Court ultimately ruled it ultra vires, the companies have not come back into the province.
The C.C.F. government took another step which I think has harmed farm credit In the province of Saskatchewan. For many years, under a Liberal administration, we had out there a provincial farm loan board. It made loans to farmers at low interest rates. Yet one of the first acts of the C.C.F. government in 1944 was to repeal the Saskatchewan farm loan act and abolish the board. Today the C.C.F. government, which professes to have such a great interest in the farmer, refuses to loan him even a five-cent piece. That is why this legislation before us today is so important to the Saskatchewan farmer, Mr. Chairman.
Under the Canadian Farm Loan Act which was passed back in 1927 the federal government lends money to farmers for all general farm purposes. Since its inception it has lent $25,500,000 out in my province, and for a number of years I am told, in this house prairie Liberal members have been urging the government to extend its provisions and make more money available. If I understood the parliamentary assistant correctly, an additional $20 million will now be made available for farm credit. This is a tangible measure introduced by the Liberal government which will be of genuine assistance to Canadian farmers.
My hon. friends in the C.C.F. party both in Saskatchewan and out in the hustings from time to time have disparaged the value of the Canadian farm loan board. For instance, if I may paraphrase his words, the hon. member for Kindersley said this morning that the policy of the board seemed to be "as stingy as possible." The socialists say that loans are too difficult to obtain, interest rates are excessive, the amount which the board will loan is too small, and so on. I say that it ill becomes a group which has done

Canadian Farm Loan Act so little to provide the farmer of Saskatchewan with long term credit, to criticize a resolution of this kind.
We appreciate that these amendments are not going to completely solve the problem, but they are certainly a step in the right direction. I say flatly that this resolution should be supplemented by provincial legislation in every province which does not already have a provincial farm loan act. If the socialists are sincere in their concern for the farmers I think they should persuade their colleagues back in Saskatchewan to reintroduce legislation establishing a farm loan board, such as formerly existed under the Liberal administration. It seems to me that instead of constantly telling the federal government what it should be doing, the socialists themselves should take some useful and practical action which will help the farmers.
Today there are a number of provinces which have provincial farm loan boards. For example, Quebec has a board which loans money at an interest rate of 2J per cent, and it is loaned for a period of up to 39J years. A few weeks ago I wrote the director and asked him to tell me something about the Quebec act. He wrote me as follows:
The results have been wonderful until now. As we are writing you, we have granted loans to the extent of $140 million and the present session has voted an additional amount of $15 million.
I have heard many of my socialist friends describe the government of Premier Duplessis as reactionary and backward. Although I do not choose to become involved in that kind of discussion today, I will say this. The Quebec farm loan board act is so far ahead of anything which has been provided by the socialists in Saskatchewan, that it almost reflects on the sincerity of the socialists toward agriculture.
I understand there is a farm loan act in existence in Ontario under which money is loaned to young farmers at 4 per cent. It appears to me to be a fairly good act. As I listened to some opposition members from Ontario speaking I wondered why they are not urging their own provincial farm loan board to extend its operations.
On the prairies the socialists are forever telling people that they are the champions of the farmer. The C.C.F. members incessantly talk about the needs of the farmers, yet in Saskatchewan where they form the government, as far as I can see, they do practically nothing for agriculture. The resolution before us today is one more example of Liberal legislation which will be of valuable assistance to the farmers.
I wish to conclude by throwing out a challenge to the C.C.F. I say to them, let us have


action instead of words. If you really believe that the farmers of Saskatchewan should be provided with better long-term credit facilities, emulate the example set by other provincial governments and by former Liberal governments in Saskatchewan, and reconstitute the Saskatchewan farm loan board. Then and only then will the criticism which you are making today cease to sound empty and hollow. I believe that these amendments are progressive and will benefit the farmers of Canada. They have my wholehearted support.


James MacKerras Macdonnell: Mr. Chairman, I want to say a word not concerning the administration of the board but with regard to two matters which came up in the banking and commerce committee last year. The first related to the length of time taken in servicing the applications for loans. There was a great deal of discussion about this matter and I would like some information concerning it. I would be grateful if the parliamentary assistant would provide us with information indicating whether or not there has been an improvement with respect to the length of time involved in servicing applications. I should also like to have a statement showing the amount of business that has been done by the board over the last several years so that we will have an idea of the volume of business they handle.


Mr. Regier:: Mr. Chairman, it is amazing to hear so many of the free enterprisers in this house welcome this resolution. It is quite a common thing that when free enterprise fails, then the government and the taxpayers are supposed to come to the rescue.
The sincerity of the members of this group was called into question a few moments ago when we plead for an extension of facilities for farm credit. There are a great many people in Canada who learned long ago that there is more money to be made when you farm the farmer than when you farm the land.
The parliamentary assistant made a rather important statement in his opening remarks when he said there has been an accelerated demand. If that accelerated demand reflects the heightened desire of the Canadian farm loan board to supply long-term credit for Canadian agriculture then of course that statement is to be welcomed. However, if the accelerated demand has been caused by the poor economic conditions of Canadian agriculture then it is a reflection that is most undesirable.
What I have reference to when I say that is the statement in the annual report dealing with the purposes for which loans have been made during the past year. It says that 30.1 per cent of the loans were made for the

purpose of paying off debts. I think the committee will recall that a year ago when we were debating the bill limiting interest rates charged by finance companies it was revealed that half of the total number of loans that had been made in one year by the finance companies were made to people who wanted to pay off loans they had already made. In other words, half the money was being used to help people refinance their debts. I regret very much that Canadian agriculture has reached the state of affairs where 30 per cent of the mortgages have to be used to pay off debts. I would much rather see a higher percentage of the loans devoted to the cause of increasing the productivity of these farms.
Progress reported.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.


[Stage Direction]
The house resumed, from Thursday, February 14, consideration in committee of Bill No. 47, for the establishment of a Canada Council for the encouragement of the arts, humanities and social sciences-Mr. St. Laurent (Quebec East)-Mr. Robinson (Sim-coe East) in the chair.
On clause 8-Objects and powers.
Mr. Blackmore:: Mr. Chairman, when we closed last night I was discussing the dangers which are imminent in respect of the activities of UNESCO. It is not my intention to occupy much more of the time of the committee just now, but I do believe that there are some other considerations which ought to be placed before the committee before we leave this discussion. For the sake of those who may pick up today's Hansard without having gone through the Hansard of yesterday it might be wise to review briefly what UNESCO is and indicate two or three important facts concerning its development.
First of all, what is the meaning of UNESCO? The word UNESCO is made up of the first letters of six words, namely United Nations educational, scientific and cultural organization. What can be said about the beginnings of UNESCO? The United Nations charter signed in San Francisco on June 26, 1945 included a provision for the promotion of cultural and educational co-operation between the member states.
Canada Council
The first conference for establishing an educational and cultural organization was convened in London in November 1945 and the representatives of the participating nations signed the constitution of UNESCO on November 15, 1945. The constitution of UNESCO entered into force on November 4, 1946. The acceptance of membership in UNESCO by the United States was authorized by public law 565 adopted at the second session of the 79th congress on July 30, 1946. This gives us a sort of passing bird's eye view of the general picture bringing it up to the point when the UNESCO commission of the United States was first established. I dealt with that event yesterday in the opening of my remarks.
Yesterday I devoted a considerable amount of attention to establishing the fact that the UNESCO program in the United States and presumably elsewhere where it was in operation was seeking definitely by propaganda to destroy patriotism in youth, to dispense with religion, to belittle parents and diminish their influence over their children, and finally to neglect a grounding in the three R's presumably so that when children grew up they would not have the ability to interpret the printed page and consequently would not be able to comprehend very clearly what was written in any document which to any extent was complex. What a calamity that would be to a nation like the United States requires only a moment's reflection to realize.
There are one or two additional things I wish to mention today. I am going to refer to a periodical which I have always found for many years to be reliable. This is called The American Nationalist, and the number to which I propose to refer is the November 1954 issue. Hon. members who will take pains to consult this particular number of this periodical will find on page 1 a headline "UNESCO Joins Segregation Fight". Hon. members will wonder what possible connection there can be between segregation and education and culture. This refers particularly to the United States.
On page 3 there is a headline "UNESCO pushes desegregation in the United States". It is almost beyond the power of imagination in a nightmare to conceive what possible connection there could be between culture and education, the arts and humanities and social sciences and all these other pretty decorations we have been talking about, and desegregation in the United States.


Mr. Ellis:: Is not that worth while?


John Horne Blackmore: Last night I mentioned the fact that certain people brand themselves every time they open their mouths, and here we have the first evidence today.

Canada Council


Alfred Claude Ellis: I wonder if I might ask the hon. member whether he does not feel that a question of that kind is quite logical and proper. I asked the hon. member whether he does not believe desegregation to be a worth while aim and I would appreciate an answer to what I think was a very honest question.


John Horne Blackmore: I believe it would be a perfectly honest question-


The Chairman:: I really do not feel I should allow a question of that kind because it would open up the discussion entirely too broadly, and I am afraid it is fairly broad at the present time. Subclause (2) of clause 8 reads:
The governor in council may assign to the council such functions and duties in relation to the United Nations Educational, Scientific and Cultural Organization as he considers desirable.
Under the circumstances I have not felt that I could intervene when hon. members were discussing this organization to a certain extent, but I would invite the co-operation of the hon. member who has the floor by suggesting that we should discuss UNESCO only in so far as it is mentioned in this clause, that is the assigning to the council of such functions with which it might be concerned. In that regard I invite the co-operation of the hon. member who has the floor.


John Horne Blackmore: Mr. Chairman, you will have the co-operation of the hon. member who has the floor. But first, before we decide whether or not we can afford to assign any function pertaining to UNESCO to any organization or agency in Canada we should know something about UNESCO and it's aims. That is obvious. So before we pass this clause we should find out what we are going into; and one of the best ways of doing that is to see what has happened under UNESCO to our neighbour, the United States. I think the connection is perfectly clear.


Alfred Claude Ellis: Why don't you answer my
question?


John Horne Blackmore: I do not propose to take up time in answering the question of the hon. member for Regina.


Alfred Claude Ellis: It' can be answered yes or no.
* Mr. Blackmore: There are a lot of questions to which you cannot answer yes or no; for example, "Have you stopped beating your wife?" or-for the hon. member over here- "Have you stopped being foolish yet" or "Have you begun to grow up yet?" All those little things.
Now, Mr. Chairman, we can see how quickly we run into difficulties. But I am not afraid. I do not hesitate. I could take the whole C.C.F. party on and work on them.


Alfred Claude Ellis: Answer that simple question.


John Horne Blackmore: Apparently the hon. member has not the intellectual perspicacity to be able to see that he is answered.
Sir, I desire to read a short excerpt from page 3 of this November 1954 copy of The American Nationalist. It is called:	"Conclusion". Those who will be reading these remarks of mine in the country and those who are listening in this house will, I think, - be greatly impressed if they follow closely just what these words are and what they imply:
Conclusion. Supposedly UNESCO is an organization devoted to the furtherance of educational, scientific and cultural advancement. The most logical place for its activities would therefore seem to be in the more backward areas of the world where there is a crying need for educational and scientific improvement. But UNESCO is not filling that need; instead it chooses to lavish its attentions upon Americans, who already have one of the world's best education systems.
This preoccupation with the educational and cultural well-being of the American people would be most flattering were it not for the type of "culture" and "education" involved. Actually, of course, it is neither education nor culture; it is propaganda.
And in this connection I will refer hon. members to the quotation I made from Senator McCarran in my remarks last night. From the excerpt "Conclusion" I continue to read:
Furthermore it is propaganda designed to prepare the Americans for world government; propaganda which is frankly directed toward the destruction of our patriotism-
This refers to the United States.
-and racial self respect.


An hon. Member:: There's bigotry for you.


John Horne Blackmore: I will leave the hon. member to talk with the editor of this periodical, and I recommend him to take a course in a lot of things he does not know much about before he undertakes it.
At this point a pertinent' question is, why this concentration on the United States? I suggest the reason is this-that the masterminds of the world revolutionary movement to whom I referred last night realize that the strongest bastion of human freedom of the world is the United States. They know that if they can bring down the United States, and bring it under a world dictatorship, they will have achieved t'heir purpose throughout the world. That is the reason behind this concentration on the United States. And now that they have the United States pretty well ready to fall into their hands they are going to turn their attention to Canada because here again is a bastion of human freedom, and if they can get the United States and Canada away from the British commonwealth-away from Great Britain-I need not even hint what would be the result for the free peoples of the world.

I go on now to quote one further paragraph from the article "Conclusion" from which I have quoted:
It is high time the United States put a stop to this flood of alien racist agitation. The question of whether or not we are to have segregation in our armed forces and in our public schools is one for Americans to decide-not foreigners. No foreign agency-UNESCO or any other-should be allowed to intercede on either side of the question. For that reason UNESCO should be compelled to halt the distribution of all literature within the United States which advocates de-segregation or which, indirectly or otherwise, attacks those who uphold segregation.
Let me once more point out to those who are present in the house and to those who will read this in the country how dreadfully serious every phase in that passage is, not only in its meaning but in its implication. I think I will say no more at the present time in respect of this matter.


Some hon. Members:: Oh, oh.


John Horne Blackmore: Oh, yes, hasten to turn oft the fountain of knowledge. You laugh now. You laughed loudly when the Bretton Woods agreement was under consideration, but we are suffering today endless dangers and disasters as a result of the Bretton Woods agreement that the ordinary member in this house does not even dream of. Yet so many do not know, and so many of us do not want to know. Thank you, Mr. Chairman.


Erhart Regier: Mr. Chairman, I do not intend to delay the committee for very long. However, after listening to the "fountain of knowledge" for some considerable time I feel that a number of things were said against the work of UNESCO which need at least some repudiation.
I have had personal observation of only one phase of the work that is being conducted by that organization. The hon. member for Macleod assured this house some time ago that he believed UNESCO was an "evil thing". I think those were his exact words. I attended a dinner some time ago at which the guest speaker was one of the leading educationists in the city of Ottawa and he had brought along with him moving pictures of the work that he had done for UNESCO for several years.
We all know that hundreds of thousands of Arab refugees live in the Gaza strip. The outlook in the world today for these refugees looks very black indeed. It is obvious that most of the countries of the world do not wish to admit these refugees as immigrants. Even when our own Minister of Citizenship and Immigration agreed to accept some of them he laid down very severe limitations respecting who would and would not be
Canada Council
admitted. One limitation he imposed had to do with the educational qualifications of would-be immigrants.
UNESCO is offering to these refugees the only educational facilities available to them. It is providing public schools as well as some high schools. UNESCO is assisting these helpless people whose only hope for the future is that maybe some civilized country will admit them if they obtain an education. If it is said that UNESCO is an evil thing when it undertakes projects of that kind, then I cannot disagree more.
As for the comments of the hon. member for Lethbridge, I do not think that the work of UNESCO should be limited only to those areas of the world that he or I might choose to designate as less than civilized. I am quite prepared to admit that even the people of Canada or the people of the United States could stand a little bit of education in certain respects. If UNESCO does engage in efforts to break down racial prejudice throughout the world, if UNESCO attempts to persuade the white people of the United States to be a little more cultured and civilized, if in Canada it should attempt to persuade us that maybe the Indian is a worthy Canadian citizen and deserving of the same rights and privileges as the white man, then I say three cheers for UNESCO and UNESCO is worthy of our support.


Mr. Hansell:: Mr. Chairman, I have said all that I need to say on this clause. I simply rise to move, seconded by the hon. member for Lethbridge (Mr. Blackmore):
That clause 2 of section 8 be deleted.


William Alfred Robinson: That would be subparagraph 2?


Ernest George Hansell: Yes.


William Alfred Robinson: Then I will make the change in the wording. It has been moved by Mr. Hansell:
That subparagraph 2 of clause 8 be deleted.
Is the committee ready for the question?


Erhart Regier: No, Mr. Chairman. I am very happy that the Social Credit party has seen fit to move this amendment. I understand from newspaper reports that they intend to make this matter one of the issues in the forthcoming election and I have every confidence that if they should decide to do so the Canadian people will not see fit to return one single Social Credit member to the House of Commons.


Mr. Wylie:: That is your idea. One man's opinion.


Erhart Regier: I have too much faith in the integrity and state of development of the

Canada Council
Canadian people to believe that they will endorse the racial bigotry that we heard expressed only a tew moments ago. When the Canadian people are asked whether they approve of the exchange of university students between countries so that international understanding shall be developed I believe the Canadian people will approve of such efforts by UNESCO. When the Canadian people are asked whether they are in favour of an international organization such as UNESCO helping to establish libraries in over 30 nations of the world that have no national library systems, when the Canadian people are asked whether or not they are in favour of fostering and sponsoring education in undeveloped areas of the world, I think the Canadian people will show by a resounding vote in the forthcoming election that we are beyond the stage of thinking exemplified by the members to my left and they will know how to deal with every Social Credit candidate.
Amendment (Mr. Hansell) negatived: Yeas, 11; nays, 72.


[Stage Direction]
Clause agreed to.
Clause 9 agreed to.
On clause 10 - Bylaws.
James MacKerras Macdonnell: I take it this will cover the fixing of the number of a quorum.


Louis Stephen St-Laurent: Yes, Mr. Chairman.


James MacKerras Macdonnell: And the Prime Minister sees no need of any indication as to the number? It is proposed to leave that entirely to the council?


Louis Stephen St-Laurent: The council will, I think, adopt bylaws designed to carry on in a way that will satisfy public opinion that they are going about their business seriously.


[Stage Direction]
Clause agreed to.
Clause 11 agreed to.
On clause 12 - Pension fund.
James MacKerras Macdonnell: 
Louis Stephen St-Laurent: I would imagine that the director and associate director	and the clerks	would be
full-time servants of the	corporation,
and clause 12 was drawn for the purpose of avoiding the setting up of a special pension fund for the Canada Council which, I hope, will carry on for a very long time. It was felt that if the council made the contribution that the government as an employer makes for civil servants and the employees of the council made similar contributions there would be a saving of expense in operating the pension fund in that way.


[Stage Direction]
Clause agreed to.
On clause 13-Not agent of Her Majesty.
Erhart Regier: I wonder if I am assuming correctly that this clause means the employees will not be civil servants. What is the reasoning behind that?


Louis Stephen St-Laurent: They will become servants of the Canada Council but they will not be subject to the civil service commission statute. They will be treated as civil servants merely for the purpose of avoiding the setting up within the Canada Council of a special pension fund. It was felt that for pension purposes they would naturally feel that there should be some provision made and that it would be better to have them grouped with the civil servants than have the relatively small number who would be in this organization depend upon a special pension fund where the risks would not be averaged over a sufficiently large number to give us the assurance that the law of averages would operate.


Erhart Regier: I quite appreciate the Prime Minister's explanation of the need for section 12. However, if section 12 were not there, there would be no need for section 13. I do not know whether or not I like section 13. I am wondering what is the reason the government has for not wishing these employees to be classed as civil servants but is willing to give them civil service status for the purpose of a pension. Will this be a benefit to those employees to be exempted from classification as civil servants or will it work a hardship on them?


Louis Stephen St-Laurent: I do not
think it will either work a hardship on them or be a benefit to them. It will, as other sections of the bill are designed to do, establish that this is not a department of government. This is a body that is set up to operate in the manner provided by the

statute as an autonomous body. It is to have the privilege of administering its funds and its responsibilities-because I think the hon. member for Vancouver-Quadra will persist in his intention to add by amendment certain words to clause 23-will be reviewed annually by parliament.


Stanley Howard Knowles: May I ask the Prime Minister who or what body will determine the rates of pay and working conditions of these employees of the council?


Louis Stephen St-Laurent: They will be employees of the Canada Council and I assume the contracts will be contracts between the Canada Council and the individual employees. There are still some relationships between employers and employees that are personal relationships, and I would hope that the employees of this Canada Council would feel that they had personal relationships with the members of the council and that they were participating in the satisfaction which I hope will be felt by the Canada Council of doing a good job.


Stanley Howard Knowles: I think most of us agree with what the Prime Minister has just said. The reason for my question was this. I noted earlier in the bill the provision that the governor in council would determine the remuneration or expenses to be paid members of the council, hence my question as to whether the employees of the council are to have their rates of pay fixed in the same way, by the governor in council, or by the Canada Council?


Louis Stephen St-Laurent: By the
Canada Council.


[Stage Direction]
Clause agreed to.
Clause 14 agreed to.
On clause 15-Advances.
Mr. Zaplitny:: I was merely going to say that this section refers to advances being made during the first year after the coming into force of this act. I have not been able to find anywhere in the bill any reference as to when the act may come into force, whether it will be by proclamation or on a particular date. Perhaps I have not read it carefully enough. What occurs to me is whether it is intended that this advance shall be only for the first year, and I would assume that that would be for the purpose of having some money to work with while waiting for the returns from the endowment fund. I should like to get it clear as to when it is expected this act will come into force?


Louis Stephen St-Laurent: It will come into force on the day that it is sanctioned.
Canada Council
That is the provision in the Interpretation Act, that if there is no other date fixed by parliament the act comes into force when it is given royal assent.


[Stage Direction]
Clause agreed to.
On clause 16-Expenditures.
James MacKerras Macdonnell: I want to ask a question on one point. This clause reads:
Any expenditure made for any of the purposes of this act. except section 9, may be paid out of
(a)	the return on investments made out of the endowment fund;
(b)	the amount advanced to the Canada Council under section 15; or
(c)	money, securities or other property received by the council by gift, bequest or otherwise, if available for such purpose.
Now, do the words "except section 9" mean that payments made here may not be made for the purpose of section 9 that is to say for construction purposes of universities, and does that preclude anyone from earmarking a gift for that purpose?


Louis Stephen St-Laurent: No, it certainly does not preclude anyone from earmarking a gift for that purpose. What is intended is that the capital grants to universities are to be made out of the $50 million contributed under section 9. AH of the other expenditures will be made out of the income or the amount advanced under section 15, which is intended to fulfil the purpose mentioned by the hon. member for Dauphin, that is to say to put into the hands of the council what it will need pending the receipt of revenues from the endowment.
The third is money, securities or other properties received by the council by gift, bequest or otherwise, if available for such purpose. Such bequests or gifts would not be available for such purposes unless it was so stated by the donor. Otherwise, they would be added to the endowment fund. But a donor might very well say, you have only, let us say, $2 million income from your endowment fund and this year there are things that should be done that cannot be paid out of that $2 million. Well, here is another $100,000 for such and such kind of scholarships or grants, which I want used in a relatively short period. The hon. gentleman will find that the council can receive gifts or accept bequests for any of the purposes that come within its scope and can receive them subject to any conditions that the donor or testator chooses to fix in making the gift or bequest.


James MacKerras Macdonnell: I assumed that that was the intention, and the Prime Minister has stated, as I understand, that the words "if available for such purpose" really intend to imply that funds may be earmarked for

Canada Council
any purpose and may be used for that purpose. It would still seem to me, on the face of it, that there is a contradiction but it may be resolved by these words. The Prime Minister will know better than I whether words used in this house may be used to assist in construing words in a statute. Perhaps the point is not sufficiently important.


Louis Stephen St-Laurent: The law
officers of the crown assured us that this carried out the intention which I have expressed in answering the hon. gentleman's question. It seemed to me that it did carry out that intention and I hope no difficulty will arise from it.


[Stage Direction]
Clause agreed to.
On Clause 17-University capital grants fund.
Stanley Howard Knowles: Mr. Chairman, if I recall
correctly, when the Prime Minister first announced this legislation last fall at a meeting of the national conference of Canadian universities he indicated that this grant of $50 million for capital expenditures was not to be spent all at once but was to be spent over a period of years, five years or 10 years.


Louis Stephen St-Laurent: Ten years.


Stanley Howard Knowles: Is there anything in the bill which limits it in that way?


Louis Stephen St-Laurent: It was felt that it might be left in that way and that it would not be apt to last more than the 10 years, though it would be proportionate between the 10 provinces in relation to the population of each province. But it was felt that it was not necessary to put any such limitation in the statute. What I had in mind was that it should not be expected that the government would be asking parliament to make another appropriation for this purpose within a period of 10 years; but it was felt that it would be just as well to leave that, because a situation might develop where even before the expiry of 10 years the government would feel that public opinion would warrant a recommendation of a further grant for capital assistance to the universities.


Stanley Howard Knowles: There is just a brief word I would like to say arising out of what the Prime Minister has just confirmed. There are some who have been critical of this legislation on the ground that we would be spending a disproportionate amount on culture in relation to other things. I am not going to argue at this moment with that contention. Our view on that matter has been well put by others who have spoken, but I think the record should make clear that actually under the terms of this legislation there will be

expended for the purposes of this act out of the total wealth of Canada only about $7 million a year. There is loose talk, I suggest, about our putting $100 million into this as compared with what $100 million could be used for in other ways. The fact is that the $50 million by way of endowment will result in about $2 million a year interest that will be spent. It is only that $2 million that will be spent. It is that $2 million that is really a tax on the gross national product of Canada. Along with that $2 million there will be one-tenth of this $50 million in each year, which is $5 million a year. After all the fuss and all the complaints, all that we are providing for the purposes of this act for the next number of years is the sum of about $7 million a year out of a gross national product now running at the rate of $30,000 million a year. I do not think we are overdoing it.


Colin Cameron: I wonder whether the Prime Minister can tell me how "the similar institutions of higher learning" are to be selected. What is the basis of selecting them? What I have in mind is, how far down the scale do we go in paragraph (b) of section 17? It refers to "a university or other similar institution of higher learning". I am just wondering how they are selected, apart from the universities?


Louis Stephen St-Laurent: Well, it
would be institutions giving learning of the same degree of intellectual development as the universities provide. An institution might not be called a university but it might be providing facilities for studies to be undertaken by those who had reached the same degree of intellectual development as is required for university work.


James MacKerras Macdonnell: I was wondering about the same point. It seems to me that the phrase "similar institutions" is wide open. I presume it has been considered and the Prime Minister is not prepared to confine it to degree-giving institutions or the equivalent. One does not want to be technical about it at all, but I am just wondering whether the council is not going to have a first-class problem, and probably a controversial problem, on its hands if it is not further guided than by the phrase "similar institutions".


Louis Stephen St-Laurent: I do not
think at the present time there are any that are not affiliated with a university. Take, for instance, those special schools which exist whether they be for philosophical studies, theological studies or scientific studies. All those who have received grants under similar language used in the estimates over the last five or six years have been institutions which were affiliated with the universities and their

enrolments were counted as part of the enrolment of the university for the purpose of determining the allocation of their portion of the 50 cent per capita that had been voted during the previous years.


James MacKerras Macdonnell: I thank the Prime Minister; he certainly has made the point clearer and more definite in my mind. I draw attention also to subsection (3) of section 17 with regard to the matter of investment. I do that because I shall have occasion when we come to section 19 to speak about powers there. We seem to go from one extreme to the other. If I may anticipate and be allowed to refer to section 19 for the moment, here we have strict restriction to bonds or other securities of or guaranteed by the government of Canada. When we come to section 19 I propose to suggest that the wide-open feature there is not desirable; but I am just wondering why it is necessary to have such a very firm restriction here, and also I am wondering whether I fully understand the phrase "investments out of money standing to the credit of". Is there any particular significance in the word "out" or does it just mean investments of money?


Louis Stephen St-Laurent: Well, I do not know why the draftsman put in the word "out". I think the hon. gentleman and I would have written it "investments of money". The reason for putting it in this form is that it is felt, rightly or wrongly, that bonds of the Canadian government or bonds guaranteed by the Canadian government always have a ready market and that the investment could be realized on very short notice, and because these funds are expected to be expended within a relatively short time and at times for which the maturity cannot be fixed in advance they should always be in the kind of securities that can be realized so that there would be no delay in implementing the decision to make the capital grant to assist a university that was making further capital investments in buildings or equipment.


Mr. Gillis:: Mr. Chairman, I would like to get some further information from the Prime Minister. When we discussed this particular matter at the resolution stage I pointed out and showed by figures that the formula used still retained in paragraph (b) of section 17 the principle that grants to universities were on the basis of student population and their relationship to the provincial population.


Louis Stephen St-Laurent: This makes no reference at all to the enrolment. This is merely to determine what part taken from the $50 million will be set aside for Nova Scotia and that will be proportionate to the
Canada Council
per capita population of Nova Scotia without any reference at all to student' enrolment.


Clarence Gillis: I just want to get this clear in my mind. At the time he introduced the resolution the Prime Minister said the Canada Council would have the authority and would be sufficiently flexible to evolve a system that would bring equality in these grants. I want to ascertain if that flexibility exists.
Mr. Si. Lauren! (Quebec East): When I said that, I was speaking not about the Canada Council but about the national conference of Canadian universities and that is with respect to the $16 million paid over annually to the national conference of Canadian universities. This is to be governed in its division by two rules: one, the provincial share is to be based on the population of the province; and second, within the province it is to be based upon the student enrolment in each of the institutions within that province. When I said that I expected the question as to whether the present formula was the right kind of formula was one that might be studied by the national conference of Canadian universities where universities are represented by delegates appointed by the universities, I meant we could devise no formula which appeared fairer to us than the one I had indicated, but it did produce a per student grant that was lower in some provinces although in none was it lower than in Nova Scotia. Nevertheless it was much larger in some provinces like Newfoundland, which is just entering the field of higher education.
There were some disputed facts governing that. There were some who claimed that the larger number of enrolments in Nova Scotia institutions was due to the fact that students enter university life there after less preparation than is required in some other provinces. I do not know whether or not that is true but it was asserted. It was also asserted that the larger number of enrolments was due to the fact that they received quite a substantial number from Newfoundland and they received a special subsidy from Newfoundland in respect of this, but I do not know whether or not that is a fact. Nevertheless these things can be threshed out in the national conference of Canadian universities. I believe the university representatives are all fair-minded, dedicated men and women and that if they come to the conclusion our formula works out unfairly because of facts that they will have verified and which we have not verified they can make recommendations. The language of that vote is subject to be changed in the yearly estimates. That is what I was referring to when I made the statement of which the hon. gentleman has reminded me today. There is no question of student enrolment in

Canada Council
this bill. Concerning the $50 million, there will be so much apportioned to Nova Scotia because its total population is a certain percentage of the total population of Canada.


Mr. Leboe:: Mr. Chairman, I was interested in the remarks made by the hon. member for Winnipeg North Centre. It was my impression that the total endowment would be $100 million which would be taken from the national revenue and not $7 million a year because once it is removed from the treasury it is no longer available to the taxpayers for other purposes. There was no comment on that and I wondered about it.


Louis Stephen St-Laurent: I think both hon. gentlemen have stated situations that are correct in fact. The hon. member for Winnipeg North Centre said what would be expended out of the yearly earnings of the Canadian people each year will be $7 million. The hon. member for Cariboo said that what will be taken out of the consolidated revenue fund this year will be $100 million and that $100 million cannot be used for any purpose other than the purpose provided for in this statute. That is also correct.


Stanley Howard Knowles: The $100 million is just being transferred from one bookkeeping entry to another.


[Stage Direction]
Clause agreed to.
On clause 18-Investment committee.
Mr. Hamilton (Noire Dame de Grace):: Mr. Chairman, I should like to direct a question to the Prime Minister. Clause 18 (1) refers to three other persons appointed by the governor in council as members of the investment committee. Am I correct in assuming from the wording of this clause that those persons would be appointed from outside the Canada Council?


Louis Stephen St-Laurent: Yes, Mr. Chairman. The statute provides that the chairman of the Canada Council and one other member appointed by the council will belong to the investment committee and there will be three others. It is intended that they will be persons chosen from outside the council to act with the other two as an advisory body on the selection of the investments to be made.


Mr. Hamilton (Notre Dame de Grace):: Within that framework, I wonder if the Prime Minister would consider a suggested addition to this clause to take care of something which is needed. The Canada Council has the life on the council of each of its members limited to three years. At the end of that time they may be reappointed for another term. We have a provision here for the establishment of an investment committee.
[Mr. St. Laurent (Quebec East) .1
The life on the committee of the three persons appointed by the governor in council is indefinite. It would seem to me conceivable that at some point this could be a source of some embarrassment. The members of the body would grow older as the years went by and perhaps they might be taken sick. Although I hope this would never be the case, it may be that over a period of years there would be some cause to question the continuing judgment of some of the members. It also may be that a person appointed to such a body with a given set of business connections would change his business connections in such a way as to render him less valuable to the investment committee. These are factors which at some point might cause the government to wish to see someone dropped from the investment committee. It is a foreseeable situation. If there is no provision in the act whereby these appointments come up periodically for review it puts the government in the embarrassing position of having to approach someone and suggest they retire.
The amendment which I have in mind would not obligate the government to change the nature of the investment committee at any given period of time because it stipulates that the members may be reappointed. This would give the government complete freedom to continue its membership on the same basis and with the same personnel if so desired. On the other hand the amendment I intend to propose establishes the periodic review of the personnel of this committee and it would allow for any necessary changes to be made with a minimum of embarrassment.
Having said that Mr. Chairman, I would therefore move to amend clause 18 by adding after subclause 3 two subclauses as follow:
To amend section 18 by adding after subsection (3) :
"(4) Each of the members of the investment committee appointed by the governor in council under the provisions of section 18	(1) of this
act shall be appointed for a term of three years except that of those first appointed one shall be appointed for a term of two years, one shall be appointed for a term of three years, and one shall be appointed for a term of four years.	,
(5) A person appointed under the provisions of section 18 (4) of this act shall be eligible for reappointment."
Before I resume my seat I should like to point out that I have tried in proposing this amendment to follow the same terminology used in connection with the Canada Council itself at the beginning of the bill, that is to have a rotating committee on which one member would come up each year for reappointment. The committee would remain the same for the first two years which would give a measure of continuity in the beginning, but the term of any one member once



IS, 1957

[Stage Direction]
the committee was in operation would not exceed three years before he became subject to review as a continuing member of the committee.
Louis Stephen St-Laurent: Mr. Chairman, there can be no serious objection to the requirement of looking at the appointments every three years to see if they are still in order. It must not be forgotten that this is an advisory committee and it would perhaps be something that would make the members of the committee feel a sense of somewhat greater responsibility if they knew that they might be there for quite a long period and have the wisdom or unwisdom of their selections of investments appear while they were still members of the committee. It is quite possible to have an investment look very good for two or three years and then after eight or ten years not look quite so good. That has happened to me in connection with the small investments I have had to make from time to time.
If the committee feels that this is something that would make for sounder administration then there would be no other objection than the one I have formulated because the amendment does provide that the government can re-appoint the gentleman or lady in question if it seems proper to do so. But it does seem to me it would be well to clarify the situation of this advisory committee. I think it was felt that there would be an advisory committee that would not have a permanent membership but which would acquire experience that would be added to the experience which a particular appointee might have, which would all be added to the acquired experience of the committee and thus be of value to the council.
If the hon. gentleman puts his amendment I would ask every hon. member in the committee to vote in the manner that would appear to him to make for the best results for the Canada Council because it seems to me that the desirability or otherwise of the amendment is pretty evenly balanced.


William McLean Hamilton: Mr. Chairman, I think that is a very fair and reasonable approach on the part of the Prime Minister but I do want to say a couple of words because it seems to me that even he might be persuaded to come along with the amendment. Perhaps I should draw to his attention the fact that members of the Canada Council after their second term of appointment are specifically precluded from being re-appointed for a period of twelve months. In drafting this amendment I carefully moved away from that because of my
Canada Council
realization that what the legislation had in mind was a continuing body.
The point that the Prime Minister made, that an investment may not look good after six or eight years, is something that I think gives strong support to this amendment. Let us imagine that they do not look very good at the end of six or eight years. Surely if that has been a consistent pattern on the part of the committee no one would want to continue with that same investment group nor would they want to face the embarrassment, unless they had to, of going to them and saying, "We wish you would resign". I am grateful to the Prime Minister for indicating that this amendment deserves attention and I propose to leave it at that.


James MacKerras Macdonnell: Mr. Chairman, I am going to venture to ask the Prime Minister if perhaps he could not accept this amendment. My colleague has paid him the compliment of keeping close to the plan of appointment set out in clause 4 and has made it clear by the provision for re-appointment that he does not intend standing in the way of the Prime Minister's idea that we need a long period of service here in order to get the best results. In other words, I think my colleague is trying to help rather than to obstruct.


Louis Stephen St-Laurent: I am sure he is, and that is why I am suggesting that all hon. members wherever they may sit should bring their own judgment to bear upon the advisability or otherwise of agreeing to this amendment. I have no firm opinion about it. I know that there could arise situations where it would be convenient to have a termination date, but whether that convenience would outweigh the advantages of making appointments to last during pleasure or not is something about which I have no firm opinion.


Mr. Montgomery:: Will the members of this committee receive a salary or a per diem remuneration? Is it to be a permanent part of the council?


Louis Stephen St-Laurent: Mr. Chairman, there might be an honorarium paid for services rendered. It might well be that one member of the committee would be asked to make a special investigation into a certain number of securities and would receive an honorarium for doing that work without a similar honorarium being paid to other members of the committee.


Stanley Howard Knowles: Like some other members of this committee I am trying to balance the arguments for and against this proposal. If the amendment moved by the hon. member for Notre Dame de Grace does not carry, and if clause 18 in its original form is enacted,

Canada Council
how do these other three members get "unappointed"? Are they appointed tor life?


Louis Stephen St-Laurent: They will get "unappointed" by someone else being appointed in their stead. I am told the question has arisen on several occasions in connection with the civil service. It is not necessary to have a person resign. If someone is appointed to the office he holds, in his stead, that amounts to a demotion, and the new appointee takes the place of the old.


Mr. Low:: That is what they call "bumping".


Louis Stephen St-Laurent: It may be
called "bumping", but it is the effect of placing a new appointee in the position that is occupied by the one who becomes his predecessor, and there are occasions when it is a convenience in the civil service to have statutory provisions that require retirement.


Stanley Howard Knowles: Before the Prime Minister made his last remarks, Mr. Chairman, I was leaning slightly against the amendment proposed by the hon. member for Notre Dame de Grace, but now I am leaning slightly the other way.


An hon. Member:: Make up your mind.


Stanley Howard Knowles: What bothers me about the amendment moved by the hon. member for Notre Dame de Grace is that it seems to me you could have a situation where one member of the committee would be re-appointed at the end of his term while another would not; and you would have a feeling of discrimination. But now the Prime Minister tells us that if such an amendment is not adopted the members will stay on the committee until they are replaced by someone else being appointed-


Louis Stephen St-Laurent: Or until they resign, or ask to be relieved.


Stanley Howard Knowles: But the Prime Minister also said that even if there were no resignations a person might be replaced by someone else being appointed in his stead.


Louis Stephen St-Laurent: Yes.


Stanley Howard Knowles: It seems to me that the arrangement explained by the Prime Minister leaves something of a vacuum-that it would leave us without any regular way of handling this situation, and I think I am leaning a little more toward the amendment proposed by the hon. member for Notre Dame de Grace.


William Earl Rowe: It seems to me that the Prime Minister has been very fair and reasonable in his suggestions, but I think the motion of the hon. member for Notre Dame de Grace has quite a deal of merit in it, and I cannot

help but think it would be less embarrassing, and probably better for the general efficiency of the scheme, if some term of years could be mentioned. If the members of the committee were all satisfactory, they could naturally be re-appointed. The Prime Minister has mentioned that new members would be appointed should a vacancy arise through a resignation or, naturally, through death, but it is quite conceivable that no matter how good the appointees are it might be decided after a few years of trial and error that someone else could fill a certain place better, and I would hope, as the hon. member for Greenwood has said, that the Prime Minister might accept the amendment, or that the house should accept it at least, because the present arrangement does appear to me to contain possibilities of embarrassment. As I said, the members might prove to be not as efficient as was anticipated, and I think the setting of the term of years would be an improvement.


James MacKerras Macdonnell: I apologize for speaking again, but I have had a somewhat similar experience to that of the hon. member for Winnipeg North Centre. I had already intended to vote for my colleague's amendment, but as I thought it over I began to find what I believe is a better argument. Also, it is a very interesting possibility that with a free vote one might actually change some members' votes by one's words.
This is my point. It seems to me, if you look at it in a practical way, that when an appointment is made without a time limit it is virtually an appointment for life. It is almost offensive if you go to a man and ask him to retire, that is, if he is able to walk unaided, and looks reasonably intelligent. This does not seem to me to be a good thing, especially in view of the wide open investment powers contained under the act-powers which I shall, incidentally, be asking the committee to consider and revise at a later stage. As the position stands now we are appointing three men to invest a large amount of money, and they will have wide open powers; they can invest in anything.


Louis Stephen St-Laurent: They can advise the council. The council is not obliged to follow the advice given, but it will have the benefit of that advice, and, as the hon. gentleman says, that can cover anything in the field of investment.


James MacKerras Macdonnell: Well, I take it you will have on this investment committee some presumably expert investors, if there are any, and on the other hand you will have on the council gentlemen who are not supposed to

be good investors, though I have seen university professors who can invest better than stockbrokers. But in view of that situation it seems to me there is a great deal to be said for not having these men appointed without a time limit being set. Suppose you appoint two or three men, and they make some mistakes, and, as the Prime Minister has indicated, after a few years the investments do not look so good? What would be the position then? I suggest there is a good deal of merit in having these positions up for review at the end of a definite time, at which point changes could be made without offence. If these men are appointed without any time limit it would be almost an affront, while they still enjoyed full vigour and capacity, to ask any of them to retire.
Amendment (Mr. Hamilton, Notre Dame de Grace) negatived: Yeas, 22; nays, 41.


William Alfred Robinson: I declare the amendment lost.


Frederick Samuel Zaplitny: I should like to say one more thing in connection with this section. Subsection (3) provides for payment or remuneration to members of the investment committee, and states:
The members of the investment committee appointed by the governor in council may be paid for their services such remuneration and expenses as are fixed by the governor in council.
It does not state by whom they are to be paid. This, again, may be covered by the Interpretation Act, but I think we might know whether this remuneration is to be paid by the Canada Council or by the treasury.


Louis Stephen St-Laurent: If the hon. gentleman will look back to section 16 he will see that any expenditure made for any of the purposes of this act, except section 9, may be paid out of the income of the endowment fund.


[Stage Direction]
Clause agreed to.
On clause 19-Property.
James MacKerras Macdonnell: This clause provides that the council may hold and dispose of real and personal property and, subject to any other provision of the act and on the advice of the investment committee, may invest in any manner it sees fit any money standing to the credit of the endowment fund or the university capital grants fund, and so on. I was surprised-I will not use a stronger word- to see these wide-open powers of investment given. Two clauses later the council is described as a charitable organization. I think the Prime Minister will agree with me that in the case of charitable organizations there is nearly always an investment restriction. I do not know whether he will agree
Canada Council
with the statement I make, but I have known of a fair number of charitable organizations and I have not known of one where there were wide-open powers of investment as there are here.
I think we want to be quite clear in our minds as to what this means. This means that if the investment committee advises and the council approves there is no reason why this huge amount of money could not all be invested in oil stocks, let us say.


Louis Stephen St-Laurent: Pardon?


James MacKerras Macdonnell: I say there is no reason why all this money could not be invested in oil stocks. The Prime Minister does not disagree. Unless there is some reason for it, that I have not been able to imagine, which could conceivably change the situation, it seems to me that this is an extraordinary proposition. I believe one leading newspaper welcomed this provision because they said it meant the council would be able to grow up with the country and share in the benefits of the increased value of what are called growth stocks.
A few minutes ago I thought the Prime Minister characterized the situation very well. He said that in connection with stock investments you sometimes get into things which look very good and then you find they are not so good. But my point is, what is the reason for departing from what I think the Prime Minister will agree is almost a universal rule viz that when you have charitable or trust funds there shall be some restriction? The restriction I am going to suggest is that this council should have the same investment powers as insurance companies. The Prime Minister will know all about that.
That does not mean you have to invest everything in Dominion of Canada bonds, as is provided earlier for reasons which the Prime Minister made clear, but it does mean that you are restricted. You can invest 15 per cent, I think it is, in common stocks; but they must be common stocks that have a good dividend record, and so on. I need not go into the details. First of all, having regard to the fact that this is a charitable trust, does the Prime Minister agree that this is an unusual provision? Second, will he explain to us, if he agrees that it is unusual, why this provision is being put in here?


Mr. Winch:: May I also add my words to those of the member for Greenwood. I was going to raise exactly the same point. I am a director of an educational trust fund in the province of British Columbia, and we are very much governed by the laws of the province and the dominion as to how we can invest our funds. The government is very

Canada Council
careful to check not less than once a year on how our funds are being invested and administered. I agree almost completely with the restriction imposed by legislation upon those in charge of such funds that they can only make certain investments.
As I understand the bill, this is a trust fund and the moneys are either coming from the taxpayers of Canada through the government of Canada or from endowments made under a certain clause of the bill. Because it is to be considered a council for charitable purposes under the Income Tax Act, I fail completely to see how it differs in any way, in the administration of the funds of an absolute trust, from any other organization administering trust funds and completely governed by acts of parliament as to how they can invest their money.
As an administrator of a large trust fund in British Columbia I find myself wondering why in clause 19 authority is given to the council, on the advice of the investment committee, to invest its funds in any way it sees fit. For as many years as I can remember the government of Canada has insisted that trust moneys can only be invested in a certain manner. Now you say that a very important foundation which will administer only trust funds can invest as it sees fit. There must be some reason for it. I should certainly like to know exactly what the reason is.


Louis Stephen St-Laurent: I think
there is a misconception in the minds of the two hon. gentlemen who have just spoken. In Canada property and civil rights are within the jurisdiction of provincial legislatures. The only institutions with respect to which there is federal legislation as to investment are the banks, which are under the exclusive jurisdiction of parliament, the trust companies that are incorporated by federal statute, and the insurance companies that are registered under federal statute.
The provisions that exist for trusts that do not come within these three categories are provisions which exist under provincial legislation, and which are different in the several provinces. I do not know of any general law in the province of Quebec, with the exception of the civil code which deals with substitutions or with inheritances that have to pass through more than one series of beneficiaries, with respect to the investment of trust funds. I was for a time a member of the syndicat financier of Laval University, and I do not know that there was any legislative provision that required them to make their investments in any special form. I would not want to be too positive about that, but at the time I felt we were the ones who had to take the responsibility for determining the kind of investments that could be made out of the proceeds

of campaigns that had been quite successful in coming to the aid of that university.
I know that in several provinces there are statutory provisions of general application which deal with trust funds. There was no special reason in this case other than the feeling that the Canada Council is very apt to receive bequests of certain securities. I know of trust funds, for instance, that were set up for the Canadian Bar Association not out of cash turned over to the association but in specific securities turned over by the benefactors of the association.


James MacKerras Macdonnell: Would the Prime Minister permit a question?


Louis Stephen St-Laurent: Yes.


James MacKerras Macdonnell: Would the Prime Minister agree that in such cases any funds that are given can be given with a special provision that they are to be invested in a certain way? Does he think that affects the provisions governing this fund which is being put up by the public?


Louis Stephen St-Laurent: Well, I would not want to answer the hon. gentleman's question offhand without looking at the provisions in the bill with respect to gifts or bequests made to the Canada Council. I would imagine that even if provision was going to be made about the general investments of the Canada Council, this house would wish that to be expressed in such a way that it would not prevent the council from accepting a bequest that was made with the condition that it was to be invested in such and such a security.
I would have to read the sections of the bill to see whether or not that is already contained in the bill. Of course it was not required in view of the general terms of section 19, but if the general terms of section 19 were to be varied I would want to look at the other sections to see if there were other provisions that would require consequential amendment so as not to create obstacles to the acceptance of something that had a condition attached requiring it to be invested in such and such a way. I can assure hon. gentlemen that was the only reason, and that there was no thought or desire of putting this Canada Council in a position where it might lose any part of its endowment fund.


James MacKerras Macdonnell: There never is.


Louis Stephen St-Laurent: I did feel that they might, probably under the terms of the Insurance Act, make some small portion of their investments in equities that were subject to enhancement in value because our country is growing and there are certain equity securities, or there probably could be

found certain equity securities, that would be apt to increase substantially in value. I do not think anyone would want to put very many eggs in the same basket. I think the persons responsible for the investments would want to have a pretty wide distribution of the investments with an eye both to a fair return and, for a certain portion of the proceeds, some capital increment.
It was felt that with this kind of an investment committee the investment would be apt to be spread out in that fashion. Of course economic conditions can be cyclical, but hon. gentlemen know that several of these investment organizations that have been set up in t'he last quarter of a century and have diversified their investments pretty broadly have shown a fair annual return and some of them a very substantial capital increment resulting from the broad nature of the securities in which they have made these investments. It was felt that with a properly constituted council and advisory board, they could be trusted to make wise investments.
This would not necessarily mean that they would appear wise a quarter of a century hence. There is always some uncertainty in these economic problems. However, there would not be much greater security in fixing as the limitation that which is imposed upon insurance companies, because we very frequently see on prospectuses that are not apt to be too impressive the statement that these securities qualify under the insurance act. The hon. gentleman must have noticed that line in advertisements in our newspapers concerning new issues of securities.
It may be there would be some feeling that they were going to have to take less responsibility if there were this same provision that exists in the insurance act. Again that is a matter upon which I would not feel qualified to express a firm opinion.


Harold Edward Winch: I appreciate very much the remarks that the Prime Minister has made. Certainly I would hope I have not given any indication that I object to any grant or endowment in stocks to the foundation. However, this is strictly on the question of investment. If my memory is correct almost all, and most certainly the majority, of the provinces have laid down regulations for the protection of trust funds, stating the manner in which investments may be made.
I know, so far as British Columbia is concerned, it is in first mortgage and government bonds; we are held down to that. By the way, if I may say this to the Prime Minister, that has not paid off very well, because the organization with which I am concerned has invested surplus funds in federal government bonds. Just recently we
Canada Council
needed some money but could not get it unless we took a loss of $8 per $100 on those government bonds.
If in the administration of trust funds it is set out by law that we have to stand a loss of 8 per cent on our capital investment in government bonds, in my opinion it is even more important as to how the funds of the council are going to be protected. I cannot understand why, if the majority of the provinces insist by legislation that investments in trust funds can only be done in a way which in the opinion of those who brought in the law is the best protection for the investment of those trust funds, the federal government gives wide open powers of investment under clause 19 of this bill. I believe if the provinces found legislation was required for the protection of trust funds, the federal government, in establishing a trust foundation, should give consideration to the same factors, especially in view of the fact that we lose money by investing in these government bonds.
May I ask at the same time, since this is a trust foundation administering a trust fund, and its headquarters are to be established in Ottawa, whether the investment of the trust fund will come under the legislation of Ontario?


Louis Stephen St-Laurent: I think it would be governed by the terms of this statute.


William Earl Rowe: It appears to me that this is another clause that might be amended to some advantage. As the hon. member for Greenwood has pointed out, you are dealing in this case not with money contributed by individuals but with money contributed by the taxpayers of Canada. I cannot help but think there should be some restriction on how this money might be invested. With it wide open and with five men named, none of whom we know, except we have heard rumours as to one and have expectations as to another, with five members practically named for life, it is almost like putting them in the Senate.


Lewis Elston Cardiff: It is the same.


William Earl Rowe: They may be fitted for the task and they may not. The 19 men administering this fund might be the greatest gamblers with the taxpayers' money we have ever had. They might buy real estate and make a lot of money; they might buy mining stock and double their money; they might buy oil wells and they might invest in dry wells. I can conceive of a lot of things they might invest in. They might invest in manufacturing industries.


Mr. Weir:: Race horses.

Canada Council


William Earl Rowe: Yes; they might even gamble on the chances of the Liberal party in the next election.


Robert Henry Winters: That is no gamble.


William Earl Rowe: It is even more risky than a horse race.


Robert Henry Winters: A sure bet.


William Earl Rowe: There are all those wide open fields. I know none of us doubt the good intentions of the Prime Minister in this issue, and we do not doubt the good intentions of his government in establishing this council. After listening to what the Prime Minister had to say a few minutes ago I could not help but think one could not doubt his good intentions, but the longer he talked the wider became the field of possible errors.
I would hope that we could have an investment committee consisting of men of as wide experience in business and investment as the Prime Minister himself. In fact I think it would be well for him to give the five life appointees a little talk like the one he gave us today, and point out to them the dangers. There may be some who would be glad to have the appointment. There may be some on that council who were never very successful in their own investments. There may be some on the council who have already lost their own money and probably someone else's money, and may still be good characters. It is left wide open for them, you might say, without any disrespect to them, to gamble with someone else's money in whatever way they see fit.
Now, this is a lot of money. It is an important function for which this council is being established. It does appear to me that the Prime Minister, with the wide experience he has shown in this matter, should put some form of restriction on the investments. As the hon. member for Vancouver-Quadra said, it need not be investments with a trust company; but I feel it is unfair to the taxpayers of Canada to leave a wide open end, to name a committee for life and tell them to take the money and invest it as they like, in anything they see fit, in anything they think is going to be good.
As the Prime Minister said today, those of us who have tried to improve our own lot have made mistakes, at least some of us have. Perhaps some are too proud to admit it, but most people have made mistakes. I have heard of some who made mistakes and have regretted their investments. As the Prime Minister said, in 10 years' time the investments do not look the same; sometimes they do not look the same in five years. In fact

I have made some investments which did not. look the same in five days. They can switch pretty fast.
The hon. member for Portage-Neepawa said, "You may invest in a gamble on an even chance". That is ridiculous. I do not mean that. I am quite satisfied that the investment committee to be selected will consist of men who will, as the Prime Minister said, have good intentions; that is, the Prime Minister is hoping they will have good intentions. Well, as the Prime Minister knows, good intentions is the pathway of failure, or the pathway of failure is strewn with good intentions.
I do not know of anyone in this house- there may be some-who might not be in error in the next five years in investments in this country. It seems to me there should be some chart, something along the same line as a trust company's guide or an insurance company's guide. As has been mentioned, investments in government bonds are not always successful. The hon. member mentioned that he lost eight points on them. The Prime Minister quite neatly replied that probably he paid too much for them; maybe he did.
Seriously, it does appear to me that with a fund such as this you are not playing with your own money; you are playing with the public's money. It seems to me that you are a trustee or executor of it. If there are those of us who wish to gamble with our own money and, as they say on the street corner, take a flyer on something by investing a few thousand dollars or a few hundred dollars, as the case may be, that is all right. We take our chance. If we lose it we sometimes do not even tell our wives about it; but if we win we are lucky, and if we win a lot we probably hesitate to tell somebody who has been less fortunate for fear he may think we are bragging. But here we are dealing with trust funds. If any of us have been executors, as most of us have been, we will realize that. This committee more or less takes the form of an executor.
If I named two of my Liberal colleagues as my executor, Mr. Chairman, I would not expect them to start gambling with the little bit of money a farmer like myself might have. They might rob my whole family with good intentions; they might want to make my estate larger.


Lewis Elston Cardiff: They might do it on purpose.


William Earl Rowe: No, I do not think they would do it on purpose. This is an executorship; therefore to my mind it should not be left wide open. This is not a matter of political differences; it is a matter of trying to set this council up soundly and in a non-partisan

way. In fairness and in all seriousness I urge the Prime Minister to give consideration to changing this clause so the investments would be in a certain type of security at a reasonable rate of interest with a minimum of risk of loss and a maximum of security for the fund.
The Canadian taxpayers do not expect this committee to double their money in some wildcat scheme or some investment, and they do not expect them, in an effort to enhance the fund, to risk it too much. It seems to me that the clause could be improved, and in all sincerity I urge the Prime Minister to give some thought to it.
We do not doubt the Prime Minister's good intentions nor do we doubt the good intentions of his appointees, but we are not infallible. For their benefit and for the security of the fund I would like to see reasonable safeguards fixed, as they are fixed for the insurance companies. The Prime Minister neatly said that he had noticed some of these balance sheets. It is true that sometimes we see what insurance companies are permitted to invest in. I think he is quite right when he says that to his mind some of them did not look to be too good, and probably they were not.


James MacKerras Macdonnell: They at least must have a history.


William Earl Rowe: That is true but, as he knows, some of the executors of trust companies have invested some of their own private family funds in investments they should not have made and have made some money in them, but there are times when it could be a very serious matter for an executor to take money and try to make ten to one on it and probably lose the whole thing.
We are not going to lose all this, but it appears to me that it would be safeguarded considerably if this suggestion was followed. I urge the Prime Minister to give some thought to applying some safeguards.


James MacKerras Macdonnell: Mr. Chairman, I am somewhat encouraged, whether with or without grounds, to believe that the Prime Minister's mind is not closed on this subject; therefore I venture to add one or two points. In the first place we are morally, although not legally of course, the trustees of public money; therefore I should have thought that prima facie, we would deal as other trustees deal. We have the wisdom of generations or even centuries embodied in legislation. This is not primarily to guard against fraud but to guard against human frailty and human limitations.
When he was answering my question I rather expected the Prime Minister would
Canada Council
say there was some reason for the strange form-strange as I see it-of this resolution, and some people are led to wonder if there is an investment situation here by reason of the two large estates. The Prime Minister smiles at that.


Louis Stephen St-Laurent: The succession duties were paid in cash and went into the consolidated revenue fund with no strings whatever attached, and there could not be any strings attached.


William Earl Rowe: They could buy back Algoma Steel, if they wished.


Louis Stephen St-Laurent: Oh, yes, they could.


William Earl Rowe: And perhaps they should.


Louis Stephen St-Laurent: Not probably; I do not know how long it is since they commenced to pay dividends on those shares. Common stocks can be acquired but only if dividends have been paid for a period of seven years, I think it is.


William Earl Rowe: I think it is three years.


James MacKerras Macdonnell: Canada Council
The powers of insurance companies are much wider than those contained in clause 17, subclause 3. The Prime Minister pointed out to us the reason for having strict limitations to govern the securities in the Universities Fund. Now, if I were proposing that restriction I think the Prime Minister might properly say to me, "No, the situation here is not the same as with the universities fund, and therefore we need a wider range". That, I submit, is exactly what is provided by the insurance company investment powers. They do have a wider range. For example, they may invest up to 15 per cent in common stocks, but there is a limitation on that. They can invest only where the companies have paid dividends for a certain number of years. I have forgotten the stipulated length of time, but I think it is a period of seven years.
I hope very much that the Prime Minister may see fit to make some concession here, and that we will not be asked as serious men dealing with large amounts of public money to hand it over to people who-in good faith no doubt, and exercising their best discretion no doubt-will be able to invest it all in one type of security which for reasons that none of us can foresee now might turn out to be a sour investment.
A friend of mine who has had a great deal to do with investments once pointed out to me that if you look back over investments you would find again and again that the blue chips of one investing generation turned out a few years later to be anything but what they looked like when they were invested in. Why do we need to take that chance? I could perhaps understand it if a valid reason had been presented, but to my way of thinking the Prime Minister has given no reason for abandoning tried and tested procedures which at the same time recognize the desirability of having a good deal of the freedom and flexibility which the Prime Minister desires. I submit that the insurance act which he has before him provides those very things.


Harold Edward Winch: Mr. Chairman, I am sorry to have to rise again, but I would like to add an additional word or two and through you to ask the Prime Minister a question. I find I am more than ever discouraged about the words, "in any manner it sees fit". As other hon. members have said and as I wish to emphasize, there is no one who questions the sincerity, integrity and honesty of the Prime Minister in moving clause 19, nor does anyone question the sincerity, integrity and honesty of any investment board that might be set up. However, as has also been pointed out, we are the trustees at least indirectly of trust funds.
[Mr. Macdonnell.l
I would like to ask the Prime Minister through you, Mr. Chairman, if he would not consider a change in the wording of clause 19 to remove the words, "may invest in any manner it sees fit" and substitute wording that would make it clear that they shall not go beyond the insurance investment powers or the authority of trust funds in the province of Ontario. I think there are broad powers in the insurance investment fund. Is it not possible for you to consider just a slight rewording which I am certain the investment board would be happy to be bound by in their sincerity, honesty and integrity? Is that possible, sir?


Louis Stephen St-Laurent: It would be very easy to find language that would accomplish what the hon. gentleman has in mind if it were felt that this would be a wise thing to do. The investments specified in the Insurance Act are merely, first of all, evidences of indebtedness, bonds or mortgages or something for a specific amount that was, let us say, $100 in 1925 and which is still $100 today with dollars that do not have the same real value they had in 1925; and in addition to the investments in securities or evidences of indebtedness stated in currency terms there is the possibility of investing as much as 15 per cent-


Mrs. Fairclough:: In common shares.


Louis Stephen St-Laurent: -in common shares on which dividends have been paid regularly for a period of seven years; and that means the things which are-to use the expression used a moment ago by the hon. member for Greenwood-the "blue chips" of the present era as far as common stocks are concerned.
These common stocks usually, if there are no other considerations affecting their value, in their increased prices on the market reflect the diminishing purchasing value of the currency. Shares that might have had, all other considerations being the same, a value of $100 in 1925 would probably have a value of $200 in the dollars of today. That is certainly a consideration. If it is felt it is better to tie this down to the number of currency units that exist today it would be easy to find the language to do it.
On the other hand, if it is felt that there can be such investments as would be more sensitive to the purchasing value of the unit of currency over a long period of time-this endowment that is being set up is for a very long period of time-we felt that it would be prudent to allow men of the calibre we expect to have for both the council and the investment committee to exercise their judgment based upon their own experience. When one says they are going to gamble with public

money he is just saying what might be legally possible but would not in fact be conceivable of those who would be entrusted with this responsibility.
We felt there was not apt to be very great advantage in restricting the investments to the kind set out in the insurance act.


William Earl Rowe: Why is the investment of money standing to the credit of the university capital grants fund to be confined to bonds?


Louis Stephen St-Laurent: Perhaps the hon. gentleman was not here when I answered that question. The reason is that this is for only a short term, and government bonds are usually redeemable or convertible at any time. This amount may have to be realized in portions at times that cannot be fixed as maturities. It was for that reason that we thought we should have something that could be rapidly converted into cash; therefore this provision was inserted with respect to that part of the fund being placed at the disposal of the Canada Council.
As to the other point, the hon. gentleman and I have lived for a good many years and it is only in the last two or three decades that we have been impressed by the fact that currencies do change in value. For a long time currency in the popular mind was regarded as something quite stable.


James MacKerras Macdonnell: The Minister of Finance is going to restore it.


Louis Stephen St-Laurent: Ministers of finance have succeeded ministers of finance ever since 1867. For a period when there was no rapid development, no rapid change in the world, the pound sterling and other units of currency were regarded as the kind of things against which you could measure mutable things. They were immutable. The experience of the last quarter century or more has shown that that concept can no longer prevail, and that the best kind of investments are not always those that can be paid off in a specified number of units of currency. That has been the unfortunate experience of the last few decades.
To what extent an investment committee or a body like the Canada Council can guard a certain portion of its investment against situations of that kind only the future will really tell. I would not feel any safer about the future of this endowment if it were declared that it could be placed only in securities that are enumerated in the insurance act.


James MacKerras Macdonnell: Mr. Chairman, I find myself in a rather devastated position because in the last few minutes I feel the Prime Minister has been making an argument in favour of the acceptance of continuous inflation. I do not know whether he read the article in the
Canada Council
Montreal Gazette of this morning, but I think it is one which everybody should read because it constitutes the argument of an authority who apparently thinks inflation is a nice thing, and therefore we should go along pleasantly with it. I think the Gazette gave a devastating answer.
The Prime Minister gave as an illustration a common stock which could have been bought for $100 in 1925 and which may be worth $200 today, but he forgot to point out that it might also be worth nothing at all today. Another thing I think the Prime Minister overlooked in connection with the amount of flexibility under the insurance act is that that act provides that in addition to common stocks being permissible, preferred stocks are also.
I do not think I need take more time of the committee. I am not convinced by the Prime Minister, and perhaps I had better move the amendment which I have prepared. I am glad there are at least some others in the committee who share my view that to give permission to invest in any manner the committee sees fit is just something that1 I do not think this committee should pass. Therefore I move as an amendment to section 19 (1) of the bill:
Delete the words "in any manner it see fit" in line 5 and insert after the word "otherwise" in line 8 the following:
"in such investments as are permitted for investment by insurance companies as set out in sections 63-66, both inclusive, of the Revised Statutes of Canada 1952, chapter 31, an act respecting Canadian and British insurance companies, or as amended from time to time."
The section would then read:
The council may, for the purposes of this act, acquire, hold, manage and dispose of real and personal property, and, subject to any other provision of this act relating thereto and on the advice of the investment committee, may invest any money standing to the credit of the endowment fund or the university capital grants fund or any money received by the council by gift, bequest or otherwise, in such investments as are permitted for investment by insurance companies as set out in sections 63-66 (both inclusive) of the Revised Statutes of Canada 1952, chapter 31, an act respecting Canadian and British insurance companies or as amended from time to time, and may hold, manage and dispose of any such investment.
In other words, Mr. Chairman, what I am moving is that the powers be restricted to the powers under the insurance act which, I argue, give them all the latitude which should properly be given.


Ellen Louks Fairclough: Mr. Chairman, I have been very much interested in the attitude of the Prime Minister toward these investments, and if I understood him correctly he said that the prices of common stocks more or less reflect the true value of the dollar. I am afraid I do not agree.

Canada Council


Louis Stephen St-Laurent: The hon. lady leaves out the qualification I made. I said, "everything else being equal."


Ellen Louks Fairclough: I cannot understand what the Prime Minister means by saying, "everything else being equal", because there are so many element's which enter into the market value of stocks. Not only the present position but earnings must be considered, and earnings are sometimes a reflection of government policy. It seems to me that it would be preferable to take some sort of basis, such as the requirements for insurance company investments, rather than leave the gate wide open to any type of investment whatever. I think the Prime Minister has a very definite point' to support his opinion that the investment of this particular fund should be more flexible than others, but I am not convinced, Mr. Chairman, that there is any advantage in leaving the whole question to the opinions of a few persons when there could be a safeguard which is not too restrictive in nature, and of which we have a very good example in our own legislation.
Amendment (Mr. Macdonnell) negatived: Yeas, 11; nays, 57.


The Deputy Chairman:: I declare the amendment lost.


William McLean Hamilton: Mr. Chairman, there is one further point which arises on this clause. It seems to me there is a possibility of contradiction in two phrases of the clause which might eventually lead to misunderstanding. As the Prime Minister has been so good about neutralizing himself in the previous debate, perhaps he may agree with this as well. Section 19 (1) uses these words:
The council-on the advice of the investment committee, may invest in any manner it sees fit any money standing to the credit of the endowment fund or the university capital grants fund-
Now it would be possible and, I think, quite logical to read "on the advice of" as the equivalent of "subject to the advice of", and if we accept that interpretation we have a contradiction. While we read that the council shall act "subject to the advice of the investment committee", we also state they may invest in any manner that they see fit. This last is definite because we have this afternoon decided that they may invest in any manner they see fit.
I am wondering whether it would not be advisable to make it quite clear in this section that the investment committee is purely an advisory body, and is not one which has any power of control over the investments of the council. That is made clear under section 18, subsection 2, where it says:

The investment committee shall aid and advise the council in making, managing and disposing of investments under this act.
But when we reach the next section, we find this position, and I think the best illustration I can use to show the force of the words is one which will be familiar to every hon. member of this house. The Governor General acts on the advice of his ministers, and certainly that terminology is taken to mean, and has meant for a long time, that he acts subject to the advice of his ministers.
If we turn to the definition in the dictionary-I have just one here, and it is the Concise Oxford-we find the word "on" defined as meaning "supported by". There are further phrases given-"attached to", "covering" and so on-which are not pertinent. But essentially it does mean in that context "subject to", and I would recommend, if it is agreeable to the Prime Minister -I am not going to move an amendment at this point-that we should consider the advisability of dropping the phrase "on the advice of the investment committee" and replacing it by some phrase such as "subject to the provisions of section 18, subsection 2", which would make the position quite clear.


Louis Stephen St-Laurent: No, Mr. Chairman, it was intended to make this advisory committee a useful body and not just an ornament that could be consulted or not as the council chose. The council is not obliged to make an investment recommended by the committee, but it would not have the right to make investments other than among those recommended by the committee. It is not to have a free choice to go ahead and make any kind of investment it sees fit to make unless it is an investment that is within the advice given to it by the investment committee, and that is the intention.


William McLean Hamilton: That clarifies the position in the mind of the Prime Minister, but it leaves me still with the feeling that there is this contradiction. The Prime Minister has said that if the council makes an investment the investment must first have been recommended to it by the investment committee. It might recommend a slate of investments from which the council could choose. Under this circumstance we have the reverse contradiction, because we have the council investing "in any manner it sees fit."


Louis Stephen St-Laurent: Subject to the provisions of the act. For example, one of the provisions of the act is that with respect to the capital grants fund, moneys can be invested only in government of

Canada securities or securities guaranteed by the government of Canada. So the terms of section 19, which create the power in the corporate body to do certain things, refer to a power which is subject to the other provisions of the act.
With respect to half the amount that is provided by the legislation, there is provision that the investment thereof has to be made in securities of the government of Canada or securities guaranteed by the government of Canada. It is only within that class that investment can be made. As to the other investments, they can be made only among the types of investment about which they have had the advice of the investment committee.


William McLean Hamilton: Will the Prime Minister not agree with me that when the clause says, "may invest in any manner it sees fit"-


Louis Stephen St-Laurent: If there is nothing else that is what it means, but with these qualifications that are in the clause it does not have the broad meaning it would otherwise have.


William McLean Hamilton: Does the Prime Minister not see any possibility of an eventual conflict in reasoning in this clause, in which we have the Canada Council specifically given authority to invest in any manner it sees fit, but on the advice of the investment committee? It seems to me that the one phrase gives the council all-embracing power and the second qualifies it, without specifically striking a balance. I am wondering whether we could not find a slight change in that phrase so there would be no misunderstanding in the future.


Louis Stephen St-Laurent: I prefer to accept the language of the draftsman. The attention of the draftsman was called to the fact that the $50 million could be invested only in Dominion of Canada bonds or bonds guaranteed by the Dominion of Canada. His attention was also called to the fact that here was a clause that seemed to be wide open, and his answer was that he had considered that and that he had drawn the clause in that way, making it subject to any other provision of the act and on the advice of the investment committee, and therefore that the broad terms were limited first of all by other provisions of the act and, second, by the advice of the investment committee.


[Stage Direction]
Clause agreed to.
Clauses 20 to 22 inclusive agreed to.
Municipal Grants Act
On clause 23-Report to parliament.
James MacKerras Macdonnell: When the bill was at an earlier stage the hon. member for Vancouver-Quadra raised the question of making sure there would be an opportunity for parliament to review the report referred to in clause 23. I therefore move:
That the following words be added to clause 23 of the bill:
"and provision shall be made for a review thereof by parliament."


Louis Stephen St-Laurent: I have already indicated a couple of times that I did not think it was necessary and that there would be ample opportunity without it, but that I could see no harm done by having such words included. The hon. member for Vancouver-Quadra seemed to have a distinct preference that they should be there and that we should not simply rely on the fact that there would be opportunities otherwise for the report, the Auditor General's report and the statement of accounts to be reviewed by parliament. I have no objection to the amendment.


James MacKerras Macdonnell: I am grateful to the Prime Minister. I am only sorry I was not as successful in my own right as I was as a proxy.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.


James MacKerras Macdonnell: By leave.


Louis Stephen St-Laurent: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



MUNICIPAL GRANTS ACT


Walter Edward Harris: that the house go into committee to consider the following resolution:
That it is expedient to bring in a measure to extend the benefits of the Municipal Grants Act and to provide for certain changes in connection with the administration of the act.
Motion agreed to and the house went into committee, Mr. Applewhaite in the chair.


Walter Edward Harris: Mr. Chairman, it will be remembered that municipal grants were first paid on federal property from January 1, 1950, under the municipal grants regulations,

Municipal Grants Act
and that these were made statutory the following year. In their original form the annual grants were paid to the extent of 75 per cent of the tax applicable on the value of federal property in excess of 4 per cent of the aggregate of taxable and federal property in the municipality. The figure used was derived from a survey of property ownership in municipalities in 1947.
This original formula was applied in the determination of grants in lieu of taxes for five years and, while of interest to but a limited number of municipalities, undoubtedly was of considerable assistance where there was a concentration of federal property. By the end of 1954, 48 municipalities were in receipt of annual grants totalling about $3 million.
Hon. members will recall that amendments were made to the Municipal Grants Act in 1955, broadening substantially the scope of the grants. In the light of experience gained in five years of operation it was decided to extend the legislation by reducing the minimum percentage or floor from 4 per cent to 2 per cent and to provide that municipalities would receive full payments on eligible property in excess of this minimum. These amendments resulted in larger annual payments to municipalities already qualifying for grants and in an increase in the number of municipalities eligible to receive them. Municipalities receiving grants under the general formula, known as section 5 grants, increased in number from 48 to the present 150. Total payments in the current fiscal year are estimated at $9J million.
As I have indicated on previous occasions, the government has kept under constant study the whole problem of the taxation of crown properties. There is no doubt in my mind that while the original grant formula was sound in principle, conditions have been constantly changing and have justified a more comprehensive approach. Much of the argument advanced for the extension of the program has been on the ground of municipal fiscal need, but this is a provincial matter and not the purpose of a bill of this nature. What we are concerned with here is the effect of the location of federal property within a municipality upon its capacity to perform its proper functions.
It is most difficult to draw any precise line to distinguish those properties which are performing a purely local function from those that have a wider use. I wonder, Mr. Chairman, whether I might have unanimous consent to complete the statement so hon. members will have it on the record, rather than call it five o'clock?


Edward Turney Applewhaite: If it is a brief statement I will not see the clock.


Walter Edward Harris: Rather than restrict the application of these grants, the government now proposes to remove the 2 per cent floor and pay grants to all municipalities with federal property where the normal municipal services in that municipality are performed on account of the federal property. This means that the federal government will, subject to certain exceptions, pay the equivalent of full municipal taxes, including school taxes, on its land and buildings in municipal areas.
Question has been raised in the past as to why these special exceptions are necessary. I think anyone who has seriously considered this matter will accept the fact that the government is not an ordinary taxpayer. The exemption of government property from taxation has existed since time immemorial. It is a principle generally accepted throughout the world and nowhere receives greater adherence than in the provinces themselves, of whom the municipalities are legal creatures. The special position that government functions occupy in the community is in itself the justification of this approach. In point of fact, many of the exceptions made are of a class commonly exempted in municipal taxing policy, as in the case of parks, museums, etc. Most of the exceptions stand as they are now contained in the present act. The principal change relates to large, self-contained defence establishments.
Formerly these were excluded from the grants base by the fact that they received no material services from municipalities; but as this criterion of material services has been removed, some special provision was necessary. These properties provide virtually all their own services and are largely independent of the municipality. However, recognition has been taken of the fact that the land they occupy is taken out of taxation, so provision is being made for a grant in lieu of taxes upon that land as well as upon federally-owned domestic establishments occupied by servants of the crown.
It has been found necessary to provide for one further special case where there are special circumstances following from heavy concentration of federal property in one municipality. This is a saving clause. Under this provision adjustments in the grants may be provided where the normal application of the act might not be appropriate in view of the relationship of other federal agencies to the affairs of the municipality. The best example of this sort of thing that comes to my mind is the position of the town of Oromocto in New Brunswick at the present time. This is a planned project connected

with Camp Gagetown, where special arrangements have been entered into with the province of New Brunswick for its management and development.
These are the most important changes proposed, but certain other provisions might also bear mention at this time. One will permit the payment of grants to local taxing authorities which are not strictly municipalities in the commonly accepted sense. This would cover local improvement districts and other quasi-municipal bodies having the power to levy real estate taxes in their own right. A further provision will allow payments on buildings owned and occupied by the crown where located on land leased from tax-exempt owners. These are now excluded by a technicality of the definition of federal property. A provision has been made for the adjustment of the applicable tax rates where municipalities have not taken into account the grants in setting the rates. This has been carried over from section 8, grants for domestic establishments which are now absorbed into the general grant structure. Of the remaining kinds of grants authorized in the present act, those in lieu of local improvement taxes will be continued, as will the transitional grants if the property concerned does not qualify for the annual grants.
The rural grants authorized by regulation under section 10, along with the section 8 grants for crown-owned domestic establishments, will be merged into the new general provisions under section 5. Authority will be continued under section 10 to pass regulations for supplementary payments to municipalities that do not contain federal property but that formerly shared in the area distribution of rural grants.
Payments to municipalities since the inception of the municipal grants program have been as follows:
Year	Amount
1950-	51	
$1,578,0001951-	52	
2,038,0001952-	53	
2,592,0001953-	54	
2,975,0001954-	55	
3,047,0001955-	56	
6,987,0001956-	57 (estimated)	
9,590,000
The treatment of the property of crown corporations remains outside the scope of this bill, as they make their own direct arrangements with municipalities concerned.
As I said earlier, these amendments will result in payments going to virtually every municipality in Canada that contains federal property which receives the normal municipal services of that municipality. The number of recipient municipalities will run to over 1,300, compared with the 500-odd now in receipt of grants. All present recipients will get increased grants in varying amounts, depending 82715-86J
Private Bill-Divorce
on the percentage concentration of federal property within their own districts. Our action in this will result in payments more comprehensive than those made by any province of Canada, and will compare most favourably for that matter with similar payments in any other country in the world.
It is estimated that the total annual payments under the amended act will come within the range of $16 million to $20 million. The new measure is intended to have effect from January 1, 1957, and to apply to tax years of the applicant municipalities commencing on and after that date.


James MacKerras Macdonnell: I just wanted to say, if I might, that I think that statement is well designed for its purpose.


Edward Turney Applewhaite: It being five o'clock we will now go to the consideration of public and private bills.
Progress reported.



PRIVATE BILLS


Mr. W. J. Henderson (Kingston) moved: the second reading of Bill No. 17, for the relief of Dorothy Amelia Ashmore MacDonald.


Erhart Regier: Mr. Speaker, this is one of the tasks, among the many responsibilities that we have as members of this house, which I hate the most. It is a responsibility of which I am sure each and every member of this house would love to be relieved.
I do believe that for the sake of what I wish to say I should read this bill into the record. In the past three years I do not recall that any one of these bills has ever been actually placed on the record. The bill as I have it reads:
An Act for the Relief of Dorothy Amelia Ashmore MacDonald
Whereas Dorothy Amelia Ashmore MacDonald, residing at the town of La Salle, in the province of Quebec, wife of Murray MacDonald, who is domiciled in Canada and residing at the city of Montreal, in the said province, has by her petition alleged that they were married on the fifth day of October, A.D. 1945, at the city of Lachine, in the said province, she then being Dorothy Amelia Ashmore, a spinster; and whereas by her petition she has prayed that, because of his adultery since then, their marriage be dissolved; and whereas the said marriage and adultery have been proved by evidence adduced and it is expedient that the prayer of her petition be granted: Therefore Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:


The Acting Speaker (Mr. Applewhaiie):: Order. I have deliberately permitted the hon. member to read the preamble to the bill because I think the preamble is an outline of the principle of the bill. I admit to the hon.

Private Bill-Divorce
member that I am not fortified with quotable authorities but I am satisfied in my own mind that he is not entitled to read into the record at this stage the clauses of the bill. My grounds are that he is anticipating the committee stage. I think he will agree with me that if it is fair for him to read into the record at this time clauses 1 and 2 of this bill, it would be equally fair for any member on any second reading to read into the record clauses 1 and 2 of any bill, even though it might be a bill with 20 or 30 clauses.
Therefore I rule the hon. member is not in order in reading into the record, word for word, the clauses of this bill at this time.


Erhart Regier: Thank you for setting me right, and also for helping with my task. I should like also to thank the Minister of Finance for going five minutes over his time and helping us out a little bit.


Walter Edward Harris: I assure you, you are entirely welcome.


Erhart Regier: The second reading of this bill, Mr. Speaker, involves endorsing the principle of the bill. I find this very difficult to do. I have been sent here by the people of my riding as a legislator, not to sit in judgment on other fellow citizens of mine. I feel that when I endorse the principle of this bill I am deserting the field of being a legislator and moving over into a field of which I know nothing.
In a former year the Prime Minister stated that this parliament is not really a divorce court at all, but that it has to grant to each and every individual citizen his primary right-whatever word he used for that

to bring his petition to the foot of the throne for relief, and parliament merely decided whether or not to grant such a petition. If that is to be taken to be what we are actually doing, then I should like to submit, as I have submitted before, that the same right must be granted to every citizen in Canada. This parliament cannot distinguish between citizens living in one or two provinces of Canada and citizens living in other provinces; after all, there may be citizens in other provinces who are not satisfied with divorce arrangements within their provinces, and they may also wish to bring petition to the foot of the throne.
On this subject of the endorsation of divorce, I happen to belong to a church that does not even believe in annulments, not to mention divorce. A few minutes ago a colleague of mine asked, "do you believe in divorce?" I honestly think I answered correctly when I said, "I have not yet made up my mind". This is basically a moral and religious problem. I rather feel that this
[The Acting Speaker (Mr. Applewhaite).]
parliament is exceeding its authority when it begins to settle moral and religious problems of its citizens. If it is the legal aspect we are thinking of, then certainly we are far removed from dispensing justice in this matter.
I understand that some new rules for the divorce committee of the other place are now being adopted, or were adopted yesterday. They may help some, and may prevent some of the flagrant violations of elementary court rules.
We in this C.C.F. group have been waiting now for many years for the government to come forth with a proposal that would be acceptable to at least most of the hon. members so we could be relieved of this obligation. In fact many of these divorce bills have for many years received the endorsation of this house because of the good will that obtained in all sections of the house. I believe it is technically within the power, or would have been within the power, of almost any one of us to block the whole machinery, had we not been men of good will heretofore.
The second reading, or the endorsation of the principle of a divorce bill, is I believe, usually meant to be based on the evidence submitted before a committee of the other place. I should rather say before one of the subcommittees of the divorce committee of the other place. Certainly the load is getting so heavy now that they actually have a number of subcommittees, and this particular case was heard by subcommittee No. 3.
I agree that these bills are all referred to the miscellaneous private bills committee of this house after they receive second reading and I wonder, Mr. Speaker, how right we are in following that procedure. I think I am safe in saying that very few members in this chamber have received, not to speak of reading, the evidence that was given before the committee of the other place.
A year ago I noted that we had to fill in a form or write a letter to the clerk of the other place and inform him whether we wished to be placed on the mailing list to receive this information. However, this afternoon I spoke to one member of our own miscellaneous private bills committee, and he had not received any of the minutes of proceedings and evidence taken at the hearing in the other place. How members of parliament can be expected to endorse the principle of a bill the name of which they see only on the order paper and of which they know nothing else is beyond me. However, we are expected to do so.
I am not at all satisfied to endorse the principle of a divorce bill on the basis of

the evidence I receive in my mail. I notice that in this particular case the evidence was heard by one man in his 79th year, another one in his 77th year and a new recruit who is in his 46th year. We, of course, are expected to be good boys, to be good sports about this whole matter; and in the ordinary course of events I assume we likely would have passed the 107 divorce bills on the order paper today in a matter of a couple of minutes.
As I said before, we have given the government every possible chance to find a remedy. They have never at any time indicated to us in this house that they are earnestly searching for that remedy. A few years ago the newspapers said the government was searching for some new method, but we have never had that report confirmed in this house.
I wish to make it perfectly clear here that what I am saying has nothing whatsoever in particular to do with the personal affairs of Dorothy Amelia Ashmore MacDonald, any more than with any of the other cases. However, when we wait year after year and the problem continues to grow; when we hold back a bill which we have presented a number of times and which would limit rather than broaden the grounds for divorce, but would transfer it to a proper court; when it is turned down when it is presented and we sit back and await action by the government-


The Acting Speaker (Mr. Applewhaite):: Order. I assure the hon. member that I am not interrupting because I want to. I have been sitting here trying to do two things at once, namely trying to enable the hon. member to discuss as fully as he might wish the matter before us, and at the same time trying not to allow him to go too far beyond what I believe the rules would permit at the present time.
I am going to take a minute of the time of the house, now that I feel impelled to rise to my feet, to quote a statement made by Mr. Speaker in 1955 when the situation was similar to what it is now. We were commencing the first discussion of divorce bills of the session and at that time Mr. Speaker said, as reported at page 116 of the 1955 Journals:
May I interrupt the hon. member to remind him that we are at the beginning of a new session. During previous sessions we have had debates as to how these divorce bills shall be dealt with on second reading. It being the beginning of a new session perhaps one may be permitted to adopt a new resolution. I have resolved that no matter how much latitude I may be inclined to give I shall not allow any discussion except that which relates to the principle of the bill. I do not think hon. members will find that they are referring to the principles of these bills when they stand up and
Private Bill-Divorce
offer suggestions as to how they should be dealt with. That is not the manner in which this can be brought about.
If the hon. member wishes to submit by way of a bill some other method by which these divorce bills can be dealt with, he will have ample opportunity to incorporate whatever suggestions he may have to offer. But I do not think it is in order on the second reading of these bills to make such suggestions, and I would like the hon. member's co-operation in respect to this point.
That is the end of the quotation from Mr. Speaker's ruling in 1955, to which I perhaps might take the liberty of adding an observation of my own. The principle of this bill, I think, has been read into the record by the hon. member who has the floor. It is the principle that if certain circumstances are proven it is expedient that a divorce should be given to this couple. I would not rule out of order any discussion at this time on the merits or demerits of the principle of divorce, because I think the principle of divorce is certainly applicable to the principle of a divorce bill; but I would ask the hon. member and others who may follow him to try with me to appreciate the difference between the principle of divorce and the principle of the forum in which divorce actions should be heard.
I think that principle was amply demonstrated some years ago when we had on the order paper several divorce bills similar to the one we are now discussing. We also had on the order paper and under discussion a bill which, had it passed, would have transferred the hearing of divorce bills from this chamber to another forum. There was nothing conflicting in those two bills because they had two separate and entirely different principles. I think the hon. member who has the floor and others will realize the difference between those principles, and will try to stay with the principles that are involved in this bill and not deal with those principles involved in a bill which we discussed some years ago and which did not pass, relative to the location of the court or forum where divorces should be heard.


Erhart Regier: Thank you, Mr. Speaker. If we do not agree with the principle that this divorce be granted I note that you read what Mr. Speaker told the house on a former occasion, when he suggested that an amendment could be moved; and at the conclusion of my remarks, which I have just about completed, I intend to move such an amendment.
I said on a former occasion that if necessary the day may come when I may have to deal with all the horrible details of these divorce cases. I do not intend to begin doing so today, but I repeat the warning that the

Private Bill-Divorce
day may arrive when we may become involved in a discussion as to whether the panties in a specific case were pink or blue in colour.
However, this is a serious matter. In the particular case before us a girl seven years of age is involved. We are endorsing the principle that this couple be granted a divorce, but at the same time we are shrugging off any responsibility for the child seven years old. We say that has to be settled by some other court or forum. In this case we have witnesses who leave much to be desired.
However, I am not going to discuss the details of this case at greater length at this moment. Instead I shall resort to what I think is the only weapon available to us- if I may use the word weapon-which I think we can properly apply and remain gentlemen and legislators. For that reason, Mr. Speaker, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That Bill No. 17 be not now read a second time, but that the subject matter thereof be referred to the standing committee on miscellaneous private bills.
I think we should know something about these bills before we endorse the principle of them. Most of us have not even read the bills.


Stanley Howard Knowles: Mr. Speaker, I wish to say just a brief word in support of the amendment, the purpose of which is to ask that this particular case be studied by the committee on miscellaneous private bills before the house approves second reading rather than after this is done.
As my colleague the hon. member for Burnaby-Coquitlam has already indicated, there is a child involved in this case, and we feel that some questions might be asked in addition to the questions that were asked in the other place with reference to the financial support the father has provided or has failed to provide for his child.
The other comment I wish to make is that this case does seem to entail some rather strange bits of evidence. In one instance where certain evidence was offered and an attempt was made to confirm that evidence the witness admitted having written to the hotel in question, only to be informed by letter that the hotel did not keep records for more than three years. The incident introduced as evidence of misconduct had taken place five years earlier; hence the strength of the evidence on that point seems to be rather slight.
Another point in the evidence that is rather interesting concerned an incident where a witness was called who admitted
[Mr. Regier.l
that he was the proprietor of a tourist home, and the evidence put in related to something that happened in the tourist home located next door to his establishment. The witness who was called admitted that he was not there but that he was looking after the next-door tourist home more or less by remote control.
These pieces of evidence do not strike us as very satisfactory, and we think it is a reasonable and responsible suggestion we are making in this amendment, namely that before we are asked to approve the principle of this bill by giving it second reading we should send its subject matter to a committee of this house for study by that committee. I therefore support the amendment which has been moved by my colleague the hon. member for Burnaby-Coquitlam.


William James Henderson: Mr. Speaker, although this bill stands in my name I do not wish to express any opinion concerning it, as did the hon. member for Burnaby-Coquitlam. I might say that the hon. gentleman has voiced the very reason we should deal with this bill. He commenced to read into the record the words contained in the bill, and Mr. Speaker prevented him from continuing.
We in this chamber have a serious responsibility with regard to the granting of divorce, as have those members of the other place and all those who serve on divorce committees. Under the rules and regulations and legislation governing divorce there are four different bodies involved, whereas in other parts of the country a divorce or annulment is granted by a single court.
I take objection to what the hon. member for Burnaby-Coquitlam said, to the effect that he was incompetent to pass judgment upon his fellow citizens. As far as matters before the committee are concerned I feel I must disagree with him. I had the privilege of being chairman of the committee during last session, and I found the hon. member to be a most competent judge of the matters brought before the committee. He fulfilled his duties carefully, with a great deal of detailed attention and understanding.
The hon. member has brought up another matter, and has contended that there should not be different methods of obtaining divorce in different parts of Canada, that all citizens should be treated alike. By the legislation and the rules and regulations governing divorce we make it possible for all the people of Canada to have available this procedure for divorce. If there is no divorce court or provision for the granting of divorce in the province in which the petitioner resides or

has his domicile, he is given the same opportunity as someone else who lives across the border in another province to obtain a divorce by coming to this body. He is placed on an equal basis with other Canadians.
We should take cognizance of the fact that we have a responsibility toward the citizens of Canada, and whether we term this a matter of legislation or passing judgment on our fellow citizens, we should do our best to arrive at a determination of these matters. It is our responsibility to handle these divorce matters in a proper manner.
Having had some experience on committees I cannot see the point in the amendment moved by the hon. member. He has indicated that he is doing this to bring about new divorce legislation, but if that were done we would possibly be depriving the two people mentioned in the petition of their right as citizens of Canada to have their marriage dissolved.
I have always felt that when these bills got to the committee stage the evidence as received from the Senate committee was fairly well reviewed. I do not think aspersions should be cast upon the members of the Senate committee, one being 79 years of age and another being 46 years of age. If we consider the history of the courts of this country or of any other country we will find that many gentlemen have sat upon the bench who had passed the age of 79 years and still were able to deliver sound judgments. Probably the older we get the greater stock of experience we have behind us to help us pass judgment on facts with which we have to deal. I am sure the gentlemen who sit on the committee in the other place would grace the bench of any court in this land or for that matter any other land.
Our procedure is to refer these bills to the committee on miscellaneous private bills after they have received second reading. When the bills reach that committee they are reviewed by intelligent members of the committee. Some members of the committee have made inquiries personally in order to assist the committee in deciding certain matters. I cannot see the point at' this stage of referring the subject matter of a bill of this nature to the committee before it has received second reading.
Since this matter has been brought up I am sure my hon. friends have noticed that there have been amendments to the regulations concerning divorce. Before dealing with that I may say that these petitions for legislation are before us and it is our duty to consider them and do our job as legislators. I understand that the Senate has made a change in the rules governing divorce. This change was enacted yesterday,
Private Bill-Divorce
St. Valentine's day, and provides that after September 1, 1957, a petition for divorce, according to my interpretation of the change in the rule, must contain the name of the corespondent or third party to the petition. Hitherto this party was not named in the petition.
However, that being the case, the defendant and the corespondent now will have the right to defend the petition, and no harm will be done to an innocent party as some hon. members of this house may feel could have happened before. As we know, we are now adopting a change by which we would be bringing the rules of the divorce committee in line with those of some of the provinces that have divorce courts. And I might say it seems there is another change in the rules respecting divorce, as I understand it, to the effect that if the name of the corespondent cannot be determined, as I understand was the case in 356 cases last year, as in the provincial divorce courts, now they have a provision that an action cannot be brought in such circumstances unless the party bringing the action is able to do so by leave of the court.
If we were to take, for example, the laws of the province of Ontario, and if we would refer to our rules of practice in Ontario, we would find that rule 776 reads as follows:
If the name of any person with whom an adultery is alleged to have been committed is unknown to the plaintiff at the time of the issue of the writ, the judge, on being satisfied that all reasonable efforts have been made to ascertain the name may grant leave to the plaintiff to issue a writ without adding such person as a defendant.
Now if we apply the rule as reported in the other place I think a great many of the difficulties which probably are presently worrying my hon. friends may be removed; and once again, as I say, all citizens of Canada will be put on an even basis as far as obtaining divorce is concerned. At least if we would apply the rule of the province of Ontario they would all be the same in that respect.
There is, of course, another advantage. I know some of my hon. friends have been worried about the question of investigators. Possibly many of us have taken a second look at that problem, so they are not alone in that. But when it comes to the point where the third, or outside, party must be named, it seems to me there will be a great deal more discretion used than in the past. I understand, if I have the right interpretation of the application of the new rules in the other place, that when there are situations where the outside party, or corespondent as we might prefer to call him in the civil courts, cannot be found or named or identified, there would be provision for this eventuality. If

Private Bill-Divorce
not, there should be a provision made whereby with the leave of those in charge of petitions the matter would be allowed to go forward without the name of the corespondent.
I know the hon. member for Burnaby-Coquitlam wishes to change the rules in the amendment he proposes. I think it would be unwise to ask to change the rules governing divorce at a time when the other house has taken up this matter. I think we, as legislators here and as people and citizens of Canada, should first look at the pros and cons of this matter to see whether we approve or disapprove of the bill before us, and in no way prejudice those who are applying themselves to this one particular divorce petition, the petition of Dorothy Amelia Ashmore MacDonald. We should in no way prejudice these people, or any of the others who have put forward petitions in accordance with the rules and regulations now in existence. Mrs. MacDonald has asked these two houses of parliament for relief in the circumstances in which she presently finds herself.
That being the case, and going back again to the question of responsibility which one of my hon. friends has mentioned and which we have as legislators, we should accept our responsibility now and pass this under the rules and regulations and under the legislation which we presently have, leaving it to the committee to decide upon the evidence and awaiting their recommendation to this house.
We always have our opportunity in this chamber, on the third reading of these bills, to raise any objections we might have to clauses in the bills, the preamble, the title of the bill and the passing of the bill, and it seems premature at this point to do anything which might delay the proper procedure which we have before us. As I have stated, we have an amendment to the regulations of the other house concerning divorce. We now find ourselves under this method we have adopted in the position of not giving the amended rules an opportunity of dealing with divorce petitions.


Harold Edward Winch: Hang on for ten minutes and you will have talked it out.


William James Henderson: As I have said, although the bill happens to be in my name I have no personal opinions to express. Nevertheless, if the bill is given second reading and referred to the committee, with which I have something to do, I am quite sure it will be thoroughly considered by the members of that committee. I conclude by saying that I think there should be an opportunity for members to express themselves at this time.

The hon. member for Vancouver East said a moment ago that I should keep talking to talk out the bill, but I leave it now with the remarks I have made.


Mr. Elmore Philpoti (Vancouver South):: Mr. Speaker, we have noticed the obvious distaste with which the hon. member for Burnaby-Coquitlam has spoken about this bill, and I rather think the only reason he spoke on it at all was that he was not very anxious to have the Trans Mountain Oil Pipe Line Company bill discussed during this hour.


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order. I do not think I should allow that statement to stand.


Elmore Philpott: I will be glad to withdraw it, Mr. Speaker. Perhaps my weak attempt at humour did not strike a responsive chord in all quarters of the house. To be quite serious, I believe the divorce procedure is certainly not in accord with the wishes of the great majority of members of the house, and it is a matter to which I have given a great deal of thought since I have been here. I believe there have been some minor improvements in the procedure. I for one think there was a very definite improvement in the procedure in the last year or so, when instead of all 266 members of the House of Commons getting all the evidence in all of the cases-does the hon. member for Winnipeg North Centre wish to say something?


Stanley Howard Knowles: I was wondering where the hon. member got the extra member. There are only 265.


Elmore Philpott: Well, I will not quarrel with the hon. member. I think there was a definite improvement when we ceased having to wade through the long and rather odious records of the proceedings.
Speaking for a moment on the concrete proposal of the hon. member for Burnaby-Coquitlam, I think it might be rather unfair to single out this particular person in this particular way with all the publicity that has been given to the matter, and especially by way of redressing some kind of grievance involving a seven year old child. It seems to me the only result would be to create additional hardship for a youngster who has had enough hardship already.
We all know that the vast majority of these divorce bills that come before the house come from one or two parts of the country. One thing that troubles the conscience of all members of parliament who have to take even a very minor part in the passing of these divorce bills is the knowledge, as has been pointed out a good many

times in the past few years, that in a good many cases there has not been adequate attention given to the family injustice that is a by-product of this form of separation. I for one have often wondered whether it would not be at least an improvement in the method of procedure if we made it a prior condition of the legislative form of divorce that all applications from the province of Quebec, the province of Newfoundland or any province should be preceded by legal separations in the province where the applications originate. In other words, the family affairs should be dealt with by the proper and competent bodies before applications for divorce are made to the agency of the parliament of Canada charged with dealing with them.
I for one am an advocate of a changed system of divorce, but I must confess that on examining the actual procedures in this exalted building I have had to revise some of the preconceptions I had before I came to this place. I think the actual procedures in the examination of divorce evidence followed by the committees of the other place will compare very favourably with the procedures of any court in the whole Dominion of Canada or, for that matter, any court in the civilized world. There is great dignity and complete fairness to all parties. There are no facilities for sensationalism in any way, shape or form. There is fair play
Private Bill-Divorce
to all concerned in the case and the whole matter is carried on in as dignified, fair and judicial a manner as possible in any kind of constituted court.
Therefore it seems to me that no matter what anyone may suggest as to changing the procedure for the handling of divorces, one thing that cannot be achieved by any change in the technique of divorce is the getting of any more fair or judicial method of handling them.
On motion of Mr. Philpott the debate was adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, Monday of course is private members' day, but for the reason I gave a week ago in announcing government business I propose to do so again at this time. If private members' business does happen to be completed we shall take the resolution in the name of the Minister of Agriculture with respect to the Prairie Farm Assistance Act, then the resolution in my name with respect to the Municipal Grants Act, and then second reading of the bill to amend the Export Credits Insurance Act. That, Mr. Speaker, will also be the business on Tuesday if it is not disposed of on Monday.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
1362
[Stage Direction]
Questions

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

Mr. Lennard: What was the amount paid to the Pinkerton detective agency by the Canadian Broadcasting Corporation, during the calendar year of 1956?
Answer by: Hon. J. J. McCann (Minister of National Revenue):
The corporation advises that during 1956 the Pinkerton detective agency provided night protection service to its television station in Ottawa. In addition, the services of this agency were used on special occasions for the
protection of television equipment used on outside broadcasts.
It has been held that it would be disadvantageous to the corporation in business negotiations to make public amounts of payments to individual persons or organizations for services provided.


PUBLIC WORKS EXPENDITURES, CHICOUTIMI COUNTY, QUE.
Mr. Gagnon: 
POST-GRADUATE ENGINEERING FACILITIES
Mr. Houck: Are there any facilities in Canada for the postgraduate training of professional engineers who are employed by health departments?
Answer by: Hon. Paul Martin (Minister of National Health and Welfare):
Yes, a post-graduate course is provided by the school of hygiene, University of Toronto, for public health engineers. Under the national health program assistance has been given to the provinces for the post-graduate training of 48 public health engineers.
82715-87J

Monday, February 18, 1957