1958-01-03

Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, I rise on a question of privilege. This is the first sitting of the house in the year 1958, which is the year in which the province from which I come is celebrating its centenary.
It just so happens that it was in the year 1778 that the first member of the white race arrived on the shore of what is now called British Columbia at a place known as Friendly Cove, on Nootka island, which is now in the constituency of Comox-Alberni. Therefore I thought it might be appropriate if I were to draw the attention of the house at this, its first sitting of this year, to the fact that this is the year in which British Columbia is celebrating its centenary.
And if I might, Mr. Speaker, I would also call the attention of hon. members to the fact that some of the high school students in my constituency have sent seasonal greetings to hon. members representing British Columbia constituencies. They were supposed to have arrived in time for Christmas, but because of delay in the mail they did not do so. So from the student council of Texada island high school we have received a greeting at the beginning of our centennial year to all members from that province, which I am sure we will all be glad to share with the other members of this house.



RESTRICTIONS ON IMPORTS INTO UNITED

Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, since parliament
recessed, the United States has extended its import restrictions on oil in such a way that Canadian exports of oil to the United States will be directly affected. I should like to report to the house on what has happened.
The history of these so-called voluntary oil import restrictions is brief and relatively simple. Oil producers in the United States, particularly those which do not own oil in fields outside the United States, have for
some years been campaigning for restrictions on the importation into the United States of foreign oils in competition with more costly domestic production. After the Suez crisis of last winter, when oil from abroad began to compete vigorously once again in United States markets, it became evident that the position of the domestic oil producers was strong enough to secure some form of restriction on imports.
The alternatives appeared to be restriction by special act of congress or by administrative action under section 7 of the trade agreements extension act of 1955, subsection (b) of section 7 of which reads as follows:
(b) In order to further the policy and purpose of this section, whenever the director of the office of defence mobilization has reason to believe that any article is being imported into the United States in such quantities as to threaten to impair the national security, he shall so advise the President, and if the President agrees that there is reason for such belief, the President shall cause an immediate investigation to be made to determine the facts. If, on the basis of such investigation, and the report to him of the findings and recommendations made in connection therewith, the President finds that the article is being imported into the United States in such quantities as to threaten to impair the national security, he shall take such action as he deems necessary to adjust the imports of such article to a level that will not threaten to impair the national security.
It appears that since restrictions by act of congress tend to be rigid and hard to amend, and since world oil supply and demand are characterized by rapid changes of pace and direction, the case for a flexible program of administrative restriction commended itself to the United States government. Certainly it was under strong pressure to act under the statutory provision I have just quoted.
On June 26, 1957, pursuant to section 7(b) of the trade agreements extension act of 1955, the President established a special committee to investigate crude oil imports. It consists of six cabinet secretaries, with the secretary of commerce as chairman. The first report of the committee was approved by the President on July 29, 1957. That report called for voluntary restrictions on imports into four of the five districts into which the United States is divided for purposes of oil administration; that is, to all the states except those bordering on the Pacific ocean, which together constitute district V.
I shall not go into the details of the July restrictive formula. We examined it very closely, and indeed our officials had been

Oil-U.S. Import Restrictions very carefully analysing all the steps leading up to it. The formula did no immediate harm to Canadian oil sales. The only market which might have been affected was that in the middle western states which had developed following the construction of the Interprovincial pipe line through northern Minnesota, Wisconsin and Michigan. In fact the formula made some allowance for expansion of imports by the half dozen refineries using Canadian oil in that area, and also made some provision for new importers. We felt that while the program might restrict expansion of our sales there at some future time, it gave no cause for objection on grounds of immediate hardship. Two of our customer refineries in the area applied for and received increases in their quotas for imports, and we saw reason to believe that the program was being so administered as to avoid restriction of Canadian oil sales.
In the absence of hardship we did not protest on the principles involved, especially because it appeared that the practical alternative to this program might have been rigid statutory restriction related to an attack in congress on renewal of the reciprocal trade agreements act, which expires in 1958 and in which Canada is much concerned.
Now I turn to district V, the United States west coast. I should perhaps explain that of the three states involved, namely Washington, Oregon and California, Washington is the only one in which we have a firmly established oil market, although we did ship large quantities to California during the Suez emergency last year. The July report of the President's special committee had recommended as follows in respect of this district:
Imports should be determined on a semi-annual basis. Pending a change in the deficit condition now pending in the area by, for example, the development of an economical means of interregional transportation, the level of imports must be such as to make up the difference between the demand and the quantity of domestic crude oil available to the area, as established by the Department of the Interior. The schedule of imports for the last half of 1957, as submitted by the companies to the director of defence mobilization appears to be slightly higher than would be called for by the foregoing formula.
However, there is reason to believe that the imports for this period will not exceed 275,000 barrels per day and, consequently, no voluntary import limitations are proposed for this district at the present time. This situation should be reviewed, however, during the latter part of 1957 from the point of view of the plans of importers for the first half of 1958, in view of the fact that additional pipe-line capacity to the west coast is scheduled to become available during the first half of 1958.
In accordance with this recommendation the special committee on November 8 ordered a hearing on district V imports. The hearing

was held by Captain Carson, the administrator of the voluntary oil import program, in Washington, D.C., on November 25 and 26. As the Prime Minister (Mr. Diefenbaker) mentioned in the house at the time, observers for this government and for the government of Alberta were present at that hearing. Also, informal talks were held with appropriate United States officials before and after the hearing. Although the figures of proposed imports filed at the hearing made it evident that some degree of restriction on imports into at least the southern part of district V was likely, the knowledge and understanding of the Canadian position which was shown by the United States authorities led us to hope that any such restrictions would exempt Canadian shipments.
On December 13 our representatives in Washington were informed that the special committee would recommend that so-called voluntary import restrictions be extended to district V, and that the formula to be recommended to the President was such that the three refineries in the state of Washington, along with the other major refineries of district V, would be required to reduce their imports in the first half of 1958 to a level 15 per cent below their average imports over the 1956-57 period. The three Washington refineries are of course the ones which use the great bulk of the Canadian oil normally sold in district V. The source of imports is not prescribed by the formula, but two of the three refineries have voluntarily announced their intention to continue to use Canadian oil, subject to price considerations.
The Canadian government was disappointed to learn that our sales to refineries in this area, for which Canada is the only source of supply by pipe line, were to be restricted. By contrast may I remind the house, sir, that the voluntary import restrictions in the middle west, where our oil is in direct competition with United States domestic oils, do not impede our sales there, at least for the present.
The Canadian government immediately asked that the President defer the announcement of this restrictive program for district V until we had time to put forward our point of view. The United States government did delay the announcement at our request.


Mr. Marlin (Essex East):: What date was that?


Donald Methuen Fleming: It was immediately on receipt of the information, December 13, the date on which our representative at Washington received the information.

In the following week, as hon. members will recall, the Prime Minister and several members of the cabinet were in Paris for the NATO meetings, as were President Eisenhower and several members of his cabinet. Accordingly, we pressed our case in Paris. In particular I had two conversations with Mr. Anderson, the secretary of the treasury. During the second he was accompanied by Mr. Dillon, the deputy undersecretary of state for economic affairs, and other United States officials.
At that time I was able to learn in considerable detail the reasons lying behind the United States system of voluntary restrictions, and I was able to explain to them the harm that we had every reason to fear would follow if those proposed restrictions were applied to Canada. I pointed out the fact that in our trade relations with the United States at the present time there is a massive balance in favour of the United States, and that we had had other reasons to complain of the policy of the United States administration in marketing its agricultural surpluses. I expressed the hope that in the context of the NATO meeting, which was then proceeding in another building, and the emphasis there being laid on the elimination of economic conflict under article 2 of the North Atlantic treaty, the United States ministers would be able to accept our point of view.
In the discussions in Paris, which of course took place outside the NATO meetings, particular emphasis was laid on the difficulties already being experienced by Canadian oil producers. We pointed out that Alberta, like Texas but unlike California, has already been prorating its production so that no sudden flood of Canadian oil need be feared in the Pacific northwest of the United States. Those states were the natural and economic market for Canadian western oil and, in time of international emergency, those states would unquestionably depend to a very considerable degree on Canadian supplies of oil.
It seemed particularly appropriate, in the NATO context, to point out to the United States ministers the implications which seemed to us to flow from their decision to base their voluntary import program on grounds of national defence. We reminded them that in matters of defence the economic efforts of the two countries had been closely co-ordinated during world war II, and that such co-ordination had been confirmed as recently as October, 1950, at the time of the Korean incident, by a formal exchange of notes. These notes set forth certain "principles for economic co-operation", as they are called, in relation to defence; and it
Oil-U.S. Import Restrictions seemed, and still seems, to the Canadian government that the United States action in restricting imports of oil from Canada on grounds of defence runs counter to the whole tenor and purpose of these principles.
The United States ministers seemed to be impressed by the arguments we put forward. They promised to review the matter as soon as they returned to Washington later that week. However, they contended that under the plan proposed by the United States government the reduction of imports from Canada would be very small. At the same time the market situation on the Pacific coast was very precarious. They contended that prices might fall seriously at any time, and the effect would be to damage not only suppliers in the United States but suppliers in Canada and overseas. They argued that quick action might be in the interests of producers both at home and abroad.
On December 23 we learned that the United States administration was not prepared to depart from the recommendations of the special committee and felt it must announce the new import restrictions immediately. The announcement was in fact made from the White House on the morning of December 24. On behalf of the Canadian government I issued a simultaneous statement in which I said in part:
The Canadian government cannot accept the view that there is any justification for United States limitations on oil coming from Canada either on economic or defence grounds. The Canadian government will continue to press its objections.
May I ask at this point, Mr. Speaker, for leave to table a copy of the statement that was issued at that time.


Mr. Speaker:: Has the minister leave to table the statement?


Some hon. Members:: Agreed.


Donald Methuen Fleming: If it is the wish of hon. members it could be printed as part of the Hansard record.


Mr. Speaker:: Yes. Will hon. members agree to the printing of the statement in Hansard?


Some hon. Members:: Agreed.
[For text of statement referred to above, see appendix "A", page 2832.]


Mr. Stewart (Winnipeg North):: Do I understand that this statement was a note of protest to the United States government?


Donald Methuen Fleming: No, it was not a note to
the United States government. It was a statement issued to the press and public following a similar press statement issued at

Oil-U.S. Import Restrictions Washington. We had warning the day oefore that the United States statement was to be issued and made public, and we had our statement prepared and ready to be issued immediately theirs was issued. It was a public statement, not a note to the government.


Alistair McLeod Stewart: Was there any note of protest sent to the government, or is this a new method of conducting diplomacy?


Donald Methuen Fleming: This was the proper form, in view of the fact that parliament was not at that moment in session, of acquainting the public with the fact that the Canadian government had been in constant communication through the normal diplomatic channels with the United States administration. Those exchanges had been going on almost continuously day by day from December 13 to December 24.
The Canadian government has not lost sight of the fact, which has been plain to all who have been involved in the discussions, that the United States authorities have sought at all times to understand the problems faced by the Canadian government and the Canadian oil industry. They themselves are faced with delicate internal problems related to oil, and they do not wish to discriminate against those other friendly nations in South America and in the Middle East which have sold and desire to continue to sell oil to the United States.
However, this recent action and, indeed, the whole basis upon which the President's special committee was established, are hinged upon the proposition that oil if not restricted would, in the words of the trade agreements extension act of 1955, be "imported into the United States in such quantities as to ... impair the national security." This, in relation to our sales of oil in the state of Washington, is in the view of the Canadian government a wholly untenable proposition. The refineries in the state of Washington were established with the actual encouragement of the United States defence authorities on the grounds that there is no local production of crude oil there, that water transportation of crude or other products in wartime is vulnerable, and that the availability of an assured supply of Canadian crude to this area by pipe line is desirable for the security of supply of the petroleum requirements of the Pacific northwestern area.
Not only does the United States action in respect of our oil make no sense, as we see it, in relation to their actual security interests, but also it appears to the Canadian government to offend, as I have already pointed out, against the tenor and purpose of the

principles for economic co-operation in defence matters that had been formally agreed in an exchange of notes between our two governments in 1950 and are recognized by both governments to be still valid and in effect. Here I quote from the notes:
It is agreed that our two governments shall cooperate in all respects practicable, and to the extent of their respective executive powers, to the end that the economic efforts of the two countries be co-ordinated for the common defence and that the production and resources of both countries be used for the best combined results.
While this exchange of notes and the principles therein set forth are drafted primarily in terms of actual scarcities rather than apprehended scarcities, the general intent is clear enough. I think it might be a convenience to hon. members, Mr. Speaker, if these notes were printed in full as an appendix to Hansard, if that were the wish of hon. members.


Mr. Speaker:: Do hon. members agree to the printing of these notes in Hansard?


Some hon. Members:: Agreed.
[For text of notes referred to above, see appendix "B", pages 2833-34.]


Donald Methuen Fleming: Further, it seems-


Mr. Pearson:: Mr. Speaker, would the minister explain again about these notes? This is a diplomatic exchange between the two governments on this matter?


Donald Methuen Fleming: Yes. The exchange of notes occurred at the time of the Korean incident. The excerpt I have read is from the text of the notes printed in a white paper issued in the Canada treaty series.


Mr. Ccldwell:: Is that 1950?


Donald Methuen Fleming: Yes, 1950. The statement was effective October 26, 1950.
Further, it seems to the Canadian government that the United States action accords ill with the communique issued at the close of the Paris meetings by the heads of NATO governments. Indeed, they were deliberating on the text of the clause I am about to read at the very time that our meetings were proceeding in another building on this subject. I have in mind in particular this statement from the communique:
We will co-operate among ourselves and with other free governments to further the achievement of economic stability, a steady rate of economic growth, and the expansion of international trade through a further reduction of exchange and trade barriers.
And another clause in the NATO statement reads as follows:
We recognize the interdependence of the economies of the members of NATO and of the other countries of the free world.

We have not been able so far to persuade the United States government to exempt Canadian oil from its program. In the long run we are confident that the United States will be a willing market for our oil, since their demand for oil appears likely to outrun their reserves. It would be unfortunate, wasteful, and surely unnecessary to find both countries committing themselves in the short run to restrictive practices which would be uneconomic and harmful rather than helpful to effective co-operation in time of war. In this spirit we propose to continue to press our viewpoint most vigorously in our discussions with the United States authorities.


Right Hon. L. S. St. Laurent (Leader of the Opposition):: I should like to ask the minister if there has been any exchange of notes at this time over this oil question, or if the representations were confined to oral representations made through diplomatic channels?


Donald Methuen Fleming: Mr. Speaker, if my memory serves me correctly all the communications were oral, in view of the urgent nature of the situation.


Louis Stephen St-Laurent: There are no notes similar to those of 1950 which could be tabled at this time?


Donald Methuen Fleming: I think not, Mr. Speaker. I think there were no written communications. The communications were passing back and forth so quickly that they were conveyed by oral representation in every case.


Major James William Coldwell: May
I ask a question. In view of the fact that the minister said the matter would be pressed vigorously with the United States, does he not think that notes should be sent which could be a record of the protests that are being made, rather than just press statements? I think this is a breach of the understanding at the NATO conference. We wish to maintain the friendliest relations with the United States and to co-operate in defence organization, but it seems to me that vigorous protests in writing by way of notes should be forwarded to the United States authorities.


Donald Methuen Fleming: I think I can assure the house that is the intention of the government.


Paul Joseph James Martin: I should like to ask the Minister of Finance whether it is correct, as was reported in a United States magazine, that Mr. Anderson told my hon. friend that the contemplated cut of 15 per cent represented the same figure which the Canadian government had in mind when it proposed that there should be a shift of Canadian purchases from the United States?
Oil-U.S. Import Restrictions


Donald Methuen Fleming: There is not a word of truth in any such newspaper report.


Mr. Harold E. Winch (Vancouver East):: May I direct a question to the Minister of Finance concerning his statement. In view of the fact that an order has been issued for a cut of 15 per cent on the so-called, and I use his own term, voluntary basis in district No. V in the importation of crude oil from Canada into the United States, has any consideration been given by the government to a restriction on the importation of refined petroleum products into Canada from the United States in order to give a greater market for our refineries in Canada, and in particular in district No. V in British Columbia?


Donald Methuen Fleming: Mr. Speaker, I cannot say that the government has given thought to that matter in particular. We hope the United States government will see fit to modify the policy it has announced. We would naturally much rather see that course followed than to seek to follow some other "beggar my neighbour" course.


Harold Edward Winch: Mr. Speaker, might I ask a supplementary question. Could I ask the hon. minister whether if further negotiations fail he will give consideration to the development of our own refineries in our own country for the supplying of our own needs?


Mr. Speaker:: Order. I do not think the hon. member should go on into the hypothetical future in his question.


Hon. Lionel Chevrier (Laurier):: May I ask
a supplementary question of the Minister of Finance. Over and above the protests to which he has referred and which he proposes to make, does the government contemplate any other action to meet the situation as it now exists?


Donald Methuen Fleming: Mr. Speaker, the government has not given thought to any other specific action. We do hope the United States government will modify its policy in the light of the protests which have been made and which will continue to be made. We would not wish to think that resort had to be had to some other type of action. The United States is our neighbour, and we have so many interests in common that we hope the viewpoint we have put before that country will be accepted.


Lester Bowles Pearson: May I
ask the minister if it is not a fact that the previous action taken by the United States administration, which had the effect of voluntarily restricting oil imports into that country, excluded from such restrictions oil exports from Canada?

Oil-U.S. Import Restrictions


Donald Methuen Fleming: Is my hon. friend referring to the action taken last summer with regard to other districts, because on that occasion imports of Canadian oil were not affected? I described that in the statement I made this morning.


Lester Bowles Pearson: No, Mr. Speaker, I was referring to action taken earlier. I am not sure of exactly the date but it was a year or two ago. Perhaps my hon. friend will look into that matter.


Donald Methuen Fleming: Yes, Mr. Speaker. I am not sure precisely what my hon. friend is referring to. There was a discussion in this house, as hon. members will recall, about two years ago concerning proposals which were rumoured in the United States at that time with respect to possible action. Some strong comments were made at that time in this house, but no action then taken by the United States government had the effect that the rumoured action would have had on imports of Canadian oil.


Paul Joseph James Martin: May I ask a supplementary question of the minister. In view of the very great importance attached by everyone in this house, including my hon. friend, to this particular matter, is the hon. gentleman in a position to say whether or not he has been officially informed of certain other action contemplated by the government of the United States with regard to the importation of commodities from Canada?


Donald Methuen Fleming: No, there has been no official communication of any kind corresponding to my hon. friend's question. I have already told the house, Mr. Speaker, on earlier occasions that when the four Canadian ministers were in Washington in October for the meeting of the continuing United States-Canadian committee on trade and economic matters there was discussion of the rumours of contemplated United States action to impose tariff restrictions against imports of Canadian lead and zinc. No action has yet been taken, but with this new year and the new session of congress we have no assurance that such action will not be taken to restrict imports of Canadian lead and zinc.


Paul Joseph James Martin: Mr. Speaker, was that not the subject of discussion between Mr. Anderson and my hon. friend in Paris, as reported in Newsweek?


Donald Methuen Fleming: I mentioned on that occasion the rumours of contemplated action on the part of the United States with respect to our zinc and lead as an additional reason why there would be strong resentment in Canada at this time against any restriction

on the part of the United States against importations of Canadian oil. I pointed out to Mr. Anderson in connection with that particular situation that there were massive advantages resting with the United States in the trade between these two countries, and I urged that the United States government should take these advantages into account before it proceeded any further in the direction of restricting imports of oil from Canada.


Mr. Erharl Regier (Burnaby-Coquillam):: have a supplementary question for the Minister of Finance. I noted that he referred to the government making vigorous protests, and it reminded me so much of the statements of the former minister of trade and commerce in this respect. I am sure the Canadian people would be most happy if the minister could inform the house in what respect these vigorous protests are different from the vigorous protests of the previous minister of trade and commerce. I am asking for this information-


Mr. Speaker:: Order. The tenor of the hon.
member's question does not seem to indicate that he is seeking information but rather that he is attempting to present an argument. Perhaps we might hear the question of the hon. member for Bonavista-Twillingate at this time.


Hon. J. W. Pickersgill (Bonavisla-Twillin-gale):: Thank you, Mr. Speaker. I wish to ask the Minister of Finance if, in view of these developments, the government has given consideration to abandoning its own 15 per cent diversion policy?


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: No, Mr. Speaker, this has
nothing whatever to do with the policy of the Canadian government to divert from the United States to commonwealth sources purchases now being made in that country which could just as well be made in the United Kingdom.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: It has nothing whatever to do with the other United States question, and there was not a breath of a suggestion on the part of the United States representatives at any stage of these discussions in regard to the action with respect to oil having anything whatsoever to do with the policy to which my hon. friend has made reference.


Mr. W. A. Tucker (Roslhern):: I would like to ask a question of the Minister of Finance with respect to this matter. Has any consideration been given to the possibility of testing the good faith of the United States government in respect to its continuous verbal

assurances of willingness to co-operate with the Canadian people and government, by asking them if they are ready to negotiate a binding treaty to that effect?


Donald Methuen Fleming: Mr. Speaker, we already have trade and economic agreements with the United States, and we are engaged in negotiations at the present time and have been so engaged for the last two and a half months for the extension of the general agreement on tariffs and trade. These negotiations are proceeding between the United States and Canada at the present time.


Walter Adam Tucker: May I ask a supplementary question, Mr. Speaker. I had in mind an agreement which would be approved by the Senate and would be agreed to as actually binding the United States people, government and nation to the carrying out of such agreement which has been made verbally respecting cooperation with the Canadian government and people.


An hon. Member:: What kind of agreement?


Walter Adam Tucker: A treaty.


Donald Methuen Fleming: Mr. Speaker, I do not know what more chance a treaty would have of passing the United States Senate, where treaties require a two-thirds majority, than would the request which the Canadian government has made that the United States should not take the action which it is taking against Canadian oil imports.
Mr. Speaker, whatever steps the United States administration has taken in recent years in entering into agreements with Canada and other countries -with respect to trade have been taken under authority conferred by congress, and the trade agreements extension act to which I have referred, the act of 1955, is an act of congress. That act expires this year, 1958, and it will be a matter of very considerable concern to this country to know what action the United States congress is going to take with respect to the extension of that legislation and the power which it confers on the executive of the United States.



UNITED STATES


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Gardiner (Melville):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Has the government taken note of the declared intention of United States agricultural secretary Benson of increasing by 50 per cent in 1958 the farm surplus give-away program of that country and has the government taken any steps to protest this decision?
Inquiries of the Ministry


Hon. Sidney E. Smith (Secretary of Slate for External Affairs):: Mr. Speaker, I would accept that as notice.



MISSION TO UNITED KINGDOM


[Stage Direction]
On the orders of the day:
Lionel Chevrier: Mr. Speaker, may I reiterate a question that I asked the Minister of Trade and Commerce some weeks ago. I would like to know whether he is in a position to say what amount of trade has been diverted from the United States to the United Kingdom because of the visit of the trade commission to the United Kingdom.


Hon. Gordon Churchill (Minister of Trade and Commerce):: I appreciate the interest of the hon. member for Laurier in this matter of trade, but I am not yet in a position to answer his question.


Lionel Chevrier: Will the minister tell the house at a later date what amount of trade has been diverted?


Mr. Green:: Don't you want any diverted?


Some hon. Members:: No.


Mr. Mcllraiih:: We don't want the Tory reduction at all.


Gordon Minto Churchill: I am quite prepared to give all the information with regard to trade when it becomes available to me, and I shall do so at the earliest possible moment.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Sidney Earle Smith: Mr. Speaker, with your permission I desire to inform the house with respect to what we have been able to do in the past week to provide emergency relief supplies for Ceylon to help the victims of the recent floods in that country, which caused widespread suffering and destruction in large areas.
In response to an appeal by the Prime Minister of Ceylon last Saturday, December 28, arrangements were made immediately to send a shipment of more than four tons of medical and concentrated food supplies, contributed from government stocks, in an R.C.A.F. North Star. The aircraft left Montreal last Sunday and is scheduled to arrive in Colombo this morning.
We were fortunate in that a Canadian firm carrying out one of our Colombo plan projects in Ceylon had a Canso aircraft available in

Inquiries of the Ministry Colombo. It has proved useful, I understand, in flying supplies into, and evacuees out of, the flood area.
The government also offered to consider the provision of transport aircraft from R.C.A.F. stations in Europe. However, we have been informed that in view of the considerable number of transport aircraft and helicopters loaned to Ceylon by other countries, help of this sort is not required.
Early this week the Canadian Red Cross Society also received an appeal for assistance from the Ceylon Red Cross through the League of Red Cross Societies in Geneva, and has arranged to send more than $32,000 worth of medical supplies. These are being paid for out of the European flood relief fund to which the government contributed one-third, and which in 1956 was turned over to the Red Cross to administer. The Junior Red Cross is also contributing $5,000 worth of infant foods. In order to ensure that these urgently needed medical and food supplies reach the disaster areas with the least possible delay the government has made available a North Star aircraft of the R.C.A.F. which is scheduled to leave Montreal this afternoon with this shipment.
As to the possible need for further assistance, I shall, of course, inform the house in due course of whatever further action the government proposes to take, and I can give assurance to hon. members that further help to Ceylon is a matter to which we are prepared to devote urgent and careful consideration. We are following the situation closely through our acting high commissioner in Ceylon and through Ceylon's representatives here. When we have more information we will give sympathetic consideration to sending additional aid.


STATEMENT ON ALLEGED BREAKING OF DIPLOMATIC CODE BY VENEZUELA
[Stage Direction]
On the orders of the day:
Sidney Earle Smith: Mr. Speaker, may I take this opportunity to reply to a question which was addressed to me on December 10 by the hon. member for Winnipeg North Centre. On that occasion he asked me if I was in a position to make a report on the alleged breaking of the Canadian diplomatic code by the security police of Venezuela.
I have now received reports from our missions in the two countries concerned. We have investigated our security arrangements in Caracas, and I am satisfied that effective precautions to preserve the confidential character of our messages have been and are being taken, and I am happy to inform the house that I am satisfied that our code was not broken.


BEAUCE, QUE.-INQUIRY AS TO FEDERAL ASSISTANCE
[Stage Direction]
On the orders of the day:
Hon. Jean Lesage (Montmagny-L'Islel):: Mr. Speaker, may I ask the Acting Prime Minister if the government intends to supply aid to the region of Beauce in the province of Quebec following the disastrous floods which occurred there?


Howard Charles Green: Mr. Speaker, as the hon. member knows the procedure in cases of this kind is to act upon a request from the provincial government, and as yet I believe no request has been received in respect of this particular disaster. We did receive a wire from the hon. member for Beauce asking us to send an engineer to make an investigation, and this was done at once; we have the report in the Department of Public Works.


LABOUR CONDITIONS
Mr. Speaker:: Does the leader of the house wish to revert to motions?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, if we may go back to motions, may I recall that shortly before Christmas I announced that the government had decided to undertake during the course of this winter a number of projects in the national parks, and in the Nothwest Territories and Wood Buffalo park, that would provide employment for some 1,700 men during this season. I also stated that further studies were under way and that further announcements would be made. The government has now taken a further decision which, if the provinces wish to take advantage of it, will provide employment for an estimated 1,000 to 2,000 more men during this winter.
The government of Canada has for some time been providing assistance to the provinces on projects to improve forest conservation and forest management. In the course of the last few months, agreements have been entered into providing contributions toward capital expenditures for forest fire protection. While these agreements will be very helpful in meeting this menace to our forests, it has long been recognized that one of the primary necessities for this purpose is to provide more access roads. Access roads for fire protection would also have a substantial value for forest management. At the present juncture the construction of such roads would have a third and significant value in providing employment during this winter.

The government has therefore decided to offer to the provinces an arrangement under which it would be prepared to pay 50 per cent of the cost of construction of forest access roads where the construction is undertaken between the date of the offer and June 30, 1958. Letters were sent by me to the premiers of all the provinces yesterday outlining the terms of the proposed arrangement and asking whether they would be prepared to participate. The amount of employment involved will, of course, depend on the extent of the provincial response.
In order that there may be no delay in initiating the program, the government has decided that the supplementary estimates of the Department of Northern Affairs and National Resources for the fiscal year 1957-58 will include an additional amount of $1 million to meet expected federal costs in this regard.
For the convenience of hon. members might I suggest, Mr. Speaker, that a copy of the letter I sent to the provincial premiers under date of January 2 be printed as an appendix to Hansard? By leave of the house I should like to table a copy of the letter and have it printed as an appendix.


Mr. Speaker:: Has the hon. member permission to have the letter printed as proposed?


Some hon. Members:: Agreed.
[For text of letter referred to above, see appendix "C", page 2835.]


Jean Lesage: May
I ask the Minister of Northern Affairs and National Resources a question. In view of the fact that a limit of $1 million has been placed on this new program, will the minister tell the house what will be the limit for each province?


Francis Alvin George Hamilton: It is almost
impossible to estimate precisely the amount of money which will be required under this particular supplementary estimate. The figure of $1 million would most accurately be described as a guess. No attempt has been made to divide this money in proportion to the provinces, but we will do everything we can to encourage useful work on the construction of access roads. The decision lies largely with the provinces themselves, and there will be no question in the mind of the government of dividing up federal funds evenly, or anything of that kind. If the work is going to be useful we will accept the proposals.


Jean Lesage: May I ask the minister how
many provinces have not as yet signed an agreement with the federal government regarding forest fire protection?
Inquiries of the Ministry


Francis Alvin George Hamilton: There is just one provincial government which has not signed an agreement with regard to fire protection.


Jean Lesage: Is the signature of such an agreement a condition of the obtaining of a part of these funds for access roads for forest fire protection?


Francis Alvin George Hamilton: Well, under this particular program, yes; it will be part of the Canada Forestry Act.


Jean Lesage: Which means, as I understand it, that if the province of Quebec, which is the only province which has not signed such an agreement, does not sign it will receive no share of that $1 million?


Francis Alvin George Hamilton: Yes, Mr. Speaker, I think that is a fair statement of the situation. I might point out in that regard that we are always willing to sign an agreement. There will be further programs announced, I hope, in the very near future affecting the province of Quebec and not under the Canada Forestry Act.


FORT WILLIAM
[Stage Direction]
On the orders of the day:
Mr. Daniel Mclvor (Fort William):: Mr. Speaker, I should like to direct a question to the Minister of Transport, but before I do so I would wish my hon. friend and baseball star a happy and useful new year. My question is the same as that contained in a letter I wrote him asking for information. In his absence I received a reply but no information.
The Canada Iron Foundries in Fort William, which supplies wheels for the Canadian National Railways, has been absolutely shut down because of a lack of orders. I just wish that the minister could have those orders restored and the men put back to work, for it is an old firm.


Hon. George H. Hees (Minister of Transport):: Mr. Speaker, I will give very serious consideration to the matter.


CANADIAN NATIONAL RAILWAYS-INQUIRY AS TO COMMENCEMENT OF CONVERSION PROGRAM
[Stage Direction]
On the orders of the day:
Mr. H. J. Murphy (Westmorland):: Mr. Speaker, I should like to direct a question to the Minister of Transport. In view of the recent and welcome statement of vice president S. F. Dingle of the Canadian National Railways that a works program which would include the conversion of out-dated rolling stock into working equipment in the

Inquiries of the Ministry Canadian National Railways shops at Moncton, London and Port Mann, providing work for probably 110 men, can the minister indicate when this work may commence, as some of the men have been laid off for many months?


George Harris Hees: I do not know the exact date, Mr. Speaker, but I assume it will be in the very near future.


FREIGHT RATES
[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: Mr. Speaker, I should like to direct a question to the Acting Prime Minister. I am sure that in view of his interest in this subject over the years he does not require any notice.
Can the minister say whether the cabinet has given consideration to disallowing under section 53 of the Railway Act the 3.6 per cent horizontal and therefore discriminatory increase in freight rates recently allowed by the board of transport commissioners?


Howard Charles Green: Mr. Speaker, a petition under section 53 of the Railway Act was filed on behalf of the eight provinces on December 31, and as yet I am in no position to comment on that petition. The hon. member will realize that now that this step has been taken, which constitutes in effect an appeal from the board of transport commissioners, the whole question is sub judice, and I am sure he will agree with me that it would be highly improper for me to make any further comment at this time.


Hazen Robert Argue: I do not think the minister is suggesting that an appeal to the cabinet makes this question sub judice. I wonder if the minister could say whether we may expect that any decision the cabinet will make will be made public before January 15, when the increase goes into effect, or before the effective date of the increase if that should be later?


Howard Charles Green: Mr. Speaker, if and when a decision is made by the governor in council it will of course be made public. I cannot say at the moment when such a decision would be made.


Hazen Robert Argue: Can the minister say whether the government has under consideration any alternative policy to the horizontal increase in freight rates?


Howard Charles Green: That is another of these fishhook questions from the hon. member, and I am afraid I have no comment to make on it


Walter Adam Tucker: Mr. Speaker, would the Acting Prime Minister inform us if when they petitioned for reconsideration of the 3.6 per cent freight rate increase the provinces asked that the coming into effect of that increase should be suspended until the governor in council had a chance to make a decision in the matter? If they asked for that, will the government give consideration to suspending the increase until a decision has been reached in the matter?


Howard Charles Green: Mr. Speaker, the petition does ask that the coming into effect of the increase be suspended until there has been an opportunity for the hearing to be held. What the decision of the governor in council may be I cannot tell the hon. member this morning.


SHIPPING
[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I have a question I should like to direct to the Minister of Transport; it is sort of a supplement to the question asked before the recess by the hon. member for Comox-Alberni. I wonder if the minister could advise what action has been taken over tlie Christmas recess to ensure that passenger and freight boat service to the communities along the coast of British Columbia will be maintained in the same degree as before Union Steamships Limited decided to discontinue its boat passenger service and drastically curtail its boat freight service to certain communities; and what is the situation at the present time?


George Harris Hees: Mr. Speaker, final arrangements are presently being made in this matter, and I expect to make a full statement in the house on Monday.


DOMINION-PROVINCIAL CONFERENCE INQUIRY AS TO DATE OF RESUMPTION
[Stage Direction]
On the orders of the day:
Major James William Coldwell: Mr. Speaker, may I ask the Acting Prime Minister a question. Has any date been set for the resumption of the dominion-provincial conference? I ask this because of the approaching meetings of the various legislatures across Canada and the necessity of the provincial ministers of finance preparing their budgets

Inquiries of the Ministry
and so on, which of course will be affected by	GRAIN
any agreement made between the provinces and the dominion.	Manitoba-allocation of box cars


Howard Charles Green: Mr. Speaker, no date has been set as yet.


John Whitney Pickersgill: I suppose that is a frivolous question.


Paul Joseph James Martin: Mr. Speaker, I should like to ask a question of the Acting Prime Minister supplementary to that asked by the hon. member for Rosetown-Biggar. The minister said no date has been set for the dominion-provincial conference. Is the Acting Prime Minister not in a position to say that there will be a resumption of the conference before the end of March this year?


Howard Charles Green: Well, Mr. Speaker, I would have thought the hon. member was more concerned with January 16 than he is with the end of March.


Paul Joseph James Martin: Well, Mr. Speaker, when January 16 comes my hon. friend will then be concerned, but he must not dodge a very important question like that. I have asked if it is the intention of the government to call a conference with the provinces before March 31 of this year.


Hazen Robert Argue: Before the election.


Howard Charles Green: I gave the answer that no date has as yet been set. When there is to be a conference called the house, if it is in session, will be given notice of it.


John Whitney Pickersgill: Mr. Speaker, I should like to
address a question to the Acting Prime Minister supplementary to the one asked by the hon. member for Essex East. Has the government received any communications since the last conference from any of the premiers of the provinces asking for an early resumption of the conference? If so, will the government table the communications and the replies?


Howard Charles Green: I will have to look into the situation. I cannot give an answer at the moment.


John Whitney Pickersgill: Will the correspondence be tabled?


Howard Charles Green: I cannot say that either at the moment.
On the orders of the day:


Mr. F. S. Zapliiny (Dauphin):: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. Has the minister recently received representations from the Manitoba wheat pool requesting immediate action to bring into effect a more equitable distribution of box cars? If so, what action has the minister taken?


Gordon Minto Churchill: No, Mr. Speaker, it has not come to my notice as yet. The communication may be in the office, but I have not seen it up to this moment.


DEFICIENCY PAYMENTS TO WESTERN
[Stage Direction]
On the orders of the day:
Mr. Victor Quelch (Acadia):: Mr. Speaker, I wish to direct a question to the Minister of Trade and Commerce. Has the government given any further consideration to the making of a deficiency payment on the 195657 wheat crop?


Gordon Minto Churchill: Mr. Speaker, that subject has been under study but no decision has been reached at the moment.


Hazen Robert Argue: Mr. Speaker, I wonder if I might ask a supplementary question. Does the minister feel a decision can be reached on this question of deficiency payments and made public before the wheat producers on the prairies commence to go forward with their now tentative decision to send a mass delegation to Ottawa to impress on the government the need for action?


Gordon Minto Churchill: I am afraid, Mr. Speaker, I cannot answer all the subheadings in my hon. friend's question, but if a decision is reached of course it will be made public.


Hazen Robert Argue: Has the minister been informed by the wheat pools of the prairie provinces that unless a favourable decision is forthcoming they will organize a mass delegation to come to Ottawa?


Gordon Minto Churchill: No, I have not heard of any such action.


Hazen Robert Argue: You will; you will.


Mr. Nesbitt:: Are you organizing it?

Inquiries of the Ministry CRIMINAL LAW


CAPITAL AND CORPORAL PUNISHMENT
[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Minister of Justice. In view of his statement prior to the holiday recess, is the minister now in a position to inform the house whether or not any date has been set for a meeting of the attorneys general of the provinces and his department on the report of the Fauteux commission having to do with capital and corporal punishment?


Hon. E. D. Fulton (Minister of Justice):: Mr. Speaker, I think the suggestion that we have a meeting with the attorneys general was confined to the Fauteux commission report. No date has yet been set for that meeting.


CANADIAN NATIONAL STEAMSHIPS
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Transport. In view of the fact that the new West Indies federation comes into being officially today, I believe, and in view of the importance of transportation to the islands of the federation and to the trade between those islands and Canada, can the minister say whether there has been any change in the status of the Canadian National steamships since we last met? If not, is consideration being given to any change in their status?


George Harris Hees: Mr. Speaker, I can only add what the management of the Canadian National (West Indies) Steamships last informed me, namely that they are seriously considering all the implications of the restoration of the service.


Victor Quelch: Mr. Speaker, I should like to ask the Minister of Trade and Commerce whether or not we are losing any trade with the West Indies as a result of the Canadian National steamships being immobilized, or is that trade being carried by ships of other countries?


Gordon Minto Churchill: I have not heard of any loss of trade because of that fact.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, may I ask the Minister of Trade and Commerce a question supplementary to the one asked by the hon. member for Acadia. The minister said he did not think we had lost

any trade because of the immobilization of the Canadian National steamships. Can the minister tell the house whether, as a result of our not losing trade, other countries are carrying cargo for us which was formerly carried by the Canadian National steamships?


Gordon Minto Churchill: Well, I will look into the matter and get a reply for my hon. friend. We are particularly interested in maintaining our trade relations with the West Indies.


Charles Edward Johnston: The minister did not get my question. He said we had not lost any trade because of our ships being laid up. If we have not lost it, what country is carrying the cargo for us? Is it being carried by the Alcoa ships of the United States, which have been plying between the West Indies and the United States?


Mr. Speaker:: Order. I think the hon. member is entering into a debate of this subject. As I understood the reply he got it was to the effect that the minister would look into the matter and give him an answer.


Hon. George C. Marler (St. Anloine-Wesi-mount):: Mr. Speaker, I wonder whether I might direct a supplementary question to the Minister of Transport. Can he make inquiries and inform the house as to what vessels with refrigerator accommodation are now available to carry the trade between Nova Scotia and the other Atlantic provinces and the Caribbean, which was formerly carried by the Canadian National West Indies steamships?


George Harris Hees: Mr. Speaker, as I understand the question it is exactly the same as the one asked the Minister of Trade and Commerce. What ships-


Lionel Chevrier: No, it is not.


George Harris Hees: As I understand it, it is what ships are carrying the trade at the present time.


Lionel Chevrier: No; refrigerator ships?


George Harris Hees: Well, I am not sure; I will be very glad to look into it.


INQUIRY FOR RETURN
[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I should like to direct a question to the Minister of Public Works. On November 25 an order for return was passed having to do with documents relating to the Stewart-Cassiar road. Will the minister inform me what has happened to them?


Howard Charles Green: I will take the question as notice. Arrangements are being made through the Department of Northern Affairs and National Resources.


Frank Howard: I asked the Minister of Public Works the question because he answered it in the first instance.


AIRPORTS
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Transport. Can the minister say what is the present status of the plans for new airport facilities at Winnipeg? Are these plans being proceeded with? When may it be expected that the new airport will be completed?


George Harris Hees: Mr. Speaker, I will take that question as notice and get the information for the hon. member.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Is the minister in a position to inform the house as to the situation resulting from statements by a former high officer of the R.C.A.F., supported by a former chief of staff, that in Canada research and manufacture were being hog-tied because of the attitude taken by the United States of America?


Hon. G. R. Pearkes (Minister of National Defence):: Mr. Speaker, the two gentlemen referred to are now in a civilian capacity. They were retired from the services over a year ago. I presume that perhaps the statements they made were based on the experience they might have had while in service under the regime of the previous government. Every effort is being made to ensure that such practices are not pursued.


John Whitney Pickersgill: Pretty cheap.



IMMIGRATION


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, I wonder whether I could direct a question to the Acting Minister of
Interim Supply
Citizenship and Immigration. Will the minister bring us up to date on the status of Christian George Hanna, in whom he took a great interest just a year ago?


Edmund Davie Fulton: Yes, Mr. Speaker. I would have to get a review made of the files and see what information is on hand, but I might say that since we took what I think was the reasonable position of giving Mr. Hanna a chance to establish himself I am not aware that he has come officially to our notice in any adverse way.


John Whitney Pickersgill: Did the hon. gentleman not see the press report which appeared in the newspapers two or three days ago that this gentleman had surrendered-that is the word that was used in the press-to the department? Is that true or is it not?


Edmund Davie Fulton: I have no official confirmation of that, Mr. Speaker. I will be glad to look into it and find out.

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



INTERIM SUPPLY

['The hon. member does not think that at all.\nResolution reported and concurred in.']
Donald Methuen Fleming: Resolved, that a sum not exceeding $257,324,674.84, being one-twelfth of the total of the amounts of the items set forth in the main estimates for the fiscal year ending March 31, 1958, except items 16, 52, 57, 69, 71, 100, 116,	117,	131,	132,	134,	153,	156,158, 217 , 218 , 219, 227 ,	248,	252,	281,	307 ,	322,	324,328, 333, 334, 335, 336,	355,	361,	364,	365,	367,	373,
389, 391, 397, 399, 422, 428, 432 and 460, laid before the House of Commons at the present session of parliament; and in addition thereto a sum not exceeding $983,904.25, being one-twelfth of the total of the amounts of items 148 and 301 of the said estimates; in addition thereto a sum not exceeding $1,393,571.59, being one-twelfth of the total of the amounts of the items set forth in the supplementary estimates for the fiscal year ending March 31, 1958, except items 621, 626, 635, 640 and 654, laid before the House of Commons at the present session of parliament; in addition thereto a sum not exceeding $2,138,888.89, being one-ninth of the total of the amount of items 669 and 670 set forth in the further supplementary estimates (1) for the fiscal year ending March 31, 1958, laid before the House of Commons at the present session of parliament; and a sum not exceeding $125,000, being one-twelfth of the amount of item 668 of the said estimates; in addition thereto a sum not exceeding $7,338,888.17, being one-sixth of the total of the amounts of the items set forth in the further supplementary estimates (2) for the fiscal year ending March 31, 1958, except items 692, 729, 732, 737, 754 and 759, laid before the House of Commons at the present session of parliament; and in addition a sum not exceeding $3,067,583.34, being one-twelfth of the total of the amounts of items 692, 729, 732 and 737 of the said estimates, be granted to Her Majesty on account of the fiscal year ending March 31, 1958.


The Acting Chairman (Mr. Rea):: Shall the resolution carry?

Interim Supply


Donald Methuen Fleming: Mr. Chairman, we have now entered the tenth month of the present fiscal year. In general, apart from the exceptions named in the resolution, funds have been voted by parliament only for the first nine months of the year, to December 31. Perhaps it would be of assistance to the committee if I gave the committee certain figures at this point.
There are, as hon. members will recall, four groups of estimates now under consideration. They total in the aggregate $5,597,316,555. Of that total the statutory items amount to $2,172,621,097, and the total amount required to be voted at the outset was accordingly $3,424,695,458. Thus far in the present fiscal year parliament has voted on account of the appropriations for the current fiscal year a total of $2,631,646,330.52 in a total of five appropriation bills. This present measure, which contemplates the introduction of the sixth appropriation bill in respect of the estimates for the current fiscal year, asks a vote of a total of $272,372,511.08. If the bill is passed the total voted by parliament will aggregate $2,913,253,431.68.
May I express the hope, Mr. Chairman, that this will be the last time it will be necessary to ask for a vote of interim supply during the course of the present session. The present request would provide the funds required to meet the expenses of government to January 31, and it may be hoped that all the items will have been voted in full by that date so far as the house approves of them.
In the present resolution, Mr. Chairman, with regard to most of the items the proportion sought is one twelfth. In some cases, as on previous occasions when interim supply was asked for, one ninth is asked of those items that were introduced having effect from July 1 and applicable therefore only to the last nine months of the fiscal year. In some cases one sixth is the fraction required, as to those items which were introduced to have effect from October 1, 1957, and accordingly apply only to the last six months of the present fiscal year. With only two exceptions there is nothing more required than that particular fraction of one month. In the present resolution the two exceptions are of a nature that has been encountered in connection with previous votes of interim supply.
There are two items, numbers 148 and 301, where the amount required exceeds one twelfth for very good reasons. In the case of item 148 the amount now requested would bring the total not to ten twelfths but to eleven twelfths. It is one of those items in the fish culture and development branch [The Acting Chairman (Mr. Rea).]
where the expenditure does not correspond exactly with the progress of the year. More of the expenditure necessarily requires to be made before the late months of the fiscal year.
The other exception is in the case of item 301, where again the amount now requested would bring the total fraction voted not to ten twelfths but to eleven twelfths. The item relates to the national parks and historic sites service, construction or acquisition of buildings, works, land and equipment, and the reason in that case is that construction in the parks is usually concentrated in the summer and fall months and good progress has been achieved this year, particularly with the road construction program.
Apart from the items in the Post Office Department which were voted in full last spring, in no case where parliament has not already approved the item in full will the total amount voted following the adoption of the bill exceed eleven twelfths.
The rights of the house are preserved, therefore, with respect to the discussion of such items because of the necessity of having approval given to the items, and by reason of that proportion of one twelfth remaining yet to be voted.
In accordance with the time honoured practice, Mr. Chairman, I assure the house of its rights; and to avoid duplication of debate I give the usual undertaking that the passing of this bill will not prejudice the rights and privileges of members to criticize any item in the estimates when it comes up for consideration in committee of supply. The usual undertaking is hereby given that such rights and privileges will be respected and will not be curtailed or restricted in any way as a result of the passing of this measure.


George Carlyle Marler: I should like first of all to say, on behalf of the official opposition, that we have no objection to voting the amount of supply which is provided for in the resolution now before the committee. The minister has assured us that in no case will the amount voted represent more in respect of any particular estimate than eleven twelfths, except for the few cases in which the estimate has been fully approved by parliament and funds voted accordingly.
I think the minister will agree that there are a large number of estimates that are affected by the various interim supply bills that have been passed. It is difficult for an opposition to follow the course of the votes in connection with each of the individual items, but so far as it is possible to tell, in no case covered by this resolution is more than eleven twelfths proposed to be voted.

I am sorry that the minister, in making some comments this morning regarding expenditures covered by this resolution, did not see fit to do more in the way of enlightening the committee with regard to the general program of expenditure than he has already done. He will probably recall that when we voted interim supply for the first time in the present parliament on October 17, he outlined-I think more particularly for the benefit of the new members of the house-the procedure that is ordinarily followed with respect to estimates. The explanation which he gave I thought made it quite clear that the tradition of the house is, and always has been, that the estimates are tabled early in the session and hon. members are therefore given an opportunity of reviewing them. There is, in fact, usually some lag in time between the date on which estimates are presented and the date when they are actually considered in the committee.
This year what we have is that despite the fact that the estimates were deposited on October 15, and despite the fact that the customary recommendation from His Excellency accompanied them-I might merely quote what was said by the minister in this connection on page 11 of Hansard of October 15, 1957:
However, this is not to say that the present government will support all of the detailed programs contemplated when those estimates were originally prepared. Rather, such changes as this government proposes to make in the current year programs will be brought to parliament's attention when the individual items affected are being considered by the committee of supply.
On various occasions, Mr. Chairman, we have endeavoured to bring to the attention of the minister the fact that this was not in keeping with the tradition that had been followed in the past. I am sure the minister himself would agree that in the past when estimates have been tabled, hon. members of the house fully expected that the expenditures they covered would be discussed and justified when the individual items were considered in committee. I fully realize that in rather exceptional instances in the past the minister has proposed reductions in these estimates when an item has been before the committee. In those cases events transpired since the preparation of the estimate, and probably since the tabling of the estimates, which made it expedient to ask for less money than was covered in the printed book of estimates.
It seems to me, Mr. Chairman, that the procedure the minister followed in October was a rather radical departure from past practice. It did seem to me that there could
Interim Supply
be no real objection to the minister acquainting the members of this committee with the reductions it was proposed to make; in other words, to put all hon. members of this house on a plane of equality so that those who were considering the estimates would know what the government's intentions were with regard to the various expenditures. As hon. members will recall, although the matter has been raised on a number of occasions the minister has steadfastly refused to give us information in the form of a table so we could see in the case of each department what items were not to be voted as presented but were to be reduced in amount.
I still find it difficult, Mr. Chairman, to understand why the minister has not seen fit to table a statement of those reductions in expenditures for the various departments. I observed that when he made his speech on the first item of his estimates he then informed the house that there were to be savings and reductions amounting to some $64 million. It seemed to me at that time, and on reflection I am even more convinced of the fact, that quite obviously the minister is aware of the changes to be made in the expenditures and is therefore in a position to tell the members of this committee just where those reductions are to be made, and what is the nature of the savings and reductions that make up this figure of $64 million to which he referred in his remarks.
One realizes immediately that $64 million is no minor reduction of a single item in the estimates of a department. It represents some very considerable changes in the estimates as presented to this house by the previous government. It does seem to me that the minister should lose no further time in giving the members this information, which they are entitled to have, as to the reductions totalling $64 million.
I have not been able, in going through Hansard, to find any case in which the estimates of any department which has been considered by this committee have been reduced. I take it, therefore, that all this reduction of $64 million to which the minister referred must be in some other items. When I say there have been no reductions in any items before the committee, I am referring to the resolutions that have been voted. I am aware of the fact that the estimates of some departments have been given preliminary consideration without a vote or resolution having been passed in consequence. I believe, therefore, it is a fair statement to make that no member on the opposition side of this house has any idea whatever as to how this figure of $64 million is arrived at.
We are not in a position, therefore, to decide whether these are real reductions and

Interim Supply
savings; whether in effect they amount to anything more than a shortfall, a lapsing of part of the estimates, or where that lapsing has taken place.
Bearing in mind what the minister said a moment ago to the effect that we are now entering upon the tenth month of the present fiscal year, it seems to me that the minister ought to be in a position to acquaint us with the details of this item of $64 million so that we may form our opinion as to whether these are real savings or whether they are merely shortfalls in expenditure; whether because of one reason or another programs are not being carried out, and whether or not there is something significant about them.
Everybody realizes that by merely curtailing a program or by merely refusing to undertake the carrying out of public works in one form or another by one department or another it may reduce the amount to be expended under a budget, but I do not think any objective person would consider that such actions represented savings. It is no saving not to build a building that is needed. That is a lapse, if you like, of the estimate, but nobody should think it is an economy, if this ordinary meaning is to be given to the word "saving".
There is one other comment I would like to make on this particular occasion, and that is that the Minister of Finance, when he sat on this side of the house, continually referred to the subject of waste and extravagance on the part of the various government departments. I have recently had the opportunity of rereading some of his speeches. I would not say these were recommended reading for the Christmas season, but as a matter of duty I felt I should read some of his remarks as recorded in Hansard of former years.
I do not think in recent times there has been a single debate on the budget in which the present Minister of Finance did not use those very vigorous terms which he is accustomed to using-which in fact he was more accustomed to using when he sat on this side of the house than he is today-and I found that in almost every year we had at least one very formidable paragraph on the subject of waste and extravagance. Yet we have been through the No. 1 item of several departments and through nearly all the estimates of some of the other departments, and in not one single case has the minister, in presenting his estimates, been able to point to an example of waste and extravagance which he has found to be carried on in his department.
The Minister of Transport, my successor in that department, seemingly found that the

department had been efficiently managed. The Minister of Public Works, who I see is just coming into the committee, has also spoken in the most glowing terms of his own department and those forming part of the permanent staff who assist in its administration. I think the last thing he would wish to imply is that this excellent staff of employees whom he has praised so highly would be guilty of such a thing as waste or extravagance.
The Secretary of State, the Minister of Mines and Technical Surveys, the Minister of Veterans Affairs in almost every case have made, if not a positive statement, at least a statement by implication that their departments were well run and that there was no waste.
I think, Mr. Chairman, this does afford an excellent opportunity for the Minister of Finance to deal with the subject on a very general basis, and that before discussion of this resolution comes to an end he should give us some specific instances of this waste and extravagance to which he referred in such vigorous and vehement terms in the past. I think it would be very enlightening to those of us who have had the opportunity to be members of the treasury board if we could find out in what particular departments that waste and extravagance existed, because it was my own experience that all the recommendations of all the departments were given the most careful scrutiny, not only of course by the permanent officials of the treasury board with whom the present minister is now so closely associated, but also by the members of the treasury board itself. In fact, as the minister knows, meetings of the treasury board occupy a great deal of time, and I am sure that he and his colleagues, our successors on the treasury board, are just as vigilant today as we were in endeavouring to make sure that no money is spent wastefully or extravagantly.
I think the minister owes it to the permanent staff of the various departments to admit that since he has come to office he has not been able to find the waste and extravagance of which he spoke previously, not having access to all the facts.
I am not going to take any further time of the committee, but I would say that we desire to facilitate the passing of this resolution, and I hope that if other members take part in the discussion today and if they take advantage of this occasion to discuss other matters which are properly the subject of discussion at this time, the minister will not conclude the debate by scolding the members of the committee for taking so long in the discussion of the estimates. It seems

to me he should realize that if scolding was in order, some such scolding could be administered retrospectively to the minister himself, as he was not always the most silent member of the opposition when it came to discussing interim supply.
I say this, Mr. Chairman, merely to make it perfectly clear that although we intend to support this resolution, that does not mean that other hon. members of the party to which I belong will not wish to participate in the general discussion.


Alistair McLeod Stewart: Mr. Chairman, it goes without saying that we are going to support this resolution, but we are also going to take advantage of the opportunity which it gives us to discuss some matters which some of us think are very important.
One of the matters we want to bring out is that of governmental policy toward NATO. The committee will remember that on the day the house adjourned the Prime Minister came before us and gave us his agonizing reappraisal of what had taken place in Paris; and that right hon. gentleman had many words with which to disguise what he probably felt were the facts of the case. He subjected us to a torrent of words; he inundated us with a Niagara of words, and it has taken some time to get the spray out of our faces, but we have succeeded in doing that today, due in no small measure, of course, to the Minister of Finance.
The minister, however, leaves me wondering exactly how many voices there happen to be in his cabinet. There are so many voices that at times it sounds like a hydraheaded monster. The minister tells us that the position of the United States, for instance, with regard to the restriction on oil is wholly untenable. He tells us that the attitude of the United States does not at all concur with the communique. Then I read these words of the Prime Minister telling us that the atmosphere in Paris was certainly one which indicated a new spirit of unity among the nations, although I gathered the impression that perhaps the Minister of Finance did not share that feeling of unity which the Prime Minister obviously had. Or, as the Prime Minister went on to say later at page 2722;
At the meeting this week the flowering of this concept of the Atlantic community was very much in evidence.
Sir, there are some weeds in this flower bed. The Prime Minister did not speak about them. The Minister of Finance does. How does he propose to eradicate these weeds? What course of action does he pursue? The hon. gentleman makes a press
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statement which he assumes that United States officials will read. I know the excuse which has constantly been put up by governments that nothing official has reached their ears. How do we know that this press statement put out by a member of the Canadian government has reached the ears of the state department?
The Prime Minister went on to say:
There was not a great deal of divergence of view as to the necessity of greater and more expanding developments.
That is economic expansion. This, I say, does not agree-far from it-with what the Minister of Finance said today, and I think we have to get some clarification on this. I suggested earlier that the minister was conducting diplomacy by press statements. Perhaps I was not altogether right, because according to what he said he was having negotiations and discussions with the United States officials in Paris. So perhaps what we are being subjected to now is cocktail diplomacy.
But I do not think we should come to either the diplomacy of the cocktail party or the diplomacy of press statements. What this house would like to see is an official protest made to the government of the United States. It is no use having a minister of the government telling this parliament what he would like to say to the United States. Let him say it to the responsible people there, not to the opposition in the Canadian parliament.
When the Prime Minister made his statement on NATO my leader, the hon. member for Rosetown-Biggar, stated that there was not a concrete proposal in anything he had to say; in other words we were rehashing what had been said throughout the years with regard to NATO's hopes, aims and aspirations. We see now more than ever that those who are leading NATO have a Maginot mind complex, and we do not want minds like these in days such as we are going through now. I notice that the Prime Minister tried to defend himself from a very obvious charge, and I am going to say that the declaration from NATO, and his own speech, were a veritable mass and mess of cliches. The Prime Minister said:
I know what the cynics will say. They have done it all down through the ages. They will contend that the declaration and the communique are simply the same old tired cliches strung together in a different arrangement but leaving the old patterns substantially unchanged.
Well, when it comes to the Atlantic community and the fundamental concept of NATO, I am not a cynic. Throughout the years in this parliament I have been one of

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the protagonists of an Atlantic community. I have gone even further and asked for an Atlantic federation. It is not a matter of cynicism with me; it is a matter of disgust at this brutal use of the English language. I think the NATO declaration ought to be sent to every high school and every university in Canada as a grim example of how not to use words. Let us examine this declaration and see how many cliches there are in it. It begins:
We, the representatives of 15 nations of the North Atlantic alliance, believing in the sanctity of those human rights which are guaranteed to all men of free nations by their constitutions, laws and customs, rededicate ourselves and our nations to the principles and purposes of the North Atlantic Treaty.
Here is a startling new thought, something which must make us all shiver with expectation. The declaration goes on:
We have agreed together upon means to give added strength to our alliance.
Here again is a brand new idea, something we have really never thought of before, and I am sure it excites us. And it continues:
We are always ready to settle international problems by negotiation.
Surely that too is an exciting new discovery, and I am certain that the hon. member for Algoma East must be kicking himself because he never thought of that during all the time he was secretary of state for external affairs in this country. Then the document goes on:
The free world faces the mounting challenge of international communism backed by Soviet power.
What an amazing piece of research. Who else could have discovered it? This is the sort of research which, perhaps, makes the friends of NATO tremble with apprehension while making its potential foes quiver with hope. The declaration goes on to say-and I hope the Minister of Finance is listening-"for this purpose we have agreed to co-operate closely." This is a magnificent new concept never revealed to this house before. All new ideas, and not a cliche amongst them.
And then:
We shall reach this goal only by recognizing our interdependence.
Mr. Chairman, what a blinding vision has been given to men, something which has never been thought of before. To give another example:
We are an organization of free countries.
Surely this is revelation according to St. John. Or let us look at something which, I am told, the Canadian government took pride in having inserted in the declaration:
If the free nations are steadfast, the totalitarian menace that now confronts them will eventually recede.

"If the free nations are steadfast", Mr. Chairman. They have been steadfast long enough; steadfast for doubt, steadfast for cross purposes, and steadfast for confusion. What we need now is to be steadfast for imagination and some leadership, and that certainly was not given in Paris by this Canadian delegation. "If the free nations are steadfast the totalitarian menace will eventually recede." What an example of pre-sputnik thinking. What an example of the Maginot mind which, I said earlier, was working in full force.
This declaration is an insult to the intelligence of the people of the western world. I say it is full of cliches. I could go on and quote more; I could quote as many from the speech of the Prime Minister himself. The relation between the Prime Minister and the cliche is not that of master and servant; it is that of master and slave because he beats these cliches and bruises them, sets them dangling before us, and then having bludgeoned them with such violence he buries their bleeding bodies in the pages of Hansard. If we want to find out what is happening we have to disinter these victims of verbosity, and when we conduct a post mortem we find that nothing has been happening.
But there are some statements in the communique with which we can agree. For example:
The aim of the Soviet bloc is to weaken and disrupt the free world.
We are agreed on that. That menace confronts us. The Soviet union is the leader of one of the big power blocs, and as an individual I am supremely suspicious of great powers and power blocs. We in the western world have seen how power can be taken and abused, but there is always the safeguard of public opinion to act as a brake and put a stop to it. On the other hand, in totalitarian nations there is no such safeguard and no such brake, and so we are faced today with two great power blocs in a world of anarchy which may mean yet a world which is at war. The consequences of this situation can be tragic for people all over the world. The one thing that saves us is that both sides know that war would be a matter of mutual extermination and anihilation. And so it is possible that both blocs, or the peoples of both blocs, want to come to terms with each other.
There has been a certain disinclination on the part of the west to come to terms with the Soviet union for reasons which in the past were perhaps good. But the situation today is so precarious that we believe it is essential that another attempt be made to test the sincerity of Russian intentions. We know what has happened in the past; we

know the disappointments we have encountered, but we still have to make another attempt. We have to be prepared to negotiate but not on the broadest basis, because that, I think, would mean failure. Rather we have to take two or perhaps three cases in which we can negotiate, those which are probably the most perilous to mankind. We have to see if we can come to some modus vivendi with the Soviet union in this connection. The following is mentioned in the communique:
We have especially in mind the problems of the reunification of Germany in freedom-
Many are convinced that unless this problem in the centre of Europe is solved there will not be much hope for peace, and therefore it is essential that we try and have Germany reunited, not on the basis of western terms and not on the basis of Soviet terms but on the basis which perhaps the Germans themselves want. In other words there has to be a compromise between the two groups.
It might be worth while considering the suggestion that both East and West Germany and Poland and Czechoslovakia be to some extent neutralized in the hope that free elections can be held there, properly supervised, and Germany eventually united. I know there are many who oppose this. For instance, there is the pentagon type of mind. It was this group or clique, call it what you like, which was responsible for bringing Germany into the North Atlantic community. They argued that the defence of Germany and the creation in Germany of an army was essential to the safety of the west. Probably they were thinking in those days of the policy of containment, but surely the advent of the intercontinental ballistic missile has shown that containment can no longer work because we cannot contain those missiles.
On the other hand there is the economic argument, which may not be expressed but which I suppose is deeply felt in nations such as the United Kingdom; the fear that if Germany does not have to spend money on rearmament she may become a more intense competitor in the markets of the world, and the other fear that as the result of not spending money on rearmaments the standard of living of the Germans would so rise as to be an incentive to other nations to follow Germany's example. I recognize that these arguments have been made, and I think I know why they are being made. Yet I still insist that one of the most important things we must try and achieve is the reunification of that country.
There is another area and again the communique mentions it; that is the Middle East. The people of the United States had better realize quickly that Russia is in the
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Middle East and intends to stay there. To ignore that fact is to blind oneself to the true facts of the situation. If we are going to achieve peace in the Middle East, which I am sure is the wish and hope of all of us, then we cannot fail to recognize that Russia is a power in that area. Here again, I suggest, is another place or another area, if I may repeat the word, where possibly we can negotiat% with some hope of success, but at least we will find out how serious the Russians are in their desire for peace.
I think in many ways they are sincere. I think the Russians realize the havoc which would be wreaked with all-out war as well as anybody else, but we face the problem that in the United States we have a secretary of state who I have no doubt in his private life is a very estimable gentleman but who as secretary of state for that country is nothing short of an international calamity. The Russians certainly do not trust Mr. Dulles, and the words he has used throughout the years perhaps might give the Russians some valid reason for distrust. Nevertheless this distrust to some extent has to be removed if it is humanly possible, and a fresh attempt made to bring peace to the Middle East.
Then there is a third area in which there seems to be an opportunity for agreement at least between the east and west, and that is in the cessation of the production of fissionable material for weapons purposes, the reduction of existing stocks of nuclear weapons and the suspension of nuclear weapons tests mentioned in the communique. Great numbers of people in the west want these things achieved and it is possible that the Russians want them achieved, but we can find out only by trying to negotiate with them just how far they are prepared to go.
Now, how do we undertake these negotiations? The communique is completely unrealistic, I think, when it says we should try to promote these negotiations through the framework of the United Nations, bearing in mind the committee which has already been set up in the United Nations and of which the Soviet union is going to have no part whatsoever. The communique was equally unrealistic, in my opinion, when it suggested that we should welcome meetings at the foreign ministers' level to resolve the deadlock. Whether the meetings be between the foreign ministers of the 15 NATO nations or of a few-and I do not care how few- Mr. Dulles will be there, and I think his use has long since passed.
But perhaps there is something else we could do. Possibly we can beat the Russians

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at their own game of propaganda if we have the intelligence and imagination to do so. Why should this matter not be referred to the United Nations as a whole? We know perfectly well that this large number of nations cannot settle problems such as these. They will have to delegate power and responsibility. Is it beyond the bounds of reason to suppose that power and responsibility could be delegated to a representative of t)|e NATO powers such as Eisenhower, a representative of the Warsaw pact such as Khrushchev, and a representative of the uncommitted nations of the world such as Nehru? These three men would meet not with the intention of giving the world a blueprint as to what could be done but in order to explore a method in which diplomacy could carry these discussions even further.
The first meeting could be held. Of course there would be great fanfare, but it would be naive to expect any concrete results from such a meeting. However, it could pave the way to more harmonious relations. Afterwards discussions could be carried on, not necessarily at the foreign ministers' level but on a level appreciably below that so we could have open covenants discreetly arrived at. Perhaps there is a promise there, and we cannot tell how promising it may be until these meetings are held.
Another point where I again disagree quite strongly with the Prime Minister is with regard to the creation of a food bank through NATO. It is time we realized that although we regard NATO as a means for our defence and protection, it is regarded in the rest of the world as a tool of imperialistic powers. We may say that is not true and disagree completely with the idea, but this concept does exist and we cannot kill it.
May I call it one o'clock?
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
["Mr. Chairman, it goes without saying that we are going to support this resolution, but we are also going to take advantage of the opportunity which it gives us to discuss some matters which some of us think are very important.\nOne of the matters we want to bring out is that of governmental policy toward NATO. The committee will remember that on the day the house adjourned the Prime Minister came before us and gave us his agonizing reappraisal of what had taken place in Paris; and that right hon. gentleman had many words with which to disguise what he probably felt were the facts of the case. He subjected us to a torrent of words; he inundated us with a Niagara of words, and it has taken some time to get the spray out of our faces, but we have succeeded in doing that today, due in no small measure, of course, to the Minister of Finance.\nThe minister, however, leaves me wondering exactly how many voices there happen to be in his cabinet. There are so many voices that at times it sounds like a hydraheaded monster. The minister tells us that the position of the United States, for instance, with regard to the restriction on oil is wholly untenable. He tells us that the attitude of the United States does not at all concur with the communique. Then I read these words of the Prime Minister telling us that the atmosphere in Paris was certainly one which indicated a new spirit of unity among the nations, although I gathered the impression that perhaps the Minister of Finance did not share that feeling of unity which the Prime Minister obviously had. Or, as the Prime Minister went on to say later at page 2722;\nAt the meeting this week the flowering of this concept of the Atlantic community was very much in evidence.\nSir, there are some weeds in this flower bed. The Prime Minister did not speak about them. The Minister of Finance does. How does he propose to eradicate these weeds? What course of action does he pursue? The hon. gentleman makes a press\nInterim Supply\nstatement which he assumes that United States officials will read. I know the excuse which has constantly been put up by governments that nothing official has reached their ears. How do we know that this press statement put out by a member of the Canadian government has reached the ears of the state department?\nThe Prime Minister went on to say:\nThere was not a great deal of divergence of view as to the necessity of greater and more expanding developments.\nThat is economic expansion. This, I say, does not agree-far from it-with what the Minister of Finance said today, and I think we have to get some clarification on this. I suggested earlier that the minister was conducting diplomacy by press statements. Perhaps I was not altogether right, because according to what he said he was having negotiations and discussions with the United States officials in Paris. So perhaps what we are being subjected to now is cocktail diplomacy.\nBut I do not think we should come to either the diplomacy of the cocktail party or the diplomacy of press statements. What this house would like to see is an official protest made to the government of the United States. It is no use having a minister of the government telling this parliament what he would like to say to the United States. Let him say it to the responsible people there, not to the opposition in the Canadian parliament.\nWhen the Prime Minister made his statement on NATO my leader, the hon. member for Rosetown-Biggar, stated that there was not a concrete proposal in anything he had to say; in other words we were rehashing what had been said throughout the years with regard to NATO's hopes, aims and aspirations. We see now more than ever that those who are leading NATO have a Maginot mind complex, and we do not want minds like these in days such as we are going through now. I notice that the Prime Minister tried to defend himself from a very obvious charge, and I am going to say that the declaration from NATO, and his own speech, were a veritable mass and mess of cliches. The Prime Minister said:\nI know what the cynics will say. They have done it all down through the ages. They will contend that the declaration and the communique are simply the same old tired cliches strung together in a different arrangement but leaving the old patterns substantially unchanged.\nWell, when it comes to the Atlantic community and the fundamental concept of NATO, I am not a cynic. Throughout the years in this parliament I have been one of", 'Interim Supply\nthe protagonists of an Atlantic community. I have gone even further and asked for an Atlantic federation. It is not a matter of cynicism with me; it is a matter of disgust at this brutal use of the English language. I think the NATO declaration ought to be sent to every high school and every university in Canada as a grim example of how not to use words. Let us examine this declaration and see how many cliches there are in it. It begins:\nWe, the representatives of 15 nations of the North Atlantic alliance, believing in the sanctity of those human rights which are guaranteed to all men of free nations by their constitutions, laws and customs, rededicate ourselves and our nations to the principles and purposes of the North Atlantic Treaty.\nHere is a startling new thought, something which must make us all shiver with expectation. The declaration goes on:\nWe have agreed together upon means to give added strength to our alliance.\nHere again is a brand new idea, something we have really never thought of before, and I am sure it excites us. And it continues:\nWe are always ready to settle international problems by negotiation.\nSurely that too is an exciting new discovery, and I am certain that the hon. member for Algoma East must be kicking himself because he never thought of that during all the time he was secretary of state for external affairs in this country. Then the document goes on:\nThe free world faces the mounting challenge of international communism backed by Soviet power.\nWhat an amazing piece of research. Who else could have discovered it? This is the sort of research which, perhaps, makes the friends of NATO tremble with apprehension while making its potential foes quiver with hope. The declaration goes on to say-and I hope the Minister of Finance is listening-"for this purpose we have agreed to co-operate closely." This is a magnificent new concept never revealed to this house before. All new ideas, and not a cliche amongst them.\nAnd then:\nWe shall reach this goal only by recognizing our interdependence.\nMr. Chairman, what a blinding vision has been given to men, something which has never been thought of before. To give another example:\nWe are an organization of free countries.\nSurely this is revelation according to St. John. Or let us look at something which, I am told, the Canadian government took pride in having inserted in the declaration:\nIf the free nations are steadfast, the totalitarian menace that now confronts them will eventually recede.\n\n"If the free nations are steadfast", Mr. Chairman. They have been steadfast long enough; steadfast for doubt, steadfast for cross purposes, and steadfast for confusion. What we need now is to be steadfast for imagination and some leadership, and that certainly was not given in Paris by this Canadian delegation. "If the free nations are steadfast the totalitarian menace will eventually recede." What an example of pre-sputnik thinking. What an example of the Maginot mind which, I said earlier, was working in full force.\nThis declaration is an insult to the intelligence of the people of the western world. I say it is full of cliches. I could go on and quote more; I could quote as many from the speech of the Prime Minister himself. The relation between the Prime Minister and the cliche is not that of master and servant; it is that of master and slave because he beats these cliches and bruises them, sets them dangling before us, and then having bludgeoned them with such violence he buries their bleeding bodies in the pages of Hansard. If we want to find out what is happening we have to disinter these victims of verbosity, and when we conduct a post mortem we find that nothing has been happening.\nBut there are some statements in the communique with which we can agree. For example:\nThe aim of the Soviet bloc is to weaken and disrupt the free world.\nWe are agreed on that. That menace confronts us. The Soviet union is the leader of one of the big power blocs, and as an individual I am supremely suspicious of great powers and power blocs. We in the western world have seen how power can be taken and abused, but there is always the safeguard of public opinion to act as a brake and put a stop to it. On the other hand, in totalitarian nations there is no such safeguard and no such brake, and so we are faced today with two great power blocs in a world of anarchy which may mean yet a world which is at war. The consequences of this situation can be tragic for people all over the world. The one thing that saves us is that both sides know that war would be a matter of mutual extermination and anihilation. And so it is possible that both blocs, or the peoples of both blocs, want to come to terms with each other.\nThere has been a certain disinclination on the part of the west to come to terms with the Soviet union for reasons which in the past were perhaps good. But the situation today is so precarious that we believe it is essential that another attempt be made to test the sincerity of Russian intentions. We know what has happened in the past; we\n\nknow the disappointments we have encountered, but we still have to make another attempt. We have to be prepared to negotiate but not on the broadest basis, because that, I think, would mean failure. Rather we have to take two or perhaps three cases in which we can negotiate, those which are probably the most perilous to mankind. We have to see if we can come to some modus vivendi with the Soviet union in this connection. The following is mentioned in the communique:\nWe have especially in mind the problems of the reunification of Germany in freedom-\nMany are convinced that unless this problem in the centre of Europe is solved there will not be much hope for peace, and therefore it is essential that we try and have Germany reunited, not on the basis of western terms and not on the basis of Soviet terms but on the basis which perhaps the Germans themselves want. In other words there has to be a compromise between the two groups.\nIt might be worth while considering the suggestion that both East and West Germany and Poland and Czechoslovakia be to some extent neutralized in the hope that free elections can be held there, properly supervised, and Germany eventually united. I know there are many who oppose this. For instance, there is the pentagon type of mind. It was this group or clique, call it what you like, which was responsible for bringing Germany into the North Atlantic community. They argued that the defence of Germany and the creation in Germany of an army was essential to the safety of the west. Probably they were thinking in those days of the policy of containment, but surely the advent of the intercontinental ballistic missile has shown that containment can no longer work because we cannot contain those missiles.\nOn the other hand there is the economic argument, which may not be expressed but which I suppose is deeply felt in nations such as the United Kingdom; the fear that if Germany does not have to spend money on rearmament she may become a more intense competitor in the markets of the world, and the other fear that as the result of not spending money on rearmaments the standard of living of the Germans would so rise as to be an incentive to other nations to follow Germany\'s example. I recognize that these arguments have been made, and I think I know why they are being made. Yet I still insist that one of the most important things we must try and achieve is the reunification of that country.\nThere is another area and again the communique mentions it; that is the Middle East. The people of the United States had better realize quickly that Russia is in the\nInterim Supply\nMiddle East and intends to stay there. To ignore that fact is to blind oneself to the true facts of the situation. If we are going to achieve peace in the Middle East, which I am sure is the wish and hope of all of us, then we cannot fail to recognize that Russia is a power in that area. Here again, I suggest, is another place or another area, if I may repeat the word, where possibly we can negotiat% with some hope of success, but at least we will find out how serious the Russians are in their desire for peace.\nI think in many ways they are sincere. I think the Russians realize the havoc which would be wreaked with all-out war as well as anybody else, but we face the problem that in the United States we have a secretary of state who I have no doubt in his private life is a very estimable gentleman but who as secretary of state for that country is nothing short of an international calamity. The Russians certainly do not trust Mr. Dulles, and the words he has used throughout the years perhaps might give the Russians some valid reason for distrust. Nevertheless this distrust to some extent has to be removed if it is humanly possible, and a fresh attempt made to bring peace to the Middle East.\nThen there is a third area in which there seems to be an opportunity for agreement at least between the east and west, and that is in the cessation of the production of fissionable material for weapons purposes, the reduction of existing stocks of nuclear weapons and the suspension of nuclear weapons tests mentioned in the communique. Great numbers of people in the west want these things achieved and it is possible that the Russians want them achieved, but we can find out only by trying to negotiate with them just how far they are prepared to go.\nNow, how do we undertake these negotiations? The communique is completely unrealistic, I think, when it says we should try to promote these negotiations through the framework of the United Nations, bearing in mind the committee which has already been set up in the United Nations and of which the Soviet union is going to have no part whatsoever. The communique was equally unrealistic, in my opinion, when it suggested that we should welcome meetings at the foreign ministers\' level to resolve the deadlock. Whether the meetings be between the foreign ministers of the 15 NATO nations or of a few-and I do not care how few- Mr. Dulles will be there, and I think his use has long since passed.\nBut perhaps there is something else we could do. Possibly we can beat the Russians', "Interim Supply\nat their own game of propaganda if we have the intelligence and imagination to do so. Why should this matter not be referred to the United Nations as a whole? We know perfectly well that this large number of nations cannot settle problems such as these. They will have to delegate power and responsibility. Is it beyond the bounds of reason to suppose that power and responsibility could be delegated to a representative of t)|e NATO powers such as Eisenhower, a representative of the Warsaw pact such as Khrushchev, and a representative of the uncommitted nations of the world such as Nehru? These three men would meet not with the intention of giving the world a blueprint as to what could be done but in order to explore a method in which diplomacy could carry these discussions even further.\nThe first meeting could be held. Of course there would be great fanfare, but it would be naive to expect any concrete results from such a meeting. However, it could pave the way to more harmonious relations. Afterwards discussions could be carried on, not necessarily at the foreign ministers' level but on a level appreciably below that so we could have open covenants discreetly arrived at. Perhaps there is a promise there, and we cannot tell how promising it may be until these meetings are held.\nAnother point where I again disagree quite strongly with the Prime Minister is with regard to the creation of a food bank through NATO. It is time we realized that although we regard NATO as a means for our defence and protection, it is regarded in the rest of the world as a tool of imperialistic powers. We may say that is not true and disagree completely with the idea, but this concept does exist and we cannot kill it.\nMay I call it one o'clock?\nAt one o'clock the committee took recess."]
Alistair McLeod Stewart: Mr. Chairman, when the committee took recess I was discussing the suggestion of a NATO food bank and economic aid being given by the NATO countries to the less fortunate nations of the world, and I oppose it.
The reason for my opposition is this. No matter how highly NATO may be regarded as a means for our own defence, nevertheless in the underprivileged areas of the world it is regarded as an instrument of imperialistic powers, and I argue that if NATO is to administer aid that aid is going to be suspect. It

would be far better if we intend to help the underprivileged countries of the world, as we should do, to do it through the United Nations and through the agencies which are already there.
But I would like to think that we would do it in a more generous way than has been indicated by the government this year in the increase it has made under the Colombo plan. The government may take some pride in the fact that it is giving another $600,000 or so, but nevertheless that merely means that one cent per capita of our population is to be given every 90 days for further economic assistance to those nations which could do with more help, and I and my party are convinced that we are not doing nearly enough in this form of aid to less fortunate countries of the world.
Then there was another matter the Prime Minister mentioned. He talked of those who were behind the iron curtain, and all of us sympathize with what he says. We are just as concerned about those people as he is. The Prime Minister said in his speech, as reported at page 2723 of Hansard:
We thought of the people behind the iron curtain, people who believe in freedom as we do. Sometimes we are apt to forget them.
It is most unfortunate that the Prime Minister and the government apparently have already forgotten about many individuals who fought against communism, who left their homes and are now denied the right to come to this country. I refer, of course, to the Hungarians and to the orders which were issued this year preventing by and large any further entry into this country of Hungarian victims of communist persecution. The Prime Minister went on:
When the declaration was being drafted I had the honour to move that there should be the inclusion of a paragraph to give to those people, whether in the Ukraine, in Hungary, in Poland . . . some hope.
I should like to give them hope; I am sure every hon. member would, but I would like to see something practical done so that hope can be translated into fact. After all, there are displaced persons in camps in Europe today who are the victims of communist persecution, Ukrainians and Poles who suffered under communism yet who, because they are ill or old, are not able to come to this country. If we feel so strongly about those people, those victims of communistic persecution, then we have to do something more than just more or less hold out hopes. We have to couple those hopes with action.
In the communique itself there are quite a number of points which demand answers. There are too many words in it and nothing

much is at all clear. For instance, the communique contained the following:
We are therefore resolved to achieve the most effective pattern of NATO military defensive strength, taking into account the most recent developments in weapons and techniques.
Let me ask the Minister of National Defence this question. How does the government propose to go about this? Later in the communique we find the following; we have-
. . . decided to bring about closer co-ordination with a view to ensuring that each NATO member country makes its most effective contribution to the requirements established by the alliance.
But how are we to do so, Mr. Chairman? These are words. We want to have these words explained; we want to know what government policy is in this regard. Then later on we find the following:
As regards defence production, We have decided, in view of the progress already made, to take further measures within NATO to promote the coordination of research, development and manufacture of modern weapons including intermediate range ballistic missiles.
There are many of us who have been asking for this close co-ordination for a long time, and we have been promised it for a long time, yet nothing has been produced which we can really get our teeth into. The government owes it to this house and to Canada to explain many of the questions which arise out of the words used in the communique.
Then there were the usual platitudes about economic collaboration and close co-operation among the countries of NATO, the need for greater unity, and so on. Yet, as the Minister of Finance pointed out, the United States is making a mockery of these high protestations which we hear and about which we read. What is the government doing to ensure closer economic co-operation with the nations of Europe? Well, there has been set up a European free trade area, and the government's only concern about it, apparently, is to see that we should not be excluded from its scope in regard to food, drink and tobacco. I would have thought, if the government was really desirous of improving the trade situation in this country, it would have made a much more decided attempt to get closer in an economic sense to the nations of Europe.
We have to do that for this reason if for no other. Earlier this session I spoke about the increasing United States economic domination of this country. We have to rectify this imbalance, and the only way we can do it is by trying to increase our trade, not with the United Kingdom only but substantially with this European free trade area. There there might be some hope for us; there, I am certain, will be the salvation of NATO.
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A lot of lip service has been given to article II throughout the years. But if there are doubts in Europe-and I at times share those doubts-I think they can be dissipated very rapidly by entering into the closest economic collaboration and co-operation with our European allies. When we do that, then I think we shall be much safer than by relying solely upon the words which we see in this communique.


Mr. Macdonald (Vancouver-Kingsway):: Mr. Chairman, I do not want to take up too much time of the committee; nevertheless I do want to follow up what the hon. member for Winnipeg North has been dealing with and deal with something which is of tremendous importance to the world at the present time.
On March 1, 1954, the Americans detonated their first hydrogen bomb near Bikini atoll, and for the first time the world was shocked into an awareness of the dangers of atomic radiation as it could affect the health and even the life and being of future generations. As we all remember, radioactive dust from that explosion settled on some Japanese fishermen who were fairly close by with terrible results.
We all know that we receive radiation to some extent anyway. It comes from the natural environment, and probably has always been there; and to some extent we get radiation poisoning when we subject ourselves to X-rays for diagnostic purposes. Now we have added a new and potentially vast source of radioactive poisoning as a result of the testing of nuclear weapons. Therefore we have entered into the fourth year of what might be called the age of radiation without representation. Without representation, I say, because the people of the world who are being subjected to these extra doses of radioactive poisoning have in no way given their consent or approval to or any voice in what is happening to them. Most of them have never had a chance through any kind of institution to say whether they approve or do not approve of the kind of danger with which they are now faced.
There are three questions that urgently require answers. First, is there a serious danger to the health and life of present and future generations as a result of the detonation of these nuclear weapons? Second, is it possible and practicable now to reach an agreement for the suspension of tests of these weapons? Third, is it necessary and desirable in the interests not only of health but of national security that we should reach an agreement to bring this process to an end? In my opinion the resounding answer to all these questions is yes.

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Just how harmful to human beings the bomb particles are that come from the detonations, which from the mushroom clouds go into the atmosphere, into the soil, from the soil into plants and animals and from there to the human dinner table is at present a matter of doubt. But the Japanese people, an intelligent and aware people, have no doubt of the extent of the danger.
It was the Japanese fisherman, of course, who first felt that danger at close hand. The Japanese government has even gone to the extent of warning its people officially to boil all of their drinking water. They are, of course, perhaps more exposed than any other area of the world because they have on the one hand the south Pacific testing region and on the other hand Siberia where the Russians have been testing their megaton bombs. There is no doubt that public opinion in Japan is overwhelmingly in favour of the prompt stopping of these tests, and I do not think there is any doubt that this is the opinion at the present time of the vast majority of civilized and thoughtful mankind.
Speaking of Canada and the west, I think our failure to take an adequate lead in bringing a halt to these tests has gravely injured our position in the thoughts, hearts and minds of most of the people of the world. In 1956 Japan moved a resolution in the general assembly of the United Nations stating that we should deal with this question first, not as part of any package proposal mixed up with other things, but that we should first get over the hurdle of the suspension of nuclear tests and deal with that matter promptly in order to bring such tests to an end. Whatever the merits of the scientific controversy may be, it seems to me that the very least we can say is that, in the words of Earl Attlee, "humanity should be given the benefit of any doubt".
Various committees have discussed and studied the dangers of atomic radiation. The general assembly of the United Nations established such a committee in 1956 and it is continuing to observe and study in this field. But I wish to refer to one committee which has been at work more recently, namely the joint committee of the United States congress which, starting on May 27 of last year, received testimony from many experts in this field, from physicists and doctors, from soil analysts and meteorologists, from chemists, biologists and geneticists.
The committee heard 5,000 pages of testimony, and while it is not possible to summarize all the findings of the scientists who took part in the investigation I should like

to read the question that the joint committee of the United States congress considered. It was this:
How much radiation from cosmic rays, medical X-rays and weapons tests combined can man tolerate before this radiation does appreciable harm to the life span and health of the present generation, and brings about a significant increase in deformed children born in succeeding generations?
The committee were able to reach no clear answer to the question they propounded for themselves, and that in itself is a disquieting thing. We are dealing here with unknown, malignant forces about which there is no certainty of scientific knowledge. Nevertheless the evidence given before the committee was most important. Dr. Alvin Graves, an employee of the United States Los Alamos project, flatly stated, for example, that there was no such thing as a clean H-bomb. All of them, he feaid, gave out radioactive poisons, and it was just a matter of degree between what is called a clean bomb and a dirty bomb.
Another scientist carefully investigated the question of whether cow's milk is already hazardous to the health of children. His answer was no, that the chance was only about one in a million. But another scientist replied that even if the chance ratio were put that low, which he did not think it should be, 3,000 cases of cancer in young children would be apparent, spread across the whole population of the world at the present time.
The consensus of agreement-I am not dealing with points upon which there was disagreement-on the joint committee is summed up in an article by the scientific editor of New Republic magazine in its issue of July 1, 1957. The points on which there was substantial agreement among all the scientists taking part in the proceedings before the committee are summarized in that article in these words:
1.	The fall-out of bomb particles from the stratosphere, which continues for 40 years after each big bomb tested, is not uniform around the world, as had previously been assumed by the government. It is concentrated in some areas by rainfall, and possibly by high altitude air currents. The northern hemisphere gets much more than the southern . . .
In other words, in the case of Canada we are more subject to this particular hazard than the world generally, and in my own province of British Columbia where there is heavy rainfall I dare say that the risk is greater still.
2.	Geneticists agree there is no "safe" level of radiation. Even a small amount produces some adverse changes in future generations.
There is no safe level; in other words every bomb tested produces some undesirable changes in the human species.

3.	As to the increase in bone cancer and leukemia in this generation from strontium-90, scientists do not know whether there is a "safe level", or a threshold, below which no damage occurs. The majority of experts assumed there is no safe level, even though the increased incidence of cancer cannot yet be proved . . .
4.	The number of persons who could be damaged by increased radiation in this generation-either with cancer or with abnormal offspring-is "roughly calculable". Estimates by individual scientists using various hypotheses ranged from 50,000 to several million in a world population of 2.6 billion . . . The increase will be proportionate to the increase in total radiation: that is, if bomb testing has thus far raised total radiation one per cent, cancer and leukemia should go up one per cent.
5.	A group of five scientists, including three atomic energy commission officials, concluded that once the atmosphere is saturated with bomb particles-a situation which one witness estimated would arrive in 10 years-the maximum rate of bomb testing without jeopardizing the entire race would be between 2 and 10 megatons of bomb materials blown annually into the stratosphere by all nations.
The upper limit-10 megatons-is the average rate at which the United States has been testing for the past five years.
The last point illustrates the fact that we are already testing-at least one nation, the United States alone, is already testing-at above what these scientists consider to be a safe rate of maximum radiation in the atmosphere.
The first question I propounded was, is there grave danger from radiation from bomb testing now, and I think the answer is unquestionably yes. How great that danger is we may not know, but that danger is there and the damage is being accomplished, as no one can seriously doubt. Already we have too much radiation in the atmosphere, and we have to consider this fact in the context of the world around us.
There was a time when only the United States had the bomb. In 1949 the Soviet union tested its first bomb. Now the United States, the Soviet union and the United Kingdom all have the bomb and are conducting tests. Does anyone seriously believe that the process will stop there? What country will be next? I presume it will be France, in the absence of international control. I presume that communist China will not be far from achieving its bomb and its series of tests. I would presume that with technological progress increasing from year to year and the techniques becoming simpler and better known, all military nations will one day have their bombs unless control is achieved.
Can you imagine what a world we would have if every South American dictator had at his disposal a hydrogen bomb with which to threaten annihilation of his adversaries unless they came to his terms? Is it going to be easier to control that situation now or when the bomb is already in the hands
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of half a dozen or a dozen more countries? Clearly the time to act is now, not only from the point of view of the dangerous increase in radiation in the atmosphere which is showing up in the bone tissue and blood stream of the people of the world, but from the point of view of a secure and peaceful world.
The objectives we should set for ourselves, Mr. Chairman, could be expressed simply in this way. First, we should seek to stop all further testing of nuclear weapons. Second, we should seek an agreement to prohibit the manufacture of nuclear fuel for military purposes. Third, we should seek ways of reducing the world's stockpile of atomic weapons, as a preliminary to full disarmament.
We cannot achieve all those objectives in the world as it is at the present time. I appreciate that, but I say we can now achieve the first one. On June 14, 1957, the Russians proposed or rather agreed before the London subcommittee on disarmament to the suspension of all testing of nuclear weapons, with control stations to be set up in Russia and other countries to make sure those countries would abide by the agreement. There were no conditions to that offer. The Russians were willing, and presumably still are willing, to treat that one point alone as something upon which agreement can be reached.
What was the answer of the west and in particular of Canada, which was one of the five nations represented on the disarmament subcommittee? Our reply was a package proposal on disarmament. We proposed four points and said we would accept the suspension of nuclear tests with control and inspection provided we reached agreement on the other three points. I agree that our package proposal was good. There was provision for a reduction of conventional armaments, for aerial inspection and for cessation of the manufacture of nuclear weapons, not just their testing. These things were good. But it has been clear that we cannot achieve agreement with the Russians on the package, so I say we should take out of that package point No. 1, the suspension of tests, and get agreement on that.
If we do that, Mr. Chairman, I do not see how it could be said that it would imperil our military security any more than the security of the Soviet union. It seems to me that once again we would have seized the initiative in these disarmament talks. We have lost that. Russia, to a very large extent, has captured the imagination of the world. She has presented herself as a nation pressing for disarmament and for peace. I know that to

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a large extent she has done that by presenting unacceptable proposals, but there is no doubt that the west has lost the initiative.
I believe that in the interests of human health as well as peace we should achieve control now before these nuclear weapons get out of hand. We should reach agreement on point No. 1 because agreement with Russia is possible now on that point, which involves the prohibition of further tests of nuclear weapons, with proper control and inspection to make sure that the agreement is carried out.
We are too apt to assume, as were the citizens of Rome, Carthage and Byzantium, those civilizations of the past, that our life will go on smoothly. We are smug about that. We do not seem to realize that the danger of mass destruction of the world in which we have been living is present and is becoming greater every day. Unless the two giants in this world today, the United States and Soviet Russia, can reach an effective agreement, the chances of this civilization surviving are very slight indeed.
It may be ironic that the great capitalist power of the world and the great communist power of the world must form an alliance and work out a settlement of their differences; must divide up their spheres of influence in the world, if this world is to survive. It is this point to which we have come at the beginning of 1958. The point is that the beginning of an agreement can be based on the ending of bomb tests.
I do urge this government, as one with great responsibility in the matter because of its membership on the United Nations disarmament subcommittee, to take the lead in pressing for the suspension of the testing of nuclear weapons. We have a chance for agreement now. The nations all over the world expect it of us. Let us take that chance. It is only a beginning, but once you have made a start then you can seize the initiative and press for other things such as the abolition of the manufacture of these weapons themselves.


Paul Joseph James Martin: Mr. Chairman, I think I should say a few words on the very important matter about which we were informed, a few days before Christmas, through the press of the country. I refer to the decision of the United States to curtail oil imports from Canada, a decision about which we learned a great deal more this morning from the Minister of Finance when he made his important statement.
It is true that after his announcement there was an opportunity for some hon. members to put some questions, but because of the item in our deliberations under which the minister made his statement there was, under our
[Mr. Macdonald (Vancouver-Kingsway) .1
rules, not the same opportunity for comment about the implications of what the minister had to relate.
It seems to me that this matter is of such great importance that the opposition would not be fully discharging its responsibilities if it did not make some comment, both on the position taken by the United States and what might be regarded as circumstances altogether apart from the internal situation in the United States which may have encouraged this very far-reaching action in so far as Canada is concerned.
I am sure all hon. members recognize the significance of the development and the discovery of oil in western Canada, notably in the province of Alberta. This discovery more and more affects the economic life of our country and, as the Minister of Finance quite properly said this morning, it is a discovery which can play a very important part in our own defence efforts and in the joint defence operations of our two countries and indeed of the free world.
Anyone who has perused one of the interim reports of the Gordon commission with respect to the potential long-term value of the United States market to Canadian trade, particularly in so far as it applies to our natural resources, will appreciate how significant is this curtailment of imports of oil by the government of the United States. It is significant that from time to time there have been indications, since this government has been in office and also while we were in office, that consideration had been given by legislative and other bodies in the United States to the kind of step announced by the United States government on December 24 last. It is also significant that Canada, until recent days, was excluded from the policy pursued by the United States government in the matter of the restriction of oil imports from other producing countries in the world. We have an obligation in this house to ask ourselves why, in this particular instance, this serious action has been taken by a friendly country.
I have made mention of the study by the Gordon commission of possible Canadian sales in the United States over the next quarter century. Anyone who examines that study will see how important the United States market could prove to be for Canadian natural products and how careful on that account any government of this country must be with respect to its trade policies with the United States, in order to safeguard this great potential for trade which is available to us if we act wisely in the conduct of our commercial relations with the United States.
This does not, of course, mean that we should not also have an appreciation of our

trading relations with other countries. However, the Canadian government, both of the moment and of the morrow, should give the gravest consideration to the formulation of its economic and trade policies, having regard to our position as a country of some 16 million people, a neighbour to a country of almost 200 million people and one of the most powerful economic countries in the world.
My hon. friend said this morning that of course this government had taken steps to indicate to the United States government its strongest disapproval of and objection to the course taken. The minister reminded us that during the course of the summer, as a result of action being taken by what might, I suppose, be called an administrative tribunal, diplomatic representatives of Canada in the United States had been alert and had brought home to the United States government our concern in this matter. The minister further said that he himself, when recently attending the important North Atlantic Treaty Organization meeting in Paris, had taken advantage of the presence of Mr. Anderson, his opposite number in the United States government, to communicate to him on several occasions the importance of the possible step which he understood might be taken on the part of the United States government.
If my hon. friend engaged in that discussion with the secretary of the treasury, then he undoubtedly had strong reasons at that time for these private and informal discussions in which he expressed the concern and indicated the objections of the government of which he is a member; indeed he would be expressing in that case not only the concern of the Canadian government but that of all hon. members of this house and certainly of the people of Canada, particularly those people directly involved in terms of their own economic interest in oil production in various parts of our country.
It seems to me, however, that there is a significance in the decision taken by the government of the United States on December 24 which must not be lost to any of us. We are all aware that during the past few years, as the former secretary of state for external affairs and the former prime minister have repeatedly indicated, the economic and trade policies pursued by the government of the United States have been a source of much irritation in this country.
This is nothing new; indeed the very committee of ministers which met in Washington at the end of September-with the Minister of Finance, the Minister of Trade and Commerce, the Minister of Agriculture
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and the Minister of Fisheries all, I believe, in attendance-represented	an organization
which came into being, if my memory serves me correctly, as a result of a discussion which took place between the then prime minister of Canada, the present Leader of the Opposition, and the President of the United States several years ago when they met in the capital of the United States. The suggestion was made that because of these trade policies of the United States which were so disturbing to us, some mechanism should be set up for the purpose of enabling our two countries, at the top level, to discuss matters of serious economic concern to Canada and the United States.
So the very fact that the government of which the Leader of the Opposition was the head had something to do with the setting up of this body indicates in itself the concern the government of that time felt about some of the policies of the United States in the field of trade, as to the disposal of agricultural surplus products and the like. The significant thing, however, is this; that while the secretary of state for external affairs in the previous government did find occasion from time to time to make public pronouncements of Canadian policy in this respect, and while the former minister of trade and commerce likewise expressed the concern of the government, I think Canadians generally will now conclude that there has been a great difference between the particular diplomacy pursued by the present administration in this regard and the kind of diplomacy pursued by the previous administration.	[DOT]
It is certainly clear that not by loud speeches made at strategic points in the United States by ministers of the crown of this government, not by these single oratorical efforts can it be hoped that the United States government will be caused to change the course it has contemplated and embarked on. We have the statement of the Minister of Finance after he returned from his talks in Washington that he and his colleagues had received certain assurances from the United States government which gave the government of Canada reason for satisfaction. Then we were told a short time afterwards in a speech by the Minister of Finance in New York that he was far from satisfied with the assurances he had been given in Washington by officials of the United States government with regard to certain features of their trade and agricultural surplus disposal policies. Then we had the very strong speech made by the Minister of Finance in Florida, and we

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noted the speech made by the Prime Minister himself last summer at Dartmouth college, New Hampshire.
Then on top of all this, serving as a sort of background, we have the statement made by the Prime Minister of Canada himself within a few moments of his return from the United Kingdom that in Canada's economic interests and those of other friendly powers it was now desirable that Canada should shift 15 per cent of its purchases from the United States, from one friendly country to another.


An hon. Member:: Hear, hear.


Paul Joseph James Martin: Someone says "hear, hear". This is an extremely important matter which affects the economic well-being of this country, and one which could in a very large measure have to do with the continuance of the high level of unemployment which now prevails in Canada. A shift of 15 per cent represents some $625 million; and while that may be a bagatelle in the combined dollar trading value which the United States has with other countries, and particularly with her best customer, is it not reasonable to conclude, Mr. Chairman, that such a deliberate policy on the part of one friendly government with regard to another may be considered as one of the reasons why the United States has deliberately resorted at this time to a 15 per cent cut in oil imports from this country?


Donald Methuen Fleming: Utter nonsense.


Paul Joseph James Martin: I know the Minister of Finance says "utter nonsense". This might not be an accurate statement because we do not know the full mind of the United States and, more regrettably, the hon. gentleman who is now in a position to have better information does not know much more about that mind than I do.


Donald Methuen Fleming: I could not know less than the hon. member.


Paul Joseph James Martin: This policy of shifting purchases from our best customer represents major departure on the part of this government, an act which may well havfe something to do with the important decision taken in this particular matter by the government of the United States. It is not that we are reluctant to see our trade with other countries improved. That is not the question. But I am sure events are going to prove before very long that this negative policy of shift, this policy not of trying to improve our total trade but of taking trade away from one area that means so much to Canada, will have very serious consequences not only for

Canada but also for certain other countries in the commonwealth, particularly for the United Kingdom.
Is this the end? Are there to be further restrictions on Canadian exports to the United States? The Minister of Finance this morning mentioned the possibility of lead and zinc being affected. That, of course, has been mentioned from time to time. It may be that the method the United States will use in this particular will be the use of tariffs or some other instrumentality, but the result will be the same; and if and when that happens the Minister of Finance will undoubtedly say that the government of which he is a member has made strong protests.
I thought it was rather significant this morning that the document which the hon. gentleman tabled and asked to be made part of our verbatim proceedings were notes which had been exchanged not by this government but by the previous administration. As the hon. member for Rosetown-Biggar asked this morning, are there no notes to be tabled and made part of the verbatim record which have been exchanged between this government and the government of the United States? The Minister of Finance cannot say there was no time, because he told us that in the month of July there were indications of what might happen-


Donald Methuen Fleming: Oh, no; that was an entirely different situation.


Paul Joseph James Martin: Well, I thought it was part of this same process of study. The hon. gentleman says I am wrong and I accept his word at once; but the fact is that early in December he went to NATO. He discussed this matter with the United States secretary of the treasury at that time, and I am sure that with his great powers of perception he had a pretty good idea then what was going to happen the day before Christmas, a day when undoubtedly the United States thought the news would hurt and embarrass less.
Surely the government had every opportunity to draw up its note of protest. We are told by the Minister of Finance that the only kind of protest was an oral one. We should be very happy if we had seen the cogent, powerful language of the press release which the hon. gentleman gave out on December 24 couched in a diplomatic note exchanged between the government of the United States and the government of Canada. I well remember on another occasion, with regard to a decision made at that time by the government of the United States to limit the Canadian quota of rye and oats, the protest

made by the hon. gentleman against the kind of objection taken by the government of Canada at that time-


Stanley Howard Knowles: What did he say?


Paul Joseph James Martin: The hon. member knows perfectly well what he said. He fumed and berated the government as perhaps it had not been berated before.


Stanley Howard Knowles: Except by him.


Paul Joseph James Martin: The fact is that this government owes it to parliament and to the Canadian people to indicate now, or to indicate soon, whether it is persisting in this policy of a 15 per cent shift; because that policy is calculated in my judgment to bring about the very situation of which I am now complaining.
The Prime Minister has never talked about this proposal in the house. We have asked the Minister of Trade and Commerce, and I have asked the Minister of Finance and the Prime Minister himself to elaborate on this proposal. I asked the Prime Minister on one occasion if he would discuss this matter with the Prime Minister of the United Kingdom when he came to Ottawa after seeing President Eisenhower, and if he had discussed it with Prime Minister Macmillan after the latter had spent a week end in Ottawa. The answer in both instances was no. We were told when my hon. friend went to Washington, if one can believe press reports, that my hon. friend and his colleagues indicated to the United States that they were not to take this 15 per cent proposal too seriously.


Donald Methuen Fleming: Nonsense.


Paul Joseph James Martin: My hon. friend says "nonsense". That means that this proposal is to be taken seriously.


Donald Methuen Fleming: That is pretty wild reasoning.


Paul Joseph James Martin: That is the first real indication we have had in this house that it is the policy of the government to bring about a shift of Canadian purchases in the United States. I will be very interested to know, if that represents the policy of the government of this country, what effect it will have in quarters which must and do, I know, engage the very serious attention of my hon. friend.
The only reference I have seen until today with regard to this particular proposal of a 15 per cent shift was the statement made by the Prime Minister himself to the members of the press gallery on his return from the prime ministers' conference, and then in the city of Montreal on the day my hon. friend
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the Minister of Trade and Commerce departed with the trade mission for the United Kingdom.
The only other reference that has been made to it, other than that now made by the Minister of Finance, was by Mr. James Duncan, who said it was a desirable thing to do, it was a practical thing to do and it was the policy of the government of Canada. He was not a member of the government, and no remark of his can be construed as an official declaration. But I say to the Minister of Finance in all seriousness that he should read the editorial in the Ottawa Journal of December 28 on this very subject, a journal that does not support this administration-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: A journal that does not support the former administration. It is a very objective editorial. My hon. friend the Minister of Finance laughs, but if he reads that editorial carefully he will find it no laughing matter. The editorial refers to the Prime Minister's efforts at NATO and to his report in this house about the importance of that meeting; and then after pointing out that the Prime Minister indicated that economic co-operation had been put forward as one of the foremost objectives of the conference the Journal asks:
But what has happened: flowered?
Well, President Eisenhower had barely had time to get back to the White House and say "hello" to his family before he approved a recommendation to place restrictions on Canadian oil entering the United States.
And in the light of NATO's talk about "sharing" and "pooling" resources, this for defence primarily, consider the reasons given for such restrictions. They are being resorted to, says Washington, to permit greater development of the U.S.'s own oil resources, this to "maintain assured supplies" in the United States itself for emergency purposes.
Clearly therefore the United States does not believe nor at least take too much stock in what was said at NATO.
I do not say that I agree with that point of view; I merely call my hon. friend's attention to this extremely important editorial, which goes on to say:
And when we talk about buying more from Britain just how far do we go in the one direction that would make such a thing possible, namely, the lowering of our tariffs against British goods? Actually there are before our tariff board at this moment applications from powerful Canadian interests to increase tariffs against British goods.
The truth is that when it comes to "pooling" resources, to the "sharing" that NATO talked about, our own hands are not so clean that we can afford to heap strictures upon the United States or upon any other country.
That editorial writer undoubtedly was thinking of the observations made by the Minister of Finance. My hon. friend today, in what was undoubtedly an effort on his

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part to minimize the seriousness of this particular action on the part of the government of the United States-


Donald Methuen Fleming: Oh, my, no. I thought I was at pains to stress the importance that the Canadian government attaches to this action.


Paul Joseph James Martin: That is exactly what I am saying.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: It is just the opposite to what you are saying.


Stanley Howard Knowles: thought you boys went to the same school.


Paul Joseph James Martin: -and in order to ease the blow that my hon. friend recognizes with regard to a matter which his government properly regards as important, my hon. friend this morning by a process of debating diversion sought to take the initiative and to indicate that his government had taken very strong steps in order to give to the United States a serious indication of this government's concern. I tell my hon. friend that having in mind the levels of unemployment we now have in this country, having in mind the economic disquietudes that prevail and which in large part are due to the discouraging effect which the policies of this government have had on the business community generally-


Donald Methuen Fleming: That is not what you said last week.


Paul Joseph James Martin: -the quicker this government recognizes that the most effective way of dealing with a friendly country is not to confine your diplomatic efforts entirely to wild and reckless speeches but by careful and quiet diplomacy, the kind of diplomacy that was carried on during the preceding period by my colleague the hon. member for Algoma East and the former prime minister and others-


An hon. Member:: So quiet that nobody paid any attention.


Paul Joseph James Martin: -and also pursuing policies that are recognized in most countries of the western world at this time as the kind of policies that are not only calculated to improve trade but are calculated at the same time to improve peaceful relations among friendly countries-


Mr. Thomas (Middlesex West):: And increase the trade deficit.


Paul Joseph James Martin: My hon. friend says, "increase the trade balance". You are certainly not going to increase your trade balance by a deliberate policy of taking

away business. The United States is a country which along with Britain and other countries is necessary for the maintenance of a high level of income from external trade in Canada.
I have said nothing, of course, about the corollary of this whole argument, the British proposal which the Minister of Trade and Commerce did not even discuss with his opposite number when he was in Great Britain for three weeks because he had no time. Apparently no member of this government has time to discuss with the British government its important proposal for some kind of arrangement which would make this 15 per cent shift possible under the terms of GATT.


Donald Methuen Fleming: Would my hon. friend permit a question? Does he give his support to the proposal to which I take it he has just referred, that the United Kingdom and Canada should eliminate all trade barriers between them and form something of a free trade area?


Paul Joseph James Martin: I am glad my hon. friend asked that question. First of all, my hon. friend has refused to give this house any information about the matter in spite of the fact that I asked him on two occasions for the details of the proposal. I say to my hon. friend, having in mind his repeated statements of loyalty to the commonwealth, as though he had a pre-emptive interest in that particular loyalty, that one of the most effective ways of showing one's friendship with Great Britain would not have been to brusquely dismiss that proposal as my hon. friend did at Mont Tremblant.


Donald Methuen Fleming: That is not true, you know.


Mr. Marlin (Essex Easl):: My hon. friend says that is not true. The only remarks that are known to have poured forth from this government with regard to the British free trade proposal were those remarks made by my hon. friend on a social occasion in the dying hours of the conference in the luxurious surroundings of Mont Tremblant.


Donald Methuen Fleming: Wrong again.


An hon. Member:: What is your attitude?


Murdo William Martin: The hon. gentleman asks what is my attitude. My attitude, and I am sure it would have been the attitude of most people, would have been that this was a proposal put forward by a friendly country, the United Kingdom. We should have said it is the kind of proposal that will engage our most sympathetic study and attention. I find in that proposal something which would be of great value to the automobile industry, for instance, an industry

which means everything to the community in which I live where there are now 20,000 men out of work.
British cars enter Canada free of duty; Canadian cars enter Britain with duty. This proposal could conceivably have the result of providing reciprocal advantages to both countries. I say that this is a proposal to which the government of the day could at least say it was prepared to give sympathetic study and consideration; but we do not know down to this minute whether the government is even prepared to do that. But the important thing-and my hon. friend cannot divert my attention from it-is that the government of the United States-not the government of Great Britain-has taken an important step in regard to a basic industry in Canada, namely the oil industry, one of our developing great natural resources, I am not saying as a result of the policy announced by the Prime Minister but from the discussions in this house, it is reasonable to argue that the decision of the government of the United States was influenced at least in part by the proposal and by suggestions that have been made by other responsible people with regard to that proposal within the course of the last two months.


The Chairman:: Order. I am sorry to interrupt the hon. member but his time has expired.


Paul Joseph James Martin: I think I have made my point and I hope the Minister of Finance sees it.


Donald Methuen Fleming: You did not answer my question.


Hazen Robert Argue: Mr. Chairman, I believe that all of us viewed with a great deal of concern the announcement by the United States that a 15 per cent restriction was being made on the export of Canadian oil into the western states of the United States. Certainly, it is one additional fact which casts a good deal of gloom over the whole oil industry in western Canada. Whether there is any connection between this 15 per cent shift and the other 15 per cent shift which this government has made so much of, of course we in this group have no means of knowing; but I do know that the action of the government, which seems to be one of diplomacy by insult, diplomacy by noise with the United States, has now for some months had a rather disturbing effect on the oil industry in western Canada.
This government was scarcely in office when, in the booming oil area of my constituency, reports were circulating that the attitude of the new government to United 96698-177
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States capital coming into the oil industry of this country was adverse and certainly in-


Donald Methuen Fleming: Where did you get that idea?


Hazen Robert Argue: -Weyburn and district there were many reports from many people-


Donald Methuen Fleming: A complete misconception!


Hazen Robert Argue: -in the oil industry. Of course, the reference that the hon. member for Essex East made to speeches delivered in this house by the Minister of Finance when he was in opposition is probably one of the reasons the United States oil industry felt that the new Canadian government might not have the same general receptive attitude to United States capital coming into Canada to develop the oil industry as had the government of Saskatchewan or as was the general attitude of the previous administration.


Donald Methuen Fleming: Will my hon. friend point to one speech that the present Minister of Finance made that tallies with the description he has given, because I can tell him that there never was any such speech and the statements made by the present Minister of Finance are quite to the contrary.


Hazen Robert Argue: I have not said that this government at any time said it would not welcome United States capital but what I have said-and it is a statement of fact-is that the people connected with the oil industry in my constituency-and it is one of the booming new oil fields in Canada-felt that this government's general attitude to United States capital coming into this country was one which required a good deal of study and questioning.
I think that the general attitude of the government, not only in this field but in others, as far as the United States is concerned, is to make a lot of noise that apparently by results accomplishes nothing in a positive way and leads many of us to suspect that it merely makes it easier for people in the United States who would like to have restrictions imposed on Canadian products to accomplish their purpose. I have never agreed, either when the other administration was in office or since this administration took office, that all of this loud condemnation of the United States export program as far as grain is concerned was the answer or the solution of Canada's problems. Instead of making big noises to the United States I think the people of this country as well as the people of the United States, would have been much better impressed if this government had drawn up a program which would deal with the Canadian problem, instead of

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making so much noise to the Americans when they were effectively dealing with their own problems.
There may be great merit in a shift of trade, but I can see little merit in the government merely saying that the shift should be brought about. There is no evidence that the shift is being brought about or that the government is taking action to bring such a shift about. Statements without action by this government lead to very serious repercussions. I think much more has to be done to improve our trade generally with other countries of the world, to expand our trade with the United Kingdom, than just sending a delegation to the United Kingdom and throwing cold water, as the government has done, on the proposals of the United Kingdom for a free trade area. I am one of those who believe that this government and our economy have so much to gain from an expansion of world trade generally that they should look at every proposal that is made by any important trading country of the world to Canada that might lead to an expansion of trade with deep consideration, with sympathy and with an open mind, to see whether in fact concrete arrangements can be established which would improve Canada's trade, would increase our own standard of living and at the same time protect legitimate interests in our country that might be adversely affected in the short run if any precipitate action was taken as far as the immediately wiping out of trade barriers and so on is concerned. But in my opinion that in no way detracts from the long-term objective which should be to reduce trade barriers and to expand trade and by so doing to improve the general standard of living of the people of this country.
The attitude of this government in a great many fields leaves much to be desired. While the government has been very vocal in its statements on the 15 per cent curtailment of oil exports to the United States, I noticed that when the Minister of Public Works was asked questions this morning about the government's consideration of action to ban the announced 3.6 per cent increase in freight rates which are likely to come into effect on January 15 it was not nearly so definite. This government was not prepared to say this morning that it would give active consideration to the request that the 3.6 per cent increase in freight rates be disallowed.
When the country is faced with widespread unemployment, when many areas are already suffering from the very great burden of freight rates, it is at such a time that we should expect the government to look very seriously at the request that the 3.6 per cent 
increase be disallowed. I do not understand the government having no concrete answer to the question whether they would delay the coming into effect of the 3.6 per cent increase until the eight provinces who have appealed under section 53 of the Railway Act have had a chance to present their case to the government. Surely the very least we should expect the government to do is to say that no increase in freight rates will be allowed at least until the appeal by the eight provinces has been considered by the cabinet.
But apparently the government has not even considered whether or not such a short term delay might be imposed. Whenever the Prime Minister is away it seems that the cabinet is unable to act and make a decision. When one asks whether the cabinet is prepared to consider something that is very important to the welfare of the nation one finds that nothing is being considered because the Prime Minister is away. The people of the part of Canada from which I come are strongly opposed to the increase. They feel it is another indication that their costs are to be allowed to mount week by week and month by month without any action being taken to prevent further increases.
I asked the Acting Prime Minister this morning whether the government was considering any alternative policy to allowing further horizontal increases in freight rates. His answer was that I was on a fishing expedition and that it was not fair to ask the government whether it was considering any policy other than that of allowing further horizontal increases in freight rates. I am speaking this afternoon for the purpose of asking the government, of pleading with the government to prevent the coming into effect of the 3.6 per cent increase in freight rates. I am asking the government to disallow the increase because of the further adverse affect it is bound to have on employment, because of the further burden it will impose on freight shippers in at least eight of the ten provinces. I suggest to the government that it should not allow this further increase in the cost of doing business which will bring about eventually a further increase in the cost of living.


William Howell Arthur Thomas: What happens if the railways cannot meet their costs?


Hazen Robert Argue: That is a very good question. We have to wait another few months until we receive their annual reports for 1957 but for the last year for which statistics are available, 1956, the Canadian Pacific railway made the largest profit it has ever made in its history. In 1956 the C.P.R. had net operating income after operating expenses

had been deducted of over $71,300,000, which is $5 million or $6 million higher than in any other year in the history of the corporation.


William Howell Arthur Thomas: Is that on the railway itself?


Hazen Robert Argue: That is not on the railroad alone. I will answer my friend's further question. He must have my notes in front of him because he is keeping ahead of me a little. In 1956 its net earnings from railroad operations alone amounted to over $41,300,000, the highest figure in any year since 1944.	1956 was the best year for net
railway earnings that the company has had since the end of the war. Yet it is given another 3.6 per cent increase in freight rates. On July 3, 1956, it received a 7 per cent increase and on January 1, 1957 it received an additional 4 per cent or a total of 11 per cent. Although it only received the 7 per cent increase for less than a six month period in 1956 the Canadian Pacific Railway Company had the highest net railway earnings since 1944.
I think the 3.6 per cent increase now allowed by the board is an abomination. I think it is a miscarriage of justice. I think it is a shame that in this period of widespread unemployment and distress in so many industries, at this time when thousands of people engaged in agriculture are considering whether they can remain in the business or whether they are going to have to close up shop and leave their farms, the Canadian Pacific railway, probably the wealthiest company in Canada, with a record of extremely high profits, should be handed a Christmas present in the form of a 3.6 per cent increase in freight rates.
The Conservative government, whose party a few months ago was going to do so much for the people of Canada if they would give them the chance to hold the reigns of government, is not prepared to tell parliament that it will postpone the coming into effect of the 3.6 per cent increase until the eight provinces have had a chance to meet the cabinet. In my opinion this is an abdication of responsibility or just a dodge and if it is just a dodge it means that the government is prepared to offer a slap in the face to the people of eight of the provinces of Canada by not being prepared to say that it will delay the coming into effect of the increase until the provincial governments have had a chance to be heard.
I could go over some of the points that were raised at the hearing before the board of transport commissioners. The proceedings there certainly lead me to believe that the C.P.R. was in no great immediate financial distress and would not have collapsed in 1958 if the 3.6 per cent increase had not been 96698-177*
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granted. The evidence before the board of transport commissioners shows that some of the very laudable modernization that is taking place on the C.P.R. has already resulted in tremendous savings. According to the evidence produced, dieselization on the C.P.R. will save the company $45 million. Passenger service changes in 1957 will save another $9| million. Another item referred to as the adoption of numerous technological devices will save the company a further $32 million. This amounts to a total of $86J million by way of saving through modernization up to 1957.
According to Vice-president Emerson of the C.P.R., the full effect of the current modernization program will not be felt for some years to come. In other words, in all probability modernization will show a greater return to the company in 1958. In the 3.6 per cent increase the board of transport commissioners allowed an item that I feel should not have been allowed. The board allowed as an item of expense an amount of $9| million the C.P.R. estimated it would probably be charged for income tax. The possible income tax of the C.P.R. was considered as a cost item in the rate making decision of the board of transport commissioners. I do not know any other companies that are allowed to calculate their income tax as part of their costs. I have never heard of private citizens being able to charge income tax as an item of expense. I have always felt that income tax was something that was paid out of net revenue and was not supposed to be charged up. It was part of the contribution that a person with a profit or a company with a profit was able to make to the national treasury for the general good.
Another thing that the Canadian Pacific has been able to make stick with our board of transport commissioners is that they have been able to keep out of any consideration of the question of rate making for freight purposes the profits the company makes from other than their rail operation. In other words, this great economic empire, which was largely built up as a result of the huge grants of land made many years ago, and other grants from the federal treasury to the amount of $88 million; the profits from this empire will not be considered by the board of transport commissioners in deciding on the rates the board will allow for the carriage of freight in this country. All the country has done in the past for the Canadian Pacific is to be used to strike out into new enterprises to make huge profits, and the results from these enterprises which were established with these land grants and cash

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grants will not be considered by the board of transport commissioners when establishing the level of freight rates.
Worse than that, the Canadian Pacific is undertaking policies which result in the company competing with itself. These policies hurt the company's rail income. The Canadian Pacific has started a vast expansion into the trucking industry. The more successful this trucking subsidiary becomes, the more profit it takes from the Canadian Pacific. Then, the more successful the subsidiary becomes, according to the Canadian Pacific and also apparently according to the board of transport commissioners, the higher the freight rates that must be paid by a portion of the people of this country. The freight rates that are being increased are not the freight rates to which normal competition can be applied. The people who live in the outlying parts, the four western provinces and the four maritime provinces, have to bear the main burden of increased freight rates.
These people are coming to the conclusion that the attitude of this government is merely a continuation of the attitude of the previous administration in allowing such tremendous increases in freight rates and this is causing a severe strain on confederation itself. There is deep resentment in the maritime provinces and the prairies that action has not been taken to prevent further increases in the already disproportionate burden of freight rates that these people must bear.
The Canadian Pacific has its tentacles in many other things. It makes huge profits from things other than rail operations. The profit from sources other than rail operations amounted to over $33 million. The Canadian Pacific made almost as much in profit from non-rail operations as from rail operations. The company made around $800,000 from hotels: it earned $3.8 million from steamships. The company had dividends of just under $14 million from the Consolidated Mining and Smelting Company, which it owns and controls. It had a net income from petroleum rents, royalties, reservation fees and land rents of $9.3 million. Although those lands were donated to the Canadian Pacific by the people of this country the board of transport commissioners refuses to take into account this $9.3 million of income which the Canadian Pacific is currently obtaining from the lands which were previously given.
As I have already said, Mr. Chairman, I should like to plead with the government to disallow the 3.6 per cent increase. I do not believe the Canadian Pacific has made a case which would justify such an increase.

I believe it would have an adverse effect on the Canadian economy at the present time. It would almost certainly add to unemployment and make it more difficult for the people in eight of the provinces to make a living. The result will be a further burden on the primary producers of this country. If the government is not prepared to disallow the increase, I feel there must be some alternative policy. I am suggesting that the time may soon be approaching when the government should consider a policy of subsidies from the federal treasury to the railway companies of this country if they can prove that further additional income is necessary to provide the service.
This policy has already been inaugurated to a small degree. There is an annual subsidy of $7 million now paid to the railway companies to maintain the trackage of the Canadian Pacific between Sudbury and Fort William and a comparable mileage of the Canadian National in northern Ontario. This bridge subsidy, as it is termed, might be expanded. Whatever method is used, I believe the government must prevent any further increase in freight rates. The railway companies have important costs to meet. They are caught in the same inflationary conditions as every other industry. The people who work for the railroads should not be penalized because they work in an industry over which a federal board has some control. I do not believe that the freight rate level should be kept low at the expense of the people who work for the railways. I know many of them in my constituency are, even today, working at very low wages. I am referring to the maintenance people, the sectionmen and so on.
There must be an over-all national policy which will maintain freight rates at a level the people can bear, and which will allow those who are working in the industry to maintain the regular, Canadian standard of living. I say the very worst type of policy the government could follow would be to allow the further 3.6 per cent increase in freight rates. I do not believe any government in the history of this country has ever taken office with more sympathy from the ordinary Canadian than has this government. I do not believe any government in the history of this country has ever been elected from which the public hoped and were confident that more would be done than had been done by the previous administration. After having made a trip out west during the recess, I was astonished at the extent to which the popular support of this government has fallen. I met a great many people, supporters of every political

party, as 1 always do when I make a visit to my constituency. I was amazed to hear so little said in a laudable fashion of this government.
The people who live on the prairies and who produce agriculture products looked with hope to this government when the house opened on October 14. They had faith in the government, they had faith in the Prime Minister and they had faith in a number of men in the cabinet whom they knew by reputation, but the faith they had in October is being dissipated at a very fast rate. They are saying: "The government has been in office since October 14; we are facing an agricultural depression which on a price-cost basis is just as bad as in the thirties and the government is not prepared to do anything about it; they are not even prepared to consider doing anything about it." I say that if the prairies areas of western Canada were to run into a series of crop failures as in the thirties, the conditions of the thirties, so far as agriculture is concerned, would in comparison look like a picnic. I say this because in the thirties the farmers might have been able to grow a few bushels of hay and a few bushels of oats to feed the horses and still have some money over, but today they have very costly equipment and every item that goes into their expenses on the farm at the present item is a cash item. Therefore they know if they had a series of crop failures in addition to the present situation they would be worse off than they were in the thirties.
I might tell the house that I was present at a meeting last Monday night in one of the larger centres in my constituency at which were representatives of farmers' unions, wheat pool organizations, local businessmen and housewives, a representative meeting which had been called as such. They invited me to give an account of some of the things I had been doing in this session so far.


An hon. Member:: Did they invite Ross?


Hazen Robert Argue: I heard he was invited at Moose Jaw and did not show up. They invited the sitting member of parliament. They discussed the economic situation; they discussed the lack of action in Ottawa and a man by the name of Clarence McKee, who is a director of the Saskatchewan wheat pool, stood up at the meeting and said that unless action was soon taken by the federal government to correct this cost-price squeeze Saskatchewan, Alberta and probably Manitoba would in the near future be organizing a mass delegation to come to Ottawa to wait on the government.
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Henri Courtemanche: I am sorry to interrupt a private member but I must inform him that his time has expired.


Victor Quelch: Mr. Chairman, we had no intention of holding up the passage of interim supply, but in view of the fact that quite a bit has been said regarding the international trade situation I would like to make a few comments. The hon. member for Essex East tried, I think, to place the blame for the action by the United States of America in cutting her imports of Canadian oil on the propostion of the present government to try to divert some of our imports from the United States to Great Britain. I personally think you have to go back a bit further to find the reason for a good deal of the bitterness which does exist in the United States today. You have only to read the United States newspapers to find that that bitterness has been developing.
I first noticed it about a year ago during the time we were discussing the pipe line in this house when a number of very bitter statements were made in the course of debate regarding United States investment in this country. Such statements were made by members of the C.C.F. party opposite-and also by members of the party now forming the government. Many of the members of the Conservative party who made such statements are now cabinet ministers. They used extremely harsh language in describing the actions of United States capitalists who were investing money in this country and were obtaining a stranglehold on certain of our industries. As I say, I think that is when this feeling of bitterness first developed.
Since then, of course, there has been much criticism of the United States surplus disposal policy, a lot of which I think has been unjustified. As a matter of fact, I feel a lot of praise is due to the United States of America for dealing with a problem which needed to be dealt with, a problem of a surplus of food on the one hand and starving people on the other. At least that country has made it possible to get that surplus food to the hungry people.
Now in so far as the shifting of imports from the United States to Great Britain is concerned, I think everyone would have to agree that to a certain extent this is a logical procedure when you have a situation where one nation has an adverse balance of trade with another nation amounting to $1 billion on the one hand and a favourable balance of trade with another nation amounting to over $300 million on the other hand. Surely in such a case the logical thing is to try to reduce the imports from the nation with

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which you have an adverse balance of trade and to expand the imports from the nation with which you have a favourable balance of trade. That seems to me just plain common sense and I cannot believe for one moment that the people of the United States would resent action on the part of Canada to try to bring about a better balance of trade in that regard.
The United States of America could remedy that situation if they wanted to by buying more goods from Canada, thus enabling Canada to achieve a more favourable balance, but if the United States refuses to buy more Canadian goods then it seems to me that the logical thing for Canada to do is to try to reduce our imports from that country and to expand our imports from other countries which have an adverse balance of trade with us. I do not for one moment think the United States would resent such action because, after all, they are sound business people and realize that such action would be plain common sense and good business.
I think probably an even better way of trying to reduce our imbalance of trade with the United States, rather than diverting that trade to Great Britain, would be to expand the production in Canada of those goods which we are importing from the U.S.A. We have, after all, around 230,000 unemployed and we have had that average number of unemployed for the past year. If those men were employed they would be producing around $2,500 worth of goods and services each and we could expand our production by half a billion dollars. Increasing the domestic production of the commodities we are importing from the United States would be the most logical means of reducing our imbalance of trade. It would also bring greater wealth and prosperity to this country. I think we should be doing everything in our power to find ways and means of expanding the production in Canada of goods we are at present importing from the United States, and as we have a surplus of labour in this country it could be used for that purpose.
I would now like to say a few words with regard to finding new ways and means of expanding the markets for our agricultural produce. We in this group have for a number of years urged that where countries are unable to obtain farm products from us through the normal channels of trade, we should explore the possibility of accepting their currency or of making long-term loans to such countries so that they could buy our commodities. Provided we were willing to have a firm agreement with those countries that when we made them a loan we would accept payment of that loan in commodities and not demand payment in dollars I believe there

would be a greater willingness on the part of other nations to obtain loans from us in order to buy our farm products.
The Minister of Trade and Commerce stated that the government was giving consideration to both these propositions; to the suggestion of accepting foreign currency and to the possibility of making long-term loans to nations who were not able to pay us in dollars. As I say, the Minister of Trade and Commerce told us that just a few weeks ago. But I realize that no matter how much the Minister of Trade and Commerce might like to initiate action of that kind he would have to persuade his colleagues in the cabinet to agree with him on such a policy and I wonder if the Minister of Finance could tell us some time just what his attitude toward such a policy would be, that is toward the acceptance of foreign currency where nations are not able to pay us in dollars, or to making long-term loans on the definite understanding that we would accept payment of those loans in commodities.
The United States has been able to expand its sales tremendously along those lines. I understand that they intend to expand this program even further. I do not believe we will accomplish anything by continuing to criticize the United States for this policy. I think that country fully intends to continue it, and rather than just protest I think the best thing for Canada to do would be to do likewise; not to the same extent as the United States is doing, but at least to go far enough to make it possible for nations which have an adverse balance of trade with Canada to balance their trade with us by accepting their currency and then using that currency for the purchase of their goods.
I think it is always better to try to solve our own problems rather than to expect other nations to solve them for us as we seem to be trying to get the United States to do at the present time.
(Translation):


Mr. Breton:: Mr. Chairman, the American government's decision to cut down by 15 per cent its imports of Canadian oil is so much on a par with the Canadian Prime Minister's decision to cut down by 15 per cent our United States purchases that we cannot help feeling that one is a direct consequence of the other. As I see it, this will go on and on and, as a result, Canadian trade will be increasingly reduced.
By inviting British industry to mix sentimentality with publicity in Anglo-Canadian relations, for the purpose of drumming up trade, the Minister of Trade and Commerce follows up the suggestion made by the Prime

Minister (Mr. Diefenbaker) to shift to the United Kingdom 15 per cent of our American imports. Recent developments have shown what harm can be caused by mixing sentiment with business.
However, due to the strategy used by the Minister of Trade and Commerce during election time, Canada was already used to sentimentality. Time will show that the Conservative party lacks the objective approach and that, unfortunately, it has placed party interests above those of the country.
This visit in England, not to sell but to buy goods, proves it beyond doubt. It is not very often that commercial delegations are sent out to buy. If the mission was a success- and probably was for England-we are not so sure it was a success for Canada. We have many reasons to doubt the success of this mission which could hurt our trade with the United States and our export trade as a whole.
I should like to point out some of the reasons for doubting of the success of this mission from the point of view of Canada.
1.	The United States being our main export outlet, anti-American propaganda might be rather harmful to our exporters particularly to those of our farmers whose sales to the American market reach $300 million annually.
2.	Canada's foreign trade shows an unfavourable balance. Increasing our imports from the United Kingdom, even by shifting some of our trade from the United States, will be no solution at all to our trade deficit problem.
3.	In wanting to increase by all means our purchases from the United Kingdom, the Canadian government runs the risk of adversely affecting Canadian industry.
4.	Great Britain's policy is primarily to serve its own interests. We cannot blame her for it. But this fact should enlighten us on the prospects of a sentimental rapprochement with Great Britain. Even if the idea of diverting part of our trade is excellent, I do believe that this question of trade with Great Britain should be dealt with on a business basis. However, I blame the government for adopting a sentimental approach to this matter.
5.	Canadian and British currencies are not interchangeable, whereas Canadian and American dollars are interchangeable. Mind you, the unconvertibility of sterling was decided by Great Britain to protect her own currency and her own trade, which put Canada in a very embarrassing situation and caused our getting closer to the United States.
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Now, Mr. Chairman, the former government was aware of our unfavourable trade balance with the United States, and it was just as resolved as the present administration to diversify our purchases and our sales. In any well organized country, that is a perfectly normal thing to do, but the only difference, I think, between the two governments is that the present one has approached this problem with a great deal of brutality and lack of diplomacy, whereas the Liberal party was trying to solve it through diplomatic channels. As a result we now have a commercial policy which tends to drive Canada and the United States farther apart, and which will provide arguments to American protectionists to use against us in Congress.
We know perfectly well that the Hyde Park agreements, signed a few years ago by the Canadian and American governments, were founded on understanding and cordial relations. In any event, that is the only way to solve our difficulties with the United States. We know too that those agreements provided a basis for the prosperity of this country and its wartime and postwar economic expansion.
Whether we like it or not, for geographic and economic reasons, we are called upon to deal increasingly with the United States. The present government's mistake-a mistake which has led us into our present difficulties and will make them worse in the future- was to forget about the time-honoured rule of diplomacy, which should apply not only in external affairs, but in the field of commerce as well.
I hope that an American government will come into power which, like its predecessor in 1939, will understand that economic problems cannot be divorced from political issues and that, if peace is to be made secure, economic, military and political matters must be given equal importance.
(Text):


Frank Howard: Mr. Chairman, I wish to draw a particular matter to the attention of the Minister of Transport and I do so even though I am aware that some arrangements are being made to attempt to overcome the problem which exists on the coast of British Columbia. I raise the matter at this time to make the minister more familiar with the problem that exists there so we can have the best possible arrangement made to meet the problem.
Yesterday the official stopping took place of the passenger service operated by Union Steamships Limited on the coast of British Columbia. We have had knowledge for some

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few weeks now of the intention of this company to stop its passenger service serving the entire coastal area of British Columbia and we also know that through the Canadian maritime commission some activity has taken place to do something about it. I do not know how many hon. members realize and indeed I do not know whether the Minister of Transport himself is familiar with the serious effect that this will have if it is allowed to continue on the many coastal communities that over the years have become dependent on Union Steamships Limited for both passenger and freight service.
This particular company has been in existence since 1889 and every year since then has been servicing the up-coast points with its terminus being in Vancouver. It affects so many communities to a greater or lesser degree that it would take up too much time of the committee to attempt to enumerate the various communities and describe the manner in which they would be affected and the number of people in each community who will be affected. However, I have received a number of telegrams from various community organizations and individuals in that part of British Columbia and I am sure other hon. members have received telegrams of a similar type. In order to give you a brief indication of the effect this stoppage and curtailment of service will have and the diversity of interests that are involved I would like to mention just one or two comments in the telegrams and relate the source of these wires.


Donald Methuen Fleming: Mr. Chairman, I wonder if my hon. friend would permit me to bring to his attention some very recent developments of which he perhaps may not be aware. The government is well aware of this matter and negotiations are under way at the present time in the hope of providing a substitute service.


Frank Howard: I appreciate the comments of the Minister of Finance in that regard, Mr. Chairman. You may recall that we inquired today of the Minister of Transport about this matter and received the answer that we would have a detailed statement on Monday about the result of the negotiations and what the status is at the present time and what the future type of service will be. As I mentioned earlier, I want to place these remarks on Hansard even though the Minister of Transport is not here so that he may be a little more familiar with the situation than he may be at the moment and therefore be in a position to make the best possible

arrangements for the continuation and extension of the service that was in existence up until yesterday and I hope you will allow me to proceed in this fashion.


Donald Methuen Fleming: There is evidently no possibility of persuading the present carrier to continue the service that has existed heretofore.


Frank Howard: Yes, Mr. Chairman, I gathered that from private discussions. However, we are not too concerned with the present carrier providing service so long as the service is provided by someone else. If, as the minister says, the government has full knowledge of the situation undoubtedly the Minister of Transport has received similar telegrams and letters from individuals and communities and I expect I could dispense with that phase of it. I would go on to point out that these people are not particularly concerned with the present carrier continuing to provide this service but they are concerned that some service be made available to them so they will not become completely isolated as will be the case for many of them if something concrete and definite is not done.
At the moment we only know that some arrangements are being made. We do not know what those arrangements are and we will not know until Monday. We cannot know at the moment whether those arrangements will be suitable. I can guess that they will not be as extensive, on the same level or with the same regularity as the service that was provided previously by Union Steamships Limited.
I wish to draw attention to some of the other aspects of this question of transportation on the coast of British Columbia. My remarks in this regard are not confined to Union Steamships Limited or to some other company which might provide a similar type of service, that is a marine passenger service, to these communities, but are directed to the general question of transportation in the coastal area of British Columbia. Before going on to discuss this I think I am entitled to raise the question as to why Union Steamships Limited gave notice a few weeks ago of its intention to stop this service on January 2.
An interesting and lengthy advertisement was placed in the Prince Rupert Daily News on Saturday, December 21 announcing the curtailment of service and I wish to refer to one or two paragraphs rather than the complete context of the advertisement. The advertisement reads in part as follows:
Our representations in this current situation have been in Ottawa in complete detail for some time, and Ottawa has been equally well informed for a

number of years that the passenger services to coastal points were becoming increasingly costly to operate.
I assume that by "Ottawa" reference is made to the federal government. The following paragraph in the advertisement reads:
We are informed by Ottawa that subsidy sufficient to cover costs is not possible at this time and we are therefore regretfully forced to make this decision.
Knowing Union Steamships Limited as I do I know they have a "tongue in cheek" attitude when they say they are regretfully forced to to do something of this nature. The general thought behind the particular paragraph I read is designed to leave the impression that the federal government is at fault for the company having to curtail its freight service and stop its passenger service. It makes reference to subsidy. Other references have been made to this particular subsidy or subvention in this house in time past. As I understand it almost since the turn of the century the federal government has granted subsidies to this particular company to service some of the more remote parts of the coast of British Columbia. In my opinion the advertisement placed here by Union Steamships Limited, designed, as I am sure it is, to show that the present Conservative government rather than the company is at fault for the curtailment of service, is completely false and leaves an inaccurate impression in the minds of the people who are affected by this action. So far as I am concerned it is an attempt in the first instance by Union Steamships Limited to get a larger subsidy than it has been receiving in past years.
I am sure that this curtailment of their service was merely another little part of the game of attempting to blackmail the federal authorities into granting them a higher subsidy and in the process use the people in the various small and large communities on the coast of British Columbia as pawns in the game. I should like to make reference to another part of this advertisement which relates to the subsidy. It reads as follows:
The matter of Union Steamships' subsidy is public knowledge as the subject has been critically brought to the floor of the House of Commons by a British Columbia member on several occasions.
Of course, they do not do the hon. member the courtesy of mentioning his name but I am sure we all know to whom they refer. I do not think I would be going too far afield in saying that the hon. member is familiar to all of us. I am sure it is the hon. member for New Westminster to whom the Union Steamships refer in this particular advertisement who has, I understand from my reading of Hansard, raised the question of this subsidy critically and bitterly on the 96698-178
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floor of the House of Commons while at the same time a navigation company, a competitor of the Union Steamships Company on the coast of British Columbia, was complaining just as bitterly to the Canadian maritime commission about the same subsidy. The name of that particular company is Northland Navigation Limited. This company has raised the greatest amount of fuss about this subsidy with the federal authorities and the maritime commission.
Suggestions have been made both in and out of the house that the granting of this subsidy by the previous administration to Union Steamships Limited had some political connotation. This undoubtedly arises from the fact that one of the hon. members in the other place is the president of Union Steamships Limited and has been so for probably two or three years. Whether there is any substance to the criticism that because the president of the company was of the same political complexion as the previous government he therefore was able to get more favourable consideration than other companies might get or not I do not know. Frankly, personally, I doubt very much whether that was the case. However, it has been raised; it has been questioned not by myself but by another member of this house that this is the reason why Union Steamships Limited have received this particular subsidy, and accordingly the service should be put on a competitive basis so that other companies who wanted to might be able to bid for that passenger subsidy.
As I said, one of the most vociferous companies was Northland Navigation which operate a freight service on the coast of British Columbia. It is perfectly fine to say that there must be bids and that people who can provide the best type of service should be the ones to get the subsidy on an open bid basis. That is a justifiable and a decent approach to the question of getting a subsidy. The only exception that one could take to that is that Northland Navigation Company,, which raised all the fuss and the noise about the subsidy for passenger service, were themselves not able at that time, and are still not able, to provide any passenger service. They are in the freight service business. I feel justified in raising this question. There may be some political connotations to the fact that Northland Navigation has raised this issue and the fact that they were supported in their complaint by the hon. member for New Westminster. It is unfortunate that he is not in his place today because I am sure we would appreciate his thoughts and remarks on this matter.

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There is a gentleman in the province of British Columbia by the name of Mr. Einar Gunderson who is known to some of us. Einar Gunderson was for one short period the minister of finance in the Social Credit administration in the province of British Columbia. Besides his many other private concerns, Mr. Gunderson is interested in and is also a director of Northland Navigation Limited, and is concerned probably from that point of view.
While we are talking about the question of Northland Navigation and one of its directors, Einar Gunderson, complaining about competition and not being able to bid for a subsidy granted by this federal government and the previous government for passenger service on the coast of British Columbia, we should have a brief look at some of the activities of the Northland Navigation Company as they apply to competition.
In British Columbia, as many people know, we have a liquor control board. From time to time beer and liquor are shipped through the liquor control board from the breweries or the distilleries to up-coast points for sale and distribution. Ever since Northland Navigation entered the picture of freight shipping, ever since Einar Gunderson became a director of the company, wherever Union Steamships-and I couple these two companies together because I am familiar with them-and Northland Navigation provided freight service to the same points, Northland Navigation now and ever since Mr. Gunderson became a director have the exclusive right to transport and ship and bring the liquor from the points in Vancouver up to the various up-coast points. Where Union Steamships used to transport some of this freight at one time they now are completely shut out and are not able to bid on the shipping of liquor to these particular spots. If the question of the free competitive spirit, as it is loosely referred to, applies in one instance, with respect to the payment of a subsidy, then certainly it should apply in the other field of shipments. Whether politics are being played there is for other people to speculate on and not for me.
The entire history of transportation services on the coast of British Columbia for many years now shows that every community-and there are many hundreds of them-every logging camp, every pulp mill, every small, isolated spot from the southern tip of British Columbia to the Alaska border, in every instance has been at the mercy of some fly-bynight corporation or company either in the air transport or the marine transport field. Anybody who has had any familiarity with

it will know that that is the absolute truth. Over the years we have seen all sorts of small, two-bit airline companies with a couple of Seabees, trying to get into the show and make a few dollars by providing some sort of service. They have been providing a type of service which leaves much to be desired. We have seen on the coast of British Columbia, because some of those concerns were not able to give good, safe service, many air disasters. Many people have been killed because small air lines have been either unable or unwilling to provide a safe type of passenger service to some of those up-coast points.
We have also seen exactly the same thing taking place in the marine transporation field. Companies have started operations with a few small boats here and there and have attempted to provide some sort of service to the up-coast points but have met with the same disastrous results. People in small communities from one end of the country to the other have been subjected to the disastrous effects of the operations of these small concerns. Some years ago we could see the situation which now exists developing. Probably it will continue to exist to a lesser degree after we are informed on Monday about the arrangements which were mentioned today.
We have seen this situation coming even in the case of the large companies. People from one end of the coast to the other are at the mercy of private corporations who are more concerned about how many dollars they can milk from the people and stow away in their pockets than they are in providing service for the people who have to travel up and down the coast. It is time that we took a longer look at the question of transportation on the coast of British Columbia. The Union Steamships situation has merely brought the matter to a head. It is time that we established some sort of all-inclusive transportation system, some agency for coordinating all forms of transportation on the coast.
Probably the most effective way that could be done would be through a crown corporation in the transportation field on the coast of British Columbia. Such a corporation would provide air passenger and freight service and marine passenger and freight service. As a crown corporation dedicated to providing service primarily it would be in a position, depending on weather, economic and other factors, to alternate between air and marine service. There is some discussion at the present time about airline companies being able to move in where Union Steamships is moving out.

That is only possible to a limited degree. At this time of the year it is very hazardous to attempt to travel by air along the coast of British Columbia except in some of the larger aircraft that follow beams and land at adequate airports. Many times days and days are spent waiting for the weather to break so that people may get in or out.
On the other hand, marine transportation generally is not upset by weather conditions on the coast of British Columbia. I hope that by placing these suggestions on the record the Minister of Transport will be able to understand the situation a little better and will have the benefit of another point of view. In his endeavours to meet the situation I trust he will not be confined to making another deal with a private company which will have to be subsidized and I hope he will not leave the residents up and down the coast of British Columbia in the hands and at the mercy of another private corporation. It is time to co-ordinate and bring together the different forms of transportation so that the people will be provided with an adequate year round freight and passenger service by one form of transportation or another and will not be left, as they have been for the past 50 or 60 years, at the mercy of the immediate economic outlook of a private corporation.


Thomas Speakman Barnett: Mr. Chairman, I should like to join the hon. member for Skeena in saying a few words about the coastal transportation situation in the province of British Columbia. In view of the interjection by the Minister of Finance a few moments ago, I should like to say at the outset that this is a matter which should concern not only his colleague, the Minister of Transport, but every member of the government. Perhaps I should put the situation in such a manner that the Minister of Finance will appreciate its significance as far as the people of the coast of British Columbia are concerned.
I can well imagine that if the Canadian Pacific railway had made an announcement a few weeks ago that effective on January 2 it would discontinue its passenger services between Montreal and Vancouver a good many members of the house would have been expressing some concern about the situation and that even if an announcement was made by the Minister of Transport, as he did today with respect to the matter we are discussing, that negotiations were going on for the provision of an alternate service, the mere fact such a statement had been made would not set the minds of members of the house completely at ease. The fact remains that if the Minister of Transport had got up and 96698-1784
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told us that negotiations were being conducted with some other concern to provide an alternative service between Montreal and Vancouver such an announcement would have been greeted with a certain amount of understandable scepticism.
While the hon. member for Skeena and myself are undoubtedly awaiting with a good deal of interest the announcement which the Minister of Transport said he would make on Monday, nevertheless we are perfectly aware of the fact, in the light of our understanding of what he has been doing, that whatever the announcement may be it will not mean a complete solution of the problems that the hon. member for Skeena has been discussing. As the hon. member for Skeena said, this is not a matter which has cropped up suddenly overnight. The action of Union Steamships in discontinuing all passenger services has perhaps brought the matter to wider attention than was the case before because not only are most of the smaller communities on the coast affected but also a good many of the larger ones.
Therefore, Mr. Chairman, in order to give the Minister of Finance and the members of the present government some indication that this is a problem which has been in existence for some time and has been brought to the attention of the house from time to time, perhaps I might be permitted to refer to certain speeches on the subject which I have made in the house on former occasions. I have a few volumes of Hansard on my desk, and I find in checking back that on November 30, 1953, the occasion of the very first speech I ever made in the house, I had this to say as recorded on page 461 of Hansard:
We have a situation now where, almost without notice, steamer services are being withdrawn or reduced. People are worrying. Those who have been on the islands for the last 30 years* or more are suddenly left without the means of getting in their supplies.
I went on to say:
Of course we cannot overlook the impact of air travel upon the facilities that can be provided by a coastal steamship service. Certainly no one would suggest that the advantages of air travel should be removed from those people. It seems to me a revolution is taking place in the whole transportation set-up in that coastal area ... I believe it is a matter to which the government should be giving very careful study and attention at this time.
There is a need for the development of an overall and co-ordinated policy in respect of the type of services that can be supplied to and maintained for the people on the coast. I think some study must be made as to how those services can be co-ordinated, keeping in mind possible highway developments . . .
I go on to explain that that of course would involve the authority and responsibility of the provincial government of British

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Columbia. I suggest there is a great deal of similarity between the remarks I made back in 1953 and the remarks that have just been made by the hon. member for Skeena. I, too, have had a great number of telegrams in the last week or so. I can only say this, in discussing them briefly, that they bear a remarkable similarity, except they may be coming from somewhat different communities, to the telegrams and letters I was receiving back in 1953 when I made that speech.
Later on in that session we were discussing the estimates of the Department of Transport, and when we were discussing provisions for subsidized services I had some remarks to make which I addressed to the then minister of transport, the Hon. Lionel Chevrier. I said then, as found at page 5866 of Hansard for June 11, 1954:
So as to complete the general picture as I see it, calculations I make would indicate that for the Atlantic coast of Canada provisions in the estimates by way of operating deficits and subventions seem to total $7,810,725, whereas, so far as I have been able to discover, for the Pacific coast of Canada at the present time we are being asked to provide the modest sum of $345,000.
I am not rising in my place to ask that the amount for the Pacific coast be increased to equal that for the Atlantic, or anything like that; but I do feel the situation is one concerning which the Department of Transport and the federal government could take effective action, if they would. If I were going to put my remarks in the form of a question to the minister I suppose I would ask him whether if Vancouver island were to revert to the status it once had, when it was a separate entity from British Columbia, the federal government would then be willing to consider accepting some of the responsibilities, which apparently they do accept in respect of another island described, so the easterners tell me, as "the island" on the Atlantic coast, just as we term Vancouver island "the island" on the Pacific coast.
The Minister of Transport, as so often happens, tried to prevent the development of an extended debate on this subject, and had this to say:
X would not want my hon. friends from the west coast, or the hon. member for Comox-Alberni, to think that his area of the country is being overlooked. It is not. But the consideration has to be in one case by way of subsidy, and in the other by way of the fulfilment of a commitment. And I hope he will not take from that any suggestion that we are not anxious to give sympathetic consideration to any application made for additional transportation service on the west coast, or to and from Vancouver island.
At that point the member for Kamloops, now the Minister of Justice, entered the discussion and he had this to say:
I have no desire to provoke a debate, but I could not allow the minister's remarks to go by without making the observation that the provision of transportation facilities was also a term of entering confederation at the time British Columbia entered. The minister will be aware that there has been a controversy, perhaps more of historical than of practical interest, over a great many years

as to whether those terms were fulfilled with respect to the provision of transportation and communication with Vancouver island.
The hon. member goes on to discuss the matter of the agreement which implied the building of a railway to Esquimalt on the southern end of Vancouver island. I hope the present Minister of Justice will be prepared to put in an oar in any discussion the cabinet has of this situation, and to point out that there is this historic responsibility on the part of the federal government to see that the people of the west coast of British Columbia have a reasonable transportation service.
Now, I gather that the hour of five o'clock has arrived-


Donald Methuen Fleming: No, you have three minutes yet.


Mr.   Barnell@: Well, that discussion took place in 1953-54, and I find that on May 27, 1954, this subject matter was again brought forward by the hon. member for Comox-Alberni. I had been discussing at some length the problems of the various communities along the coast, and at page 5169 I said:
Then we come back again to Texada Island which is in the gulf. There we find a situation arising out of the fact that the C.P.R. steamer service to Powell River, which had included this island as a port of call, was being withdrawn and that the residents not only of Powell River but of Texada island were not going to have any means whatever of getting their cars in and out of that area. It is perfectly true that plans had been made for the building of a road and the establishment of a car ferry which would make car and truck transport to Powell River a possibility. But we find there a situation where a service which has been provided for years is being arbitrarily withdrawn before any substitute is provided to take its place. In the last few years that sort of thing has been happening all over the coastal area.
I mention that, Mr. Chairman, to make it clear that so far as I am concerned the Canadian Pacific steamship company has had no greater degree of interest or responsibility in maintaining service than has Union Steamships or some of the other concerns to which my hon. friend the hon. member for Skeena referred in his remarks.


Charles Edward Rea: It being five o'clock, I shall rise so the house may discuss private and public bills.



Stanley Howard Knowles: the second reading of Bill No. 6, to amend the Canada Elections Act (voting at advance polls).
He said: Mr. Speaker, the purpose of this bill, which I have had the privilege of presenting to the House of Commons on at least

two previous occasions, is to extend the privilege of voting at the advance poll in connection with federal elections to any qualified voter who finds that he will have to be away from home on election day for any reason whatever. As hon. members are aware, there is at present in the Canada Elections Act a provision for the holding of a certain number of advance polls. However, the right to vote at those advance polls is limited to commercial travellers, fishermen, employees on railways, vessels and aircraft, together with members of the Royal Canadian Mounted Police. Even in connection with these categories of voters permission to vote at the advance polls is allowed only if the voter is away from home in pursuit of his employment as defined in the Canada Elections Act.
I am sure that hon. members will agree with me that one of the rather common grievances at election time, and as candidates in elections we do pick up these grievances, is the fact that many people find that they have to be away from home at election time and cannot vote because their absence is not covered by the provisions in the act. It seems to me that we should take a new look at this question; that we should be thoroughly consistent with our belief that the right to vote is a privilege which belongs to every one of our citizens.
If, then, the right to vote is a privilege, I submit that we have no right to take that privilege away from any one of our citizens if, for example, he has to be away from home because he is on vacation. I mention that type of absence in particular because it is a most common one so far as the grievances brought to our attention are concerned and I think it brings into focus the problem presented by this particular shortcoming in the Canada Elections Act. Surely it is no crime to be away on holidays. Surely one is not committing some misdemeanour for which he should suffer a penalty such as the loss of his right to vote. Either a citizen has the right to vote or he does not have that right and if he has it it seems to me that our elections act should safeguard it in every possible way.
In a number of the provinces in this country there are provisions for the universal right to vote at advance polls. This is true in my own province of Manitoba as well as in some other provinces and I know that in the province of Manitoba the fact that any one who finds he will be away from home on election day may vote at the advance poll does not result in an avalanche of votes being cast in this way. People do not take undue advantage of the advance polls; it is still only a small percentage of the population which votes in this manner, but the right or
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the privilege is there and it does remove a very serious grievance which obtains at federal elections.
In at least two provinces of this country, Saskatchewan and British Columbia, there is a provision which I think is very commendable and which is even wider. I refer to the provision for absentee voting. In each of these provinces at general election time it is possible for a person to vote if he is away from home anywhere in the province. Arrangements are made for him to make his choice among the candidates of his own constituency and then, by the machinery which has been set up, these votes are counted and added to the total of votes for the candidates in the home constituency. In other words, what is done with regard to civilian absentees at provincial elections in Saskatchewan and British Columbia is the same as is done with regard to the service vote in our federal general elections. Our service personnel are in effect absent from their home constituencies but they are not denied their right to vote. Rather their votes are taken where they are and the totals for the various candidates are added to the totals of the civilian vote.
True, any arrangement of this kind involves extra machinery and involves some delay in the final totals being arrived at but surely it is of the essence of democracy that everyone who is a qualified voter-in other words everyone who is qualified by virtue of age, citizenship and residence in the country -should have the right to exercise that vote. Furthermore that vote should not be taken away from him because the election happens to fall at a time when he has to be away, whether it be on some kind of business not covered by the act or whether it be because he is on a holiday.
I have referred again to the question of holidays because, as I say, that is the cause of the greatest number of grievances in this field and I submit that since the time when the elections act was first drafted in this country there has been a great change both in the attitude towards the taking of holidays and in the number of people who are able to take holidays. Because of these changes I submit it is time for a change in the act itself.
My bill, since it is a bill, must therefore be a complete entity in itself and it goes into many details. However, most of those details -indeed all of them-are consequential upon the basic change which is proposed. That basic change-the principle of the bill and the only change which is now before the house for consideration-is the question as to whether voting at the advance polls should be limited to the few employment categories

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to which I have already referred or whether it should be made available to all those who are qualified voters. There is in the bill as I have had it drafted a provision that before a person could qualify to vote at an advance poll he would have to take an affidavit in which he would declare that he believes he will be away from home on election day. The reason does not have to be stated. In other words, any reason is sufficient so long as the voter is prepared to declare by way of an affidavit that he believes he will be away from home on election day.
This does not mean that it is a false affidavit if it turns out later that the voter is not away from home and I know that is the sort of thing that happens, for example in my province of Manitoba, where voting at advance polls is open to all qualified voters. I mention that detail just to make it clear that there is that one particular provision which imposes some limitation. In other words, a person has at least to be in the position of being able to give an affidavit to the effect that the believes he will be away from home on election day.
I hope the members who study this bill and speak to it will not get involved-first because it would be out of order to discuss the clauses of the bill in any case and, second, because these matters of detail do get away from the principle-in some of the consequential changes which are set out in the bill and which are necessary, either in the form in which they are spelled out in the bill or in some other form, on account of this principal change. In other words, if you are going to have the universal right to vote at advance polls it would follow that more people than at present will vote at these advance polls and, in the opinion of our election officials, that would seem to make necessary a longer lapse of time between the day when the advance polls close and the day when the general election is held. If there is going to have to be a longer lapse of time -not necessarily the length of time mentioned in my bill but some additional length of time-it may also be necessary to put the official nomination day a little further ahead of election day than is now the case.
However, Mr. Speaker, these are details which do not affect the basic principle of the bill; they can be changed one way or another, or the committee on privileges and elections to which I hope this bill will be referred after second reading might decide that these changes are not necessary at all and that it would be possible to carry out the idea of the universal right to vote at advance polls even with the other provisions of the act as they now stand.

There has been a great deal of conjecture as to when the next election is coming. On a number of occasions, we have had it in the middle of the summer, right in the midst of the vacation period when the number of people who would have wished to vote at advance polls would, I believe, have been very large. Current rumour suggests that the election might not be held off until the summer, that it might be held on April 14 or during the third or fourth week in March. If it comes on dates of this description there would, of course, not be many people away on holiday, but there would still be people who would lose their right to vote because they would be absent from home, people in addition to those listed in the present act. But if there is to be an election in the early spring, that might give us a chance to try out this idea of giving a greater number of people the right to vote at advance polls before we experiment with the idea in the middle of summer, perhaps at the election after next, when the numbers away on vacation would be greater.
Mr. Speaker, I do not think it is necessary for me to argue further as to the merits of the principle of this bill. I urge hon. members not to become bogged down in details because none of the details is sacrosanct; any of them can be altered in the committee of privileges and elections. I recall the discussions that took place on the estimates of the Secretary of State (Mrs. Fairclough) earlier this session, and hon. members in many quarters of the house, fresh from the election of June 10, complained that nothing had yet been done about widening the privilege of voting at advance polls. Here is an opportunity to approve of the principle that any qualified voter should have the right to vote at an advance poll, and I say at this time that if this bill is given second reading I will not ask that it go immediately to the committee of the whole but will move that it be referred to the committee on privileges and elections so that it may be examined and changed if necessary to meet the wishes of members generally at that time.
Mr. Speaker, I hope it will not seem to be lacking in tact if as a clinching argument in support of my bill I refer once again to the fact that in the election campaign preceding the election of June 10 there was in one constituency of this country a most excellent piece of election literature. I refer to a well set-up four page leaflet put out in the constituency of St. Paul's by the Progressive Conservative association. I am not surprised that the candidate supported in this four-page election leaflet won his election, and indeed it gives me pleasure once again to

refer to him with esteem as our first commoner. I will not refer to the other items which are mentioned in this excellent piece of literature distributed on your behalf, sir, but I should like to read this sentence which appears on page four:
If you are a commercial traveller, an airline pilot or stewardess, a railway employee or a sailor you may vote in the advance poll from 9 a.m. to 7 p.m., Thursday, Friday and Saturday, June 6, 7 and 8.
Then I ask the house to note the next sentence which is in parenthesis:
Sorry, but Liberal government regulations will not permit advance poll for vacationers.
Mr. Speaker, I hope that if you are a candidate, as I trust you will be, in the next election it will not be necessary for your campaign committee in the leaflet to be prepared at that time on your behalf to put in the same sentence changing the words to read: "Sorry, but Conservative government regulations will not permit advance poll for vacationers."
I admit this is bordering on something which perhaps should not be done, that is bringing Your Honour into a debate, but I tried to do it with somewhat the same sense of humour which Your Honour uses on occasions. In that spirit it has been a pleasure to quote that complaint against the former Liberal government for not having agreed to this change in the hope that this new House of Commons will look with favour on the principle of this bill.
I say again that though there may be details about which there could be argument, let us have those arguments in committee. The only question before us is whether or not the right to vote at advance polls should be limited to commercial travellers, fishermen, employees on railways, vessels, aircraft and so on and members of the Royal Canadian Mounted Police, or whether that right should be extended to any Canadian voter who finds that he or she will have to be away from home on election day for any reason whatsoever. After all, the right to vote is a privilege, and being away on holiday is not a crime for which any person should suffer any disability as far as his rights of citizenship are concerned. I feel that the right to vote at advance polls should be extended to all qualified voters, and it is on that basis that I present this bill to the house for second reading.


Mr. John Palleil (Peel):: Mr. Speaker, we listened with interest to the remarks of the hon. member for Winnipeg North Centre (Mr. Knowles) and to his suggestion that we should discuss the principle of extending the rights of voters to vote. It would seem to me that if
Canada Elections Act
we were to follow his argument to a logical conclusion we might say we all agree we should eliminate a cold or something of that sort, and according to that principle, that we should accept the first remedy offered. I suggest that that reasoning cannot very well be followed in dealing with a bill affecting so many people, introduced without the benefit of advice from those who are primarily concerned with the administration of the election act, and without the benefit of a much fuller discussion than would be possible during the time remaining in this session for the discussion of private members' bills.
I suggest to you, sir, that the hon. member who introduced this bill cannot have been too serious about what he actually did say, because he has introduced and put on the order paper so many other bills, and if one took seriously that he really means that this bill should be passed this session, then he would have put this bill on the order paper so that it could have come up the required number of times on private members' days and so that it could have had the full discussion it merits, instead of putting on the order paper a great many other bills which also must have full and proper discussion.
As to the principle of enlarging the franchise at the advance polls to all voters, I think that if the house will refer to the remarks of the Secretary of State (Mrs. Fair-clough) when her estimates were under discussion hon. members will see that she agrees with the principle that it should be enlarged.
The bill goes a little further than the hon. member would suggest it goes. He said the amendments are merely consequential to the general principle. One small amendment he advocates is advancing the date of official nomination from two to three weeks. That could effectively eliminate certain candidates from elections. There are many people who for personal, financial or other reasons cannot be persuaded to enter the public field until a very short period of time immediately prior to election day and the adoption of the hon. member's amendment would eliminate that group from public service. I do not suppose the hon. member who introduced the bill considered for one moment that that would be the effect of it nor did he entertain any thought of having it achieve that effect but that is a consideration of which we must take note of in this house.
He suggested we do not read the bill before dealing with it. I admit I read the bill rather casually but one provision I observed suggests that the advance poll is going to be counted before the results of the general voting day are known. If those results are known to individuals they could

Canada Elections Act
have a serious effect on the general vote and not necessarily a proper one. It would be something like running an advance poll in each polling subdivision, and to have the vote counted some days ahead of time more than one person would know the result as they must because each candidate would be entitled to have his agent present at the count. This would result in an advance indication of the feeling of the people who voted which would in some way have an effect on the people who came to vote on election day. We must look at this bill. We must not take the medicine that is prescribed without examining what we are taking. This course of action is what the hon. member for Winnipeg North Centre suggests should be followed.
If a proper bill amending the Canada Elections Act were introduced and referred to a commitee another subject that might be discussed is the cost of advance polls. I do not think cost is of primary importance among the considerations to be discussed in determining whether or not advance polls should be held but since we are dealing with the public purse these days it might be interesting to hon. members to appreciate that if this bill is passed and advance polls are created we would be dealing with an expenditure of approximately $250,000. This is a matter we have to take under advisement with regard to the principle in question but there are other things with which I think we can agree.
The hon. member for Winnipeg North Centre suggests that all people entitled to the franchise should be allowed to vote. He neglected to include in his remarks consideration [DOT] of the people who serve this country so well overseas in the foreign service. There is no provision in the bill for granting the right to vote to these people, the absentee votes such as he described in Saskatchewan and British Columbia. If the hon. member is sincere in saying he wants all Canadians who are entitled to vote to have a vote then this bill is singularly lacking in a provision for those who are serving this country in a civilian capacity outside the country. If we are going to deal with amendments to the Canada Elections Act then we should deal with them right across the board and not on a piecemeal basis.
There are several other things we might consider. In this short session we have experienced two by-elections and have sat looking at the seat of the hon. member to be wondering exactly what day he would appear. I think an amendment that would permit a member to take his seat immediately following the by-election subject to the formalities
[Mr. PaUett.l
being completed after he has taken his seat would be desirable. I came to this house by a by-election in 1954. My riding was without a representative for some months before that election was called and it was some weeks after the election before I was able to take my seat here. I see that the hon. mem-for the Yukon is not yet with us. That riding has been without representation for some months. I suggest this is another thing that could be considered in a general review of the Canada Elections Act.
I have heard it said that we might become more realistic about the expenses of elections and that we should do as they do in England and set out that no more than a certain amount of money may be spent in a riding in the conduct of an election campaign. It has also been suggested that we should make some provision in the laws of the country so that financial contributions to the political life of the country, and after all that is a vibrant part of the country, should receive some consideration in the form of being allowable expenses or something of that sort. Would it be desirable to establish a maximum of a certain amount on the money that can be spent in an election in any given riding? These are things that a review of the act might well disclose.
If we want to follow the principle enunciated by the hon. member for Winnipeg North Centre of enlarging the scope of the act to extend the privilege of voting to all those who are entitled to vote we would have to consider the taking of votes in hospitals and allowing invalids certain privileges at the polls. There are many things we would have to consider if we are to extend the franchise and I think every hon. member of this house would agree that the right to vote should be made available to every Canadian both inside or outside the country.
In my own law office I have had the experience of taking the vote of United States citizens who were in this country. They were voting in Canada in elections which were taking place in the United States. They were absentee voters. They had forms which they filled out and affidavits which were sworn, and they were allowed to vote in Canada or, for that matter, anywhere in the world, in elections taking place in the United States. I think it is a very desirable thing. It gave them a pride in their country. It gave them an opportunity to participate in the events that were taking place on that day.
We agree, Mr. Speaker, with the general idea of enlarging the franchise. That has been done, as the hon. member for Winnipeg North Centre pointed out, in many provinces.

I do not agree with the suggestion that we can deal with this bill, which 1 am sure the hon. member knew full well could not have a full discussion because so many other bills have been placed on the order paper, and which, his plea notwithstanding, I have read and found to be lacking in many respects. I suggest, Mr. Speaker, that the proper course for this house to follow is the course followed in connection with the bill introduced by the government, when with the advice of those people who are handling the election machinery, with the advice of the committee on privileges and elections-on which I had the honour to sit along with the hon. member for Winnipeg North Centre, which dealt very fully with this problem in 1955 and which at that time, as matters were then explained to the committee, decided not to endorse this proposal. It may be, of course, that times have changed enough so that the committee might feel that it is now opportune to advance it. These are matters that the house should know. It should know that on a reference of this matter to the committee that was the conclusion that was reached.
We have to consider all these things, Mr. Speaker, and not just one member's remarks that this is the principle, that this is the sugar-coated candy that will cure the ailments. Let us take this sugar coat off the candy and examine it. When we do we shall find that it is not a bill that effectively does what the member wants it to do or what he hopes it will do. It is not a bill that the members of this house, I am sure, feel will enlarge the franchise to the extent that every member here wishes it to do. If we are to extend the vote to everyone-and that is a desirable thing, Mr. Speaker-I suggest we have the legislation set out in language that we can support.


Mr. W. M. Howe (Wellinglon-Huron):: Mr. Speaker, I should like to say a few words on this bill to amend the Canada Elections Act. I cannot help but admire the hon. member for Winnipeg North Centre (Mr. Knowles) and his persistence in year after year bringing this question of advance polls to our attention. The question of voting, whether it be at advance polls or at any other poll that takes place, or on the regular polling day, is of great importance to us in Canada. It is a privilege that was won for us with great eloquence and persistence by our forefathers and is something of which we should be justly proud. I believe that every Canadian is proud of that right, the right to take a part in the affairs of his country, through the medium of the ballot, the medium of being allowed to vote on election day.
Canada Elections Act
When the question of advance polls was discussed on the estimates of the Secretary of State (Mrs. Fairclough) I made the statement that I was in favour of enlarging the scope of those who are permitted to vote at advance polls for the simple reason, Mr. Speaker, that we are living in changing times, in times when transportation facilities have made it possible for people to live many miles away from their work. We have construction workers who, through skills that they have and positions that they occupy, do not work in the same municipality-some of them do not work in the same province-in which they live. Many of them have to leave home early on Monday morning and do not return home until late on Friday evening. The result is that when election day comes along they have their wages to make and even though they are allowed a short time in which to cast their ballots, many times they have to leave home before the polls open. The result is that they are not allowed to exercise their franchise. In fact there are people who drive 80 to 90 miles a day to their work, day in and day out, with the result that it is sometimes a tremendous hardship for them to exercise that franchise which is so important to the people of Canada. Consideration should be given to this.
When the hon. member for Peel (Mr. Pallett) was speaking he said many things about the election act which would bear investigation and revision. No doubt this question of advance polls is one that should be given considerable attention. We do know that in 1951 the act was amended and no doubt then and, as the hon. member for Peel indicated, in 1955 consideration was given to the question. However, this bill which indicates that practically anybody who for any reason whatsoever is away from home on election day, or intends to be away from home on election day, can vote gives a little too much scope to people. It would allow them to vote at whatever time they wished. I sometimes feel that in the last election we had enough indication of what could happen in the way of impersonation and unfair election practices during election day. If this amendment were made to the Canada Elections Act we would have instead of one election day probably three or four election days. What would be the result? This day is, as I indicated, so important to the people of Canada.
It is the day in which the individual citizen can take his part and his share in welding and developing the principles and the rules of law that are so important to this country. The hon. member for Winnipeg North Centre indicated that there is a lot of discussion

Canada Elections Act
about the lack of interest on election day but if we had three or four election days on which practically anybody whose name was an the voter's list could vote I think the importance of election day would certainly be lessened. People would say, "well, I can vote on Thursday, Friday or Saturday of the week before." The result would be that more people would say, "Well, what is the use? It is not important." They would not bother to vote.
I think election day is too important from the point of view of Canada's welfare and history to alter the present situation too much and widen the scope to the extent that the bill before us does. If we are going to have several election days then, as the hon. member for Peel indicated, we would have a duplication of the services that are necessary on election day. Instead of having a few advance polls we would have many, with all the officers necessary to control those polls, and the result would be that expenses would mount and the cost to the country would be a great deal more than it is now. Goodness knows, we hear enough now about the tremendous cost of elections, and if we were to provide for additional days of voting at advance polls I think it would add tremendously to the cost of elections.
As I indicated, I believe that something should be done to widen the scope in order to make it possible for more people to vote who have to work away from home on election day. But I do not believe that people who want to go hunting or fishing on election day should be allowed to go to an advance poll a few days before, sign an affidavit and vote. Therefore, Mr. Speaker, I cannot support the bill.


Mr. C. A. Cathers (York North):: Mr. Speaker, in rising to speak on the bill may I say that I am very interested in it because there are some phases of it with respect to which I think the hon. member for Winnipeg North Centre (Mr. Knowles) should be commended. However, I also think his approach to the bill is piecemeal and because I had so many experiences in the last election I think the whole election act should be given intensive study and properly revised. In my own riding we had one advance poll and some people who wished to vote at that poll had to make a round trip of 120 miles. I do not think any voter should be asked to do that. I made inquiries from the returning officer as to why there could not be more advance polls located in the different municipalities and he gave me the answer that in the previous election only a certain number had voted. If the establishment of an advance poll requires a 
certain number of people I can readily understand why more were not established in view of the distance that people have to travel in rural areas.
This is only one point where I think the act should be revised. There is also the method of enumeration. In the towns two enumerators go from door to door making their enumeration of the people who will be eligible to vote but in the rural areas only one enumerator is used. The question in my mind is why that is so. I think there should be some revision of the method of enumeration because the costs are terrific.
There is another feature which is very costly and which I fail to understand. The urban voter is provided with a complete list of names of all those eligible to vote together with the place at which he is to vote although the place to vote is usually put in such an obscure corner and in such small print that he never realizes where the polling station is and consequently is at a loss to' know where to vote. But why does the rural voter not get the same treatment? He at least would be able to know that his name was on the list. Another proof that the election act should be overhauled-


Mr. Speaker:: I am sure the hon. member will not mind my recalling his attention to the principle of the bill. Perhaps I allowed the hon. member for Peel (Mr. Pallett) a little too much latitude in discussing the advisability of other amendments to the election act. As I understand the bill before us, it relates precisely to one provision of the act, the provision for advance polls, and it seems to me that the principle under discussion is that of advance polls. If I am in error about that I can be corrected, but subject to that correction it seems to me it is not in order to discuss other desirable amendments to the election act on second reading of the bill now before us.


Cecil A. (Tiny) Cathers: Mr. Speaker, I was just trying to point out that this is only one part of the job that should be done.


Stanley Howard Knowles: Is
that any reason for not doing this job?


Cecil A. (Tiny) Cathers: I would answer that in this way. As I said earlier, it is only doing a piece of a job and there is great urgency to do the whole job. I also agree with one of the former speakers that this is not the proper way to do the job that the hon. member for Winnipeg North Centre is endeavouring to do.


Stanley Howard Knowles: Will
the hon. member permit a question? Does he realize that if the bill had suggested three or four changes in the election act hon. members from his party would have stood up and said

that they agreed with one or the other but could not vote for the bill because they did not agree with all the changes?


Mr. Hodgson:: How do you know?


Stanley Howard Knowles: Because I have been here for some time.


Cecil A. (Tiny) Cathers: That may be so. As a new member, I do not know what approach members on this side of the house would have made to such a bill, but I feel that the present bill is not doing the job it should be doing. If advance polls are provided as outlined in the bill I think there will be more discrepancies such as occurred in your own riding, Mr. Speaker, in the last election and also in other ridings, I believe. In my opinion the hon. member has drafted his bill in such a loose way as to provide an opportunity for dishonest practices to creep in. I should like to see some way found to have a compulsory vote. I believe they have tried this in Australia and it has worked fairly successfully. Such a plan might eliminate some of the difficulties we have had in previous elections.
In a modern country such as this every child is registered for the baby bonus, every worker is registered for unemployment insurance or for old age pensions so, in effect, we are really given a number. Although I do not like the idea of stamping everyone with a number, the presentation of a registration card such as people carried during the last war might be sufficient to qualify them to vote at any place in the country. I hesitate to criticize this bill presented by the hon. member for Winnipeg North Centre, who has set himself up as, and possibly is, quite an authority on the rules of the house. I must say that the hon. member has been quite successful in the elections. I think I see in his bill the same lack of consistency which he has displayed in the house on many occasions during this session. He has criticized the government for delay in getting things done, and at the same time he has asked more questions and presented more bills which are of no consequence or of no immediate importance, than any other member in the house.
Now, the extension of the advance poll which the hon. member is suggesting has a good deal of merit. However, as has been suggested, I feel that a great deal more thought should be given to it, and to these other factors which I have endeavoured to outline. The advance poll is merely a small detail in a large project. I would strongly urge that during the next session, if there is no election as the hon. member for Winnipeg North Centre has proclaimed, we should
Interim, Supply
give this question proper study and consideration because I do not believe dealing with one point covers the subject in an adequate manner.


Mr. C. A. Milligan (Prince Edward-Len-nox):: Mr. Speaker, I welcome the opportunity of making a few remarks in connection with this bill. I have listened with much interest to the comments on the bill, and I should like to commend the hon. member for Winnipeg North Centre (Mr. Knowles) for his foresight in bringing this bill before the house and also upon his determination to do something about this situation. As the hon. member has said, he has brought this bill before the house on three former occasions but no action has been taken. I think the former government was a little lax in not doing something about the matter before now.
Probably I am a little more sympathetic to this cause than some other members because on one occasion I was deprived of my vote, not because I was on holiday but because I was absent on business. I find that has happened on a number of occasions. In my own riding during the last election there was considerable criticism because some people could not vote at the advance poll as they did not qualify. I feel something should be done about it because it is a privilege and everybody should have the right to vote. I cannot say I am going to support this bill because I do not think it goes quite far enough. I believe the subject should be given considerable study, and when the matter comes before the Secretary of State (Mrs. Fairclough) some action should be taken.


Mr. Speaker:: Order. The hour for consideration of private and public bills having expired, the house will revert to the business which was interrupted at five o'clock.

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


Henri Courtemanche: It being six o'clock I do leave the chair.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Thomas Speakman Barnett: Mr. Chairman, when the discussion was interrupted at five o'clock I had been drawing to the attention of the committee the fact that Canadian Pacific Steamships not so long ago had withdrawn


Erhart Regier: Mr. Chairman, I should like to express a few thoughts before this resolution is carried. One of them has to do with the words the hon. minister used in making his announcement this afternoon when he explained to the house that he had registered a vigorous protest against the United States limitations on the import of oil to that country from Canada. I note, and I think all of us do, that this is not the first time in recent years that the United States government has placed limitations on the import of Canadian products, and the present Minister of Finance when he was in opposition listed these instances for us on July 14, 1955 where, according to page 6130 of Hansard, he said:
In 1952 it took the form of restrictions on dairy imports from Canada; in 1953, more restrictions on dairy imports; in 1954, quotas on imports of Canadian oats b.arley and rye; and in 1955, steps to curtail imports on crude oil from Canada, and hardboard, and the issue there is still in the balance.
We have more recently had warning that there may be curtailment of Canadian exports of lead and zinc to the United States. This process has been going on for some time now and may become much more serious in the years ahead, and I feel that careful consideration by this committee of exactly what the

Interim Supply
minister meant when he spoke of a vigorous protest is very warranted. The former minister of trade and commerce made several replies as to what he was doing with regard to the situation. On July 14, 1955, in reply to the present Minister of Finance, Mr. Howe said on page 6166:
Our representations have been made, and we are hopeful that there will be no change in the tariff on hardboard.
These words have a familiar ring when we think of the words of the Minister of Finance this afternoon. Then, on page 5621 on July 4, 1955, the present Minister of Finance gave some indication that he was not satisfied with the type of reply he was receiving, and he said:
Mr. Speaker, I should like to ask the Minister of Trade and Commerce what action the government proposes to take in view of the latest United States steps to exclude Canadian rye.
It is obvious that the present Minister of Finance was expecting the government of the day to inform the house as to what action it was intending to take. That is precisely what the Canadian people are now asking him to do. On another occasion the former minister of trade and commerce, Mr. C. D. Howe, made this statement as recorded in Hansard of December 14, 1953 at page 862:
It has been the hope of the Canadian government that the United States government would in its own interest and in the interest of the free world decide not to impose any further restrictions on imports.
This was over four years ago, Mr. Chairman, but it seems by now to be obvious to all of us that the hopes which the Right Hon. C. D. Howe then entertained have not been borne out by the facts, because since then, as I mentioned previously, there have been limitations placed on the export of various Canadian products. As recorded on page 277 of Hansard of November 24, 1953, the hon. member for Middlesex East asked the government this:
What about suggesting to the United States that they honour their signature to the Geneva and subsequent agreements? ... Is the policy of the government again to be too little and too late?
We are now, in the light of our serious marketing difficulties, asking the hon. member for Eglinton, now that he is Minister of Finance and the man responsible, whether he is going to be responsible for a government policy which is going to do too little and be too late.
When I think of the nature of his reply this afternoon I cannot resist reading back to him something he had to say about another government some time ago on March 18, 1954, at which time the government of

the day was not very clear in stating its intentions to parliament. He said on that occasion, as recorded at page 3130 of Hansard:
The minister's answers were evasions; but the time for evasion has passed, the time for a statement of policy from the government has come-
I feel very keenly that simply registering a vigorous protest is not enough. I am not blaming the government of the United States for following the policies it is following. It has to listen to the voice of the people. It also has elections which it must face and the United States government, unless there are more powerful reasons for not doing so, will pay attention to the lobbyists in that country, will pay attention to the voters it has to face at election time. In fact some of the actions of the United States government which at times have not been very helpful to Canadian producers are not to be condemned at all. As the hon. member for Acadia pointed out so well this afternoon, and as he has pointed out on other occasions, the United States government at least has found a way of making surpluses available to those people in the world who require those things which that country has in surplus. The United States government is taking the action it has taken because of the weakness of the Canadian government both past and present.
If the Canadian government were able to convince the United States government that its vigorous protests were something more than mere words then the government of that country would consider the consequences. As it is the United States government does not have to pay any attention to us. It knows we will only continue to make vigorous protests. We will make representations, as the former minister of trade and commerce used to say, and we will let it go at that and our people are bound to suffer the hardship of unemployment that results when we lose markets.
The Canadian government has it within in its power to make the United States government pay attention to what it says. We have south of the border a customer that must have our asbestos, nickel and cobalt and that for defence purposes requires air fields in Canada. The United States requires various other concessions and certainly it needs our co-operation. The hon. member for Vancouver East pointed out this afternoon that one way in which the government could make a vigorous protest that would have some meaning would be to put severe limitations on the importation into Canada of United States refined petroleum products. I believe that even today we are importing more petroleum products than we are exporting and if I am not mistaken a very large portion comes to us

from the United States. This is one way in which we could give the United States a very direct answer.
The other matter I wish to take up deals with nuclear bombs in the air over Canadian territory. I understood that the Minister of National Defence was going to answer the question I asked the other day of the acting minister. As yet I have not had an adequate answer to this problem which is of concern to the people of Canada. I should like to know if the government of the United States has asked the permission of the Canadian government to carry nuclear weapons across our territory and, if so, has our Canadian government given such permission? If it has given such permission what safety measures are there and what assurance have the Canadian people that a horrible accident will not take place? There can be no "maybe" in this matter. We simply cannot afford to have either a hydrogen or atomic bomb or any other nuclear weapon accidentally fall on any of our Canadian towns or cities. I understand from a fairly reliable authority that regardless of the precautions that may be taken the danger of accident exists and I feel the government owes the Canadian people an assurance in this respect.
I was very pleased to hear the announcement made this afternoon by the Secretary of State for External Affairs that we are giving some aid to Ceylon. In that connection I should like to quote again the remarks of the present Minister of Finance when he was in opposition on November 18, 1953, at page 139 of Hansard. Dealing with the subject of aid to the underdeveloped nations of the world the hon. member for Eglinton said there are areas in the world today where people are hungry and he went on to quote Mr. Trygve Lie who is supposed to have said:
There is no fact In the world, in terms of humanity and in terms of politics, which is more important than this:	The vast majority of the
people of the world live in poverty and misery and they know it and they don't like it. Most human beings are hungry today most of the time; more than half the people in the world are illiterate; half of the world population is constantly ill, and expected to die before the age of 35.
The hon. member for Eglinton then went on at some length to impress upon the government the urgent need to supply such countries as India, Pakistan and Ceylon with some of their basic needs and he referred specifically to the large supply of surplus wheat we have. As reported at page 140 of Hansard of that date he went on to say:
We should go forward and say, "We are going to help you; we are going to help to feed you, and we are going to do it in a way that will strike the imagination of the eastern world, we hope of the entire world."
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Unfortunately for the poor people of Ceylon there has been presented to us a splendid chance for the Minister of Finance to show the people of Canada that he meant what he said on this matter back in 1953. To send just medicine and take other such measures in terms of assisting Ceylon is unworthy of the wealth of this nation. The government proposes sending merely one, two or three airplanes loaded with supplies for 300,000 homeless refugees. I should like to recommend that we send a shipload of lumber, lumber which is in excess supply on the west coast, in order to build some homes for these 300,000 refugees or homeless people and that we offer to the government of Ceylon, let us say, one million bushels of wheat of which we have so many millions of bushels in excess supply. Ceylon is a sister nation of the commonwealth, a democracy, a new nation. And Ceylon has a fairly powerful communist party. Let us not again sit back with a policy of too little and too late and wait until Soviet Russia has made an offer to the people of Ceylon.
We could make the offer this very evening that if they could use it we will supply them with enough lumber to build their houses and with enough wheat to feed those people until they are able to plant those fields again and raise their own food. It would help us in providing employment for all our people on the west coast and in other lumbering areas. It would help Canadian agriculture; it would help us in our ideological battle against communism.
However, I do not think we should be making the offer because of those reasons and they are valid reasons in themselves. It is only right that we who have more than we need should share with those who have met with this disaster. For this reason and this reason alone we should make the offer and I appeal to the government to make such an offer to the government of Ceylon before another 24 hours roll by. Let it for once be a democracy that is ahead of the game in this ideological war.


Daniel (Dan) McIvor: Mr. Chairman, I am going to make the shortest speech in this debate. I would have been very happy if I could congratulate the Minister of Finance at this time on having included in his supply bill increased pensions for retired civil servants.


Mr. Nicholson:: Mr. Chairman, this morning I intended to ask the Secretary of State for External Affairs a question regarding the decision made by the government to aid Ceylon. The Secretary of State for External Affairs made a statement before I had a chance to ask him the question but, like the hon. member for Burnaby-Coquitlam, I was very disappointed that the national emergency

Interim Supply
in Ceylon should have been treated as it was this morning. I was sorry that the new Secretary of State for External Affairs was not able to announce that on hearing of this calamity he immediately cabled the prime minister of Ceylon offering assistance on behalf of the Canadian people. I feel very strongly about this question because I, along with 12 other Canadians, was the guest of the government of Ceylon a few weeks ago. At this point I should like to thank the hon. members of my own party and the Canadian Branch of the Commonwealth Parliamentary Association for making it possible for the Canadian delegation to attend the first commonwealth parliamentary conference that has ever been held in Asia. Three countries acted as hosts: Ceylon, Pakistan and India, and about 100 delegates from all parts of the commonwealth enjoyed the wonderful hospitality extended to us by our hosts in this important part of the world.
Naturally, on Christmas day, when I heard that Ceylon was experiencing the most serious floods that they had ever had in the 2,500 years of recorded history of that very beautiful island, I hoped that Canada would rise to the occasion in a generous way. The first day's reports indicated that 94 people had lost their lives. The next day the total was up to 130 and the last report I saw indicated that 288 had lost their lives and about half as many people as we have in the province of Saskatchewan are homeless, having lost their worldly possessions and their future is uncertain because of those terrible floods. The neighbouring countries have responded very generously, and I am glad that Canada has done something. But to draw from the defence stores medical supplies and foods in a crisis of this sort does not really represent the feelings of the majority of the Canadian people.
I share the view of the hon. member for Burnaby-Coquitlam that the Minister of Finance, who expressed those very generous sentiments after he had attended a commonwealth parliamentary conference and got first-hand information regarding conditions in some parts of the commonwealth, would want to review the statement made by his colleague this morning and to have something more generous placed on the record tomorrow.
While I am on my feet I should like to take a few moments to report on the part that Canada is playing in this part of the world. In Ceylon we were told of the work that has been done in the co-operative movement by Canadians who received their training at St. Francis Xavier in Nova Scotia. There are six very important co-op centres that have been set up as a result of Canadian contributions under the Colombo plan. We

heard a good deal of Mr. Gus. McDonald, who received his training at St. Francis Xavier. Although it is six or seven years since Mr. McDonald was there, for the next 25 years his name is going to be a name that will be highly regarded. When they have a difficult problem in the vegetable co-ops, for example, one of the members says: "Well, now, if Mr. McDonald was here he would suggest that we approach this problem in this way. He would not approve of the suggestions that have been made by one of the members," and whoever can express the considered opinion of what Mr. McDonald would do in a given situation carries a good deal of influence.
Naturally, we were pleased to hear of the part that the Canadian homemakers and women's institutes have played in improving the standard of living of their sister women in Ceylon. Lady Coomer Aswamy, the wife of the high commissioner designate from Ceylon to Canada, has been very active in organizing the country women of Ceylon. We saw her report and noted with some pride that Canada was right at the top of the list of contributors and had made a more generous contribution to the work of keeping the country women of Ceylon than rich countries such as the United States and Great Britain. I am sure that during the lifetime of all the people in Ceylon the fact that Canadian women who have never been to Ceylon have been willing to make investments in order that there might be nursery education, health centres, and classes in home management to make life a little more tolerable for the people of that area, will be greatly appreciated.
We did not see Professor Hardy, a very distinguished professor, from the University of Saskatchewan. He has been in Ceylon now for several years under F.A.O. When I learned that Canada contributes a little over two cents per person per year to the work of F.A.O. I realized that Professor Hardy has been able to go out there and spend six years to help introduce new methods of cultivation in that area. I feel that Canadians generally should have the opportunity to know more of the work that is being done by some of our Canadians who go out under schemes such as W.H.O. and F.A.O. and other schemes promoted by specialized agencies of the United Nations.
' I realize that while we have so many unsolved problems in Canada, governments do receive criticism for spending any money outside the country; but when one realizes that for two cents per person per year a man with Professor Hardy's outlook on life, his background-he has been president of

the trustees association of Saskatchewan; he was an outstanding rugby player when he was much younger than he is now-, with all his vast experience, can go to that part of the world and start life over again when he had an assured future in the province among his friends, is something for which Canadians have reason to be proud.
In Pakistan we had the good fortune to meet some of the Canadians who are working on the Warsak power project. Again, we were proud of the fact that these young engineers had gone out there with their wives and children in order to provide power and irrigation projects for the people in that area. We also met a group of engineers in Pakistan who had spent some months in Canada under the Colombo plan studying the operations of the Canadian National and Canadian Pacific railways. While they naturally appreciated the know-how they were able to obtain from their study of our railways, the thing I remember most is the tribute they paid to the rank and file of the Canadian people. They said they could not get over the fact that when they sat down in a restaurant in Winnipeg, Calgary, Vancouver, Moncton or wherever it might be, Canadians, recognizing that they were strangers, came to their table and said, "We see you are strangers. Where is your home and what are you doing here?" Before they knew what had happened they had formed new friends and Canadian people had taken them to their homes.
It does not require a great deal of effort to take a person from another country into your home once in one's lifetime but it does mean a great deal to people who are in a strange country and away from their friends to find that they are accepted, given a chance to meet our people and to see something of home life in Canada by visiting the homes of complete strangers. Naturally we were quite thrilled to have this tribute paid to the rank and file of Canadians. These engineers did not remember any names and we were not asked to bring messages to any people who had entertained them but they were greatly impressed by the generosity of complete strangers who did not want anything from them but merely wanted their stay to be as pleasant as possible.
Naturally we spent a major part of our time in India where the commonwealth parliamentary association met for the first time in the capital of that country. This is a very important part of the world. One cannot realize the problems that exist without actually going there. We had read about these countries during our school days, but it is hard for us to realize, for example, that a million babies are born every month and that
Interim Supply
in sixteen months time as many babies are born in India as the total population of Canada.
India is embarking on a program to provide education for all children between the ages of 6 and 14. How many children are there in this age group? There are over 60 million, nearly four times as many as the entire population of Canada. They are going to have a host of problems for years to come. I think it was two weeks ago yesterday that some of our delegates visited one of the villages where 100 children met in one school, half of them in the morning and half of them in the afternoon. In this school there are no doors, windows or floors. The children sit on sacks on the ground with their legs crossed and only have a very small blackboard, but in many of these villages the children are receiving an education for the first time in the history of the country.
In one of the schools the teacher explained that the school was being conducted on the parliamentary basis. They had a prime minister and ministers of agriculture, education and health. We asked to meet the prime minister. A little lad twelve years of age came to the side of the school where we stood and explained that it was his duty to see that his colleagues discharged their respective responsibilities. We asked to see the minister of health. He had to see that the children had their faces and hands washed before they came to school. We then asked to see the minister of education. She was the most beautiful minister of education I have ever seen, with jet black eyes and braids down her back. She was only ten years old but she was emphasizing the importance of having good books in the school, of having the blackboard cleaned every morning before school started and seeing that the school was as tidy and the children as orderly as possible. I am sure that in 10 or 15 years time these children, who have only known what school is like for two years, are going to be taking a very important part in the life of that country.
Two days previously we had gone to Agra to the Taj Mahal. Hundreds of years ago 20,000 people worked for nearly 20 years to construct one of the most beautiful buildings I have seen. It is truly one of the seven wonders of the world. The people who worked on the project travelled miles from their peasant homes and worked long hours. When they finished they did have one of the most beautiful buildings in the world but I am sure that the peasants of today who see their children having the chance to go to school are getting a great deal more satisfaction out of the achievements of

Interim Supply
modern India than their great grandfathers did years ago by participating in the building of this great structure.
In India and in China to the north important experiments are under way. Both countries are fighting the ancient enemies of mankind, ignorance, disease and poverty. China has adopted communist techniques and is following a totalitarian pattern but in India the people are determined to work out a solution of their problems by the parliamentary system and democratic methods. I think it is very important that those of us in more fortunate areas of the world should appreciate more fully the importance of the experiments in this part of the world. Since we pride ourselves on belonging to a commonwealth of nations concerned about the common good, I do not think we can indefinitely accept a situation where in a country like Canada we have an average income 40 or 50 times as high as the people of India. We accept the fact that a baby born in Canada can expect to live to be 65 or 70 but we have not accepted the responsibility of seeing that the know-how that has made it possible to extend our life expectancy is made available to other countries. The life expectancy in some of these areas in Asia is less than half what it is in Canada. Hollywood has been successful in conveying the impression to Asia and Africa that this is a fairyland and that on this side of the Atlantic we have very high standards of living. Actually the standards of living are not as high as the people who see Hollywood pictures conclude but the fact is that our health records and living standards are very high. We place second to the United States, being higher than Great Britain, Australia and New Zealand, and I think a contribution of two cents per person per year to F.A.O. is not good enough in a country as rich as Canada.
The hon. member for Lanark, the leader of our delegation, the hon. member for Swift Current-Maple Creek and I had the pleasure to be present in Bombay when the first shipment of Canadian wheat was turned over to India. The hon. member for Swift Current-Maple Creek made a few brief remarks after the Canadian trade commissioner had spoken. Perhaps the Canadian people might appreciate how serious famine conditions are in that part of the world this year if they realized that rice, the staple food, cannot be used in Pakistan if more than 25 people are together at any one gathering. Rice is being rationed in parts of India. When you consider the very large supplies of wheat we have available in Canada, and the fact that Canadian wheat is prized very highly because it blends well with

wheat in that part of the world, then you realize that our most recent contribution of $7 million worth of wheat is going to create a great deal of good will. It is going to make it possible for children to live through this winter, when death would have been the alternative.
Really, this $7 million does not put a great strain on Canadian resources. I understand that is less than we spend in two days on our defence program. However, there is a limit to what 16 million people can do towards solving the problem of 360 million in India, 80 million in Pakistan and 8 million in Ceylon. I believe we could be more generous than the statement made by the Secretary of State for External Affairs this morning would indicate in a situation where serious flood conditions have removed the life accumulations of 400,000 or 500,000 people and taken another large group to an early death. I think we could continue to participate more generously in supplying personnel to these countries.
In Bombay we met a young Canadian engineer who had only been in India for two months working on the atomic energy reactor. I was somewhat surprised to find that this young engineer said before he was in India for a week he decided he should know more about the country and its background. He decided a good book to start with would be Ghandi's autobiography. He had just finished reading over 1,000 pages and was greatly impressed by the contribution that Ghandi had made to India and to the world. Believe me, the people in India are greatly impressed by the fact that a young Canadian engineer, who has seen a great deal of the world and is not going to be in India for the rest of his life, settles down within two weeks of his arrival to try to understand more about the country and more about the people.
My last words before I sit down are to the effect that I believe we must find ways and means in the future of making it possible for more members of parliament to visit other parts of the commonwealth. I understand that since the last election two ministers have been around the world in a government plane. The former minister of national health and welfare went around the world about a year ago. He took some press correspondents with him, and I do not criticize that. I think the correspondents for Canadian newspapers should get a chance to see the world. We are living now in a very small world. I think it is unfortunate that of the 13 Canadians who went as delegates, not one had been outside Canada before on any mission of this sort.
Since we have had a large measure of agreement in parliament here over the years on the importance of the Colombo plan, and

the role that Canada should play towards creating a better understanding, I think that when a government plane is flying all the way around the world it would not be unreasonable if the cabinet ministers concerned were to take a couple of private members from the government side and from the opposition and the Senate. We had two government members in our delegation, two members of the official opposition, one from the Social Credit and one from this party, and a member of the Senate. I believe a delegation of that size might reasonably be taken on these important trips to international meetings of the World Health Organization, the Food and Agriculture Organization, meetings of the Colombo plan, and so on.
As conditions in Canada become more difficult there is going to be more criticism about using funds outside of Canada while we have so many unsolved problems in this country. I do not believe, in this critical period of the world's history, any country can wait until all domestic problems are solved before participating more actively in solving the problems of the commonwealth and of the whole world. I make a special plea, therefore, to the Minister of Finance, who had the good fortune to go to Africa when he was a private member, to use his good offices to see that when government planes are flying around the world at public expense consideration is given to having an all-party delegation go along so that the elected representatives of the people will be able to give first-hand information to their people back home regarding the importance of Canada participating in solving these complicated national and international problems.


The Deputy Chairman:: Shall the resolution carry?


George Carlyle Marler: Is the Minister of Finance going to answer the request for information which I made this morning?


Donald Methuen Fleming: The matter has been dealt with several times. I have indicated on several occasions the way in which that information would be given to the house in committee of supply as the estimates of each department are considered. I think that is the proper way to put the information before the house, so the minister concerned can, in each case, give all the information required by the committee.


George Carlyle Marler: This causes me to recall the days when I was minister of transport and the present Prime Minister used to ask questions about the internal operations of Canadian National railways. He used to refer constantly to the curtain of secrecy which
Ways and Means
surrounded the operations of Canadian National. I cannot help but think we are getting an actual iron curtain around this $64 million.


Donald Methuen Fleming: The hon. member does not think that at all.
Resolution reported and concurred in.



WAYS AND MEANS

[Stage Direction]
The house in committee of ways and means, Mr. Casselman in the chair.
["No,\nten o'clock, Mr. Chairman.\nProgress reported."]
Donald Methuen Fleming: That towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31,	1958, the sum of $272,372,511.08, be
granted out of the consolidated revenue fund of Canada, as set forth in the resolution concurred in this date in the committee of supply.
Resolution reported and concurred in.
Mr. Fleming thereupon moved for leave to introduce Bill No. 242, for granting to Her Majesty certain sums of money for the public service of the financial year ending March 31, 1958.
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the said bill be read a second time? Now?


Stanley Howard Knowles: By
leave.


Donald Methuen Fleming: the second reading of the bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Casselman in the chair.
Sections 1 to 9 inclusive agreed to.
['the second reading of the bill.']
Arza Clair Casselman: Shall the schedule carry?


Stanley Howard Knowles: Before the schedule carries may I ask the Minister of Finance if, in conformity with the statement made by one of the ministers this morning, it is intended to introduce further supplementary estimates at a later date?


Donald Methuen Fleming: Mr. Chairman, some time before the close of the present fiscal year there will, of course, have to be introduced further supplementary estimates. Precisely when they will be introduced I am not now in a position to say.


[Stage Direction]
Preamble agreed to.
Title agreed to.
Bill reported.
['Mr. Chairman, some time before the close of the present fiscal year there will, of course, have to be introduced further supplementary estimates. Precisely when they will be introduced I am not now in a position to say.']
Mr. Speaker:: When shall this bill be read
a third time? Now?

Supply-National Defence


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.

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



[Stage Direction]
Defence services-
240. To provide for the Canadian forces, the defence research board and other expenditures relating to defence, including costs incurred in the participation of the Canadian forces in the United Nations emergency force and contributions toward the military costs of the North Atlantic treaty organization; to authorize expenditures in the current year out of the amount hereby provided, not exceeding $130,000,000, under the provisions of section 3 of the Defence Appropriation Act, 1950, and to provide that, notwithstanding subsection (3) of that section, where equipment or supplies are transferred, the estimated present value thereof shall be credited to this vote instead of being paid into the special account mentioned in the said subsection (3), and when so credited may be expended for the purposes of the Canadian forces; and notwithstanding section 30 of the Financial Administration Act to authorize total commitments for the foregoing purposes of $3,338,164,131 regardless of the year in which such commitments will come in course of payment (of which it is estimated that $1,521,731,982 will come due for payment in future years), $1,669,450,149.
Arza Clair Casselman: Order. Department of National Defence, Vote 240. The item will be found on page 47 of the Blue Book, details on page 313. On Thursday, December 5, last, when this matter was last under discussion by the committee, general discussion had been completed and the committee was considering the details under the various headings set out on pages 313 to 315. Discussion had been concluded on the heading "Departmental Administration" and was proceeding on the heading "Inspection Services", page 315, when the committee rose. Has discussion under this heading been concluded? If so, discussion of the next heading commencing at page 318 is in order.


Mr. Henderson:: I do not think, Mr. Chairman, that we had completed this discussion. We were on inspection services and at that stage the minister rose to give a statement on certain savings which he had effected on various items and I was under the impression when we were drawing to a close on December 5 that the minister was to have a statement ready for the further discussion on the estimates with particular regard to those items on which such savings had been effected. I was wondering if the hon. minister would be prepared to open his discussion today on that basis.


George Randolph Pearkes: In answer to the question which was asked on this particular item, Mr. Chairman, I was requested to state how much had been spent during the fiscal year of 1956 to 1957 on inspection services.
The amount spent was $8,088,389 out of an estimate of $10,105,000. This year, out of an estimate of $9,649,000, it is estimated that there will be an expenditure of $8,217,733. Thus in the year 1956 to 1957, there was a saving or money unspent totalling $2,016,611. This year, having taken into consideration when the estimates were prepared and the saving or the unspent money of last year, it is estimated there will be a saving of $1,431,267. This estimate of the unspent money is due to the completion of much of the procurement program and, therefore, less money is required for the inspection services.


Arza Clair Casselman: Shall the item carry?


William James Henderson: Do you mean the item, Mr. Chairman, or the section of the item?


Arza Clair Casselman: The section. Any discussion on the heading "Navy". Royal Canadian naval reserve on page 325.


Lionel Chevrier: May I ask a question of the minister? What is the position with reference to the naval reserve; is it in the same position as the militia?


George Randolph Pearkes: The role of the naval reserves in Canada is to provide personnel to complete the shore and ship establishments in the event of an emergency. They would only have a secondary role as an aid to the civil power. It is anticipated that if an emergency arose many of the regular personnel of the shore establishments would at once complete the ships' complement. The ships at the present time are manned at approximately 70 per cent of their wartime complement and the rest of the personnel are on training courses and at various shore establishments. Naval reserves in the event of an emergency would then take over those shore establishments and help to complete the establishments' complement.


Lionel Chevrier: What I had in mind, Mr. Chairman, was this: some weeks ago the minister made a statement with reference to the curtailment of activities of the militia reserves in Canada, and I wonder whether the same appertained to the naval reserve.


George Randolph Pearkes: The naval reserves are kept at the establishment required to fulfil the function I have just mentioned.


Lionel Chevrier: There is no change?


George Randolph Pearkes: There is no change in the functions of the naval reserve.


Mr. Bourgel:: Is it the intention of the minister to ask tenders for two, three or four destroyer escorts this year, or only for two this year and two next year?


George Randolph Pearkes: Orders have been prepared for two replacement vessels, namely two destroyer escorts this year, and the long leads have been prepared for two more vessels which will probably be ordered a year hence.


Maurice Bourget: Was money included in this year's estimate for four destroyer escort vessels?


George Randolph Pearkes: No-two this year and the long leads for two more-two this year, and to get ready two more in the immediate future.


Lionel Chevrier: Mr. Chairman, may I ask the minister a question with reference to one of the naval ships which was built at considerable cost under the former administration, the H.M.C.S. Labrador, and which was equipped, in a special manner for defence in the northernmost parts of Canada. Was the transfer of the Labrador from the minister's department to the Department of Transport effected with his consent, and would the minister tell us why this ship, which to my mind, at least, appeared to be a naval vessel of a particular type for an area which was required to be patrolled by the navy, should have been transferred to what is a peacetime department?


George Randolph Pearkes: Yes, it was considered that the icebreaker, H.M.C.S. Labrador would be able to carry out more effective work under the Department of Transport than if it remained in the Royal Canadian Navy. There are other means of patrolling the northern waters and it was felt that more efficient and more general employment could be found for the Labrador under the Department of Transport.


Lionel Chevrier: I agree that it is probably the case that the Department of Transport would have a requirement and a need for additional icebreaking services as the Minister of Transport indicated to the house, but the point I am making is that the Labrador was equipped with special equipment for defence purposes. What is to become of that equipment which, I am sure, cannot be required for peacetime purposes and certainly cannot be required for icebreaking work in the St. Lawrence.


George Randolph Pearkes: The equipment which was on the Labrador and which will not be required
Supply-National Defence by the Department of Transport will be held in naval stores in case at some future time a further requirement for it arises.


Lester Bowles Pearson: Is it true that this equipment to which reference has been made is very expensive, very specialized and very valuable and intended for the important purpose of detecting underwater craft which might be in northern seas under the ice, and that there is no other similar equipment available in any other Canadian naval ship for use in those waters?


George Randolph Pearkes: No, I can assure the hon. gentleman that that is not correct.


William James Henderson: Aside from the question of the ship itself, I understand there was accommodation provided on the Labrador for the training of about 210 naval personnel under Arctic conditions. I should like to ask the minister how he is providing now for the training of personnel in the specialized conditions which exist in the Arctic.


George Randolph Pearkes: The naval personnel receive their training in the other vessels of the Royal Canadian Navy.


Lionel Chevrier: May I clear up a point with reference to the Labrador? I understood the minister to say a moment ago that much of the equipment was kept in naval stores and that it could be used for other purposes. However, my understanding is-and the minister will correct me if I am in error-that much of this equipment, indeed the larger part of it, is fixed to the ship, is part of the ship itself, and therefore is used and could be used for defence purposes in the far north. That being the case, what becomes of this valuable equipment, the cost of which runs, I am told, into millions of dollars?


George Randolph Pearkes: I wonder if the hon. gentleman could tell me the nature of the equipment to which he is referring. As far as I know, what naval equipment is not required by H.M.C.S. Labrador by the Department of Transport has been removed or is in the process now of being removed and placed in store.


Lester Bowles Pearson: Does the fact that it has been removed now and put into store mean that it was of no particular value when the Labrador was with the Royal Canadian Navy? And if it was of value, what is taking its place?


George Randolph Pearkes: I understand it was mainly communication equipment which was on the Labrador and which has been removed. There was no major armament on the Labrador when she was used as an icebreaker.


William James Henderson: Getting back to the question of personnel, what other Canadian ships
2824	HOUSE OF
Supply-National Defence could offer the same training in the Arctic for naval personnel as the Labrador could?


George Randolph Pearkes: The frigates and destroyers stationed on the Atlantic station.


Lionel Chevrier: What other naval ships are in Arctic waters?


George Randolph Pearkes: 1 do not think there are any Canadian ships in Arctic waters at the present time.


Lester Bowles Pearson: Mr. Chairman, does the minister know-perhaps he does not know offhand -whether there are United States naval vessels in Arctic waters.


George Randolph Pearkes: I cannot tell the hon. gentleman the disposition of the United States naval vessels.


Mr. Batten:: Mr. Chairman, I wonder if the minister would be in the position, either now or at any future time before the consideration of his estimates is complete, to give us some information about H.M.C.S. Caribou at Corner Brook, Newfoundland and say, if it is proposed to have this unit carry on, what accommodation for this unit will be provided in the Corner Brook armouries.


George Randolph Pearkes: That, I understand, is one of the reserve divisions of the Royal Canadian Navy and is stationed at Corner Brook. I am afraid I have not the information immediately available as to the type of accommodation it is using but I shall be very pleased to give the hon. member that information as soon as I have obtained it. I am told that the division is using the armoury which is located at Corner Brook at the present time.


Herman Maxwell Batten: Mr. Chairman, I think the minister is quite right in saying they are using the armouries at Corner Brook but I understand the accommodation provided for that unit is not at all satisfactory under the circumstances and my question related to the fact that there was some talk of more money being spent on the armoury to provide for. the unit accommodation more commensurate with the work they are trying to do.


George Randolph Pearkes: I thank the hon. member for his interest in this unit and I will have the question of the accommodation looked into.


John Whitney Pickersgill: While we are discussing Newfoundland I wonder if I could ask the minister what progress is being made with the armouries at St. John's. I understand a site was acquired and plans were in progress some time ago.


George Randolph Pearkes: That is an army armouries, is it not?


John Whitney Pickersgill: I beg the minister's
pardon.


George Randolph Pearkes: If so, it will be more convenient to answer it when we are dealing with the army.


Stanley Howard Knowles: Mr. Chairman, may I ask a question supplementary to the one asked by the hon. member for Algoma East. I appreciate the difficulty the minister is put in if he is asked about the disposition of the ships of another power such as those of the United States but if the question asked by the hon. member for Algoma East could be narrowed so that it reads, "Could we be told whether there are any United States naval ships in Canadian Arctic waters?" is that not a proper question to be answered in the Canadian House of Commons?


George Randolph Pearkes: I do not think there are at the present time any United States vessels in Canadian Arctic waters but I will have that checked and let the hon. gentleman know.


William James Henderson: Mr. Chairman, I wonder if the minister could tell us how much of a saving he effected in the navy and how much was actually spent for the year 1956-57?


George Randolph Pearkes: The estimates for the navy for 1956-57 were $325 million. Of that amount of money the actual expenditures were $326,684,471, an over-expenditure of $1,684,471. This year the estimate is for $272,798,000 of which it is expected at the present time to spend $271,821,800. That is an under-expenditure of $976,200.


Alexander Barrett Macdonald: Mr. Chairman, perhaps as this bureau covers the three forces under the department I might ask the minister whether or not the bureau of current affairs has been discontinued?


George Randolph Pearkes: The bureau of current affairs has been discontinued but that does not come under this item.


Alexander Barrett Macdonald: should like to ask the minister what saving was achieved by the discontinuance of that bureau. Perhaps he would like to give the answer at a later time. I would also ask why the department saw fit to discontinue that form of education, recreation and enlightenment through the services and on what date that service was cut off?


George Randolph Pearkes: Mr. Chairman, this item comes under departmental administration which has already been discussed. I do not have the actual officials here but speaking from memory I believe a saving of $300,000 was effected. The services carried out by the bureau of current affairs are now being

Supply-National Defence
carried out as they had been prior to the come in cash in some way or is it a book-Korean war by the officers of the respective keeping entry? In any case where does it services.	come from?


Arza Clair Casselman: Am I correct in assuming that we have now covered all the items with respect to the navy down to the heading "Army" on page 326?


Stanley Howard Knowles: Mr. Chairman, I should like to ask a question with regard to certain words which appear in the middle of page 326 just above the subheading "Army". I refer to the phrase:
Less-The estimated amount to be paid from the special account and the estimated credits from transfers of equipment charged to mutual aid.
Opposite that wording appears the figure $36,242,000. I note that there are similar entries in the details of the other services. I wonder if the minister could explain this novel bit of bookkeeping?


George Randolph Pearkes: A special account is set up when equipment is transferred to Mutual Aid and that is reflected in this item to which the hon. member is referring. That is the amount of the equipment which has been transferred from the navy to Mutual Aid.


Lester Bowles Pearson: Mr. Chairman, could the minister tell us on what basis the valuation of that equipment is made?


George Randolph Pearkes: I understand that there is a regular scale of values set up which has been agreed to by the various countries and we work to a definite formula. I have not the actual formula before me at the moment but there is a formula and a regular scale of valuation.


Lester Bowles Pearson: Did I understand the minister to say that that scale of values is agreed to with the government of the country receiving the mutual aid before it is charged to this special account?


George Randolph Pearkes: No, it is not agreed to by the country receiving it but any old equipment which is disposed of is set at a certain valuation which will cover the cost of packing and shipping that equipment. New equipment is passed to the receiving country through the Mutual Aid organization at cost.


Stanley Howard Knowles: Mr. Chairman, could the minister explain how this item appears as though it were a cash credit? As I look at this page of the estimates it would appear that we are called upon to lay out the sum of $309 million to cover certain items but actually we have to lay out only $272 million because we get this $36 million back. Does that $36 million


George Randolph Pearkes: This is crediting to the navy certain naval equipment which has been given to the NATO countries as mutual aid. You will see it reflected in the details on page 347, transfers to NATO countries of equipment from service stocks.


Arza Clair Casselman: Shall this section carry?


Some hon. Members:: Agreed.


Arza Clair Casselman: The next section starts with the heading "Army" at page 326. It would appear to run to page 334, and include the item of $444,467,000 at the top of the page. Is it satisfactory that the item be combined? Shall the item carry?


William James Henderson: Mr. Chairman, there is one aspect of the army that I should like to deal with at this time. Probably the minister can deal with it. Will the colleges operated by the services come under this item? I refer particularly to Royal Roads and the Royal Military College at Kingston. I understand the services are now in the position where an insufficient number of students with the high qualifications required are now applying in the ordinary way to enter these colleges and that more training could be conducted at these colleges than is being done at the present time. I think we might expand the entrance qualifications, not necessarily on the intellectual side, to include other groups of the services for admission as students to colleges such as the Royal Military College. I refer particularly to a group of applicants who might be included from the reserve forces of Canada. There are young men in those forces who might wish to continue their education and get it at the Royal Military College, at Royal Roads or at the other college. Has the minister given any consideration to expanding the groups who may enter those service colleges to include persons who are taking their reserve training at the present time?
There is one other point that I should like to mention and it has to do with the Royal Military College at Kingston. I hope the committee will forgive me for mentioning a local matter; but I believe the colleges are now in a position where they must compete with all other colleges of North America for their staff. Any college to have a good staff must compete in facilities, just as other colleges in Canada must do. It is not unusual for the colleges of Canada to be erecting more and larger buildings and providing more facilities for the staff to work in. We
2826	HOUSE OF
Supply-National Defence know that service colleges such as the Royal Military College have had their building programs restricted. I believe that if those programs are restricted we will not be able to compete and get as good professors, nor will we be in a position to provide an education for as many young Canadians. I must say that they do get a fine education at the Royal Military College. Will the minister tell us whether the buildings which were to be constructed, and which at the present time have been held up for one reason or another, will be constructed within the near future?


George Randolph Pearkes: I have noticed the hon. member's interest in the Royal Military College at Kingston and it is very much appreciated. The Royal Military College is administered by the army. Royal Roads is administered by the navy. The Royal Military College now has the maximum number of cadets that can be accommodated at the college. It receives not only first year cadets but third and fourth year cadets from colleges such as Royal Roads and the College Militaire. It is not the intention to extend the number of cadets being trained at the Royal Military College, as the supply of officers from the service colleges, and from the other means by which men can qualify for a commission, is meeting the full requirements of the Canadian army at the present time.
The hon. gentleman asked about buildings. There is a plan at the present time for a new library, which I believe is to include certain laboratories as well as lecture rooms. There has been some difficulty in completing the design of the building and it is hoped that construction of the building will start in the next financial year.


Mr. Deniset:: Have we reached the item "Canadian militia" or are we just getting to it?


Arza Clair Casselman: We are just coming to it.


Alexander Malcolm Nicholson: There is an item here for medical and dental consultants, $2,453,000. Can the minister give us a breakdown of this item and will he be good enough to say what progress is being made in eliminating the overlapping in the medical services of the navy, army and air force? I understand we are still maintaining three separate medical establishments for those services.


George Randolph Pearkes: Serious study is being carried out now as to the advisability of amalgamating several of the administrative services such as the medical services of the navy, the army and the air force. Progress is being made along that line. There are certain specialists who are now tri-service in nature


and, furthermore, in certain stations the medical staff of one service look after the medical and health requirements of the other services which are located at that particular station. For instance, at Esquimalt in British Columbia there is a hospital run by the navy. The navy medical personnel staff that hospital. Army personnel and air force personnel in the vicinity are sent to that navy hospital. We are taking every possible course open to us to eliminate any duplication in the services, but it is not an easy matter completely to integrate the three services and to have one medical service for all the three services, the navy, the army and the air force, but we are working in that direction.
Let me give the actual breakdown of the total of $2,453,000 which the hon. member is asking for. Hospitalization in the Department of Veterans Affairs hospitals-that is, for cases where there is no military hospital in the immediate	vicinity-$1,750,000;	for
civilian hospitalization of service personnel, $160,000; for employment of civilian doctors and nurses either at military hospitals or at other hospitals, $235,000; civilian dentists' fees, $143,000; medical services overseas for Canadian personnel who are serving abroad, $90,000, and other items $75,000.


Alexander Malcolm Nicholson: If I may return to the first subject the minister discussed, it seems to me it is probably 15 years ago that suggestions were first made that there was a good deal of additional costs and considerable waste of valuable personnel by maintaining medical establishments for the army, air force and navy. I would think that 12 years is a long time in which to settle the problem. Is there any better reason for maintaining separate establishments for medical personnel than for dental care? It is some years since we discontinued the provision of separate dental services for the army, navy and air force. At this time, when there is such a shortage of medical personnel in the country, it seems to me that we could effect quite a saving in personnel and dollars by having one medical service for all three services. Can the minister indicate how many more years it will likely be before any effective action may be taken?


George Randolph Pearkes: I am afraid I cannot be responsible for the past 12 years. I have felt, as the hon. member does, that there should be progress made toward integration of the three services. If the present government remains in power I hope that may be accomplished before the end of another 12 years.


John Whitney Pickersgill: Would the hon. gentleman answer my question about the plans for an armoury at St. John's?

Supply-National Defence


George Randolph Pearkes: I understand there is no item removal expenses and also the item for telein this estimate for an armoury at St. John's, phones and telegrams? Can he give us a Consideration is being given to the desirability break-down showing how the two companies of including an item in next year's estimates, fared?


John Whitney Pickersgill: It is correct, is it not, that a site has been acquired?


George Randolph Pearkes: I will have to have that
checked. I will let the hon. gentleman know.


Mr. Robichaud:: Can the minister advise the committee if any decision has been reached to provide armoury facilities for the New Brunswick North Shore Regiment in Bathurst?


George Randolph Pearkes: I will have the officials look into that and I will let the hon. member know.


Thomas Speakman Barnett: On page 333, somewhat below the point where the hon. member for Mackenzie was asking questions, there is an item "exhibits advertising, films, broadcasting and displays, $1,060,000." Would the minister explain the purpose of that vote? Has it to do entirely with the recruiting activities of the army or is this money for some other purpose?


George Randolph Pearkes: That item covers advertising for army recruiting purposes. I may say that is one of the items in which we have been able to effect some reduction. We were able to transfer money from that item in order to meet other expenses to which I referred in my opening remarks.


Thomas Speakman Barnett: The minister will realize that there are a good many pages listing various positions in the civil staff of the army. Is there any way, through an examination of the details of the estimates, by which one can ascertain which are civil service positions and which are prevailing rate positions?


George Randolph Pearkes: Both civil service and prevailing rate employees are included here and no particular break-down is shown.


Mr. Haidasz:: Can the minister tell the committee whether there is any truth in the rumour that the historic University avenue armouries in Toronto are to be abandoned?


George Randolph Pearkes: Representations have been made by a number of organizations recommending that the armoury site be abandoned and there have been an equal number of recommendations that it be retained. The matter is under very careful review. No decision has been made nor will one be made for some time.


Alexander Malcolm Nicholson: Again on page 333 there are two large items for travelling and removal expenses and telephones and telegrams. Does the minister have a break-down of the payments to the Canadian National and Canadian Pacific railways with respect to the item of $17 million odd for travelling and 96698-179


George Randolph Pearkes: I am having my officials look up the matter to see whether we have a break-down between the two railways. For Canadian National Railways the total was $2,988,507.16 and for Canadian Pacific $1,821,996.81.


Alexander Malcolm Nicholson: I gather that is for travelling. Has the minister a break-down of the item for telegrams? There is nearly $2 million for telephones and telegrams.


George Randolph Pearkes: We do not have a break-down of that figure.


William James Henderson: Can the minister tell us what proportion of the army construction program for the year 1957-58 was either deferred or not proceeded with?


George Randolph Pearkes: I had a review made of the construction program of the army because it seemed to me that we were constructing accommodation for a very high percentage of the regular personnel. We have what may be a peak load of regular army personnel in that we have some 49,000 officers and men in the service. The buildings which have been constructed are of very excellent quality and are of a permanent character likely to last 50 or 75 years. It seemed to me it might be advisable not to construct that type of building for all our regular army personnel and that it would be better to have a certain proportion of the regular forces living in what might be called more temporary buildings because it is hard to foresee the future and one would not want to have a lot of permanent buildings constructed in out of the way places. Generally speaking, we are providing permanent accommodation for approximately 70 per cent of the regular army.


William James Henderson: Just how much would this deferment or erasure amount to in dollars in so far as the construction program for 1957-58 is concerned?


George Randolph Pearkes: It is approximately $20
million. Some of that is deferred and may be deferred for a number of years. Some of it will certainly have to be proceeded with in the near future. I have had this review made. It is not quite completed yet, so I am not able to give a definite answer.


Frederick Samuel Zaplitny: On page 332 of the book of estimates there is a breakdown by occupations of various personnel. I notice that there are nine panel beaters. I wonder if

Supply-National Defence the minister could tell the committee just what a panel beater is and what his functions are?


George Randolph Pearkes: He is a man employed in the maintenance of automobiles, lorries and so forth and his duties are connected with the panelling or framework of the automobile. He is really an automobile repair mechanic.


Frederick Samuel Zaplitny: Is that what is ordinarily known as a body repair man?


George Randolph Pearkes: I think that is the term used in civilian life.


William James Henderson: I wonder if the minister would make a statement concerning page 334 as to the amounts in the fiscal year 1956-57 which may not have been spent and what he expects might be underspent or overspent in this year?


George Randolph Pearkes: Referring to the army estimates for 1956-57, the estimate	was
$384,822,000 and the amount spent was $388,673,195. In other words there was an over-expenditure of $3,851,195. In this year the estimate was $400,110,000, and it is estimated that $390,359,000 will be spent, which will be a saving of $9,751,000.


William James Henderson: The $20 million of construction has been taken into consideration?


George Randolph Pearkes: Yes, it is all taken into consideration.


William James Henderson: That has been deferred, so actually there would have been $11 million more spent if the construction program had been carried out this year than was estimated?


George Randolph Pearkes: I have the answer now concerning the St. John's Newfoundland armoury. The land was bought on August 28, 1957.


Arza Clair Casselman: Shall that section carry?


Stanley Howard Knowles: Mr. Chairman, there is a question of a general nature I should like to put to the minister. Perhaps I could indicate its terms now and he could consider and answer it tomorrow when we resume consideration of these estimates, as I believe is the intention.
When the minister introduced his estimates on December 5 he had something to say about the savings that had been effected in some branches of his department which made it possible to meet increased salaries and other items without having to ask for a supplementary estimate. I feel it is fair to say that the minister spoke as though further savings could be counted on. I have in mind

in particular what he said as recorded on page 1903 of Hansard for December 5. I took it from the tenor of his remarks that one might look for a reduction in defence expenditures in the next fiscal year.
Since that time, however, there has been the NATO conference in Paris. We are conscious of some of the things the Prime Minister said when he came back from that conference. He referred to the possibility, under certain conditions, of defence expenditures having to be increased. He used words such as "colossal" and "gigantic". I wonder whether the Minister of National Defence has any comment to make as to which way we are going. Are we moving in the direction of reduced defence expenditures as I thought was forecast by the minister in the opening remarks on December 5, or are we moving in the direction of more gigantic expenditures as the Prime Minister indicated was a matter of apprehension when he spoke on December 21? Perhaps the minister could think about that overnight and give us a statement in the morning.


George Randolph Pearkes: I could hardly be expected to discuss next year's estimates while we are still discussing this year's. I do not believe I could be expected to give an answer concerning the size of the estimates for next year. The Prime Minister indicated that there might be colossal expenditures unless certain steps were taken by the NATO countries as a whole. I hope, and I am sure the hon. member hopes as does every hon. member, that it will be possible to relieve the terrific burden which all countries are feeling so far as defence expenditures are concerned. But until there is some comprehensive disarmament plan worked out it would be foolish for one country to start paring down materially on expenditures on national defence.


Arza Clair Casselman: Shall this portion carry?


Stanley Howard Knowles: It
is ten o'clock.


Arza Clair Casselman: Shall this portion carry?


Stanley Howard Knowles: No,
ten o'clock, Mr. Chairman.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: What is the business for tomorrow?


Howard Charles Green: Tomorrow we shall continue with the estimates of the Department of

National Defence; then the estimates of the Department of Finance, and then those of citizenship and immigration.


Lionel Chevrier: May I ask whether the house leader can give any indication of the business for next week?


Howard Charles Green: Thus far I can only say the business on Monday. It will be a private members' day.


Stanley Howard Knowles: Mr. Speaker, may I ask the house leader a question? I wonder if the government is giving any consideration to the suggestion that was made, I believe by the hon. member for Peace River, at the time when the house passed the motion extending our sitting hours to the six-day week on which we are now operating. I believe the suggestion was made across the way at that time that if we did not finish the business of the session before the Christmas recess this matter might be reconsidered on our return in January. I wonder whether any consideration has been given to more normal working hours, if not for the benefit of the members at least for the benefit of the staff of the House of Commons?


Howard Charles Green: Well, Mr. Speaker, the house decided about these hours when the vote was
Business of the House
taken some weeks ago. It must be remembered that we are only considering the estimates for the current fiscal year which were brought in by the former government. There has already been a great deal of time spent on them.
In addition to finishing up these estimates there remain a very few governmental measures and I feel it would be the wish of the vast majority of the members of the house to get the work of the session completed rather than letting it drag on for weeks and weeks and weeks. After all, there is the work of the new session to be done. The fiscal year will be ending in less than three months and there are new estimates under way. It should be possible to have them dealt with before much more time has expired and I really doubt whether there are very many members of this house who would like to see this present session just dawdling along without any consideration being given to doing the business of the country in a prompt and efficient manner.


Some hon. Members:: Hear, hear.


[Stage Direction]
It being four minutes after ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on December 2, 1957.
2830
[Stage Direction]
Questions

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

Mr. Knowles (Winnipeg: North Centre):
1.	What are the names and addresses of the Canadian representatives looking after Canadian interests in connection with the Ogdensburg-Prescott international bridge?
2.	When the bridge is completed, who is to operate it and on what basis or terms?
3.	Will the bridge be subject to tolls, and if so, who is to obtain the revenue after the costs of the bridge have been paid?
4.	What are the names and addresses of the contractors now building the bridge? What are the total amounts of contracts awarded to each such contractor?
5.	What portion of the work being done is now on the Canadian side?
6.	What is the total number of Canadian workers now employed in the construction of the Canadian section of the bridge?
7.	Have any complaints been received on behalf of Canadian workers not being able to obtain employment in connection with the construction of this bridge? If so, what has been done about such complaints?
Answer by: Hon. Ellen L. Fairclough (Secretary of Siaie):
1.	Information is contained in an act to incorporate Ogdensburg bridge authority, Ch. 57-1 Elizabeth II.
2.	Information is contained in an act to incorporate Ogdensburg bridge authority, Ch. 57-1 Elizabeth II.
3.	Information is contained in an act to incorporate Ogdensburg bridge authority, Ch. 57-1 Elizabeth II.
4 and 5. This information pertains to construction by a private bridge company; the government has no knowledge of the details. However, it is understood that almost all the construction has so far been done on the United States side and that two contracts have been let to the firm of Merritt, Chapman and Scott. The total amounts of the contracts awarded are not known to the Canadian government.
6 and 7. Some inquiries have been received as to the employment of Canadian workers on the bridge construction project. However, as recited in answers 4 and 5, work to date on the project has been almost all on the United States side and United States labour has been used therefor. The construction materials have been provided and supplied to the site from Canada. According to recent available information, construction on the project has been shut down until spring. Discussions have been carried on and are continuing with representatives of the New York state public works department and the Ogdensburg bridge authority for the purpose of working out appropriate arrangements for employment of Canadian labour in the further stages of the construction project.



CENTRAL MORTGAGE AND HOUSING


Mr. Johnsfon (Bow River): 1. How many foreclosure actions have been instituted by Central Mortgage and Housing Corporation in Alberta up to December 1, 1957?
2. How many foreclosure actions have been instituted by lending agencies of Central Mortgage and Housing Corporation in Alberta up to December 1, 1957?
3.	What was the amount in arrears in each case when foreclosure action was commenced by Central Mortgage and Housing Corporation or their lending agencies?
4.	How many quit claims were there in each case and how much was still owing on the mortgage?
Answer by: Hon. Howard C. Green (Minister
of Public Works):
1.	Central Mortgage and Housing Corporation has instituted seven foreclosure actions and three actions to cancel agreements for sale in the province of Alberta up to December 1, 1957.
2.	Ten foreclosure actions were commenced on loans made under the national housing acts by approved lenders in the province of Alberta up to December 1, 1957.
3.	The following schedule outlines the particulars of each action commenced under 1 and 2 above.

Questions
Amount No. of Balance .	of	monthly outstanding1 ype of acct. Date writ issued	arrears	payments on account	Remarks
Actions commenced by CMHC-
Mortgage	Nov/51	
175Mortgage	Feb/53	
571Mortgage	March/53	
327Sale Agt.	Oct/54	
451Sale Agt.	June/55	
102Sale Agt.	Feb/57	
152Mortgage	Feb/57	
228Mortgage	Feb/57	
218Mortgage	March/57	
204Mortgage	Oct/57	
342
Actions commenced by approved lenders-
Mortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	Feb/49	
NilMortgage	May/55	
2,8804.	No properties have been taken over by quit claim in the province of Alberta up to December 1, 1957.



BEECHWOOD POWER COST

Mr. MacEachen: 1.	What is the estimated cost of the generation of electricity from Beechwood under present financing?
2.	By what amount will the estimated per mill rate be reduced through loans at lower interest from federal government?
Answer by: Hon. Alvin Hamilton (Minister of
Northern Affairs and National Resources):
1.	Assuming a production of 300 million k.w.h. annually and a borrowing rate of 6 per cent on the $29 million, the cost of power produced by the present Beechwood plant would be of the order of 7 to 7.5 mills per k.w.h.
2.	This cost could be reduced by approximately 1.2 mills per k.w.h. by loans from the federal government at a lower interest rate.



PRINTING BUREAU CHARGES

Mr. Fisher: 1.	What criteria does the Queen's printer apply in deciding on the selling price of a publication sponsored by a department?
2.	What criteria are used in deciding the charges made to such a department?
3.	What arrangements are made with departments for rebates or alteration of price charged by the Queen's printer where publications have a larger sale than anticipated, through the Queen's printer?
6	$ 3,334	Foreclosure completed10	5,997	Foreclosure completed10	3,449	Arrears paid-account reinstated11	4,914	Arrears paid-account reinstated3	3,972	Arrears paid-account reinstated4	3,685	Arrears paid-account reinstated3	3,713	Arrears paid-account reinstated3	1,254	Arrears paid-account reinstated3	7,170	Action incomplete5	8,289	Arrears paid-account reinstatedNil	4,561	Nil	4,351	Nil	3,962	Nil	2,103	Builder constructing 40 houses-Nil	2,070	[DOT] encountered financial difficulty andNil	3,031	9 mortgages were foreclosed.Nil	2,099	Nil	2,660	Nil	4, 335	3	93,365	Sixteen unit apartment-foreclosure completed4.	If a publication does not sell up to its printing how is this failure reflected in charges to the department concerned?5.	What allowance on a government "best seller" is made to a department by the Queen's printer with regard to prepublication expenses such as writing, editing, photography, etc.?
Answer by: Hon. Ellen L. Fairclough (Secretary of State):
1.	Cost of printing.
2.	Cost of printing.
3.	None.
4.	None.
5.	None.



PRINTING BUREAU CHECK-LIST

Mr. Fisher: 1.	What was the total cost of assembling, printing, and distribution of the daily check-list in the last financial year?
2.	How many people and agencies outside parliament and the federal services have full selection privileges; how many have and take full repository rights to publications listed in the daily check-list?
3.	What was the estimated value of such free distribution in the last financial year?
4.	In the cost control of such free distribution is any allowance made to departments in lieu of the lack of income from such distribution?
Answer by: Hon. Ellen L. Fairclough (Secretary of State):
1.	$4,760.78.
2.	Libraries: 469; 32.
3.	$35,000.
4.	No.

Oil-U.S. Import Restrictions



APPENDIX &quot;A&quot;


[Stage Direction]
The Minister of Finance today released the following statement:
The government of the United States has just announced that the voluntary oil import program, which has been limiting imports of oil into most parts of the United States during the past five months, will immediately be extended to include the west coast area and will thus for the first time directly affect imports from Canada. In the view of the United States, these limitations are required in order to maintain assured supplies that might be required for national defence.
The Canadian government learned with great regret, some days ago, of the United States proposal to extend import limitations. Since that time the Canadian government has made the strongest possible representations to the United States administration and has urgently pressed them to reconsider and
revise their proposals. However, in view of the mounting pressures on supply-price relationships the United States has decided that it must proceed with its plan immediately.
The United States administration has represented that the plan is not likely, in the coming months, to involve a very substantial reduction in U.S. imports from Canada below recent levels. Nevertheless the impact on Canadian interests may be expected to be adverse.
The Canadian government cannot accept the view that there is any justification for U.S. limitations on oil coming from Canada, either on economic or on defence grounds. The Canadian government will continue to press its objections.
Ottawa, December 24, 1957.

Canada-U.S.-Economic Co-operation


[Stage Direction]
Exchange of noies (Oclober 26, 1950) between Canada and the United Stales of America giving formal effect to the statement of principles for economic cooperation.
[Stage Direction]
The Secretary of State of the United States of America to the Canadian Ambassador in the United States of America
Department of State Washington, October 26, 1950.
Excellency:
I have the honor to refer to recent discussions between representatives of our two governments for the general purpose of reaching an agreement to the end that the economic efforts of the two countries be coordinated for the common defense and that the production and resources of both countries be used for the best combined results. Their deliberations were based on concepts of economic cooperation which were inherent in the Hyde Park Agreement of 1941* and which are still valid today. They formulated and agreed to the "statement of Principles for Economic Cooperation" annexed hereto, which is intended to guide, in the light of these basic concepts, the activities of our respective governments.
If this attached statement is agreeable to your government, this note and your reply to that effect will constitute an agreement between our two governments on this subject.
Accept, Excellency, the renewed assurances of my highest consideration.

[Stage Direction]
Statement of Principles for Economic Cooperation
The United States and Canada have achieved a high degree of cooperation in the field of industrial mobilization during and since World War II through the operation of the principles embodied in the Hyde Park Agreement of 1941,* through the extension of
* For the text of the agreement see Canada Treaty Series, 1941, No. 14 and Canada Treaty Series, 1948, No. 1.
its concepts in the post-war period and more recently through the work of the Joint Industrial Mobilization Planning Committee. In the interests of mutual security and to assist both governments to discharge their obligations under the United Nations Charter and the North Atlantic Treaty, it is believed that this field of common action should be further extended. It is agreed, therefore, that our two governments shall cooperate in all respects practicable, and to the extent of their respective executive powers, to the end that the economic efforts of the two countries be coordinated for the common defense and that the production and resources of both countries be used for the best combined results.
The following principles are established for the purpose of facilitating these objectives:
1.	In order to achieve an optimum production of goods essential for the common defense, the two countries shall develop a coordinated program of requirements, production and procurement.
2.	To this end, the two countries shall, as it becomes necessary, institute coordinated controls over the distribution of scarce raw materials and supplies.
3.	Such United States and Canadian emergency controls shall be mutually consistent in their objectives, and shall be so designed and administered as to achieve comparable effects in each country. To the extent possible, there shall be consultation to this end prior to the institution of any system of controls in either country which affects the other.
4.	In order to facilitate essential production, the technical knowledge and productive skills involved in such production within both countries shall, where feasible, be freely exchanged.
5.	Barriers which impede the flow between Canada and the United States of goods essential for the common defense effort should be removed as far as possible.
6.	The two governments, through their appropriate agencies, will consult concerning any financial or foreign exchange problems which may arise as a result of the implementation of this agreement.
[Stage Direction]
Canada-U.S.-Economic Co-operation II
The Canadian Ambassador in the United States of America to the Secretary of State of the United States of America
Canadian Embassy Washington, October 26, 1950.
No. 619 Sir:
I have your note of today with regard to the recent discussions between representatives of our two governments for the purpose
of reaching an agreement to the end that the economic efforts of the two countries be coordinated for the common defence and that the production and resources of both countries be used for the best combined results. I am glad to confirm that the "Statement of Principles for Economic Cooperation", which was annexed to your note, is acceptable to my government. Your note and this reply will, therefore, constitute an agreement between our two governments on this subject. Accept, Sir, the renewed assurances of my highest consideration.

[Stage Direction]
B.C. Forest Access Roads


[Stage Direction]
Ottawa, January 2, 1958.
The Honourable W. A. C. Bennett,
Premier of the Province of British Columbia, Victoria, British Columbia.
My dear Premier:
Under the Canada Forestry Act the government of Canada has offered financial assistance to all provinces with respect to the completion and maintenance of provincial inventories of forest resources, certain kinds of reforestation projects, and, more recently, capital expenditures required for forest fire protection. Agreements relating to one or more of these classes of forestry activity have been executed with nine of the provinces.
My colleagues and I feel that the protection of the forests against fire is a matter of particular importance. Although substantial improvements have been made in this field in recent years, forest fire losses are still excessive and constitute a major deterrent to the application of sound silvicultural practices in forest management.
Good access roads are essential to the attainment of adequate forest fire protection, as well as for other forest management requirements. The seventh British commonwealth forestry conference, which recently met in Australia and New Zealand, recommended that "road systems be developed wherever necessary to permit maximum efficiency and economy in the management and protection of the forests and in the utilization of their produce".
In view of the foregoing and also in view of the need to provide additional employment this winter and spring my colleagues and I are of the opinion that the time is now opportune, if the provinces are so disposed, to enter into further agreements under the Canada Forestry Act which would provide for additional federal financial aid to the provinces for the construction of forest access roads and trails. The agreement envisaged would be essentially along the following lines:
(a)	The road and trail construction programs to which the federal government would contribute would be planned and executed by the provinces. The federal contribution would be 50 per cent of the cost,
the remainder being paid by the province or by a forest protective association.
(b)	Federal aid under this proposal would apply to expenditures incurred between the date of this letter and June 30, 1958, and the maintenance of roads and trails would be a provincial responsibility.
(c)	The forest access roads and trails included in such programs would be those required for forest fire protection excluding, of course, county or municipal roads and provincial highways.
(d)	Projects to which Canada would contribute under the proposed agreement would not be eligible for assistance under the present fire protection agreement with respect to costs incurred during the period referred to above. However, any unfinished work on such projects, on and after July 1, 1958, would be eligible for inclusion in programs under the present agreement. The latter provides for a federal share of road and trail construction costs amounting to 25 per cent, subject of course to a total yearly allotment.
(e)	Provinces may include their share of the costs under the proposed agreement-to the extent properly chargeable to fire protection-in calculating their annual expenditures on fire protection for the purpose of arriving at allotments of federal contributions under the present agreement.
(f)	Canada would not make any contribution with respect to the acquisition of any land or right of way.
I should be glad of your views on this proposal, and of your advice at the earliest possible date as to whether an agreement along the lines indicated above would be acceptable to the government of your province. In the event that it does prove acceptable, a preliminary estimate of the cost of the program you envisage would also be appreciated.
In the meantime, if you wish your officials to obtain further details as to the agreement we might propose, they might contact Mr. J. D. B. Harrison, director of the forestry branch of this department. I have asked him to work out the detailed terms of a possible agreement under the general terms mentioned above.
Yours sincerely,
Alvin Hamilton.
[Stage Direction]


Saturday, January 4, 1958