1958-07-18

Mr. Speaker:: I have the honour to inform the house that Hon. Dr. Kwame Nkrumah, Prime Minister of Ghana, will address both houses of parliament in this chamber on Monday morning next at eleven a.m., and immediately following the addresses there will be a reception in the railway committee room at approximately 11.45 to give hon. senators, members of the House of Commons and the parliamentary press gallery an opportunity to meet our distinguished visitor.



VETERANS AFFAIRS

[Stage Direction]
Third report of standing committee on veterans affairs.-Mr. Dinsdale.


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: May I
direct a question to the Minister of Labour. In view of the strike of the employees of Black Ball Ferries Limited, which now leaves Vancouver island completely isolated from the mainland except for air transport, does the government intend to take any prompt action to ease the hardship and inconvenience being caused by this strike and that on the Canadian Pacific ships?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, we heard of this strike approximately half an hour ago. The deck officers and engineers of Black Ball Ferries have gone on strike, tying up this essential service. We are making an on the spot investigation today, and on the basis of the report an announcement will be made in the house tomorrow.


Lionel Chevrier: Will the government give consideration to organizing an airlift of R.C.A.F. and commercial aircraft to assure that vital supplies reach the island?


Michael Starr: No discussion on this question has yet been held by the government.
57071-3-149



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Grant Campbell (Stormont):: I should like to address a question to the Minister of Finance. In view of his recent statement in the house to the effect that any recommendations of the tariff board in regard to cotton textiles would not be considered this session, would the minister confirm his intention, as indicated in his budget speech, that section 35 of the Customs Act will be amended this session to provide that the value for duty on imported goods shall not be less than the cost of production plus a reasonable advance for selling cost and profit?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, the statement I made in the house on Tuesday in tabling the report of the tariff board on woollen yarns has no bearing whatever on the announcement I made in the budget speech on June 17 as to the intention of the government to introduce at this session an amendment to section 35 of the Customs Act for the purpose of introducing as a basis for value, as the hon. gentleman said in his question, cost of production plus a reasonable advance for selling cost and profit.
The announcement I made on Tuesday was by way of indicating the position of the tariff board with respect to the progress it has made with the very large reference to it of all the items in the textile tariff. The board has now made two reports, one on woollen fabrics and the one which was tabled on Tuesday on woollen yarns.
With regard to its inquiry into the tariff items in respect of cottons, the board has completed its hearings but I think it will be some time yet before the report is received and I was indicating in my statement that under these circumstances nothing by way of legislative action could possibly be expected at this session of parliament in relation to cottons, let alone other textiles, synthetics in particular, to which the board will be addressing itself in the remaining studies.
The amendment to section 35 of the Customs Act, as I indicated in the budget speech, will be introduced at the present session by my colleague the Minister of National Revenue.

Inquiries of the Ministry



CONVERSION LOAN


[Stage Direction]
On the orders of the day:
Mr. Erhart Regier (Burnaby-Coquiilam):: should like to direct a question to the Minister of Finance. I do so in the light of several newspaper reports yesterday concerning the effect of his bond conversion plan. Is the minister able and willing to inform the house as to the additional amount of interest the Canadian people will have to pay on private, corporate, municipal and provincial borrowings as a result of the increases announced for the federal conversion bonds?


Donald Methuen Fleming: I was asked a question yesterday, Mr. Speaker, by the hon. member for Nipis-sing about what might be expected to be the increase in interest charges on the outstanding debt that is now represented by the five outstanding victory loan bonds and will after the conversion loans we hope be largely, if not almost entirely, represented by the Canadian conversion bond issue of 1958. It is not now possible to indicate what that might be.
I do wish to take advantage of the question of	my hon. friend	to point out what I thinkis	a fallacy. My	hon.	friend suggests	thatthis conversion loan is raising interest rates. I do want to make it	quite clear that	thisis	not the fact at	all.	The conversion	loan
takes account of the existing situation in the bond market and of the desire of the government, in the interests of all borrowers in Canada and not simply the federal government-all borrowers, provincial governments, municipal governments and others-to grasp the advantage that will accrue to them from the extension into the future of the present debt represented by the outstanding five victory loans. The rate that has been set in each case, whether 3, 3J, 4} or 4J per cent, represents a realistic assessment of the cost of money in the market today in relation to borrowings with such maturities as have been set in the new conversion loan.
I point out to my hon. friend that in the bond markets of this continent, starting in the United States, there has been a weakness evident, a weakness that preceded the budget and had nothing to do with the budget.
The terms of the new conversion loan have been recognized right across this country as realistic and fair under all the conditions. I am happy to be able to report to the house that the response to the loan already has been not simply encouraging but has indeed been almost overwhelming. We have had a response from provincial governments indicating that they are converting their holdings of victory loan bonds into the conversion loan

bonds, and a statement was issued yesterday by the Bank of Canada indicating that already we have commitments of over a billion dollars from the holders of these outstanding victory loan bonds.
There is every indication, Mr. Speaker, that with the kind of widespread support we are receiving on every hand this major undertaking is going to be a great success, and that the benefits that will flow therefrom will accrue not simply to the federal government in its future borrowing operations, but will accrue as well to provincial governments, municipal governments and other borrowers in this country in the days to come.


Hon. J. W. Pickersgill (Bonavisia-Twil-lingate):: May I ask a supplementary question. Is it not true that the interest rate on this 25-year loan is higher than anything ever authorized by the previous administration, at which time the minister himself was complaining about high interest rates?


Donald Methuen Fleming: I thought my hon. friend was aware that there is no precedent for an undertaking of this size in Canada. There have been previous conversion loans, but there were-


John Whitney Pickersgill: On a point of order, Mr. Speaker; I directed a question to the Minister of Finance, and he is not answering the question but is making a speech.


Donald Methuen Fleming: My hon. friend-


Mr. Speaker:: Order. I think the question itself was probably not in order, because it was asking for information that is readily available to all hon. members of the house.



INQUIRY AS TO TABLING OF REPORT ON FLUORSPAR

[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, may I ask the Minister of Finance whether he can give us any further information as to when the report of the tariff board investigation on fluorspar is expected or may be tabled?


Donald Methuen Fleming: Mr. Speaker, there has been no change in the information I gave to the house in the budget speech on June 17 on that subject.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: I wonder if the Minister of National Defence would care to comment on a statement made on the front page of this morning's Globe and Mail to the

effect that the Canadian government has a brigade of troops in readiness as a contribution to any security force which might be established by the United Nations in the Middle East. If so, has any such offer been made to the Secretary General of the United Nations?
Hon. G. R. Pearkes (Minister of National
Defence): No offer has been made, nor has any request been received so far as I know from the Secretary General of the United Nations.


Hazen Robert Argue: Would the minister say whether the government has done anything to warrant the statement that Canada has in a state of readiness a brigade of troops that might be used in this quarter?


Mr. Pearkes:: I have announced in this house on several occasions that Canada keeps one battalion in a more advanced state of readiness than the rest of the troops of the regular army of Canada. There has been no change in that situation.



NOVA SCOTIA


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Mr. Speaker, may I ask the Minister of National Defence if his department has recently made an investigation into the administration of the Bedford naval magazine in Nova Scotia?


George Randolph Pearkes: No, I do not think there is any such investigation.


John Whitney Pickersgill: Could the minister inquire?



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, in view of the fact that the leader of the house last evening in indicating the business of the house for the first two days of next week made no provision for a debate on foreign affairs, would the Prime Minister inform the house whether it will not be possible to have such a debate in the early part of next week?


Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I would hope that by Thursday next the situation would be such that a debate could be held. I do not want to see it postponed unnecessarily, not only because I know the government wants the benefit of the views of members in all parts
57071-3-149i
Inquiries of the Ministry of the house but also because it is not possible to have the estimates of the Department of External Affairs considered until such time as we have this debate, at which time the estimates will be referred to the committee.


Lester Bowles Pearson: I have a supplementary question. If developments made necessary a debate earlier than next Thursday, would the Prime Minister keep that matter in mind?


John George Diefenbaker: Yes, Mr. Speaker. If events do make necessary or desirable an earlier debate, then I hope consent can be secured from all parts of the house to have such a debate take place.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. G. R. McWilliam (Northumberland-Miramichi):: I wish to direct a question to the Minister of Fisheries. Is any action being taken to protect the market in the United States for Canadian lobsters as a result of the bill now before the United States Senate to restrict lobster imports to the United States?


Hon. J. A. MacLean (Minister of Fisheries):: Mr. Speaker, I just received notice of this question a few moments ago. I should like to point out that it is one that more properly should be directed to my colleague the Minister of Trade and Commerce. Perhaps he would take it as notice.


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I accept it with thanks, and I will take it as notice.



DOMINION-PROVINCIAL RELATIONS NEWFOUNDLAND    INQUIRY AS TO REPORT OF ROYAL COMMISSION ON REVISION OF TERMS OF UNION

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I wonder whether I could ask the Prime Minister whether he thinks the government would be in a position on Monday to table the report of the royal commission on the revision of the terms of union with Newfoundland. The 10 days he anticipated will have elapsed by then. If the printed report in French is not available will the government consider doing what has been done in many other cases, namely tabling a manuscript copy of the report in French in order to facilitate the work of the government of Newfoundland?

Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, so far as the first part of the question is concerned may I say that I have had no report in the last day or two from the printing bureau as to the progress being made in the printing of the French copy of the report. As to the second portion of the question may I say this. While consideration will be given to the suggestion made, I think in general the usual course should be followed in the tabling of this report and that it should be tabled in both languages. However, I will have the question looked into.



DEFENCE PRODUCTION


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I have a supplementary question. Perhaps I could ask the Minister of Defence Production how soon he expects to be able to table the French copy of the report of his department?


Hon. Raymond O'Hurley (Minister of Defence Production):: Mr. Speaker, I will get the information and report as soon as possible.



POTATOES


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I wish to direct a question to the Minister of Agriculture. My question is based on a press report in the Charlottetown Guardian of July 12 concerning price supports for potatoes, to the effect that all hope of receiving aid had vanished in so far as island growers were concerned. What factors have prevented the application of the provisions of the agricultural prices stabilization legislation to this important class of agricultural producer?


Hon. D. S. Harkness (Minister of Agriculture):: Nothing has prevented it. As a matter of fact an offer was made by the stabilization board, which was approved by the cabinet, to the Prince Edward Island potato producers to give them support on the same basis as it has been given in New Brunswick as far as potatoes which are diverted to starch in that province are concerned. The potato association there accepted the offer but subsequently discovered that the potatoes had sprouted to some extent and therefore there was difficulty in so far as determining the grade was concerned. We are carrying on further discussions at the present time to try to overcome this difficulty.


Hédard-J. Robichaud: May I ask as a supplementary question whether the delay of the government in applying this measure is not an example of the weakness of the agricultural stabilization program?


Some hon. Members:: Order.


Mr. Speaker:: The hon. member knows he is really advancing an argument in putting forward that question.


Douglas Scott Harkness: Mr. Speaker, since this statement has been made I think I should have the opportunity of answering it. Any delays which have taken place in regard to the potato situation in Prince Edward Island have been due to the provincial government and/or the potato association in that province not being able to make up their minds, not accepting the offer when it was made to them, and not putting the plan which was offered to them into operation.


Some hon. Members:: Hear, hear.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I would like to ask the Prime Minister-and perhaps he may wish to take this question as notice-whether the North Atlantic Treaty Organization, through its permanent council, has been considering developments in the Middle East and, if so, will he be in a position to make a statement on the results of such consideration.


John George Diefenbaker: Mr. Speaker, I feel sure that the council has been giving this matter consideration and, in putting it that way, I think my hon. friend will understand exactly what is the position.
As to making a report with respect to the consideration being given by the North Atlantic council, that of course is a question which will have to be taken under advisement. My experience has been that when the hon. gentleman who has asked the question occupied the position of secretary of state for external affairs his general reaction to similar questions was that there were obvious limitations on the information to be given respecting the actions of the council.


Lester Bowles Pearson: Mr. Speaker, I would like to inform the Prime Minister that the only reason I asked the question was because of newspaper reports from Paris on these discussions, quoting members of the council, including a Canadian member.


UNEMPLOYMENT INSURANCE
[Stage Direction]
On the orders of the day:
Mr. Lucien Cardin (Richelieu-Vercheres):: would like to ask a question of the Minister of Labour based on a telegram I received this morning to the effect that 20 per cent of the labour force in Sorel is still unemployed. In view of the Prime Minister's promise that this government would not rest while one Canadian remained out of work and that no one would be allowed to suffer, would the Minister of Labour reconsider extending unemployment benefits in Sorel, if the government is incapable of providing work in that area?


Mr. Pallelf:: What is the source of the information? Who sent the telegram?


Mr. Speaker:: I think the hon. gentleman will recognize that that question has been asked and answered on at least one occasion recently.


Louis-Joseph-Lucien Cardin: But the problem still remains, sir.


Mr. Speaker:: That is a matter for argument in debate.


NORTHERN AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: May I address a question to the Minister of Northern Affairs and National Resources. Recently a very good pamphlet was issued by his department and I wrote for a French copy of it. My answer was as follows, and this is my translation:
I will exercise the greatest care in the choice of the person to whom the redaction would be given, in case there would be a sufficient demand for a French pamphlet.
Does the minister not believe that it would be hard to ask for something which is nonexistent?


An hon. Member:: Nonsense.


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: I will have to take that question as notice.
(Translation):


WAR SURPLUS EQUIPMENT
[Stage Direction]
On the orders of the day:
Mr. Guy Rouleau (Dollard):: Mr. Speaker, I would like to put a question to the Minister of Defence Production.
Inquiries of the Ministry
Has the minister read the telegram sent to me by the Maase Equipment Company, which I forwarded to him yesterday?
If so, and since the government has allowed the sale of American war surplus goods in Canada, what action is the government considering to protect the distributors of construction machinery against the competition of United States surplus war assets in Canadian territory?


Donat Raymond: In answer to the question just put by the member for Dollard, I may say that the government has received representations from manufacturers and dealers in heavy equipment, but I must inform the hon. member that, on the other hand, we have also received requests from contractors who wish to purchase this heavy equipment.
I must, moreover, make it clear that we received a number of telegrams from individuals who protest against the importation of heavy materials and equipment from the Pacific islands or Japan. I must say that these importations were not made through a crown corporation coming under my department.
I might add that this matter is still under consideration. The ministers have taken notice of requests made by parties on both sides, but so far no decision has been taken which would be contrary to the policy followed in the past.
(Text):



HIGHWAYS


[Stage Direction]
On the orders of the day:
Francis Alvin George Hamilton: Mr. Speaker, yesterday the hon. member for Gloucester asked whether the construction of a highway to provide a direct road link between Saint John and Fundy national park and the Plaster Rock link-up across the central stretch of New Brunswick were included in the proposed roads to resources program for New Brunswick.
As I have already indicated, I have given approval in principle to certain projects in New Brunswick on which construction is already under way and which will be eligible for federal assistance, subject to the execution of a formal agreement between the province and the federal government.
As to the remainder of New Brunswick's program, I have just received a letter from Premier Flemming, dated July 9, in which he has proposed very substantial changes in
2366	HOUSE OF
Inquiries of the Ministry the program originally put forward by the province. These new proposals are now under study by my technical advisers and I have written to the premier of New Brunswick for additional information. In the circumstances it would be premature for me to say more at this time.



LIVESTOCK


[Stage Direction]
On the orders of the day:
Grant Campbell: Mr. Speaker, I should like to address a question to the Minister of Agriculture. In view of the very serious rabies epidemic in Stormont and other parts of this province, has the minister considered the desirability of extending the provisions of the Animal Contagious Diseases Act to cover compensation for the loss of domestic animals owing to rabies, as has been done in the case of brucellosis, tuberculosis and, I believe, in the case of foot and mouth disease?


Douglas Scott Harkness: Mr. Speaker, the Animal Contagious Diseases Act provides authority for the payment of compensation only with respect to animals which are ordered slaughtered as a disease control measure to prevent the spread of the disease. This is the authority under which compensation is paid for animals ordered slaughtered if they are found, in the course of official testing, to be infected with brucellosis or tuberculosis. It is also the authority under which compensation would be paid for animals ordered slaughtered if they were infected with or exposed to such serious diseases as foot and mouth disease.
There is no authority in the act, and it is not the intent of the act, to provide compensation to owners of animals which may die normally from rabies or from any other disease.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Erhart Regier: Mr. Speaker, I hope I can get an answer this time from the Minister of Finance. When does the minister expect to be able to report to the house on the results of the active studies that he said are being made on the pensions paid to retired civil servants and members of the R.C.M.P., and do such studies also include the pensions being paid to railway employees?


Donald Methuen Fleming: Mr. Speaker, I have answered such a question a number of times during this session. I can only give the same answer today, that this important subject is under very active study. Whenever the time is appropriate to make any announcement to the house my hon. friend may be sure that it will be made.

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



DEPARTMENT OF TRADE AND COMMERCE

[Stage Direction]
391. Departmental administration, $739,086.
The Deputy Chairman:: Shall this item
carry?


Lester Bowles Pearson: Mr. Chairman, this item, of course, gives members of the house an opportunity to speak generally on questions within the jurisdiction of the Department of Trade and Commerce, and I wish to take advantage of that opportunity. Before doing so, Mr. Chairman, in a substantive way I should like to express my regret and the regret of members of our party over the resignation of the deputy minister of trade and commerce, Mr. Mitchell Sharp, and to express our gratitude-and I am sure all members of the house will join with me in this-for the magnificent, effective and unselfish service which he gave to the government through the civil service over so many years. I had the pleasure and privilege of being his colleague during part of that time, and therefore I am in a position to testify to the value of his unselfish service. I know he must have regretted leaving the civil service as much as we regretted seeing him go.
If Mr. Sharp had to leave, Mr. Chairman, he could not have been replaced by a better official than Mr. John English, who is now the deputy minister of the department and with whom I also have had the pleasure and privilege of working for many years as a member of the civil service. On my own behalf and on behalf of our party I would like to wish him well as he presides over the department in the capacity of deputy minister.
This item, Mr. Chairman, is related to the work generally of the Department of Trade and Commerce, and in preparation for the observations I want to make on that work I have been studying the annual report of the department. I have been looking at the report of the economics branch of this department. In the previous report for 1956 under this section "economics branch" there is this sentence:
During the past year, general economic conditions in Canada have been kept under review, and

a number of reports on various aspects of Canada's economic development have been prepared for official use.
This is the branch of the department, Mr. Chairman, which is responsible for the preparation of reports such as that famous so-called hidden report about which we heard last autumn and this spring; but in 1956 the reports of this branch were prepared for official use and official use only. For some reason or other, in the section of the 1957 report at page 53 dealing with the work of the economics branch there has been a slight change in reference to the duties of this branch, and this year the paragraph reads:
During 1957 general economic conditions in Canada were kept under review and a number of reports-
Including reports such as the famous hidden report.
-on various aspects of Canada's economic development were prepared-
And this is the change:
-mainly for official use.
I suppose it was necessary for the author of this report to include the word "mainly" to cover the practice of the Prime Minister in introducing to public attention some selected passages from a report of the economics branch that the branch said in the past was prepared for official use only.
I had hoped, Mr. Chairman, that in his review of the work of the department the minister might have given us the benefit of some information about the report for 1958, prepared by this branch on economic conditions in the country. It would have been very interesting to have received that information-perhaps more interesting, as it would have been more valuable, to have received it than it was last January and in the spring to have received selected passages from the previous report. If it was appropriate to have selected passages of that report made public in 1957, without any request from the house, perhaps it would have been even more appropriate to have had the information in the report for 1958 made public when it was requested by the house.
In any event, Mr. Chairman, it would have been helpful to have had an analysis of the economic situation as it was seen by the Department of Trade and Commerce, so that it might have been related to what the Minister of Finance had to say about it in his budget speech. However, that was not done.
In his review yesterday the minister emphasized, and quite rightly, the importance of foreign trade in our economy. Indeed, the magnitude and importance of our external
Supply-Trade and Commerce trade are shown, as he pointed out, by the fact that the figures have now reached well over $10 billion. That development of our external trade over the years until it reached this unprecedented figure in 1957, which as the minister pointed out was 2 per cent above the figure for 1956, and owing largely to the increase in the early part of 1957, must bring us all a great deal of satisfaction.
It must also bring some shadow of anxiety because of the realization of what it means in our dependence on markets outside of this country for not only our prosperity but our economic stability. In a sense it emphasizes that we are-I do not want to be misunderstood in the way I am putting this- hostages of other people's fortunes.
That is shown by the fact that about one third of our gross national product is now derived from our foreign trade, which reached a per capita figure in 1957 of $625, I think, a figure not exceeded in any country in the world except New Zealand, a country which is hardly comparable so far as industrialization is concerned.
It is also interesting to remark, and the minister mentioned it yesterday, that $7 billion of our $10 billion plus foreign trade comes from our trade with the United States of America. There is no difference of opinion among members of the house as to the desirability of diversifying, in so far as it can be done by natural, wise and economic methods, our foreign trade and broadening and deepening the bases of that trade. In 1958, in a time of recession, we are all very happy to know that our external trade is holding up so well. The minister pointed out-I think he used these figures-that in the first five months of this year our exports were about 1 per cent ahead of the same period in 1957, and that our imports were down something over 16 per cent from the comparable period of last year. Our imports from the United Kingdom are up 2 per cent, I believe, but our imports from the rest of the commonwealth are down about 11 per cent. Our imports from the United States are down even more than that. Because of that fact in the first five months of this year the deficit, as the minister pointed out, has been reduced from $514 million to $173 million, about one-third of what it was last year, and the deficit with the United States has been reduced from $660 million to $374 million.
But any satisfaction we can derive from the reduction of the unfavourable trade balance with the United States must be sensibly modified by a realization of the causes that have brought about the decrease in the deficit, because it is due not to an increase in our exports but to a decrease in our imports and it is not due to government policy. It is not

Supply-Trade and Commerce due to any shift from imports from the United States or other countries to Canadian production and purchases but is due primarily to the reduction in business investment in Canada, especially in machinery and equipment, a very important part of the import trade. That in its turn is due to the recession and the fact that our economy has slowed up so far as investment is concerned. There is less need for the capital goods that we had to import, particularly from the United States, when we were in a period of expansion and boom.
It is also true, as the minister pointed out yesterday, that this decline has been accompanied by a shift in the geographical distribution of our import trade. In 1957 the United Kingdom took about 8.8 per cent and in 1958 that figure increased to 10.4 per cent, whereas the United States share declined from 74.1 per cent in 1957 to 70.9 per cent in 1958. But again, while we may take some satisfaction from that shift, and I think we should, it is not due to government policy but to the recession and to the nature of the imports from the United States compared with the imports from the United Kingdom. The minister knows that our imports from the United Kingdom are mainly consumer goods. The level of imports of consumer goods is determined largely by personal income in Canada; and personal income, consumption and expenditure in Canada have, fortunately, been holding up very well in recent months.
On the other hand, our imports from the United States have been mainly capital goods and consumer durables and, as I have just said, the volume of their import is determined largely by the nature of investment in Canada. That has been declining as the demand for these goods in Canada and other countries is very sensitive to a change in business conditions, which change has taken place.
I have been talking about our import trade. There is also a shift in the geographical distribution of our export trade. The United Kingdom and the commonwealth are gaining relative to the United States but, as I am sure the minister will admit, that again is largely due to the increased assistance we have been giving to the Asian countries of the commonwealth under the Colombo plan; and while we may welcome that increase, we should not blind ourselves as to the reasons for it. The dominant factor, however, in our foreign trade remains our trade with the United States of America, and if conditions do not improve in the United States not only will our trade with that country decline but our trade with other countries will also decline, because those countries will feel the 

impact of any recession in the United States and that in its turn will affect their ability to buy from us.
The present situation may then be summed up by the following proposition. While it is true to say, as the Minister of Finance said in his budget speech, and the Minister of Trade and Commerce expressed the same sentiment yesterday, that, to quote the Minister of Finance, "our trade deficit with the United States was reduced and our trade with the United Kingdom, the commonwealth and the rest of the world moved in the direction of more balanced relationships", it must be borne in mind that these changes and shifts in our trade picture have not been brought about by any systematic government policy but are the direct consequence of the current economic recession both in our own country and in the United States, and of the traditional nature of our trade relationships with the world but more particularly with the United States and the United Kingdom.
If our exports are holding up reasonably well, which is true and we all take satisfaction from it, it is important to analyse the reasons for that. The analysis made last night by the hon. member for Rosthern was a very simple one. He said that it was due to government policy and that disposed of the matter. Well, if he will study the export figures carefully he will discover, as perhaps he has already discovered, that our export trade is holding up largely because of the increase in three commodities, uranium, cattle and wheat. So far as uranium is concerned there has been a tremendous increase in our exports. This year they will perhaps be between $200 million and $300 million, whereas a year or so ago they were a very few millions and a few years ago they were almost nothing at all.
That increase is due not to the policy of the government but to the fact that the previous government managed to make an arrangement with the United States for the purchase of practically all the uranium we could produce at terms pretty satisfactory to the producers, and we are now reaping the benefit of that agreement. The agreement runs until 1962, and the minister must know that it is of the greatest importance to find markets for our uranium in other parts of the world. We are beginning that process, and it is very important to maintain it and expand the use of Canadian uranium for peaceful purposes.
So far as the cattle trade is concerned, I suggest to the hon. member for Rosthern that the government had about as much to do with the increase in cattle exports to the United States in the last year as the sultan of

Zanzibar, and I mean no disrespect to the sultan of Zanzibar. That increase, and it was a very formidable and desirable one, was due to a strengthened demand in the United States which in its turn was due first to the shortage of cattle because of the drought in that country and the need for cattle to restock United States ranges and ranches and, second, to the tremendous corn crop across the line which persuaded farmers and ranchers there to convert a lot of that corn into meat, for which purpose they were glad to have some Canadian cattle. While the government may have had very little responsibility for the increase in this cattle trade across the line, the government certainly has some responsibility for maintaining it. I am not so sure that that is going to be easy.


Mr. Nasserden:: Would the hon. member permit an observation?


Lester Bowles Pearson: I might, but I do not think you would, Mr. Chairman. A question would be something else.


Edward Nasserden: What I tried to establish yesterday-


Lionel Chevrier: No; order.


The Chairman:: I regret the necessity for informing the hon. member that his remark must be in the nature of a question which the Leader of the Opposition permits.


Edward Nasserden: Thank you, Mr. Chairman. I wonder if the hon. member would tell us how we have been able to take advantage of this United States market if the policy of the government was so hostile that it turned the United States away from our market here?


Lester Bowles Pearson: Yes, I shall try to deal with that and explain why we were able when we were in power to lay the basis for this cattle trade across the border which, up until June 28 of this year, has resulted, the figures tell us, in 171,333 head moving across the border. To explain this you have to go back to 1947, when the Canadian tariff on fresh fruits and vegetables was bound under GATT. This was a very considerable concession to the United States, in return for which the United States had to make some concessions to Canada. One of those concessions, and perhaps as it turned out almost the most important of those concessions, was that the quota on Canadian cattle exported to the United States was raised to 400,000 a year. It was on the basis of that agreement that last year we were able to take advantage of this situation by increasing our cattle exports to the United States.
I would point out, too, that to preserve that concession, and it is a very important 57071-3-150
Supply-Trade and Commerce one and becoming so important that there are a great many rumblings of dissatisfaction amongst the producers in the United States, we have to maintain the concession we have given to the United States on fruits and vegetables. I believe the government is now negotiating with the United States- I will be informed if I am wrong-about an increase in the duties on fruits and vegetables. If an increase is made then the United States is entitled, in its turn, to concessions. Demands are being made already in Washington for such concessions in return for this concession on fruits and vegetables which is being requested by the Canadian government. One of the demands which is being most persistently made is for an increased duty and a reduced quota on Canadian livestock, and this at a time when livestock producers in Canada need all the markets they can get and when the United States, because of interest in the development of these markets, is clamouring now with greater force than previously to keep the cattle out. There is the problem.
The third main reason for our increased exports is our exports of wheat and flour. As was pointed out by my hon. friend last night and by the minister before him, last year we exported 282 million bushels.


Gordon Minto Churchill: No, 262 million.


Lester Bowles Pearson: Well, 262 million, and this year we are about to reach 300 million. By the end of the year I believe we may very well be over the 300 million bushel mark. This is a very substantial and very satisfactory increase indeed. But let us see how that was brought about. Perhaps a clue to it, in addition to what the minister no doubt would refer to as the aggressive sales policy of the Canadian wheat board-it was not so aggressive last autumn when we aked him about the desirability of taking steps to sell wheat to Australia-is given in United States figures. Last year their exports were 546 million bushels, and this year that figure has dropped to 400 million bushels. The reasons for our increase within that comparative figure are, first, the gifts and longterm credits we have made available to Colombo plan countries. The minister mentioned this yesterday, and I am not criticizing or quarrelling with that for one minute. Another reason is easier credit terms generally, whereas when we were in power we were able to sell our wheat for cash or commercial credit, except when we gave it away for relief or for Colombo plan consumption.
When we talk about increasing our wheat exports under the Colombo plan, as part of the Colombo plan arrangements we must not forget that the Colombo plan was established

Supply-Trade and Commerce and operated for capital and technical assistance, not on the basis of supplying consumer goods. When we had responsibility for operating the Colombo plan we found the Asian countries hesitant indeed about accepting consumer goods rather than capital goods.
Then another reason for the increase, as the minister pointed out yesterday, was the sales of wheat to Russia. He knows, of course, who made the agreement that made those sales possible. Then for the first time for a good many years there were some sales to China, and I shall have a word to say about that later. Another reason for the increased sales was the higher quality protein wheat in 1957.
Another very important reason, which is illustrated by the United States figures, is that the United States barter program, which was that aspect of their surplus disposal program which, perhaps along with tied sales, was causing us the most damage and about which we complained most, was modified. This modification began in April, 1957, as a result of assurances which we received from the United States government. At that time the United States government said they would not operate barter sales in such a way as to interfere with normal purchases of wheat by the importing country; that is one reason why the United States has not sold so much wheat in the current year.
While we all may take satisfaction, therefore, out of this increase in our export trade, perhaps it is just as well to analyse the reasons which brought it about. We still have, and will have for some time, surplus disposal problems. I suggest that the government should, if it has not already, give consideration to a co-operative arrangement with the United States for a joint approach, a continental approach if you like, to the problems of surplus disposal, especially of wheat. The government should give consideration also to international schemes for the utilization of surplus wheat and other foods, something about which they talked a good deal when they were in opposition and which, when we were in power, we had taken up at international conferences but with which we did not, in those days, make very much progress. Perhaps circumstances are such that now it will be easier to make effective progress.
There is also the proposal which might be very important for our wheat producers, for a NATO strategic food reserve. This is a matter which was brought up in the NATO council in previous years and in which other members of NATO did not show very much interest. At the end of last year the Prime Minister and Minister of National Defence- I am not sure whether the Minister of Trade and Commerce mentioned it but certainly the Prime Minister, Minister of National Defence

and Secretary of State for External Affairs- told the country that they had taken up at the December meeting of the North Atlantic council the feasibility-I am referring to page 2936 of Hansard for January 7, 1958-of implementing that proposal of creating a food bank, and that it would be studied, we were told, by the NATO council. In April, when the Minister of National Defence came back from the NATO defence ministers' meeting in Paris, he said that he also had advanced the proposal on strategic grounds of a food bank, a stockpile of wheat and that kind of thing; and he also said in April it was being studied.
I was very much interested in this proposal and the assurance we were given that it was being studied by NATO, because this might turn out to be a very important thing in the long run with regard to our wheat exports. So I was very much interested and somewhat disappointed to read the testimony of the United States ambassador to Canada before the senate foreign relations committee on May 16 last when, in answer to a question about this NATO food bank matter by a United States senator, he had this to say:
As far as the department is aware-
That is the United States state department.
-the Canadian government has made no detailed proposal in NATO or to the United States government that such a bank be established nor has any exploration of its possibilities taken place in NATO or the United States government.
Then he went on to say this:
Without receiving further details regarding the Canadian proposal it is impossible to tell how it might fit into NATO planning which has already been done, but this government will of course be glad to consider any detailed proposals which may be made in NATO by our Canadian friends.
We were told last December that it had been done. We were told in April that it had been done. I suggest that it is time the government begin it and make detailed proposals to NATO for this purpose, which they have talked about now for six months but which the United States government says has never been received at all in Washington or NATO.
I now want to say a few words about trade with China. The minister has been stimulating our curiosity in recent weeks on this subject, as indeed he and some of his colleagues stimulated our interest in a somewhat more ambiguous way during the election. It is true that wheat sales have been made to China, but I suggest that perhaps the government may have had very little to do with this matter. If the government wish to take active steps to encourage wheat sales to China or sales of any other commodity to China- and perhaps over the years though not immediately there may be quite a market there for Canadian products-I suggest they will

never make any progress if the Prime Minister talks in public as he did in this house on November 1, when he related the question of diplomatic recognition to the question of sales, and with regard to diplomatic recognition said this as reported at page 654 of Hansard of that date:
The attitude of this government is unchanged in that direction, and until such time as the people's government, the communist government of China, expiates its wrongdoing under international law there certainly will be no justification for the granting of recognition, as we see it.
That may be the policy of the government, and it is not in question at the moment in this particular debate. But to talk like that about a country to which you are hoping to sell goods does not seem to me to be very intelligent diplomacy. During the election campaign our position was stated very clearly, namely that we should do what we could as a government to develop our trade with China in respect of all goods which were not on the strategic list, and that for that purpose it would be desirable to send not merely a trade commissioner from Hong Kong to China but a governmental mission headed by a minister.
I ask the minister-and perhaps he will clear this matter up when he replies-what actually is the situation with regard to the strategic list for communist China. As he knows, over the years through a committee that meets in Paris-COCOM-lists have been agreed on with other NATO countries of goods which should not be exported to Russia and which should not be exported to China because of their strategic character. But there was a difference between the Chinese list and the Russian list. The Chinese list was more extensive than was the Russian list.
I have been trying for a good many months to find out whether that differential has been removed and, if so, whether the list of prohibited goods to China is now the same as the list of prohibited goods to Russia and whether that change, that co-ordination, has been agreed to by all the members of NATO. Until that change is made and until that differential is removed, it is going to be extremely difficult indeed for us to develop our exports to that country.
While over the years we may be able to build up an export trade to China, especially in agricultural products and in timber which were our two main exports in earlier years, we must not deceive ourselves that even under the most favourable conditions, this is something which will take place overnight. Perhaps within the next two or three years this may not be the market which will be the solution for an expanding export trade 57071-3-150J
Supply-Trade and Commerce but it is certainly worth developing. Far more important, as I have said, and the dominant factor in our trade, remains our trade with the United States.
I should like to say something about our United States trade relationships, more particularly in the light of the very happy visit we have just had from the President of the United States, who talked about these relationships. In this vital matter of relationships with the United States, whether political, economic or cultural, I think frank talk helps. If it is given in the right spirit it will not hurt; it will help to bring about an understanding of our mutual problems. It will help to clear away the cobwebs of some of the after dinner sentiments to which we are all exposed on occasion and which do not seem to me to be a very substantial basis for a sound Canadian-United States relationship.
So far as I am concerned, I have tried over the years to speak perfectly frankly but in as friendly a way as possible about our relationship with the United States. I have a very vivid memory of a speech I made in Toronto as far back as 1951, for which I was criticized very strongly by some people in this country who since that time have directed to the United States far more vigorous criticism that I was giving then. At that time in 1951 I ventured to say that the days of relatively easy and automatic relationships between our two countries were over especially, as I tried to point out, in the realm of economic affairs, and that our mutual problems in the future were going to be more complicated, more difficult and more numerous.
Nothing that has happened since 1951 has caused me to change my mind as to the validity of that forecast. In the years after 1951 I do not think anything I have said departed from that position in talks that I made in the United States or in Canada. I recall very well that in those days my hon. friend and some of his colleagues when on this side in the opposition used words which went further in criticizing the United States than we went on the other side. I remember some of them agreeing in those days, as perhaps they agree today, although I am not so sure now, when I said more than once in public that defence co-operation between our countries, which is not only desirable but is essential, and economic conflict are not reconcilable. I still think that is true.
The Prime Minister now does not like that sentiment. In this house he has charged me with using threats by talking like that and of wrongly trying to relate defence and economic relationships. I think defence is an important part of our economic and trade

Supply-Trade and Commerce relationships with the United States of America, and I do not mind him putting on the record again what I did say, so I can confirm that I stand by what I said. One of the things to which the Prime Minister has taken exception was a remark I made with respect to economic and trade matters while in San Francisco during the summer of 1957. So there will be no departure from my statement, and to show that I still stand by it, I will read what I said. I was talking about the demands of the United States for further tariff protection against Canadian imports and the resentment this was causing in Canada because of the already great imbalance in our trade with that country. I said:
The resentment caused in Canada by this process is increased when attempts are made to justify these demands for more protection on the ground that the requirements of defence make national self-sufficiency in certain commodities essential. This argument may well be valid in respect of certain vulnerable areas which might be closed to you as a source of supply in time of crisis or war. Surely it does not apply to Canada. We are the less impressed by the argument because on many other occasions we are told by other American authorities that defence can only be considered as a continental problem and dealt with on a continental basis. It is. I think, a simple, though significant, fact that any further restrictions on Canadian imports into the United States would make further defence co-operation more difficult. At least that is how I feel about it, and I am sure you would wish me to express my feeling in plain language as is customary when Americans and Canadians speak to each other.
That is what I said to the American Society of Newspaper Editors, and that is the way I feel about it. On July 10 the Prime Minister accused me in the House of Commons of trying to relate these two things in a wrong way and I would like to quote, as he did, what I said in this house on this matter in the debate on the reply to the speech from the throne. Just to prove that I stand by my remarks, I will quote not only the part of my speech which he quoted but I will add another sentence which he did not quote, as recorded at page 25 of Hansard for May 13, 1958:
We must naturally protect our interests when they are prejudiced by United States policy. We must, for instance, make it quite clear that the United States cannot expect full and complete co-operation in continental defence, which is desirable, if she treats us unfairly in her tariff and trade policies.
I also added the following sentence, which the Prime Minister did not quote:
But at the same time we must do everything we possibly and honourably can, to avoid economic conflict with the United States, which conflict would be bad for both countries and certainly disastrous for us.
That is exactly how I feel. Surely it is a good thing for the United States to know that in our view in this country the kind

of defence co-operation which we would like to have-full and complete-is not possible, as it should be possible when there is economic conflict. We will co-operate with the United States with respect to defence, irrespective of economic policy, because we must in our own interests, for our own safety and for our own security; but that co-operation will not be as complete as it should be if there is economic conflict alongside it. That is what I said, that is what I mean, and that is what I still stand by. I would like to ask the Minister of Trade and Commerce when he next gets up to speak whether he disagrees with that particular doctrine.
On July 9 last, when the President of the United States spoke in this house he honoured us, he complimented us, by speaking frankly, as I think we should speak to each other but without recrimination on either side. He said, and he was right, that frankness is the measure of friendship, and in his speech he said some things which were true and valid. I think he put some of the differences, especially the economic differences, between us in perspective and perhaps in a little better balance than had existed previously. But he was stating the United States case just as our Prime Minister when he goes to the United States states-and I hope he will continue to state-the Canadian case.
While we must respect what the President said and I think we must be complimented by his frankness, we do not need to agree with everything he said any more than we have to agree with the United States policy all the time. He did state the United States case with respect to their agricultural surplus disposal policy in a way which perhaps helped us more than we have previously been helped to appreciate the United States side of the picture, but I am afraid he did not remove all our doubts as to the wisdom of United States policy in this matter in so far as its relationship to Canada is concerned.
He raised the question of base metals, about which we are pretty anxious because the exports of these metals are so important to this country. Here I think we should pay tribute to the efforts of the administration in Washington to maintain the position in that respect by preventing action which would keep out our base metals and by endeavouring to fall back on stockpiling, something which will help their own producers without, we hope, hurting ours.
I suggest, however, it is not a tolerable position in Canadian-United States economic relationships when in time of crisis-and I am thinking back to the world war and to Korea-we are asked to bend all our efforts in this country to develop our natural resources and to produce strategic materials

and make them available for the common good, particularly for that of the United States. Then when we do this and the crisis is past these considerations seem to be, if not forgotten, at least diminished in the minds of those who previously persuaded us and we are told that only economic considerations, particularly the considerations of local producers, really govern domestic policy. If we are to develop resources of this kind for the common good in time of crisis, surely we cannot be left high and dry with respect to that development and that production when the crisis is over.
During the war we faced this problem and we tried to solve it. We solved it very successfully in wartime by setting up joint boards in Washington. I particularly have in mind a board covering base metals and materials called the combined materials board; and perhaps the time has come-and I have mentioned this before in the last two or three months-for the government to explore the possibility of once again establishing a joint raw materials board with the United States for the consideration of these questions. Perhaps this would be a very good subcommittee of the joint cabinet committee, either on economic matters or on defence matters, because this is certainly an important aspect of defence.
The President also dealt with the United States action in regard to oil imports. He tried to remove some of our worries on that score, and emphasized that in the action they were taking they hoped to cause a minimum of damage to Canadian producers. Then he had this to say, and I quote from page 2085 of Hansard:
We believe that to ensure adequate supplies of oil in an emergency, it is necessary that exploration to develop oil reserves be carried forward with vigour. This means a healthy oil industry throughout the continent and a healthy domestic oil-producing industry is vital to our national security.
Well, that is true; but I should like to substitute for that word "domestic" in the United States statement the phrase that a healthy "continental" oil industry is vital to our security. As I said in my speech in San Francisco, while it may be desirable for consideration of security not to be dependent on overseas sources of oil, you cannot use that argument in connection with continental production in North America. If defence is to be considered on a continental basis, then resources and material for continental defence must also be considered on a continental basis. Perhaps we are more aware of that necessity today than we were a week ago; because the events of this week must surely have driven home to people in Washington, London, Paris and Ottawa that in placing re-
Supply-Trade and Commerce liance on overseas sources, especially in the Middle East, for vital oil supplies one is resting on a very unstable foundation.
There was one other matter which the President talked about and which was probably also talked about a good deal more in private discussions. This was United States policy in regard to the exports by Canadian subsidiaries of United States firms to countries which are on the prohibited list as far as United States exports are concerned. As my hon. friend from Ottawa West pointed out yesterday, in spite of everything that has been said, we over here, at least, are still in some confusion as to the situation with regard to this very important matter, a matter which is not only of practical importance but of political importance, too, and which involves questions of principle and of national sovereignty.
I suggest the sooner we can get this matter cleared up the better it will be for relations between our two countries. Is it not an intolerable position that the United States should pass laws of extraterritorial application of the kind covered by this particular law, administered in such a way as to ignore the interests of Canada in her own trade? If in fact, as we have more or less been led to believe, the application of this law so far as Canadian exporters are concerned can be set aside by administrative action, I should hope that the United States administration would announce that they were going to adopt that policy with regard to such administration rather than merely suggest that every time there is a special Canadian case under this law consultations will take place.
There are a good many other things about which the minister talked. I am not going to deal with them all, because we will have a chance when the individual items of the estimates come up for consideration. I should however like to mention some of the omissions from his statement. There was, first, one very important omission. Perhaps this may not have been the right occasion for him to talk about the matter, but I hope he will rectify the omission before long. I refer to the menace of Soviet trade and economic policy to our own trade and export policy, and the ways in which we should meet it in concert with our friends, which is the only way in which it can be done. Perhaps a week ago we should have said that this menace was greater than the threat of military action.
There is no doubt whatever that in the last year or two a decision must have been made in Moscow to push ahead with an offensive on this particular front. We know the strides

Supply-Trade and Commerce the Soviet union has been making in export trade during the last two years and also with regard to aid, particularly to African and Asian countries. That aid in the last couple of years has amounted, I have been told-and the minister will correct me if I am wrong-to the figure of about $2 billion. This constitutes a real problem for Canada and the other free countries. It is something we will have to do something about.
Then there was another notable omission, an omission which was noted by my hon. friend from Ottawa West, namely the way in which commonwealth economic questions were dealt with, or rather were not dealt with. We did not hear very much about the results of the trade mission of last autumn to the United Kingdom. By this time I should have thought it would have been possible for the minister to be able to say something in concrete terms about the result of that mission, more particularly whether the govpi-nment itself has increased any of its purchases over which it has control and diverted any of them from the United States to the United Kingdom. We heard very little at all about diversion. Perhaps diversion has now disappeared as an element of government policy.
We heard nothing-and it was a very important omission-with regard to the United Kingdom offer of free trade. The hon. member for Rosthern had something to say about this last night, and it was a very interesting observation indeed that we were all free traders. Then he went on to explain what he meant. I wish the spokesmen for the government would say the same thing in the same terms on the eve of the commonwealth economic conference.
Whenever we bring this up in the house we are always asked what our own policy is, and that is a fair enough question. The hon. member for Peel is not here today to ask it of me or it would have been asked before now. Our policy in this matter, as a party, has been stated more than once. It is that immediately that this offer was received we should have told the United Kingdom government that we would give it immediate, sympathetic and full consideration, and we would start discussions with the United Kingdom government in respect of it on the governmental level to explore the possibility of working something out. Whether or not the government has done that I do not know; they have never given us any reason to believe they have had any talks of any kind in respect of this very important offer.


Gordon Minto Churchill: Would the hon. gentleman permit a question? With regard to the statement of the policy of his party concerning

this offer, which he has mentioned several times and which he has now put on the record, he has based that on a resolution passed at the conference of the Liberal party last January. Would the hon. member put that resolution on the record in full, including the last two sentences in which I am particularly interested?


Lester Bowles Pearson: We will be glad to do that. We will put it on the record in the interests of the discussion.	*


Gordon Minto Churchill: In full?


Lester Bowles Pearson: Of course. Our resolutions are published, unlike the resolutions of the last Conservative party conference. They are there for everybody to read, and we will stand on them.


John Whitney Pickersgill: They hid their resolutions.


Lester Bowles Pearson: I thought the minister was going to ask me what I meant when I said we would start discussions with the United Kingdom government. That would have been a good and reasonable question. I have in mind exactly the kind of discussions which the United Kingdom government is holding with European countries in working out a free trade area with the continental European countries. The move to work out a customs union on the continent was a very important development, and other European countries who were not included in this union had to make up their minds whether they would associate themselves with it in some form of free trade area or whether they would stand aloof.
The Scandinavian countries, Ireland and the United Kingdom and others were concerned with this. The United Kingdom took the stand that they must try to associate themselves with the customs union by working out a free trade area. They have been discussing this matter for a couple of years now, and that, I suggest, is what we should be doing at this time about the United Kingdom free trade offer.
In these European discussions there should be no delusion in anybody's mind about the difficulties in the way of working this out, and I think it is yet too early to say whether or not they are going to be successful. But they are trying to meet the objections to the establishment of a European free trade area by laying down provisions which would ensure that as the area is built up over the years-because they are going to take their time over it-the position of particular industries inside the free trade area would be considered, and the impact on them would be cushioned over 15 or 20 years.
That kind of approach would, of course, have to be made by any Canadian government

in talking to the United Kingdom government about a free trade offer. I suggest however to the minister that there is nothing which is of more importance in the economic problems facing this country or this government than arrangements which would have to be made for Canadian association with this European free trade area.
When I say that if we had been in power we would have begun discussions with the United Kingdom over these free trade proposals, I do not for a moment believe that any bilateral arrangement between the United Kingdom and Canada would be enough.
Even this kind of bilateralism is inadequate. Therefore we would have to do our best with the United Kingdom and with our friends to expand those arrangements over the whole of the Atlantic area. This means trying to bring in the United States.
Now, I have no illusions about the difficulty of this, or about the obstacles in the way of solving those problems of Atlantic freer trade. But, Mr. Chairman, this is the day of vision, and I do not know any more important or any greater vision, apart from building up our own country, than trying to build up the Atlantic area as a free trade, politically co-operating and defence area. Surely there could be no more important Canadian policy at this time, political or economical, than to take the initiative in that regard.
Here again I know something about the difficulties in trying to convert NATO, for instance, into something other than a defence organization. I have attended a good many NATO meetings, and at every NATO council meeting I ever attended we brought up the question of implementing article II. I confess we did not make much progress, very little indeed.
I also sat on the committee of NATO which was charged with the duty of working out recommendations which would convert NATO from a defence organization into a political and economic co-operative organization through consultation in non-military matters. We produced a report on this which is a pretty good report, but it is much easier to produce reports than to implement them, as indeed we pointed out in our own report. However, circumstances have now changed. During the last two years since that report was prepared the Europeans themselves have begun to build up their own political and economic area.
One of these days they will perhaps-I hope this is true-have completed that process. If they do, I hope they will do it in a way which will not shut out North America because, as the Minister of Finance and the Minister of Trade and Commerce have
Supply-Trade and Commerce pointed out, it is absolutely essential that that European area be a low-tariff area, if we can make it so. Any other kind of European free trade area bodes no good for us. Therefore we should make, and I am quite sure we are making, our influence felt in Europe to ensure this does not happen. But our influence in this matter would be far greater if we could also take a lead expanding the proposed European free trade area into Atlantic freer trade.
I do not know anything more important, as I have said, than a Canadian government initiative along these lines. I do not know any more important vision before us-except the vision of building up our own country, and the two are related-than that of developing a great Atlantic free trade area, especially at this time when the free world countries, especially the Atlantic countries, must get closer together economically or politically or they are going to fall apart.
NATO has been the sheet anchor of our defence and our security in the last 10 years, but NATO is not going to survive, I am afraid, merely as a military alliance. Now that the Europeans have begun the process, now that the Russians are emphasizing the necessity of continuing that process-they very often are the people who make us aware of things like this-I hope the government will take very seriously indeed the desirability of not only discussing with the British a free trade area, but of broadening the basis of this discussion to include all the NATO countries and perhaps even as many commonwealth countries as would come into such an association. If we can do that, not only will we have laid a better and stronger foundation for our trade and economic policies in the future, but we may have laid a stronger foundation for peace and security in the world.


Mr. Smith (Calgary South):: I wonder
whether I might ask the Leader of the Opposition a question purely for information. He made an interesting reference to a form of continental plan for the development of resources of oil and gas, or oil in particular. I wonder whether he was referring to the often mentioned plan of considering the resources as a unit? If so, would he not feel that conceivably, based on the small percentage that Canadian crude represents in such a continental plan, our resources of oil might represent even a smaller unit or proportion than it does today?


Lester Bowles Pearson: Yes. If I may deal with that point, I appreciate that particular danger and I did not have that particular device or procedure in mind when I talked about the joint materials board. I had in mind the

Supply-Trade and Commerce mechanism we developed during the war when it was necessary to produce raw materials on a continental basis for war purposes, quickly and efficiently, and when it was necessary to allocate that production over the whole of the continent, indeed, not only the whole of the continent but over the whole of the anti-Nazi world at that time. What I had in mind-and I go no farther than this at the present time because it requires a good deal of thought and study in working it out-is the kind of joint materials board such as the one we had in Washington at that time so that those problems, especially concerning base metals, oil and supplies of strategic materials, could at least be considered by both governments through their representatives on a continental basis. When one government felt that is was being unfairly treated, or that some development taking place in the other country was prejudicing a development in Canada, there would be this kind of mechanism to which to appeal.
That can be done now through governments, and of course it is being done, but perhaps it would be of some use to have a permanent committee. I know we talk a lot about boards these days, and sometimes boards are excuses for inaction rather than mechanisms for action, but perhaps it would be useful to have that kind of board, if you like, as a joint subcommittee of governments which would be meeting almost continuously, as it used to meet in Washington during the war, where those problems could be threshed out. But I did not have in mind the detail which my hon. friend mentioned in regard to oil.
As far as the second part of his question is concerned, I have only this to say. Perhaps he will agree with me, but perhaps he will not, that surely the economic way to develop our oil resources in western Canada would be to exploit the northwestern and western United States markets. That is the way it would be done in a rational world and we would get our oil supplies in the east where we could import them most economically, from overseas or from Venezuela, or from any other country. Perhaps that is the way it should be done in a rational world; but if this world, indeed if this continent, is not to be rational and if Canadian producers are prevented from access to that United States market and thereby prevented from developing their production, then I suggest that any Canadian government would have no alternative but to see what it could do to market our oil in eastern Canada. That is not anything that a government would want to do on economic grounds, but it is something a government might have to do on national

development grounds especially if we are excluded from an economic market across the border.
While I am on my feet, Mr. Chairman, perhaps the minister would like me to put on the record this Liberal resolution.


Gordon Minto Churchill: Yes; I have lost my copy of it.


Mr. Mcllraiih:: Ours was printed and is available.


Lester Bowles Pearson: I will be glad to send you 50 copies for distribution to your members.


Gordon Minto Churchill: I have a large wastepaper basket, but go ahead.


Lester Bowles Pearson: The resolution reads:
In that perspective-
Perhaps I should read the whole thing.


Gordon Minto Churchill: Don't read the whole booklet.


Lester Bowles Pearson: I will not read the whole book but I will read the resolution on trade, and I hope my hon. friends will be able to refrain from cheering as I read:


Mr. Brooks:: Cheering or jeering?


Lester Bowles Pearson: No, I said "cheering". I read:
The Liberal party has always favoured policies which promoted the expansion of trade on a multilateral basis, and under Liberal administration Canada's trade attained unprecedented volume. From a total of only slightly more than a $1 billion in 1934, our trade increased to more than $10 billion in 1956.
In view of the success of these policies-


An hon. Member:: Oh, oh.


Lester Bowles Pearson: Well, an increase from $1 billion to $10 billion may be considered as evidence of some success.


An hon. Member:: Normal growth.


Lester Bowles Pearson: Normal growth because of intelligent government policy. I continue:
1. The Liberal party believes that the prime object of Canadian trade policy should be to continue to increase exports as much as possible and to widen the geographical basis of our external trade. This expansion, not diversion of trade, is the only policy compatible with sound, rapid economic development and with increasing productivity and living standards.
2.	The Liberal party believes that Canada should continue, within the framework of international agreement, to seek the reciprocal removal of trade restrictions in the world and to prevent economic isolationism.
3.	The Liberal party also believes that to assure the security of the free countries we must work toward a close interdependence of our economies to gain greater opportunities for trade, full employment, greater productivity and higher living standards.
4.	In that perspective, a Liberal government would give immediate, sympathetic and detailed consideration to the British proposal for the gradual establishment of a free trade area between the United Kingdom and Canada and would take

Into account both the new opportunities that might be opened for Canadian industry and the importance of maintaining existing industries and living standards in Canada.
That is perfectly reasonable, and that is exactly what is happening in the development of the European free trade area today. That is exactly the way they are proceeding, because these transitions cannot be made overnight and they cannot be made without cushioning the shock in respect of industries which in the long run might benefit but which in the immediate future might be hurt.


Mr. McIntosh:: I wonder if the hon. member would permit a question. Yesterday I asked a question of the hon. member for Ottawa West which, by the way, was not recorded correctly in Hansard. I was referring to world war II, not world war I. I said that prior to world war II Canada had 40 per cent of the wheat market and in 1956 Canada had 25 per cent of the wheat market, and I asked why there was this decline in view of the Liberal government's trade policies.


Lester Bowles Pearson: Mr. Chairman, the hon. member for Ottawa West is jealous of his right to answer that question asked by the hon. member yesterday. He has been doing some research work, and he will answer it immediately I sit down. The last paragraph of this very progressive and important resolution reads:
In the same spirit, a Liberal government would also consider the possibility of a co-ordinated program for the reduction over a period of years of trade barriers within the commonwealth and Atlantic communities.
We are very glad today, Mr Chairman, in July, 1958, to stand on that policy.


Mr. Horner (Acadia):: May I ask a question?


George James McIlraith: Now that we have had the resolution passed at the Liberal leadership convention of 1958 put on the records of the House of Commons, I wonder whether the Minister of Trade and Commerce would now place on the record the resolution on the subject of trade passed by the Conservative leadership convention in December, 1955.


Hazen Robert Argue: Mr. Chairman-


John (Jack) Henry Horner: Mr. Chairman-


Charles Edward Rea: Does the hon. member wish to ask a question?


John (Jack) Henry Horner: I should like to ask the Leader of the Opposition a question. In his speech he dealt with the export trade to the United States, including livestock. Then he read the Liberal policy and stated that the Liberals have always worked toward freer trade. I should like to ask him why
Supply-Trade and Commerce they did not obtain the removal of the embargo on Canadian cattle in 1946, when we could not ship our cattle to the United States and the price in that market was 30 cents a pound?


Lester Bowles Pearson: I tried to point out that in 1947 we did take action in that regard and made an agreement under GATT which made it possible to get into the United States market.


John (Jack) Henry Horner: You could have done it two years earlier.


George James McIlraith: Perhaps I should answer the question asked yesterday by the hon. member for Swift Current-Maple Creek. I did not understand the question when he asked it yesterday but I saw it this morning at the opening of the house when I got Hansard. I find that as reported on page 2329 of Hansard the hon. member asked this question:
Will he touch on the question why Canada had 40 per cent of the wheat market prior to world war I and has only 25 per cent of the world market now?
This morning he says that he meant world war II. In any event, the very short and simple answer is that there are three reasons. If he relates it to world war I he will have to recognize the development programs in Europe, particularly the extremely high protection put on wheat.


Mr. Mclnlosh:: Before we get an unnecessary explanation, may I say that my question had to do with world war II.


George James McIlraith: Well, it is still the same thing.


Mr. Bell (Saint John-Alberl):: For you
people.


George James McIlraith: I do not know what the hon. member for Saint John-Albert means by that.


Thomas Miller Bell: You are living in the past.


George James McIlraith: From the hon. member's technique in the house I would assume that he has no appreciation of the problem of marketing wheat and its significance in the economy of this country. Perhaps he might refrain from interrupting until we deal with what I am sure the hon. member who asked the question will appreciate is a very important and serious matter to this country. I think the hon. member who asked the question asked it in a serious way and intended it to be treated seriously.
There is the whole question of the development of production in the European area. We recall the tremendous tariff protection,

Supply-Trade and Commerce indeed the virtual embargo, with respect to Canadian wheat imposed by certain governments in the immediate pre-war period in order to develop their production. We recall the development in Russia whereby Russia increased its production of wheat and used the weapon of trading wheat with certain countries in adjacent areas for heavy equipment which was needed, and by that device increasing her own wheat production.
In this morning's Montreal Gazette there is a Reuters dispatch from Moscow dated July 17 which is headed, "Red Wheat Hike". It reads.
The area under wheat in the Soviet union increased by 34 million acres between 1954 and 1956 and now is one and a half times as big as the area under wheat in Canada, the Soviet news agency Tass announced today.
The third and most important factor is the tremendous increase in the production for export in the United States of America. I think the hon. member will agree that that is the most important of the three factors. The subject is one that is worthy of a full length speech. There are two very short documents containing some interesting data on the subject and treating it in a more historical way. There is a little booklet published by the Canadian institute of international affairs entitled, "What's Happening to Wheat" by M. Western and R. Hedlin. It is a very small pamphlet. Then there is another rather thorough treatise on the subject. It is a thesis submitted by Mr. M. W. Menzies, who I believe is now an economic adviser in the Department of Finance. The thesis was written in 1956 for the University of London, and it deals with the Canadian wheat board and the international wheat trade. It is a very comprehensive and thorough document and contains all the historical developments.


Gordon Minto Churchill: It is a masterpiece.


George James McIlraith: I hope I have answered the question.


John (Jack) McIntosh: May I ask a supplementary question?


Joseph Pierre Albert Sévigny: The hon. member for Assin-iboia.


Hazen Robert Argue: I think the house will agree that we have all been very patient and lenient about the number of questions that have been asked the previous speaker. I think he and his colleagues have been very generous in giving full answers to those questions. I listened with a good deal of interest yesterday to the statement by the Minister of Trade and Commerce. I was pleased to have this comprehensive review of the government's attitude toward trade with various countries.

It was a review of our experience and something of the outlook for the future.
The minister made a statement of which we were all aware, that during the current crop year there have been substantial increases in our exports of wheat. In this regard I am not going to follow the impression I received from the remarks of the Leader of the Opposition when he was speaking about it, that he wished to take away a substantial part, if not all, of the credit that might be due to the government for this improvement. I am quite prepared to give the government whatever credit may be due to them, and I think there is credit due them for having adopted policies which, if not entirely new, were certainly expansions of other policies and which have resulted in this improvement.
I hope the minister's statement that the coming crop year should equal the past one or perhaps even exceed it will be borne out by experience. I believe that if we can get our exports up from, let us say, the present 300 million to 350 million bushels as an annual target figure, even if we have larger wheat crops in the future than we have had in the past we will be able to liquidate the surplus we now have. I hasten to add, as I see the minister smiling when I ask for a further increase in exports, that I feel it is my job to keep setting a target for him so we will keep on improving. If crops are of average size or even less than that, according to the history of this country exports at the annual rate of 300 million bushels are enough to clear the crop.
There is another aspect of this matter which I believe should receive the attention of the minister immediately, and that is the whole question of the price the producer receives for the commodity. There are two important aspects of this subject, one sales and the other price. The minister has shown that there has been a substantial improvement in sales, but the same improvement does not apply to sales of barley or flax. In fact I believe there is no improvement, and that they are running at about the same figures as last year. There has been some improvement with regard to wheat.
I am wondering if the minister could inform the house, when he speaks, whether or not there is an application now before the board of grain commissioners by elevator companies for a further increase in their handling charges for grain. He will appreciate that any increase in the handling charges that might be allowed will come out of the producers' payment for wheat and reduce any subsequent interim or final payment.
I should like him to comment also on this aspect of the government's program, which was started by the previous administration,

namely the payment of storage costs on that quantity of wheat in excess of 178 million bushels in storage on July 31. Would he say whether, in the grain picture as it is now developing, the amount of storage the government will pay into the wheat board fund on account of this policy is likely to be reduced? I think that will follow as the surplus is moved to the markets of the world. When the government's payments into this fund are reduced, that will result in the wheat producers receiving an even smaller payment in the years ahead.
I noticed the other day a report in the press that the government's bond issue may result, and is likely to result, in an increase in the premium on the Canadian dollar. This would be another factor which would result in further deterioration in the price of grain. I am asking the minister, therefore, whether he can give us, when he speaks, the price picture and the price outlook so far as these important commodities are concerned.
I noticed with interest the minister's statement that exports increased in 1957 over 1956 by some 2 per cent. The minister seemed to me to be rather satisfied with what had been accomplished and with the general outlook. I believe that an improvement of 2 per cent in 1957 over 1956, in the light of all the circumstances, in the light of the needs of this economy, is in fact a rather dismal showing.


Gordon Minto Churchill: It is a record.


Hazen Robert Argue: I know it is a record, and I
am going to have something to say about that. If we should keep on having a record every year of adding 2 per cent to our exports it means that we are falling down in the export field, because to increase our exports by 2 per cent, coupled with the statement of the Minister of Finance on previous occasions that the gross national product would probably go up by the same 2 per cent this year, means a continuing recession in this country. It is not good enough to have a 2 per cent increase, even though in dollar value this may be a record. Unless we are able to increase our exports by a much higher rate than 2 per cent we are going to have continuing trouble in our industries which depend on export markets.
The government has had some very nasty things to say about the previous administration. I always sit back and listen with a great deal of enjoyment when I hear government members tearing into the official opposition on the basis of their record. I think if the Minister of Trade and Commerce will look at the record of exports for the previous two years, as compared to the same time a year previous in each case, he will see that
Supply-Trade and Commerce in times of prosperity in this country our exports were increasing by a figure much in excess of 2 per cent.
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.
Hazen Robert Argue: Mr. Chairman, I have in my hand some figures on the increase in total merchandise exports in recent years. I find that the Bank of Canada statistical summary shows that merchandise exports for 1957 stood at $4,935 million, an increase of $72 million over the previous year or 1.5 per cent. The merchandise exports in 1956 increased by $512 million over the previous year, or some 11.8 per cent. In 1955 merchandise exports increased over the previous year by $404 million or 12.4 per cent.
The point I am making is that while there was an increase of between 1 per cent and 2 per cent in 1957 over 1956 in commodity exports or merchandise exports, this was just a small part of the much larger increase that had prevailed in the two preceding years. I think there is a definite correlation between the very small increase in merchandise exports in 1957 and the very substantial unemployment this country has been facing.
The increase in the physical volume of exports which adjusts exports to a change in the purchasing power of the Canadian dollar, shows exactly the same trend. In 1954 the index for the physical volume of exports, based on 1948 equalling 100, was 109.6. In 1955 the index had gone up to 118.3 or an increase of 8.7. In 1956 the physical volume of exports was up to 128.3 or an increase of 10. In 1957 the index was up to 129.8 or an increase of only 1.5. Hence while there has been a moderate increase in 1957 it is a rather inadequate showing in comparison with that in previous years.
To me the disturbing part of the minister's statement is that he seemed rather satisfied with the 1957 volume of Canadian exports, and he seemed quite satisfied with the showing in 1958. He did not say to the house what is a fact, namely that our 1957 exports should have been higher and that the 1958 exports should be much higher than they are now. If the minister had been in the same frame of mind as his party was a year ago I think he would have had important plans that would result in a large increase in our exports. Instead, he was content all through his speech to take what seemed to be general satisfaction in the trade picture

Supply-Trade and Commerce as it now exists. In his opening remarks, as reported at page 2320 of Hansard, he said:
For the year 1957 a new record total was established in our commodity exports, amounting to almost $5 billion, or about 2 per cent above 1956, which in turn had been a peak year. Preliminary figures for the first five months of 1958 confirm a further improvement in our foreign trade, with total commodity exports for this period amounting to almost $2 billion, or about 1 per cent ahead of the corresponding period last year.
Then he went on to say:
Some of the reasons for this good showing-
He terms a 1 per cent increase a good showing. I would suggest that a 1 per cent increase is an inadequate showing and that very serious economic conditions will result in this country if we cannot get it above 1 per cent in the days ahead.
About a year ago now the government was making statements as to the effects which would flow from a commonwealth trade conference. When the commonwealth trade conference last year was concluded statements were issued on the wonderful results of this conference. From the statements that were issued at that time we thought a new era was dawning, but in the minister's statement today I see little attention given to the coming commonwealth trade and economic conference. He seems to take a rather conservative view, I would say, of what the results of that conference may be. As reported at page 2323 of Hansard he said:
We are looking forward to the commonwealth trade and economic conference in September in the hope that there will be a further expansion of markets within the commonwealth, a removal of trade restrictions and the development of a new approach to some of the major trade and economic problems facing the world today.
We find there very little in the way of a definite policy and certainly, to me, no indication that the government really expects this conference to do a great deal for Canada. I do not know how the government can expect the conference to have any great success when, in advance of the conference, the government has announced that it would increase tariffs on certain goods coming into Canada from the United Kingdom. It would seem to me that the government announced in advance that it was putting roadblocks in the way of this coming commonwealth trade conference.


Mr. Bigg:: You hope.


Hazen Robert Argue: What was that statement?


Frederick Johnstone (Jack) Bigg: You hope.


Hazen Robert Argue: That is not true, and the hon. member should not be making a statement like that.


Frederick Johnstone (Jack) Bigg: Then why all the gloom?


Hazen Robert Argue: In his remarks the minister has said-and his colleagues have indicated it also-that these tariff increases are going to take place. When it was announced in Canada that this government was increasing tariffs the press reports in Great Britain, as far as the conference was concerned, were very disturbing indeed. Some of the most influential publications in the United Kingdom questioned what would come of this conference in the light of the restrictive trade practices which this government had indicated it would follow.
The minister also, in my opinion, seemed to brush over rather lightly, though he spent some time on the subject, the common market being set up in Europe. I think this common market, if Canada is not associated either with it or with the free trade area, could have some very bad effects for Canada; and I do not make that statement on my own, for it has been made by some of the most prominent farm organizations in this country. They say it is clear to them that the common market which is to be set up in Europe might be disastrous as far as exports of wheat from Canada to Europe are concerned.
I hope the government will some day tell us what is its policy as far as the United Kingdom free trade offer made last year to Canada is concerned, and I think the government should now be considering, with the United Kingdom and other European countries, how Canada can associate itself with the free trade area and the common market in order to increase the volume of Canadian trade and raise economic standards in this country.
Something has already been said during this debate as to the United States action in limiting the flow of Canadian oil to that country. The export of Canadian oil to the United States and the development of the eastern Canadian market are most important to the people of western Canada. Recent events in the Middle East might suggest that some of the imports of oil normally coming to Canada from that area may be cut off, and I am wondering if the minister would agree to make a comment as to how any decrease in the flow of oil from Arabia and Iran into Canada would affect the Canadian market for our domestic oil.
The hon. member for Kootenay West in his speech yesterday emphasized the importance of developing the China market. The minister has told us that Canada has increased its trade with China and, in all fairness, this government seems to be interested in developing the market in China. But it seems to me that the government has two policies with regard to China, and that they

are inconsistent policies. The government puts its head in the sand as far as recognizing China is concerned and seems to pretend that the new government of that country does not exist. It tags along with John Foster Dulles and company, refusing to recognize the government of China; but, as if to attempt to gain for Canada the benefits of recognition, the government follows another policy of endeavouring to promote trade.
I am in the main interested in developing the second policy, but I say that if we are to take consistent steps to improve our trade with China then we should recognize the government of that country, and I hope the minister will use his influence within the government to see that such recognition is brought about at an early date. I am certain that such recognition would make easier our relations with China and would of itself lead to a substantial increase in trade with that country.
There is, I believe, one very serious omission from the minister's statement. I could scarcely believe that he had omitted any reference to the growing threat of the U.S.S.R. in the economic field. I do not believe the minister made any reference at all to that matter in his speech. As I read the reports of economists, newspaper writers and, yes, the speeches of heads of states, this would seem to be the major economic development in the world during recent months. There are growing reports that the U.S.S.R. is entering into very serious competition in the field of steel and that United States and Canadian steel prices and production may be seriously affected by such competition from Russia. The Financial Post of June 14, 1958 contained an article headed "Is Russia Gearing Itself for Pulp and Paper Push?", which reads in part as follows:
Foreign observers bring back word from Russia that forest-based industries there are expanding quickly, both in size and efficiency.
For instance there are estimates that Russia is spending $3 billion yearly to hike forest output and efficency.
The minister apparently does not think there is any threat in this regard. Growing trade and competition from the Soviet union did not warrant a reference by him at all, yet in the Montreal Gazette of June 5, 1958 there is a report headed "Red Trade 'Grab' Thrust on C.M.A.", which in part reads as follows:
The price war being waged by the Soviet union in its increasing invasion of world export markets, including those for a number of Canadian products, was bluntly thrust upon delegates' attention early in the proceedings.
This cut-price bid for business at the expense of Canada and other western countries was rated by H. V. Lush, of Toronto, C.M.A. president, as "just as dangerous as the military 'cold war' of recent years."
Supply-Trade and Commerce
Those are the words of the president of the Canadian Manufacturers Association, and the article goes on to say:
Russia, said Mr. Lush, is "pinching our toes" and preparing to "hurt us in the future" with deliberate efforts to "under-cut sensitive markets" at a time of North American economic slowdown.
There seems to be throughout the minister's statement a complete lack of policy and a complete lack of new thinking which the government referred to as being necessary and is thought to be necessary in other countries; and I suggest the only way Canada will be able to increase its share of trade in the world is for the Canadian government itself to take a more active part in promoting such trade.
The one feature of Canadian trade to which the minister was able to refer with pleasure and pride was the increase in Canadian exports of wheat, and this increase was brought about precisely because the government, in this instance, adopted new and far-reaching policies to move a product in surplus supply. The day has now arrived, I suggest, when in terms of trade we need a greater degree of government management and government promotion, and we say again that to deal with the increased threat of Soviet trade the government should be considering the establishment of such a policy, the providing of export and import boards, providing for the sale of Canadian products on a long-term contract basis and also the purchasing of Canadian imports on a long-term contract basis.
The government can pooh-pooh the idea; it can say "this is socialism, we do not have anything to do with it"; but the only product which has shown an increase, namely wheat, is sold by a government board that has complete control over the buying and selling of that product in respect to interprovincial and export trade, and also because the government had adopted new policies to promote the sale of that product.
The day of looking to convertibility of currency, the day when you can expect all the so-called free enterprisers who are engaged in the production and sale of various commodities consistently to expand Canadian trade year after year, is over; and these people and these industries, in the very words of some of their officers and some of their authorities, will not be able to meet the increased competition from the Soviet union which, they have been saying in recent days, is more dangerous to our way of life than the cold war itself.
I suggest that when the minister makes his statement he should give the house concrete proposals which he thinks will result in increasing Canadian trade, and I express the

Supply-Trade and Commerce hope that he can give us some assurance that in the year ahead our exports can increase by a volume very substantially higher than the 2 per cent increase of last year.


Joseph Pierre Albert Sévigny: Shall item 391 carry?


Hazen Robert Argue: The minister has been asked a number of questions, and I think it is customary about this time for him to make something of a general reply to the many questions that have been put to him.


Gordon Minto Churchill: I am quite prepared to do so, but the hon. member sat down somewhat more hurriedly than I had expected.


Hazen Robert Argue: Just two minutes short of my full time.


Gordon Minto Churchill: I appreciate that the house would like to proceed as rapidly as possible with the estimates of this department, recognizing at the same time that in view of the importance of the department there should be no undue haste. But with the summer getting rather warm and the end of the session, perhaps, not too far away, I feel quite certain that hon. members would like to proceed as rapidly as possible with this department so they can deal with the others.


Hazen Robert Argue: The haste is all on your side.


Gordon Minto Churchill: No, I am quite patient about this. 1 appreciate the attention which has been paid to this subject of trade, and I am grateful for the kind remarks which most of the members participating have made with regard to the efforts the government is making toward increasing trade. I appreciate very much the suggestions which have been made for further improvements, even if I do not accept them all.
The speeches we have heard so far are typical of speeches from the opposition. One of the great advantages of spending several years in the opposition and transferring to the government side is that one knows precisely the type of speech that may emerge from opposition ranks. When I sat over there I used to examine the speeches made by the minister introducing the estimates of whatever department it was, and if I could find no fault with his speech-which is very much what has happened in the course of this debate so far-I would then look for omissions, things which had not been mentioned.
Members of the opposition have assisted me in this respect and pointed out all my sins of omission. And then I would go on to examine very carefully the policy as set out by the minister, or lack of policy, depending upon the point of view. All of that is perfectly right for an opposition, and I understand the attitude of hon. members and think


their contribution to the debate has been constructive.
It will not be possible for me to answer every question that has been asked. If I omit answering something that should be answered I hope hon. members will draw my attention to it, because it will not have been done intentionally. I recall that some years ago when I was then critical of the then minister of national defence on his estimates, he would answer all the other opposition members who had spoken and leave me out entirely, which is not the type of treatment I propose to offer on this occasion. So if I do omit something please draw my attention to it. However, I will try to deal with some of the questions that have been raised, and in view of the contribution made this morning by the Leader of the Opposition perhaps I may begin by making a few comments on that.
I think in his usual fashion, as he got near the end of his speech and began dealing with the realm of external affairs, the hon. gentleman waxed eloquent-he is always more at home in this field than with regard to certain other matters-and drew our attention to what he called a broader vision of a western world more closely tied together economically. He spoke about freer Atlantic trade.
I fully appreciate his views in this regard, and draw his attention to the fact that in the spring of 1952 when I was seated in approximately the place now occupied by the hon. member for St. Boniface, and when my speeches in the House of Commons did not receive the attention which they perhaps deserved, I spoke on the subject of closer union of the Atlantic community and expressed sentiments somewhat similar to those expressed by the Leader of the Opposition today.
That is, I had what he calls a vision of a more closely linked Atlantic community; and in those days-and I hold the same opinion today-I thought it would be wise for us as western democracies to come more closely together than we were at that time, or are at this very moment, if we were to protect ourselves against the growing threat of nations which hold a different view on political matters. Part of that unity can be achieved, just as the Leader of the Opposition said, through closer links by way of trade. To that extent we are together in our thinking.
The hon. member was led into a final discussion of the European common market and the European free trade area, subjects which have been touched upon by the hon. member for Assiniboia and others. May I say that we are well aware of the problems that may arise if the European common market countries erect restrictive barriers against

trade with Canada. But as I pointed out in my speech yesterday, we have received assurances from them that that is not the intention. Moreover, they are all members of GATT and will negotiate with us under the terms of the GATT agreement.
I do not hold the views that some people do with regard to what may happen to our trade if the common market countries proceed with their plans. I think the six nations joining together and having free trade within their borders will lead to a higher standard of living in those countries, which in turn will result in greater buying power; and forecasts made of the six-nation common market development in Europe indicate that there will be an increase in population and an increase in productivity, just as happened on the North American continent, leading to an increase ability to purchase commodities from abroad. Thus it is not with alarm that I view the development of the arrangement among the six nations of Europe. At the same time we are keeping in contact with them in order that Canada's interests may not be overlooked.
The European free trade area is similarly being watched, and we have had adequate assurances from the United Kingdom that agricultural imports from Canada will not suffer any restriction if and when the United Kingdom enters into the free trade area with other nations of Europe. We are well aware of these problems and are keeping closely in contact with them.
Well, it was from a discussion of this that the Leader of the Opposition went on to his rather splendid climax, but earlier he was worrying himself about the co-called United Kingdom offer of free trade with Canada. I asked him to put on record the Liberal party's statement of policy in so far as that was concerned, and I indicated that the concluding phrases or sentences of that policy hedged it about so that it is almost if not entirely meaningless.
Then the Leader of the Opposition elaborated. He said, "Had this offer been made to us when we were in power we would have said, 'we will examine it; we will give sympathetic consideration to it, but we will go a step further, we will say now this is fine for the United Kingdom and for Canada, but let us not forget the United States; let us bring the United States in as well, and then we must not forget the commonwealth, and the commonwealth countries must be considered' ". So this sets the stage a little more broadly and extends the conversation.
Then I suppose he would have carried it a little further and said there are nations outside the commonwealth, not on the North
Supply-Trade and Commerce American continent, that should be brought into this idea of freer trade among the nations. And I am sure that before the deliberations would have gone very far my hon. friend, had he been in office, would have said, in view of the probability of interplanetary communication, perhaps no further steps should be taken until the attitude of the residents of Mars had been considered. That is the way you consider, that is the way you take into account-


Lester Bowles Pearson: That is an excuse for doing nothing.


Gordon Minto Churchill: -the so-called free trade offer from the United Kingdom to Canada.
We are quite prepared to consider any suggestion with regard to expanding trade, but my hon. friend knows that suggestion was put forward as an objective, just as the suggestion of a closer link among the Atlantic community is an objective that can be worked for. It cannot be accomplished overnight and our United Kingdom friends said that this cannot be done in a day, a month or a year, and it might take 12 or 15 years to bring to fruition. Why are my hon. friends so alarmed about this matter? Let them produce some ideas themselves as to what might be done. We do not differ from them in being desirous of expanding trade, lowering the restrictions that now exist with regard to trade, and generally bringing nations closer together through the medium of trade.
Quite a number of references were made to China. I think we should keep the discussion with regard to China in proportion. There is theoretically a very large market there, 600 million people. If they all wanted television sets and refrigerators, why you would be kept busy for the next six generations supplying them. But it just does not follow that you can immediately expand Canada's trade with a country like China. Our policy is to make some attempt along that line, and that is precisely what we have been doing.
Canada's trade with China has been going on for years. It did not just start when we came into office or when our friends were in office; it has been going on for years. Since the war and the revolution in China that trade has been curtailed; nevertheless certain articles have been exchanged between our two countries over the years. During this year we were fortunate to re-establish a trade in wheat with China which 20-odd years ago was substantial. I think we are justified in taking some pride in the fact that several cargoes of wheat have been sold to China. That trade, if it can be maintained and expanded, might very well reach the proportions in the future that it was years

Supply-Trade and Commerce ago, and surplus wheat production in Canada might be utilized in the Far East. Therefore I think we are on the right ground there.
With regard to restrictions on trade with China, the Leader of the Opposition was asking about the strategic list and I think someone else questioned me as to what articles might not be sold to China. I have here a publication issued by the queen's printer, a reprint of the Canada Gazette, part II, volume 91, dated January 9, 1957, when my hon. friends were in office. It is called the Export and Import Permits Act, export control list. It gives the list of materials which are under control, and at the present moment negotiations are going on at the so-called COCON conference to see whether or not the list may be modified, but there is nothing concealed about it. Anyone may have a copy of it if they wish to get it and see what articles are under prohibition.
I noticed that the Leader of the Opposition had something to say with regard to our increased exports, particularly in wheat; and, as was pointed out by the hon. member for Assiniboia, he tried to make it appear that nothing we had done as a government had brought about the increase in the sale of wheat this year; that it was the short crop in Australia, the smaller crop in the Argentine, the higher protein value of the Canadian wheat, and so on.
These factors have their place in world trade in wheat. On the other hand he might have pointed out that there was a very large surplus of wheat in the United States which has its effect on the Canadian market in international trade, and that there was a very large European crop of wheat, which balanced out any loss in world production in the Argentine or in Australia. Although we cannot take credit for everything that happened with regard to trade in wheat, nevertheless as a government we did take some new measures and showed considerable activity in supporting the wheat board in suggestions they made with regard to increasing our sales of wheat abroad.
My first act after being sworn in on June 21, 1957, was to go out to Winnipeg and meet the wheat board and the board of grain commissioners for two days rather than asking them to come to Ottawa. That was the start of our developing a policy with regard to the sale of our surplus grains. Subsequently I met the wheat board again, journeyed with members of that wheat board to Europe in September, spent 10 days there calling upon and meeting over 200 representatives of the grain trade in Europe and assuring them that Canada would not enter into any sharp pricecutting war and was not going to upset the market in wheat.

Subsequently it was the policy of the government to make available wheat and flour to Pakistan, India and Ceylon under either a long-term loan or an outright gift to the extent of supplying $35 million for loan purposes and $15 million for outright gift purposes. Then for the Palestinian refugees, who have been in desperate straits for many years in the area of the border between Palestine and Egypt, we made an outright gift of $1J million worth of flour.
All this was in addition to and without interfering with the normal development program under the Colombo plan to which a grant of $35 million has been made annually for several years. That was a forward looking policy with regard to the disposal of surplus food, and it was a policy devised and put into operation by this government. It resulted in moving a substantial quantity of wheat from the prairies, and I think the Canadian people as a whole approve of it. The more wheat we move from the prairies and from the elevators, the less we eventually pay for storage and the greater the advantage to the people of the world who require food.
That was the program during last winter. These things taken together made up our policy with regard to wheat and have resulted, when you take all factors into account, in a very good year with regard to the sale of wheat. We will exceed last year's record by 40 million or 50 million bushels, and the record of two years ago of 309 million bushels exported will be exceeded as well.
My only difficulty at the moment is that if we set too high a record in the export of wheat this year we will be under the grave difficulty of matching it a year from now. If we reach 320 million bushels this year the hon. member for Assiniboia, who wants our export of wheat now to be 350 million bushels, will raise that figure to 380 million. I am always at a disadvantage with my hon. friend who likes to be just one jump ahead of whatever anyone else proposes or whatever is being done. That is the record of the government and the wheat board with regard to our wheat sales, and it has all resulted not from an aggressive sales program as some people have called it-I have never used that term-but from an active policy directed toward moving our wheat into international trade.
I was very grateful to the Leader of the Opposition for drawing my attention to a word in the annual report of the department which, of course, I had not seen before and was not aware of. He referred to the sentence in the report of a year ago, "Various reports were prepared for official use", and pointed out that in the report this year the word

"mainly" had crept in so the sentence read, "Various reports were prepared mainly for official use."


Lester Bowles Pearson: It crept in?


Gordon Minto Churchill: I know how it got there, but I am not going to make any accusations. Of course I did not see the report until it was in published form and I did not compare it with that of the previous year. The burden the Leader of the Opposition has now placed on deputy ministers is that they will have to produce the preceding year's report and indicate to the minister the changes from the normal sentences which will appear in the new report, so it is an added burden on the civil service in the future. I am very grateful to the Leader of the Opposition for drawing my attention to that.


John Whitney Pickersgill: In well run departments it was always done that way.


Gordon Minto Churchill: Sometimes these reports are published during the course of an election campaign when it is not possible to see everything that is coming out. There has been some talk about uranium. Exports of uranium certainly have added to our total export position this year, and we are very grateful that the world needs uranium and that Canada has the supplies. As a matter of fact uranium exports for the first five months of this year reached a total of $89.9 million compared with $35.7 million the year before, and we expect that these exports will continue to add greatly to our export position certainly for several more years. It is rather difficult to see too far ahead but we are blessed with a bountiful supply of uranium and it may well be that as atomic energy is put to use more widely throughout the world, even after 1962 there will be an enlarged demand for uranium. Canada will be in a position to supply the world with the uranium that will be required for the various power plants that are now beginning to appear in different countries in the world.
I make no excuses for presenting the picture of our external trade in the best light. I have not intentionally concealed any facts. I pointed out in my speech that it is due to greater sales of wheat, uranium and cattle that the picture looks as favourable as it does at the present moment. There were reductions in the sales of other commodities. I did not list them in the course of my speech, but I mentioned the fact that there were reductions here and there.
The hon. member for Assiniboia thinks I was very complacent with regard to the trade picture. I had no intention of indicating any complacency, but I think it is a matter of pride for Canada that with a recession
Supply-Trade and Commerce prevailing on the North American continent, we nevertheless had a larger export trade than a year ago. My hon. friend wants our export trade to be higher than it is at the moment, but he takes that position on everything that comes before the house. If I had said that our export position was 5 per cent or 10 per cent greater than a year ago he would have said that it should have been 20, 25 or 30 per cent greater. Once again it is impossible to satisfy that type of criticism of the facts of the case.


Hazen Robert Argue: Would the minister permit a question?


Gordon Minto Churchill: There is no complacency at all.


Hazen Robert Argue: Is the minister satisfied with the 1 per cent increase in the first few months of this year over last year?


Gordon Minto Churchill: I would have been terribly disturbed if the figure had been 1 per cent below the exports of last year, but we are holding our own and are doing better than some other countries. This is partly due to the policy of the government, the activity of the trade commissioners representing us throughout the world, and the excellent work being done by Canadian businessmen who are pushing their products in so many countries of the world. I think full credit should go to them for maintaining our exports at their present high level.
I used to be very good at listing omissions in speeches in days gone by, and my hon. friends opposite are doing quite well at it. The list of omissions includes one mentioned by both the Leader of the Opposition and the hon. member for Assiniboia. They said I had paid no attention in my speech to the growing threat of the economic warfare being conducted by the U.S.S.R. I could have included everything in my speech if I had continued for two hours. Many years ago speeches in the house used to run from two to five and a half or seven hours, but the modern practice has been to reduce the length of speeches.
So there were omissions; but the only reason I omitted a reference to that economic threat was that it had been mentioned so frequently either in the house in answer to questions or in public statements made by the Prime Minister in addresses elsewhere in the country. It was only a few days ago that the Prime Minister, speaking on the occasion of the visit of the President of the United States, and the President himself, made reference to this situation. On page
2386	HOUSE OF
Supply-Trade and Commerce 2801 of Hansard for July 9, 1958 we find the words of the Prime Minister of Canada:
The communist world is waging an intensive economic global offensive of "aid and trade", an offensive which is not designed to secure profits in a bookkeeping sense in order to secure the ordinary values of trade for its peoples, but an offensive whose success will be measured by the degree to which the souls and hearts and the freedoms and aspirations of the recipients will be subverted under communist tyranny.
On other occasions he has mentioned this economic warfare, and in his statement the President mentioned it as well. I thought it was well understood by all hon. members, and that everybody in Canada was aware of that threat. We are well aware of it. There is the threat with regard to aluminum. We have looked into that. We have made representations to the United Kingdom, one of the great buyers of our aluminum, asking them to continue to purchase the Canadian product despite offers that might be made by the Russians at a much lower figure. We are fully conscious of the threat posed by the economic warfare of communist countries.
I received some advice and some comments, Mr. Chairman, from the member for Ottawa West yesterday with regard to which I might make some answer. Apparently I have dealt with quite a number of the things he brought to my attention. He did deal at some length with our trade with the West Indies and thought I had not made any elaboration of our policy with regard to those countries. That is quite right; I did not elaborate-


Charles Edward Rea: Order; I must advise the Minister of Trade and Commerce that his time has expired.


Some hon. Members:: Go ahead.


Charles Edward Rea: Has the minister unanimous consent to continue


Some hon. Members:: Agreed.


Gordon Minto Churchill: I held out the suggestion of a 5-hour speech, and I think hon. members have agreed to that. I did not elaborate with regard to the West Indies for this reason. They are in the process of forming their federation. They have to effect a customs union amongst the islands that make up the federation before they will be in a position to deal on a government to government basis with other countries with regard to general trade matters. We have a sympathetic interest in the West Indies. We want to promote our trade with those islands, and our trade is complementary. We have the industrial base here and the manufactured goods to exchange with them for the tropical products which they can produce. Our trade with the West Indies has been going on for several generations, and I think can be extended.


Of course the hon. member for Ottawa West used this topic as a club to belabour me with regard to the decrease in shipping lines to the West Indies. This is not an immediate problem of mine, and he perhaps should save his remarks for some other occasion. On the other hand we have gone this far, that we have offered to construct and give to the West Indies a ship for their interisland trade capable of travelling from Jamaica to Trinidad, a distance of something over 1,000 miles. There are ships from Canada engaged in the West Indies, though certain boats have been withdrawn from that trade. There is no evidence that the general trade with the West Indies has been seriously curtailed on that account.
I should like to mention two very helpful speeches which were made yesterday by representatives from Newfoundland, the hon. member for Bonavista-Twillingate and the hon. member for Burin-Burgeo. They gave some very helpful suggestions with regard to the fisheries industry in Newfoundland. I have read the speeches over again because of my interest in the subject. As I think I have mentioned, we have had six conferences with representatives from Newfoundland and Nova Scotia on the subject of Atlantic fisheries, and the speeches of my hon. friends have added some information to that supplied by those who have visited here.
I confess that like my hon. friend the member for Bonavista-Twillingate, coming as we both do from Manitoba, neither of us was as knowledgable with regard to the fishing industry of Newfoundland as we are becoming. My hon. friend, of course, has a greater knowledge of it than I have because he has a constituency there to represent. I note a similarity between the problems of the fishermen in the Atlantic coastal regions and the prairie farmers. There may be a need to take some new and different action with regard to the fisheries problems on the Atlantic coast. What that action should be I cannot say at the moment, but I am open to suggestions from hon. members who have had vast experience with regard to the Atlantic fisheries.
The government can only play a certain part with regard to the export of fish from Newfoundland and Nova Scotia. There are other voluntary organizations playing a part in that situation. With regard to Brazil, Jamaica and the other countries that are consumers of Canadian fish, naturally the government can make representations and endeavour through trade agreements or other means to maintain our markets there. The government cannot take some steps which appear to me to be necessary-and these were

not mentioned by my hon. friends-perhaps to raise the quality of the product that is now being marketed.
I recall some conversations with representatives of the fishing industry in the Atlantic region-I hope someone will correct me if I am not right in this statement-and I understand that we are not producing the types of graded fish that some of our customers would like to have. Whether or not my colleague the Minister of Fisheries will be able to produce some solution to that I do not know. But from the standpoint of the Department of Trade and Commerce we are doing what we can to stimulate the sale of fish from the Atlantic coast.
I think I can safely assure my hon. friends that our market in Jamaica has just been lost temporarily. The information I have had is that we will be back into that market. I hope that as we continue our negotiations, and as the Federation of the West Indies is more fully developed, we will establish very firmly our trade in fish with the West Indies so we will not run the hazard again of being undersold by subsidized fish products from other countries.
Other members made suggestions of one sort or another which perhaps we could take up as we come to the various items that are scattered through the estimates.
I presume I could go on at some length just in a debating sense countering arguments that were raised. On the other hand, it might be better if we got down to the specific items. If I have omitted things that I should have commented on, I will gladly take them up. I have not mentioned the contribution made by the hon. member for Richelieu-Vercheres except jocularly last night, the hon. member for Cartier and the hon. member for Mount Royal. We heard from the hon. member for Kootenay West, the hon. member for Timis-kaming, the hon. member for Skeena and the hon. member for Port Arthur. I was grateful to the hon. member for Vancouver South for his comments on our trade with China and to the hon. member for Rosthern for his suggestions.
I think the hon. member for Macleod put his finger on the trouble that affects trade, wherein we fail sometimes to analyse the picture accurately and determine the dollar exchange balance because, as he pointed out, there can be no effective trade with another country unless they have dollars with which to buy our products. Basically that is one of the problems affecting world trade. The whole question of the price of primary products throughout the world is one which is before the nations now for consideration and I hope it will be considered at the commonwealth conference. If the price of primary
Supply-Trade and Commerce products is depressed, the countries producing those primary products cannot earn the dollars necessary to buy the manufactured articles that they require.
One of the reasons for our emphasis on trade throughout the world is that we may, by buying or in some way getting imports from abroad, make it possible for those countries in their turn to take the products that we have for sale such as our forest products, the products of our mines and our agricultural products. If they have not earned the dollars, how can they purchase our products? That is why we want to diversify our trade and buy many things from other countries of the world. If we buy from the West Indies bauxite and alumina, citrus fruits and so on they will buy our fish. If we buy from the United Kingdom in quantity, we can sustain our market there for 100 million bushels of wheat each year. These aspects of our trade are constantly in our mind. That is why we want to broaden it out so that it is not too greatly concentrated in any one place.
That, Mr. Chairman, constitutes my reply to those who have spoken thus far. I hope that I shall be able to give answers to any who feel that they have been overlooked in the interval.


Lionel Chevrier: I wonder whether I could
ask the minister a question. I do not -want to hold up this item. He has dealt with the subject matter of trade and commerce at some length. But from time to time during the question period last session and, I believe, once during the question period this session I asked him whether he could tell the house what had been the result in dollars or pounds sterling of the trade mission to the United Kingdom and what amount of trade had been thus diverted? I remember that at one time he or someone announced that the hydro electric power commission of Ontario had given a large order for the purchase of electrical equipment for the main powerhouse at Cornwall. I believe there was also some question of the purchase of tin-plate by certain manufacturers in this country. I think the gist of the minister's answer from time to time was that in due course it would be possible for him to give a reply to the house as to the amount of purchases in dollars or pounds sterling. I wondered whether this could be done at this time.


Gordon Minto Churchill: There has been considerable interest in the trade mission that visited England last fall and a certain amount of understandable curiosity on the part of my hon. friends opposite as to the exact dollars and cents return from that mission. I may at some time have said that in due course I would be able to provide the figures for

Supply-Trade and Commerce which my hon. friend is now asking. I have not those figures here today. I do not think they can be obtained very readily. I always considered that, as the months went by, the effect of that trade mission would become clearly evident. It is not a question of deciding this week or this month what purchases were made in the United Kingdom as a direct result of the trade mission. The only way in which I could get that information would be from members of the trade mission reporting directly to me as to the purchases which they made and which on other occasions they might have made elsewhere. Two or three members of the trade mission have indicated to me that they were considering very large orders with the United Kingdom as a result of their visit there.
It is all a matter of private business, and until these orders are placed and the goods are shipped it would be just impossible to get an answer that would satisfy my hon. friend. Perhaps later on towards the end of this year, as companies compile their returns and as the bureau of statistics reports on imports from abroad, we might be able to segregate some of these items and determine that these were directly the result of that trade mission. I am positive that we are getting results from that trade mission because of the statements that members of that mission have made to me, from the inquiries that have come from British industry, from the visit of British industrialists here some time ago. There is more to it than just the purchase of some goods from England at this particular moment. We look to see the establishment in this country of more branch plants from England. We are looking forward to a larger capital investment on the part of the people of the United Kingdom. We are looking forward to an increase in our imports from the United Kingdom with respect to goods that are not now manufactured in Canada. Those are, broadly, the purposes of that mission; and so far I have had no evidence that those purposes are not being fulfilled.
While I am on that topic may I say that someone was asking-it was the hon. member for Richelieu-Vercheres-about component parts of articles shipped into this country from the United States, and he thought that I gave a rather abrupt answer last winter, something which was not intended. I will give him a better answer now, or at least I hope it is a better answer. In the case of imports of manufactured goods from the United States such as tractors, these imports are attributed to the United States where the finished article is fabricated or assembled and subsequently consigned to


Canada. Likewise imports of textiles manufactured in the United Kingdom are attributed to the United Kingdom even though the materials from which the textiles are made may originate in the United States or some other country. Canadian exports-for example automobiles-may contain materials or components which have originated in the United States or other countries but to trace the ultimate origin of materials or components of commodities imported or exported would be a formidable task involving extensive and expensive investigation. The information required is not now available to the government and would have to be sought from the business firms involved in particular trading transactions not only in Canada but also abroad.
That just indicates the difficulty in answering what is, I am prepared to admit, a question which arises in the minds of many people. In fact, the six nation common market group over in Europe are taking into consideration a problem allied to this one as to imports where the country of origin may have to be shown. However, in so far as we are concerned, no statistics are compiled and it is very very difficult to give the hon. member a better answer than I have done.


Lionel Chevrier: May I thank the minister for the time he has taken to deal with my question. It is a most incomplete answer; but as he says, it takes some time in order to ascertain what the effects of a trade mission of this nature would be. I would draw his attention to the fact, however, that when I asked my question it was over ten months ago and I have received no answer but I will still be willing to wait patiently in the hope that at a later date there will be some positive results to be reported.
It seems to me that when the mission departed it was in conjunction with the proposed diversion of 15 per cent of our trade from the United States to the United Kingdom -that seemed to be the objective of the trade mission-and the other question I would like to ask the minister is, has the idea of diverting that 15 per cent of our trade from the United States to the United Kingdom now been abandoned?


Gordon Minto Churchill: I have never understood that any policy was announced framed in the terms of a 15 per cent diversion of trade from the United States to the United Kingdom.


Some hon. Members:: Oh, Oh.


Gordon Minto Churchill: I said policy-


Mr. Bourget:: Was it a vision?


Gordon Minto Churchill: I have always understood that the phrase was used as an indication of what would happen-


Lionel Chevrier: I used the word objective.


Gordon Minto Churchill: As an objective. The objective of the mission to the United Kingdom was not based on any percentage. Our objective was definitely based on obtaining from the United Kingdom materials and supplies which are now coming from foreign countries and which are not now obtainable or manufactured in Canada and it was part of a program to reestablish a better balance in our trading relations.
I pointed out in my speech yesterday that our trade with the United States of America was of paramount importance-it has been so for generations and will continue to be so- but on the other hand over the last 15 years we have felt that that trade has got out of balance. We are buying from the United States over $1 billion more each year than we sell to them. We are not asking them to balance our trade out to the last degree but if they would take more of our products we would not be under this disability. We do, of course, produce things which the United States does not require-for example, Canadian wheat. There is no market for Canadian wheat in the United States and so we have to sell it to the United Kingdom, the European markets, Japan, China, Africa and so on, and our flour made from Canadian wheat goes around the world. The United States does not require flour at all. As I said earlier, the countries which do require and might use Canadian wheat and flour have to have the purchasing dollars to buy those products; they have to have something to exchange with us and so we have to trade with nations throughout the world.
If our trade is funnelled into one channel, namely the United States, how do we make it possible for these other countries to trade with us? We simply say it is wiser and safer to have our trade spread out among many countries and with respect to the $1 billion which we spend as an excess figure in relation to our imports from the United States each year, some of that money might be spent in Europe or in Japan or in Africa or in Latin America to buy products from those countries. They in their turn would buy manufactured goods from Canada or Canadian wheat or Canadian lumber.
That is the situation. Fifteen years ago Britain's share in the Canadian market was much higher than it is today and we suggested to them that here was an opportunity for them to re-establish their position in Canada's import market and get back to what was considered years ago to be a good
Supply-Trade and Commerce pattern of trade-the triangular trade of Canada, the United Kingdom and the United States. The United Kingdom industrial component is now in such a condition, having recovered from the war, that it can produce many of the things Canada now gets from the United States and does not herself manufacture, indeed, which we might more wisely buy from the United Kingdom.
That is our policy. The Leader of the Opposition and the hon. member for Ottawa West were today lamenting the fact that our imports had declined; they said nothing about the fact that some of those articles formerly imported are now being manufactured in Canada. It is not dire ruin if your import figure goes down if, at the same time, your manufacturing figure goes up. Last year we imported less pipe for pipe lines than we would have done because of the fact that in Canada we can now produce the type of pipe in the size and quality desired. With respect to the pipe lines across this country, compressor stations are required to boost up the pressure, forcing the gas or oil along the line, and during the past 12 months a Canadian firm has been able to manufacture and supply compressors for one of those lines. This has reduced the import figure from the United States because those compressors would have come from that country had they not been manufactured here. So although we are trying to get our general trading pattern into better balance, we are not overlooking the fact that those who want to speak in terms of diversion of trade might get equal results by stimulating manufacturing in Canada, thereby reducing imports from the United States.


Lester Bowles Pearson: Mr. Chairman, in view of the fact that the minister has mentioned one or two points with which I had attempted to deal, and in order to make sure there will be no misunderstanding with respect to what I said or intended to say, I wish to state that I was not opposed to a decrease in the amount of imports into this country if this was done as a result of the replacement of those imports by Canadian goods manufactured at reasonable cost and on an economic basis. Of course that is all to the good and such a diminution of imports is helpful. Furthermore, when we can diminish our imports by diversion-I am not afraid to use the word-to countries which have need of dollars to purchase Canadian goods and where we can get similar materials from those countries at a reasonable and competitive price, this is also desirable.
The main reasons, however, for the diminution of imports from the United States in recent months have not, surely, been the

Supply-Trade and Commerce increase of Canadian production, although that no doubt has had some effect, nor has it been because these imports have been diverted to the United Kingdom. Imports have diminished from the United States because of the fact that our investment situation and our trading picture in this country-are such that we did not need to import capital goods such as we required a few years ago for our great development program. That surely is the major reason why imports have gone down. It is not the only reason but it must be the major one. When the minister talks about the desirability of restoring the pattern of trade to that of the old days-the triangular pattern-we must of course all agree with him. He must, however, know that no country and no government could have done much more to restore that pattern than the Canadian government has done since 1945.
That pattern cannot be restored until the pound is made convertible. You cannot have a triangular pattern of the old kind without convertibility of the pound, and when the British were unable to make the pound convertible after world war II because of the financial circumstances at that time arising out of the sacrifices they had made, the Canadian government made a great many dollars available to them-$2 billion-to help them get in a position where they could make the pound convertible and restore the triangular pattern of trade which was previously our salvation, if that is not too strong a word, and which we all hope will be restored before long. But this is something which the government of the United Kingdom has to decide. I hope the government of Canada, and the minister, will do their best at the forthcoming commonwealth economic conference to see that every possible progress is made in this direction.


Gordon Minto Churchill: That is one of our objectives. I hope I did not give the wrong impression when I was speaking about the question of imports. I did not want to misinterpret the Leader of the Opposition in any way. I was just pointing out one of the omissions in his speech.


Lionel Chevrier: I have just one other question to ask if I may. The minister in his remarks did not deal at any length with the commonwealth conference to be held at Montreal in September. He made some reference to it in a general way, but I am wondering if he could not go a little further and give us an indication of the subjects likely to come up for discussion. After all, the conference is to take place in barely two months time and there must be a great deal of preparation going on in his department as well as in


other departments which are concerned with it. Perhaps the minister could tell us whether or not the British trade proposals are likely to be considered, and I think the committee would appreciate any other information he might care to give at this time.


Gordon Minto Churchill: I did not deal with this matter at any length because my recollection is that in the budget speech my colleague the Minister of Finance devoted some time to the question of the trade and economic conference which is to be held in September and, in fact, on page 1239 of Hansard I find his reference to that conference occupies virtually an entire page in both English and French in dealing with this. I have no elaboration to offer at the moment.


Hazen Robert Argue: I think the minister made some reference to the possibility of Canadian subsidiaries of United States firms trading with China. I believe the question of the 1,000 automobile offer to purchase was first disclosed in February or March, but certainly it was long before the federal election, and at that time a statement was made that a thorough investigation would be carried out with regard to this particular offer and especially with regard to the alleged impossibility of Canadian automobile manufacturers supplying these automobiles. We all know that this question was further discussed when President Eisenhower was in Ottawa, and I wonder if the minister could give us some idea of the steps that were taken to make it a thorough inquiry, just what the inquiry involved, and whether he now feels with certainty that any such offers in the future could be accepted and filled by any Canadian company provided it could produce the product at a competitive price. I wonder, now, whether Canadian grain companies which are subsidiaries of United States companies are completely free to develop Chinese markets.
When this question has been raised before in this house the minister has maintained that while a certain number of companies may not be able to undertake this business we were fortunate that there were distinctively Canadian companies which were quite prepared to develop this market and which had been successful to some extent. My question now is: is it completely clear that all grain companies in Canada are free to develop the Chinese market, and is the minister completely confident-I am not sure that this was in his statement-that it is the intention of the United States administration to allow Canadian firms to compete in the nonstrategic field in the Chinese market or in the markets of other communist nations.


Gordon Minto Churchill: I have no evidence to indicate that there was a firm offer and acceptance in regard to the alleged intended purchase of 1,000 automobiles some time ago. However, instances have been brought to my attention of trading deals with China which might have been impeded by the restrictive law of the United States. As the hon. member has mentioned, we did discuss this problem with Mr. Dulles when he was here a few days ago. We received an assurance that the matter would be taken under consideration and we are pursuing the matter further. Although I cannot answer the hon. member's question definitely at this particular moment, I have every confidence that the way is going to be cleared so that we shall not be faced with this problem in the future. That, I hope, will free the hands, if they are tied, of any flour mill operating in this country whose parent is in the United States. But only a few days have elapsed since we had this conversation, and we have not had time to tidy the matter up. However, I have no reason to doubt that we will reach a satisfactory solution.


Hazen Robert Argue: I was under the distinct impression from the statement the Prime Minister made following the president's visit that it had been tidied up. I am not endeavouring to misinterpret what the Prime Minister said; in thinking he said that, I was apparently in error. Since the matter has not been tidied up and since this process is still going on, can the minister say when he hopes to be in a position to give the Canadian people an unqualified assurance that in the field of nonstrategic goods companies operating within the Canadian borders will be free to take any business that is not barred by Canadian law.


Gordon Minto Churchill: The hon. member asks me to give an assurance when this may happen, or if I am hopeful that this may happen. I live in daily hope that all my problems will be solved within 24 hours. It does not work out that way, but I do have hopes that this particular problem will be solved very shortly.


Lester Bowles Pearson: I should like to follow this up, because the secretary of commerce of the United States is reported to have stated in Washington while the president was visiting this country that exemption from this particular United States law, which has extraterritorial effect, in that it applies to United States citizens and United States corporations and subsidiaries of the United States corporations outside the United States, can be granted by administrative action on the part, presumably, of the president or some member of the executive. He gave the impression in his
Supply-Trade and Commerce statement, as reported from Washington, that that would be done.
Now, Mr. Chairman, if it were a matter of amending the law, that would be a very complicated question indeed and I can understand why the president, or indeed any other member of the administration, could not give the Canadian government the assurances which they might have requested, though this matter has been before the United States government presumably for a good many months. But if it is a matter of administrative action to exempt a corporation, or a person, from the operation of a law, then surely there is no reason why there should not be a statement from the administration in Washington confirming what the secretary of commerce is reported to have said to the effect that when this law operates to interfere with business from Canada of a kind which is proper and legal under Canadian law, that administrative action exempting the Canadian subsidiary from the law will be taken. Surely, the government could press the United States government to give the assurance that that administrative action would be taken in every suitable Canadian case, and then the problem would have been disposed of.


Gordon Minto Churchill: Mr. Chairman, the matter is being actively pursued. If it can be done in the way the Leader of the Opposition suggests, by administrative action, that will be the easy way out. I saw a very brief report along the lines that he mentioned but I have not had any confirmation of it.


Hazen Robert Argue: I am rather disappointed that we have this kind of explanation now, in the light of the Prime Minister's former statement, because I was under the distinct impression from his statement that the matter had been cleared up at that time to Canada's satisfaction, in that Canada expected that from the moment President Eisenhower made his statement it was being cleared up from that time on and Canadian companies were free to undertake this kind of business.
There is some doubt as to whether a company can or cannot undertake that business because it seems to be waiting on some future action. The minister said it might happen in 24 hours. Now it depends on some future action by the United States administration.


Gordon Minto Churchill: I think what is required is a specific instance where there has been an offer made and they are on the point of acceptance. Then we shall know the actual facts of the case and what may happen. My hon. friend is expecting a little too much too quickly but we are not inactive in this matter. As the Leader of the Opposition understands from his long experience, you have to move

Supply-Trade and Commerce along certain channels and make certain representations. You have to get all the i's dotted and the t's crossed. Governments do not just make those blanket statements without very careful consideration. Therefore, if my hon. friend will be patient I think this will turn out all right. We could not have done more than what has been done at the present time. We made the representations to the people who have the authority to act.


Hazen Robert Argue: When?


Gordon Minto Churchill: When our distinguished visitors were here. Now it is just a matter of following the thing up.


Lester Bowles Pearson: Mr. Chairman, we on this side really have been pretty patient in this matter. On March 27 I think the Prime Minister said that this question would be taken up immediately with the United States, and he gave the country every reason to believe that not only was it to be taken up but that action would be secured and that United States policy was an infringement of Canadian sovereignty. When we asked the Prime Minister questions in the house a couple of weeks ago as to what action had been taken the minister will remember that he informed us that representations had been made to the United States some time in July, I think it was early in July. But on further examination, the representations turned out to be not governmental, not even diplomatic representations but that an official of his department went over to the United States embassy and talked over the matter with somebody in the embassy, perhaps with the commercial consul.


Gordon Minto Churchill: That is the way you used to do it.


Lester Bowles Pearson: No, that is not the way we used to do it.


Gordon Minto Churchill: That is the way you used to start.


Lester Bowles Pearson: I hope in our day we never waited two months before we made that kind of start.


John Whitney Pickersgill: After the Prime Minister had promised action.


Lester Bowles Pearson: After all this promised action two months ago we had this rather niggling initiative and then the President came. I agree that when the government had the President here they could take it up with him, and that was probably the right procedure to follow then. But it would have been much better if this arrangement had been made through diplomatic discussions before the President got here so that he would have known all about the problem, he would have

been briefed, Mr. Dulles would have been briefed, and all they would have had to do- and this is what you really should do at a summit conference-would be to sign on the dotted line. It would have all been worked out before.
Now, we do not know really what has been worked out, whether the agreement had been merely to consult in the appropriate instances. Whether action can be taken by administrative action. If the latter, as the secretary of commerce of the United States has indicated, I hope the minister will not wait until a concrete case comes up but that he will press the United States government to make a formal statement to the effect that in every such case, if it can be done by administrative action, Canadian corporations will be exempted from the operation of this law, which is the only thing that really we can expect as vindication of our sovereign rights in regard to the control of our exports.


Gordon Minto Churchill: My hon. friend understands that we can ask the administration of any country to do certain things but then action itself rests in their hands.
On the subject of impatience to get an answer to this particular problem, may I point out that the United States law and the regulations governing the authority of United States subsidiaries in a foreign country have been on the statute books of the United States for many years during the period in which my hon. friends were in office here, and the alleged purchase of the 1,000 motor cars from Windsor occurred before my hon. friends were retired from office and they did nothing about it. We were the ones who were impatiently waiting for action from a government that had been in office 22 years.


Lester Bowles Pearson: Mr. Chairman, perhaps my hon. friend will tell me the date on which the law in question was passed in Washington.


Gordon Minto Churchill: Certainly before June 10, 1957.


Lester Bowles Pearson: Indeed it was, Mr. Chairman, but not very long before June 10, 1957, and on no occasion while we were in power was that law in any way, shape or form used against any Canadian exporter to any country of the world and we had no reason to complain at all.


Hazen Robert Argue: The minister said we cannot do anything concerning a matter within the sovereignty of another country. Surely, the conduct of business organizations within Canada is something which should be within the sovereignty of this nation and of this parliament. If the United States refuses to grant this very fair request, the minister

and the government should consider what I suggested they do a few days ago, namely introduce in parliament a Canadian law requiring Canadian corporations to act in a business way to the advantage of this country and to make it a penalty for them to carry out the law of another foreign country if such a law is detrimental to our nation. I think the statement of the minister that they are still working on the case and we cannot expect to hurry too much is a most disappointing answer.
There seems to have been a great change in the tempo of the government since March 31. Before that time, if something had to be done, it was done forthwith, action was taken quickly. Four months have gone by now and for all we know it may take another four months before the people of this country can be given the full assurance that the welfare of Canada in the selling of its commodities is not to be interfered with by another country.
In his response to a statement that the U.S.S.R. was continuing an all-out trade effort, the minister referred to increased competition from that nation in the field of aluminum. Can he say whether the new, dynamic trade policy of the U.S.S.R. has interfered in any way with the volume of export and conditions of sale of any other Canadian commodities?


Gordon Minto Churchill: I missed one or two words there.


Hazen Robert Argue: The minister said it was quite apparent that the U.S.S.R. had been very aggressive in the sale of aluminum to European nations and had been cutting prices. Are there other commodities with regard to which we see the effect of this new, aggressive trade policy and, if so, what are the other commodities that are affected? As the minister has said, the Prime Minister has pointed out the very serious aspects for the western world of this new trade policy and trade drive. My general question is: How is it affecting Canada?


John Whitney Pickersgill: Before the minister answers, if the hon. member would permit me I should like to clear up one factual point with regard to what was being discussed before. Did I understand the minister correctly to say that this incident about the 1,000 cars arose when the previous administration was in office? The minister nods indicating that is so. In that case, the minister admits this took place before June 21,
1957,	and that the Prime Minister did nothing whatever about it until March 27,
1958,	four days before the election, at which time he only talked about it. Then it took
57071-3-151
Supply-Trade and Commerce two more months before any action whatsoever was taken and then by a civil servant going down to the embassy here in Ottawa.


Gordon Minto Churchill: Let us get the record straight.


John Whitney Pickersgill: That is what I was trying to do.


Gordon Minto Churchill: My hon. friend is very ingenious-


John Whitney Pickersgill: I was reciting the facts.


Gordon Minto Churchill: -at establishing records. My information is that the alleged transaction was initiated when my hon. friends were in office. It did not come to our attention until just before the election in 1958.


Lester Bowles Pearson: Does the minister know whether it was ever brought to the attention of anybody in Ottawa before March 27, 1958?


Gordon Minto Churchill: I always assumed that you people knew everything down here.


Hazen Robert Argue: Is the minister going to answer my question?


Gordon Minto Churchill: I am sorry. I do not have information available as to specific items in which Canada's trade has been interfered with seriously. I have mentioned aluminum with regard to which I have some accurate knowledge. I believe that our lumber exports have suffered quite a bit from Russian competition.


Hazen Robert Argue: What about wheat? I know that eastern countries have been buying some wheat from us. I refer specifically to the increase of 34 million acres in wheat production that it is said the Soviet union has accomplished in the last two or three years. Has the minister any comments to make on whether there is any appearance of increased competition from the U.S.S.R. in this field at this time and whether the production from this new 34 million acres, which is one and half times the acreage of Canadian wheat production, is likely to be serious?


Gordon Minto Churchill: I was not aware of that very large increase in the acreage devoted to wheat in Russia but from time to time Russia has had wheat for export. We have never been sure whether this was due to a surplus quantity of wheat or whether it was being exported for some other reason. As my hon. friend knows from his experience as a farmer, crop conditions vary from year to year and although increased acreage may pose a threat weather conditions can remove it.


Hazen Robert Argue: The minister must have seen press reports in the last three or four years, as all of us have, to the effect that Russia was endeavouring, if I remember correctly, to bring about 70 million new acres of virgin

Supply-Trade and Commerce land into the production of grain crops, most of it in Siberia. While I think reports will show that they have not reached that goal, I do think the report of 34 million acres additional land in grain production in this morning's press is very likely to be correct. It would seem to me that Canada should at all times be studying the situation and be aware of any great drive to increase grain production in a country like the Soviet union because the new drive in the export field that country is now undertaking may have very serious consequences for the Canadian agricultural industry. I hope it will not and I do not know that it is now but it would seem to me that this is part and parcel of the Soviet union's economic drive to step up the production of aluminum, steel, pulp and now wheat.


Mr. Cardiff:: May I ask the hon. member whether he is sure about the figure of 34 million acres?


Hazen Robert Argue: That is why I am asking the minister. It would seem to me that with the many trade commissioners and embassy and other officials and his intimate knowledge himself he is the man to give us the correct figures. I was merely saying that on the basis of press reports I have seen over a number of years and in the absence of any statement by the minister to the contrary it would seem to me that the figure of 34 million acres might well prove to be correct.


Gordon Minto Churchill: I am not sure that it is possible to get information with regard to matters in Russia that is completely accurate or satisfying. I think there has always been some difficulty along that line. However, we do attempt to keep informed with regard to wheat production throughout the world and we do not look with too great favour on countries which are subsidizing the production of wheat on a high cost basis when we have here in Canada the best wheat producing land in the world and can produce wheat at a lower cost than almost any other country. Were it not for the long freight haul we would foe in an even better position competitively. But I do not think we need to become too alarmed with regard to an unknown number of acres put into wheat in Russia. Suppose this has happened. Suppose that an additional 34 million acres of wheat are grown in Russia and a tremendous surplus of wheat becomes available in that country. I presume at that stage my hon. friend will ask what the policy of the Canadian government is, but I would prefer to wait and see before we are pushed into that position.


Lionel Chevrier: I should like to revert to another matter discussed earlier having to do with trade with the West Indies. The minister said earlier that that was not an immediate problem of his.


Gordon Minto Churchill: No, the ships.


Lionel Chevrier: I agree that from an administrative standpoint it is not. The ships are owned by Canadian National Steamships and the person who speaks on their behalf in the House of Commons is the Minister of Transport. But I am sure that in the over-all aspect and having in mind the field of trade the minister considers and realizes that it is a matter of deep concern to his department. I raise the problem because, as the minister knows, one of his predecessors in office, the late Hon. Mr. MacKinnon, spent a great deal of time in activating trade between Canada and the West Indies. Indeed, he made several trips and I think he had a lot to do with enhancing the atmosphere of friendship that already existed between Canada and the various islands of the West Indies.
The problem that arises and gives me some concern, notwithstanding what the minister has said, is that the government has stood by while these eight ships were being withdrawn from service. He said here that he did not consider the trade between the islands and Canada had been seriously curtailed because of this withdrawal. Of course, I cannot challenge that statement other than to say I doubt very much the accuracy of it. After all, there was a considerable amount of trade carried by these eight vessels. The fact a new ship is going to be furnished by the federal government is not going to have any effect at all on the trade because that ship is going to operate between the various islands of the West Indies. It will, I am sure, create good will for Canada, but it is not going to help the actual trade between Canada and the West Indies.
The question I am prompted to ask now is this. Does the minister not think that a serious attempt ought to have been made by the government to keep these ships in operation? Failing that, if a sale has to be made as seems to have been the decision now, would it not have been better to sell them to some agency in the West Indies in order to maintain the trade between the two countries?


Gordon Minto Churchill: As the hon. member was asking these questions my mind went back a few years and I found myself regretting that I had not paid more attention to the Department of Transport when I was in the opposition instead of paying so much attention to the Department of National Defence.

Then I would have been able to put to the then minister some of the difficult questions which he is now putting to me. In those days I directed my attention to other departments. I did not want to get involved in a discussion of the ships that my hon. friend has mentioned, because I thought this was a topic he would prefer to discuss with the Minister of Transport.
With regard to whether or not our trade with the West Indies has been curtailed, the hon. member says my statement may not be correct. That question was asked in the house some time ago and the information I received at that time was that other shipping interests had taken up the trade formerly carried by these Canadian National vessels. Whether or not the information I received was accurate, at any rate I was informed there had been no curtailment of trade between Canada and the West Indies. I am quite prepared to have another look at it, and if it develops that the trade between our countries has been adversely affected by the discontinuance of this particular line of ships, then of course we might have to review the matter. But I have no knowledge at the moment that any of the trade between Canada and the West Indies is less today than it was earlier because these ships are no longer in service.


Mr. Tucker:: Some time ago the Minister of Fisheries, and I believe the Minister of Trade and Commerce, held a meeting with representatives of the Newfoundland salt fish trade association, the Newfoundland department of fisheries, the Newfoundland federation of fishermen, and representatives of the Nova Scotia salt fish exporters association to study the many and varied problems of the salt fish industry. I should be grateful if the minister would advise this house if he is prepared to make a statement on the outcome of this meeting.


Gordon Minto Churchill: I believe I made a statement with regard to meeting these various organizations the other day in answer to a question in the house. My hon. friend is now asking, what was the outcome of this meeting. This meeting was very informative. I am very grateful to the people who came to Ottawa to give us the information that they had. These men had years of experience, either as fishermen themselves or in endeavouring to sell the products of the fisheries. Quite a number of suggestions were put forward with a view to the improvement of the fishing industry on the Atlantic coast.
The decision I came to, after listening to these representations along with my colleagues the Minister of Fisheries and the Minister of National Revenue, was that on
57071-3-151J
Supply-Trade and Commerce the official level discussions should continue, and plans would be formulated, if at all possible, aimed at improving the fishing industry of the Atlantic provinces along the lines suggested by those people who came to see us. Some of the things they mentioned had to do with the processing of the fish; the packaging of the fish; methods of shipping or warehousing; overseas shipments; general sales promotion; things of that nature. The officials have been instructed to continue negotiations and evolve a plan, and to put that plan before us as soon as that can be conveniently done.
I was impressed by the fact that the fishing industry does require something in the nature of assistance, whether it is through advice as to how best it should operate or the assistance of departmental officials in organizational plans, something along that line, I do not know. Apparently something has to be done to assist the fishing industry of the Atlantic coast. Whether the plan evolved will come from those actively engaged in fishing, from the Newfoundland provincial government, from the Department of Trade and Commerce, from the Department of Fisheries or from a combination of all four, I am not sure. However, this combination of four has been instructed to get to work to see if some plan cannot be formulated.


John Whitney Pickersgill: I should like to follow that up for a moment, if I may. I do not want to press the minister about what he said about Jamaica. I was very much encouraged by his confident expression that we would be back in the Jamaican salt fish market at the end of this six-month period. I hope his optimism is well founded. I realize it might be awkward to pursue this matter at this time when negotiations are presumably taking place.
I should like, however, to be assured by the minister that active steps are being taken, rather more active steps than seem to have been taken about this motor car trade with China, to get back into the Brazilian market. At one time this was a very big market and it was lost because of currency restrictions, through no fault of the Canadian government. I could not be too critical of the present administration if they were not able to get back there. But I would be very critical of them, and I am sure everybody on the Atlantic coast would be very critical if they were not trying very hard, using every possible device they can think of in negotiations to that end.
The minister said a few words about the European market, and he was kind enough to make a rather flattering reference to a speech I made, as well as to the excellent speech

Supply-Trade and Commerce made by the hon. member for Burin-Burgeo who knows far more about the fishing industry than I do.
There is one brief suggestion I made yesterday that I should like to repeat to the minister today. I imagine this suggestion would actually require to be implemented through the Department of Fisheries. The minister talked about the shortage of fish for the European market. It is quite true that the quality of fish required for the Spanish and the Italian markets, which pay a better price than does any other market for salt fish, has been short the last two or three years, since Mr. Winters made his visit to Europe and negotiated the increased market there. I urged upon my colleagues in the previous administration,-without success, I admit-I urge upon the minister, and I intend to urge upon the Minister of Fisheries, that we should adopt a system of premiums for this high quality fish for a few years in the hope of having the production kept up and possibly expanded until such time as the technical and economic problem of making that improved fish in fish plants is completely solved.
The minister will perhaps recall that before the war, when we were seeking to get into the market in the United Kingdom-I know my leader knows a great deal about this matter-for bacon and cheese premiums were used very successfully to expand the Canadian production rapidly in order to get that larger fraction of United Kingdom markets which we had in those days and about which the minister spoke earlier. It seems to me that that device, which we know through experience worked very well in the case of bacon and cheese, would probably work well also in the case of this high quality fish.


Mr. Howard:: A moment ago the minister made a comment I believe in answer to a question asked by the hon. member for Assiniboia. The reference was first to aluminum and whether there were any other commodities with regard to which Russia had been able to underprice us and undersell us and thus affect what may have been traditional Canadian markets. He mentioned lumber particularly as having suffered because of lower prices being offered by the Soviet union in what were traditionally our markets. I wonder first whether the minister could expand that statement that our lumber exports have suffered by mentioning the markets which we have lost or in which our sales have dropped as a result of Russian sales of lumber.


Gordon Minto Churchill: I have not that information readily available. I would have to have it looked up and perhaps give a report to the hon. member at a later time.


Frank Howard: I should like to make one other comment in that regard. It arises not only out of the answer just given by the minister to this specific question but out of other answers of a similar type. Would the minister not consider that it would probably be more advisable to follow the lead of his colleagues and arrange to have departmental officials here to advise him on some of these detailed questions which may arise.


Gordon Minto Churchill: Yes; but I am waiting until we get past this first item and I am hoping now that the hon. member is suggesting that we move on,-


Frank Howard: It is not a suggestion to move on, it is a suggestion to get some information.


Gordon Minto Churchill: -that we may move on past the first item. The procedure is to have officials here in order to provide answers to the specific questions which are asked, not on the first item on which there is general discussion but when hon. members start asking specific questions on lumber or something like that. I think the hon. member is suggesting the officials should be here.


Frank Howard: I should like to point out that the minister himself raised the question of lumber in the first place.


Gordon Minto Churchill: But I did not ask a question about it.


Lester Bowles Pearson: This is I think a general question. In rising I should like to bring the minister back to the West Indies and to his trip there in May when he was attending the ceremony on the birthday of the West Indies federation and when at a press conference he is reported as being asked by a correspondent of the London Times whether Canada regarded the West Indies as their protege rather than Britain's.	The report
goes on to say that the Hon. Gordon Churchill gave an answer that added up to the view that Canada did regard the West Indies as its protege rather than Britain's. Would the minister like to comment on that very important statement?


Gordon Minto Churchill: It is a very important statement, Mr. Chairman; and my friend the Leader of the Opposition, with his fine experience of press conferences, knows perfectly well that this is a fabricated answer because it says that my answer added up to such and such. It did not say that I said it directly, and of course I did not say it at all.


George James McIlraith: There are one or two general matters with which I want to deal before we move on from item No. 1. They arise out of the minister's remarks this afternoon. The first one has to do with the discussion about the proposal of the chancellor of the exchequer of the United Kingdom for free trade between Canada and the United Kingdom. In dealing with all that had been said about that matter yesterday and this morning by hon. members on the opposition side of the house, the minister disposed of it rather quickly; and as I understood his remarks and tried to note them down, he tried to liken that proposal to a suggestion put forward in the same way by the Leader of the Opposition about the Atlantic area trade, and he left the whole matter there. I think it should be pointed out to hon. members that the proposal for free trade between the United Kingdom and Canada was put forward by the chancellor of the exchequer of the United Kingdom at a conference called by the Canadian government to decide whether or not a commonwealth trade conference should be held. At that conference I think all the commonwealth countries were represented by their ministers, or nearly all of them; and it is quite a different matter than a suggestion made in a speech in the house here. It is something that I do not think he should brush aside quite so lightly as he has done.
The second point I want to deal with is this. Yesterday and again today the minister dealt with the balance of trade between certain areas; that is between Canada and the United States and between Canada and the sterling bloc or the United Kingdom. In both his speech yesterday and again today he made a rather flattering reference-and I think properly so-to a speech made by the hon. member who spoke last night on balance of payments.


John Whitney Pickersgill: The hon. member for
Rosthern.


George James McIlraith: No.


Gordon Minto Churchill: The hon. member for Macleod.


George James McIlraith: Yes, the hon. member for Macleod. I want to draw to the attention of the minister one omission in his speech yesterday in relation to this subject and to find out whether there is any significance in it. I noted it yesterday when he was delivering it but I did not refer to it earlier. As reported at page 2321 of Hansard, the second column, the minister, in talking about the pattern of trade, goes on to give, for example, the commodity exports to Great Britain, the commodity exports to other commonwealth
Supply-Trade and Commerce countries and to the United States. Then in the next paragraph he refers to imports from Great Britain rising by two per cent and imports from the United States falling. Then in the next paragraph he went on to say this:
The trade figures that I have given are indicative of three developments. First, Canada's foreign trade with the world as a whole has been maintained-
And so on. Then he says this:
Second, a certain measure of diversification and expansion of trade has taken place leading to a better balance in our trade pattern.
What concerns me is that the minister in dealing with the item gave the exports to three areas, namely the United Kingdom, the remainder of the commonwealth and the United States. He then gave the imports from two of those areas, the United States and the United Kingdom. Imports from the U.S. have of course dropped and that would make an apparent improvement in the balance of commodity trade with that area. Exports to the U.K. have risen, which would also make an apparent improvement in the blance with that country. But the minister omitted to deal with the second part of the problem. He failed completely to refer to imports from the remainder of the commonwealth, and I would respectfully suggest to the minister that if he is going to make a distinction between the rest of the commonwealth and the United Kingdom he should have elaborated a little further. If the minister will refer to the weekly bulletin of the dominion bureau of statistics dated Friday, July 11, 1958 he will find in the second last paragraph on page 9 these words:
Imports from the United Kingdom reached $116,200,000 in the first quarter of 1958, some 2 per cent higher than in the first quarter of 1957.
Then the first sentence of the last paragraph reads:
Canadian imports from the commonwealth fell about $36 million in the first three months of 1958, some 14 per cent below their 1957 level.
What I would like to know from the minister is the reason why he dealt with the three areas in respect of export figures and only two of them in respect of import figures. Is it because he is seeking to balance the trade with each country individually or what was the reason for the rather noticeable omission?
The third matter which I wish to deal with arises out of the discussion this afternoon about the 15 per cent diversion of imports from the U.S. to the U.K., which was brushed aside rather hastily by the minister. I think it is well to place on record some of the newspaper references to this matter which are rather interesting. It will be seen that these Canadian newspapers are important ones. I

Supply-Trade and Commerce think one or two of the many such references will serve to illustrate why I believe the Canadian, British and other people are entitled to believe that the Prime Minister and the government meant what they apparently said on the occasions when they advocated a policy of diverting 15 per cent of our imports from the U.S. to the U.K. Firstly, the London Times of July 8, 1957, carried an article, part of which I will quote as follows:
Mr. Diefenbaker, the Canadian Prime Minister, told a press conference yesterday on his return from the commonwealth conference in London that Canada has as a planned objective the diversion of 15 per cent of her present imports from the United States to imports from the United Kingdom.
Then the Ottawa Journal of the same date had this to say:
The diversion of 15 per cent of Canadian buying to the British market would make "a substantial improvement" in trade with the United Kingdom without damaging business relations with the United States.


John George Diefenbaker: Mr. Chairman, I have mentioned this on more than one occasion, but I do not mind the repetition over and over again of a song that was sung throughout the election campaign. However, the first statement mentioning an objective, is a statement that was not made and any of these other quotations will have the same effect on this house as they had on the country when they were quoted during the election campaign.


George James McIlraith: I do not know if the Prime Minister is now repudiating his policy.


An hon. Member:: He is not.


George James McIlraith: But will the Prime Minister kindly extend the courtesies to other persons in this house which are extended to him?


Some hon. Members:: Hear, hear.


George James McIlraith: He holds a very high office-


Some hon. Members:: Oh, oh.


John George Diefenbaker: Mr. Chairman, on a question of privilege-


Lionel Chevrier: There is no privilege.


Joseph Pierre Albert Sévigny: The hon. the Prime
Minister.


John George Diefenbaker: I do not mind anybody misinterpreting me when I am here but when I say that a statement was not made excepting that our objective was to bring about an improvement-that was the statement-if my hon. friend wants to go on and misinterpret me and to utilize the time of the house for the repetition-


John Whitney Pickersgill: What is the question of
privilege?


John George Diefenbaker: To repeat a statement that is untrue, I will say no more.


Some hon. Members:: Hear, hear.


George James McIlraith: Mr. Chairman, with respect to your dealing with a question of privilege, there is none, as you will have seen. I was reading quotations from various newspapers and I propose to continue to do so in answer to something said by the Minister of Trade and Commerce in this house this afternoon -a very important matter-when the Prime Minister of Canada was not in this house. I have no criticism of him for that-he was undoubtedly on proper and urgent business requiring his attention-


John George Diefenbaker: I was on government
business.


George James McIlraith: But I say we as members of this house have the right to expect one holding the very high and honourable office of Prime Minister-


Mr. Ricard:: Don't get excited.


George James McIlraith: [DOT]-to extend to hon. members who rise to speak the kind of courtesy he receives in this house.


Some hon. Members:: Hear, hear.


George James McIlraith: And we are entitled to have you, Mr. Chairman, apply the rules to us when we speak in this house.


An hon. Member:: You are whining, you are not speaking.


George James McIlraith: I propose to continue my remarks on the subject of item No. 1 of the estimates of the Department of Trade and Commerce and the remarks of the minister on that item when we were discussing the question of trade diversion from the U.S. to the U.K.


John George Diefenbaker: As long as you don't falsify the record.


George James McIlraith: If the Prime Minister will just possess his soul and have the courtesy and patience to read my remarks in Hansard he will see that when he was talking to the Minister of Trade and Commerce my remarks were in order.


Some hon. Members:: Hear, hear.


Joseph Pierre Albert Sévigny: I regret to interrupt the hon. member, but in making a ruling there was no intent of discourtesy in the present debate and it would be appreciated if the hon. member would adhere to the discussion of the resolution now being considered.


Some hon. Members:: Oh, oh.


George James McIlraith: You, Mr. Chairman, have no right to an opinion on whether it is discourtesy or not.


Mr.. Chevrier:: Hear, hear.


Joseph Pierre Albert Sévigny: I regret to tell the hon. member that he told me he expected me to have courtesy in this house-you yourself-


Some hon. Members:: No, no.


George James McIlraith: I did not say that.


Lionel Chevrier: He directed his remark to the Prime Minister.


Joseph Pierre Albert Sévigny: That was the way in which the Chair interpreted it, and it would be appreciated by the Chair if the hon. member would speak about the resolution being discussed.


George James McIlraith: Mr. Chairman, I made no reference to discourtesy from the chair at all.


Some hon. Members:: You did.
Other hon. Members: No, he did not.


George James McIlraith: I want to make it very clear, Mr. Chairman, that there was nothing of that nature intended. In any event, to show how this was regarded in the country I want to read some more of these press clippings.
In the Kingston Whig-Standard of July 9, 1957, the following appears:
Mr. Diefenbaker has returned from the commonwealth conference in London. What he proposed there came as no surprise since the new Prime Minister has long advocated more trade with Britain. He has also long been concerned about Canada's unfavourable trade balance with the United States and now proposes that 15 per cent of our purchases from that country should be diverted to Great Britain.


John George Diefenbaker: Those are observations from the press instead of quotations.


George James McIlraith: I am well aware of the rule but I am entitled to proceed unless I am out of order.
Then the Financial Post of October 12, 1957 had this to say:
Mr. Diefenbaker, who started it all with his declaration that he wanted to switch 15 per cent of Canadian trade from the United States to the United Kingdom, took personal charge.
And another from the Winnipeg Tribune of October 18, 1957:
The mission is a development that followed the suggestion of Prime Minister Diefenbaker last July that Canada switch 15 per cent of her imports from the United States to Britain. Such a move would double Canadian imports from Britain to some $1 billion a year.
The Montreal Gazette of November 22 had this to say:
Prime Minister Diefenbaker said here yesterday that he has every confidence that the Canadian trade mission to the United Kingdom will achieve its objective of diverting 15 per cent of Canadian imports from the United States to Britain and thus save this country from "ultimate economic danger."
Supply-Trade and Commerce
Then, the Globe and Mail of January 24, 1958, said this:
A preliminary but significant shift in Canadian trade has developed a trend toward the 15 per cent target suggested by Prime Minister Diefenbaker for diversion of Canadian purchases in the United States to Britain.
There are a great many more of these excerpts but there is one which is, I think, of particular interest. I refer to a comment by Sir David Eccles, reported in the Montreal Star of April 28, 1958. Sir David Eccles, who is president of the United Kingdom Board of Trade, is not an inconsequential person, as I think the Prime Minister will readily agree. He, apparently, was in some degree of uncertainty about this policy, with reference to which he had this to say:
I think the proposed 15 per cent shift in Canadian import habits will take a few years to really get under way.
The switch of 15 per cent will create a beneficial situation for all three countries. It will strengthen the economy of Canada and Britain and give Britain more dollars to spend on the North American market. But once again this is a longterm proposition.
The point I wanted to make was that in the light of this kind of newspaper comment in very responsible newspapers all over the country, and indeed in some outside the country, it should not be a matter of surprise, surely, that hon. members should have asked, on the estimates of the department concerned, what this policy really is, how it is working and so on. The Minister of Trade and Commerce had something to say on this subject, too, by the way. It is interesting to see what the minister had to say as reported in the Windsor Star of November 19, 1957:
Prime Minister John G. Diefenbaker suggested last July that Canada might divert as much as 15 per cent worth of its imports from the United States to the United Kingdom.
"Over a period of years that is not impossible," Mr. Churchill maintained.
That latter part purports to be a quotation from the minister.


Gordon Minto Churchill: Is it in quotation marks?


George James McIlraith: Yes, that latter remark is in quotes

"Over a period of years that is not impossible." When that kind of story goes out throughout the country, surely there is some reason for believing that people concerned with trade should ask what is the policy of the government with regard to this matter. I am sure that if the Prime Minister were to read what has been said on this subject yesterday and today he would see that what has been asked have been perfectly proper inquiries in relation to the subject matter, and he would himself wish that the Minister of Trade and Commerce

Private Bills
had taken a minute or two longer this afternoon in order to deal a little more fully with the subject than he did. I am aware of the fact that the Minister of Trade and Commerce had a great many questions to answer and that it is not always possible in one speech to gather up answers to so many questions, but when the Prime Minister looks into this he will see exactly what the problem is and, I am sure, he will share with us, though he may not care to admit it, a desire that the position should be clarified and that any impression, right or wrong, which had been created on the subject should be put right for all time.


Mr. Jones:: Would the hon. member permit a question arising out of the remarks he has just made? Is he not aware that earlier this afternoon the leader of his own party said he was in favour of a return to the triangular trade pattern and claimed that the Liberal party had sought to re-establish that pattern, which would be the result achieved by the very thing which the hon. member has been criticizing.


George James McIlraith: I will answer the question and then have some comments to make on it. This is not a simple proposition as the hon. member seems to imply. This is a far deeper and far wider-ranging thing, involving taking away $600 million worth of business from our best customer. I would point out-and this is a very interesting thing-that in the last two days almost all the questions which have been asked by private members on the government side have been directed to hon. members on this side of the house instead of to the ministerial benches.


An hon. Member:: We cannot understand you, that's why.


George James McIlraith: It shows the need for the government to explain its policy on these matters, and the absence of policy by the government, and the absence of explanations-


Joseph Pierre Albert Sévigny: Order. It being five o'clock it is my duty to leave the chair.



PRIVATE BILLS

Mr. Speaker:: There being a number of divorce bills standing for consideration in committee of the whole, is it agreed that all be referred to the committee of the whole in one motion?


Some hon. Members:: Agreed.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. SD-56, for the relief of Margaret Patricia Winckworth Thornton Sherwin.-Mr. McCleave.
Bill No. SD-79, for the relief of Benita Gertrude Kozlov Cohen.-Mr. McCleave.
Bill No. SD-80, for the relief of Marie Marguerite Amelia Genier Wright.-Mr. McCleave.
Bill No. SD-81, for the relief of Winifred Jean Garrett Somers.-Mr. McCleave.
Bill No. SD-82, for the relief of Frances Erdanova (Erdan) Weiskopf, otherwise known as Esther Weiskopf Weiskopf, otherwise known as Frances Erdanova (Erdan) Stern, otherwise known as Esther Weiskopf Stern. -Mr. McCleave.
Bill No. SD-83, for the relief of Mac Bernard, otherwise known as Manny Bernard. -Mr. McCleave.
Bill No. SD-84, for the relief of Marcelle Gagnon Lachance.-Mr. McCleave.
Bill No. SD-85, for the relief of Jean Claude Albert Leonard.-Mr. McCleave.
Bill	No.	SD-86,	for	the	relief	of	Anne
McCluskey Templeton.-Mr. McCleave.
Bill No. SD-87, for the relief of Lillian May Seymour Perez.-Mr. McCleave.
Bill No. SD-88, for the relief of Lucille Esther Hudson Donnelly.-Mr. McCleave.
Bill	No.	SD-89,	for	the	relief	of	Dorte
Glahn Carnie.-Mr. McCleave.
Bill	No.	SD-90,	for	the	relief	of	Marie
Therese Carmen Pauline Legault Lortie.- Mr. McCleave.
Bill No. SD-91, for the relief of Joseph Leo Nolet.-Mr. McCleave.
Bill	No.	SD-92,	for	the	relief	of	Naomi
Ruth Wolfson Fischel.-Mr. McCleave.
Bill No. SD-93, for the relief of Florence Lillian Henderson Pinkney.-Mr. McCleave.
Bill No. SD-94, for the relief of Francine Major Daigneault.-Mr. McCleave.
Bill	No.	SD-95,	for	the	relief	of	Odette
Lemay Dussault.-Mr. McCleave.
Bill No. SD-96, for the relief of Joan Collie Showier.-Mr. McCleave.
Bill No. SD-97, for the relief of Johanna Hendrika Jilderda Haring.-Mr. McCleave.
Bill No. SD-98, for the relief of Patrick Charles Stanford.-Mr. McCleave.
Bill No. SD-99, for the relief of Beryl Elizabeth Scrase Laliberte.-Mr. McCleave.
Bill No. SD-100, for the relief of Barbara May Ramsey Bryant.-Mr. McCleave.
Bill No. SD-101, for the relief of Joyce Sherman Fogel.-Mr. McCleave.
Bill No. SD-102, for the relief of Wilfred David Oliver.-Mr. McCleave.
Bill No. SD-103, for the relief of Joseph Urban.-Mr. McCleave.
Bill No. SD-104, for the relief of Olive Margaret Lester James.

Mr. McCleave.
[Mr. Mcllraith.l

Bill No. SD-105, for the relief of Florence Mildred Matthews Dawe.-Mr. McCleave.
Bill No. SD-106, the relief of Marie Berthe Helene Guerard Maher.-Mr. McCleave.
Bill No. SD-107, for the relief of Marie Juliette Pauline Josette Beaudoin Said.-Mr. McCleave.
Bill No. SD-108, for the relief of Judith Margaret Bianchi Sartori.-Mr. McCleave.
Bill No. SD-109, for the relief of Clarabel Ellement Vaillancourt.-Mr. McCleave.
Bill No. SD-110, for the relief of Alice Elizabeth Edden Aumais.

Mr. McCleave.
Bill No. SD-111, for the relief of William Gordon Heughan.-Mr. McCleave.
Bill No. SD-112, for the relief of Roland Doutre.-Mr. McCleave.
Bill No. SD-113, for the relief of Gerald Edward Burnham.-Mr. McCleave.
Bill No. SD-114, for the relief of Ottilie Wilhelmine Auguste Stegelitz Carpentieri. -Mr. McCleave.
Bill No. SD-115, for the relief of Francine Josephine Ghislaine Boisdenghien Lebrun. -Mr. McCleave.
Bill No. S-D116, for the relief of Doris Cahill Chabot.-Mr. McCleave.
Bill No. SD-117, for the relief of Ruth Marsha Yanover Caunter.-Mr. McCleave.
Bill No. SD-118, for the relief of Joseph Wilfrid Rene Fortier.-Mr. McCleave.
Bill No. SD-119, for the relief of Ingeborg Alves-Probst Wright.-Mr. McCleave.
Bill No. SD-120, for the relief of Paulette Priscilla Benning Buchanan.-Mr. McCleave.
Bill No. SD-121, for the relief of Irene Georgina Descyca White.-Mr. McCleave.
Bill No. SD-122, for the relief of Eszter Jeszenszky Tahy.-Mr. McCleave.
Bill No. SD-123, for the relief of Alice Latou Tubbs Wood Green.-Mr. McCleave.

[Stage Direction]
The house resumed, from Friday, July 4, consideration of the motion of Mr. Taylor for the second reading of Bill No. S-4, respecting the Burrard Inlet Tunnel and Bridge Company, and the amendment thereto of Mr. Regier.
Mr. J. F. Browne (Vancouver-Kingsway):: Mr. Speaker, hon. members will recall that I had just taken the floor in the debate on this bill on Friday, July 4, before six o'clock. I hope that I will be able to clear up in a few moments some of the misconceptions that were apparently held by some hon. members at that time.
57071-3-152
Private Bills
To refresh our memories I might state briefly that the bill deals with a toll bridge which runs between the cities of Vancouver and North Vancouver and the purpose of the bill is to make provision for the payment of remuneration to the directors of the Burrard Inlet Tunnel and Bridge Company and reimbursing them for their expenses in the performance of their services as directors. The shares of the company are held by the municipalities concerned and the city of Vancouver. Since that time I have taken a look at other bridge companies. There are about 250 tunnel and bridge companies in Canada incorporated under dominion charter since confederation and I cannot find one other instance in all of those bridge companies where no provision is made for the directors to be paid. That in itself is a pretty good indication that this is a reasonable and straightforward request.
The second point I wish to deal with is that some of the members brought up the interest of the taxpayers, in as much as this bridge and its shares are held by the municipalities concerned. I think that is one of the very good reasons why we should pass this bill, because we are not deciding here that these directors are going to be paid. The municipalities as shareholders will actually have the right to authorize payment. We are not saying that they are going to receive so much pay. They are setting a very low limit as to what they can be paid and that is contained in the bill. The maximum is $500 a year for a director and a slightly higher amount for the chairman of the board. Also, some other hon. members felt that this board should be compared with some of the other boards of city councils. For instance, the hon. member for Vancouver East (Mr. Winch) had this to say as reported at page 1946 of Hansard:
Being elected members they are in the same position as others with similar responsibilities.
He was referring to the fact that all of the members of the board of directors are also members of the city and municipal councils which are involved. He continued:
If you are a member of a city council, a municipal council or a rural municipal council your work is designated by the council. You may be called upon to serve on a library board, a sewer board and undertake all the various responsibilities that go with election to office. Quite bluntly, I cannot see why there should be any differentiation between the responsibilities of a member of a council serving on a library board or sewer board and those of a director of a bridge company engaged in rendering a service.
Since that time I have received from one of the aldermen of the city of Vancouver certain information in this respect in which he states that he has sat on the greater

Private Bills
Vancouver water board and also on the greater Vancouver sewerage board and for that service he has received $15 a meeting, and those meetings often take place more than once a month, which would mean perhaps that he would be receiving $30 a month or some $360 a year in remuneration on that basis. He also states that he has put in considerably more time on the bridge board than he has ever put in on the other boards involved. Therefore, it becomes apparent that even if the maximum rate were put into effect the men would not be overpaid.
I hope that this will clear up some of the misconceptions, because members of those other boards are paid and also, as I have pointed out, all of the other bridge authorities from one end of Canada to the other pay their directors. I did not look over the entire 250 but I did look through 50 or 60 of them and in many instances it was stated in the charter that provision was made for the municipalities to take them over. There was the understanding that some of them might be municipally owned but still there was provision for the directors to be paid. In the light of the new facts that we have to go on, it will be seen that there is no need for the amendment that is before us and this bill could be properly passed.


Mr. E. J. Broome (Vancouver Soulh):: Mr. Speaker, I do not intend to take up the time of the house for more than two or three minutes. The hon. member for Burnaby-Coquitlam (Mr. Regier) moved his amendment in good faith in order to protect the taxpayers of the municipalities. Since this bill was first discussed-I do wish that when it was brought up more information had been available to hon. members-I have received more information and other Vancouver members have also received information which should make it quite clear that this is not asking for anything to which we should not agree.
As the hon. member for Vancouver-Kingsway (Mr. Browne) has said, other municipal boards, the Vancouver sewerage board and the water board, pay the members of the board on an honorarium basis. School boards on which I have served are quite free to pay themselves if they so wish. The criterion in this bill is that the municipalities themselves own all the shares in the bridge and they would have to authorize payment. All that we are being asked to do is to make it possible for the municipalities if they so wish to do so. They are free to pay the directors within the limit stipulated within the bill. I think, Mr. Speaker, that the amendment should be withdrawn but if the hon. member is not willing to withdraw it we should defeat it, pass the bill and leave to the

municipalities concerned the right to run their own affairs instead of our trying to tell them what they can or cannot do.


Frank Howard: Mr. Speaker, I have just one comment or two. The last two hon. members who have participated in this debate, especially the hon. member for Vancouver South (Mr. Broome), indicated that some additional information had been received which would warrant the withdrawal of the amendment to refer it to a committee first. But with no indication as to what this additional information is, where it emanated from, what effect it would have on clearing up our lack of understanding and that expressed by members of the Conservative party when the bill was being debated on another day; with no clear indication from the councils of the municipalities owning practically all the shares in the bridge and tunnel company, we cannot properly be expected to agree to withdraw the motion for referral to a committee first. If the bill is put before a committee in the manner we have suggested there will then be ample opportunity to determine the actual position of the municipal councils which to date, so far as I am aware and from the information given to the house, has not been indicated in any shape or form.
Without such an indication I do not see how hon. members can properly expect that we could consider not pressing our amendment and insisting that the bill not now receive second reading until such time as this lack of information is cleared up and we definitely know what the position of the municipal councils is and not just that of one or two selected individuals.



CATHOLIC EPISCOPAL CORPORATION OF TIMISKAMING

Mr. O. F. Villeneuve (Glengarry-Prescotl) moved: the second reading of Bill No. S-5, respecting the Catholic Episcopal Corporation of Timiskaming.
He said: The purpose of this bill is to change the name of the Catholic Episcopal Corporation of Timiskaming to the Roman Catholic Episcopal Corporation of the Diocese of Timmins, to modernize its charter, which has not been revised since 1910, and to bring its objects, purposes and powers in line with its present requirements. The revised and added clauses are similar to those now usually 57071-3-152J
Private Bills
included in private acts incorporating religious bodies.
In 1910, the diocese was known for ecclesiastical purposes as the Vicariate Apostolic of Timiskaming: it is now known for such purposes as the Diocese of Timmins. Clause 1 of the present bill gives statutory recognition to the new designation.


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

Mr.  M. D. Morion@Davenport: the second reading of Bill No. S-7, respecting Canadian Pacific Railway Company and certain wholly owned subsidiaries.
He said: Mr. Speaker, if I may, I should like to outline just briefly the purpose of this bill. The Canadian Pacific railway over a period of years have assumed control over a number of subsidiaries which have been embodied in the C.P.R. system. In order to simplify the corporate organization of the C.P.R., they wish to dissolve these companies as subsidiaries and to take over the assets and the liabilities of the companies as outlined in the bill. This is the third project. They have already done this with respect to two other groups, in 1956 when 13 were dissolved and in 1957 when 14 were dissolved. I may make it quite clear that they are still maintaining the same services, they are employing their own men on these railways and there will be no change in the employment of the people concerned. It is a matter of reorganization for administrative purposes. I also want to state to the house that when this bill is referred to the committee the officials of the company will be present to answer any questions that any hon. members might have in respect of these companies. Of the nine companies mentioned here, seven are dominion companies and will be dissolved by this act. The other companies are provincial companies and would have to be dealt with by the provincial jurisdiction. This act deals with the assets and liabilities of these companies in so far as the dominion jurisdiction extends to them.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, while we in this group fully appreciate the explanation given by the hon. member with respect to the purpose of this bill which, according to the explanatory note, is to simplify the corporate organization of the Canadian Pacific Railway Company, on behalf of this group I want to say a word or two.
These bills coming before the house to cancel the charters of various subsidiaries and to bring them within the terms of the

Private Bills
parent company indicate the number of charters that were granted years ago to these railway companies throughout Canada. Only two sessions ago, I think it was, we had a number of bills with the same purpose with respect to a number of railways in British Columbia. I occasionally look up the grants these various railway companies have received in the way of land, money and things of that sort. Anyone who reads the history of railway development in Canada realizes that the Canadian Pacific railway and all the subsidiaries that are now being incorporated or brought within the fold of the company did very well in the early days with respect to grants of land or cash from the federal government or, in some cases, from the provincial government.
I think these bills to simplify the corporate organization of the C.P.R. clearly indicate a certain trend in this country. We are not going to oppose this bill because we realize that under these circumstances this is the common sense thing to do. However, we are taking this opportunity to bring a few things to the attention of the house. I think it was two sessions ago that we had another bill that provided for the abandonment of a certain portion of the C.P.R. between Kaslo and New Denver and at that time as a sort of carrot held out to local people was the fact that the government of British Columbia was going to take over the right of way and use it as a standard highway and so on. To date there has been no action in that respect. Consequently that portion of the district has been completely without rail services or highway services satisfactory for the hauling out of mining commodities since that time.
Not only these bills to simplify the corporate organization of the C.P.R. but those to abandon certain sections of the railway in certain parts of Canada and also to reduce services as has been done on the Kettle Valley railway in recent months-a situation which we tried to correct by introducing in this house a bill which was unfortunately defeated-we presume are efforts to lower costs because of changing circumstances in Canada. As far as we are concerned, they all indicate a fluid and uncertain situation in Canada with respect to railway transportation.
From the point of view of this group, we think that all these measures to simplify the corporate organization of the C.P.R., to abandon certain sections of the line entirely and to reduce service on other sections of the line indicate the necessity for a national transportation policy which we in this group have urged for many years. We consider that railways are a very important utility-possibly the most important one-linking all regions in Canada, and certainly very necessary for
[Mr. Herridge.l
the transportation of goods produced in this country from one point to another. It is for that reason that the C.C.F. believe in the necessity for an over-all national transportation policy as a result of action by the government of Canada which will integrate our rail, water, air and road transportation to the end that we may have some logical development of our transportation services so that we are able to provide the people of Canada with adequate and necessary transportation services at the lowest cost possible having regard to the national needs of Canada, and the people of Canada first. Second, we in the C.C.F. believe that a national transportation policy would be to the advantage of the employees of the railway companies of this country and to the employees of the other transportation agencies.
In that connection, before resuming my seat, I also wish to illustrate the need for some sort of over-all transportation policy and control so far as developments, extensions, roads and pensions are concerned. We all know that the pensioners of the C.P.R. who retired prior to January 1, 1953, have been asking for amendment of their pensions. These long service railroaders are being denied justice at the present time because they are pensioned at a very much lower rate than are those who were pensioned after January 1, 1953. I am sure all members of this house have from time to time received briefs from railroad organizations and from the men concerned-


Mr. Speaker:: I understand that the hon. member intends to be very brief, but he is wandering rather far afield from the purpose of this bill.


Herbert Wilfred Herridge: I am just winding up, Mr. Speaker. In one sentence I want to say that something should be done to remedy this situation because the Canadian Pacific Railway Company in the United States has granted a 49 per cent increase to the same category of worker while here in Canada our men are still denied this very much warranted increase in their pensions.
Coming back to the purpose of the bill, in accordance with your wishes, Mr. Speaker, I do want to emphasize this need for a transportation policy, and also to say that I took this opportunity to make these few remarks because we have so little opportunity to express our credo on transportation matters.
(Translation):


Lionel Chevrier: Mr. Speaker, I only have a word or so to say with regard to the bill just introduced by the hon. member for Davenport (Mr. Morton).
This bill is a very important one to us because, if I remember rightly, something

along this line has already been done with regard to the operations of the Canadian National Railways.
I listened with a great deal of attention to the explanations given by the hon. member, and I will tell him at once that we, in the opposition, have no objection at all to that bill especially as regards the principle involved. I hope it will be referred to a committee, probably the committee on railways, canals and telegraph lines.
In principle, Mr. Speaker, we support any step which is not designed to centralize government in Ottawa, but to centralize railway operation of a series of companies, such as Canadian Pacific Railways subsidiaries mentioned here. This will not only make the administration of that corporation easier, but also simplify its organization.
I said a moment ago that when I was with the Department of Transport a few years ago, the Canadian National Railways felt it wise to take this same course. I believe that in that instance the Canadian National Railways had placed a series of corporations-there were several-under the control of a single company. I believe that all these operations had to do with the Canadian National Railways hotels and that the purpose of incorporation was to simplify the management of the hotels of the Canadian National Railways.
Along with my colleagues on this side of the house, I feel that, from an administrative point of view, this bill is an excellent thing for the Canadian Pacific Railways. Not only will its implementation make organization and administration of that company easier, but it will be extremely useful in the matter of accounting, which is very important.
That is why we support that motion and hope that it will be referred for further study to the committee of railways, canals and telegraph lines.
(Text):


Mr. M. D. Morton (Davenport):: May I make one observation with respect to the comments of the hon. member for Kootenay West (Mr. Herridge). He seemed to imply-


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


Murray Douglas Morton: The hon. member seemed to imply that the services of the companies mentioned were being abandoned. I think that would be an unfair implication to be drawn because that is not the intention of the company.


Herbert Wilfred Herridge: I quite understand the hon. member's explanation but I was taking the opportunity to refer to some other services which had been abandoned which had cut us to the quick.
Private Bills


Lionel Chevrier: Would the hon. member not comment on my remarks also?


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.


[Stage Direction]
Bill No. SD-124, for the relief of Annie Allish Watson.-Mr. McCleave.
Bill No. SD-125, for the relief of John Spence Brown.-Mr. McCleave.
Bill No. SD-126, for the relief of Verne Alfred Freeman.-Mr. McCleave.
Bill No. SD-127, for the relief of Davina Betsy Snow Campbell.-Mr. McCleave.
Bill No. SD-128, for the relief of Jack Spinner.-Mr. McCleave.
Bill No. SD-129, for the relief of Kaljo Klasman.-Mr. McCleave.
Bill No. SD-130, for the relief of Claude Hector Proulx.-Mr. McCleave.
Bill No. SD-131, for the relief of Mary Florence McLelland Pringle.-Mr. McCleave.
Bill No. SD-132, for the relief of Robert Maurice Sherwood.-Mr. McCleave.
Bill No. SD-133, for the relief of Margaret Jeanette Young Warmington.-Mr. McCleave.
Bill No. SD-134, for the relief of Mary Isabella Cross Davidson.-Mr. McCleave.
Bill No. SD-135, for the relief of Rita Firestone Flax.-Mr. McCleave.
Bill No. SD-136, for the relief of Dorothy June Pearce Tribble.-Mr. McCleave.
Bill No. SD-137, for the relief of Anne Rottermund David.-Mr. McCleave.
Bill No. SD-138, for the relief of Gordon Edwin Limbrick.-Mr. McCleave.
Bill No. SD-139, for the relief of Helen Paperno Bogatin.-Mr. McCleave.
Bill No. SD-140, for the relief of Joseph Victor Cyril Goyer.-Mr. McCleave.
Bill No. SD-141, for the relief of Henry Joseph Haggett.-Mr. McCleave.
Bill No. SD-142, for the relief of Ethel Roe Emond.-Mr. McCleave.
Bill No. SD-143, for the relief of Frederick Wilson Abbott.-Mr. McCleave.
Bill No. SD-144, for the relief of Gilda Rosen Silverman.-Mr. McCleave.
Bill No. SD-145, for the relief of John Luczko.-Mr. McCleave.
Bill No. SD-146, for the relief of Anita Fischer Staub.-Mr. McCleave.
Bill No. SD-147, for the relief of Margaret Irene Dawe Mays.-Mr. McCleave.
Bill No. SD-148, for the relief of Janine Lafontaine Frost.-Mr. McCleave.
[Stage Direction]
Private Bills
Bill No. SD-149, for the relief of Lydia Feodorovna Ovchinnikova Lipsman.

Mr. McCleave.
Bill No. SD-150, for the relief of Donald Malcolm Gangin.-Mr. McCleave.
Bill No. SD-151, for the relief of Marie Louise Plourde Auld Emard.-Mr. McCleave.
Bill No. SD-152, for the relief of Ralph Murrin.-Mr. McCleave.
Bill No. SD-153, for the relief of Bruno Giovanni Albertini.

Mr. McCleave.

[Stage Direction]
The house resumed, from Friday, July 11, consideration of the motion of Mr. Broome for the second reading of Bill No. S-6, respecting Trans Mountain Oil Pipe Line Company.
Frank Howard: Mr. Speaker, it appears that the fates are not operating very kindly for me, for upon reflection it seems to me that last week when I made a few comments on this matter it was at about this time and I did not get the opportunity to conclude my remarks. I hope I will be able to do so today.
Last week at about six o'clock the hon. member for Vancouver South (Mr. Broome), the sponsor of this bill, directed a question to me which I was unable to grasp at the time. Upon looking at Hansard for July 11 and reading the question, I hope I am now in a position to answer. The question asked as recorded at page 2183 of Hansard for that date was as follows:
Will the hon. member permit a question? Is he not aware that not one cent was made in promotion fees in the promotion of the Trans Mountain Oil Pipe Line Company?
Then, I expect in explanation he continued:
In reading the prospectus I tried to point out that every cent raised went into the treasury of the company and was used for the development of the company.
I suppose the hon. member's question arose out of my remarks just preceding his question, which were with reference to the fact that the oil and gas pipe line industry in general was a most lucrative one, with which I am sure he will not disagree. At that time I had no specific reference to the Trans Mountain Oil Pipe Line Company. It was a general reference to the industry and the profitable state in which that industry had been for many years, both here in Canada and particularly in the United States.
Following those remarks as to the lucrative state of the industry both with respect to oil and gas pipe lines and the public services which such pipe lines provide, I was leading up to the opinions expressed by other members of the C.C.F., both verbally and in formal form by motion in the year

1951 when the company was originally incorporated. For the benefit of hon. members who have not read the history of this company, we offered the suggestion that this particular pipe line company, inasmuch as it did provide a public service, should be operated under public ownership, the same solution as we suggested should be applied to Trans-Canada Pipe Lines in the years later than 1951. At that time, in 1951, with respect to this company, and in later years with respect to the Trans-Canada Pipe Lines Company, we in the C.C.F. could foresee the present state of events, and while there have been tremendous earnings and tremendous profits in this particular company there has probably not been the type of stock market manipulation which has taken place with respect to the gas pipe lines industry where, probably, the reasons for public ownership are even more pronounced than they are here. That was the trend of my remarks which occasioned the hon. member for Vancouver South to ask his question, and X am sure that if he will read in Hansard what I said he will realize that there was no need to have directed that question to me, and that the matter does not require any more extended answer than I gave in my explanatory remarks.
An idea of the resources and the profit making capacity of this company has already been placed on the record, together with the number of shares placed on the market. At one time I understand they cost in the neighbourhood of $140 a share compared with $10 when they were originally put on the market and at the time these shares were being sold on the market for $140 this company approached parliament with the selfsame bill asking for the same thing that they are asking now, that is, in effect a stock split of five to one by an increase in the number of shares which they might issue. Apparently the reasons advanced last year in favour of this proposal do not differ too greatly from those which the officials of the company are putting forward at this time, namely that the price of the shares on the market when they were at $140 a share was too high and that if additional shares were put on the market for sale the company would have a difficult time selling them to the general public because few people would care to pay $140 for a share in Trans Mountain Oil Pipe Line Company when there was every possibility that the price of the shares might decline and that they could be bought later on at a lower price. By splitting five to one, or by increasing the number of shares that the company may issue, the $140 divided by five would equal $28-this was one year ago-and the shares then, if this bill had

been proceeded with a year ago, would have been reduced to $28 a share on the market.
We find, now, that if that same reasoning of the Trans Mountain Oil Pipe Line Company were to be applied to the request for a change in their capital structure this year, they should properly not have asked for a five to one split but only for a two to one split. I do not know what the actual price of these shares is today, but it is somewhere in the neighbourhood of $50 to $60. If the reasoning was that the company wanted these shares to get down to, say, $28 when they were selling at $140, then, surely, when they are selling at between $50 and $60, to get them down on the market to a share price in the area of $28 we can reasonably assume that they should have asked for a two to one stock split.
I wonder why the company still requires a five to one division now. If their reasoning was valid a year ago they should either have asked for a greater increase in the stock split ratio before or for a lesser increase now in order to keep their thoughts now in tune with what they were a year ago. Now when the officials of this company undertook to meet with those of us in the C.C.F. party who had expressed some interest in this particular bill, they answered a number of questions and made a number of general comments, and if my memory serves me right the figure I jotted down indicated that they had put on the market on their original capitalization-and if I am incorrect I am sure I will be corrected-1,500,000 shares, or something in that neighbourhood, as of 1956, and as of today that same amount is out and the company has not issued any more shares from its treasury.
We asked the officials at that time whether, if they had put more shares on the market out of the original five million shares which the company issued that would not have had some effect on holding down the number of the shares.


An hon. Member:: Six o'clock.

The house again in committee of supply, Mr. Sevigny in the chair.
DEPARTMENT OF TRADE AND COMMERCE 391. Departmental administration $739,086.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Joseph Pierre Albert Sévigny: Order. Shall item No. 391 carry?
Supply-Trade and Commerce


Lester Bowles Pearson: Mr. Chairman, before this item carries may I say that when we left it at five o'clock we had been subjected by the Prime Minister to some interesting observations concerning the 15 per cent diversion proposal, a matter about which he seems to be exceedingly sensitive. All I want to say about that is, as was said by the hon. member for Ottawa West, that everybody in Canada who read about it in the newspapers, everybody in the United States or in the United Kingdom who read about it in the newspapers, thought there was such a proposal and referred to it as such. It was allowed to be considered as a proposal during the election campaign and it accomplished its purpose presumably at that time and now it is to be forgotten and we are not supposed to mention it. Apparently the election decided that diversion should die. The first obituary notice that I discovered was in a United States magazine, the U. S. News and World Report. As a matter of fact, I think I have come across not only the obituary notice of this proposal but its birth notice. It lived from 1953 until 1958, because on July 10, 1953, speaking in Red Deer Hill, Alberta, the Prime Minister is reported by the Prince Albert Herald as having said, and I quote from this newspaper account of the statement he made at that time:
Britain could buy Canadian products if she had the dollars-15 per cent of Canada's present defence needs are being purchased in the United States, but should be bought in the United Kingdom, as well as heavy machinery.
This was in 1953. There is the birth of the 15 per cent proposal, which has now apparently died.
There is one other matter, though, Mr. Chairman, that I want to bring up before we leave this item because I am not clear in my own mind as to what is the situation actually, although the minister did his best this afternoon to explain it. It is in connection with the list of prohibited exports to China. The minister said this afternoon that that list had been made public in January, 1957, and that if any member of the committee wants to find out what goods are on that prohibited list and, therefore, not eligible for export to communist China under present conditions all he has to do is read the list. But it was my impression

and the minister will correct me if I am wrong about this and I think it is a matter of some importance- that at that time there was a list of prohibited goods for China which was more extensive than the list of prohibited goods for Russia and that international discussions began to remove that differential in 1957.
What I should like to ask the minister is, are these discussions still going on? Are we obliged to take no action in regard to the

Supply-Trade and Commerce reduction of that list of prohibited goods until we get agreement with all the members of the commission in Paris. Are any other members of that group-most of them are NATO countries-and particularly is the United Kingdom, observing the same list of prohibited exports to China as we are, or is our list the same as that of the United States but not the same as that of some other countries? What is the exact position in regard to that matter? If the minister is not in a position to give me details of that matter at the present moment perhaps he might be able to do it later when he has his officials before him.


Gordon Minto Churchill: Just a comment, Mr. Chairman; my understanding is that the prohibited China list was much more extensive at one time than the list in so far as other communist countries were concerned, but that within recent months, or within the last year, there was no dissimilarity between the two lists. Then, we moved a step farther and conferences that are now taking place are aimed at reducing the items on the list still farther.


George James McIlraith: In view of the rather
lengthy discussion about trade with China yesterday and today, I wonder whether the minister would care to give the committee any information that he feels he can about the Chinese group who are in Canada at the present time apparently on a buying or selling mission. In this morning's Montreal Gazette I found a story headed up: "Red China winds up city tour." The article refers to their presence in Montreal. There have been other similar types of stories in the papers in the last few days.


Gordon Minto Churchill: I have been informed that two representatives from China have been in Canada for some time and are here for the purposes of trade, representing some, if not all, of the state trading corporations in China, of which there are 16, and that these gentlemen have visited various cities in Canada. I think they were in Ottawa about two weeks ago and are in Montreal at the present time and are engaged in a buying and selling mission. I have heard that they were interested in the subject of wheat and my hope is that perhaps they will find it possible to make arrangements for the purchase of another cargo of Canadian wheat. That is all I know with regard to them. I think there are two of them. Are there more than two mentioned in the article?


George James McIlraith: No, just the two.


Gordon Minto Churchill: That is all I know about these two gentlemen who are in Canada at the present time.


Lester Bowles Pearson: Again on China, the minister said last evening that the jurisdiction of the trade commissioner in Hong Kong-if "jurisdiction" is the right word-extends to continental China-that is communist China- as well as to certain other territories, including Taiwan. I should like to ask the minister whether it is contemplated that the trade commissioner in Hong Kong will make, as part of his routine duties, periodic trips to continental China as is normally the case with trade commissioners in respect of territories which they cover and whether the Chinese government in Peking accepts our trade commissioner's trade credentials, not diplomatic but trade credentials, over the territory in question of the communist government of China.


Gordon Minto Churchill: I think that as a result of his visit there last fall and arising from the contacts he made with the heads and representatives of the trading corporations in the four cities he visited Mr. Forsyth-Smith will go back to China, continue his investigations and continue to maintain close relations with those who are so actively engaged in trade. I do not know what his plans are at the moment but it would appear to me to be quite worth while that he should do so. In his messages back home he has repeatedly urged that Canadian businessmen visit Hong Kong and China and get acquainted with the representatives of these trading corporations. They have offices in Hong Kong in addition to their headquarters in Peking, Canton, Shanghai and so on. He feels that by making personal contacts our Canadian businessmen might be able to enlarge our business in China and that this would be best done in that manner. I suppose the point of contact for our Canadian businessmen would first be in Hong Kong with Mr. Forsyth-Smith who could then advise them as to what course of action to follow after that.


Louis-Joseph-Lucien Cardin: Mr. Chairman, may I first of all thank the minister for answering, in the course of his remarks this afternoon, a question which has been bothering me for quite some time relative to the importation into Canada of tractors from the United States which are originally made in Great Britain. Has the minister given any consideration to the suggestion I made that the government, through the high commissioner in London, might conceivably encourage the Massey-Harris-Ferguson Company in Great Britain to have the tractors that are used in the Canadian market assembled in Canada rather than Canada purchasing such tractors from the United States?

The amount of money spent on the tractors imported from the United States is considerable, something like $150 million, and the financial situation would not be changed in any way. Great Britain would get the same amount of return and I believe it would create employment in Canada if these tractors were assembled in this country rather than in the United States. I wonder whether the minister might, through the high commissioner in London encourage Massey-Harris-Ferguson to make use of its subsidiaries in Canada for the assembling of these tractors in this country.


Gordon Minto Churchill: I should like to thank the hon. gentleman for what appears to be a very useful suggestion and I will see that the matter is taken up with the appropriate officials in London.


Louis-Joseph-Lucien Cardin: Thank you.


John Whitney Pickersgill: Mr. Chairman, I should like to ask the minister if he recalls the approximate date-I do not mean the exact date-he first saw one of the documents prepared in his department for official use and for the use of the minister entitled, "The Canadian Economic Outlook for 1957?"


Gordon Minto Churchill: I find it very difficult to recall the date. I was rather busily engaged last fall in certain travels but I think it was perhaps late in the fall that it came to my attention. I could not take my oath on the date at all. Whether it was November, December or January I am not in a position to state.


John Whitney Pickersgill: Then the minister did not see this document before preparations were made for the Mont Tremblant conference? One would have thought that this would be the kind of document that the minister would use in preparation for that conference and I wondered whether that might perhaps assist him in recalling.


Gordon Minto Churchill: The difficulty there is that the Mont Tremblant conference took place just at the end of September. In the early part of September I was out west for two or three days making a speech at the annual meeting of the dairy council. That was followed by two or three days inspecting the northern Ontario gas pipe line. On my return to Ottawa I left after a very short interval for a ten-day trip to England and Europe. I recall getting back here on a Friday at noon and leaving by plane for Mont Tremblant at 2.30 with a brief case filled with documents. That document may have been in the brief case but I had very little opportunity to make the type of preparation for the Mont Tremblant conference that it
Supply-Trade and Commerce required. Under those circumstances my memory fails me whether or not the document was there or whether I had time to read it if it was there.


John Whitney Pickersgill: Supply-Trade and Commerce carried on in the cabinet-I am not attempting to penetrate the secrets of the cabinet at all-it would have been very logical, and perhaps very obvious, for the Minister of Trade and Commerce to have received that documentation in his department. A decision of this importance, particularly a decision made by a government which had campaigned throughout the country on the basis of doubling the modest immigration program we had up to that time, I can only assume was a very serious and grave decision, and that all the possible information that might be brought to bear upon it was brought to bear upon it.
I do feel, therefore, it would be of some interest to know at what date the minister considered that document, and at what date he had begun the planning of the administration of his department in relation to the information contained in that document which we were told, on an occasion last January, was a document of transcendent importance and which revealed all that was going to happen in the economy of Canada for the rest of the year. It does, I think, cast a rather curious reflection upon the minister's administration of his department in the first five or six months he was minister that he is unable to recollect when he first saw this document which contained this startling information that the Prime Minister revealed to us in such dramatic fashion in January.
Another reason, of course, for my curiosity about this matter is that we were assured- perhaps it would hardly be in order for me to go this far afield-by the Prime Minister at the time of the federal-provincial conference in November, and we were assured by the Minister of Labour as late as December 10, 1957 in most categorical fashion, that all was rosy with the Canadian economy. There does seem to be a good deal of evidence, to which the minister has contributed a little more this evening, that the government, apart from the Minister of Justice who admitted quite frankly he had the information, seems to have been extraordinarily unaware of the situation which burst upon them with such dramatic suddenness in January. I do not know whether, in the light of what I have recalled to the minister's mind, I have assisted him at all in his recollections.


Lester Bowles Pearson: Following up this matter a little bit, Mr. Chairman, the minister will remember, as we remember, how bitterly we on this side were attacked last January by the Prime Minister because we kept secret the contents of this report in 1957, to which my hon. friend has referred. We hid it, and that was a dastardly crime to parliament and to the public. It became the hidden report. We refused to make it public
[Mr. Pickersgill.l
at that time, and that was our sin and our crime.


John Whitney Pickersgill: The Minister of Justice compounded the felony.


Lester Bowles Pearson: I am very anxious to free the minister from the possibility of any such accusation in respect of the report for 1958, the report which has now been completed and is in the possession of the government, and on the conclusions of which no doubt the Minister of Finance based, in part at least, his economic and financial calculations for his budget. So that the minister may not be subject to this accusation of hiding a report from parliament, I wonder whether he would take advantage of this opportunity to give us some information about the conclusions of the report which is now in the possession of the government and which deals with the present fiscal year?


Gordon Minto Churchill: I am very grateful, Mr. Chairman, for the solicitude shown by the Leader of the Opposition for my integrity, and the care he takes about my future in regard to this report. My recollection is, however, that the Prime Minister, in response to a question asked in the house several weeks ago, gave the appropriate answer concerning this report and other reports of a confidential nature which circulate within the departments of government.


Lester Bowles Pearson: Yes, the Prime Minister said it would not be proper to table this report or make it public until January, 1959. But, the Prime Minister attacked us very bitterly and vehemently because we did not make public the report for 1957 in the spring and summer of 1957. If we were wrong in concealing that report at that time, is the government not wrong in concealing at this time this report for the next year?


Gordon Minto Churchill: I thought that the accusation levelled at the former administration was that, having the knowledge contained in that celebrated report, they failed to act upon it and misled the people.


Lester Bowles Pearson: Oh, no, Mr. Chairman, if my hon. friend will read the record of that debate he will find that the charge was that we kept that report hidden. We heard about it not only in the House of Commons but all over the country during the election campaign. It was a crime against the public interest to have kept that report hidden; that is how it got the name "hidden report". So what about the report for this year?


Mr. Baskin:: You told the Canadian people the opposite.


Lester Bowles Pearson: What about the report for this year? Is it in a different category?


Mr. Habel:: Are you not misleading the people of Canada now?


Gordon Minto Churchill: The economic survey for 1958 will be studied very carefully, and has been studied very carefully, and the government, in its judgment, will act in accordance with that report, as we thought the former government should have done.


John Whitney Pickersgill: On that point, I convict the minister out of the mouth of the Minister of Justice. The Minister of Justice admitted quite unequivocally in the passage I read from Hansard, that one of the senior members of the government-I do not believe the Minister of Trade and Commerce would deny his influence as a member of the government-not only had but acted upon that information in July. In other words, if there was anything wrong about our attitude to that report before June, surely it was much more wrong for the government and for the Minister of Justice to have kept it hidden after it was discovered in late June, and for the Minister of Justice to have failed to tell the Minister of Trade and Commerce what was in it or to tell the Minister of Labour what was in it, instead of letting him go on giving these rosy pictures of the economy which were given by the Prime Minister to the premiers of the provinces when they were here in November, and which were given in public utterances by the Minister of Labour, the member of the government having the special responsibility for unemployment.
So if there is any kind of charge that when we received this report in March we did not act upon it, a charge which is totally false, incidentally-


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Well, anyone who will make an honest and careful comparison of that document with Mr. Harris' budget speech will see that Mr. Harris very faithfully reproduced in his budget speech the conclusions of that document. What the Prime Minister did do, in the most shocking piece of misrepresentation this parliament has ever seen, was to take bits and pieces out of that document to deceive the public for political purposes.


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


John Whitney Pickersgill: Certainly.


Frank Charles McGee: There are two matters that I should like the hon. member to confirm, he having been so close to the administration at the time. Did that report state or did it not that heavy unemployment was anticipated? The second question is this. Did not
Supply-Trade and Commerce the election pamphlets of 1957 say "Vote St. Laurent for More Jobs"?


John Whitney Pickersgill: I could look the matter up very quickly for the hon. member. It forecast exactly what happened. It stated that it was expected that employment would increase all through 1957 and employment did increase all through 1957.


James William Baskin: Because there was a change in government.


John Whitney Pickersgill: If hon. gentlemen who are making these unintelligent noises will look at the statistics they will find that all during 1957 employment did increase.


Joseph Pierre Albert Sévigny: Order. We are possibly straying a little bit away from the present resolution.


John Whitney Pickersgill: On the point of order, Mr. Chairman-


Joseph Pierre Albert Sévigny: Will the hon. gentleman take his seat while the chairman is standing?


John Whitney Pickersgill: Yes.


Joseph Pierre Albert Sévigny: As I was saying, we are straying a bit away, I believe, from the present resolution. At the present time we are discussing a resolution that deals with departmental administration of the Department of Trade and Commerce. We are not really discussing the resolution when we are discussing the record of the Liberal administration of years past.


John Whitney Pickersgill: Not at all, Mr. Chairman. What I was discussing was a document issued by the Department of Trade and Commerce and introduced into this parliament by the Prime Minister. I was attempting to find out when the minister, the present incumbent of that office, took cognizance of that document which the Prime Minister himself said was the most important economic document prepared for the previous government and available to them when they came into office. Surely nothing could be more relevant to the discussion of the estimates and the administration of the department by the minister than the question as to whether the minister, after he took office, spent his time travelling around the country, getting off one plane and getting into another, or whether he spent some time familiarizing himself with the duties of his office.


Some hon. Members:: Oh, oh.


Joseph Pierre Albert Sévigny: Order. I believe there are too many speakers in this room tonight. There is no reason to interrupt the hon. member for Bonavista-Twillingate and it would be appreciated if hon. members would listen to what he has to say.

Supply-Trade and Commerce


John Whitney Pickersgill: If I may continue my reply to the hon. member for York-Scarborough, I was saying that this was a forecast. That is all this document was, a sort of economic weather forecast. The gentleman who prepared this document was well trained. I have no doubt about that. But he did not know what was going to happen all through 1957 any more than did anybody else except the Creator.


James William Baskin: Who trained him?


John Whitney Pickersgill: Judging from the faith that the Prime Minister had in every word in that document, he evidently had a high opinion of his capacity.


James William Baskin: What about Harris?


John Whitney Pickersgill: If I may continue, Mr. Chairman, to answer the hon. member for York-Scarborough, may I say that what that document forecast was that employment would continue to rise throughout 1957 but that the rate of increase might be slower than it had been in 1956. That is precisely what happened.


Frank Charles McGee: That is not how you described it last January.


John Whitney Pickersgill: I did not catch that remark.


Frank Charles McGee: That is not how you described it last January.


John Whitney Pickersgill: How I described what last January?


Frank Charles McGee: The unemployment situation.


John Whitney Pickersgill: The unemployment situation last January was, as the Prime Minister himself admitted, becoming very serious.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: The hon. member for York-Scarborough apparently was not listening as attentively as he usually does because I was talking about employment. I was not talking about unemployment. There is no doubt that unemployment did increase much more rapidly than there was any ground for expecting it to increase on the basis of that so-called hidden report. There are some of us who feel that part of the reason why it increased more rapidly than was expected was because of a certain event that happened last June.


Lester Bowles Pearson: Leaving that report and returning to the current report which is certainly in order because it deals with the work of the department this year, I wonder whether the minister would give us some indication of the conclusions of this economic report from his department and more particularly tell us whether it agrees with the Minister of Finance's budgetary statement that
[The Chairman.]
our gross national product will increase by 2 per cent while our price level will remain constant during the year, and, in general, the economic trends that it forecasts. I am sure that information would be very interesting to the house and perhaps very important.


Gordon Minto Churchill: If the Leader of the Opposition has reached the conclusion that the Minister of Finance based some of his budget remarks on the report to which reference has been made, I think the question now put should be put before the Minister of Finance. I do not think I am called upon to explain the connection, if any, between one report and another. I would hope that the ancient report of 1957, allegedly twice lost or hidden, might now be buried, that the 1958 report might be safely left where it is, and that perhaps we could get on with questions dealing with trade and commerce.


Hazen Robert Argue: Mr. Chairman, I want to get back to the Soviet trade offensive for a moment or two, if I can, and get away from the hidden sins of both the Liberal party and the Conservative party. I do not see any difference between hiding a report in 1957 and hiding it in 1958. Sometime ago we learned of a letter that was sent by the Soviet premier, Nikita Khrushchev, to the President of the United States proposing a tremendous increase in trade between the United States and Russia. According to Premier Krushchev's letter he envisaged trade of several billion dollars. I should like to know whether there has been any consultation or exchange of notes between the government of Canada and the Soviet union as to increasing trade between our two countries. What study is the government making on improving or increasing the amount of trade between Canada and Russia? Has a similar proposal been made to Canada? I think we will all agree-and certainly the Americans agreed, although they turned it down

that it was a very important and far-reaching proposal and that it was another indication of the all-out Soviet trade offensive. I might say, Mr. Chairman, that we in this group believe that the government should do everything possible to increase trade with all nations of the world in non-strategic goods. I would hope that the minister would be able to give the committee a fairly comprehensive report on just what Canada is doing to increase trade with this very large and important nation?


Gordon Minto Churchill: There has been no exchange of notes of a nature similar to the one to which my hon. friend refers, so far as I know, between Canada and Russia. We are actively interested in expanding our trade everywhere in the world, as I have stated on so many

occasions. We have had conversations with the Russian representatives here in Ottawa with regard to expanding trade between our two countries. We have had from time to time reports from businessmen who have visited Russia with regard to the possibility of enlarging Canada's trade with that country.
I think we have been quite active so far as Russia is concerned and we are quite prepared to trade with that country. We have in fact had a fairly satisfactory deal with Russia in respect to wheat during the last two or three years.


Hazen Robert Argue: I wonder if the minister could say whether any substantial official trade delegation to the Soviet union has been considered. There was some discussion some time ago as to whether the minister himself might make a trip to China this fall, and I believe the Prime Minister was rather non-commital in this respect. I wonder if the government has given this matter any consideration, and I would hope it has, with respect to the sending of a trade delegation to Asia, particularly to China and the Soviet union. I would think if Canada received an offer in somewhat similar terms to that made by Premier Khrushchev to the United States it would be advisable for Canada to consider such an offer as a serious one and to negotiate with the Soviet union on the basis of such an offer because at the present time with the widespread unemployment in this country, any very large increase in Canada's exports would help to restore full employment. I hope the government, and the minister in particular, are giving consideration to this idea.


Gordon Minto Churchill: The second part of my hon. friend's question was hypothetical. It had something to do with "if a similar note came, would we do something about it".
The first part of his question was whether or not I was contemplating a visit or was arranging for an official trade mission to Russia and the answer to that is no, not at the present time. We have in mind and are considering various visits but have not yet reached a decision as to where such visits should be made. The important thing to consider in undertaking trade missions or visits on the part of the officials and the minister of this department is as to where we can get the greatest advantage, tradewise from those visits. Now it sounds interesting to talk about China or Russia but there are other parts of the world where our trading relations have been closer and where our trade is greater and where trade expansion might be more easily achieved. All these factors will be taken into account before any decision is reached as to where missions from Canada may be sent.
Supply-Trade and Commerce


Hazen Robert Argue: I would hope, Mr. Chairman, in the light of the world situation at this time and in view of the great need for expanded markets the minister himself would very seriously consider heading up an official Canadian delegation to China and the Soviet union in order to discuss the possibilities of a vast expansion of trade between Canada and those countries. I would now like to ask the minister to comment on a report in tonight's Citizen by Bruce Phillips which in part states as follows:
U.S. officials in Ottawa will ask their government to lift import quotas against Canadian oil.
Diplomatic sources say U.S. embassy staff here have undergone a change of outlook on the subject of import controls, and will make their views known in Washington.
They have, apparently, accepted the Canadian government's contention that Canada's oil represents a vital source of supply in terms of continental defence, and should therefore be exempt from import barriers.
Could the minister say whether the government is making progress in this regard and does he hold forth hopes of the so-called voluntary restrictions possibly being lifted soon?


Gordon Minto Churchill: It is obvious from the article that the government has been making great progress and I do hold out great hopes.


Hédard-J. Robichaud: In the course of his remarks this afternoon the minister said that our lumber exports have suffered from Soviet competition. I would like the minister to answer this question, and I am sure he can do so without the assistance of his officials because it has nothing to do with statistics. The economy of the Atlantic provinces is closely related to the export of pulpwood and pit props. We all realize that in recent months, especially in the last 12 months, the export of pit props to the European market has dropped considerably and we are told that even Great Britain, with whom we are anxious to increase our trade, is buying its pulpwood and pit props from Russia and from countries under Russian domination.


Gordon Minto Churchill: And from Finland.


Hédard-J. Robichaud: Could the minister tell us what action is being taken by the government with respect to instructing his department to try to bring back to normal the export of pulpwood and pit props from the maritime provinces.


Gordon Minto Churchill: Mr. Chairman, I took a very active interest in the question of pit props which were exported in considerable quantity from the maritime provinces and last fall, when the president of the board of trade from the United Kingdom was in this country with his officials, we discussed this matter. Subsequently when I was in England

Supply-Trade and Commerce later that fall we again discussed it and exchanged correspondence about it. We communicated with the appropriate government officials in the maritime provinces and there was some difference of opinion with regard to price of pit props from the mari-times. The market had in part been lost to Russia or Finland but we did everything in our power to re-open it. I do not know the situation at the present moment.


Hédard-J. Robichaud: What about pulp wood?


Gordon Minto Churchill: Well I have no answer with regard to pulpwood. That was not discussed at the time and here is a case where statistics would be helpful as to exports of that commodity.


Hédard-J. Robichaud: The minister must surely know that in past years we had a considerable market for pulpwood in France and in Great Britain. We have apparently completely lost these markets and the same would apply to long lumber. Considerable quantities of long lumber were exported from the maritime provinces, particularly eastern New Brunswick, to Great Britain and Ireland. I do not have the statistics so I am in the same position as the minister at this time, but I am given to understand that the exports of long lumber to the European market have been practically nil since the first of this year.


Gordon Minto Churchill: I will have to look into the matter and will give an answer to my hon. friend on some other occasion.


Lester Bowles Pearson: I quite agree with the hon. member for Assiniboia. We should do whatever we can, and I am sure the minister agrees with this, to develop our trade in all markets, including our trade in non-strategic goods with communist countries such as China and Russia. It is true that the development of such trade is now being affected by the Soviet economic policy of forcing goods on world markets, perhaps in some cases for other than economic reasons. Experience in Europe during recent months has shown that with respect to commodities such as lumber, pulp, aluminum, oil and rails, they are putting these goods into European markets at a price with which we on this side cannot compete. It is also true that recent experience has shown, on the other hand, that they are asking too high a price for some of their exports to European markets and are not getting those markets, all of which indicates-and of course this is not new to any member of the house- that the impetus behind their trading offensive, if you can call it that, is political rather than economic. As a matter of fact, Mr. Khrushchev himself, in 1955, talking to a group of United States congressmen visiting

Moscow, said: "We value trade least for economic reasons and most for political purposes". Mr. Khrushchev has a habit, very often, of blurting out the truth.
Perhaps at the present moment, more important than the development of our trade with communist countries are the steps that might be taken to increase our trade with those countries that cannot trade with us now because of what the economists call insufficient international liquidity, which is a horrendous phrase meaning that these countries have not got enough foreign exchange to buy from us what they would like. There has been a good deal of discussion in the United States and in the United Kingdom as to what could be done to remove the consequences of this insufficiency of liquidity and help these countries get foreign exchange. Mr. Macmillan, Prime Minister of the United Kingdom, has been making proposals to Washington and, perhaps, to Ottawa, also with this in mind, and the minister will recall that Dean Acheson and Adlai Stevenson both put forward some every imaginative proposals in the United States about the way in which that government could make a contribution to this end, and without United States participation it would, of course, be difficult to make progress.
Whether this can be done through existing institutions such as the international monetary fund or whether some new agency should be set up, I do not know, but I am sure the minister would agree that nothing in this field is of greater importance than to join with other countries in a new move designed to increase the purchasing capacity of these countries. I wonder whether the minister could report on any developments that may have taken place in this field since the visit of President Eisenhower or of Mr. Macmillan.


Gordon Minto Churchill: Mr. Chairman, I am not able to make any report with regard to these matters, but the subjects raised now by the Leader of the Opposition quite naturally are being considered.
The Leader of the Opposition has correctly assessed the situation as I see it, and I hope that the international monetary fund may be strengthened, or some new organization created to strengthen this aspect of world trade. The Leader of the Opposition will fully appreciate that it is no more possible for me to make a report at this stage of the proceedings than it frequently was for him in the past on negotiations being carried on with various countries.


Lester Bowles Pearson: I was wondering whether there had been any specific proposal made either to the United States government or to the United Kingdom government, or both.


Gordon Minto Churchill: Not at this stage. It will be interesting if someone does come forward with some definite proposal.


Erhart Regier: While we are on the subject of imports and exports, yesterday the minister, as quoted on page 2322 of Hansard, said that last year our imports from the United States were valued at approximately $4 billion. I wonder if the minister could give us any indication what it is expected that our imports in 1958 may be. I know he has stated there is going to be a decline.


Gordon Minto Churchill: I welcome the hon. member to the discussion of the trade and commerce estimates. He is coming fresh to the fray. I hope he is not too vigorous, because we have been going on a long time. I think the information he requires is contained in publications. Reports are published which give the information with regard to exports and imports, and they are available to all members. By a process of elimination I have found my copy among the other papers in front of me. I have one dealing with exports, published by the dominion bureau of statistics, and there is a companion volume headed "Imports" which gives all the relevant information from January to the end of April. That, I think, is the answer to the hon. member's question.


Erhart Regier: I also have these reports. May I point out to the minister that the reports are always based on what has taken place, and my question to him was whether he can give to the country any indication-and after all he does have these forecasters in his department-of the kind of decline in imports we may be expecting this year. Last year we bought goods worth $4,000 million. Is he able to say that this year the figure is likely to be 25 per cent less, or $1,000 million less?
I have a further question to ask the minister at this time. Is he able to indicate which areas are affected by the decline? Is it likely to be a decline in capital goods, or is it more likely to be a decline in our imports of consumer goods? I have particular reasons for asking this question, and I hope the minister will indicate both the expected size of the decline and the field in which it will occur.


Gordon Minto Churchill: In answer to the first part of the hon. member's question, I am not in a position to forecast as he would like me to do. Forecasts are sometimes accurate, sometimes inaccurate. Economists all across the country make them from time to time, and their forecasts appear in the papers. If the hon. member wants a longer distance forecast he might refer to the reports given to the Canadian royal commission on economic prospects with regard to imports and exports.
Supply-Trade and Commerce The crystal ball has been examined there and the vista extended over a great many years.
With regard to the second part of the question, the fields in which there is a decline, here again I have to refer to these booklets and statistics which indicate Canada's import and export figures. As I pointed out yesterday, and as hon. members opposite pointed out, the decline has been to a certain extent in capital goods, and the decline in our exports has been in our primary and semi-processed metals, in some minerals and things of that nature.
There are certain downs in some things and ups in others. I have a list in front of me indicating our exports divided into half a dozen different main headings showing the general situation, but without going into very great detail I could not answer the hon. member's question. It would require reading out a great number of headings and providing statistical tables.


Erhart Regier: In that case I have to explain to the minister my reason for asking for the information. All of us were very pleased to hear of the determination of the government to do something about eliminating our adverse trade balance with the United States. Some of us were a little alarmed at some of the methods that were proposed. Now we are indeed bringing about a closer equilibrium between our imports and our exports. However, if the reduction in our imports is as a result of a reduction in imports of capital goods, well it merely means that the expansion and the rapid industrialization that I sometimes thought was rather excessive in some years gone by is declining, and as long as we have apparent surpluses here I do not think that that alone ought to worry us overly much.
My concern is that very much of this heavy reduction in our imports may be in the field of consumer goods, and if the reduction is in the field of consumer goods then this adjusting of our adverse trade balance is happening in a manner that the Canadian people do not like and did not expect. I am asking the minister whether the plight of our unemployed who are unable to buy many of the consumer goods they would like to buy and the low income of our farmers and fishermen in Canada are the factors primarily responsible for the great decline in imports, because if that is the case then I feel we have very little that we can brag about when we say that our former adverse trade balance is not as great as it was.


Gordon Minto Churchill: I think the hon. member was otherwise engaged this afternoon when I was discussing the decline in our imports.

Supply-Trade and Commerce I pointed out that that might very well be balanced off by an increase in manufacturing in Canada. Consequently it is not necessarily a bad thing that imports should fall off if at the same time you are able to provide in Canada those materials which formerly you were importing. But I note here in some notes that I have in front of me that the decline in imports has been concentrated primarily in iron and steel and industrial machinery purchases, so that I think my hon. friend is unduly alarmed if he thinks it is just in consumer goods. I doubt very much whether he could relate the decline in those imports to any decrease in the purchasing power of the Canadian people.


Hédard-J. Robichaud: Mr. Chairman, prior to June 10, 1957 and, more so, prior to March 31 of this year we heard a lot about the great decentralization program of the present government. In view of the events that are taking place in the maritime provinces, such as the announcement that a sugar plant in Saint John may be moved to central Canada and that a candy manufacturer in St. Stephen would like to follow suit and that base metal mines in northern New Brunswick are closed down completely and the coal mines have curtailed their operations at least for a period of five weeks at the present time and our pulp mills have cut down their operations from five days to three days a week, can the minister give us some clarification of the decentralization policy of this government?


Gordon Minto Churchill: My hon. friend has been painting a picture of gloom-


Hédard-J. Robichaud: Actual facts.


Gordon Minto Churchill: -and has not mentioned some of the constructive policies of this government to put those mines back into production and to keep the coal mines functioning. Why must the hon. member just give one side of the picture?
With regard to decentralization of industry, this is something which has been advocated by this party over many years. In so far as it is possible steps will be taken to make each sector of our country prosperous and if that can be done through decentralization of industry, why steps along that line of course will be taken.
The very fact that support is being given to the coal mining industry in the maritimes is an indication of the desire of this government to maintain economic strength in that part of our country and that, of course, is part of decentralization. If they were permitted to close down and industries based on coal then shifted to central Canada you would have much greater centralization of industry than would be advantageous for Canada as a whole.


John Whitney Pickersgill: Mr. Chairman, on the point raised by the hon. member for Gloucester, the minister perhaps did not pay as much attention, as did the hon. member for Saint John-Albert and some other hon. members, to the famous Moncton manifesto of the Conservative party which was issued some time before the election of June 10 and which indicated that the government would set up a special agency for the promotion, not the preservation at the last minute and after a five-weeks layoff in the existing coal mines, but of new industries in the maritime provinces.
The other day I asked the leader of the house to which minister one should address questions to about this matter, and he just looked confused, and I addressed the question to the Prime Minister who was not able to give a very satisfactory answer. I wondered whether the prime responsibility for the promotion of new industries in the Atlantic provinces rested with the Department of Trade and Commerce or, if it did not, to what department's estimates it would be appropriate for us to make our inquiries.


Gordon Minto Churchill: So far as I know, Mr. Chairman, all inquiries may be made on these estimates. If, as sometimes happens, an inquiry runs over two or three departments, I think I heard the Prime Minister say the other day that it would be quite appropriate to inquire of him.


John Whitney Pickersgill: Perhaps the minister did not quite comprehend my question. It was our understanding-I think it was the understanding of the people in the Atlantic provinces and perhaps part of the reason why the government got as much support as it did-that the government was going to set up some special agency in some particular department to take special charge of this function and I wondered whether that department was the Department of Trade and Commerce or whether it was some other department.


Gordon Minto Churchill: I have not been notified
to that effect yet.


Mr. Richard (Ottawa East):: I want to ask the Minister of Trade and Commerce a question which has nothing to do with what we have been discussing. At the present time there is a royal commission on patents which is studying the Patent Act and the effects of the Patent Act. I was wondering whether the Minister of Trade and Commerce, through his economic adviser, has been in touch with this commission and has made representations to it? The point is this. The origin of the things which we buy is governed in many instances by the owner of the patent which

this country grants and, as the minister probably knows, about 85 per cent of the patents issued in any year are issued to foreign countries. Now, of course, there is no provision in the act to manufacture in Canada and patents generally, as the minister knows, create a monopoly and, of course, control prices. Without going into the question in detail, I was wondering whether the minister should not have his economic advisers get in touch with this commission immediately and study the effect of patents on the economy of Canada.


Mrs. Fairclough:: Was that in the order of
reference?


Jean-Thomas Richard: It has not been done.


Ellen Louks Fairclough: It was not in the order of reference and your government set up the commission.


Jean-Thomas Richard: I appreciate this interjection by the Minister of Citizenship and Immigration but she was also secretary of state for a while and had an opportunity to do these things. I am not reproaching her or anybody else. I am not here to reproach anybody. I am trying to do something for the citizens of this country. If there is one member of the house who has been very mild in criticism at all times in the past it is myself. At no time have I ever tried to interject anything that could be taken as a reproach upon anybody in the house. I am just requesting very nicely that the Minister of Trade and Commerce have his economic advisors consult with this commission to find out what is the effect of patents on trade and commerce in this country.


Ellen Louks Fairclough: If I may, Mr. Chairman, the hon. member has been interested in this question for a long time. This commission was set up at a time when his party formed the government. If my memory serves me well, the hon. member made repeated representations to his own government and to his own minister in charge of that department. I would suggest that the time when he should have made his heated criticisms was when his own minister sat on this side of the house and not now-


Jean-Thomas Richard: Well-


Ellen Louks Fairclough: Now, sit down and take it-at a time when as he well knows, if he knows his law as I think he does-


Alexis Pierre Caron: Who is in power now?


Ellen Louks Fairclough: -the order of reference cannot well be changed with respect to a commission that has been operating for three years.
Supply-Trade and Commerce


Jean-Thomas Richard: Mr. Chairman, I forgive the dear lady for all she has said. I am sure she does not understand. I did not start my remarks in that manner and I am just asking the minister to do something now. I am not reproaching anybody. This is a very important matter and as the commission is still functioning and has not submitted its report there is still time to do this. I think it would be to the glory of the government, if it wants glory, if it would listen to this suggestion. What is the effect of patents on trade and commerce in this country? The commission is still sitting. It has listened to many people and I suppose it is going to listen to others unless it has closed its sittings. When the report is completed the government will no doubt look at it. Nobody has criticized anybody. This is a most innocent suggestion but probably one of the most constructive that has been made in relation to patents for some time.


Gordon Minto Churchill: The hon. member has asked me if I will refer the matter to the economists in the Department of Trade and Commerce to see if there is anything that may be done with regard to patents in so far as they affect trade and commerce in this country. The Department of Trade and Commerce has very competent economists. I will put the problem to them and see what the answer is.


Jean-Thomas Richard: Thank you.


Mr. Peters:: Before the item carries I should like to ask the minister if he would care to comment on reports we have heard in the last few weeks throughout northern Ontario about a proposal to sell the crown corporation section of the trans-Canada pipe line. The people of northern Ontario are appreciative of the fact that this is a crown corporation. While there may have been many faults the people know that some control has been exercised because of the fact that the minister through his officials controls this particular section of the line and therefore exercises some control over the whole pipe line and possibly the distribution of gas through it. We have heard reports recently that Trans-Canada Pipe Lines is now in a position to make an offer, ten years prematurely, to buy out the section of the line for the construction of which the Canadian people of necessity had to set up a crown corporation. I certainly would appreciate a report from the minister on this very important part of his department.


Gordon Minto Churchill: Mr. Chairman, I do not wish to interrupt the hon. member because I realize he is keenly interested in this problem, but although I have a responsibility to report to parliament with regard to the activities of

Supply-Trade and Commerce the Northern Ontario Pipe Line Crown Corporation that report would not normally be given under the estimates of the Department of Trade and Commerce.


William Arnold Peters: I looked through the estimates and could not find any item but as this matter comes under the minister's department I presume from what he has said that a report will be made later. I should like to ask when and under what item.


Gordon Minto Churchill: Unless there is an item in the estimates with regard to that particular matter, obviously members are precluded from asking questions on the estimates of the Department of Trade and Commerce. It is not this item at all. The corporation is not a part of the Department of Trade and Commerce. I just happen to be responsible to parliament for it.


Lester Bowles Pearson: Well, this is parliament.


Gordon Minto Churchill: But not on this occasion.


Hazen Robert Argue: You are responsible but you will not talk.


Gordon Minto Churchill: I also have the responsibility to report for the national research council and for atomic energy. Do you propose to ask questions on them tonight or shall we continue our useful discussion of trade and commerce and deal with the estimates that are listed in this book under that heading?


John Whitney Pickersgill: I should like to say a word on the point of order raised by the minister. My recollection is that it is not the Hon. Gordon Churchill who answers to parliament, as is the case with the C.B.C. and the Minister of National Revenue, but that it is the minister of trade and commerce, whoever he may happen to be. Therefore if there is no specific item for something surely on the administration item of the department we can ask questions about anything that comes within the ambit of the administration of the Minister of Trade and Commerce. That has always been the practice in the house in the past and the point raised by the minister is a very extraordinary and restrictive one.


Mr. McPhillips:: Your minister never made any answer.


Mr. Fisher:: I wonder whether we could have a ruling, Mr. Chairman. I would take it that the attitude expressed by the hon. member for Bonavista-Twillingate opens the door to questions with regard to this crown corporation. First I should like to ask the minister whether reports in the press that the present head of Northern Ontario Pipe Line Crown Corporation is leaving to join Rio Tinto are true, whether the minister has the resignation in his hands and, if so, whether he would care to comment upon it?


Gordon Minto Churchill: In the first instance I am not accepting a conclusion reached by the hon. member for Bonavista-Twillingate. Second, I do not propose on this occasion to answer questions concerning the Northern Ontario Pipe Line Crown Corporation. I think such questions could be asked on the orders of the day-


Some hon. Members:: Oh, oh!


Gordon Minto Churchill: -just as effectively as now.


John Whitney Pickersgill: Is this the kind of accounting we are going to get?


William Arnold Peters: Mr. Chairman, the crown
corporation section of the trans-Canada pipe line is, as I understand it, administered by a deputy minister. Therefore I would assume that there are certain departmental expenses connected with the performance of his duties and on that basis I think there is a responsibility for the minister to report.


Albert DeBurgo McPhillips: Find it in the estimates.


Lester Bowles Pearson: On this point of order, Mr. Chairman, we have this item No. 1, which is the general item of the Department of Trade and Commerce. We have also the annual report of the Department of Trade and Commerce, and surely anything in that report is pertinent. If hon. members will turn to page 118 of the report they will find this, "Directory of boards, crown companies and agencies, reporting to parliament through the Minister of Trade and Commerce." Amongst those agencies is the Northern Ontario Pipe Line Crown Corporation. If we cannot ask questions in respect of those matters dealt with in this report under this item of trade and commerce, when can we ask questions in the House of Commons about them?


Gordon Minto Churchill: It is quite possible to ask questions like this every day on the orders of the day.


Some hon. Members:: Oh, oh.


Hédard-J. Robichaud: We are shut off on orders of the day.


Gordon Minto Churchill: There is no item in the estimates referring to this. I think on this occasion when we are dealing with trade and commerce we should complete the estimates of the Department of Trade and Commerce.


Alexis Pierre Caron: Why not admit you are ignorant about the matter?


Lester Bowles Pearson: This is a very important matter, and the stand taken by the minister is quite unprecedented to my knowledge in the House of Commons.


Joseph Pierre Albert Sévigny: I believe that since the Northern Ontario Pipe Line Crown Corporation comes under the Department of Trade and Commerce it is quite in order to discuss that on this item 1 of the estimates of this particular department.


William Arnold Peters: The attempt tonight, Mr. Chairman, to shut oft discussion would appear to be in keeping with the actions that have been taken in connection with this gas transmission line over the years. I appreciate your support, Mr. Chairman, but this crown company must obviously come under this department. The president, Mr. Golden, is, I understand, a top official of a department.
In so far as the pipe line being built through northern Ontario is concerned, there has been a great deal of dissatisfaction from the point of view of the municipalities which are to be served by the secondary trunk line. On numerous occasions there have been requests from the municipalities that the trans-Canada pipe line be put under public ownership. Recently, the heads of the municipalities throughout Ontario met and unanimously endorsed this position.
I think it is generally conceded by the people in northern Ontario living in the section through which the crown-controlled corporation has been operating that the crown-controlled operation has been advantageous. The farmers in that area have received much more satisfaction than those who live in the sections through which the privately owned pipe line is passing. The advantages of the crown corporation operation have been reflected in better terms for labour and better terms of expropriation.
One clause in the agreement between the crown corporation and Trans-Canada Pipe Lines gives the latter the opportunity of purchasing this line, and gives to Trans-Canada Pipe Lines the right to transmit gas through the crown corporation section of the line, and to receive any moneys that accrue from that for a period of 10 years. At the end of 10 years the private corporation has the option of buying this section at cost. At the end of that time, the crown corporation may go out of existence if the government is foolish enough to allow that to happen. Then we will find that rates will have been established for the distributing lines throughout Ontario.
The federal government could exert a great deal of influence and could assist greatly in the maintenance of fair and reasonable prices for the transmission of this gas. Unfortunately, in areas like Timmins the rates that are being quoted are $1 higher than they are 500 miles farther along that line. The people of northern Ontario are of the opinion that
18, 1958	2419
Supply-Trade and Commerce the fact that the part of this line with which they are concerned is crown-controlled has been advantageous. We wish the crown control to be continued. Certainly the fact that the federal government did get involved in the construction of this most difficult section of the line-a fact which resulted in the line being built in Canada-has shown the Canadian people that governments can build these lines. Certainly some control is going to have to be exercised over the private operators in this public utility field.
It has been suggested in the Ontario legislature that legislation must be introduced to exercise some control over the price of the product in these distribution lines. Certainly if that is true in the provincial field, it must also be true in the federal field. There has been considerable talk about starting a new line alongside of the present line, and before long there will probably even be a third line carrying a variety of products. Before this happens we should give consideration to the introduction of legislation that will provide for a more equitable situation in so far as expropriation is concerned. We have seen, particularly in the sections of the line not controlled by the crown, intimidation used in connection with expropriation. Farmers have been told that if they do not sell the land the company will take them to court and expropriate it. Farmer has been set against farmer, and very little care has been exercised to ensure that a farmer knows what kind of contract he is signing. Some legislation should be introduced which would be much more acceptable to the people of the rural communities when it comes to this matter of obtaining land which the farmer may not be too happy to sell at the price which is being offered.
It would appear to me that the old Railway Act or the sections of the Pipe Lines Act which provide for expropriation are cumbersome, expensive and of a type that works in favour of the company rather than the farmer who is trying to get a fair and reasonable price for the land he has to sell.


Joseph Pierre Albert Sévigny: I regret to interrupt the hon. member, but he is straying away from the subject of the Northern Ontario Pipe Line Crown Corporation. He is talking now about pipe lines in general. I believe he should limit his remarks to the Northern Ontario Pipe Line Crown Corporation.


William Arnold Peters: The people who have received the benefits from the pipe line going through Northern Ontario have been satisfied and are satisfied, in my opinion. Yes, there have been some problems. The Minister of Labour has been very helpful on a number of occasions in settling them. He has been able to

Supply-Trade and Commerce do this without serious difficulty because it comes under the jurisdiction of the federal government. Certainly the people in those areas want to see this pipe line extended under federal jurisdiction rather than limited. We should be very happy to hear the minister reaffirm that the government intend to maintain this line at least for the ten years that they have the right to do so and to extend that further if he sees fit to do so.


Joseph Pierre Albert Sévigny: Shall the resolution carry?


Douglas Mason Fisher: Mr. Chairman-


Gordon Minto Churchill: Is this on the same topic?


Douglas Mason Fisher: Yes; it is on the same topic. I am a little bit surprised that the minister does not want to carry out his role as the heir of the Right Hon. C. D. Howe in connection with this particular organization at this particular time.


Gordon Minto Churchill: May I ask the hon gentleman a question?


Douglas Mason Fisher: Yes.


Gordon Minto Churchill: Suppose you wanted to express the will of the house. What action can you take with regard to this particular matter? On other matters you could move to have the appropriation reduced and you could have a vote on it. What can you do here? If the hon. member wishes to express himself on the subject, of course he can go ahead. But I just wondered what action he would propose.


Douglas Mason Fisher: The minister is aware of the fact that I spoke to him about this matter previously and asked him about it. I was quite prepared to wait. 'But if it is going to be the ruling that it can be touched on at this time, I feel that I have every right to ask questions.


Gordon Minto Churchill: The ruling was given. I was just asking a question myself. It was my turn to ask a question.


Douglas Mason Fisher: In connection with the crown corporation, may I say that I think a great many people are unaware that the corporation has only five employees. If, as my friend the hon. member for Timiskaming suggests, the fact that five spreads on the line have been under the crown corporation and have accomplished better work than that which has been accomplished in the spreads that are directly under the Trans-Canada company, I suggest that these five employees deserve a tremendous accolade. It is interesting to note that Mr. Golden, the gentleman at the head of Northern Ontario Pipe Line Crown Corporation receives less than $1,000

per year for his work in that particular regard, a fact which indicates that the government is very careful in how it rewards gentlemen who are at the head of what was last year fairly close to being a $64 million business. I think it is a matter for comment that a man should be at the head of an organization handling a business of over $60 million and received from it $960 in return.


Alexis Pierre Caron: Mr. Chairman, could we suspend the committee for a few minutes in order to let the minister get some information? He may be unable to answer.


Douglas Mason Fisher: I should like the minister to comment on the small size of this organization and just how effectively it can carry out its duties in building the line. One of my complaints is in connection with troubles in the Northern Ontario Pipe Line Crown Corporation. Whatever the backbenchers and the frontbenchers may feel, this has been the biggest problem in our whole area because it has stirred up a hornet's nest as far as Canadian-United States relations are concerned. If you went through the news columns of the newspapers and listened to the chit-chat around the twin cities and down the line, you would realize that the Northern Ontario Pipe Line Crown Corporation, in the work of the United States contractors along the line, has been the biggest single issue in our area.
I should like to suggest to the minister that this phase is passing. We know that the crown corporation will be going out of existence very shortly. The government has indicated that it has no intention of making this a permanent affair. Trans-Canada Pipe Lines Limited has announced that it intends to take advantage of what was created by the previous government. I should like to suggest to the minister that, out of the experience we have had in that area the government could learn some lessons. If, for example, we get into any crown corporation that is going to build an oil pipe line to Montreal from the west, if that should develop, I think one of the things that we can learn is that if there is going to be any crown corporation handling something that is many miles from Ottawa it needs to have offices in the field rather than having five people settled at Ottawa and trying to oversee, in some degree at least, the operations of a project as big as this one.
I would remind the minister that one of the difficulties that has cropped up repeatedly has been the whole question of United States labour in the various parts of the job. It drags in the Minister of Labour. It drags in the Minister of Citizenship and Immigration and the respective officials. I do not want to

go off into the realm of whether we should go after the government to have public ownership in this particular regard. I feel that there have been and will be in the future opportunities for that action. But I should like the minister to consider the problems that have cropped up locally out of the building of this line and out of the broad status that the crown corporation has had and I should like him just to give us his assessment of it and how well it has worked. I have a feeling that it has not worked very well at all. If he wants to lay the blame for the poor working upon the previous administration, I should like to hear about it. I hope he can give us an answer with regard to the gentleman who for $960 has looked after the crown corporation for a year. Aside from any personal sentiments one may have, I believe that he is an exceptionally able civil servant. I think it would be regrettable if he pulled out of the government service for private industry. I should like to hear whether the minister is doing anything to keep him in it or whether or not the reports are true.


Gordon Minto Churchill: I heard that rumour to which my friend the hon. member for Port Arthur refers but I have not seen Mr. Golden in order to ask him whether or not it is true. I hope he will find it possible-if there is anything in the rumour-to remain with us until the completion of this northern Ontario pipe line. I appreciate my hon. friend's interest in this pipe line construction. I know that he has seen the line under construction, as have I and as I hope to do within the next two or three weeks if these estimates get through the house.
I know the hon. gentleman has been interested in the problems in connection with the labour force working on that pipe line. However, I think things have gone very well despite the control exercised from Ottawa. Nevertheless, my hon. friend realizes that the line which is presently under construction and which will be completed this year has been let out to the various contractors. It is divided into five spreads and those contractors are responsible for the work that is done and for the completion of the work according to the contract. This was the same operation as that which was carried on last year. I think there were five spreads on the line from the Manitoba border to Port Arthur. The work was completed according to schedule under rather difficult conditions because they made a late start. They started in June. But nevertheless it was done and gas was ready to flow through the line to Port Arthur by the end of December. However, the distribution system in the city of Port Arthur was not ready to receive it.
Supply-Trade and Commerce
This year, on the remaining portion of the line from Port Arthur to Kapuskasing, work is much further advanced. We instituted a policy last winter of clearing the right of way during the winter months. It provided a great deal of employment and it turned out to be a very good policy to have that work done during the winter. The result is that an earlier start was made on the second section of the line. The work is very well advanced, the pipe has been delivered and is in position. The chart that was shown to me a week ago indicated great progress on the completion of the five spreads which are under construction, so that I think early in the fall the line will be completed. Despite my hon. friend's fears as to the way this has been controlled here is an indication that the work has gone ahead very well and I hope to be actually in the field to see the contractors and the progress of the work early in August. I believe there is no doubt at all that it will completed early in the fall and that the gas will be available for distribution.
My hon. friend said something about labour conditions in respect of the employment of Americans and Canadians. Had I known he was going to raise this question tonight I would have had available a report on that very question which is in my office and which indicates that the percentage of Canadians employed is very high. In the early stages of gas pipe line construction in Canada it is true that a large number of Americans had to be employed because of the inexperience of Canadians in this type of operation but this situation no longer prevails. We now have in Canada very many competent native born Canadians able to do the specialized work in connection with pipe lines and in fact on the present northern Ontario section which is being completed the vast majority of the people employed are Canadians. Only certain specialized groups have been brought in from across the border and this year there has been no evidence of some of the dissatisfaction which appeared last year, although it was not very marked, with reference to this particular question. I think, therefore, things are going very well and that credit is due to the president of the Northern Ontario Pipe Line Crown Corporation and his associates for keeping this work going and for their having arranged amicable settlements of the disputes as they have occurred from time to time and generally in respect of their whole supervision of the operation.


Douglas Mason Fisher: Perhaps this is not the time to go back in retrospect as to the development in this matter, but if the minister will recall, last December I told him and the Minister of Labour that there was going to be a strike on the clearing of the way and the step

Supply-Trade and Commerce which he took in regard to the clearing of the right of way was very much appreciated. At least three times before the strike did break out, however, I passed on word that it was developing and about to break, yet we did not get an investigator to the area to see what was the problem until the very day the strike broke out. The Minister of Labour and the Minister of Trade and Commerce are aware that on that line there was what one might call a most regrettable kind of labour agreement involving workers who were not even on the job and who did not even know they were going to be on the job. The labour agreement between the pipe line contractors and these four unions has been standing in the way of a closer liaison between various government departments and a quicker solution of all the problems which have arisen.
The point I wanted to make was that if the government early in this development had put an investigator in the area through the crown corporation which, after all, is the body in charge of this whole business, we would have had much less of this shillyshallying back and forth and the three government departments working on the problems. The Trans-Canada Pipe Lines, the pipe line contractors and the four unions, and a host of municipal authorities who were all mixed up in it would not have needed to become so involved. I just suggest that perhaps this experience contains a lesson for the minister and, for that matter, the Minister of Labour.


William Arnold Peters: I notice that on page 721 of Hansard of May 30, a starred question was asked by the hon. member for Port Arthur of the Minister of Trade and Commerce. The minister, in answering the question, mentioned in part 4 of his answer the remuneration for certain employees of the Northern Ontario Pipe Line Crown Corporation in the amount of $960, and I would like to ask the minister where in the estimates that sum of money appears which, after all, is an amount expended by parliament?


Gordon Minto Churchill: I would be very pleased to give that information to my hon. friend when my officials are here and when they will be able to turn directly to it.


William Arnold Peters: I am not too familiar with these matters but I notice there are a number of crown companies and agencies which report to parliament. I refer to page 118 of the annual report of the Department of Trade and Commerce for 1957 which includes the names of the chief commissioner of the board of grain commissioners, Mr. R. W. Milner; the chief commissioner of the Canadian wheat board, Mr. G. H. Mclvor; the


chief statistician of the bureau of statistics, Mr. W. E. Duffett; the president and general manager of the Export Credits Insurance Corporation, Mr. H. T. Aiken and the president of the Northern Ontario Pipe Line Crown Corporation, Mr. D. A. Golden. Could the minister indicate where the salaries and expenses which must be paid in this connection are to be found in the estimates?


Gordon Minto Churchill: The hon. member has the same advantage of myself if he has the book of estimates before him. He can refer to this book and he will find there are items in the estimates dealing with the headings he has read out with the exception of the Northern Ontario Pipe Line Corporation.


Joseph Pierre Albert Sévigny: Shall the item carry?


Hazen Robert Argue: I wonder-


Mr. Valade:: Obstruction.


Hazen Robert Argue: Did I hear someone say
"obstruction"?


Georges-J. Valade: I said it is obstruction.


Hazen Robert Argue: That is a nice thing, Mr. Chairman, that is a fine democratic remark.


Lionel Chevrier: Hear, hear.


Hazen Robert Argue: From a member of the party-


Georges-J. Valade: Can I not pass a remark?


Hazen Robert Argue: -which had to wait for two or three weeks to debate another issue in this house under a previous administration and then that administration accused his party of obstruction. We have been on one item of the trade and commerce estimates and this is only the second day. Yet if we take two days to debate the items of this department, what do we have hurled at us? The word "obstruction" from a new member of the Conservative party. I suggest, Mr. Chairman, that interjection is contempt of parliament.


Some hon. Members:: Oh, oh.


Hazen Robert Argue: And that the older members on the government side, when they were over here, would have picked up a remark like that and would have spent a long time damning the party to which the hon. member who made it belonged.


Some hon. Members:: Hear, hear.


Georges-J. Valade: May I make a remark on this matter, Mr. Chairman, because I feel it is a question of privilege. When the previous government was in power and when we were in opposition we did not have one-tenth of the chance we are giving the hon. member to argue tonight.


Some hon. Members:: Oh, oh.


Hazen Robert Argue: There, Mr. Chairman, is a further slur.


Joseph Pierre Albert Sévigny: Order. I believe we are getting a little away from the estimates of the Department of Trade and Commerce and it would be better if we kept our discussion to the item under consideration. The hon. member for Assiniboia at present has the floor.


Hazen Robert Argue: A remark to the effect that the government backbenchers are allowing members of the opposition or of the C.C.F. group a certain latitude is, in itself, in contempt of this house.


Some hon. Members:: Hear, hear.


Hazen Robert Argue: Those members are not allowing members of the C.C.F. group or any other group in this house to speak and, secondly, a member of this house is entitled to stand up in his place on any item of the estimates and speak for 30 minutes and then if another speaker intervenes he is entitled after that to stand up again and speak for another 30 minutes. That is what the rule says. Yet these people want to get away and have some holidays, they say. They did not say that before the election.


Joseph Pierre Albert Sévigny: I regret to interrupt the hon. member for Assiniboia, but his latest remarks are out of order. We are at present discussing the estimates of the Department of Trade and Commerce.


Hazen Robert Argue: Mr. Chairman, I suggest that the remark of the hon. member should be withdrawn.
What I rose to say, Mr. Chairman-and I am listening now for further comments-was that I was interested to know whether one of the boards which reports to the minister, namely the Canadian wheat board, will have its annual report referred to the committee on agriculture during this session and whether that board and its officials will be in Ottawa to report to the committee on agriculture.


Gordon Minto Churchill: The hon. member asked that question only a few days ago on the orders of the day. My answer then was that I thought it was within the competence of the agriculture committee to ask for that report and I am sure that if that is done and if the report is to be studied by the agriculture committee, the officials of the wheat board will be only too pleased to appear.


Hazen Robert Argue: I have never yet known the agriculture committee to meet and make a formal request of the minister that a certain report be referred to it. I know that it has been said in the past that members of the
Supply-Trade and Commerce opposition can have a committee called together, but I know that hon. members have tried and tried unsuccessfully. If the report of the Canadian wheat board is to go to the agriculture committee for review, the way it is brought to that committee is for the minister to stand up in the house and say that he has received the report and is prepared to have it sent to that committee and to move to that effect. If the minister would do this the report would be referred to the committee and the wheat board officials would come to Ottawa and appear before the committee.
It is now two years since the Canadian wheat board and its officials appeared before the committee on agriculture to give a report of its operations. No one, I think, would complain that the board did not come last year, or earlier this year, because it was almost impossible, but since it has become a regular procedure for the Canadian wheat board to appear before the committee and answer questions I think the minister should tell us now that he is himself prepared to move that the annual report be sent to the committee on agriculture.


Gordon Minto Churchill: I am prepared to accept the hon. member's suggestion and give it consideration. If this is the procedure which has been followed in order to have the report considered by the committee and in order to have the representatives of the wheat board present I will look into the matter. I was not clear that this was the way in which it has been done in the past. I accept the hon. member's advice.
^r- Argue: I want to ask the minister a straightforward question. Is he prepared to move in this house that the annual report of the Canadian wheat board be referred to the agriculture committee? If the answer is "yes", that is it.


Gordon Minto Churchill: I thought I gave a straightforward answer. I said that if this is the procedure that has been used in the past I would be prepared to do it.


Hazen Robert Argue: I just want it to be as categorical as that. And then I would like to know if it could be done as quickly as possible-the week after next, I would suggest-so that the wheat board could be here for that date.


An hon. Member:: The day before yesterday.


George James McIlraith: May I say that the practice as far as this report is concerned, as I recall it, has been, for the minister, when he has tabled the document, to say whether or not he intends to refer it to the committee, and very often if he did not make that reference he was asked about it and then, as I recall,

Supply-Trade and Commerce the minister always made that motion referring it to the committee, indicating at the time when the officials would be available.


Gordon Minto Churchill: I thank the hon. member for his suggestion, and as a great respecter of parliamentary procedure and practice I will look into the matter and if that is how it has been done in the past, I am quite prepared to do that.


Lionel Chevrier: I understand that the minister's department is responsible for the export of power and the granting of licences therefor. There is, I take it, a branch of his department which deals with this question. I should like to ask if there has been an increase in the export of electricity to the United States in 1957, because I presume that is the only year of which the minister would have any record. The next question is: has there been any export of electricity from the Beechwood project?


Gordon Minto Churchill: Would the hon. gentleman be satisfied if he received an answer to those two questions tomorrow?


Lionel Chevrier: Yes.


George James McIlraith: One more question. I
wonder if the minister would look at the notice of motion for the production of papers I have on the order paper to see if the correspondence I asked for passing between the minister and the students working at the trade fair in Brussels could be tabled tomorrow morning? If that could be done, conveniently, it might save some time.


Gordon Minto Churchill: That has not been passed by the house yet.


George James McIlraith: It is not passed. It is on the order paper.


Gordon Minto Churchill: It is on Votes and Proceedings. I will take the hon. gentleman's request into consideration.


Lionel Chevrier: May I ask a third question regarding the export of power? There was at one time a quantity of electricity exported at Massena, New York, and I am wondering if following the development that is to take place at the international section if any additional power will be exported to New York state?


Gordon Minto Churchill: I have not heard anything about that yet, and I do not know anything about a request for that export.


William Arnold Peters: Would the minister please
check with his department and try to ascertain where the $960 appears in the estimates because I have checked again and cannot find it.


Gordon Minto Churchill: We will do everything in our power to assist the hon. member and inform him with regard to this estimate.


Joseph Pierre Albert Sévigny: Shall the resolution carry?


Some hon. Members:: No. Ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

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


Gordon Minto Churchill: We will continue, with I hope greater speed, the estimates of the Department of Trade and Commerce, followed by the estimates of the Department of Agriculture, and then the estimates of the post office and the Department of Veterans Affairs.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on July 14.
[Stage Direction]
Saturday, July 19, 1958