1958-01-29

[Stage Direction]
Second report of standing committee on external affairs.-Mr. White.


CANADIAN FLAG


Mr. Hansell: 1.	Has the government considered the recommendations of the joint parliamentary committee of 1946 on a design for a distinctive Canadian flag?
2.	If so, have steps been taken by the government to bring down legislation implementing the committee's recommendations?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, the answer to question No. 1 is no, and the answer to the second part of the question is that no consideration has been given in this regard.



UNEMPLOYMENT FIGURES, ONTARIO

[Stage Direction]
Question No. 61
Mr. Henderson:: 1.	How many unemployed were registered in (a) the province of Ontario; (b) the areas served by the Toronto, Hamilton, Windsor, North Bay and Pembroke offices, respectively, of the unemployment insurance commission, on or about the 9th day of January, 1958?
2.	How many unemployed were registered in (a) the province of Ontario; (b) the areas served by the Toronto, Hamilton, Windsor, North Bay and Pembroke offices, respectively, of the unemployment insurance commission on or about the 9th day of January, 1957?


Hon. Michael Slarr (Minister of Labour):: Mr. Speaker, the answer to the question asked by the hon. member for Kingston is as follows. The numbers of persons registered at January 9, 1958, and at January 10, 1957, at local offices of the unemployment insurance commission in the province of Ontario and at local offices serving the areas of Toronto, Hamilton, Windsor, North Bay and Pembroke were:
January January
	9, 1958	10, 1957
Province of Ontario 	.... 241,926	151,079Toronto 	.... 55,364	38,351Hamilton 	.... 19,159	9,875Windsor 	.. .. 16,246	8,277North Bay 	... . 3,063	1,895Pembroke 	1,674



COST OF TRADE MISSION TO U.K.

Mr. McMillan: What is the cost to the Canadian taxpayer to date, of the recent buying mission of some 50 persons and staff to the United Kingdom, and what further costs are anticipated?


Hon. Gordon Churchill (Minisier of Trade and Commerce):: Mr. Speaker, the answer to this question is not yet available, as all the accounts have not been received. With regard to further costs, we will have to pay for the printing of the report which is in course of preparation.


Mr. Speaker:: The question stands.



AUDITOR GENERAL'S REPORT, 1957  SECTION 61

Mr. Castleden: With reference to section 61 of the Auditor General's report, 1957:
1.	What is the name of the firm which received the $119,200 contract to build a naval vessel for the Department of Defence Production?
2.	Were tenders called for this contract through advertising?
3.	What officers of the department signed the progress certificate under which the contractor was paid for work?
4.	What was the total amount paid to the contractor under this contract?
5.	Was the contract finally cancelled?
6.	If so, what percentage of the work was completed at time of cancellation?
7.	What is being done with the incompleted vessel?


Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, there are seven parts to this question, the answers to which are as follows;
1.	Withey's Shipyard Limited, Silva Bay, Gabriola island, B.C.
2.	The original requirement, of which this vessel is a part, covered seven harbour craft and four clearance diving vessels. Tenders were invited on the total requirement on August 7, 1951. After examination of the tenders it appeared that the specifications for the clearance diving vessels were less than adequate. Accordingly on October 1, 1951, tenders were recalled for the seven harbour craft only, and contracts subsequently awarded for such vessels.
The specifications for the clearance diving vessels were rewritten. Rather than recalling tenders the clearance diving vessels were allocated, such allocation being made on the recommendation of the Canadian maritime commission and limited to those companies

Questions
who had tendered successfully on the harbour craft. The contract for the vessel in question was awarded on April 25, 1953.
3.	No officers of this department signed the progress certificates. The progress certificates were signed by the responsible naval overseeing officers of the Department of National Defence.
4.	$99,102.55.
5.	Yes, with work being stopped on January 13 ,1956.
6.	It is impossible to define precisely the over-all percentage of work which was completed at the time of cancellation. Materials had been ordered of which approximately 80 per cent were delivered. Construction of hull, decks and bulkheads had been completed. Outfitting had only commenced. Installation of engines and associated equipment had not commenced. An over-all estimate of completion of 50 per cent of total work appears reasonable.
7.	The vessel was transferred for completion to H.M.C. Dockyard, Esquimalt, B.C.



R.C.M.P. FILES ON MEMBERS OF PARLIAMENT

Mr. Fisher: 1.	Has the Royal Canadian Mounted Police any files, inoperative or otherwise, on members of the present House of Commons?
2.	If so, how many, by provinces?


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, in this question the hon. member for Port Arthur asks whether the Royal Canadian Mounted Police have any files, inoperative or otherwise, on members of the present House of Commons, and if so how many, by provinces.
It will be appreciated by the house that all Royal Canadian Mounted Police files on individuals are confidential and that many are secret.


Mr. Sinclair:: That does not bother the Prime Minister.


Edmund Davie Fulton: It will also be appreciated that one of the primary duties of all those responsible for such files is to respect and preserve the confidential or secret nature of their contents. It will also be appreciated that a large number of such files are started by reports, statements or knowledge of activities coming to the attention of responsible members of the police which they are bound to investigate in the course of their duties. The follow-up on such reports in many cases reveals no necessity for further action, yet there is still a file. This means that many files will be in existence under the names of individuals against whom there is nothing of a substantial, let alone a criminal, nature.
I am quite certain that all hon. members, including the hon. member who asked this

question will agree that it would be grossly unfair to any such individual to have it revealed or even suspected that there exists a police file under his name, yet there may be many ways in which such a suspicion could be raised. It is my opinion, which is shared by my advisers in the Royal Canadian Mounted Police, that one of the surest ways of laying the foundation for the raising of suspicion would be to isolate a group of individuals, such as members of parliament, start answering questions as to whether there are any files on any of them and then refuse -as I would have to refuse-to go any further when questioned as to the existence or non-existence of a file on a specific member or members of such group. But this is exactly the door which is opened-quite unintentionally, I am sure-by this question.
Not only would this lead to the possibility of prejudice to an innocent individual, but if there were in fact with respect to any one or more members of such group a file or files which contained information serious enough to warrant further investigation the success of the investigation, and possibly the security of the state, might be seriously prejudiced by giving any information whatsoever.
It therefore follows that both in order to protect innocent individuals on whom there may be files and to preserve the interests of the state I have to advise the hon. gentleman that I consider it contrary to the public interest to give a specific answer to this question.



U.K. IMPORTS ASSEMBLED IN U.S.

Mr. Cardin: What is the estimated value for each of the years 1954, 1955, 1956 and 1957, of products manufactured in the United Kingdom, which because they are assembled or finished in the United States or distributed by an agency in the United States are included in Canadian imports from the United States?


Gordon Minto Churchill: Mr. Speaker, no records such as are asked for by the hon. member are kept, and the information is not easily obtainable as it involves tracing the country of origin of components in manufactured articles coming from the United States.



COLD LAKE INDIAN RESERVE


Mr. Dechene: 1.	Did the departments of national defence and citizenship and immigration agree upon a final settlement of the compensations and benefits to be paid to the band of the Cold Lake Indian reserve No. 149, in connection with the establishment of a bomber range for the Royal Canadian Air Force, north of Cold Lake, Alberta?
2.	If so, what was the amount agreed upon?

3.	How much of that amount has already been paid to the band, and on what dates?
4.	Is further compensation still due? If so, when will the final payment be made?


Edmund Davie Fulton: Mr. Speaker, the answer to part 1 of this question is no, an official settlement has not been agreed upon. The answer to part 2 is therefore that it is not applicable. The answer to part 3 is also that this question is not applicable. With regard to part 4 the answer is that negotiations with regard to settlement are continuing.



POSTAL SERVICE SURVEY, SUMMERSIDE, P.E.I.

Mr. Pickersgill: 1.	Has a recent survey been made in the town of Summerside, Prince Edward Island, to determine the feasibility of commencing street delivery of mail?
2.	If so, how many points of call were shown by the survey?
3.	Were previous surveys made in the town of Summerside?
4.	If so, when were such surveys made and how many points of call were shown by each survey?
5.	How many points of call are necessary before street deliveries may be started?
6.	Did the present survey include more territory than the previous surveys?
7.	If so, what additional territory was included?
8.	What requirements beyond the requisite number of points of call must be complied with before street delivery can be commenced?
9.	Will the rent of post office boxes be increased should street delivery be commenced?


Hon. W. M. Hamilton (Postmaster General):: Mr. Speaker, in answer to part 1 of this question which deals with a survey to determine the feasibility of commencing street delivery of mail in the town of Summerside, Prince Edward Island, I would advise that there is a survey being made but the report covering it has not yet been received at departmental headquarters. Since that is the case it is also impossible to give an answer to parts 2, 6 or 7 of the question. In answer to part 3, previous surveys have been made in the town of Summerside.
Part 4 of the question asks for details. A survey was made in September, 1948, at which time no actual figure was available as to the number of calls. In 1951 there were 1,531 points of call. In September, 1956, when the last survey preceding this one was made, there were 1,850 points of call. The question asks how many points of call are necessary before street deliveries may be started. The answer is that 2,500 points of call are normally the minimum for that requirement.
Section 8 asks for the requirements beyond the requisite number of points of call which must be complied with before street delivery can be commenced. Those include (1) satisfactory walking conditions in all types of weather; (2) systematic numbering of all
Motion for Papers
premises; (3) street name signs at intersections; (4) proper pathways from the street into each house; (5) installation of an approved type of letter slot or box at each house; and (6) that there should be no duplication of street names within the proposed delivery area.
The last part of the question asks whether the rental of post office boxes is increased should street delivery be commenced. The answer to that question is yes, in accordance with a pattern which has been established over many years in the past.


Mr. Pickersgill:: I wonder whether I might ask the minister whether, if I put part 6 in the present tense, it could not be answered.


William McLean Hamilton: Certainly not immediately. In explanation may I say this. The normal procedure here is to refer a survey of this kind to the district officers, who determine the details of how the survey will be taken and the area which it will cover. When they have completed the survey they report back to us. We have not yet received that report. There is therefore no information in the department to tell the exact area covered.



QUESTIONS PASSED AS ORDERS FOR RETURNS


IMMIGRATION


Mr. Pickersgill: 1.	Have any persons been authorized by order In council to immigrate to Canada since June 21, 1957? If so, how many?
2.	What is the name of the person in Canada who applied for each such prospective immigrant?



ACCESS ROAD PROJECTS, ONT.

Mr. Benidickson: 1.	Have specific requests been made since June 1, 1957, by the province of Ontario for financial assistance for the construction of access roads for mining and northern development other than for forest protection and into picnic grounds?
2.	If so, what specific road projects for joint financing have been proposed by the Ontario government?



RETURNING OFFICER REPLACEMENTS

Mr. Deschatelets: 1.	Have any returning officers been replaced since June 10 last?
2.	If so, how many in each province?



MOTION FOR PAPERS


[Stage Direction]
Motion No. 49-Mr. Gauthier (Lake St. John):
For a copy of all correspondence or other documents exchanged since January 1, 1957, between the federal government or any of its departments and the municipal authorities of the town of
[Stage Direction]
Inquiries of the Ministry Alma, relating to the establishment of a letter-carrier delivery system within the town of Alma (St. Joseph d'Alma), county of Lac-St-Jean, province of Quebec.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. J. A. Byrne (Kootenay East):: I should like to direct a question to the Minister of Finance. Has the minister's attention been drawn to a statement by the executive board of the international union of mine, mill and smelter workers, which represents 100,000 workers in the base metals industry? The statement reads in part as follows:
We declare the erection of barriers between the United States and Canada to prevent the free flow of non-ferrous metals is contrary to the interests of our membership and we therefore recommend that no tariff barriers be erected between our two countries.
Would the minister bring this important development to the attention of the United States authorities?


Hon. Donald M. Fleming (Minister of Finance):: My hon. friend sent me a copy of this document headed "Statement on Tariffs" since coming into the house this morning. What it indicates is not a new situation at all. This parliament has control over the tariffs of this country. As to whatever tariffs the United States choose to impose upon the importation of non-ferrous metals from Canada into that country, of course that is a matter for the United States administration and congress. But in that respect I repeat what I have said so many times this session, namely that we have made strong and urgent representations to the United States against any such action on their part. The United States administration has not indicated latterly any final policy with regard to this year 1958, but they are very well aware of the views of this country.


James Allen (Jim) Byrne: I have a supplementary question. I am sure the minister does not realize that this is a new development, that the unions in the United States had made representations to the tariff commission favouring the tariff. In my opinion this is a new development, and I was wondering whether the minister would bring it to the attention of the United States authorities.



OIL-STATEMENT ON REPORTED ORAL REPLY FROM THE UNITED STATES TO NOTE RESPECTING RESTRICTIONS

[Stage Direction]
On the orders of the day:
Donald Methuen Fleming: Yesterday, Mr. Speaker, the hon.
member for Medicine Hat directed to me a question which is reported at page 3897 of Hansard, inquiring as to the accuracy of a Reuters dispatch which appeared in yesterday morning's Gazette to the effect that the United States had made an oral reply to the note presented by Canada protesting against limitation of United States oil imports from Canada.
I have made inquiries, Mr. Speaker, and I can assure the house that there is no foundation for this press statement. No reply, written or oral, has yet been received from the United States government.



BUSINESS OF THE HOUSE


Mr. William Bryce (Selkirk):: With your permission, Mr. Speaker, I wish to withdraw question No. 333. I have received the information I requested.


Mr. Speaker:: Question No. 333 withdrawn.



REQUEST FOR TABLING OF CONFIDENTIAL REPORTS

[Stage Direction]
On the orders of the day:
James Sinclair: Mr. Speaker, I should like to address a question to the Prime Minister based on remarks he made, as found on page 3563 of Hansard of January 21, when tabling the confidential report made by the deputy minister of trade and commerce. Has the Prime Minister yet found the missing front pages of this report?


John George Diefenbaker: Mr. Speaker, as far as I am concerned there are no missing front pages.


James Sinclair: I should now like to ask a supplementary question. Will the Prime Minister now tell the house how at page 3526 of Hansard he was able to give the full title of the report without these pages, since the title occurs nowhere else in the text of the report which he tabled?


John George Diefenbaker: Mr. Speaker, that of course is just one of these trick questions-


Some hon. Members:: Oh, no.


John George Diefenbaker: -and has no meaning whatsoever. The title was apparent, the title was available and the title was in the document.


James Sinclair: I rise on a question of privilege, Mr. Speaker, relating to the document tabled by the Prime Minister in the house. The Prime Minister has just asserted that the title is apparent. I say that in the document which he tabled the title is not apparent and occurs nowhere, either on the front or throughout the report. Therefore the answer he has just given is in direct contradiction to the report he himself tabled.


John George Diefenbaker: Mr. Speaker, my hon. friend is, as usual, making exaggerated statements.


Some hon. Members:: Oh, oh.


John George Diefenbaker: This is no time for a debate on this question.


Some hon. Members:: Oh, oh.


An hon. Member:: What about the supremacy of parliament?


John George Diefenbaker: Any time my hon. friends want a debate on that question I will be very happy to hear them participate in one. At the moment I simply say that the records available in the department indicated the name of the report, and I referred to that name.


James Sinclair: I should like to direct a supplementary question to the Minister of Justice. In view of the fact that the Prime Minister now tables confidential and secret departmental reports, will the minister now amend the answer he gave about R.C.M.P. reports?


Some hon. Members:: Order.


Edmund Davie Fulton: Mr. Speaker, there is no necessity to amend any answer given by myself or the Prime Minister at any time. The answers deal with entirely different subjects which are not to be confused in the way in which the hon. gentleman is deliberately trying to confuse them.


John George Diefenbaker: Mr. Speaker, I should like to add one thing. Any tabling was done at the request and demand of those opposite.


Mr. Martin (Essex East):: Mr. Speaker, I should like to ask a supplementary question.


Mr. Knowles (Winnipeg North Centre):: Was it not tabled because of a rule of this house that any public document which is cited must be laid on the table?


Mr. Speaker:: Order. A debate on this question is unnecessary. The record is before all hon. members as to how the document was tabled.


James Sinclair: I should like to ask a further question of the Minister of Justice. In view
Inquiries of the Ministry of the fact that the Prime Minister has said that the confidential report in question was tabled at the request of the house, will the minister now accede to the request for the tabling of this other confidential document?


Mr. Speaker:: Order. The question of the hon. member for Coast-Capilano is in the nature of argument or debate.


Edmund Davie Fulton: I think it should be pointed out that there was no request before me for the tabling of any document. If the hon. gentleman would read the question and answer instead of getting so excited he would save himself and the house a great deal of time.


James Sinclair: I am exercised about the rights of parliament.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: I should like to direct a question to the Minister of Public Works. According to information received, tenders were requested for the disposal of the old post office in Hull, which tenders were to be opened on February 28 next. I have been told that pressure is being exerted to put back that date. Is it the intention of the department to accede to such demands?


Howard Charles Green: This matter comes under the Crown Assets Disposal Corporation and I shall have to make inquiries before I can answer the question.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. I regret that I was not able to give him notice, but I think he will be able to answer it. If not perhaps he would take this as notice. Has the government been engaged in discussions or negotiations with the Soviet union to work out an agreement for exchanges between the two countries, along the lines of the agreement which was worked out in Washington between the United States and the Soviet union, and which was announced last Monday?


Hon. Sidney E. Smith (Secretary of State for External Affairs):: To my knowledge there have been no communications between the U.S.S.R., through its ambassador here

Inquiries of the Ministry or otherwise, with respect to exchanges. I can assure the Leader of the Opposition that this matter is under consideration by the government.


INQUIRY AS TO LEGISLATION EXTENDING &quot;VICTIMS POLICY&quot; TO REFUGEES
[Stage Direction]
On the orders of the day:
Mr. Stanley Haidasz (Trinity):: Mr. Speaker, I should like to ask the Prime Minister whether in view of his favourable answer to my question of December 10 last regarding the extension of the so-called "victims policy" to the victims of Nazi persecution who are now in the countries of the west and in need of financial aid, to the effect that he would give this matter every consideration, he is able to make any further statement on this matter today.


John George Diefenbaker: No, Mr. Speaker, I am not, but
I will have it looked into.


REQUEST THAT NOTICE BE GIVEN BEFORE DISSOLUTION
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North
Centre):	Mr. Speaker, may I direct a question to the Prime Minister. In view of the fact that the hon. member for Quebec East on each of the three occasions when he decided to ask for the dissolution of parliament gave notice of that intention to the House of Commons some days in advance, will the present Prime Minister, if he forms an intention to ask for the dissolution of parliament, extend the courtesy of giving a similar notice?
John George Diefenbaker: I	will	give	consideration	to that
in due course.


EMPLOYMENT OF STENOGRAPHIC STAFF AFTER DISSOLUTION
[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I would like to ask the Prime Minister if when he considers dissolution of parliament he will take into consideration the employment of the stenographic staff?


John George Diefenbaker: I think that is a very hypothetical question, Mr. Speaker, because after all the time when I commence to think of dissolution will be time enough to consider matters such as this.


Daniel (Dan) McIvor: Thank you.


AIRPORTS
[Stage Direction]
On the orders of the day:
Mr. Louis Lewry (Moose Jaw-Lake Centre):: I should like to direct a question to the Minister of Transport. Yesterday he replied that he had not to his knowledge received any representations in connection with a proposed intercity airport to serve Moose Jaw and Regina. I have supplied the minister with a copy of a letter written to him on January 22 by the Moose Jaw chamber of commerce. I should like to know whether, in view of these further representations, his department would now undertake consideration of the establishment of an intercity airport to serve the two cities of Moose Jaw and Regina?


Hon. George H. Hees (Minister of Transport):: The department will give this proposition careful consideration.



NATURAL RESOURCES


[Stage Direction]
On the orders of the day:
Mr. G. W. Montgomery (Victoria-Carleton):: I should like to direct a question to the Minister of Northern Affairs and National Resources. Has the government given consideration to extending the assistance program formerly carried on by the federal government in connection with spruce budworm infestation in New Brunswick?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: The answer to that question is yes.



CRIMINAL LAW


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: I should like to direct a question to the Minister of Justice. In the light of representations which I have received from my constituency, I should like to ask the minister if consideration is being given by him or his department to amending the Criminal Code so as to clarify and strengthen those sections which deal with the publication and distribution of obscene and salacious literature.


Edmund Davie Fulton: Mr. Speaker, I thank the hon. member for giving me notice of this question. I think by way of reply I shall have to repeat in effect what I said on two earlier occasions in this house,

the last one being in reply to a question by the hon. member for Kamouraska which appears in Hansard at page 2472.
The Department of Justice is giving active consideration to a number of proposals that have been made for amendments to the Criminal Code. While it was not possible to introduce a bill to amend the Criminal Code at this session of parliament, it is hoped to introduce such a bill at the next session.
When such a bill is introduced it will contain any necessary amendments to improve the effectiveness of section 150 of the code in preventing the publication, distribution and circulation of obscene literature.



POSITION OF 1956-57 POOL ACCOUNT

[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I would like to address a question to the Minister of Trade and Commerce. I wonder if the minister could inform the house as to the position of the 1956-57 barley pool account at this time; whether it is being closed out and whether the producers may soon expect a final payment at least as large as the payment under the former administration of over 13 cents a bushel.


Gordon Minto Churchill: I am waiting for some detailed information from the wheat board with regard to the barley pool, but I do know this, that it is in good condition and things generally are going better than they were under the former administration.


Mr. Stuart (Charlotte):: The unemployment situation?


Hazen Robert Argue: That being the case, Mr. Speaker, I wonder if the minister could explain how the barley pool account was closed out on November 14, 1956, for the previous year and yet, although many months have now passed since November, 1957, he is still not able to say when the 1956-57 account is going to be closed out?


Gordon Minto Churchill: I appreciate the hon. member's confidence in the wheat board, which I share with him, and I am awaiting their decision in the matter.



AWARDS AND DECORATIONS


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: I would like to address a question to the Prime Minister. Having in mind the interest previously shown by the Prime Minister in
Inquiries of the Ministry the Canada medal, would he inform the house whether it is contemplated that such an award will be made to the fine Newfoundland poet Dr. E. J. Pratt, who is celebrating his 75th birthday this week?


John George Diefenbaker: I am sure that Professor Pratt's contribution to Canadian letters is one which deserves the highest commendation, and that members in all parts of this house, realizing that contribution, will extend to him congratulations on his 75th birthday.
With regard to the earlier part of the question, I may say that at the moment the government is dealing with urgent problems, and in due course a study will be made of the whole question of the Canada medal being made available to distinguished men and women whose contributions to Canada have been meritorious and deserving.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
James Allen (Jim) Byrne: I would like to address a question to the Minister of Labour. Press reports of the circumstances surrounding the mine accident which claimed the lives of two men at Elliot Lake on Monday seem to indicate a woeful lack of safety precautions, and in view of the mounting number of serious accidents in the whole Blind River area would the minister consider the setting up of a board of inquiry to determine whether proper safety regulations are being enforced in those mines coming under federal jurisdiction?
I may say, Mr. Speaker, that the union has made representations to me several times indicating that the safety regulations were not being enforced in that area.


Michael Starr: I will certainly look into the matter, and if circumstances warrant the setting up of a board of inquiry it will certainly be done.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. Yves Leduc (Verdun):: On January 22 last I asked a question of the Minister of Transport concerning the lay-offs at Montreal and vicinity by Canadian National Railways. This question to my knowledge has not yet been answered. Does the minister expect such information shortly from the management of Canadian National Railways?


George Harris Hees: I hope so, Mr. Speaker.

Inquiries of the Ministry



PORT ARTHUR


[Stage Direction]
On the orders of the day:
Michael Starr: I would like to answer a question put to me by the hon. member for Port Arthur yesterday on orders of the day regarding welding classes. The hon. member asked if such classes could be held in the evening for the retraining of people who are employed during the day. I answered that I was not aware of any such representations having been made.
Since then I have found that the hon. member has been in communication with the deputy minister, and I want to say that the classes sponsored by the department are for unemployed workers, whereas the hon. member's question refers to persons with jobs. I would therefore suggest to him that the proper authorities to which this question should be directed would be the local educational authorities in his community. They have the right and the duty to decide as to what type of courses may be made available for evening study programs.



TRANS-CANADA PIPE LINE    INVESTIGATION OF WALK-OUT EAST OF PORT ARTHUR

[Stage Direction]
On the orders of the day:
Mr.  M. W. Marlin@Timmins: May I address a question to the Minister of Labour. Has the minister any information as to what is causing the delay in the settlement of the walk-out on the northern Ontario gas pipe line which was supposed to have been settled a week ago Monday?


Michael Starr: We have had discussions, Mr. Speaker, and had arrived at what I considered to be an agreement with the pipe-line operators. The representatives of the unions were contacted and they were very satisfied with the decision as to the increased rate of the classification which is under dispute. The matter rests entirely on an agreement between the pipe-line contractors and the employees.



CANADIAN NATIONAL RAILWAYS, MONCTON   EMPLOYMENT IN HUMP YARD

[Stage Direction]
On the orders of the day:
Mr. H. J. Murphy (Westmorland):: May I
address a question to the Minister of Transport. Will the minister inform the house if the men required in the construction of the new hump yard at Moncton will be employed through the unemployment insurance commission offices or the C.N.R. personnel office, or will they be employed in a way similar to that in which they are employed at the

Fundy national park, namely through contact with various organizations?


George Harris Hees: I shall get in touch with the management of Canadian National Railways, and when I have an answer I will give it to the hon. member.



PUBLIC WORKS


[Stage Direction]
On the orders of the day:
Mr. E. B. Huffman (Kent, Oni.h I would like to direct a question to the Minister of Public Works. As a result of the shifting of the river bank adjacent to the public general hospital in Chatham, does the minister now propose to protect the whole area covered in the original plan agreed to by the hospital board and the department?
Howard Charles Green: Mr. Speaker, if I remember correctly arrangements were made some weeks ago to proceed with the work which had been discussed with me by representatives from Chatham. As for doing any additional work, I do not think that is the responsibility of my department.



ARTS, LETTERS AND SCIENCES REQUEST FOR INCREASED FEDERAL APPROPRIATION FOR BURSARIES

[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I would like to address a question to the Minister of Labour. Has the minister noted the public remarks of Dr. Dunlop, the Ontario minister of education, suggesting that dominion-provincial bursaries should not have this name because only $100,000 of the $470,000 appropriation comes from federal sources. If so, is the minister considering any changes or adjustments in the federal appropriation?


Michael Starr: Mr. Speaker, I thank the hon. member for having given me notice of this question. My answer is that it is immaterial to me or to my department what name is given to these bursaries, and as for changes or adjustments, naturally they are being constantly reviewed and when decisions are made they will certainly be announced.



DISPOSITION OF DOWNSTREAM BENEFITS IN INTERNATIONAL WATERWAYS

[Stage Direction]
On the orders of the day:
Hon. Jean Lesage (Monlmagny-LTslei):: Mr. Speaker, may I direct a question to the Minister of Northern Affairs and National

Resources. Has the government made any progress in its discussions with the United States regarding downstream benefits on international rivers since I last mentioned this subject in the house on December 3?


Francis Alvin George Hamilton: Mr. Speaker, with regard to the progress on the Columbia river project, to which I suppose the hon. member is referring-


Jean Lesage: Downstream benefits.


Francis Alvin George Hamilton: -and which involves many matters in addition to downstream benefits, we have received the engineering reports and we are now engaged in making an economic study of those reports.


Jean Lesage: A supplementary question.
Have there been any dealings between the government of Canada and the government of the United States regarding the question of the payment for downstream benefits on the Columbia river and elsewhere since May 20 last?


Francis Alvin George Hamilton: Yes, Mr. Speaker.


Jean Lesage: Will the minister not tell us what those dealings have been?


Francis Alvin George Hamilton: Mr. Speaker, I think the house will readily understand that when discussions of this sort are going on it is not customary to keep everyone informed of every move that is being made. I have mentioned earlier in my answers to the hon. member that in the public interest it is of advantage to keep these things to ourselves while negotiations are in progress.


Jean Lesage: Mr. Speaker, when I occupied the post the hon. gentleman now occupies I always replied-


Some hon. Members:: Oh, oh.


Mr. Speaker:: The hon. member has received an answer, and I have no power to ask anything different to be done.


Mr. H. W. Herridge (Kootenay West):: Will the minister inform the house as soon as there are any definite conclusions from these negotiations with the United States?


Francis Alvin George Hamilton: Yes I think that is a fair question, Mr. Speaker, and I will be glad to do that.



REQUEST FOR TABLING OF LETTER TO PREMIER OF NEWFOUNDLAND

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I should like to ask the minister of northern affairs if he is now in a 96698-250
Dominion-Provincial Relations position to table the letter he sent to the premier of Newfoundland refusing to make the amendment he asked for.


Francis Alvin George Hamilton: Yes, Mr. Speaker.


John Whitney Pickersgill: Could it be tabled today and included in Hansard as an appendix, as is usual in the case of correspondence with provincial governments?


Francis Alvin George Hamilton: I think, Mr. Speaker, my staff will have it available by tomorrow.



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Transport. Has the minister yet received a reply from the Canadian Pacific Railway with respect to his appeal to the railways of Canada to step up their winter work programs?


George Harris Hees: Mr. Speaker, I received the following reply from the assistant to the president of the Canadian Pacific Railway, Mr. D. M. George, which reads as follows:
Dear Mr. Hees:
In the absence of the president, who is out of the city this week and will not return to the office until Monday, I acknowledge your letter dated January 17, dealing with the question of employment, which was received on the 22nd.
The matter is receiving careful study by our people, and Mr. Crump will write you early next week.



DOMINION-PROVINCIAL RELATIONS MEASURE TO PROVIDE FINANCIAL ASSISTANCE TO ATLANTIC PROVINCES, ETC.

Donald Methuen Fleming: the second reading of Bill No. 247, to amend the Federal-Provincial TaxSharing Arrangements Act.
He said: Mr. Speaker, this measure has already been under discussion during the resolution stage for two full days, and I think all aspects of the matter have been very fully explored by this time. The measure is a brief one, and it carries out the twofold approach to the problem of dominion-provincial fiscal relations indicated in the resolution.
The first aspect of the bill is that the Atlantic adjustment grant, arrived at on the basis of a formula concurred in by all the provinces affected, and arrived at by a procedure which was fully contemplated at the November dominion-provincial conference, is reflected in
3956	HOUSE OF COMMONS
Dominion-Provincial Relations the proposal now being put forward that over the next four fiscal years, commencing April 1, a total sum of $100 million should be made available to the four Atlantic provinces by way of an Atlantic adjustment grant payable at the rate $25 million in each of those fiscal years. The amounts going to each of the Atlantic provinces are declared in the bill, and the proportions have been agreed to in full by 'the four Atlantic provinces affected.
The other aspect of the matter is, as has been stressed several times, an interim measure to take account of the urgency of the present situation and the fact that it was not possible to reconvene the dominion-provincial conference under the pressure of the present protracted session of parliament. Having regard to the exigencies of the financial planning and budgeting by the provincial treasurers at this very time, it was felt that something of an interim nature should be provided for this immediate period, so the measure makes provision for a sum to be distributed among the 10 provinces arising out of an increase from 10 per cent to 13 per cent in the income tax portion of the standard taxes which are shareable in accordance with the provisions of the main act.
Estimates have been given as to what this may mean to the provinces. These are estimates only, but it is quite clear that this is a measure which will be of very substantial assistance to the provinces. The $25 million per annum for the Atlantic adjustment grants is a fixed and determined figure. The figure that will result from the increase from 10 per cent to 13 per cent in the provincial share of the individual income tax will be a varying figure, depending upon the yield from these taxes as well as on one or two other factors created by the statute. We estimate broadly that this measure will mean in this immediate fiscal year approximately $87 million for the provinces, $25 million of which will be certain by way of the Atlantic adjustment grants, and a sum of approximately $62 million available from the other source.
This is a measure which the government commends to the house with confidence. We believe it will be of very substantial assistance to the provinces. We believe that through them very great benefits will flow from this measure to the municipal governments. We believe the unemployment problem will be assisted very substantially by the use which the provincial and municipal governments will undoubtedly make of this additional assistance; and we believe, also, that this will make a contribution to better relations between the dominion and provincial levels of government in this country.

I was flattered in the discussion yesterday by the request of one hon. member for rapid fire answers to certain questions which actually involved considerable calculation. I indicated to him that if he would put his questions on the record I would obtain the answers and would give them when second reading of the bill was moved. I would therefore like to give the following replies to the questions that were put yesterday by the hon. member for Montmagny-L'Islet.
The first question was, "Is the increase in the per capita equalization $3.97 for each province?" My hon. friend came close. The difference between the per capita levels to each of the provinces is $3.96, that is the difference between $41.58 which appears in the table on record in Hansard, which is the per capita for the top two provinces, Ontario and British Columbia, under the proposed 13-9-50 formula and the top two provinces under the existing formula of 10-9-50. The per capita difference in equalization varies for each province depending on the extent to which standard taxes per capita have increased as the gain is made up of two factors, first the increase in the standard tax returns and, second, the increase in equalization.
I have had a table prepared which indicates the result for each province. It refers only to these two factors, namely the increase in the standard tax returns and the increase in equalization before introduction of the stabilization payments or application of the stabilization factor. If it were the wish of hon. members that this be placed on the record I should be glad to do so with the reservations I have indicated, that this particular table does not take account of any stabilization payments.
The second question was, "What is the increase in the equalization for Quebec as a result of the change in the formula?" The answer is that the increase to Quebec on the basis of the most recent estimates applied to the 1957-58 data totals $18,859,000, of which $8,755,000 is attributable to the equalization principle and $10,104,000 to the increase in the standard tax yield.
The third question was, "Will the increase in the standard rate of individual income tax apply to the 95 per cent stabilization based on the return from the act for the fiscal year 1957-58?" The subsection referred to-and I made mention of this last night-is subsection 4 (a) of section 5 of the federal-provincial tax-sharing arrangements act. That subsection provides that the basic stabilization amount shall be:
-for the fiscal year ending in the year 1959, 95 per cent of the total of the tax equalization payment, provincial revenue stabilization payment and current tax rental payment applicable to the province for the fiscal year ending in the year 1958.

This is, therefore, a matter of actual money that was received, and is not a question of backdating a new proposal.
Stabilization has two principal forms and purposes. First, it provides that no province shall be worse off under the new formula which became effective April 1, 1957, than it was under the old rental agreements which expired March 31, 1957. This was made necessary by the preferred per capita position held by British Columbia and Prince Edward Island under these rental agreements during the period 1952-57. They have in this current fiscal year 1957-58 benefited from that stabilization provision. Second, it provides that no province shall receive less than 95 per cent of what it received in the previous year or, for subsequent years, the average of the previous two years. The purpose was to assure that no province would suffer a sudden and serious fall in revenue from federal payments under this act in the five year period commencing April 1, 1957.
To do as was suggested by the hon. member's question would go further than was ever contemplated so far as I have been able to determine. The effect would be to make any increase in standard rates retroactive to the extent of 95 per cent of the change. If this had been the intention when the existing plan was formulated and the legislation passed, presumably the previous government would have worded the subsection in a manner that would have covered this, and would have related the stabilization to the current rates of standard taxes and not to the actual payments in the previous year. I can find no evidence that any province ever suggested that this was a proper application of the stabilization principle. Therefore, Mr. Speaker, the bill now before the house, Bill No. 247, to amend the Federal-Provincial Tax-Sharing Arrangements Act does not give effect to or provide for any such change as was suggested in my hon. friend's question.
This measure was commended by every hon. member who spoke in the discussion on the resolution stage. It is our confident hope that the measure will now command strong support of this house, particularly having regard to the extent to which it does bring needed assistance to the provincial and municipal levels of government in this country which hold a constitutional position of very high importance under our system, and which carry very heavy constitutional responsibilities.


James Sinclair: Mr. Speaker, the Minister of Finance has pointed out that we have had two days' discussion on the resolution stage of this bill, and has expressed the hope that the matter would now go forward speedily. I would recall to 96698-250i
Dominion-Provincial Relations him that when similar measures were before the house in earlier sessions a great deal more than two days were spent discussing them. The hon. member himself on one occasion talked for about two days, if all his speeches were grouped together. However, perhaps there is not the same need for extensive discussion today, because in those days the Conservative opposition were violently opposed to the principle of our bill but today we find the exact principle incorporated in this bill without a single change.
What are the three principles of these financial arrangements with the provinces? First of all is tax sharing of the three direct fields which under our constitution can be used by both the federal and provincial governments. Those are the fields of personal income tax, corporation tax and succession duties. Second there is equalization, a new principle introduced by Mr. Harris bringing the tax collections per capita in all the provinces up to the average of the two wealthiest provinces. Third there is stabilization, the guarantee to the provinces which the minister has just described, under which they can count on stable revenues because of the guarantee that their payments during the term of the agreements would not fall below the final payment of the last agreement or 95 per cent of payments in subsequent years.
The only real change in this bill is of a minor nature, changing one of the tax rates from 10 per cent to 13 per cent. Aside from that the Conservative party has now adopted in toto the Liberal policy behind these dominion-provincial tax-sharing agreements.
Let me just touch briefly on each of these three main principles. First of all I mention tax sharing. The agreement drawn up last year by Mr. Harris provided 10 per cent of personal income tax to be allotted to the provinces, 9 out of 45 percentage points of corporation taxes or in effect 20 per cent of the federal collection of corporation tax-it is not quite that because of course small corporations pay a slightly lower rate, but in essence it is 20 per cent of corporation tax- and 50 per cent of succession duties. It is here and only here that there is this change in one of these rates, the income tax rate, from 10 per cent to 13 per cent.
Then there is the equalization principle which was regarded as an extremely important factor in this assistance, to help the poorer provinces have access to revenues which would enable them to discharge their responsibilities to their citizens in the same way as the wealthier provinces, those which are endowed either with greater natural resources or those which have had more benefit out of the tariff in Canada through industrialization.

Dominion-Provincial Relations
The Minister of Finance does not seem to be really aware of what the equalization payment amounts to, because as reported at page 3847 of Hansard, when he was giving his explanation at the resolution stage he described it in this fashion:
It takes the average of the two top provinces in the matter of personal income, the per capita income, and makes provision for a federal grant, an equalization payment, designed-
Listen to this.
-to bring the per capita income in each province up to that average.
It would take far more than the revenue of this government to bring personal incomes in the provinces up to that average.


Donald Methuen Fleming: There is a word omitted.


James Sinclair: Yes, there is a word omitted. But the minister did not make that correction, and as far as the record is concerned that is the formal explanation of the minister on equalization payments.


Donald Methuen Fleming: I may tell my hon. friend that I have not yet had time to read over the Hansard of that day. That will be corrected, because there is a word omitted.


James Sinclair: I would point out again that you have a great many able officers in your department who no doubt were prepared to advise you that you had made a very serious error there. We, of course, know you do not consult them as much as you should. That leads me to the third principle, namely this matter of stabilization, a very important point, and a point which is in this legislation, I say with pride, primarily because of the representations of Premier Hart of British Columbia, who wanted this sort of guarantee. The provinces, when they gave up these direct fields of taxation to the federal government, wanted some stability of revenue in return. It was because of his very determined representations that this principle was incorporated, in these agreements, a principle which is of immediate advantage not only to Prince Edward Island, our smallest province, but to British Columbia, our biggest and fastest growing province.


Jean Lesage: Not the biggest.


James Sinclair: The biggest as far as the future is concerned. This principle of stabilization is one which successive premiers of British Columbia and premiers of Prince Edward Island have championed with vigour at each dominion-provincial conference. Premier Johnson of British Columbia and only this spring Premier Bennett of British Columbia put up a very vigorous battle on behalf of this third feature, namely stabilization. But

Dominion-Provincial Relations to give the provinces all the money they needed to discharge their constitutional responsibilities and, of course, the municipalities too.
Well, he assumed office on June 21. This matter had been debated at great length in the House of Commons in previous years. The Tory position had been well explained by people such as himself when he was the member for Lake Centre and for Prince Albert and when the Minister of Finance was the member for Eglinton. Since they have now adopted in toto the Liberal principles behind this bill and are making only a trivial amendment to change one figure from 10 to 13, it would not have been difficult to call a conference of the premiers last July and then by telegram, if they want to pursue that course, have told the premiers in September that they were getting this extra money for the present year. Then the premiers could have used that money to do something to provide employment this winter, but instead of that course the government stalled and procrastinated, had a two-day conference in November, sent the premiers home and now on the eve of an election suddenly come forward with this proposal out of the blue.
History certainly repeats itself because that, of course, was the technique of the Bennett government when they faced the country in 1935. In their last month of office they came forward with a great flood of popular legislation, things they had stalled on and refused to do in the previous five years, and then hurried into action hoping the people would forget the inaction of the previous years. The Tory party could have done these things last September; it could have made these grants then.
What about employment? The Minister of Finance has told us that is one of the reasons for the bill. Let us go back for the moment to the two-day conference of last fall and quote the words of the Prime Minister. This book, the record of the conference, has a blue cover and a frontispiece on it. Neither of them has been torn off. I did not have to check with any official in any department to find out what the rest of it is about because the title is here on the covering page and also properly typed out on the initial page. I must also point out that it is not classified, neither "confidential" nor "secret" is typed on either of these pages which I have now produced.
I want to read the words of the Prime Minister as found on page 10 of the report. He was talking to the 10 premiers assembled at the conference, and this is what he said:
I wish now to say a word or two on the question of unemployment. In many countries of the free

world there has been a pause this year in the rapid pace of development and, as in 1954 and 1955, an increase in unemployment. You will remember in those years that while the percentage of unemployed in Canada in relationship to the number employed was much higher than it is today-
This was last November he was speaking, of course.
-that fact and those circumstances did not herald the beginning of depression. What actually happened was that there was a levelling off process which subsequently led to an even wider development and expansion program. When I say that, of course, I do not mean that prompt action must not be taken to meet what I believe-
These are the key words of his report to the premiers.
-to be a temporary situation this winter. This government has taken active measures to meet this short term situation and is taking additional ones.
I find it very difficult to reconcile that with the statement of the Minister of Finance that this additional money is to help unemployment, when the money does not even begin to flow to the provinces until next April.


Donald Methuen Fleming: They know now that it will be coming, and they can prepare their budgets accordingly.


James Sinclair: They can prepare works, but it needs money to start these things and provide jobs. If you had told them last September and had given the money last September they could have had these projects under way now.
Let us talk about this short term situation. We all know that the Prime Minister is a very careful student. He is not a man who makes off the cuff statements like the Minister of Finance. He does not do his own calculations, I hope. The Prime Minister would not go before the 10 premiers without having very careful assessments of the economic and employment situations before assuring the premiers that this was just a short term recession and would be over in the spring. Therefore I should like to ask the Prime Minister whether, before making this reassuring statement to the premiers, he had studied the quarterly confidential reports which are made by the Department of Trade and Commerce to the Minister of Trade and Commerce.


Mr. Speaker:: Order. It seems to me that the hon. member in going into the unemployment situation is straying from the principle involved in the bill.


James Sinclair: Mr. Speaker, the reason I tied it in so directly is in the light of the statement the Prime Minister made to the premiers and the fact that the Minister of

Finance in opening this discussion said that one of the reasons for these extra payments at this time was to assist in relieving the current unemployment situation.


Mr. Speaker:: I follow the hon. member that far, but if he goes on to deal with the unemployment problem then I think he is going beyond the scope of the bill.


James Sinclair: I certainly bow to your direction in that respect. I assure you I was not going to go into actual details with respect to employment. In view of the fact that we are asked to support the bill, one of the reasons for which is to provide money to relieve unemployment, what I was asking for was a reconciliation between the statement made by the Prime Minister to the premiers at the dominion-provincial conference which occasioned this bill and the statement made to the House of Commons by the Minister of Finance at the opening of the debate, at the resolution stage. If I wander into the actual field of unemployment and what should be done I hope, sir, you will check me.
I think the members of the house in discussing the bill on this basis would also like to have the benefit of the confidential reports, which the Prime Minister must have had before he addressed the premiers at the dominion-provincial conference, reports from both the Department of Finance and the Department of Trade and Commerce. Normally, of course, these reports made by a departmental head, a civil servant, to a minister have been regarded as confidential and secret, but the Prime Minister has broken new trails this session by tabling one of them.
In tabling that confidential document he justified himself this morning by saying he had done so because the opposition had asked for it. I am a member of the opposition, and I should like to ask for these confidential reports for the three quarters before the Prime Minister made his speech, made by the deputy minister of trade and commerce and the deputy minister of finance. They are not hidden but they are confidential; and since they are confidential they are not lying around on a desk for a charwoman to pick up. But I can tell you where you can find them. You will find them where they should be, in the files of the deputy minister of finance and the deputy minister of trade and commerce.
I come back to the point I was raising about the need for the bill. If, as the Prime Minister assured the premiers, all is well and this is just a short term unemployment situation we are experiencing this winter, why does the Minister of Finance put forward in justification of the measure the fact
Dominion-Provincial Relations that the extra money which is going to be paid will help the provinces this winter with their very serious unemployment problem? I raise this point and make this request. It would be very helpful in our discussion of the bill if we could have these confidential reports from the two deputy ministers on which the Prime Minister must have based his reassuring remarks to the premiers. If the Prime Minister wants to rip off the two covers of these reports, and table them without classification I think we will not object, because that principle has been established by him.
I should like to close by stating by way of summary that this bill changes not one iota the principle of the dominion-provincial fiscal arrangements which were passed by this house this spring, as sponsored by the former minister of finance, Mr. Walter Harris. There has been one minor amendment to increase one tax division from 10 per cent to 13 per cent. So far as British Columbia is concerned I think the people will want a much better explanation than they have received so far as to why they were led up the garden path to believe they were getting $5.5 million instead of getting just $2.8 million. They will want an explanation, too, as to why the per capita extra payments made to our province are just half those made to the provinces of Ontario and Quebec, which are the only two provinces that could be fairly compared with British Columbia.
I think, however, the great interest of the nation will be in the payments made to Ontario. This province got the most, and it continues to get the most.


An hon. Member:: Hear, hear.


James Sinclair: A Tory member says, "Hear, hear". This indicates the way they value the equalization payments and the special grants to the Atlantic provinces which are, of course, in direct contradiction to this position that Ontario wants everything for itself.
What I want to talk about is the fact that last spring when Premier Frost was here he said he had to have at least $100 million to discharge his constitutional responsibilities in his province. Then last June on the platform he again announced to an audience in Toronto-I shall quote from the red book. No; hon. members opposite now know the Prime Minister's promises as well as we do, so quotation is unnecessary. Premier Frost pointed and said, "This man Diefen-baker will get us an extra $100 million'*. Well, Premier Frost did not get $100 million, but he got $22 million. He is happy with it, so it was only a bargaining position he was establishing last spring when he asked the

Dominion-Provincial Relations Liberal government for $100 million. He would have been happy if he had received $22 million. This was Premier Frost's reaction to this proposal.
Even more interesting, of course, is the way this shows again how the Tories have failed to keep their election promises. Instead of the $100 million for their favourite province they were able to settle for $22 million, or one fifth that amount. Then there is the promise we had in advance of the baby budget, from the Prime Minister and the Minister of Finance, that they would give this nation $500 million in tax cuts this year. In the end they provided only $26 million this year, or one twentieth of what they had promised. So in the end we have a watered down settlement of Tory promises from last June; the promise of $100 million for Ontario and the settlement for $22 million; the promise of tax cuts of $500 million and the settlement for $26 million.


Stanley Howard Knowles: Mr. Speaker, as we indicated at the resolution stage it is our intention to vote for this measure. In doing so we will be taking a position, unlike that of the Conservative members of this house, consistent with the position we took in 1956. We voted for this measure then and they voted against it. As a matter of fact they did so on at least two occasions. We note now that they are proposing slight amendments to the measure without changing its basic principle. We are voting for this measure not only because that is a stand consistent with the stand we took in 1956, but because we believe that the provinces need and are entitled to such additional revenues as are provided in this legislation.
We are voting for it as well because at a time when special recognition has been given to the particular needs of the Atlantic provinces we feel, as we have already made clear, that the basis for special aid to any of the provinces of this country should be laid down in terms of a formula that would be applicable to any province. We hope even yet that will be done, so far as the Federal-Provincial Tax-Sharing Arrangements Act is concerned.
We are for this measure, not only for the reasons I have given but because we believe that Canadian unity should be something more than words, something more than a pious slogan. We believe that a real and determined effort should be made to raise the living standards, to raise the standards of services for our Canadian people to the highest possible levels in all parts of this country.
One of the economic facts with which Canada has had to contend for a number of
years is the fact that because the head offices of some of the powerful corporations of this country are located in the central provinces, the incidence of taxation does not automatically result in the benefit of that taxation accruing to the people as a whole. It is because of that economic fact that it has been necessary to go in for tax rental agreements, tax-sharing agreements, and the various changes that have been made in these proposals.
We feel that still further efforts along this line should be made. We feel that much more consideration should be given to the fiscal needs of the various areas of the country, and we suggest to both of the old parties that we have not yet reached the end of the road in trying to achieve a satisfactory solution of the problem of federal-provincial fiscal arrangements.
Before I go on to the few words I want to say in pursuance of that position, may I say that though we are voting for this measure for the reasons I have indicated, we still regret the manner in which it has been brought forward. As my hon. friends of the Conservative party said so well when they were in opposition, this is a field, the field of federal-provincial arrangements, where the utmost in co-operation, consultation and mutual understanding is required. Yet in this instance, despite the promises of the Prime Minister, despite the promise in November that there would be a resumption of that conference in January, the government has gone ahead and taken this unilateral action. The only way some of the premiers learned about it in the first instance was by reading about it in the newspapers. In due course all of them, it appears, received their telegrams. There has been no attempt at consultation, no attempt to work out even this interim arrangement on the basis of consultation and mutual understanding.
We are not going to take further time to berate the Minister of Finance for the arithmetical errors he has made and the errors in understanding the legislation for which he is responsible. But we do suggest that when a minister of the crown has made a serious error or series of errors he should draw those errors to the attention of the house without waiting until someone else has checked him up and then making his explanations.
I suggest that in our view this whole question of federal-provincial fiscal relations calls for a great deal more than has yet come within the compass of this legislation or even the negotiations that have been held in connection with this subject. The Prime Minister himself, at the conference in

November and in the statements he has made in the house, has recognized that federal-provincial fiscal arrangements involve more than just a sharing of taxes. He has admitted that the question of unemployment has to come into the picture. Indeed, one of the promises he made to the federal-provincial fiscal conference was that the federal government would do something further with regard to unemployment assistance, namely remove the threshold in the Unemployment Assistance Act.
It is not now in order for us to rehash the debate that took place on that legislation, but perhaps I might point out that we have still not seen an implementation of the principle laid down many years ago that the federal government should be responsible 100 per cent for employable unemployed. It is still accepting that responsibility only to the extent of 50 per cent, and I call the Prime Minister as my witness that unemployment is a matter germane to the question of federal-provincial fiscal arrangements.
If the federal government and the provinces are going to address themselves to the economic problems of this country, one of those problems is that of employment or unemployment, and we urge upon both levels of government a much more serious approach to this problem than has yet been indicated. We suggest to the Minister of Finance and to the government that there is really a tremendous opportunity in this whole field of employment to come to grips with the fiscal problem.
It has been estimated that for each person in the labour force the contribution to the gross national product is of the order of $5,225 per year. I therefore submit that one of the ways in which to increase tax revenue for the federal and provincial governments is to tackle the problem of unemployment. If the quarter million, half million or three quarters of a million of our people who are now unemployed could be put into employment and one could multiply that number by the increase in the gross national product of something over $5,000 per employed person, one would realize that there is a solution to our governmental revenue problems which would be much more effective than the mere sharing of an inadequate tax-inadequate because our gross national product is not as high as it could be under present conditions.
The Prime Minister also admitted at the federal-provincial conference that germane to the whole question of federal-provincial arrangements is the question of what federal-provincial governments do about health. This 96698-251
Dominion-Provincial Relations was admitted when the Prime Minister asserted that there was general agreement at the conference to do something about the financing of the hospital insurance plan provided for in the statute passed in 1957. There seems to be disagreement between the Prime Minister and the premier of Manitoba as to what aspect of hospital insurance financing was agreed upon. The Prime Minister says it was as to the effective date of the act, while the premier of Manitoba says it was with reference to the inclusion of mental and tubercular cases within the provisions of the legislation.


Paul Joseph James Martin: There is no doubt about that; that is indicated by a reading of the communique.


Stanley Howard Knowles: The
interpretation placed upon the agreed communique by the premier of Manitoba would indicate that that is correct.


Paul Joseph James Martin: Hear, hear.


Stanley Howard Knowles: The
point I am making now is that it has been admitted by the Prime Minister himself that in the context of the federal-provincial fiscal arrangements, when you are talking about what the federal and provincial governments can do for the economy and well-being of the country one of the matters to be discussed is the health of our people. I call upon the federal government, if it is sincere in its assertion that these matters of federal-provincial fiscal arrangements are extremely important, to pursue that important matter not only by having discussions as to the sharing of the tax dollar, but by having further discussions as to the ways and means to greatly improve the contribution made from the treasuries of this country to protect the health of our people. In other words, let us not have any further delay in getting the Hospital Insurance and Diagnostic Services Act into operation; let us not have any further delay in including all types of illnesses within the provisions of that act, and let us move along further to a national health insurance program.
I insist, Mr. Speaker, that in doing something in this field the government would be pursuing more effectively than has yet been the case the assertion that federal-provincial fiscal arrangements are of great importance to this country. They are of great importance, but they are of importance not just in a vacuum, and not just in terms of dollars and cents; they are of importance in relation to some of the specific issues which are of concern to our people.
I suggest to the government across the way that there are other fields where there
3964	HOUSE OF
Dominion-Provincial Relations should be federal-provincial co-operation. We have raised in this house on a number of occasions-and again I must refer to this only in passing, because there has already been a debate on this matter during this session-the whole question of education, which is more and more being recognized as an important matter to which Canada must pay increased attention. If we are going to do that, Mr. Speaker, it calls for more than fine words and fine speeches; it calls for a serious endeavour to grapple with the financial problems related to education.
I submit that this matter calls for federal grants in aid of education without interference with the jurisdiction of the provinces in this important field. May I point out that this is one aspect of federal-provincial fiscal arrangements which means something specific and which has not been touched upon in the bill, good as it is, which deals only with the sharing of the tax pie we now have and which changes that sharing to only a very slight extent.
The government across the way has had a good deal to say about its national development program. We have urged the fullest possible development of the resources of this country, and that position is taken by all political parties and by all those who are interested in public affairs. In the same vein that we suggest that it would improve our governmental revenue picture to have the unemployed put to work, so we say this position would be greatly improved if real steps were taken to develop the economy of this country in all its various regions.
All levels of government are having difficulty in getting by on the available revenues. You do not really solve these problems by changing the angle of division within the pie. You do not solve them nearly as well in that way as by dealing with them as they ought to be dealt with, namely by increasing the size of the pie, increasing the wealth that is produced in this country. We suggest that as part of the active pursuit of effective federal-provincial fiscal arrangements there should be greater concentration as to ways and means of co-operating in generally developing the resources and the economy of this country.
I could go on to talk about the need for a second trans-Canada highway and assistance to other highways and roads, or about the need for assistance in the building of bridges and other public works. I could refer to the speech which my hon. friend from Kootenay West has made so well in this house on the need for a national conservation program. I could refer to the speech which my good friend from Burnaby-Coquitlam


made the other day about the problems of the municipalities. These questions are all wrapped up in this basic problem of financing the needs of this country, and that is what is before us in this bill which is before parliament today.
Our complaint is that the government seems to see it only in terms of a slight alteration in the division of the revenues which are now available. Basically what we are concerned with is the economy of the nation as a whole. What we are concerned about is organizing that economy in terms of national unity, so that all our people across Canada will have a chance of securing the highest possible standards of living and the highest possible per capita income.
The Minister of Finance made a mistake the other day when he referred to per capita income. I hope he will not take that out of Hansard. I hope that having made that mistake he will realize that it is one of the tasks of government to raise the per capita income of our people, and particularly to raise it in areas where it is lower than in others. That is what we are concerned about, not just the division of the pie among the various spending agencies but the raising of our production levels, our standard of living and our standard of services.
That, I say, should be the aim of this legislation. The legislation before us has been brought about in a way we do not find satisfactory. It has been brought about on a unilateral basis. This business of doing it by telegram, and blaming an employee of the Canadian National Telegraphs because two of the premiers did not get their telegrams when in reality it was the fault of the government for relying on this method of so-called consultation, is not good enough as far as we are concerned.
The extra money to be received by the provinces will be welcomed by them, and we are voting for this measure; but we hope we will yet have in this country a government which sets its sights much higher in terms of what can be done to raise our standard of living and our standard of services than either the government which is now in power or the government which held office for too many years.
Hon. members of the Liberal party have enjoyed in the last day or two pointing out that the Conservatives are buying off Premier Frost at 20 cents on the dollar. I do not blame them for making a debating point of that, but I think I could make one too. When I hear this 20 cents on the dollar mentioned and the suggestion that the government is giving only one-fifth of what it promised to the premier of Ontario, I am

Dominion-Provincial Relations
reminded of another occasion when it was 20 cents on the dollar. In 1945 the Liberal government, as set out in the green book proposals-and those books are available, too, with the covers on them-


John Whitney Pickersgill: They were always public.


Stanley Howard Knowles: -
offered a health program to which the federal government was prepared to contribute $150 million a year. That was in 1945. It was three years before Mr. King even began to implement that promise, and what did he come down with? Thirty million dollars a year, or one-fifth of what was promised; twenty cents on the dollar. As a matter of fact right until the present time, when we are hoping to get the Hospital Insurance and Diagnostic Services Act into operation and when there have been some increases in the hospital construction grant, the amount being paid by the federal government in relation to the promise made in 1945 is still of the order of 20 cents on the dollar. Apparently hon. members across the way learned this technique of getting by with their promises at the rate of one-fifth from their predecessors in office.
We think that the people of Canada still feel this is not good enough. Promises which are made should be kept. We think the people of Canada still want full implementation of an adequate health program and an approach to federal-provincial fiscal arrangements which envisages not just a different sharing of the taxes received but a raising of the per capita income of our people, the raising of the standard of services provided for our people, and the raising of the standard of living generally for all our people in a united Canada.


Mr.  A. B. Pafierson@Fraser Valley: Mr. Speaker, it is not our intention in this group to unduly delay the passage of this measure. I believe it is recognized that we in this group believe in stating our position clearly and positively, but that we do not talk for the sake of talking.
My leader briefly but very adequately outlined our position with respect to this particular bill when he welcomed the proposal but voiced some misgivings with respect to the method employed in its introduction, and also the possible danger that this gesture on the part of the dominion government might be used as an excuse for not calling any further dominion-provincial conferences.
It was a source of disappointment, regardless of what reasons may have been given for the change, to find that the apportionment for British Columbia has been reduced from $5,500,000 to $2,800,000. Regardless of what 96698-2oli
reasons may have been given, it was a letdown to be told first of all that it was $5,500,000 and then to find that it had been reduced by so large an extent. The provinces are facing increasing difficulties in providing facilities and services needed by their people.
The previous speaker has outlined some of the responsibilities which devolve upon the provincial administration with regard to education, health, and other services, and we are all aware of the tremendous increase which has taken place in the cost of providing those services for the people. The various provincial and municipal authorities across the country are finding it almost impossible to keep up with the demand occasioned by increasing population, especially when the cost of providing such services has increased to so great an extent.
However, there is another factor which we must recognize, and it is this. During the past two years or so we have been suffering from the effects of a fiscal policy which was introduced by the late administration and which is commonly referred to as the tight money policy. The dangers of the policy had been outlined and stressed on many occasions, but seemingly unmindful and heedless of these warnings the late administration continued that policy, with the result that governments at the municipal and provincial levels encountered almost insuperable obstacles in the discharge of their responsibilities.
The present Progressive Conservative government takes credit to a certain extent for an easing of those restrictions, but I would suggest that even up to the present time the easing of restrictions has not resulted in any considerable assistance in these particular fields, and until there does come a time when we get back to normal and municipal and provincial governments can secure adequate finances at reasonable rates and in the amounts that are required, we are still going to be up against a most difficult problem. I would point out with regard to the $2.8 million for the province of British Columbia that it is extremely meagre compensation for the loss occasioned by the tight money policy that has been in force for some time.
The matter of dominion-provincial fiscal arrangements is becoming one of urgent importance. As I have said, through the unjust and unsatisfactory division of the tax dollar the provinces and municipalities are unable to fulfil their constitutional responsibilities. It was pointed out yesterday that approximately 74 cents out of every tax dollar accrues to the federal coffers, and I would suggest in view of the responsibilities that

Dominion-Provincial Relations are faced by the provincial and municipal governments that this is a highly unrealistic division.
Speaking at the time when the dominion-provincial tax-sharing agreements were being discussed, about two years ago, I suggested to the then minister of finance, Mr. Harris, that if he would face the issue squarely and bring in fiscal arrangements that were more in keeping with reality the federal government would not be confronted with so many demands upon the federal treasury, and I believe that is still the case.
I would now like to refer to a bulletin called Economic Intelligence, issue of December, 1957, published by the economic research department of the chamber of commerce of the United States, which carries an article referring to the governors' conference in Williamsburg in 1957, at which President Eisenhower called for a general re-examination of the changing governmental structure. He expressed concern over the shift of power from local and state governments to the federal government, and suggested that a task force be established to do the following things:
(1)	Consider existing federal programs which should and could he returned to state control.
(2)	Recommend appropriate specific tax sources which could be currently returned to the states.
(3)	Identify future problems that may call for government attention and to recommend the appropriate governmental level at which such responsibilities should be assumed.
I wish to read a brief quotation from the speech Mr. Eisenhower made in connection with these suggestions, as recorded in the Economic Intelligence bulletin:
Every state failure to meet a pressing need has created the opportunity, developed the excuse, and fed the temptation for the national government to poach on the states' preserve. Year by year, responding to transient popular demands, the congress has increased federal functions.
I suggest that it might be to our advantage if such a task force, in the form of a committee or commission, were set up in Canada to consider some of these very same problems, which I believe are very real in Canada at the present time. It seems to me that with respect to the consideration of the problem of provincial jurisdiction and the encroaching of federal authority upon that jurisdiction we ought to be sure that if there is any change in responsibility it is done in a constitutional manner, and not brought in through the back door. We find that with increasing grants from the federal government to the provincial governments there is in many respects a corresponding increase in control and direction.
As I have already stated, we welcome the increased amounts but again voice the conviction that there must be a full and careful

reappraisal of this whole question of dominion-provincial fiscal arrangements. The holding of a conference is imperative. I do not think we can consider as adequate the excuses given by the government. When you analyse the whole situation it boils down to the fact that the government did not want to call a conference, and is trying to blame the opposition for its own lack of interest and failure in calling a conference at this time. The government talks about the opposition speaking too long carrying on the debate, and refers to the long hours the house is sitting, but the crux of the matter is that the calling of a conference is a responsibility of the government which it must assume in order to fulfil its promises and carry out its obligations. A conference should be called, and should continue to meet until this entire matter is resolved.


Mr. Speaker:: Before calling it one o'clock may I remind the house that at one o'clock the ceremony of the presentation of a portrait of Thomas D'Arcy McGee will take place in the Hall of Honour at the library end. The members of the Thomas D'Arcy McGee association will gather there to make the presentation, and I would hope that a number of hon. members of the house would be able to attend.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
Mr. T. A. M. Kirk (Shelburne-Yarmouth -Clare):: Mr. Speaker, to the best of my knowledge no Nova Scotian has as yet taken part in this debate. As a Nova Scotian I should like to make a few comments on Bill No. 247, and to make special reference to that portion of the bill which applies to the special fiscal or adjustment grants.
In doing so, however, I should first of all like to pay a tribute to Mr. Henry D. Hicks, the present leader of the Liberal opposition in the province of Nova Scotia and the former premier of that province who, when attending the preliminary conference in April of 1955, first made the suggestion that special fiscal or adjustment grants should be made. In making that proposal he brought it forth as one that would apply not only to the Atlantic provinces. He brought it forth as a type of policy which could be applied to any province should conditions arise similar to those which were in effect in the maritime or Atlantic provinces when he first brought forward the proposal.
There is no question but that the people in the Atlantic provinces will consider this $25

million, this portion which is to be the special assistance grant or special fiscal grant, of great assistance. They will consider this a move in the right direction. I think they realize, as must the house, that a move of this nature, an amount such as $25 million, is needed in the Atlantic provinces today because of the deteriorating economic conditions even more than it was when Mr. Hicks first made the suggestion less than three years ago. I feel that the real objective of the government should not be deficiency payments, if I may call them that, to the governments of the Atlantic provinces but efforts to bring about higher incomes for the people of the Atlantic provinces. Such higher incomes could be brought about, of course, by policies leading to industrial development. In other words, what we need to assist us in the Atlantic provinces are some imaginative proposals and policies.
I am thinking of one of the steps that was taken along that line only last year or to be more exact, less than a year ago. It was one of the most imaginative steps that has ever been proposed for the maritime provinces. I refer to the action by the then minister of northern affairs and national resources, the hon. member for Montmagny-L'Islet (Mr. Lesage) and the then finance minister, Mr. Harris, when they brought forth the thermal power policy for the Atlantic provinces.
I think of another step which was taken by previous Liberal governments within the last few years which resulted-


Donald Methuen Fleming: On a point of order, Mr. Speaker, may I say this. We are not discussing thermal policy, surely. This is a debate on the motion for second reading of this particular bill. It does not mention thermal power.


The Acting Speaker (Mr. Rea):: I think I shall be obliged to remind the hon. member that he is a little off here. I have been listening to him very carefully.


Thomas Andrew Murray Kirk: Thank you, Mr. Speaker. As usual I will bow to your ruling. I will say to you, if I may, and to the Minister of Finance that what I was trying to show was that in the past imaginative proposals have been put forward by previous Liberal governments, and I am trying to show that what we need in the maritime provinces is such policies rather than what I called a moment ago deficiency payments.
With that in mind I think there are several steps that could be taken which would be of assistance to carry out the purposes of the bill as outlined by the Minister of Finance. He said it is to authorize the payment of certain grants to the Atlantic provinces. In the course of his speech he spoke of the great
Dominion-Provincial Relations good it would do the Atlantic provinces, and he referred to the present unemployment situation.
I do not intend to go into details about the unemployment situation, particularly after the comments which were made this morning, but I would hope that some action would be taken or some policy developed which would relieve the present unemployment situation, improve the employment situation and bring about a higher per capita income to the people of the province rather than a higher income to the government of the province directly from the federal government.
I think one of the things that might and could be done by this government in these proposals would be to bring us up to date with respect to a survey of the natural resources of the Atlantic provinces, so we could make speedier use of our natural wealth and thereby raise the standard of prosperity in that part of Canada, and at the same time raise the income of the individual citizens. Another move we might make which would be of great assistance would be the development of an Atlantic provinces capital assistance fund for the purpose of financing those large projects which are essential for sound industrial development.


Donald Methuen Fleming: I am sorry to interrupt my hon. friend, but surely this is not the proper time to debate other measures that might be of assistance to the maritime or Atlantic area. This surely is a debate on the second reading of this particular bill.


John Whitney Pickersgill: If I might do so I should like to say just a word on the point of order, Mr. Speaker. Surely the minister has indicated, and it is indicated in the bill, that the purpose of this bill is to pay, as my hon. friend has put it, deficiency payments to the Atlantic provinces because the average income of those people is below the average income in the other parts of Canada. Surely we are not to be limited so strictly in debate here that an hon. member cannot rise in his place and say that, desirable though these deficiencies payments are, it would be more desirable still to bring these incomes up so that such payments were not necessary. That surely is addressing oneself directly to the principle of the bill, and I submit that my friend the hon. member for Shelburne-Yar-mouth-Clare is completely in order.


Stanley Howard Knowles: On
the same point of order, Mr. Speaker, may I say that I am bound to support the position taken by my friend the hon. member for Shelburne-Yarmouth-Clare. Otherwise almost the whole speech I made this morning was

Dominion-Provincial Relations out of order. I am grateful to the Minister of Finance that he did not raise the point then.
I would point out that in opening the conference that produced the legislation or as a result of which we have the legislation that is now before us, the Prime Minister said that the purpose of that conference was to take steps to assure the ability and capacity of federal and provincial governments to discharge their respective functions. Surely involved in the whole question of these federal-provincial fiscal arrangements is the question as to what is their purpose. The Prime Minister went into unemployment, health insurance and these other matters. Surely we are entitled to express our views as to the means that are necessary to carry out the intent of a federal-provincial approach to the economic problems of this country.


The Acting Speaker (Mr. Rea):: Order. As everyone realizes, of course, this bill covers the relation between the provinces and the dominion with reference to revenues. Hon. members will realize that we cannot allow them to start going into unemployment and other fields, as happened this morning. I see no reason why those fields cannot be mentioned. However, I do not think they should be gone into as far as debate is concerned, so there would be a great deal of discussion on the matter. They might be mentioned in passing.


John Whitney Pickersgill: First they gag the provinces and then they gag the House of Commons.


Donald Methuen Fleming: The Speaker is in charge here, not Bonavista-Twillingate.


Mr. Bell (Carleton):: He is too ridiculous to pay any attention to.


Thomas Andrew Murray Kirk: I have followed this debate
very carefully and have been in the house practically all the time since the resolution was first introduced. I have listened rather carefully to the discussions that have taken place and the points of view that have been brought forward, and in practically every case I felt that they met very carefully and accurately the words of the Minister of Finance when, in introducing the resolution, he said the government attaches very great importance to the measure for it looks upon it as one that will bring aid to the provinces and municipalities in this country and will be effective also in meeting the problem of unemployment. It was because of his original comments that I felt, sir, I would be in order in mentioning these matters but not debating them at length. I am trying to show that there would be even greater benefits to the

Atlantic provinces if further action were taken along the lines I have suggested.
I suggest that it would be of great help to us in the Atlantic provinces if assistance were given to the new British Caribbean federation and if long range plans were developed so that we could expand trade with that area. So far as my own province is concerned, in fact along the whole seacoast of the Atlantic provinces, we had our greatest development and economic activity in the days when we were trading by water with other seacoast areas.
Another thing I believe would be of even more help would be assistance in the establishment of trunk highways so that we in the Atlantic provinces could bring our products not only to the provinces of central Canada but to the thickly populated area of the United States, particularly the New England states. I believe further thought should have been given to the matter before the bill was introduced, with a view to following other methods to assist transportation within the Atlantic provinces and improve our facilities through the building of trunk highways, the construction of a causeway to Prince Edward Island, and extension of coastal services in the newest province of Newfoundland.
The study originally suggested some months ago and started prior to last June with respect to the effect of the Maritime Freight Rates Act should be continued and it should be decided whether or not the change from 20 to 30 per cent, that is the 50 per cent increase in the preference, which was given last spring, is adequate at the present moment. While that is being done, of course, there should be provision made for a continuing study of this particular problem. So far as the coal mines are concerned, as a rule my confrere the hon. member for Inverness-Richmond usually speaks in the house on that subject, as it is one in which he is very well versed and with respect to which he is most qualified to speak. But I should like to say that I believe further assistance should be extended. There should be some sign of imagination on the part of the government, some program of scientific and industrial research as to the possibilities of the use of coal and other natural resources as another means of expanding employment and increasing the per capita income of the maritime provinces.
In doing that I feel that a good deal of thought should have been given and must be given to the production and marketing of coal. If necessary there should be greater and more flexible use of subventions, not only with respect to the use of coal within the maritime provinces but also in central Canada.

One of our biggest problems in the mari-times, particularly in the province of Nova Scotia, has to do with farm or rural credit. Only a few months ago the Hawkins commission in the province of Nova Scotia made very definite recommendations.


Donald Methuen Fleming: Mr. Speaker, I must rise again. My hon. friend is talking about farm credit. He has been talking about coal and subventions. Coal subventions and thermal development are two matters that were discussed in earlier debates. Action was taken on them by the house, and they are concluded. Surely this is far removed from matters germane to the debate on second reading of this particular measure.


The Acting Speaker (Mr. Rea):: I do not
want to remind the hon. member again. I said before that he could mention these things but not enter into a debate on them. After all, we are on second reading of the bill and the principle of the bill is supposed to be discussed at this time. I hope the hon. member will not enter into a debate on every subject he brings up.


Thomas Andrew Murray Kirk: I thank you again for your ruling, not only for your ruling but the very kind way in which you made it. I only had one other main topic that I wished to mention, but in deference to your ruling I shall, of course, not do so. However, I am wondering whether one of the reasons I may have gone as far afield as I have on second reading is the fact that for the last few weeks I have done quite a bit of reading of speeches made by the Minister of Finance when he sat on this side of the house.
May I close by saying that we in the Atlantic provinces quite frankly appreciate this move and quite frankly say that we think it is a step in the right direction. We think it will be of help. We realize that so far as the $25 million is concerned, of which $7| million will go to my own province of Nova Scotia, it is for a period of four years and therefore is an interim deficiency payment. Nevertheless we believe it is a move in the right direction and will increase the incomes of the governments of each of the four provinces. It will enable them to carry on certain projects which they have started and others which they feel they must start.
Having said that, however, I must say in all fairness that when the announcement was made the premier of my own province, Premier Stanfield, as reported in the press only a day or two ago, said that while this measure would help it was not nearly enough, and would not provide for doing nearly as much as they had hoped would be done for
Dominion-Provincial Relations the benefit of Nova Scotia. Without mentioning again any of the specific items I mentioned earlier I say that much as this will be of help, if the government would take bolder and more imaginative action they would assist not only the Atlantic provinces but all the provinces of Canada. I do not mean by increasing substantially and directly the incomes of the provincial governments, but by taking such action as would increase the per capita income of the individuals in each of the provinces, and thus in turn improving the income not only of the provinces but of the federal government.


Mr. Colin Cameron (Nanaimo):: Mr. Speaker, I do not propose to spend too much time on the minister's arithmetic, as other members have done-


Stanley Howard Knowles: He
did not do so either.


Colin Cameron: -because, to be quite frank, I have a fellow feeling for the minister. I recognize him now as a rival to myself as champion in the field of faulty arithmetic. I always thought I was in a class by myself when it came to the ability to add up columns of figures and get two or three wrong answers. It was an ability I displayed during my school days, and I sometimes wondered if I did not shorten the life of one of my unfortunate teachers when he would be confronted with the wrong answer which I had achieved after several pages of careful but incorrect calculation. But what really sent him around the bend was when I came up with the right answer as the accidental result of a number of mistakes cancelling each other out.
The other day, when I heard the minister modestly taking pride in the fact that in spite of his somewhat unorthodox methods he had arrived at within $3,000 of the correct answer, I could almost see the ghost of that old teacher quivering with fury over me and muttering, "double distilled essence of stupidity". That is a phrase that has been graven on my heart and has caused me ever since to view my arithmetic with a very dubious eye, and always to check it with someone more competent than myself. This is a course I would commend to the minister.
As a British Columbian, Mr. Speaker, I was seriously perturbed when I tried to picture what was going to happen to the unfortunate premier of my province who, we are given to understand, is suffering anyway from a case of natural blind staggers, when he found that Santa Claus was holding before him a $5.5 million gift and then thrusting it back in the bag and producing one at half the price. He must almost have had a heart attack over that change in the minister's attitude. I am

Dominion-Provincial Relations not suggesting for a moment that this move on the part of the government can be categorized as a mere vote-catching measure. I would suggest, however, that I doubt if Mr. Bennett is going to vote Conservative this time. After all, this measure is not going to affect the lives of more than a few Canadian people, in fact only the 10 provincial premiers. There are only 10 votes involved, so I doubt that that is its purpose.
When the minister introduced this measure this morning it was referred to as the Federal-Provincial Tax-Sharing Arrangements Act; or has the name now been changed, because I noticed that he mentioned the dominion- provincial tax-sharing arrangement act? However, the minister left no doubt in our minds that the rose, by whatever name it is going to be called in the future, should smell very sweet in the nostrils of the Canadian people. He told us it was a very important measure. He suggested it was important because it would enable the provinces, for one thing, to cope with the problem of unemployment.
I was very pleased to find that the minister had, for the time being, laid aside his rose-coloured glasses and had actually been able to see that there was an unemployment problem existing. I cannot forbear pointing out, Mr. Speaker, that surely if what he has been urging on us this morning is true, then his mention of unemployment on the floor of this parliament will increase the problem this measure is supposed to help. I am glad he recognized it, however, and took off his rose-coloured glasses.
I think we have to regard this measure as somewhat in the form of an instalment of a serial budget. There are advantages in this rather peculiar way of presenting a budget in instalments. After all, the reader's interest is kept at a fever pitch all the way through. Undoubtedly, like the readers of serials in magazines, the reader, as he reads this part, will be saying to himself, "What will Donald do next week?"


Donald Methuen Fleming: We would both like to know.


Colin Cameron: Indeed we would. The minister told us this is a very important measure which is going to solve the economic problems of the provinces and enable them to fulfil their constitutional functions. According to the latest estimate it will cost about $87 million. The statisticians of the dominion bureau of statistics for whose competence with arithmetic I have great respect, tell us that by next March the number of those unemployed and seeking work will reach a million. I find that even the minister and I can do that simple piece of arithmetic. We can divide 1 million into 87 million quite easily, and we come up with $87. We can see all

the wolves at the doors of the unemployed shuddering back in fright at this flaming sword in the hands of the Minister of Finance.
Admittedly, Mr. Speaker, it is an improvement on the record of the unlamented Liberal government, a slight improvement. At least this government has taken one hesitating step. I suppose, because it is an improvement on the sorry record of the previous administration, our Liberal friends have been spending their time chiding the minister for his faulty arithmetic. In my opinion it is a much more serious problem that is involved than that the minister is no better than I in the matter of arithmetic.
I want to go back again to my own province of British Columbia. I want to ask the minister if he is seriously trying to tell us that an additional $2,800,000, I think the latest estimate was, is going to solve the serious problems that are now on the doorstep of the unfortunate Social Credit government of British Columbia. Of course Mr. Bennett may be able to use this $2,800,000 to pay the statutory school grants he gypped the school boards out of in November because he said he had no money. Even if he is able to do that these school districts will still be left with the serious plight that confronts them, and has confronted them for some years, a plight that is giving serious concern to every informed educationist not only in British Columbia but throughout the country. I suggest that the minister should hesitate to imagine that this $2,800,000 is going to solve even that problem, let alone the problem of unemployment, or is in fact going to make any material difference at all to the province of British Columbia.
I am asking these things, Mr. Speaker, because the minister presented this measure in precisely that light. He impressed upon this house the fact that this is a very serious measure, a very important measure; that it presumably is going to have a very serious and important effect upon the economy of Canada. I believe there must be a lot of people who are wondering if the minister has been signing cheques without entering the amounts on the stubs. A lot of people may be wondering whether or not he has been paying enough attention to the bank account before he signs the cheques, and may wonder whether or not some of them may come back marked N.S.F. Even if they do, I would submit that he is making an attempt, which is more than his predecessors in office did.
But we have had no word from him concerning any possibility that he is prepared to see fhat the bank account keeps pace with the cheques he is issuing. I am not going to repeat the figures I put on record

yesterday, Mr. Speaker, but I would suggest this. If this government is going to take even this faltering step, and will continue taking similar steps in the years to come, if by good fortune they find themselves in office again after next week-


Mr. Power:: Whose good fortune?


Colin Cameron: Their good fortune; after all I, as a neutral, can observe with equal equanimity either of these two parties sitting in power.


John Whitney Pickersgill: The hon. gentleman has no hope for posterity himself?


Colin Cameron: At least I have an unblemished ancestry.
I am going to suggest that if this government is going to proceed with this type of policy which is designed to further the distribution of wealth throughout the country, then they are going to have to take some decisive steps in order to direct to the public treasury some portion of the enormous sums that are now left in the hands of private individuals, private groups and corporations.
We have had no word of that from the minister. It may be, of course, that he is considering doing that after certain events take place which shall be nameless, because of course it would not be wise to name them in view of the serious effect they may have on the sinews of war. I do hope the minister has been totting up the amounts on the stubs in his cheque book, getting a little help with the addition to make sure he is right. Then he will realize that what we are suffering from today is an impractical division of the wealth produced in this country, a division that prohibits this government from doing anything worth-while or effective in those fields in which the minister says this measure is supposed to operate, the very fields in which the previous Liberal government so signally failed to move.
I would hope that some time in the not too distant future we shall have this serial budget wound up and a bound volume thereof presented to us, outlining the minister's proposals for a whole 12-month period if he is able to look that far into the future; because while I would say Mr. Bennett on behalf of the province of British Columbia will welcome this $2,800,000, it is not going to cope with the most serious problem in this country, namely the unemployment problem in the whole of Canada. I am afraid the people of British Columbia will look at this $2,800,000 with a rather cynical and sardonic eye. It may, as I say, get Mr. Bennett's vote, but I doubt if it will get very many more votes in British Columbia.
Dominion-Provincial Relations


Mr. Maurice Breion (Jolieile-L'Assompiion-Monicalm):: Mr. Speaker, I would like to
say a few words on this bill, not because I am against the principle of giving a few million to the provinces since there is never too much of a good thing, but there is one limit and that is the capacity to pay. A reproach has already been made to this government for spending large amounts of money without any planning or without introducing a budget. This, in my opinion, is the surest way to drive the economy of this country into a frightful mess.
I do not intend to go back to this aspect of the question, but in presenting his resolution the Minister of Finance said that the federal government is taking too large a share of the tax dollar, while at the same moment he has asked parliament to approve an appropriation of $187 million and is boosting more than ever the spending on the part of the federal government. It is apparent that we are facing a big deficit for the present fiscal year, and I am wondering if it is sound business to redistribute the tax dollar by means of a federal deficit.
This, however, is not my main interest in this debate. What I want is clarification of a sentence used by the Minister of Finance in his speech on Monday, as reported at page 3581 of Hansard:
We respect the constitution; we are federation-ists, not centralists, and we must take into account the fact that the burdens carried by the provinces in the matters of education, highways, social services, etc. have been increasing in almost astronomical proportions.
It is evident that the meaning of centralization and decentralization has a different connotation on the government side of this house from that on the opposition side. I think it is most necessary in the circumstances to have from the Minister of Finance a clear definition of those words, which were also used by the Prime Minister, because they tried to convey the impression that the Liberal government was centralist and the Conservative government is decentralist, in other words that the present government is protecting the autonomy of the provinces.
From the implication of the many bills presented to this house in the present session it would seem that the distribution of money is, to the government, the yardstick of decentralization. In this respect I might say that the Liberal government has been decentralist to the extent of $630 million, as compared with the small decentralization on the part of the present government to the extent of only $82 million. According to a

Dominion-Provincial Relations report in the Globe and Mail of April 26, 1957 the Prime Minister, in a speech on April 25, said:
We believe in the federal system of government. We believe that its preservation is essential to Canadian unity. We believe the federal system is today being challenged by the centralization complex of the St. Laurent government and that a health division and balance of revenues as between the federal and provincial governments must be assured.
Such declarations have been repeated on many occasions, particularly during the last election campaign.
(Translation):
Now, Mr. Speaker, I shall quote part of a letter which was sent a few weeks ago to Quebec Conservatives and which was read by Hon. Mark Drouin, Speaker of the Senate, at the close of a dinner given by the young Conservatives.
It is from the newspaper La Reforme, for January 9, 1958. Here is what Mr. Diefen-baker says of the Liberal party:
This opponent had been in power for 22 years. Was there, in the whole of our history, a period when dissatisfaction was more widespread, to such an extent that almost all the provinces rose against it because it had turned away from the spirit and the letter of the constitution which governs us and the respect for which is essential to the maintenance and survival of your most cherished rights and freedoms?
Let me add, Mr. Speaker, that when, during the election campaign, the Prime Minister stated repeatedly that the Liberal party had drifted away from the spirit of our constitution, I do not know what he meant, particularly since everyone is fully aware that what was intended by Sir John A. Macdonald was the creation of a monolithic state, as opposed to a federation of provinces. If this is what the Prime Minister had in mind, he can be said to be indeed working in the direction of centralization, as we shall see from the following remarks:
(Text):
In this declaration in Quebec a few weeks ago the Prime Minister implicitly approved the attitude of Premier Duplessis on matters relating to fiscal relations. It is interesting to note the attitude of Premier Duplessis with respect to this matter. In 1945 at a federal-provincial conference Mr. Duplessis had this to say:
(Translation):
It is the considered opinion of the province of Quebec, it is the considered opinion of highly qualified jurists, that the fact that the constitution of 1867 specifically gives to the provinces the right of direct taxation means conclusively that the provinces have priority in the matter of direct taxation.
And further on, on page 413 of the report, he says the following:

Natural resources belong to the provinces. They belong to the provinces to such an extent that the Privy Council decided that even a federal loan does not affect provincial natural resources. That is why I say that some consideration should be given to the exclusive and essentially indispensable right of the provinces in connection with natural resources, forests, water power, mines and so forth.
(Text):
We have in this declaration by Mr. Duplessis a complete contradiction of the attitude of the present government. In 1945 Hon. ' George Drew made a similar declaration in which he approved, in part, the attitude of Mr. Duplessis, and in which he quoted Sir Wilfrid Laurier, as recorded at page 569 of the report of the conference.
(Translation):
Quoting Sir Wilfrid Laurier, Mr. Drew said this:
It is a completely false principle that one government should impose the taxes and another government spend them. This will always lead to extravagance.
(Text):
In other pages of this report Mr. Drew contradicted Mr. Duplessis on the question of the rights of the federal government with respect to direct taxation, but never did the present Prime Minister oppose the declarations of Mr. Duplessis in 1945,. 1955 and 1957. I believe that is one of the reasons he did not discuss the problem with the provinces, but has been content to introduce a bill giving them some money. It is because he is sure Mr. Duplessis does not share his point of view. For the Prime Minister, not compromised in any way as to a definition of centralization, it is easy to say that the Liberals do not want centralization and that this is decentralization; but if hon. members will look at the facts they will realize that there are not two kinds of centralization. The Prime Minister tries to convey to the people of Quebec that he is a decentralist, and to the other provinces he says that decentralization means more money.
I think the conclusion we can draw from all this since the government took power is that there is a big difference between words and deeds; and we must reproach this government with trying to give a false impression, if not to the whole of the people of this country then at least to the people of the province of Quebec.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, the bill we are now debating on second reading is entitled an act to amend the Federal-Provincial Tax-Sharing Arrangements Act, and I should like to say at once that I welcome very heartily this much needed assistance to the Atlantic provinces, and in particular I welcome the very substantial assistance to my own province.

But since this is a federal-provincial taxsharing arrangement we would prefer to have this done in a manner which would not give it the appearance of a hand-out. I am sure people reading the Hansard record of this debate will get the impression that this is just one more act of charity on the part of a generous central government to the poverty-stricken Atlantic provinces. We do not like being placed in the position of a poor relation depending upon the benevolence of a generous central government, and I think something should be put on the record to correct any such impression, because there is another side to this picture.
Prior to confederation Newfoundland was in a position to make her purchases in the cheapest markets and to sell her products in the highest priced markets we could obtain. When confederation took place we became imprisoned within the high tariff walls of the Canadian economy, and for that reason we became a captive market, primarily of the two great central provinces. That market is worth several hundred million dollars, particularly to those provinces. I do not know that it is possible to estimate the value of this market very precisely, but it has been placed at between $200 million and $300 million per year. If the position could suddenly be reversed, mainland Canada today would be in the situation of losing one of her most important markets abroad.
So while we are grateful for this much-needed assistance we want it to be understood that we are, on the other hand, offsetting that generosity by the contribution we ourselves are making to the welfare of other parts of Canada. These purchases of $200 million or $300 million yearly add up to a great many jobs in the central provinces and. in addition, increase the profits of the corporations which benefit from this trade and which contribute directly or indirectly to the revenue of the federal government.
Thus, Mr. Speaker, we feel that grants of this nature should be distributed in accordance with a formula which takes into consideration the fiscal needs of the provinces concerned and the contribution they are themselves making to the general economy of Canada; and also that they should be made in such a way that these grants can be given as a matter of right in the knowledge that they are available on exactly the same basis to every other part of Canada.
Some reference has been made to the benefit these grants will bring in offsetting the unemployment situation. Just how it will benefit unemployment in my own province it is difficult to say. We do not have very many municipalities organized in such a way that they can undertake any great programs
Dominion-Provincial Relations of public works. We feel that although a federal grant to the province is one way of meeting the unemployment situation, it is not the best way. We believe that the best way of offsetting unemployment is by means of a national development program, and we urge the government to push ahead with the national development program to which reference is made in the speech from the throne.
This does not necessarily mean huge expenditures. The soundness of the economy of any country does not depend on huge loans or developments by huge corporations. In my opinion the soundest way to make jobs available in our own province is by helping the small enterprises and the small businessmen. I personally would like to see the industrial development bank charter modified to enable it to give more assistance to these people than it is able to do at present. The development of Canada and its resources is a necessity, even if it has to be done in the face of economic handicaps.
I believe that the federal government would very well be justified in expending money on worth-while schemes in these provinces even if they were not economical at the beginning, because unless every part of our country is developed evenly we cannot have equal opportunities across Canada and will always be dependent on some sort of hand-out or supplementary grant from the central government. What everybody in the Atlantic provinces really wants is to be able to stand on his own feet, earn his own living, keep up his own end of the Canadian economy and stay in step with the rest of Canada.


Mr. A. J. MacEachen (Inverness-Richmond):: Mr. Speaker, I wish to make a few brief remarks in connection with this bill. First of all I wish to share the sentiments that have been expressed by the hon. member who just took his seat and those expressed by the hon. member for Shelburne-Yarmouth-Clare, who expressed the view that the most desirable form of assistance to the Atlantic area is in the form of economic development so that incomes in that area will not be below the Canadian average.
As has been stated by several hon. members from the Atlantic area, there is certainly agreement that this bill will provide a measure of assistance to the hard-pressed treasuries of the Atlantic provinces, and for that reason it is welcomed. However, in my remarks I wish to address myself to one particular phase of the legislation that was introduced by the Minister of Finance, who in presenting the resolution to the house on Monday, January 27, as recorded at page 3847 of Hansard said:


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Courtemanche in the chair.
On Clause I-Additional grants to Atlantic provinces.
Mr. Brooks:: May I say that the minister was called out of the house on a very important telephone message. He will be right back.


Paul Joseph James Martin: We would all have confidence in the minister who is here now.


Alfred Johnson Brooks: That is very kind of the hon. member.


Mr. McMillan:: Mr. Chairman, I well recall the discussion in this house on the federal-provincial tax-sharing agreements now in force. Premier Frost of Ontario announced publicly at that time and afterwards that the province of Ontario required an extra $100 million. He also criticized the Liberal members of this house for not standing up in our places and taking the part of the province of Ontario. He criticized the equalization payments to the smaller provinces and particularly mentioned the province of Alberta as being a province without much debt and therefore not requiring these particular payments.
Dominion-Provincial Relations
In looking over the table appearing on page 3850 of Hansard, I find that Ontario gets some $216 million of the approximately $630 million total federal payments payable to the provinces in the fiscal year 1957-58. This works out at approximately 34.24 per cent of the total which is Ontario's share at the present time. Under this bill the amount of the estimated increased payments to the provinces is $87,203,000. If the province of Ontario received the same percentage, namely 34.24 per cent, the amount accruing to that province would be increased by some $28,800,000. But under this bill Ontario's increase is only approximately $22,315,000. Hence the province of Ontario is really slated to get $6J million less under this bill than it would get under the formula devised by the previous government.
I realize that in this amount is the amount of $25 million given to the Atlantic provinces. But if we exclude this $25 million of the Atlantic provinces adjustment grant, we have $62,203,000 to divide among the other provinces. Among these six remaining provinces, Ontario provides over 46.7 per cent of the yield of standard taxes and gets only 35.87 per cent of the increased amount to be divided as federal payments among the provinces. This differential percentage-wise would mean some millions of dollars to the province of Ontario. From this one can draw only one of two conclusions, either that the premier of Ontario is taking a much more generous view towards the other provinces in these federal-provincial fiscal arrangements than he did formerly or that, since this bill is considered to be an interim arrangement, an understanding has already been reached to supersede or to amend this bill at some later time in order to pay the province of Ontario more.
I am willing to vote the Atlantic provinces or any other part of Canada any money they require for federal assistance. I do not like this piecemeal method of legislation and this all comes from the lack of the presentation of a proper budget. This government seems to lack an over-all national policy.
The mere fact that this is an interim arrangement suggests to me that the government and the Minister of Finance have in mind further arrangements that he is hiding from us at this time. I had high hopes that the Minister of Finance would fill his office with high efficiency but I cannot but think that he lacks the candour and that high tradition of office possessed by many of his predecessors from both major parties in this house.
It was argued and debated at the time of the last federal-provincial agreements that in

Dominion-Provincial Relations order for Ontario to get $100 million extra, that province should tax the people of Ontario directly for this amount. I did not blame the premier of Ontario for not doing this, as he certainly would not want double taxation.
I do not think that we should assume a selfish attitude no matter in what province we live. Canadians should co-operate and strive to maintain full national unity in fiscal and all other matters. If the province of Ontario had taken a purely selfish attitude to obtain this extra $100 million, it probably would have taxed the people directly for this amount, because in order to obtain $100 million under the present tax rental agreements or arrangements, it would cost the taxpayers of the province of Ontario $127 million in taxes. Any new formula that has been presented here has been not so favourable for the people of the province of Ontario.
I am one who thinks that we should pay off our debt in good times and borrow to see us over hard times. This bill will help to create some employment and as such is a good bill. But I would ask the Minister of Finance to be as careful as possible with our money. I would ask him also to remember that only on two occasions-once this century and once between confederation and the turn of the century; twice in all-has any Conservative minister of finance ever had a surplus of as much as $1 million. I had hopes that the present Minister of Finance would not go that way, but in looking over the expenditures to be made in the coming year I would think that he would have a deficit greater than any previous Conservative minister of finance at any time in the past, either in times of war or times of peace. In the 1958-59 budget, if he presents it, I anticipate a deficit many times more than all the accumulated surpluses the Conservative party has been able to build up since confederation.
I heard the minister say that he worked 18 hours a day and I agree with him that in doing so he is attempting to render a great service to Canada. I wish, however, that he would not be so partisan in his consideration and would treat members of the house as good, loyal citizens who want to do their best for Canada. I thought it beneath his dignity as Minister of Finance to refer to members of my party as not liking the commonwealth. That appears on page 1163 of Hansard. I felt these words keenly because I love my country. I think these words suggest some measure of disloyalty on the part of myself and other members of this party.


Alfred Johnson Brooks: On a point of order, Mr. Chairman, the hon. member is supposed to be discussing clause one of the bill, I take it. I

do not see that his remarks have any application to the first clause of the bill but rather have nothing to do with the bill at all.


Charles Edward Rea: I think the point of order of the Minister of Veterans Affairs is well taken. I would ask the hon. member for Welland to come back to clause one.


William Hector McMillan: Pardon?


Charles Edward Rea: I would ask the hon. member to come back to clause one. I think he is wandering.


William Hector McMillan: I just want to add one
sentence-


Some hon. Members:: Order!


William Hector McMillan: -that no one on this side of the house or any other member-


Some hon. Members:: Order!


Jean Lesage: You do not know what he is going to say.


William Hector McMillan: -has compared their war record with that of the Minister of Finance, and I think it is time that he and other members of his party-


Charles Edward Rea: Order. We are not discussing-


William Hector McMillan: -ceased casting reflections on any member of this house.


Charles Edward Rea: Order. We are not discussing war records on this bill. I would ask the hon. member to come back to clause one.


Mr. Stick:: 
Donald Methuen Fleming: The two things have nothing to do with each other.


Leonard T. Stick: Inasmuch as I am in favor of the measure and am only sorry that the amount is not $15 million, I have only one question I would like to ask. How will the

amount be paid? Will it be paid to the province on a monthly, quarterly or half yearly basis?


Donald Methuen Fleming: That is a matter to be determined by regulations under the act, but presumably it will be monthly.


Leonard T. Stick: What is the usual way of paying up to now?


Donald Methuen Fleming: These payments are all made monthly now under the act being amended by the present bill.


Mr.   Marlin@Essex Easl: The payments are made quarterly, are they not?


Donald Methuen Fleming: Monthly.


Stanley Howard Knowles: Mr. Chairman, there is one precise question, although it may take me a few minutes to lay it before the minister, to which I think we are entitled to a clear-cut answer. May 1 first of all remark that it is a matter of passing interest to me that the Minister of Finance has brought before the house two measures which, though related, are quite distinct. Yet he has not only included them within the compass of one bill but within the compass of one clause in that bill. When the Minister of Finance was on this side of the house he used to complain when the former government did things in this way.


Donald Methuen Fleming: No, no.


Stanley Howard Knowles: However, not a great deal turns on it. Well, if the Minister of Finance did not offer such complaints, certainly other members of his party did when several matters were included within one bill or within one clause.


Donald Methuen Fleming: If my hon. friend will permit me, what he is speaking about now is a bill that purports in its various clauses to amend different statutes. That is a different matter altogether from what we have here. Here we have one clause which adds two sections to the one act being amended by the bill.


Stanley Howard Knowles: In
principle there is no difference-


Donald Methuen Fleming: There is a big difference.


Stanley Howard Knowles: -but I will not pursue the point. The minister knows that he has also objected in the past to more than one amending clause being included in the one clause in a bill as in the case of the clause now before us.


Donald Methuen Fleming: No, not at all.


Stanley Howard Knowles: However, Mr. Chairman, I propose to address my remarks and my question mainly to that part of clause one which adds a new section
Dominion-Provincial Relations 12 to chapter 29 of the statutes of 1956. This is how the new clause will read:
In its application to the fiscal year commencing on the 1st day of April, 1958, paragraph (f) of sub-section (1) of section 2 shall, for the purposes of this act and any tax rental agreement, be read and construed as if for the words "ten per cent" therein there were substituted the words "thirteen per cent".
The minister has made it perfectly clear in his remarks that this is an interim arrangement and the wording of the clause confirms the minister's position that this is an interim arrangement. The reference to 10 per cent is found in section 2 of the act, namely the interpretation or definition section. The minister is not by this amending bill changing the definition or interpretation section. It remains as it is. He makes it perfectly clear that this change is just a temporary change for the year from April 1, 1958, to March 31, 1959.
I submit, Mr. Chairman, that that makes it crystal clear that something more, something by way of this same change or another one, will have to be made before April 1, 1959. What we have at this moment is a government which, according to all reports, is just about to go to the country,-apparently it is only a matter of days-but which is refusing to tell the House of Commons or the country what its real position on any long-run basis is going to be so far as federal-provincial tax sharing arrangements are concerned.
A great deal was said about this matter in the election campaign of last year. The Conservatives made the point that they would produce a change. In fact, they have said since the election campaign that there would be a different kind of deal under the Conservatives than was obtained under the Liberals. I submit, Mr. Chairman, that it is most unfair to the country for the government to think of going to the country in another election without having made clear what it really proposes to do regarding federal-provincial fiscal arrangements.
This is an arrangement just for the year. The real, true blue Conservative policy regarding federal-provincial fiscal arrangements is yet to be made known.
There is a divergence of opinion, Mr. Chairman, on this matter as between the Conservatives on the one hand and ourselves on the other, although I must say that a similar divergence exists between the Conservatives and Liberals. We have taken the position across the years that the purpose of federal-provincial tax-sharing arrangements should be to modify the economic structure of this country which, when left to itself, results in a concentration of the tax revenues in the central provinces and leaves Canadians in other parts of Canada at a disadvantage. It

Dominion-Provincial Relations has been our contention across the years that the reason we should have federal-provincial tax-sharing arrangements is so that we could have a really united Canada, so that the wealth which is created in all parts of Canada, in the Atlantic area, in the prairie provinces and in the central provinces, might get back to Canadians in all parts of Canada on a level as close to equality as it is possible to achieve.
Let it be clear, Mr. Chairman, that that is not the Conservative position; that is not the position that Mr. Drew stated clearly time and time again in this house. The traditional Conservative position is that the provinces and the dominion have equal rights to these taxation fields, and that therefore they should be divided. In fact, when that position has been stated most clearly and most emphatically by provincial premiers, such as the premier of Quebec, this position of equal rights has been declared to mean a 50-50 division of tax revenues available in the various provinces of Canada. If that position is pushed to the limit it means that those provinces in which are situated the head offices of corporations are in a much more favourable position than are the other provinces of Canada. In other words, if that position is pushed to the limit, there is no question but that we do not have unity; we do not have equalization so far as Canadians as a whole are concerned.
I am doing my best to point out that at the centre of the arguments we have over this matter, in the centre of all the political crossfire that has taken place as to the way this party voted or that party voted on a previous bill, has been this fundamental cleavage in the approach to federal-provincial fiscal arrangements. Is it simply a matter of dividing the fields, letting the provinces get what they can, which would be a lot in some cases and not very much in others, or is it a case of the provinces and the dominion getting together as responsible Canadian governments to try to share up on some basis of equality our tax revenues so that, as Canadians, we can all enjoy a decent standard of services and a decent standard of living. I say that across the years our position has been clear, and although the Liberal position has not been exactly as ours has been, we do appreciate the extent to which our position has been approached by the equalization formula which the Liberals produced in the last legislation on this point.
We would like to go further than the governments of this country have gone thus far, but at least we feel this should be made clear. The Canadian people should know whether the point that has been reached, the
[Mr. Knowles (Winnipeg North Centre) .1
point of equalization, is going to be maintained and preserved or whether it is going down the drain in favour of the traditional Conservative position of simply dividing the field and letting the wealthy central provinces enjoy a high standard of tax revenue while the other provinces become the poorer members of the Canadian family.
I said a moment ago that rumours are now rather definite that an election is not far away. I confess that for some considerable time I have been making the prediction that it would come on April 14. I am afraid I am now going to lose my reputation as a prophet and it is going to be on March 31, which I suggested as an alternative to April 14, with dissolution only a few days away.


Mr.   Marlin@Essex East: I will bet you on
that.


Stanley Howard Knowles: My
hon. friend, the hon. member for Essex East wants to place a wager on it.


Mr. McGee:: Will the hon. member permit a question?


Stanley Howard Knowles: Certainly.


Frank Charles McGee: What is the source of the hon. member's information?


Stanley Howard Knowles: Just go out in the halls and talk to anyone, talk to the newspaper men, and you will get more information on this point than you will get on the floor of the House of Commons.


Donald Methuen Fleming: Could we come back to the bill now?


Stanley Howard Knowles: am coming right back to the bill, Mr. Chairman. In fact, I am interested that on this day, a Wednesday, we are dealing with legislation. Normally, at this point in the session when there are so many estimates yet to be put through and not much legislation, the government arranges for its legislation to be discussed on Mondays and Tuesdays and it leaves the estimates for other days when a motion to go into supply is not necessary. It is an interesting point.


Mr. Cardiff:: The hon. member is more interested in talking than anything else.


Donald Methuen Fleming: May we come back to the bill now?


Stanley Howard Knowles: My
hon. friends at least show their interest when references are being made to an election that is just about upon us.
My point, Mr. Chairman, is that this fundamental cleavage between the position of the

Dominion-Provincial Relations
Conservatives on federal-provincial fiscal arrangements, and the position we take and that the Liberals have taken as well, is such that the government has no right, just on the eve of an election, to refrain from telling us what their real intentions are by asking us to pass this clearly interim provision. As the Minister of Finance says, this 13 per cent measure is to be in force for one year, from April 1, 1958, to March 31, 1959.
We feel that this government has been most unfair with the provinces, most unfair with the people of Canada, and that it has reneged on its own promises by not resuming the federal-provincial conference early in January as the premiers expected, and by not having this matter settled by a process of agreement at the earliest possible date. We say that to ask us to approve something which is interim in character, when the Conservatives will not make known to the country what they are really going to do in the field of federal-provincial fiscal arrangements, is not good enough for a responsible government. I say to the Minister of Finance that he can wipe out my whole speech, he can make all I have said look ridiculous, if he will answer one question. I did not catch the remark that was made under the minister's breath just now, but I shall give him a chance to rise to his feet in a minute. He can make all I have said look ridiculous and unnecessary; he can put at rest the fears and anxieties of governments and people in the provinces other than those whose revenues are at the top of the list, if he will say categorically on behalf of the Conservatives that if his party comes back to power it will, without question, preserve the equalization principle in the re-arrangement of federal-provincial fiscal matters that will come out of the next federal-provincial conference. I ask the minister that simple, direct, precise question. Will he say categorically that the Conservatives will maintain and preserve the equalization principle in these arrangements?


John Whitney Pickersgill: I would be happy to let the minister reply if he wishes to do so.


James Sinclair: How unusual to see him silent.


Stanley Howard Knowles: wonder whether the hon. member for Bonavista-Twillingate would give the Minister of Finance a chance to answer that simple question?


Donald Methuen Fleming: I would say that this present bill has carried the equalization principle farther than it has ever been carried before.


Stanley Howard Knowles: The
minister knows very well that that does not answer my question at all. In fact he has
said quite clearly that this is only an interim measure in so far as the change from 10 to 13 per cent is concerned. The reference to the Atlantic provinces is on a four-year basis. There is no argument about that, but he has made it quite clear that the change from 10 to 13 per cent is for one year only and that its application comes to an end on March 31, 1959, which again makes it quite clear that something else, something different, will have to be put into effect before that time for the remaining three years of the present agreement.
I ask the minister, will the equalization principle be maintained and preserved for the remaining three years of this federal-provincial fiscal agreement?


Donald Methuen Fleming: Mr. Chairman, I have made it clear in my remarks-I have done it several times already but I suppose there is no harm in doing it again-that the reason we have rejected some of the blandishments of hon. gentlemen opposite is that we are not re-pudiationists. We have an existing situation here with agreements entered into by nine provinces based upon legislation passed one and a half years ago. We criticised that legislation and we were sound in our criticism of it. The legislation was not fair to the provinces; it did not make adequate provision for the provinces and it did not make adequate provision for assisting the municipalities. We are now trying to make up for some of the deficiencies in that legislation but, when we came into power we found the situation in which nine agreements had been entered into and we are not the kind of people to repudiate agreements entered into in the name of Canada.


Stanley Howard Knowles: What is your basis for making adequate provision for all the provinces and municipalities if you, presumably, are back in power and have a chance to do so?


Donald Methuen Fleming: So far as the immediate situation is concerned-and that is what we are dealing with in relation to the second part of this clause of the bill-it is indicated here in this measure.


Stanley Howard Knowles: It
is obvious that the minister will not answer my question, so we know where we stand.


Donald Methuen Fleming: It is obvious that the minister considers himself confined in discussion to the terms of this bill with which we are dealing, in order to meet the immediate situation and the difficulties in which the provinces find themselves, until such time

Dominion-Provincial Relations as it is possible to reconvene the dominion-provincial conference-as I said in my remarks several days ago-so as to seek fiscal settlements.


John Whitney Pickersgill: Mr. Chairman, when you recognized the hon. member for Winnipeg North Centre I rose at precisely the same time to ask, or to repeat, in my own words, precisely the same question I asked last night, which was one question to which the minister did not reply when he spoke on second reading. I suppose that in a sense what I am going to say could be regarded as repetition but I am going to take up the point which the minister has just made with respect to this suggestion of repudiation. That, sir, does not arise at all. There is obviously no possibility of this government, without a majority, repudiating-which could only be done by statute-what is enacted by statute.
However, we are now dealing with what exists at this time, not what existed before Saturday or the different situation which existed on Monday; we are dealing with the new proposals which the government has made. That is what is before this house and there is nothing whatever to compel the government, because Mr. Harris made an equalization on a particular basis, to follow Mr. Harris' pattern in this additional aid which the government says is necessary. They could have used a different formula if they had had one to use or, perhaps, if they had had a different formula which they would have dared to proclaim publicly before an election.


Jean Lesage: That is right.


John Whitney Pickersgill: Of course the Minister of Finance cannot tell us; for it is only the Prime Minister who can commit his party, and we know something about even his commitments, but I say the only person who can tell us whether or not this principle of equalization on the basis of the two top provinces in this sharing as to revenue will be continued or something better will be done for the poorer provinces-and I stress that, something better for the poorer provinces-and put in its place, is the Prime Minister, or the Minister of Finance if he is speaking for the government as a whole. I said last night, and I repeat, that this is a grim and serious matter to the people who live in seven or eight provinces of this country, who are those most affected. I say we have a right to know in this house and that the public has a right to know whether or not the principle of equalization, which means a great deal more to the people of

the Atlantic provinces than do these additional grants,-welcome though they are- will be continued. I say this because of course the Atlantic provinces receive at least twice as much under equalization as they will under these grants. Equalization is much more important to the Atlantic provinces, and it is more important to the provinces of Manitoba, Saskatchewan and Alberta, and it is palpably more important to British Columbia than this little hand-out which was cut in two by the minister after he discovered he had made a mistake in arithmetic. The people of all these provinces-and even the province of Quebec, because we were told that half of this $18 million is equalization to the people of Quebec-


Jean Lesage: Practically half.


John Whitney Pickersgill: Or practically half. I say this is the most important thing in this whole measure. Therefore, the people should know and not be asked to vote blindly. They should know what they are voting for.
The minister has refused to answer the hon. member for Winnipeg North Centre and so I am sure he will not answer me but, I make him this offer. If he will answer categorically "Yes" to my question I will sit down and I will not say anything more in this debate.


Francis Alvin George Hamilton: That is a terrific temptation.


John Whitney Pickersgill: I can understand that it must be a temptation to the minister because somehow I do not think he cares too much for the sound of my voice.


Mr. Bell (Carleion):: He and 263 other people in this house.


John Whitney Pickersgill: The hon. member for Carleton can speak for himself. I must say I rather care for his voice and I wish we could hear from him more often in this house because most of his interventions, up to now, have been rather helpful to us.
I do not, however, want to be distracted by these pleasantries or by the sense of humour of the minister; I want to get back to this grim point. If the minister will tell us right now that it is the policy of the Conservative party to continue equalization on a basis at least as good as that of Mr. Harris' formula for all the provinces, or that the government will do something even better, such as was asked for by Premier Campbell, I will sit down right now. If the minister is not prepared to do that I intend to make one other observation.


Donald Methuen Fleming: Mr. Chairman, we have done better and we are quite content to be judged on what we have done.


John Whitney Pickersgill: Oh yes. Then I say what my right hon. friend the member for Quebec East said before the election. He believed the policy of the Tory party, and he believed this because Mr. Frost stood on platform after platform in Ontario-and I have many quotations in my pocket if anybody would like me to read them-and said, "These Liberals cheated us out of $100 million." These are not the precise words, but Mr. Frost said, "We have to have $100 million more; we are entitled to $100 million more." He pointed to the present Prime Minister and he said, "And there is the man who will get it for us." That was the kind of appeal made in Ontario in the last election. It was made all over the province and my right hon. friend observed this and drew the conclusion, which most of the rest of us also drew and which I believe is the correct conclusion, that it is intended if the Tory party ever gets a majority-which I do not believe it ever will-to give the lion's share of what the provinces get out of these taxes to the province of Ontario and to abandon the principle of equalization. That is why this additional payment is being made for only one year. Why is it not being done for four years as the Atlantic provinces grants are being made for four years? It is being done for one year because hon. gentlemen opposite cherish the hope-the illusion-that they can fool the people, get a majority, then pay off their friends in Ontario and forget the rest of the country.


Paul Joseph James Martin: Mr. Speaker, I should like to say a word. There are some occasions, when matters of great importance justify a repeated argument. As the hon. member for Winnipeg North Centre said in one passage of his speech, which I believe was one of his most eloquent and powerful utterances in this house, an important point deserves emphasis and repetition.
It seems to me that in respect of this matter we are dealing, as we rarely have an opportunity of doing in this house, with one of the fundamentals of the structure of government in Canada, and not only with one of the fundamentals of the structure of government but with one of the elementary principles involved in the preservation of the unity of this country.
The Minister of Finance and I both studied at the same university, as he has on several occasions reminded the house. We were taught by the same professors and from the same textbooks. He will recall W. P. M. Kennedy's "Constitution of Canada" even better, perhaps than I, because his preeminence as a student was outstanding in those days. He will remember the implications of some of the final paragraphs in
Dominion-Provincial Relations Kennedy's book on the constitution of our country, and I wonder whether it is too late now to make an appeal to the minister, with his undoubted theoretical knowledge of the nature of our confederation. All of us in this country are not agreed as to the character, legal or political, of the concept that brings us together into one nation. There are some who hold the compact theory. There are others who argue that the powers of the provinces have been set out in section 92 of the British North America Act, and while there has been specific enumeration of the powers of the dominion under section 91, nevertheless there is an over-riding interest of the nation as a whole that must be subscribed to by recognizing the primacy of the dominion.
I am asking the Minister of Finance this afternoon, in the light of the nature of our confederation, whether one subscribes to the former or to the latter view of the nature of confederation in Canada, is it not conceivable that one of the most effective ways of preserving the unity of this nation and of providing for the basis of good government is by the kind of pattern of consultation, maintained between the two senior levels of government? This is a fundamental question, and in my 22 years in this parliament I know of only one occasion when there was a more persuasive reason for making the kind of observation I am about to make. Certainly I know of no other occasion in the matter of federal-provincial relationships involving the allocation of moneys collected by the federal government from all of the people of Canada than this amendment where allocation has been proceeded with on a basis so contrary to the very spirit of confederation itself, whether one subscribes to either one of the two theories to which I referred earlier.
Undoubtedly, because of its unlimited taxing power, the federal government does not have the same problem as do the provincial governments, although the problem for the federal government of acquiring the necessary revenue to carry out its obligations is believed great. For this reason the federal government has from time to time embarked on programs designed to supplement the work of the provinces, in the field of health and social services, and so on. But there is a difference between grants in aid made by the federal government to the provinces for specific purposes, and grants made by the federal government for the purpose of enabling the provinces themselves to carry out obligations imposed on them by section 92 of the British North America Act. I mention
3982	HOUSE OF
Dominion-Provincial Relations this because the minister may say, after he has listened to my argument, that I have been inconsistent.
With regard to grants in aid for specific purposes, the federal government has undoubtedly in the past not always made these grants after consultation with the provinces. But I think the practice, particularly in the last decade, has been that generally speaking the federal government does not embark on programs without having some form of informal consultative arrangement with the ten provinces, which have within their sphere, under the constitution, an important field of legislative as well as executive authority.
Regarding this matter of fiscal arrangement, however, this is another matter altogether. Section 118 of the British North America Act recognizes the principle that there devolves on the federal government a responsibility for providing assistance to the provinces in the discharge of their various responsibilities and, perhaps, as an indication of the growth of our country, all one has to do is to examine section 118 of the act to ascertain the relative insignificance of the original basic financial requirements in this respect imposed on the central government. But the fact is that right at the beginning and arising out of the very terms of discussion of the British North America Act at Charlottetown and at Quebec there was the concept that while we were going to create on the North American continent under the monarchy a country that would be united and that would develop its own national aspirations and integrity, it was recognized as a fundamental prerequisite of this constitutional arrangement that the provinces would have to acquire assistance from the federal government, the government in the area afforded unlimited constitutional opportunity of having the necessary funds to carry out its responsibilities.
I submit that in this matter the relations between the federal government and the provinces have been dealt a blow the like of which we have not witnessed in this country for many years, a blow that involves not only the principle of fiscal relationships but particularly the relationship of one government in Canada in its treatment of other governments.


Donald Methuen Fleming: Mr. Chairman, on a point of order, we are on the committee stage of this bill. The house has approved the principle of the bill. If my hon. friend's remarks were to have any relevance to the measure at all they must surely have been delivered on second reading. I am not saying they would have been relevant there but certainly they could not be considered relevant at this stage after the house has approved the principle of


the bill. We are now supposed to be discussing the terms of the clauses in the bill.


Mr.   Marlin@Essex East: Mr. Chairman, under clause 1 of the bill, as the Minister of Public Works so often indicated in this house, it is open to any hon. member to discuss without restriction, within the terms of the bill itself, just as is done in the resolution stage.


Donald Methuen Fleming: No.


Paul Joseph James Martin: My hon. friend says "no" but I say that is one of the reasons why the statutes are arranged in the order they are as a means of bringing home to the government or to the opposition the importance of a resolution, or the principle involved in a bill. For this reason there is no limit at this particular stage of discussion.


Donald Methuen Fleming: On the point of order, Mr. Chairman, there is certainly a limit. The principle of the bill cannot be attacked in a discussion of clause 1. It is quite true that in discussions as to the extent of debate on clause 1 of a bill there has been a difference of view. The chairman of the committee in former sessions has referred to the citation that discussion in committee must be relevant to the particular item in the bill under discussion; there has been another view that there is more latitude allowed on clause 1 of the bill in committee than on other clauses. However, Mr. Chairman, that it not the question before us now. Never was it contended or pretended that the principle of the bill was open to attack in the committee of the whole in the discussion of clause 1. My hon. friend is surely now attacking the principle of the bill and the house has decided that.


Paul Joseph James Martin: No, Mr. Chairman. Either I have not been as lucid as I had hoped or my hon. friend has not followed what I have said. I am certainly not attacking the principle. What I am attacking is something that flows from the way in which my hon. friend and his colleagues are dealing with this particular matter. That is what I am seeking to establish.


Donald Methuen Fleming: That is the principle of the bill.


Mr.   Marlin@Essex East: What I am seeking to establish is this. My hon. friend, the Minister of Finance, and his Prime Minister and his colleagues, during the course of the last election vigorously expressed their opposition to the way the former administration dealt with the provinces. They opposed the kind of financial arrangements that it made with the provinces and said that as a result the provinces were not put in the position of being able properly to discharge functions which under the alleged non-centralist policy of the

present administration should be permitted. Now we are confronted with the situation that having made these statements, having said that this would be one of the first assignments the government would undertake if elected, the fact is clearly revealed that this government is not carrying out that promise. We are certainly entitled at this stage to remind the country and to remind the government itself of this fact.
The fact is that this particular matter was dealt with by the government only in the month of November. As the record now demonstrates, the Prime Minister clearly indicated time and time again that one of the first things he would do as Prime Minister would be to settle this question once and for all. We now know that when the federal government met with the provincial governments in November the Prime Minister stated the policy of the government in some particulars. By way of parenthesis, it is interesting for the committee to recall that that conference began on a Monday and that on the previous Friday the Prime Minister was asked to tell the house what position the government would take when it met with the provinces on the following Monday. The Prime Minister refused to take the house into his confidence as to the policy which he would publicly outline on the following Monday. I think that this was not in keeping with the traditional attitude which the Prime Minister takes toward the rights of parliament. And then on the Monday the Prime Minister made his statement to the provinces.


Donald Methuen Fleming: Mr. Chairman, I rise on a point of order. What on earth has this to do with the clause that is now under consideration? The house approved the principle of the bill.


Paul Joseph James Martin: If my hon. friend will just be patient he will find that it has everything to do with the bill.


Donald Methuen Fleming: When does it start?


Paul Joseph James Martin: When the Prime Minister outlined the policy of his administration that policy did not provide an answer to the questions put by the hon. member for Winnipeg North Centre and the hon. member for Bonavista-Twillingate a few moments ago. That certainly is very much involved in this particular discussion.


Donald Methuen Fleming: No.


Paul Joseph James Martin: When the Prime says "no". That is his attitude. However, 1 want him to respect the fact that there are others in this house who feel very strongly that that is involved and very
Dominion-Provincial Relations seriously, too. As the hon. member for Quebec East said when he spoke the other day, the principle of equalization was recognized for one year only. That principle is acknowledged by all the provinces including the premiers of Ontario and Quebec. Certainly, so far as one can judge from their statements made at the conference, that principle was recognized as a valid and effective way of dealing with all the provinces on an equitable basis. The so-called poorer provinces would in this way be better enabled to discharge their responsibilities. The hon. member for Winnipeg North Centre and the hon. member for Bonavista-Twillingate had every justification for asking the questions they did, whether, assuming that my hon. friend after a federal election was given the responsibility of continuing in this post, the policy of this government would be to continue the principle of equalization which is acknowledged by everyone to be the only way of providing the kind of equitable treatment which should be made available to all the provinces of our country.
The fact is that my hon. friend has not answered this question. Now, he may not be in a position to do so; the government may have no policy in the matter. The fact is, whatever the reason, whether my hon. friend proposes in some months from now to abandon what he is now doing for a year, or whether it is that he has not yet obtained concurrence from his colleagues as to a continuation of this principle for more than a year, the Minister of Finance in this government has not been able to give a satisfactory reply to this particular question.
The result will be that in the province of Manitoba, and in all of the provinces certainly outside the two major ones, there will be understandably the deepest concern over the failure of the government to indicate that it is prepared to extend this principle of equalization beyond the year.
The point from which my hon. friend has diverted me is the one for which I ask his special consideration at this time. Is it possible to have satisfactory relations between the provinces and the federal government if the public business is going to be conducted in the way in which this particular matter has been pursued by the federal government? What was the claim made by my hon. friend when he spoke on this side of the house? What were the claims made by my hon. friend, his Prime Minister and others with regard to the way in which we should carry on with the provinces?
The suggestion was that if the provinces and the federal government sat down face to face, they might not be able to agree on all

Dominion-Provincial Relations the solutions that were offered on either side but that, as a result of discussion, as a result of consultation with one another, these representatives of the three senior levels of government would be able, in terms of justifiable compromise, to work out arrangements in their common interests,-and it is the common interest that we must bear in mind; not the interest of this government but the common interest-namely the interest of the federal government, the interest of the provincial governments and the interest of all of the people of Canada. That is the type of responsibility devolving on a government in respect of this matter.
I therefore say to the Minister of Finance, reminding him again of Kennedy's law of the constitution, that by sending a telegram to the provincial governments and saying to them, "Here is our policy; here is what we are going to do for the time being", without giving them an opportunity of direct comment, without treating them as equals in the matter of intergovernmental relationships in Canada, he resorted to a technique which I trust will never be repeated by any succeeding government in Canada. How does this method fit in with the suggestion of the Prime Minister that, if elected, he would sit down with the provinces and work out a policy in complete co-operation and good will? Is that the way in which to encourage co-operation? Is that the way in which to encourage good will? Is it in keeping with the objective of maintaining satisfactory dominion-provincial relationships to call the provinces together to a conference of two days, to give them an opportunity of stating their case in an unrestricted way and at that conference not stating what the federal government's position was but leaving, after an interval of some six weeks or seven weeks, the opportunity to the federal government to say unilaterally without being face to face with the provinces, "Here is what we propose to do?"
If my hon. friend does not recognize the validity of what I am saying, then I have a feeling that in the short time in which he has been Minister of Finance he has not learned how to conduct satisfactorily the relations between the federal government on the one hand and provincial governments on the other. He may say in reply, "Oh, well, on one occasion when the right hon. gentleman sitting to your right was prime minister, he wrote to the provinces and said, 'Here is our policy' ". That is true. My friend will find that on the record, I think, on January 6, 1956. The then prime minister of this country communicated with the provinces and he said, "Here is our fiscal proposal". But let us compare that action with the conduct and

the action of this particular government in this particular case. Before the then prime minister wrote that letter of January 6, 1956, he had had several conferences bilaterally with some of the provincial premiers. He had seen them all in this very room. At least on two occasions prior to that time provincial officials had met with their opposite numbers in the federal public service. The significant thing is this, however. Not only had there been these antecedent negotiations, but after the then prime minister had written and said, "Here is our policy", he gave the provinces the opportunity of discussing that policy in Ottawa with him and with his colleagues.


Donald Methuen Fleming: Mr. Chairman, surely the hon. member is nearly finished with his speech, but I must ask you to invite the hon. member to come back to the clause under discussion. The matter on which he is roaming about now has nothing whatever to do with the function of the committee, the house having determined that it approved the principle of this bill.


Mr.   Marlin@Essex East: I want to say to you, Mr. Chairman, with great confidence-


Stanley Howard Knowles: On
the point of order, Mr. Chairman, may I ask you to take note of what was said on May 16, 1956, as recorded at page 3992 of Hansard, by the then private member for Vancouver-Quadra and the then private member for Eglinton-


James Sinclair: What is his name?


Stanley Howard Knowles: -who are now respectively the Minister of Public Works and the Minister of Finance. We were on clause 1 of a bill which happened to have to do with housing. Mr. Winters questioned whether or not the hon. member for Vancouver-Quadra should be allowed the latitude he was taking. I quote from Hansard as follows:


Howard Charles Green: 
John Whitney Pickersgill: He could never stay out.


Stanley Howard Knowles: His statement consisted of a fairly long paragraph but I am sure that I am not doing violence to it if I read only the last half of it.


James Sinclair: Read it all.


Stanley Howard Knowles: This is to be found at page 3992 of Hansard, the present Minister of Finance speaking:
Instead of renewing the discussion we so often have as to whether the rule of strict relevancy is to be applied or whether the custom should prevail of permitting general discussion on the first clause, might I suggest that we are going to lose time by standing on any rule in this matter and that we shall make much more rapid progress if we follow custom and dispose of questions relating to policy on this first clause of the bill.
I suggest, Mr. Chairman, that you have regard to and be guided by the excellent observations on this point made by the Minister of Public Works and the Minister of Finance when they were in opposition.
This was only one of the occasions when these gentlemen took this position. They have taken it over and over again and we supported them when they did so. It was made quite clear that it is the custom of the house to permit a general discussion as to policy on the first clause of a bill and therefore that custom should not be set aside at this time.


Donald Methuen Fleming: Mr. Chairman, it is not the custom of the house to allow speeches to be made on clause one of a bill that are at variance with the principle of the bill which has been adopted when the motion for second reading was adopted by the house.


James Sinclair: What a weak excuse!


Paul Joseph James Martin: Mr. Chairman, I am sure the house and you will be very grateful to the resourceful member for Winnipeg North Centre for finding the actual words that were used by hon. gentlemen opposite, particularly the words of the Minister of Public Works (Mr. Green), to whom I had made an earlier reference. However, if the Minister of Finance will just contain himself now I am sure he will help to speed up the business. I suggest to him that the action taken on January 6, by the right hon. gentleman who sits on my right now, followed by the conference in March of 1956, is a precedent which the government of this day might well have followed before taking the
Dominion-Provincial Relations unilateral step it took on Saturday, a step that is bound to serve as a precedent, a step that is not calculated to cement or to further the kind of relationships that should prevail between the provinces on the one hand and the federal government on the other. I say in the face of this situation that the government not only owes it to the provinces and to the house to say what its long term policy in the matter of equalization is, but it also owes it to the provinces and the house to say in precise terms what its long term policy is.
The government has said that this is an interim arrangement. In the absence of meeting the provinces again, why is the Minister of Finance now, in the face of the assurances he and his colleagues gave during the election, not in a position to tell the house what is the government's long term attitude on this matter? What is the limit of the money that it is prepared to give to the provinces? Is it going to be only this or is this really interim? If there is a long term policy, will the amount reach the figure of $300 million or $325 million?
That kind of indication would at least give the provinces, particularly the poorer ones, some assurance which they are not now receiving as the result of the equivocal position taken by the Minister of Finance in answer to the questions put to him today on the matter of equalization. On the eve of an election, if that is what the government has in its mind-personally I have some doubts about that at this very early juncture -it owes it to the provinces and the people of Canada to say, "If we are returned to office this is what we will give to the provinces". It is not fair, it is not in accordance with the democratic process, to refuse in the year of an election to indicate how far this administration will go in its fiscal dealings with the provincial governments.
Personally I have a lot of respect for the Minister of Finance. I appreciate the great difficulties and the strain under which he has carried on the administration of the department since he came into office. But, notwithstanding my high personal regard, I say to him that he has not done himself justice in this particular matter. I could say that he has not done himself justice in many matters since he became Minister of Finance-


Donald Methuen Fleming: You mean in any.


Mr.   Marlin@Essex East: -but I will not say that. There are some things-


Donald Methuen Fleming: One or two?


Mr.   Marlin@Essex East: -with respect to which my hon. friend has done something-


Donald Methuen Fleming: One maybe?

.Dominion-Provincial Relations


Paul Joseph James Martin: -that would win even the commendation of a close friend like myself. The hon. member for Coast-Capilano, who is not as generous in this particular as I am, says that he cannot recall any instance. I think that is unfair. But I do say to my hon. friend that if he really wants to give evidence of the outstanding qualities that he really does possess, the kind of boldness that on other occasions and in other situations he has manifested, let him now even at this very late date take the house into his confidence and tell us why he brought in this interim measure, tell us why the Prime Minister will not reconvene the conference and tell us what the government's true position is with regard to the principle of equalization. If my hon. friend will take that course he will undo all the mischief he has perpetrated since last Saturday.


Some hon. Members:: Oh, oh!


Jean Lesage: Mr. Chairman-


An hon. Member:: Again?


Charles Edward Rea: Order.


Jean Lesage: Mr. Chairman, I have not spoken on second reading and this is the first time I rise on the committee stage of the bill. Moreover, I do not need to ask the permission of hon. members opposite. The only hesitation I had in rising came from the fact that I thought that after the really moving appeal the hon. member for Essex East (Mr. Martin) made-


Some hon. Members:: Oh, oh!


Donald Methuen Fleming: You are laughing yourself and so is everybody else.


Jean Lesage: -to the Minister of Finance the minister would have taken the opportunity to assure the house and the country that the reason why he does not wish to say what the policy of the government is, is not that they have in mind sabotaging the basis of equality and justice found in the principle of equalization with respect to fiscal arrangements. However, I see that the Minister of Finance is silent and the only conclusion we can draw is that he and his colleagues are ready after the election-of course they would not do it before the election-to sabotage the principle of equality and justice with which the provinces as a whole are all satisfied.
I wish to raise a special point. This morning the Minister of Finance answered the questions I asked yesterday and I thank him for doing so. However, he admitted this morning that the new rate of 13 per cent will not apply for stabilization payment purposes. I should like to draw his attention in

a very special way to this problem and I will illustrate the importance of the point by referring again to the figures he put on Hansard on Monday. I will take the case of Manitoba as an example. Let us suppose for one moment that the projected tax rental agreement for 1957-58-I am now using the term as defined in the act-results in the figure found in line 10 of the table, namely, $32,350,000. That is based on 10 per cent of the personal income tax. If I am wrong at any time I should like the minister to correct me as I go along. The figure of $32,350,000 is based on 10 per cent of the personal income tax yield.
According to the table, if the yield of the standard rates in 1958-59 is the same as estimated for 1957-58, Manitoba will benefit by an additional payment of $3,405,000, bringing its payment in 1958-59 to $35,755,000. I believe that is correct. If I am wrong I should like to be corrected.


Donald Methuen Fleming: The larger figure my friend has quoted is the estimate of the amount that would accrue to the province after the amendment now under discussion has been adopted.


Jean Lesage: That is what I said, I think, for 1958-59.


Donald Methuen Fleming: It being the assumption under the new formula.


Jean Lesage: That is right, that is what I said, I believe, all the way. What I say, sir, is that it might very well happen that, because of a decline in the economy and a consequent reduction in the revenues of the federal government from the standard rates, these standard rates will not yield $35,755,000 in 1958-59 for Manitoba. I say that Manitoba should be entitled to a stabilization payment based on that figure of $35,755,000, if that had been the projected tax rental payment for 1957-58. I made this argument yesterday, and I am applying it to Manitoba.
In other words, for the purpose of stabilization payments, the new rate of 13 per cent should apply both to the adjusted 1957 payments and to the projected 1958-59 payments, but the bill does not have this effect, as was admitted this morning by the minister. What I ask the minister to do is to consider amending this bill, because if we do not apply the new rate to the stabilization provisions of the act, with a decline in revenues in 195859, we might very well deprive the provinces of a very substantial part of the benefits that they might expect to accrue to them from this amendment to the act. If we have a decline in the economy, this might turn out to be what I would call an Indian gift. If there

is a serious decline in the economy, the increases which are mentioned here might even be completely wiped out.
This is a serious matter, and the minister should give consideration now to guaranteeing the provinces that they will definitely benefit in 1958-59 from this amendment, whatever the economic conditions are in that year and whatever the revenues from the standard rates may be for the federal government. I should like the minister to give serious consideration to that point.


Donald Methuen Fleming: If there is a decline in the amount of revenue that the provinces have been receiving, a decline of the kind of which my hon. friend speaks, it will not be the result of any failure on the part of this amendment. It will be the result of a deficiency in the legislation as it stands, which he helped to introduce and pass through this house. This argument takes nothing away from the effect of the amendment. Manitoba and the other provinces will receive the benefit of the additional 3 per cent of the yield from the individual income taxes.


Jean Lesage: That is not correct, sir. Manitoba and the other provinces will not get the benefit from the additional 3 per cent. If there is a decline in the economy, and if the revenues of the federal government from these standard rates decrease-


Donald Methuen Fleming: Whatever the 3 per cent yields, the provinces will get. There is no guarantee-


Jean Lesage: That is not what the amendment says.


Donald Methuen Fleming: Apart from the operation of the stabilization principle, there is no guarantee, no floor established as to the yield that may be expected from the 10 per cent of the individual income tax, the 9 per cent of the corporation tax or 50 per cent of the succession duties. I draw your attention to this. There is nothing in this bill in relation to stabilization payments. They are mentioned in another section of the act entirely, which is not involved in the amendment here. We had this all settled yesterday.


Jean Lesage: Surely I am not prevented from discussing the effect of the amendment; that is what the minister would like to do now, to impose another kind of closure and to prevent me from discussing the effect of the amendment on the benefits the provinces might derive. Let me remind the minister that stabilization payments are dealt with in section 5 of the act. I do not know if he has read it, but if he has he will see that the payments are based on 10 per cent of the
Dominion-Provincial Relations personal income tax yield. There is a payment to be made to each province for 1957-58 based on 10 per cent of the personal income tax. In each case, therefore, it is based on 10 per cent, as defined in what my hon. friend has called correctly the tax rental payments for 1957, or as defined here in section 5, the "adjusted 1957 tax rental payments" and then, for 1957-58, "the projected tax rental payments." Both will have been based on the 10 per cent personal income tax rate.
What I say is that the increase of 3 per cent, which will apply only to 1958-59, should be made applicable, but only for stabilization payment purposes, to section 5 of the act.


Mr. Cannon:: I have listened with interest to this debate, and particularly the questions that were asked of the minister by the hon. member for Winnipeg North Centre, the hon. member for Essex East and the hon. member for Montmagny-L'Islet. They asked him to tell the house and the people of the country whether or not he was going to continue the equalization payments that were instituted by a Liberal government, or whether he was going to introduce some other measure. For the record, Mr. Chairman, I wish to suggest the answer that the minister should give under the circumstances. The answer he should give, to be absolutely truthful, would be to say that the present government has found nothing better than the equalization payments that were instituted by the Liberal government. The reason for this is easy to understand. The best brains of the Liberal cabinet tried to find a solution to these dominion-provincial tax-sharing difficulties for a great number of years, and I do not think it is any exaggeration to say that the best brains of the Liberal cabinet were at least equal to the brains we have in the cabinet now. In so far as advisers are concerned, they have the same advisers as the Liberal cabinet had.
If the Minister of Finance were fair and just and truthful, he would say they have found nothing better than the equalization payments. That they intend to go along with the equalization payments. He would admit also that the Prime Minister, yes all the Conservatives who waged the last campaign, were deceiving the people of Canada when they told them that they had a solution for the dominion-provincial fiscal problem that was better than the solution we had. They had no such solution then, and they have no such solution now, and I defy them to say what it is if they have one.


Mr. Legare:: I have a question to ask of the Minister of Finance, but I will put it in French because I know he can understand me as well in French as in English.

Dominion-Provincial Relations (Translation):
I wish the minister would tell me on what basis this figure was set at 13 per cent, instead of 10 per cent, with regard to that portion of the personal income tax to be paid over to the provinces? Why was not the percentage fixed at 12, 13, 14 or 15 per cent, which would have been better? Is it because the minister did not want the expected deficit for the next fiscal year to go over 500 or 700 million dollars, or is it because he did not wish to pile a further 62 or 63 million dollars on the budget of an administration for which he will no longer be responsible?


Donald Methuen Fleming: Mr. Chairman, we chose-


Stanley Howard Knowles: Hear, hear.


Donald Methuen Fleming: We chose 13 per cent-


Jean Lesage: Because it was 13 per cent.


Donald Methuen Fleming: We chose 13 per cent because we felt it is a fair one, in the present circumstances, both for the federal government and the provinces.
(Text):


John Whitney Pickersgill: Is the minister going to answer the very serious question asked by my hon. friend, the member for Montmagny-L'lslet, who demonstrated quite clearly that because the 13 per cent is not being put into the stabilization formula as well as the formula for calculating revenues, if there is any serious decline in the revenues of the federal government, then these estimates, which the minister said were only estimates, could be very wide of the mark when the payments were actually being made. One way to safeguard the position of the provinces would be to put the 13 per cent in both places, as was done by the Liberal government with the 10 per cent, and as my hon. friend suggested should be done in this legislation.


Henri Courtemanche: Shall the item carry?


Jean Lesage: We expect an answer to this suggestion.


Donald Methuen Fleming: The matter is entirely out of order, Mr. Chairman, because the clause in relation to stabilization is not affected by the present bill and it is a rule of this house, a very sound rule, that when introducing a bill to amend clauses of an existing statute those clauses only can be discussed and no other clauses of the statute. Here we are dealing with a bill which amends one subclause of clause 2 of the bill. It adds at the end of the bill, in the parts with which we are now dealing, an amendment or qualification for one

year in a particular subclause of clause 2 of the bill. That does not permit discussion on clause 5 of the existing statute and I do not propose to introduce any amendment to clause 5 of the statute.


Jean Lesage: On the point of order, Mr. Chairman, the matter I have discussed has to do with the second part of clause 1 of this bill, which is No. 12, and I want to be sure that the amendment proposed will have its full effect. The only way in which this can be done is for another section of the act to be amended at the same time. I am asking the minister, in order to give full effect to this amendment, is he ready to amend the act further by amending clause 5. That is certainly in order, Mr. Chairman, and I believe the minister should reply.


Donald Methuen Fleming: The government is satisfied that the present bill gives full effect to what is required in the context.


Mr. Hahn:: The minister has made the
point quite clear, Mr. Chairman, in the chart on page 3850 of Hansard-a portion of it, at any rate-where it says:
No stabilization will be due under the amended rate on the basis of 1957-58 figures.
That is in relation to British Columbia. I also have the report of the dominion-provincial conference at Ottawa dated November 25 and 26, 1957. I am interested in a table on page 63 of this report and, on comparing this particular table with the chart on page 3850 of Hansard, I have found some very interesting facts. Possibly the minister would comment on this matter in so far as discrepancies seem to exist.
The figures are practically identical but there is in this chart, as prepared by the government of British Columbia, item 10, which reads as follows:
Estimated present rental payments.
These figures are based on the population and they compare with similar figures in the chart on page 3850 of Hansard. The interesting point in this instance is that in Newfoundland the estimated figure is $16,537,000 and the increase as proposed in the 13-9-50 ratio would be $9,186,000, which is somewhat better than 50 per cent. In the case of Prince Edward Island the estimated present rental payments are $4,136,000 and the increase is $2,500,000, which would be somewhat better than 50 per cent. In comparing the figures I find pretty well the same thing applies in the cases of Nova Scotia and New Brunswick.
When we come to Quebec, Ontario, Manitoba, Saskatchewan and Alberta, I find in the comparison of these figures that they are going to receive just under a 10 per cent

increase as compared with the present estimated rental payments. I find Quebec receiving $184,708,000 and the increase is to be $18,859,000, which is better than 10 per cent. In the case of Ontario they are receiving $224,755,000 estimated, and the estimated increase will be $22,315,000, which is somewhat better than 10 per cent. However, when we come to British Columbia we find that the present estimated rental payments are $58,983,000 and they are to receive an increase of $2,842,000, which would work out to about a 4.8 per cent increase.
In view of the fact that British Columbia is now to be denied the stabilization fund that it has received up to the present time, it would seem to me that it puts that province out of line with the ratio of the increase given to the others.


Donald Methuen Fleming: Mr. Chairman, British Columbia is not being denied the benefit of stabilization in what is proposed under the present bill. There is nothing in the present bill which impairs the efficacy of the stabilization provisions in the act. The fact is, however, that with the benefits which British Columbia will derive from the present bill its receipts will exceed the floor established by the stabilization provisions of the act. In other words, on the basis of these estimates they are going to go above the floor created in that respect.
As to the table on page 63 of the printed proceedings of the dominion-provincial conference of November, 1957, I must say I cannot take any responsibility for any of the figures on this sheet; they are figures prepared by British Columbia, not the figures of the dominion government. They were prepared by British Columbia presumably to illustrate the effect of an increase which they were apparently seeking in the formula from 10-9-50 to a quarter of the receipts from the individual income tax, a quarter of the receipts from corporation taxes and half the receipts from the succession duty. When they take a figure in line 10 of estimated present rental payments, all I can say is that their total is obviously out of line to the extent of about $20 million. Their figure is $650,838,000. Our figure of the estimated payment for the current fiscal year is $20 million less, and, therefore, I take it some adjustment must be made in all the figures which appear in this line for all of the provinces.


Frederick George Hahn: The hon. minister says these figures are the responsibility of the British Columbia government, and that they are in error. I must point out to him, much as I dislike doing so, that he himself was 50 per cent or 100 per cent wrong in the case of 96698-252J
Dominion Succession Duty Act British Columbia only a few days ago, and in respect of this particular figure, if the province did happen to be "out" $20 million out of $650 million, the discrepancy is much less in this case than it was in his.


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


Donald Methuen Fleming: Now.


Stanley Howard Knowles: By
leave.


Donald Methuen Fleming: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



DOMINION SUCCESSION DUTY ACT

[Stage Direction]
CHANGE IN METHOD OF COMPUTING TAX;

[Stage Direction]
The house resumed, from Tuesday, January 28, consideration in committee of the following resolution-Mr. Fleming-Mr. Courtemanche in the chair:
That it is expedient to introduce a measure to replace the present Dominion Succession Duty Act, to provide that the tax on property passing or deemed to pass, on death, be computed by reference to the property comprising the estate of the deceased rather than the property contained in the bequests from the estate to the beneficiaries; and also to consolidate, revise and simplify those provisions of the present act that continue to be appropriate.
Mr. Macdonald (Vancouver-Kingsway):: Mr. Chairman, when the committee rose at ten o'clock last night I was about to make a few remarks concerning this resolution. I think it is a significant one, and I would ask the minister to take the views of all sections of this committee into account when he comes to draft the final legislation.
We are dealing here with something that is of great social significance in a democratic state-I refer to estate duties, death duties, succession duties, call them what you will- and I think it is worth while sitting back for a moment and taking a long look at this kind of legislation. We should ask ourselves, what is the purpose of laws of this kind, and try to decide what social objectives we nave in mind.
The first objective is, undoubtedly, the raising of revenue. From very ancient times this has been one means by which kings made a levy on the effects of their deceased subjects to help support their courts and their concubines and their armies and so forth. By the time of Henry VIII this practice was embodied in the legislation of

Dominion Succession Duty Act England; as it then was, and raising revenue is one of the major purposes of this legislation today.
But there is a second purpose in modern times, and I am a little concerned lest this has been forgotten by the government, judging from what we know of the bill which is proposed. I am referring to the use of this legislation for the purpose of effecting a redistribution of national wealth from those who have too much in favour of those who have too little, and I am in favour of this as one of the means of bringing about a measure of equality and fair play in the distribution of the good things of life throughout our society.
We have followed the British example in that we are making this legislation more simple. The present Dominion Succession Duty Act is complex; we tax not only the estate but the benefit going to each beneficiary, and the duty depends on the degree of relationship and other factors. I congratulate the minister on simplifying this legislation. Speaking as a lawyer, I must admit of course, that when you simplify laws and make them more understandable it becomes harder for lawyers to make a living-


James Sinclair: That is good.


Alexander Barrett Macdonald: -
but I think this is a kind of simplification which could well be extended in many other directions.
So far as the rate of succession duty is concerned, I think that during 1948 we established a $50,000 exemption in Canada. That sounds like a lot of money, and the minister is now proposing to increase this amount by making allowances for widows and infant children, if any, but I think there are problems which have to be considered here. While $50,000 sounds like a lot of money, let us consider the case of a widow who is left with a farm. The farm might be valued at $70,000 but the income might be only $700 or $800 a year-net farm income can be as low as that-and perhaps it would not be possible for a widow with infant children to live on this income and still be in a position to meet heavy succession duties. Thus, on this question of the rate as it affects the small estates, I have an open mind. Frankly, I think the principle of allowing an exemption for infant children and an exemption for a widow is a good one. It might be said one should not allow an exemption for an infant child because that child might not share in the estate, but I think that in most wills made in this country one would find that minor children would share at least to that extent.

So far, then this is good legislation. I like the simplification; I like the fairer exemptions proposed. But I should like the minister, when he drafts the bill, to look for loopholes in the existing legislation-


Donald Methuen Fleming: The bill is, of course, already drafted. The bill will be introduced, and the expressions of opinion which we hope will be received can then be based upon a perusal of the actual terms of the measure to which we hope to give first reading today.


Alexander Barrett Macdonald: I am
glad to hear the minister say that the bill has been drafted. It has been currently in the hands of organizations such as the Canada Trust-


Donald Methuen Fleming: No.


Alexander Barrett Macdonald: I
will read to the committee briefly the Canada Trust bulletin of January 1958 where it states:
Another provision of the proposed act will remove the doubt as to whether proceeds of life insurance purchased by any member of the insured person's family out of funds provided by the insured will be taxable as part of his estate. Such insurance will be so taxed.
I think that is a very useful provision.


Donald Methuen Fleming: Let me make it very clear that no one outside the department has had access to this bill or to a copy of this bill, and no one will have such access until the committee passes the present resolution and the bill is given first reading here. Whatever may be said about the accuracy or otherwise of that paragraph in the Canada Trust bulletin, which was brought to my attention several days ago, the fact is I do not know what they purport to base it on, or what may be the source of their information. I have made inquiries, and I am satisfied it did not come from the Department of Finance.


Alexander Barrett Macdonald: I am
glad to hear the minister express concern about this, because I think it is important that the text of a bill which it is proposed to bring into the house should be explained first of all in this house.
I hope that the bill will eliminate tax avoidance such as was possible under the previous legislation. I am not referring to tax evasion when I say "tax avoidance". I recognize that if the law is written in such a way as to make avoidance possible then people are entitled to take advantage of it. Under the previous legislation it was possible for estates by careful planning years ahead to escape the burden of succession duties to a very large extent. I do not propose to discuss how that might have been done under the previous legislation. A lawyer always flinches at the thought of giving free

legal advice, and if he does give it it is usually worth no more than is paid for it. I leave this matter there with the hope that some of the loopholes will be eliminated in the new legislation.
I wish to turn now to the larger social objective I mentioned, namely the necessity of trying to ensure a fairer distribution of wealth in Canada. We should ask ourselves how the national income is distributed today. What claims are made upon the total national wealth produced by all of us? I think it falls into three broad groups. In the first place you have people who have a claim because they perform services by hand or by brain. They have made a contribution to the community and they secure a just recompense for the service. In the second group you have people who assert a claim becauses they are in need. They may be in need through sickness, accident, widowhood or something of that kind. Under our social welfare legislation we recognize that need and make provision for it. Indeed, many of us think that kind of distribution of our national income should be increased in accordance with the Christian principle that the strong should help bear the burdens of the weak.
But there is also the third group which makes a claim upon our national income not because of something they do or because they are in need but because they own something. They may own stock certificates or real estate titles. They say that by reason of ownership they are entitled to such and such a living, and usually it is a very handsome living. As a result of that we have in Canada people who have amassed great private personal fortunes. Through the receipt of rent, interest, profit and capital gains great fortunes are built up and they take a very large proportion of our national income. Perhaps I should not say large. I doubt whether it is much more than 10 or 15 per cent of the total national wealth produced and yet when you consider that it flows into so few hands it is a very large percentage indeed.
We are faced with the problem, which this bill should cope with, that these large private fortunes pass on from generation to generation. Under the operations of our economy, and particularly in a period of economic expansion, these private fortunes can hardly help but increase from generation to generation. In spite of our taxation laws that increase takes place and like a snowball rolling downhill large private fortunes increase from generation to generation. The result, of course, is that you have an hereditary aristocracy of wealthy individuals
Dominion Succession Duty Act existing side by side within a democratic state with the other groups I have mentioned. It should be one of the objectives of this bill to remove this anomaly. I think we should and must so graduate succession duties that we will be able to assure to all children an equal start and fair rules in the race of life.
The rates of taxation that obtain in Canada now should be compared briefly with those in effect in Great Britain at the present time. I have made rough calculations of the British rates. They are not completely up to date but they will serve to indicate how in Great Britain they have graduated this tax steeply in the upper brackets in order to eliminate to some extent hereditary fortunes passing on from generation to generation. In Canada an estate of $100,000 is taxed on death at the present time at between 15 and 19 per cent and in Great Britain it is roughly the same for a comparable estate, but when it comes to an estate of $1 million, which is taxed in Canada at around 40 per cent, that same estate is taxed in Britain at 65 per cent. In the case of an estate of $5 million it is taxed in Canada at roughly 54 per cent, but in Britain it is taxed at 85 per cent. It can therefore be seen that British governments -perhaps this method was initiated by a Labour government but it has been left intact by a Conservative government-have insisted upon a steeply graduated tax rate on large fortunes. That is the second purpose of this kind of legislation to which I referred.
I believe I have said enough to indicate that I feel strongly about it. If we are going to introduce a measure of social equality and fair play and equal chances in our society we have to give attention to the means of bringing this about. I do not think we want million dollar babies or even billion dollar babies existing alongside the ordinary run of the mill babies in this country. As I said before, if we are really interested in equal starts and fair play in the race of life, for all, I think we must give consideration to more steeply graduating this kind of tax on big fortunes and I hope that when the minister brings in the bill he will go much farther than he did on December 6 in this 'house, because at that point he suggested only a change in the exemptions and did not suggest a change in the graduated rates that should apply on large fortunes.


Mr. Christian:: Mr. Chairman, I would like to agree with the hon. member for Van-couver-Kingsway in the statement he made to the effect that this measure has great social significance. However, I do not agree with him in respect to his observation with

Dominion Succession Duty Act
regard to heavy taxation on large fortunes. The hon. member mentioned that in Great Britain an estate of approximately $5 million would be subject to taxation of about 85 per cent whereas in Canada such an estate would be taxed at approximately 54 per cent. If this measure were designed to bring about an equality of wealth to such a degree I think a policy of this kind would have the tendency of discouraging initiative and killing the imagination and ingenuity of people and would show an utter disregard of the ability of an individual.
I have one question to ask the Minister of Finance. Under the Dominion Succession Duty Act certain revenues have accrued during 1957. Assume that this new estates tax act becomes the law in the year 1958, how does the Minister of Finance anticipate that the revenue under the new act will compare with that under the old act?


Donald Methuen Fleming: Mr. Chairman, as I indicated in my statement on this subject on December 6, the new act will yield less revenue than the present Dominion Succession Duty Act. It has been drawn that way deliberately with a view to reducing the rates of tax particularly on estates of smaller size.


Frank Claus Christian: Thank you. That is what I anticipated. I would also like to ask the minister whether he could give us some idea when the bill will be introduced and circularized?


Donald Methuen Fleming: Mr. Chairman, the moment this resolution is passed the bill will be introduced, given first reading and will be available at once for distribution. As I indicated last night, we do not propose to go any farther with it than this at the present session. But, in the light of the suggestions, recommendations and advice we may receive from those who study the bill in the interval between the two sessions, we would propose to introduce the measure at the next session of parliament. It may be that it will not then be in the same form. It may be that we shall be making changes in the light of the recommendations we shall receive. But the measure that is drafted will be available the moment this resolution is passed.


Frank Claus Christian: I should like to say further that we in the Social Credit group in this house agree that it is expedient that this measure be introduced to replace the present Dominion Succession Duty Act. I am particularly concerned about the provision in the estate tax measure to the effect that if a man is survived by a widow and dependent children, certain statutory exemptions will be given. As I understand it, under the old act there was a $20,000 exemption for the widow


and that if a widow survived and there were five children, each child would have an exemption under the old act of $5,000, making a total exemption for the widow and five children of $45,000. However, under this measure there is an exemption for the widow of $60,000 and $10,000 for each child, which makes the total amount of exemption of $110,000. Under the old act-and I took a look at it-I note that the definition of "child" includes a child of the deceased and also a child who has been lawfully adopted while under the age of 12 years by the deceased as his child, provided at the time of the death of the deceased the child was under 18 years of age, in the case of the deceased's own child or an adopted child.
Under the new act, as I understand it, the age will be raised for the child from 18 years to 21 years. When the definition of the word "child" is given I trust that it will also include an adopted child.
With regard to the matter of the bill itself, I should like to read from the Canada Trust bulletin for the month of January, 1958. The heading in the bulletin is "The New Estate Tax Act" and it explains the difference between succession duty and an estate tax in the following words:
It is not generally known that succession duties are levied against beneficiaries-not against estates. The rates of duties payable by the beneficiaries vary in relation to the size of the estate, the value of the individual benefits, and the degree in which the beneficiaries are related to the deceased. As a result, the assessing of succession duties can be a very involved process requiring large and highly trained departmental staffs.
In contrast, an estate tax is levied against estates, and although the rates of tax may vary with the size of the estate, the assessing of the tax is not complicated by such factors as the value of individual benefits and the relationship of the beneficiaries to the deceased. An estate tax, therefore, possesses the merits of simplicity and economical administration.
I would therefore congratulate the minister. I believe that this particular measure, when it is introduced into the house and when it becomes law, will be a good one and will be a big improvement over the old succession duty act.


Herbert Wilfred Herridge: I just want to say a few brief words on this resolution. First of all, I must say that I am glad that the minister who is introducing the bill is leaving it, as it were, on the order paper so that it will be given study by a good number of people who are interested in this type of legislation. I know that members of this group-and, I suppose, the same is true of all members of the house-have received representations from various organizations suggesting the necessity

for some amendment to the Dominion Succession Duty Act. This legislation, of course, will be somewhat on a different basis; it is called an estate tax.
Before proceeding further I want to express my complete support for the general point of view expressed by the hon. member for Vancouver-Kingsway. He was speaking for this group in that respect. It expresses one of our attitudes towards life on these important problems relating to taxation.
I want to emphasize that we in this group have not the philosophy of bringing everyone down to a certain level. We want to bring everybody up to a certain level. When it comes to the question of estate taxes, we want to make sure that the widow is well provided for; that there is provision for the satisfactory education of the children and so on. However, at the same time we believe it is time that we increased the rate of taxation on these very large incomes. The hon. member for Okanagan Boundary made reference to some extent to a portion of the remarks of the hon. member for Vancouver-Kingsway when he was referring to incomes in the millions-and I think he used the figure of $5 million-as taking away, as it were, the initiative from people and not recognizing their ability. I can tell the hon. gentleman this.
I know a few people in my large experience who have a million and up to ten million, and the reason they have it largely is not as a result of any exceptional ability as compared with the average man but rather as a result of the opportunity they have had to plunder their fellow man. That is why they have this money. I am not saying that there are not many cases of people with large fortunes who have shown exceptional ability and have used them, from their point of view, to the best advantage possible under this system. But if in the days ahead, in the opinion of members of this group, we are going to solve some of these economic questions that are facing us today, and if we are going to bring about a greater, shall I say, social equality in this country, a greater fairness between all people, we must give serious consideration to such legislation as this along the lines suggested by the hon. member for Vancouver-Kingsway.


Frank Claus Christian: Will the hon. member permit a question?


Herbert Wilfred Herridge: Gladly.


Frank Claus Christian: Do you agree with the percentage figure mentioned by the hon. member for Vancouver-Kingsway, namely 85 per cent of the amount of an estate? Do you think that is fair? Do you not think that is plunder by government?
Dominion Succession Duty Act


Herbert Wilfred Herridge: That is a simple question to answer. Even with 85 per cent of $5 million, you have quite a good deal left, have you not? You have a bit more than the average at that. I certainly agree with it. The hon. member was speaking for this group when he gave that figure.
I am just going to say this in conclusion, Mr. Chairman. If we are to develop a sense of social responsibility and also social equality, if we are to do something to meet the economic problems that face us today with respect to unemployment, and are to provide the services that are required in this country from coast to coast, we must introduce a great many other changes in legislation. We must view succession duties, taxation and estate tax according to the principles enunciated by the hon. member for Vancouver-Kingsway when he spoke for this group on this important measure.


Mr. Hansell:: I want to have something to say on this resolution by reason of the fact that many of us, a year or so ago, received many letters and petitions asking for a revision of this act in the interests of the women of this country. I especially want to call to the attention of the minister the fact that a year ago, in the last session of the last parliament, I asked the then minister of finance, Mr. Harris, whether, on the basis of this flood of letters which all members of parliament were receiving, we could expect any revision of the succession duty act to be made before the session ended. He responded that the government had been working on a revision of the act but that it would have to be deferred to the next session of parliament. Of course, since that time there has been a change. An election has been held and a new government has come into office.
But I pursued the matter a little further. A number of weeks ago, I think in November, I asked the present Minister of Finance a similar question. I prefaced my question by calling his attention to the fact that we had all received many letters and resolutions, mostly from women and women's organizations, asking for revision of the act and making certain proposals. I also reminded him of the question I had asked his predecessor. The answer the present Minister of Finance gave me at the time was that the matter was under active consideration. I want hon. members to notice that I prefaced my question by calling attention to the fact that women's organizations throughout the country were asking for certain things.
I come now to the present resolution and I say that we are reasonably pleased that there are to be changes in the present succession duty act. The name of the act is to be
3994	HOUSE OF
Dominion Succession Duty Act changed and there will be slightly greater exemptions. Estates will not be taxed quite so heavily as before. At the same time, having regard to what is contained in the resolution, I am afraid that some of us will have to express serious disappointment. Our disappointment arises from the fact that the present resolution and the bill to follow, if we are to judge the bill on the basis of the resolution, do not come anywhere near giving the widows of this country what they have asked for in resolutions they have presented to members of the House of Commons. In addition, not so long ago there was a convention of women in Ottawa. I think they represented the Canadian Women's Institutes. They held their convention at the Chateau Laurier and if I am not mistaken a delegation of these women waited on the Prime Minister and the Minister of Finance.
They were encouraged at the time to believe that some attention would be paid to their request. Again I say that if all that is in the bill is simply a reduction of the taxes imposed on estates the legislation will fall far short of satisfying the women of the country. It will fall far short of what the women have been asking for. In my files I have a letter from Mrs. Kehr of Vulcan, Alberta. I have another one from Mrs. Finlayson of Ottawa who is chairman of the Canadian Committee on the Status of Women. I have another from Mrs. Kellar of Cayley, Alberta, another from Mrs. Gillanders of Blackie, Alberta, another from Mrs. Ray of Royalties, Alberta, another from Mrs. Beagle of High River, Alberta, who is the president or secretary, I believe, of the High River Women's Institute, another from Mrs. Maisey of Kirchaldy, Alberta. I think she was writing for the women's institute of that district. I have another from Mrs. Williams of Arrowwood, another from Mrs. Hill of Arrowwood, Alberta, another from the district director of the Farm Women's Union of Alberta, Mrs. House of Arrowwood. I believe I have other letters in another file regarding the same matter.


Stanley Howard Knowles: Is
this a request program?


Ernest George Hansell: I do not care what sort of program you call it. What I am saying is that if I have received this many letters from my own constituency, then I miss my guess if other members cannot equal the number I have received. We have all received them. They come from all over Canada. As I said, these women met in convention in Ottawa. They waited on the government and they were given encouragement. Again I say that the resolution and the bill to follow fall short of giving the women what they ask for. Here is a typical resolution I received which requests that one half of a deceased husband's


estate be conceded for tax purposes as earned by his widow and therefore not subject to succession duties when passed to her upon his death. I think that is a reasonable request.


An hon. Member:: Even with a $5 million estate?


Ernest George Hansell: I know my hon. friend can poke that sort of question at me if he wishes. I am not saying that if you get into the $5 million class, there should not be some sort of graduated tax. I am not saying anything about that. But there are very few in the $5 million class.
I will give an example of what I mean. There is a widow in my constituency whose husband was ill for years. What did the wife do? She cared for her husband over those years and she managed the farm by employing a hired man. The husband and wife had a joint bank account. When the husband eventually died the joint account was frozen. That is reasonable for certain legal purposes, but then there was the further event that even though the wife thought she had a right to claim half of that joint account she was not allowed to do so when the estate was calculated. She could not claim a nickel of it except as it was calculated for inclusion in the estate. The result was that they might just as well not have had a joint account.
We find that particularly so with farm women. For the most part farm women work hard all their lives. They are one with the husband in the estate and therefore they should be half owners of the estate. I think we should acknowledge equality in the marriage partnership and recognize that work within the home and for the family is just as necessary and important as the husband's work is outside the family. The government has recognized that to some extent in other legislation.
The government of Canada has, I might say, increasingly imposed upon married women the burden of partnership with their husbands because the wife is required to pledge her credit when the husband desires to get a loan from the bank. In so far as the Veterans Land Act is concerned, the wife of a man who applies for a loan has to sign the documents and is jointly responsible. The same situation applies to the National Housing Act. The husband and wife are considered partners for the purpose of protecting these loans.
However, when it comes to considering what the husband leaves the wife, then evidently the government does not consider the wife as a partner. I suggest that this bill falls far short of what the women of this country expect. I think it is reasonable that

they should expect half of the estate up to a reasonable amount. I am not going to hold up the committee, but the minister has said that when the resolution is adopted the bill will be given first reading but will not be proceeded with beyond that stage. The minister said we would be given time to analyse it and come forth with suggestions.
I want to ask him if he is really sincere in asking the members of this house to come forth with their suggestions. If he is, then he is going to get some. If he is sincere in requesting that we come forward with our suggestions he should indicate his sincerity by saying that he will listen to them; that he will accept those suggestions and if they are reasonable, when the bill is presented at the next session of parliament, if he has anything to do with it, those suggestions will be incorporated in the bill. If he is sincere, that is exactly what he will do. If this bill is introduced and we can see it and analyse it, the women's organizations of this country can also see it, then I am quite certain that the minister will be flooded with suggestions as to how the women of this country who are left widows, perhaps without earning power, feel they should be regarded in so far as their husbands' estates are concerned.
I will not say any more than that. I want the minister to be sincere in this matter. I think he is sincere. I think he wants to do a good job for Canada. I have no doubt about that. He is a very fine gentleman. I am going to say this, however, that we in this corner of the house have, for many years, recognized that he is restricted in what he would like to do. He is restricted by reason of the fact he is a victim of the financial policies that have been embodied over the years in the legislation of this country. His hands are tied. If he is sincere about this matter and wants to do a real job for this country and particularly the unfortunate widows, he will look into all these matters, including the financial policy which is tying his hands, and he will tear himself loose from that type of policy. This will enable him to do all the things that he believes the people of this country desire he should do. Some of us expect to be back for the next parliament. I do not know whether or not the minister will be, but I suppose he expects to be. If we are all back here, we are going to remind him of what he said this afternoon. We are going to ask that suitable amendments be made to the bill.


Frank Charles McGee: May I take just a moment
before the time expires, to point out one aspect of this matter which appeals to me in particular. Recently we have heard a great deal about the decline in the purchasing power of the dollar. It seems to me that the 96698-253
Dominion Succession Duty Act main features of this proposed bill will have the effect of increasing the purchasing power of the insurance dollar, certainly as it applies in my particular case. I should like to pass along to the minister and the house the comments which I have received from my riding concerning this bill. The people in general are most enthusiastic about it and the manner in which it faces up realistically to present problems.


Colin Cameron: May I call it six o'clock, Mr. Chairman?
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Colin Cameron: I do not propose to take much of the time of the committee now, but since we have been told that this bill is not going to be proceeded with during this session I feel there are some things which should be said in regard to this particular phase of our taxation structure.
I want first of all definitely to associate myself with the views expressed by my colleague the member for Vancouver-Kingsway who, I think, set forth the views not only of this group but of a growing number of people throughout the country. I think it is not too much to say that most intelligent people today in our western society tend to give at least lip service to the idea of an egalitarian society, and by that I do not mean any rigid level which puts everyone on precisely the same basis. I do suggest, however, that most people today do consider that the serious inequalities between incomes and the consequent standards of living and opportunities should be ironed out as rapidly as possible, and one of the major sources of continuing inequality in society, of course, is the inheritance of wealth.
I quite understand and agree with the view expressed by the member for Macleod when he spoke of the position of widows who are left with children to support and to educate. I am sure no sensible person and no person with any sense of justice would want to deprive a widow of the necessary estate in order that she might continue the work of rearing her family, although I should say that, as far as I recall, I have had only one letter on this matter. It may be that I have not as many potentially rich widows in my constituency as has my hon. friend from Macleod. However, I am quite prepared to agree that something should be done to take care of that situation. I believe that the

Dominion Succession Duty Act measure before us, as outlined by the minister, as recorded at page 2008 of Hansard for December 6, does indicate a point of view with which I, for one, and I think a great many people in Canada, would hesitate to agree. I have in mind the following words of the minister:
For the present I point out that in every tax bracket the tax payable under the new law will be less than under the present Succession Duty Act.
I strongly suspect that the vast majority of the people in Canada hold entirely opposite views to the views which must be held by anyone who would advance that as a desirable development. I think we have to take into consideration the development in our society of new standards of value.
I was quite struck with the comments of the hon. member for Okanagan Boundary when he suggested that there was a danger, even with the bill as presented or forecast by the minister today, of a loss of incentive in our society, and I am tempted to ask, incentive for what? Do we really want to hold ourselves down, in a society which we claim to be a civilized one, to the idea that the only incentive worth thinking about is that to acquire a fortune? I think that is a false standard to hold before our people, and I may say that any continuation of the means by which people can inherit a markedly superior standard of living from that of their neighbours is one that prevents the development of new standards in our society that I believe to be very essential at the present time, if we are to progress in the way which many of us want to progress.
I recall the remarks of a quite eminent financier in Canada on this particular question and I took very great comfort from what he said. He is a gentleman who held a very respected position in the banking fraternity, and, during the hearings of the banking and commerce committee four years ago, I had a private conversation with him. He made what I thought was a very significant and a very valuable comment. He told me that he enjoyed one of the largest salaries paid to anyone in Canada but he said, "You know, these days a lot of nonsense is talked about saving but I pay no attention to it. My wife and I spend every nickel we get. I see no reason at all, now that I have raised and educated my family and they are all standing on their own feet, why I should take steps to leave them money which they do not require." I believe that is a point we have to consider in relation to this matter, whether we are really serving the best interests of the people by permitting them to inherit vast

fortunes as they do under the present Succession Duty Act and, according to the minister, as they will be able to do to an even greater degree under the bill he proposes.
Most of us, I think, are acquainted with cases of the children of rich men who have suffered from the very fact that they are the children of rich men and who have found themselves outstripped by those who have been brought up in a more modest and realistic part of society. I would urge, therefore, that before the minister again brings this measure down before the house he should consider the new ideas which are abroad in our country and in most other countries of the western world and which cause us to look with slightly dubious eyes at those who devote all their energies to the accumulation of large fortunes. After all, large fortunes can only be accumulated by someone who has a single track mind, and a person with a single track mind is not only of no particular value to us at the present time but, if he is allowed to have economic power, as in these instances, he is a positive danger to us.
I would hope to see the legislation of this parliament designed in such a way as to iron out the economic inequalities in our society and thereby help in the development of a new and more valid scale of values with which to face the difficulties which lie ahead of us. I say this because I am afraid that we shall eventually have to face the challenge of people who have a slightly different scale of values, one perhaps for which we do not care very much, but certainly not the scale of values envisaged in this measure before us. I would like to see the minister give very serious thought to this matter before the next session of parliament. If he is still the Minister of Finance I would like him seriously to consider whether he is really serving the interests of the Canadian people by bringing in a measure of this sort, or merely serving the interests of a very small though powerful minority in our society, a small and powerful minority which I would think one could safely say would not comprise the most valuable members of our communities. The most valuable members of our communities, it would seem to me, would not be the rich men but the wise men, and it is noticeable that riches and wisdom are very seldom found in the same place because, as I have pointed out, to acquire wealth one needs a single track mind. A single track mind does not easily achieve wisdom.
Therefore, while we are not going to be given the opportunity to vote on this measure during this session, I did think it would be as well for some of us to put on record our views with regard to the inheritance of

wealth, namely that it is something that should be limited strictly to protecting the rights of widows for instance, who are left with families to rear and children who still must have their education and their start in life. Beyond that, however, society owes no debt whatever to any young man or any young woman. A young and healthy man or woman who has been trained and educated has then received from society all to which he or she is entitled.


Mr. Nicholson:: Over the dinner hour, Mr. Chairman, I consulted the library and found "The History of Canadian Wealth", volume 1, by Myers. I, too, was interested in the comments this afternoon of the hon. member for Okanagan Boundary when he said he felt we would really take away an important incentive from the youth of Canada if we were to act upon the suggestions of my colleague the hon. member for Vancouver-Kingsway when he suggested that the British proposal to acquire 85 per cent of an estate, say, of $5 million, would be a step which the Minister of Finance should consider.
The hon. member for Okanagan Boundary thought that 85 per cent was a very large amount to take, but my colleague from Kootenay West emphasized that it was not so much the amount of money taken that mattered, in a situation of that sort, but how much was left, and I think that a family which inherits an estate of $5 million should not complain too much about having $750,000 left. I suggest this amount will be enough to provide the hon. member for Okanagan Boundary with the indemnity he gets as member of parliament for 75 years, though he might not be able to live that long.
I think we should look at the legislation which is before us. It does provide that if an estate of $5 million is left the amount is taxed as an initial rate on the aggregate net value of 20 per cent and then an additional 34 per cent. That would be 46 per cent for the estate, so if a deceased person had a widow and nine children, which, it is true would be quite a large family, they would be left with $2,300,000 to be distributed-$230,000 for each of them-and it would seem to me we should not lose too much sympathy on the dependants of Canadians who inherit that sort of an estate.
As I look through the "History of Canadian Wealth" I find chapters on the Hudson's Bay Company, the landed proprietors, the railroad promoters and so on, and I find that many of these fortunes have been created by special legislation passed by parliament. In this modern world, there is no self-made person; there is no one who acquires an estate of $5 million as a result of hard work and savings.
96698-253J
Dominion Succession Duty Act I notice that some 80 years ago Sir John A. Macdonald made some remarks of which the present Minister of Finance might well take note. As reported in this "History of Canadian Wealth", a Mr. Donald A. Smith was accused in parliament of using his position as a member for the personal benefit of himself and his associates. Sir John A. Macdonald accused Smith of more warmly and strongly advocating a lease bill "which is in his own interest and which will put money in his pocket" than the minister who introduced it. Macdonald termed it a fraudulent measure. More opposition came from another house member, Mr. White, who said:
There seems to be a party in this house-a very prominent party-who cares more for the Hudson's Bay Company, the Montreal Bank and private matters than for the interests of the people of Manitoba ....
It is a mistake to think that any one person, as a result of skill and ingenuity, can create a great fortune today. I think we should remember that the wealth of this country, and of any country, is created as a result of the efforts of all the people in the country, and I think it is a mistake to assume that because one individual, as a result of special legislation, obtains control of a huge fortune his children and his grandchildren should escape the responsibility of having to make any useful contribution to society.
Just two years ago we passed through this house the famous pipe line legislation. There is no doubt that whoever is writing the history of Canada 50 years from now will be able to look back on that act of parliament and say that a Canadian parliament then made it possible for certain individuals in Canada to become rich at the expense of those who use the natural resources of this country.


Mr. Patterson:: That is not true.


Alexander Malcolm Nicholson: I am sure the hon. member who interrupted me, and particularly the member for Lethbridge-


Mr. Blackmore:: I said nothing.


Alexander Malcolm Nicholson: Well, I am sure some of his colleagues who have children and wish to prepare them to make the greatest contribution for the greatest good, will not wish to share the views of the hon. member for Okanagan Boundary who took exception this afternoon to this legislation which will result in all the people of Canada sharing to a greater extent than in the past these large fortunes being passed on to succeeding generations.
Resolution reported and concurred in.

Industrial Relations
Mr. Fleming thereupon moved for leave to introduce Bill No. 248, respecting the taxation of estates.
Motion agreed to and bill read the first time.



INDUSTRIAL RELATIONS


[Stage Direction]
The house resumed, from Thursday, December 19, consideration of the motion of Mr. Starr for the second reading of Bill No. 16, to provide for annual vacations with pay for employees in public works, undertakings and businesses.
Stanley Howard Knowles: Mr. Speaker, I believe that when this bill was last before the house on December 19 it was my privilege to adjourn the debate on the motion for second reading.
It is not my intention to speak at any length because there is really just one point that remains at issue so far as this bill is concerned. On the assumption that second reading of this bill may be reached tonight, and a decision taken on it, I propose to say something which will be a relief to the mind of the Minister of Public Works. It has been a source of some concern to him for a number of months that there have been two bills on the order paper having to do with vacations with pay; and I trust that the minister agrees with me as to the ruling given by Mr. Speaker that until a decision has been taken on one of these bills it is in order for both of them to be debated. However, I will give him the assurance that if a decision is taken tonight on the government bill I will not try on a subsequent occasion at this session to call my bill. It would then be out of order.
As I say, I wish to deal only with one point-the main point of difference between government Bill No. 16 and my Bill No. 2. Incidentally, my bill was before the house on previous occasions and the last time it came to a vote it had the support of the Minister of Public Works (Mr. Green) and ten other members of the present cabinet. Of course, at that time they were sitting on the opposition side of the house.
I point out to them that what they voted for on that occasion was a bill the purpose of which was to provide two weeks' annual holidays with pay to employees who come under federal labour jurisdiction after one year's employment. The bill that is now before us in the name of the Minister of Labour (Mr. Starr) is a desirable piece of legislation. It is time we had legislation of this kind on the statute books of Canada and it will have our support. We regret, however,

that, having gone this far, the government has short changed the workers of this country who come under federal labour jurisdiction by providing that the two weeks' annual holidays with pay stipulated in this legislation are to be enjoyed only after two years' continuous employment. I recognize that there is a provision that in the case of those who have had only one year's continuous employment one week's holiday with pay is provided. We think, however, that the provision suggested in my bill, which is in line with the request made by the Canadian Congress of Labour when it appeared before the government of Canada on October 21, 1957, is one to which the Minister of Labour should still give consideration.
This question has been debated, of course, off and on during the session and I believe that the nub of the matter came out in an exchange that took place between my good friend the hon. member for Brandon-Souris (Mr. Dinsdale) and me when this question arose:	Is an annual holiday with pay a
matter of right or is it a reward? It was my contention that holidays with pay should be a matter of right. My hon. friends on the other side were agreeing that we should have annual holidays with pay. After all, they must take that position because the government is advocating that principle in this bill. However, they made the point that two weeks should not be accorded to employees until they have demonstrated two years of loyalty to a particular employer. In answer to my question my friend the hon. member for Brandon-Souris said that it was both, it was partly a matter of right and partly a matter of reward. We feel that two weeks' holiday with pay should be just as much a matter of right to a person who has put in a year's work with an employer, if that is his first year's work, as it is if it is a year later on in the employ of that particular employer. We feel that the concept that what an employer does for his employee is a reward for faithful service is the old master-servant concept. That has gone by the board and what we should be dealing with today is the question as to what belongs to employees as a matter of right.
It is on that basis that we, in giving our support to the minister's bill, urge him to consider even yet making the amendments that would be necessary-and they are extremely simple-to change this bill so that two weeks' annual holidays with pay would be enjoyed by workers under federal labour jurisdiction after one year's service. We find it difficult to understand, now that the government has gone this far, has been prepared to recognize the validity of the

principle and provide legislation in this field so that annual holidays with pay should be granted by the law of the land and that it has gone far enough to recognize that what is desirable is a holiday of two weeks in a year with pay, why it has seen fit to provide that an employee does not receive two weeks' holidays with pay in a year until he has been two full years in the employ of an employer.
We urge that when we get into committee on this bill and come to the appropriate clauses the minister give favourable consideration to the necessary amendments to change the bill in this one particular. We are happy to support the bill. We are glad to see this kind of legislation coming forward. We think there should be more like it. We think there should be a bill to provide for statutory holidays with pay, and one to provide for minimum wages and we hope there will be bills to provide for the other aspects of a proper and adequate national labour code.
When these other measures are brought in we hope there will not be any short changing of the Canadian workers as there is in this bill but that the government will do its best to meet what we believe are the reasonable demands placed before it in the memorandum presented to the government by the Canadian Labour Congress on October 21, 1957, and the requests that have been laid before it by other responsible labour bodies.
We shall be glad to support the bill but we hope the minister in committee will accept amendments to provide that the two weeks' annual holidays with pay shall commence after one year's service in line with a vote on that very proposal which the Conservatives registered in this house in 1956.


Mr. Speaker:: I must inform the house that if the Minister of Labour speaks now he will close the debate.


Michael Starr: Mr. Speaker, may I first of all thank the hon. members who have taken part in the discussion on second reading and for the comments that have been made in respect to the principle of this bill. Several of the hon. members who spoke on this bill expressed disappointment that it does not provide for two weeks' annual holidays with pay after one year's service. I wish to point out, however, that when the bill comes into effect the great majority of employees will be entitled to two weeks' vacation within the year following because the bill takes into consideration previous continuous employment. In other words, this bill is retroactive for two years.
The government gave this matter very serious consideration and the result is this
Industrial Relations
decision. Consequently, although I appreciate the suggestion that an amendment be considered at the committee stage, I must say at once that our decision was reached after extremely serious consideration and the result is as set out in the bill, one week's vacation after the first year and two weeks' vacation after the second year, retroactive for a period of two years.
Moreover, hon. members of this house must be aware that the prevailing holiday provision in the collective agreements covering the majority of employees in the federal and provincial field is two weeks' vacation with pay after three years' employment. Therefore, this bill provides a vacation standard which is substantially ahead of prevailing vacation standards established by collective bargaining. Hon. members in this house who advocate that we should impose a vacation provision giving entitlement to two weeks' paid vacation after one year are proposing in effect that we should impose a minimum vacation plan which in substance would be equivalent to the most advanced holiday plans now provided under collective bargaining agreements in Canadian industry. I do not consider that it would be wise or responsible legislation to impose such a provision as a minimum vacation standard at this time. This government has given the question serious consideration and we feel that in the proposal of this bill and in its submission to this house the government has taken a step that goes a long way in the provision of sound labour legislation.
We hope that in the future we shall have the opportunity to bring forth legislation such as that proposed and suggested a few moments ago by the hon. member for Winnipeg North Centre.
The hon. member for Kootenay East (Mr. Byrne) commented on the fact that the province of British Columbia legislation extends to everyone. I want to point out that the province of British Columbia legislation and that of the other provinces with regard to vacations with pay all provide for certain exemptions.
The hon. member for Skeena (Mr. Howard) and the hon. member for Winnipeg North Centre also commented on the fact that certain members of the present government, on a previous occasion when they were in the opposition, voted in favour of a bill containing a better provision than does the present one, namely the bill that was submitted this year, as it was in the past, by the hon. member for Winnipeg North Centre, providing for two weeks' vacation after the first year of employment. My only comment is that at that time the vote was on the principle of vacations with pay, that it was

Industrial Relations
on the principle that the members of this cabinet and the members of our party at that time voted, and that the particulars of the bill were not then being considered because the vote was then taken on second reading.
Some criticism has been made of the bill providing for exemptions. I must say that, as was said before, all the provincial statutes on this subject provide for exemptions, the majority of which do so by orders in council or on the order of a board or commission.
Other points were brought forward by other members who have participated in this short debate. I wish to thank them again very much for their suggestions, Mr. Chairman. My last remarks will be to this effect. We hope that this bill will receive favourable consideration by all members of this house because we feel that it is a step in the right direction in the field of labour legislation.


Daniel (Dan) McIvor: Mr. Speaker, may I ask the minister a question? Does this bill apply to both sexes, men and women, equally?


Michael Starr: That is right.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rea in the chair.
On Clause 1-Short Title.
Mr. Barnett:: I do not intend to make any extended remarks on clause 1 of this bill, Mr. Chairman. However, in view of the rather disjointed way in which the subject matter of it has been under discussion during this session, with the two bills being under discussion at various times over a long period of weeks, perhaps I might state at the outset that on previous occasions, either on the bill introduced by the Minister of Labour or the bill introduced by the hon. member for Winnipeg North Centre, I have made clear my own view that the provision of two weeks' vacation-after one year of service would have been a much more desirable provision for us to have. I certainly agree with the position which was just taken by my colleague the hon. member for Winnipeg North Centre, namely that in approaching the discussion of this whole matter we should view the need for an annual vacation as something which belongs to people as a matter of right rather than as a matter of a handout on the part of an employer.
I was attempting to follow closely the remarks made by the minister in closing the debate at the second reading stage, and there was one statement which he made, if I heard him correctly, which has me rather puzzled.
[Mr. Starr.l
I should like him, if he would, to clarify a little bit just what he had to say in this connection. Am I correct in understanding it was his suggestion that if this bill were to provide for two weeks' vacation after one year of service, it would be providing by law something which would exceed in its provisions what is contained in the collective bargaining agreements now in effect across the country? That is what I thought I heard the minister say and I was very much surprised to hear it. If I misunderstood the minister, I should be glad if he would clarify that statement for me now before I go any further.


Michael Starr: Mr. Chairman, when I made mention of the fact that it would exceed what is provided under the collective bargaining agreements, I meant the bargaining agreements that are prevalent amongst federal employees or persons who are in the employ of federal undertakings. I did not refer to those in private industry.


Thomas Speakman Barnett: I thought that was a point on which I should be clear because I would not want to launch an argument against the minister on something where we disagreed as to the facts. As has already been pointed out several times during the discussion of this subject, the provision that those of us in the C.C.F. group have been arguing for is something which is enjoyed by law in the province from which I come and in one or two other provinces of the country. I know that a good many of our collective agreements contain provisions which are better than the minimum requirements set out in the law.
I simply want to say that I am genuinely glad to see this bill being introduced from the government side of the house. I think it is some recognition of the fact that the time has come when this principle of the need of people for holidays should receive recognition in the statutes of the country. To the extent that this principle is written into law, to that extent at least it is a recognition that these things come by right.
I may have some further questions to ask as we get into detailed discussion of the clauses of the bill. However, I wanted to make my position clear while we had the subject matter under discussion again, and also to clarify for my own satisfaction just what the minister had in mind in his earlier statement on second reading.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.

On Clause 3-Application of act.
Michael Starr: At this point, Mr. Chairman, I should like to put forward an amendment to clause 3 of this bill. Many collective agreements have provision for the granting of annual vacations with pay which have operated satisfactorily for a number of years. While the vacations with pay provision in the agreements may conflict in some particulars with the provisions that have been proposed in this legislation, the sum total of the vacations with pay provisions in the collective agreements may be considered by the parties to the agreement to be more satifactory for their purposes than the vacations with pay provisions provided in the legislation.
I think there should be some provision in the bill to meet this type of situation. I do not consider that the legislation should impose a completely rigid pattern for vacation arrangements. It should leave a reasonable scope for some variation in the vacation with pay provisions agreed upon in collective bargaining as long as the provisions are satisfactory to the parties and adequate in relation to the minimum standards of frequency and duration of holidays set forth in this legislation. However, these arrangements should still be subject to the approval of the minister responsible for the administration of the legislation. Accordingly I put forward for approval an amendment to clause 3 of the bill by adding a subclause 2 thereto in these words:
This act does not apply to employment under a collective agreement entered into after the coming into force of this act and containing provisions, approved by the minister, for the granting of an annual vacation with pay.
I ask my colleague the Minister of National Health and Welfare to so move.


Mr. Monleilh:: I move:
That clause 3 of bill 16 be amended as follows:
1.	Insert "(1)" after "3", and
2.	Add the following subclause-
"(2). This act does not apply to employment under a collective agreement entered into after the coming into force of this act and containing provisions, approved by the minister, for the granting of an annual vacation with pay."


Stanley Howard Knowles: Mr. Chairman, I am very happy to give endorsa-tion to this amendment. Indeed, I am happy to congratulate the minister on having his colleague propose it. Perhaps I might be pardoned for drawing attention to the fact that in the bill which will now not get a chance of coming before us again at this session there was a clause, the purpose of which was to make sure that nothing in that bill would affect any provisions for vacations with pay enjoyed by any employees where any provisions were more favourable than those
Industrial Relations
provided in that bill. I am glad to note that, although the Minister of Labour is not prepared to accept one of the really important provisions of my bill, he has picked out this provision and written it into the bill now before the house. That gives me hope that further progress may yet be made.


Thomas Speakman Barnett: Mr. Chairman, I hope the amendment the minister has proposed, and which the hon. member for Winnipeg North Centre has seen and I have not, does what he thinks it does. That was the question I was about to ask. I was quite aware of the phrasing chosen by the hon. member for Winnipeg North Centre in his bill but I was not sure, either from the reading of the amendment as I heard it or the statement made by the minister, that that was the purpose the minister had in mind in introducing this amendment. If it is, I hope he will say so in so many words. I noted that the explanatory statement he gave us was a carefully generalized one and I was going to suggest that if he would give one or two explicit examples of the situation he has in mind to be covered by the amendment the understanding of the committee as to what he is driving at would be improved.


Michael Starr: There is provision in clause 8 that if in a collective bargaining agreement there is a better provision for vacations with pay then that shall prevail. The legislation does not apply in those cases but it does apply in cases where the collective agreement does not provide as well for vacations with pay as does the legislation.


Thomas Speakman Barnett: Perhaps I am a little more sceptical than my colleague, the hon. member for Winnipeg North Centre. As I understand the amendment introduced by the minister, it would be possible for the minister to agree to a holiday provision which was less favourable than the minimum provided in the bill. As I say, his explanatory statement was so general that it did not really mean very much. The amendment must have arisen because of some situation of which the minister has knowledge. Can he not give us an example of what kind of variation from the normal holiday provisions might make it necessary or desirable for him to agree to a variation?


Michael Starr: Mr. Chairman, this amendment is introduced in order to provide for those cases where employers and employees in conjunction wish to apply to the minister because of certain stipulations in their collective agreements particularly with regard to vacations with pay and to leave it to the judgment of the minister to grant their request in regard to that aspect of the bill. I can assure the hon. member that no minister

Industrial Relations
would grant any request at any time that did not come up to the standards of the legislation. However, I think it is agreed that there has to be some provision made in order to take care of certain peculiar situations that exist between employers and employees. As an example, the employees of the Bell Telephone Company have a certain type of classification where consideration must be given when applied for by employer and employees.


Mr. Regier:: Mr. Chairman, I realize that the minister has to have a bit of leeway in the administration of the legislation. The minister is a little hard to hear at this end of the chamber. Do I take it that the minister has the authority under his proposed amendment to allow an employer to make a cash payment in lieu of holidays?


Michael Starr: That can he done under the regulations by paying two per cent of the total salary for the first year and four per cent of the total for the second year.


Mr. Thompson (Edmonion-Slralhcona):: I
should like to ask the minister whether the purposes of this amendment are not covered under clause 9 (f)?


Michael Starr: This is under the regulations and it gives the minister the power to grant any exemptions that may be applied for by employers and employees in any particular group.


[Stage Direction]
Amendment agreed to.
Clause 3 as amended agreed to.
On clause 4-Annual vacation of two weeks with pay.
Stanley Howard Knowles: Mr. Chairman, the Minister of Labour on his side and we on this side are getting along very well tonight. Indeed, he has just moved an amendment to which we have agreed and now I am going to move an amendment to which I hope he will agree.


Thomas Speakman Barnett: Hope springs eternal.


Stanley Howard Knowles: Clause 4 is the main operative clause of the bill which provides for annual vacations with pay.
It specifies in subclause (1) that vacations with pay shall be for two weeks in respect of every completed year of employment. This is fine, and it is too bad it does not stop there. Subclause (2) is one of those modifying clauses which says that if an employee has had less than two years of employment, then he does not get two weeks' vacation with pay but gets only one week for the one year of employment.

We feel, Mr. Chairman, that that subclause (2) should be struck out. If the minister will just agree to do that, he will have a very fine bill and one of which he can be proud when he goes about the country in the next couple of months.


An hon. Member:: What will he be doing?


Stanley Howard Knowles: What will he be doing? The number of questions people can ask, the answers to which they already know, is most interesting.
The Minister of Labour, when speaking on this point, made the objection that to provide for two weeks' holiday with pay after one year would be establishing legislation in line with, or perhaps even ahead of. the most advanced provisions there are in this field. We see nothing wrong with that, Mr. Chairman. I point out to the minister that at least two provinces in this country, British Columbia and Saskatchewan, already have provision for two weeks' holiday with pay after one year. There are about four other provinces that have provisions like this although they do not go as far as in those two provinces. We suggest that what the federal government should be doing is going along with the best legislation that is now in effect in the provinces and giving a lead to the others.
Therefore, Mr. Chairman, to make this most desirable bill which the minister has introduced a perfect bill, I move:
That clause 4 be amended by deleting subclause (2) therefrom and by re-numbering subclauses (3) (4) and (5) as subclauses (2),	(3) and (4),
respectively.
These words simply have the effect of striking out subclause (2) of clause 4, so that subclause (1) stands by itself without being modified as it now is.


Michael Starr: Mr. Chairman, as I said on second reading, this suggestion was given very serious consideration by the government, and we felt that the bill, as it is now, would be acceptable in every respect. We thought that we had established legislation to provide vacations with pay that was at least as good as or better than some legislation in existence in the provinces. We feel that this is a very good bill. I mentioned also that immediately upon the bill coming into force it will apply to the majority of the employees affected by it because it has a retroactive clause. In other words, if a person has been in steady employment in a federal industry, without any leave or remuneration in lieu thereof, then immediately upon the date of this bill coming into force, he would be entitled to two weeks' vacation with pay.

Mention has been made of the fact that this measure is not as good as some of the acts which are now in existence in the various provinces. I might say that five provinces provide for a vacation of one week after one year's employment, and they are New Brunswick, Quebec, Ontario, Manitoba and Alberta. There are two provinces that provide for a vacation of two weeks after one year, namely Saskatchewan and British Columbia. In addition, Alberta also provides for two weeks after two years, which is in line with the proposal contained in this bill. Manitoba provides for two weeks after three years. It will be seen, therefore, that the bill is equal to or better than the provision made in five of the seven provinces having vacation with pay legislation. There is no provincial legislation, I think, in this field in the provinces of Newfoundland, Nova Scotia and Prince Edward Island. The New Brunswick legislation is limited in that it applies only to mining and construction, and such related fields as have been brought within its scope by order in council.
Under the circumstances, Mr. Chairman, since all these things were taken into consideration when the bill was drafted, I am afraid that I cannot accept the amendment moved by the hon. member for Winnipeg North Centre.


Thomas Speakman Barnett: I suppose this question can be discussed back and forth across the floor at considerable length, if we desire to do so. I suppose if we kept at it long enough we would reach the point where we would be saying we want it and the government would be saying, we will not give it to you. This state of affairs could continue for hours.
In view of the remarks the minister has made about the very careful consideration he and his colleagues in the government have given to this matter, this might be the appropriate place to put on the record the fact that certain other bodies have also given this matter careful consideration. The distilled consideration of the membership of the entire Canadian Labour Congress on this subject was presented to the government of Canada on October 31, last. Under the heading, "Labour Legislation" found on page 18 of the Canadian labour congress brief, the congress expresses its considered opinion in the following words:
Uniform labour legislation is one of the goals of the congress. Divided jurisdiction makes this difficult. But there are several things which can be done without any constitutional amendment, and which should be done promptly.
The first is to fill the gaps in dominion labour legislation.
We welcome the announcement of a vacations with pay act,-
Industrial Relations
This brief was presented following the speech from the throne in which the announcement foreshadowing this legislation was made.
We welcome the announcement of a vacations with pay act, and hope it will provide for two weeks after one year's service.
It goes on to say:
But even when this gap is filled there will still be no dominion legislation providing for a legal maximum work week or minimum wages, or paid statutory holidays or a minimum age of employment.
Merely establishing for dominion industries the best provincial standards would be something.
A little later on the congress says:
But the dominion should not confine itself to doing as well as the best of the provinces. It should give a lead.
All I am going to say to the minister at this juncture is that I agree most thoroughly with the point of view expressed by the Canadian Labour Congress in its brief of last October.


Mr.  M. W. Marlin@Timmins: I should like to just put one or two questions to the minister. He has just mentioned that this legislation, in its present form, is going to catch up to five of the provinces but will still lag behind two others. Having had some little experience at the bargaining table and heard some of the answers received by labour representatives when they request additional holidays, and so forth, I believe that possibly one of the main reasons why more of the provinces do not have two weeks' vacation with pay legislation is that they say, "Why should we do it when the federal government does not do it?" and so it becomes a vicious circle. The federal government will not do it unless the provinces do it and the provinces will not do it unless the federal government does it. I certainly think, therefore, that the lead should come from here.
I would also like to ask the minister whether there are any other objections to these two weeks, apart from the fact that only two provinces have such legislation at the present time. I have heard of no other reasons, and I would like to know if there are other reasons why this could not be done.


Michael Starr: In answer to the question of the hon. member I would like to say that when he stated this was in line with what five provinces now have, it is in fact ahead of four provinces because actually there are five which provide for a vacation of one week after one year. Alberta has two weeks after two years. With respect to Manitoba we are ahead because that province provides

Industrial Relations
for two weeks after three years. In the circumstances it was felt, taking all these things into consideration, we certainly are ahead of most provinces in this respect, but there are two provinces which apply two weeks after the first year.


Jean Lesage: Since in matters of labour the provinces reserve jurisdiction except in certain cases where the federal government has jurisdiction, and for reasons given by the Minister of Labour, I for one will have to vote against this amendment.


Stanley Howard Knowles: confess that a while ago I spent some hurried moments in going through the Ottawa papers for the week when the Liberal convention was held in order to try to find out where the Liberals stood on this question. I could not find out but now we have the statement of the hon. member who has just resumed his seat.


Jean Lesage: I spoke for myself.


Stanley Howard Knowles: Oh,
well, maybe my hon. friend has not been able to find that in the papers either.


An hon. Member:: Nobody could find it.


Stanley Howard Knowles: The
Liberals did take a stand on some labour matters and I hope they took a stand on this important question.
I might just say to the Minister of Labour that I do not think it is a very strong point for him to say there is a retroactive provision in this clause which makes it possible for employees who already have two years' service to enjoy the benefit of this legislation just as soon as it comes into effect. I am glad it is that way but in the same vein I can point out to him that a large percentage of employees who come under federal labour jurisdiction already have more than this legislation will provide.
The purpose of this legislation is to extend that benefit to the few workers in the federal field who do not now have it and to give a lead to the provinces, the province of my hon. friend the member for Mont-magny-L'Islet and to all of the provinces of this country. I earnestly hope that not too many members will be taken in by this argument that we should not be out in front and should not be taking a lead. My hon. friends across the way sometimes call themselves just Conservatives, but they sometimes call themselves Progressive Conservatives. Why not be progressive in this respect? Sometimes the Liberals-in my province at any rate-call themselves Liberal Progressives. Why can they not be progressive too? We think it is a good idea that the federal government should

be at least in line with the best legislation existing in this country which is already in effect in two provinces. For that reason we urge the approval of this amendment to clause 4.
Amendment (Mr. Knowles, Winnipeg North Centre) negatived: Yeas, 28; nays, 82.


Stanley Howard Knowles: Mr. Chairman, before clause 4 carries, may I ask a question on behalf of my hon. friend the member for Fort William, to be clear on one point. The hon. member asked whether it is clear that this bill applies with equal effect to men and to women. My bill did have a clause in it spelling that out; this one does not, but I assume that the words "every employee" are quite explicit.


Michael Starr: Yes, it is.


Mr. Schneider:: I would like to ask the minister whether there is not a possibility of a misinterpretation in clause 1. Under this bill every employee is entitled to a vacation of at least two weeks with pay in respect of every completed year of employment. Is there not, then, a possibility that some bright employee might come along and claim two weeks' holidays for every year which he has completed? That is to say, if he were employed for two years he could claim four weeks, and so on. I just wonder whether there is a chance of misinterpretation and whether the word "every" should not be changed to "each"?


Michael Starr: We checked that particular part of the clause with the Department of Justice and we were assured that it could not be misinterpreted.
Clauses 4 to 6 inclusive agreed to.
On clause 7-Termination of employment.


Stanley Howard Knowles: Mr. Chairman, I rise simply to point out that clause 7 is another one which carries forward the proposal that those with less than two years' service are not entitled to two weeks' holiday with pay. Had my amendment to clause 4 carried I should, of course, have moved an appropriate amendment to clause 7 striking out paragraph (b) thereof. However, that would have been only a consequential amendment and since the other amendment did not carry I will not propose it now. Rather, I hope that when we get to third reading the house will agree to refer this bill back and deal with the two clauses together in order to effect the change which, I am sure, the minister in his heart of hearts would like to make.


Mr.   Barnell@: Mr. Chairman, I think that clause 7 is an appropriate point at which to

call attention again to a point I made at an earlier stage of the discussion, namely that this bill as it is drawn up at present-at least as I understand it, and the minister may correct me if I am wrong-makes provision for holidays only for those who have served periods of continual employment with one employer. In other words, this rules out the possibility of vacations with pay for certain skilled tradesmen who by the nature of their work usually move from one employer to another. As I pointed out, when vacations with pay were first brought in in British Columbia this problem did come to light, if my memory serves me correctly, and the legislation was modified to correct that situation. I am wondering what consideration has been given to this problem by the minister and those who advise him, and what the minister's reaction is to the fact that this measure does not cover a great many people who because of the nature of the trade they follow normally move from one employer to another, even though they may be in continuous or relatively continuous employment.
The legislation in British Columbia provides that a percentage of wages should be paid when employment is terminated and thus, over the course of a year, an employee accumulates the amount necessary to enable him to take a vacation at a normal time.


Michael Starr: Mr. Chairman, every employee is entitled under this act after 30 days of continuous employment to 2 per cent of his salary, and in clause 6 it is provided that:
Where any particular federal work, undertaking or business in which an employee is employed is, by sale, lease, merger or otherwise, transferred from an employer to a new employer, the employment of the employee by the two employers before and after the transfer in the work, undertaking or business shall be deemed to be continuous with one employer, notwithstanding the transfer.
And clause 9, which is the clause dealing with regulations, subclause (k) provides:
For the calculation and determination of vacation and vacation pay in the case of seasonal or temporary employees or in other suitable cases.


Thomas Speakman Barnett: As I understand it, clause 6 to which the minister refers, covers the case where an undertaking is transferred. I am thinking of the situation which arises, for example, in the construction industry where a particular contractor will employ a large number of employees until the termination of his contract. Then another job comes up and the bulk of the employees may move to the service of another contractor. Am I correct, in the first place, in understanding that no provision is made for covering a transfer of this sort?


Michael Starr: I pointed out to the hon. member that this matter to which he refers in
Industrial Relations
respect of seasonal work or construction work is taken care of through calculation of the period of time a man has worked under the regulations in subclause (k).


[Stage Direction]
Clause agreed to.
Clause 8 agreed to.
On clause 9-Regulations.
Herbert Wilfred Herridge: Mr. Chairman, this clause reads:
The governor in council may make regulations for carrying out the purposes and provisions of this act, and, without restricting the generality of the foregoing, may make regulations . . .
And then it goes on to list subclauses (a), (b), (c) and so on. I wish to refer particularly to subclause (h) which reads: Prescribing the time when vacation pay shall be paid.
And to subclause (1) which says:
Providing for the granting of vacation or payment of vacation pay in the event of temporary cessation of employment.
I want to ask the minister two questions. Is there not a duplication of intent in subclauses (h) and (1), and does subclause (1) actually mean you provide for the paying out of the vacation pay at the same time as a man might be unemployed and eligible for unemployment insurance. We had that situation come up last winter in a lumber organization in my area. This concern was ceasing operations in the new year and was wondering whether it should grant paid vacations during the period when the men were unemployed and receiving unemployment insurance, but it was not quite sure whether it was proper to do so under the Unemployment Insurance Act.


Michael Starr: Subclause (1) of the regulations provides for lay-offs of extended duration and indefinite lay-offs and it is entirely separate from subclause (h) which gives authority, or at least prescribes the time when vacation pay will be paid. In other words, it could be one day before the vacation periotl or two weeks before the vacation period. I do not know whether I understood the hon. member with respect to a person who has received 2 per cent, say, or 4 per cent in lieu of his vacation. And then I think his question was: can these men draw unemployment insurance? Well, if a man is on vacation he is still with an employer and drawing his pay, but if he is discharged he receives 2 per cent, or 4 per cent, whichever the case may be, of the amount he received for the year or for the period of time in which he was employed, and then, of course, after being discharged, he must wait before he

Industrial Relations
can apply for unemployment insurance, but most certainly he could receive unemployment insurance in such a case.


Herbert Wilfred Herridge: My point is this: in a number of our woods operations men working at certain levels know that their employment will definitely cease at the end of the year, let us say, because above a certain level snow conditions would make it impossible to work. Because of those snow conditions many of these men want to work continuously throughout the rest of the year without taking time oil for vacations with pay. They were interested in knowing if they could reserve those vacations with pay until such time as the logging or mill operation was closed down and they were then eligible for unemployment insurance. Would it be improper for them to draw their vacations with pay and at the same time draw unemployment insurance under those circumstances?


Michael Starr: Mr. Chairman, I am afraid I cannot authoritatively answer the hon. member's question. I most certainly could look into the matter. It is quite possible that a test case would have to be made if there are no provisions for the sort of thing the hon. member has brought to my attention. I am afraid that at the moment I do not have an answer to that question.


Herbert Wilfred Herridge: In order that the minister will be correctly informed and have the opportunity for a test case I will suggest that the manager of a certain lumber company provides him with that opportunity.


Mr. Peters:: I would like clarification on one point, Mr. Chairman. Is it necessary under the regulations to take the vacation period in order to obtain the pay for that vacation period?


Michael Starr: No, Mr. Chairman, it is not necessary. An employee may take the amount of money, 2 per cent or 4 per cent, in lieu of the vacation period.


William Arnold Peters: Would it not be advisable to have it worded in such a way that the employee would have to take the vacation period in order to receive payment for it? I think that one of the reasons labour has asked for vacation pay legislation is that a vacation period should be one of rest and recreation. There are occasions when for reasons of emergency a worker will not take a vacation but will work during his vacation period. This is not the purpose of the bill as I understand it and I would suggest that the vacation pay should be paid only when the employee has taken a vacation.

I would also like to ask whether there is any provision for the accumulation of vacation periods in cases where an employee chooses not to or is unable to take a vacation in one year? I failed to find such a provision in the bill.


Michael Starr: Mr. Chairman, subsection (1) of the regulation provides for the postponement of a vacation by an employee or the waiving of the right of an employee to his vacation.
With regard to the other question, I do not feel that we should provide a restriction that would compel an employee to take a vacation. At times there are extenuating circumstances. For instance, an employee may be sick during that period of the year and after returning to work should his vacation period come along he may choose to work and receive his regular wages plus the vacation pay in lieu of his vacation. I do not think we should compel him to take a vacation in such circumstances and certainly it is his prerogative to work if he chooses to do so.


Herbert Wilfred Herridge: Mr. Chairman, I apologize for rising again but I did not want the minister to think I was a bit of an ass because I mentioned a lumber company with respect to federal legislation. I used that illustration only to indicate what could happen and the reference I made to unemployment insurance would apply to companies coming under federal labour jurisdiction.


[Stage Direction]
Clause agreed to.
Clauses 10 and 11 agreed to.
On clause 12-Commencement.
Stanley Howard Knowles: Mr. Chairman, can the Minister of Labour say when it is intended to issue a proclamation bringing this act into force?


Michael Starr: Mr. Chairman, we will give this matter immediate consideration as soon as this bill is passed.
Clause 12 agreed to.
Bill reported.


Michael Starr: the third reading of the bill.


Stanley Howard Knowles: Mr. Speaker, my remarks at this juncture will be exceedingly brief. One of the reasons I shall make them brief is that in case a recorded vote is necessary I would not want it to run past ten o'clock. As has already been indicated, we feel that this is desirable legislation. We are glad the government has brought it in and given parliament a chance to put it on the statute books of this country. However, we feel that when

we are doing the job we ought to do it properly and that the provision for annual holidays with pay should be of the order of two weeks' vacation after one year. This would require the reconsideration of changes in just two of the clauses of the bill to accomplish the change which we feel ought to be made. I therefore move, seconded by my colleague the hon. member for Comox-Alberni (Mr. Barnett):
That Bill No. 16 be not now read a third time but that it be referred back to the committee of the whole house for the purpose of reconsidering clauses 4 (2) and 7 (b) thereof.
In keeping with what I believe has been established by the Chair as good practice, I did not put any of the details in for the moment, but hon. members will be quite clear as to what it means. The two subclauses referred to are the subclauses that deal with the question as to when two weeks' holidays with pay become effective. The house should have this opportunity to vote on the desirability of changing the bill so that the two weeks' vacation with pay will be effective after one year's employment.


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


Some hon. Members:: Yes.


Michael Starr: Mr. Speaker, may I rise again to say very briefly what I said in the committee stage-


Mr. Speaker:: I am sorry to interrupt the minister but I am advised by the Clerk that having gone as far as having read the amendment moved by the hon. member for Winnipeg North Centre (Mr. Knowles) in putting the question to the house it is not in order to speak further on the motion.


Stanley Howard Knowles: Mr. Speaker, could we not agree to allow the minister to speak for a few minutes? The minister's argument is a poor one and we know what he is going to say but we would like to hear it anyway.


Mr. Speaker:: By leave of the house?


John Whitney Pickersgill: We all like the minister.


Some hon. Members:: Agreed.


Michael Starr: I just want to repeat what I said at the time when the amendment was introduced in committee. All the aspects of this bill were carefully studied by the government. It was felt that we were introducing an entirely new piece of labour legislation, one that has not been in existence in the federal field previously and that it was designed in advance of five other provinces that have existing legislation on this particular aspect of the matter, namely vacations
Industrial Relations
with pay. We felt that this bill was sufficient at this time and I must say, Mr. Speaker, that I cannot accept the amendment which has been proposed.



NORTHWEST TERRITORIES ACT


Francis Alvin George Hamilton: that the house go into committee to consider the following resolution:
That it is expedient to amend the Northwest Territories Act to authorize the commissioner of the territories to borrow money for territorial, municipal or local purposes on behalf of the territories and to lend money for local purposes; and also to provide for the appointment and remuneration of deputy police magistrates.
Motion agreed to and the house went into committee, Mr. Courtemanche in the chair.


Francis Alvin George Hamilton: Mr. Chairman, the resolution I have the honour to move tonight seems on the surface to contain two very simple amendments, and I am not going to say much more than what appears in the text of the resolution on the order paper. One of the amendments originated with the Department of Northern Affairs and National Resources and is part of the program of that department to move the status of the government of the territories one step further towards self-government. The other amendment comes from the Department of Justice as an administrative amendment to help improve the administration of justice in the Northwest Territories and is concerned with the appointment of deputy police magistrates.
The first amendment gives to the territorial government in the Northwest Territories the same rights as the territorial government of the Yukon, namely the right to borrow money and the right to lend money to municipal and school associations. I think that is all I need to say on the resolution stage. I think it is well understood that the measure has the general support of all members of the house in a move to bring the Northwest

Territories one step forward in their progress towards self-government. I know we all look forward to the development of this area in the hope that the population and the financial base will improve and make possible some day complete self-government for the territory.


Jean Lesage: Mr. Chairman, as far as the two points covered by the Minister of Northern Affairs and National Resources are concerned, there will be no objection on this side, of course, because the proposed legislation had been approved by the previous administration before the election on June 10.
I should like to ask the minister just two or three questions. Will the bill authorize the commission council to establish a Northwest Territories liquor account in the consolidated revenue fund of Canada? I might as well put all my questions together. Will the bill authorize the governor in council to make regulations respecting archeological sites and specimens? Will it authorize the governor in council to appoint a small debts official? Finally, will the bill provide that the Importation of Intoxicating Liquors Act shall not apply to the Northwest Territories?


Francis Alvin George Hamilton: No, Mr. Chairman, the amendments are simply as I described them, that is to give to the territorial council the right to borrow with the consent of the governor in council, and once the money is in their hands it is classified as territorial revenues and is mixed up with other revenues of the territorial government. The council has the right to carry on as they see fit, and lend the money to the institutions I mentioned, namely the municipalities and school districts. This is all that the amendment entails.
So far as these other questions are concerned, such as a liquor account, archeological sites, small debts officials and the importation of intoxicating liquors act, those matters will be left as they are at the present time.


Herbert Wilfred Herridge: In view of the long-standing interest of this group in the development of the Northwest Territories and its natural resources and our continuing keen interest in the welfare of the population of the Northwest Territories, as well as the future development of this area, this group is pleased to support this resolution as it apparently provides some further opportunity for the implementation of those objectives which we have repeatedly sought over the years.


Mr. Hardie:: The hon. member for Mont-magny-L'Islet said and quite rightly, that the last government proposed these amendments because, in the Northwest Territories and the Yukon the municipalities have no way of

borrowing money except through the territorial council. This amendment will give to the council the right to borrow moneys from the federal government which, in turn, will be handed over to the municipalities and school districts. This will be of great assistance to the municipalities and school boards in the Northwest Territories.
Resolution reported and concurred in.
Mr. Hamilton (Qu'Appelle) thereupon moved for leave to introduce Bill No. 249, to amend the Northwest Territories Act.
Motion agreed to and bill read the first time.



CRIMINAL CODE


Howard Charles Green: the second reading of Bill No. 15, to amend the Criminal Code.


Stanley Howard Knowles: What is it all about?


Jean Lesage: It concerns the French version.


Mr. D. J. Walker (Parliamentary Assistant to the Minister of Justice):: In the French version there is inadvertently an error in one section which is now numbered as nine instead of twelve. The amendment is simply to correct the French version by substituting the word "twelve" for the word "nine".


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Courtemanche in the chair.
On clause 1-cour d'appel.
Herbert Wilfred Herridge: I am rising to ask if the
parliamentary assistant can inform the house how this error was brought to the attention of the minister?


David James Walker: As a matter of fact, it was an error which was made during the last regime; the hon. member will be happy to know that. I believe the other place decided to amend the French version, and in so doing inadvertently got the numbers mixed. I believe Premier Duplessis drew it to the attention of the Department of Justice. The correction which is suggested by the bill before the house tonight will officially solve a very knotty problem.


Herbert Wilfred Herridge: I am very interested indeed to notice the close co-operation between Mr. Duplessis and the present administration.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
Criminal Code
Mr. Speaker:: When shall the bill be read a third time? Now?


Stanley Howard Knowles: By
leave.


Howard Charles Green: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Can the house leader tell us what is proposed for tomorrow?


Howard Charles Green: Tomorrow, we shall commence with second reading of the bill amending the Northwest Territories Act; then take item No. 3 on today's order paper, with respect to the boundary between the province of Alberta and the Northwest Territories; then second reading of the bill to amend the Indian Act, which is No. 5 on today's order paper. Then we shall go into estimates, commencing with those of the Department of Citizenship and Immigration; then one item which remains of the post office estimates; legislation, and mines and technical surveys.


John Whitney Pickersgill: Can the minister indicate when it is proposed to bring on the estimates of the departments of labour, public works and transport, in which we on this side of the house are really interested?


Howard Charles Green: I really cannot say, Mr. Speaker, when they will be brought in.


John Whitney Pickersgill: We were hoping, in view of the great co-operation we have shown this evening, that the minister might co-operate with us.


Howard Charles Green: I thank the hon. member for his co-operation this evening.


Herbert Wilfred Herridge: Could I ask the minister a question? Is there any significance in the fact of legislation being brought forward tomorrow?


Howard Charles Green: Well, the hon. member will just have to place whatever significance he can on the business that has been announced for tomorrow.


Stanley Howard Knowles: In
view of the statement the minister made a week or so ago that the house normally handled estimates during the latter part of the week and legislation on Mondays and Tuesdays, perhaps the minister would tell us whether or not the government has lost interest in the estimates for this session, or can he tell us what we will be taking on Monday and Tuesday of next week?


Howard Charles Green: I wish I knew, Mr. Speaker.

Thomas D'Arcy Gee


Alexander Malcolm Nicholson: I wonder whether the minister would answer one more question. He told us that he expected to finish this session on Saturday, and some members have made reservations to go home on Friday. Could the minister tell us if he still expects to finish on Saturday?


Howard Charles Green: Mr. Speaker, the members in question can go home tomorrow if they wish.


Stanley Howard Knowles: The
minister and I will still be here.



PRESENTATION OF PORTRAIT OF THOMAS D'ARCY MCGEE

Mr. Speaker:: It has been suggested that some members might like to have as an
appendix to Hansard the short address given today by Dr. Emmett J. Mullally, president of the Thomas D'Arcy McGee Associates, on the presentation by the associates to the House of Commons of a portrait of Thomas D'Arcy McGee, one of the fathers of confederation.
Is it the pleasure of the house that this address be printed as an appendix to Hansard?


Some hon. Members:: Agreed.
[For text of document above referred to, see appendix, pages 4013-14.]


[Stage Direction]
It being five minutes after ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on December 2, 1957.

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. Hansell: 1.	Has the government ever refused any applications for private licences to establish any new private radio or T.V. stations when the C.B.C. recommended the granting of such licences? If so, how many have been refused, and in what cases?
2.	Has the government granted any licences to establish any new private radio or T.V. stations when the C.B.C. has not recommended, or advised against it? If so, how many and in what cases?
Answer by: Hon. George H. Hees (Minister of Transport):
1.	No.
2.	No.


RISBOROUGH TELEPHONE COMPANY, QUE.
Mr. Poulin: 1.	Did the Risborough Telephone Company, in the province of Quebec, receive a grant from the Department of Transport during the years 1952 to 1957 inclusive?
2.	If so, (a) on what date; (b) in what amount?
3.	Did the said company, during the same period, make an application for a grant which has not been allowed? If so, on what date?
Answer by: Hon. George H. Hees (Minister of Transport):
1.	Yes.
2.	(a) February 16, 1956; (b) $2,000.
3.	Yes. June, 1956.


FEDERAL REVENUE COLLECTIONS, ALTA.
Mr. Holowach: 1.	What were the total revenues collected by the federal government in the province of Alberta, during the fiscal years 1955-56 and 1956-57, by way of: (a) income tax; (b) corporation tax; (c) sales tax; (d) succession duties; (e) customs and excise taxes; (f) other revenues?
2.	Do these figures include payments collected: (a) on goods at entry ports outside Alberta; (b) corporation taxes paid by head offices on behalf of provincial branches; (c) tax paid at manufacturer's level on consignments to Alberta?
3.	If so, what is the amount in each case?
4.	If not, what is the estimated average of such total outside collections?
Answer by: Hon. Donald M. Fleming (Minister of Finance):
1 and 2.
Revenue collected by the federal government through district offices of the Department of National Revenue situated in the province of Alberta:
1955-56	1956-57
(thousands of dollars)
Individual income tax ..	79,291	95,682Corporation income tax ..	40,415	53,532Succession duties	2,891	3,535Sales tax	18,971	23,510Special excise taxes .. ..	838	689Excise duties	11,110	11,577Customs duties	17,493	21,817Sundry collections (misc.	non-tax revenue) .. ..	41	49
These amounts of revenue collected through offices in Alberta do not necessarily correspond with the taxes on income earned, or goods consumed, in the province.
The amounts shown as collections of individual income tax and corporation income tax are amounts collected from returns filed in district offices in Alberta. However, individuals in the Northwest Territories file their returns in Alberta and corporations operating in Alberta may file in another province, and corporations filing in Alberta may operate outside that province.
Succession duty returns filed in Alberta will not necessarily correspond with dutiable estates situated in Alberta.
Sales tax, special excise taxes and excise duties collected through offices in Alberta may include taxes and duties on goods produced in Alberta but consumed elsewhere. Similarly the taxes and duties on goods produced outside Alberta and shipped to Alberta for consumption will be collected through offices outside Alberta.
Customs duties and sales and special excise taxes on imports are collected at points where imports are cleared through customs. These points may not be situated in the province where the goods are consumed.
3.	Not available.
4.	Not available.


VOCATIONAL SCHOOLS
Mr. Gauthier (Lake St.: John):
1.	Was the government of Canada a party to a federal-provincial agreement in 1957, providing for federal assistance to the provinces, concerning the construction and operation of vocational or trade
schools?
2.	If so, what amount was paid to the province of Quebec under such agreement, in 1957?
3.	To what schools in the province of Quebec was the government of Canada called upon to finance the cost of construction in 1957, and what amount was allotted to each?

Questions
Answer by: Hon. Michael Slarr (Minister of Labour):
1.	An agreement providing for federal financial assistance to the province toward the construction and operation of vocational, technical and trades schools has been entered into by the government of Canada with each of the provinces, except the province of
Quebec, effective for a period of five years from April 1, 1957, under the authority of the Vocational Training Co-ordination Act and order in council P.C. 1957-23/367 of March 21, 1957. The province of Quebec has not signed this agreement.
2.	Nil.
3.	Answered above.

Thomas D'Arcy McGee


APPENDIX
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The years 1957 and 1958 are centenary years connected with the life of Thomas D'Arcy McGee. (1) His family came to live in Montreal in the month of August 1857; they came from the city of Brooklyn, New York state, (2) he came under the sponsorship of St. Patrick's Society of Montreal, (3) he was chosen as the representative for the constituency of Montreal West in the coming election in December 1857; and was elected with the largest vote of the six candidates presenting themselves for the three seats in Montreal, (4) on January 2nd, 1858, he issued the first number of his Montreal tri-weekly newspaper The New Era.
When Mr. W. A. Higgs of the Thomas D'Arcy McGee Associates of Montreal wrote the newly elected Prime Minister of Canada, the Honourable Mr. John Diefenbaker, about the recently formed society and its purpose of doing honour to the memory of McGee and in particular of the society's hope of presenting Canada with an oil painting of McGee, he was welcomed quite warmly in a letter from Mr. Diefenbaker written from London and dated July 2nd, 1957.
Later on in the summer of 1957, the McGee Associates were told about the agreement made with Mr. Bruce Mitchell, a Montreal artist, to paint the portrait of Thomas D'Arcy McGee, and at the same meeting Mr. Patrick Lynch offered to pay the fee the artist asked for his services. The McGee Associates are deeply indebted to Mr. Lynch's generosity.
This occasion is not the time nor is this the place to go into a detailed account of McGee's very active life; he was born on April 13th, 1825, in the town of Carlinsford, Ireland, and on the night of April 6th of the year 1868, shortly after he had left the House of Commons, he was assassinated in Ottawa, Canada, and on the 43rd anniversary of his birthday he was buried in Montreal on April 13th, 1868.
He left Ireland for the first time with his sister in April 1842 to visit relatives in Providence, Rhode Island. He became a writer for the Boston Pilot and attracted so much attention by his writings and speaking that the owners of the Freemans Journal invited him back to Ireland in August of the year 1845 to become connected with newspapers in Dublin and in London. His connection through Charles Gavin Duffy and the Nation newspaper was an important event in his life; through the Nation came the abortive rebellion of 1848, under the leadership of Smith
O'Brien; its repression followed, and McGee's second departure from Ireland, disguised as a priest, with a price on his head by the British government, took place. The years 1846-48 are the years of the great famine in Ireland; the great migrations from the homeland to England and Scotland, to the United States and South America, to continental Europe, to Australia and New Zealand and to Canada-Quebec, Montreal, Toronto and Kingston. In Montreal in one large burying place at the western end of the Victoria bridge, there are six thousand dead of Irish emigrants who sought to make Canada their home in 1847-48.
McGee reached Philadelphia on the emigrant ship, "The Shamrock", in 1848 and for the next ten years he was engaged in newspaper work in a number of American cities, Philadelphia, Buffalo, Boston, New York, interspersed with many lecture engagements in the United States and Canada. In 1850, McGee founded in New York the newspaper The American Celt, which he later moved to Buffalo-soon he became known as one of the more attractive lecturers and came frequently to Canada and later on to Canada's maritime provinces where Archbishop Connolly of Halifax remained his constant friend until McGee's death.
In the years 1856 and 1857, the Irish, who had been coming to Montreal in larger numbers for twenty-five years and more, stated through St. Patrick's Society their intention of naming and electing one of their own to represent them in one of the three seats which Montreal then held in the legislative assembly of Canada. As there were a number of aspirants for the honour, St. Patrick's Society decided to go outside of Canada and in the United States, they asked Thomas D'Arcy McGee to be their candidate for parliament. In August of the year 1857, McGee's wife and children moved to Montreal and took up residence on St. Antoine street, near Richmond square in the western suburbs of Montreal.
The ministerial candidates for the three parliamentary seats which Montreal had in the 1857 election were Georges Etienne Cartier, Sternes and John Rose; the reform candidates were Antoine A. Dorion, Luther Holton and Thomas D'Arcy McGee; the polling days in Montreal were Monday and Tuesday, December 21st and 22nd; at the close of the election at 5 p.m. Tuesday, December 22nd,	1857, Dorion, Rose and
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Thomas D'Arcy McGee McGee were elected and McGee led the poll; there was great excitement during the two days of the election.
McGee continued to represent the constituency of Montreal West until his assassination in 1868. He ran four more elections in Montreal; in 1862 he was opposed by John Young and in 1867 was opposed by Mr. Barney Devlin. McGee won both these elections. Canada West and Canada East, now known as Ontario and Quebec, made up what was called Canada from about 1841 to Confederation in 1867.
McGee took his seat in parliament for the first time in the first session of the sixth provincial parliament at its opening in Toronto on February 25th, 1858, one hundred years ago this coming	February-the
attorney general of Canada West, John A. Macdonald, and the attorney general of Canada East, Georges Etienne Cartier, were the two leaders of the government. Cartier in the 1857 election was defeated in Montreal but elected in Vercheres. McGee and Dorion were in opposition. The opposition party was called Reformers. Later McGee became a member of John A. Macdonald's government, but not for a year or more. McGee had an interesting time in Toronto. On St. Patrick's day of the year 1858 while his friends escorted him to his hotel, a section of the True Blue orangemen showered stones on his carriage.
The time now is too brief to enter into all the details of McGee's public life. He became an anti-slavery defender in the United States in 1861; he was made president of the council in the Sandfield-Mac-donald-Sicotte ministry in 1862; chairman of the intercolonial conference at Quebec in 1862. In 1862 McGee announced his independence in parliament and was elected in Montreal West; his opponent was John Young; in 1863 he joined the Liberal-Conservative political party and toured the country with John A. Macdonald; in 1864 he became minister of agriculture, immigration and statistics in the Tache-Macdonald ministry.
In 1864 he was a member of the Charlottetown conference that met in August and in October of the Quebec conference, where most of the clauses of the British North America Act were decided upon.
In 1867 in the contest for Montreal West with Mr. Bernard Devlin, he won his last election by a majority of 250 votes.
The following are some of his better known books:
"O'Connell and His Friends" in 1845.
"Irish Writers of the Seventeenth Century" in 1846.
"Life and Conquests of Art MacMurrough" in 1847.
"Memoir of Charles Gavin Duffy" in 1848. "A History of the Irish Settlers in North America" in 1850.
"The Catholic History of North America" in 1853.
"The Attempts to Establish the Reformation in Ireland" in 1855.
"The Life of Bishop Maginn" in 1857. "History of Ireland" in 1863.
"Federal Governments, Past and Present", published in 1865.
"Campaign against Fenianism" in 1865. "The Irish Position in British and in Republican North America" in 1866.
In the month of November 1869, about three hundred and fifty of Thomas D'Arcy McGee's poems were published by Mrs. James Sadler of Montreal and New York; explanatory notes were printed in the book, as was a splendid biographical sketch of McGee.
Mrs. Sadler wrote in her sketch:
It was in June 1842 when our young Irish poet McGee arrived on a visit to Boston from Providence, R.I.
When the 4th of July came around, the roar of artillery and the gladsome shouts of the multitude, the waving of flags and the general jubilation of a people who had freed themselves, fired his youthful imagination. It seemed to him that which he saw that day was but the fore-shadowing of similar scenes in his own beloved land.
Thomas D'Arcy McGee, at the time seventeen years old, addressed the people that day and the eloquence of the boy-orator enchanted the multitude who heard him there as the more finished speeches of his later years were wont to do.
And oh it were a glorious deed To show before mankind How every race and every creed Might be by love combined:
Might be combined yet still would show The sources whence they rose As filled with many a rivulet The lordly Shannon flows.
It was close to two a.m. on the morning of April 7th, 1868, when the House of Commons in Ottawa adjourned; the house had heard one of McGee's speeches defending Canadian confederation. With the music of McGee's oratory in their ears the members of parliament sought their ways homeward. McGee was bending down to open the street door of his Sparks street boarding house when he was shot in the back of his head and died almost instantly.
The government of Canada took charge of the funeral arrangements, arranged a pension for McGee's widow and the two surviving children and provided a tomb in Cote des Neiges cemetery for McGee's body.
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Thursday, January 30, 1958

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Second report of standing committee on external affairs.-Mr. White.