1958-05-14

Hon. Michael Starr (Minister of Labour):: With your permission, sir, and with the indulgence of the house I should like to make a brief reference to the recently concluded strike by the Canadian brotherhood of locomotive firemen and enginemen on the Canadian Pacific Railway. As hon. members probably are aware by now, the strike has been terminated. Agreement was signed in Montreal last night at 11.59 p.m. by Mr. N. R. Crump, president, on behalf of the Canadian Pacific Railway, and by Mr. John Graham, chairman of the Canadian Pacific branch of the firemen's brotherhood.
The signing of the agreement ended the strike in its third day and followed a series of negotiations which lasted right up to a few moments before the agreement was finally signed. Naturally I was most pleased when finality was reached in a situation which was at best troublesome and contentious and which at worst contained the elements of a far-reaching and serious impasse.
Hon. members are no doubt aware that the problem of the eventual disposition of the diesel firemen on the Canadian Pacific Railway is one which has exercised the close attention of the management of the railway and the representatives of the brotherhood involved, as well as the best efforts of a royal commission and the solicitude of successive governments for more than two years. As Minister of Labour I am happy to be able to report that the settlement which was reached was such that there will be an absolute minimum of dislocation in so far as the personnel involved are concerned.
I feel also that I should like to commend the principals on both sides in the negotiations for the fact that, even in the anxiety and at times heat of the discussions, they were able to keep before them the larger consideration of the general welfare, as well as their own particular interests which were, of course, extensive in this matter. I feel that the settlement which has been achieved is one which has given to both sides as much as could be expected under the circumstances. I feel also that the general welfare has been
served in that the matter has been brought to termination and the spectre of serious difficulty has been averted.
I may add that I was in almost constant communication with negotiants on both sides last evening, and I was most happy to be able to inform the Prime Minister shortly after midnight last night that agreement had been reached.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I am sure that we welcome most heartily the announcement that the Canadian Pacific Railway strike has been settled. We know that a railway strike at any time in a nation like ours is a serious matter. We have followed the negotiations, as reports have been appearing in the press, since they began. On the basis of the information we were able to get from the press I believe the settlement is not entirely but very closely in line with the offer made by the Canadian Labour Congress and union on Thursday last. It would seem that if a little extra effort had been made at that time on the part of the other people who were taking part in these three-way conferences, a settlement might then in fact have been reached so the railway strike would not have taken place. As I say, we are pleased that it has been settled; and no matter what has been said in the press to the contrary we think the results show that in Canada we have a very responsible labour movement.



SMALL LOANS ACT


Hazen Robert Argue: for leave to introduce Bill No. C-2, to amend the Small Loans Act.


Some hon. Members:: Explain.


Hazen Robert Argue: Mr. Speaker, the purpose of this bill is to place a ceiling on the interest rate that may be charged by small loans companies, namely an effective interest rate of 12 per cent per annum.
Motion agreed to and bill read the first time. CRIMINAL CODE



AMENDMENT RESTRICTING CAPITAL PUNISHMENT TO CERTAIN OFFENCES

Mr. Harold E. Winch (Vancouver East) moved: for leave to introduce Bill No. C-3, to amend the Criminal Code (capital punishment).

Proposed Legislation


Some hon. Members:: Explain.	NATIONAL HOUSING ACT


Harold Edward Winch: The purport of this bill is to abolish capital punishment as a penalty in our country except for such offences as treason or piracy on the high seas.
Motion agreed to and bill read the first time.



AMENDMENT TO ABOLISH IMPOSITION OF CORPORAL PUNISHMENT

Harold Edward Winch: for leave to introduce Bill No. C-5, to amend the Criminal Code (corporal punishment).


Some hon. Members:: Explain.


Harold Edward Winch: The intent of this bill, Mr. Speaker, is to carry into law the recommendation of the joint committee of the Senate and House of Commons made some years ago, to the effect that corporal punishment should no longer be within the authority of a judge as part of a judicial sentence.
Motion agreed to and bill read the first time.



INTEREST ACT


Hazen Robert Argue: for leave to introduce Bill No. C-4, to amend the Interest Act.


Some hon. Members:: Explain.


Hazen Robert Argue: The purpose of this bill is similar to that of the first bill I introduced, but has a wider application. It would place a ceiling of 12 per cent per annum on interest rates and charges which might be made by small loans companies, on instalment credit purchases and in all other business transactions.
Motion agreed to and bill read the first time.



UNEMPLOYMENT INSURANCE


Michael Starr: that the house go into committee later this day to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to provide for the temporary extension of the seasonal benefit periods under the Unemployment Insurance Act for a six weeks period, from May 18, 1958, to June 28, 1958.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon., Howard C. Green (Minister of Public Works) moved that the house go into committee later this day to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the National Housing Act, 1954, to increase from $400 million to $750 million the aggregate amount that may be paid out of the consolidated revenue fund under subsection 1 of section 22 of the act.
Motion agreed to.


UNEMPLOYMENT INSURANCE


Mr. Martin (Essex East): Have representations been made for the extension of seasonal benefits under the Unemployment Insurance Act beyond May 15, 1958?


Michael Starr: Mr. Speaker, the answer to the question is yes. The government has given notice of intent to introduce legislation to amend the Unemployment Insurance Act to provide for the extension of the seasonal benefit periods to June 28, 1958.



MOTIONS FOR PAPERS


[Stage Direction]
Motion No. 1- Mr. Chevrier:
For a copy of all letters, telegrams, plans and other documents exchanged, since July 1, 1954, between the federal government and the government of the province of Quebec, and/or Hydro Quebec, concerning the carrying out of works, including the development of power in the Laehine section of the St. Lawrence river.
Hon. George H. Hees (Minister of Transport):: Mr. Speaker, a similar motion was agreed to by the last parliament but because of dissolution it could not be acted on. At that time it was understood in conversation with the hon. member that the reference to works in the Laehine section of the St. Lawrence river means the Laehine section of the St. Lawrence seaway, including the development of power. On that basis, together with the usual reservation as to the consent of the province, there is no objection to the motion.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion subject to the comments of the Minister of Transport?


[Stage Direction]
Motion agreed to.

[Stage Direction]
Motion No. 2-Mr. Marlin (Essex Easl):
For a copy of all correspondence, telegrams and other documents exchanged between the federal government and the provinces of Canada since January 1, 1957, in respect of matters having to do with the hospital insurance act enacted by parliament on April 10, 1957.
Hon. J. W. Monieilh (Minister of National Health and Welfare):: Mr. Speaker, we have no objection to the tabling of this correspondence, subject, of course, to the usual reservation with regard to receiving permission from the provinces. I would point out, however, that on February 4, 1957 some correspondence with the province of Ontario was tabled and that on March 26 some additional correspondence up to that date was also tabled, and I presume the hon. member would not wish those particular items to be tabled again.


Mr. Speaker:: Subject to the limitation expressed by the minister, is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. W. L. Houck (Niagara Falls):: Mr. Speaker, I should like to address a question to the Minister of National Defence, but perhaps the acting minister would answer the question in his absence.
Considering the fact that there are approximately 800 persons presently laid off at the Sydney steel plant, would the minister consider cancelling a previous directive ordering a lay-off of some 112 civilian employees at the Point Edward naval base at Cape Breton, of whom 80 per cent to 90 per cent are returned veterans?


Hon. George C. Nowlan (Minister of National Revenue):: Mr. Speaker, the Minister of National Defence is away attending a funeral, as the house will know, but I will draw his attention to this question on his return and endeavour to have an answer for the hon. member at an early date.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs.
Inquiries of the Ministry
Has the attention of the minister been drawn to the front page report in this morning's Globe and Mail to the effect that the United States Senate internal security subcommittee is reviving the E. Herbert Norman case in a prelude to a full-dress defence of its investigation of our Canadian diplomats, including Mr. Bryce.
If so, is his department contemplating making any representation to the responsible department in Washington, and, should the investigation be proceeded with, will Canada's position be made abundantly clear on this matter?


Hon. Sidney E. Smith (Secretary of State for External Affairs):: Mr. Speaker, in reply to this question I must state at the outset that I have not seen the report which has been prepared pursuant to the direction of that committee of the United States Senate. All I can depend on are the newspaper reports. Assuming that these are accurate I must say that I resent an additional occurrence of ex parte proceedings, leaving behind innuendos against Canadian citizens.
For example: I have known Mr. Bryce for a long time and I have a high regard for him. According to this morning's newspaper he made the statement that he has nothing to hide, and I endorse that statement on behalf of Mr. Bryce.
One aspect of this matter concerns my department. Hon. members will recall that on April 10 last year our ambassador in Washington, acting on the instructions of the Canadian government, presented a note to the United States government regarding the procedures which had been followed intermittently by the internal security subcommittee, a subcommittee of a committee of the United States Senate, in releasing the names of Canadians who had been mentioned in its proceedings and particularly in its executive sessions. I am going to take the time of the house to read a part of that note:
The Canadian government has more than once complained of the methods employed by that subcommittee in releasing the names of Canadians and has stated that if the names of Canadian officials appear in evidence before investigating committees in Washington, those names should be sent in confidence to the Canadian government so that the allegations can be investigated and dealt with in Canada.
This procedure requested by the Canadian government has, however, never been followed and references made in proceedings of the subcommittee to individual Canadians have not been made known to the Canadian government except through the press.
As the United States government knows, the Canadian government finds the procedures adopted by the subcommittee with respect to Canadians difficult to understand, unfair and indeed intolerable. The Canadian government therefore requests

Inquiries of the Ministry again that these procedures be altered in so far as Canadians are concerned along the lines indicated above.
In reply to this request the United States Secretary of State, in a note dated August 13, 1957 stated:
The view of your government was made known to the appropriate members of the United States congress, at which time the Department of State emphasized the great importance the United. States attaches to maintaining the friendliest relations with the government of Canada. I wish to assure you that this sentiment is wholeheartedly entertained by the congress.
In view of the friendly sentiments expressed in this way by the United States congress the Canadian government decided to let the matter rest, trusting that should the names of Canadian citizens thereafter appear in evidence before congressional investigating committees these names would, as we had suggested, be sent to us in confidence for investigation if necessary in Canada.
The developments to which the hon. member has referred have shown that this trust was misplaced. Once again an investigating committee of the United States congress has made public the name of a Canadian civil servant in complete disregard of the Canadian government's views forcibly made known to the congress only a few months ago as to the fair and proper way to deal with matters of this kind. I am sure that all hon. members of this house will share the Canadian government's disappointment at this turn of events. I am, therefore, instructing our ambassador in Washington to convey to the United States government the sense of the statement I have just made.


Harold Edward Winch: Mr. Speaker, may I direct a supplementary question to the Secretary of State for External Affairs, but before doing so I wish to state I am certain that all hon. members appreciate the information that has been given to us by the minister. However, in view of what he said and in view of the question of the Norman case being reopened and a new name brought in, could I ask the minister if it is now the intention of his department to again make the strongest possible protest to Washington and to make our Canadian position exceedingly well known, not only in the interests of diplomacy but in defence of the two men who have been named in this fashion?


Mr. Speaker:: Order. I think the house will agree that this is not supplementary but a repetition of a question which has already been answered.


Harold Edward Winch: I did not get my answer as to whether or not due representation was going to be made.


Mr. Speaker:: I understood the minister to say that.


INQUIRY AS TO STEPS TO PROTECT
[Stage Direction]
On the orders of the day:
Mr. Armand Dumas (Villeneuve):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Will the minister tell the house what steps have been taken to implement the recommendations made to him recently by the Canadian Metal Mining Association regarding the possible reimposition of import duties on Canadian copper by the United States?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I should like to thank the hon. member for giving me notice of this question. The answer is as follows. I have had detailed discussions with a delegation from the Canadian Metal Mining Association on the subject of the possible reimposition by the United States of a tax on copper. Copper is normally subject to a United States import tax of 2 cents per pound, but in recent years this import tax has been temporarily suspended by act of congress. According to this legislation the suspension will end on June 30 next. The United States administration has not seen fit at this time to seek a renewal of this suspension, which has been so obviously in the interests of both Canada and the United States. In accordance with commitments under our trade agreement, the United States rate of import tax on copper will, in the absence of further suspension, amount to either 1.7 cents or 2 cents per pound, depending on whether the market price in the United States is above or below 24 cents per pound.
Hon. members may be assured that the views of the Canadian government as to the importance of ensuring that there is no increased tariff or other barrier to exports of base metals from Canada to the United States have been made known to the United States government.


BROADCASTING
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I should like to direct a question of national significance to a gentleman of national importance, namely the Minister of National Revenue. In view of the fact that thousands of Canadians are still denied satisfactory radio reception and particularly the

opportunity to listen to the Canadian Broadcasting Corporation programs, will the minister inform the house what action the government intends to take to remedy this long-standing injustice?


George Clyde Nowlan: Mr. Speaker, the question, without the flowers, was sent over to me after the opening of the house. Canadian Broadcasting Corporation programming is a matter under the control of the Canadian Broadcasting Corporation. The matter of providing funds for that corporation is the responsibility of the government and, as the hon. gentleman will see by looking at the estimates, this government this year has provided several millions of dollars more to the Canadian Broadcasting Corporation than has ever been provided before. I know it is the intention of the corporation to proceed with an expanding service in various communities within the next few months.


ST. LAWRENCE SEAWAY INQUIRY AS TO DECISION RESPECTING TOLLS
[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: Mr. Speaker, I should like to direct a question to the Minister of Transport, of which I sent notice to his office. When will a decision be reached concerning the proposed shipping toll charges on . the St. Lawrence seaway and Welland canals? Will these proposed toll charges be tabled in the house and an opportunity given to members to consider them?
Hon. George	H. Hees (Minister of
Transport): Mr. Speaker, I wish to thank the hon. member for his courtesy in advising me of his intention to ask this question. The Canadian-United States toll committees have not yet completed their work. Once a decision has been reached, public announcement will be made and hearings will be held at Ottawa by the St. Lawrence seaway authority and at Washington by the St. Lawrence seaway development corporation.
If hon. members wish to express their views on these tolls or on what they think they should be, they are quite free to do so in the debate on the address.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to address a question to the Minister of Justice or, in his absence, to his parliamentary assistant who perhaps will take it as notice.
Inquiries of the Ministry


Mr. Fleming (Eglinton):: There is no parliamentary assistant.


Harold Edward Winch: Has the attention of the Minister of Justice been drawn to the case of William Heikkila of San Francisco, who was placed by United States immigration authorities in the Vancouver jail under a false name, held incommunicado for some 39 hours and not brought before a justice of the peace or judge on any charge as required by Canadian law?
If so, can the Minister of Justice inform the house whether an investigation is being made relative to the matter, and can he inform the house as to whether or not there is any Canadian-United States agreement or treaty under which a foreign power can detain a non-Canadian citizen in a Canadian jail, contrary to Canadian law?


Hon. Howard C. Green (Minister of Public Works):: I shall be very glad to draw these questions to the attention of the appropriate minister.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, yesterday the hon. member for Timmins asked me a question relating to the percentage of unemployed workers who were presently receiving seasonal benefits. The answer is as follows.
On April 30 the percentage figure of persons receiving seasonal benefits related to the total number of active claimants was 30 per cent. In answer to the second part of the question I can only say that on March 31, a month earlier, the same ratio was in the neighbourhood of 27 per cent. The reason for this is that the number of registrations declined during the period, causing an increase in the proportion of those on seasonal benefits.



INCOME TAX


[Stage Direction]
On the orders of the day:
Sidney Earle Smith: Mr. Speaker, yesterday the hon. member for Port Arthur asked this question:
Can the minister tell the house whether the Canadian ambassador to the United States has in recent weeks made either a public statement or any official representation to the state department on his government's position in the Premium Iron Ores tax case?
The Canadian ambassador to the United States did not take any initiative in respect

Inquiries of the Ministry of making further representations to the state department. However, Mr. Speaker, on February 28 the state department asked the Canadian government to clarify certain observations made by my colleague the Minister of National Revenue in the house on February 1, in reply to a question by the hon. member for Kenora-Rainy River. In clarifying these observations the Canadian government took the opportunity to review the considerations on which their position in this matter has been based.
The explanation of the remarks made by my colleague the Minister of National Revenue was in these terms: What the minister had in mind, in his answer to a question in the house on February 1, was that the Canadian government would wish, in due course, to study the court of appeal's judgment in relation to the facts established in this case to see whether the terms of our double taxation convention had been interpreted in the sense we had intended them to have at the time they were negotiated and, if not, to consider whether those terms require revision.



SHIPPING


Hon. Lionel Chevrier (Laurier):: May I
direct a question to the Prime Minister or, in his absence, to the leader of the government. Can either of them tell the house when the report of the royal commission on coastal shipping will be handed down?


Howard Charles Green: Mr. Speaker, I shall be glad to make inquiries about that report.



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I
should like to direct a question to the Minister of Transport. Can he give us the approximate date when legislation will be introduced to establish a lakehead harbour commission, in view of his pre-election statements that municipal tardiness was holding up the projected harbour improvements?


George Harris Hees: As the hon. member well knows, having listened attentively to the speech from the throne, the government intends introducing legislation to establish a lakehead harbour commission at this session. The

legislation will be presented to the house just as soon as the business before the house permits.



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

[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, I should like to address a question to the Minister of Finance. Can the minister inform the house whether the report of the royal commission on terms of union with Newfoundland has yet been received by the government? If not, how soon does the government expect to receive it?


Donald Methuen Fleming: The report has not been received, and I have had no intimation from the royal commission as to when it expects to conclude its work and submit its report.

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



INTERIM SUPPLY

Donald Methuen Fleming: That a sum not exceeding $626,292,380.09, being the aggregate of
(a)	one-sixth of the total of the amounts of the items set forth in the main estimates for the fiscal year ending March 31st, 1959 laid before the House of Commons at the present session of parliament:
(b)	three-quarters of the total of the amounts of items 439, 443 and 502 of the said estimates;
(c)	one-half of the total of the amounts of items 111, 200, 352, 409 and 513 of the said estimates;
(d)	one-quarter of the total of the amounts of items 49, 148, 312 and 399 of the said estimates;
(e)	one-sixth of the total of the amounts of items 37 , 94, 162, 297, 311, 368, 432, 446 and 447 of the said estimates; and
(f)	one-twelfth of the total of the amounts of items 65, 74, 90, 98, 153, 163, 179, 224, 229, 234, 242, 246, 264, 333, 364, 391, 401, 402, 431, 479, and 485 of the said estimates, be granted to Her Majesty on account of the fiscal year ending March 31st, 1959:
Provided the amounts hereby authorized to be paid and applied in respect to those items shall be deemed to include and not be in addition to the amounts authorized for such items by the special warrants issued by the Governor General pursuant to orders of the governor in council of April 9, 1953 (P.C. 1958-492) and of May 1, 1958 (P.C. 1958-641).
He said: Mr. Chairman, may I, as the first member of the house to address you since you have assumed the office of Deputy Speaker of the house and chairman of its committees, extend to you the heartiest congratulations and warmest good wishes for your success in the important responsibilities which you have assumed. You hold this office by a decision of the house and in due

recognition of your own high personal merit. In addition however, sir, I know it is a matter of very considerable gratification to all hon. members in this house that in your election to this high office, a worthy son is following in the footsteps of a very worthy and distinguished father.
I am sure it will be the wish of all hon. members that in the discharge of your responsibilities you will earn the same confidence and the same gratitude that your distinguished father earned in his time in the discharge of these same duties 40 years ago.
As all hon. members are aware, Mr. Chairman, from the statement I made to the house yesterday, the house is being asked today to vote a fraction of the estimates which were tabled yesterday for the fiscal year 1958-59. The expenses of the government have been already provided for only until the 16th day of May, which is Friday of this week, and the government will be without funds after that date. The government has taken the utmost steps to ensure under the existing circumstances the utmost control by the house over the appropriation of needed moneys.
By way of emphasizing the urgency of today's motion, may I remind the house that in addition to the fact that funds available now will be exhausted after May 16, it is always necessary for the treasury to have funds in hand some days before the date on which the salary and pay cheques go out because they have to be sent to all parts of the country. We have to allow time as well for passing by the Senate and royal assent to the bill.
The house is concerned as to the extent of the funds to be appropriated under the present measure. The appropriation now proposed is intended to provide funds for the needs of the government until the 31st day of May. That means that a further request for interim supply will be made to the house in the first week of June. It is, of course, obvious that we might have asked for a larger sum now, but we felt that under all the circumstances the usual course should be followed of asking in the first motion for interim supply the equivalent of two months' needs.
There are some hundreds of items in the book of estimates tabled yesterday. In all but 42 cases the sum now asked for is one-sixth of the total, or in other words the equivalent of two months of these items which are capable of being disbursed or lend themselves to disbursement on a pro rata basis throughout the year. As to the 42 items in question, they fall within one or other of the four categories I mentioned yesterday of 57071-3-5J
Interim Supply
cases in which the needs contemplated by the item are not capable of pro rata calculation or disbursement month by month throughout the year.
The total amount the house is being asked to provide for these needs to May 31 appears as the sum of $626,292,380.09. But that sum is subject to a reduction in a manner I shall mention in a moment. I wish to make it very clear that even in the case of these 42 items, in none of them is the house asked to vote today the entire sum. There are a few of them in which the program is already well advanced and in which as much as eleven-twelfths of the total item are asked today, but these are items of an exceptional nature. I stress the fact that at least a portion of these extraordinary items remains to be voted by the house on a future occasion. Therefore with respect thereto the house will retain its full opportunity to discuss, review and consider. I shall shortly be giving to the house the usual assurance with respect to the rights of all hon. members of the house in reference to every one of the items of which a portion is being appropriated today.
I mentioned yesterday the issuance of two special warrants under the terms of the Financial Administration Act by His Excellency the Governor General on the advice of council in order to meet the needs of government from April 1 until the 16th day of May. These are the two warrants which are referred to in the proviso which constitutes the closing paragraph of the resolution now under discussion. The two warrants for which I gave particulars yesterday amount to the sum of $303,560,195. Every item that was included in the governor general's warrants is to be found in the book of estimates tabled yesterday with one exception, and one only, which I mentioned yesterday. That is an item of $7 million appropriated by governor general's warrant which does not find its way into the book of estimates because it is a loan to Trans-Canada Air Lines and therefore will be included in due course in the bill that normally provides for the requirements of the Canadian National Railways.
That item of $7 million which was appropriated by governor general's warrant carries the needs of Trans-Canada Air Lines to June 30, and it is trusted that by that time the house will have been in a position to pass the bill respecting the provision for Canadian National Railways financing. So with regard to all items in the governor general's warrants, with that one exception they are to be found in the book of estimates which was tabled yesterday and a portion of each item in which the house is being asked to appropriate today.

Interim Supply
A question may be asked as to what is the appropriate relationship of the appropriation already made by those two governor general's warrants to the appropriation of a portion of these items in the estimates which the house is being asked to approve today. There was a similar situation in the year 1940. There had been an election in the month of March of that year. The house was called to meet in May on a date a little later than the date on which the present parliament was called to meet. Both in the late days of the fiscal year ended March 31, 1940 and in the period of April and May 1940 prior to the convening of parliament a number of governor general's warrants had been issued. Indeed, the number was quite formidable; actually fifteen warrants had been issued. In the fiscal year which had commenced April 1, 1940 the warrants issued in that period had appropriated sums aggregating approximately $100 million; and I am sure that the finance minister at that time, the late lamented Mr. Ralston, was faced with a similar question.
One finds that in the first appropriation bill that he introduced in the early days of the 1940 session the house was called upon to appropriate sums intended to provide all needed supply for the first two months of the year, but in the bill no provision was made respecting the governor general's warrants which had already taken effect and which by their nature had already appropriated sums of money.
The first interim supply or the first appropriation bill of that session made no reference whatever to the governor general's warrants. We have considered that the better practice is to ask the house in this first appropriation by statute in this new session to take note of the issuance of the two governor general's warrants since the opening of this present fiscal year on April 1.


Mr. Benidickson:: What about the earlier one?


Donald Methuen Fleming: I think the practice which was followed on that occasion is the one which had obtained earlier and it is our view, Mr. Chairman, that the course which the government now proposes is one which preserves more directly the control of the house over the appropriation of public money. In other words perhaps I might say this; that in 1940 on the first motion for interim supply the subject of the governor general's warrants was not even mentioned. The interim supply was voted through all stages in this house in a matter of about eight or nine minutes and it was only in the final supply bill of the year that account was taken of the sums which had already

been appropriated by governor general's warrant prior to the opening of the session.
The next appropriation by way of interim supply on July 31, 1940 occupies half a column in Hansard, indicating that the motion was passed through all stages in perhaps a minute or a minute and a half, but in the final appropriation of the year reference was made to the governor general's warrants and I should like to lay before the house the clause in question. The statute is chapter 47 of the statute of 1940, and clause 2 of that statute provides for the appropriation of the named sum of money and then proceeds to set forth this proviso:
Provided the amount hereby authorized to be paid and applied in respect to each item, set forth in said schedule A, shall be deemed to include and not to be in addition to, the amount authorized for each such item by governor general's warrants issued during the fiscal year 1940-41 prior to the 16th day of May, 1940.
We propose that the measure which the house is being asked to pass today should include a clause in those words so that it will be clearly understood, and indeed is expressly provided, both in the resolution now under discussion and in the bill to follow, that the house is being asked to appropriate the full sum of $626 million odd, which is the entire sum required to meet the expenses of government from April 1 to May 31, and there will be a provision that this sum is to be deemed to include and not to be in addition to the two sums already appropriated by governor general's warrants. In saying that I ask hon. members to bear in mind, of course, that under the-


William Moore Benidickson: Mr. Chairman, may I ask the Minister of Finance if in referring to this clause he would suggest that this would prevent us from later discussing item by item the matters which are referred to in that clause?


Donald Methuen Fleming: No, Mr. Chairman; I intended to speak on that matter. There is no room for question on that subject whatever.
However, before I leave the point with which I was dealing I do wish to draw attention to the form of the appropriation. Under the Financial Administration Act, section 28, an appropriation, under the circumstances there provided by governor general's warrant operates as an appropriation. It would not be proper to ask the house to reappropriate sums already appropriated; nevertheless we are anxious that in the fullest manner the control and authority of the house over appropriation and expenditure of moneys should be clearly asserted, and that is why both the resolution and the bill take the form I have indicated.

I would now like to say a word or two about the rights of the house with respect to discussion and approval or disapproval of items under these estimates at a later period in the session. All these items in the book of estimates will be reviewed, of course, in the ordinary way in the committee of supply, department by department. Neither the appropriation of any item by governor general's warrant nor the appropriation of any portion of any item by an interim supply bill will prejudice the right of hon. members to discuss such an item when it is reached in the ordinary course in committee of supply. The position in that respect is not in any degree different with respect to those items appropriated by the governor general's warrants from the position of those items appropriated by interim supply. Never has a vote of interim supply nor an appropriation by governor general's warrant precluded the fullest discussion of the item when it is reached in committee of supply in the ordinary course.


William Moore Benidickson: What about February 1?


Donald Methuen Fleming: Mr. Chairman,
there was no attempt to preclude or limit discussion on that matter on February 1.


William Moore Benidickson: Oh, you are very wrong.


Donald Methuen Fleming: I am afraid the hon. member is completely mistaken. There was an assertion at that time, apparently, by some members on the question of the position of the house with respect to sums appropriated by two warrants which had been issued in the summer of 1957, and in fairness to one or two hon. members who raised this point I think it was overlooked by them that the procedure contemplated by the Financial Administration Act both in regard to tabling of the warrants in the house and in regard to their publication in the Canada Gazette had been scrupulously followed by the government. There was no attempt whatever to limit discussion or debate on February 1, and I do not think my hon. friend is going to suggest that February 1, in view of the matters which were discussed and the things that were said in the course of that day, was an altogether normal day. I am not going to apply a too strict examination to the contentions of some hon. members who sought that day to make something of an alleged limitation of their right of debate; there was no limitation. As a matter of fact I think my hon. friends will recall that debate waxed long and furious on the subject through, I think, that entire day.


William Moore Benidickson: But the master's voice was not available. That is what went wrong.
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Donald Methuen Fleming: No, there was nothing that went wrong except that those who sat on the same side of the house where my hon. friend now sits-or at least his portion of that side of the house-
Mr. Pallet!: That is better.


Donald Methuen Fleming: -had misapprehended the position. I think they were anticipating the blowing of election winds, and jumped the gun in that respect. They were making, in essence, hustings speeches and I think we can leave the matter at that.
I do, however, wish to make it abundantly clear to the house that neither the appropriation of any portion of the estimates by governor general's warrant nor any appropriation of any portion by a vote of interim supply affects the rights and privileges of the house in this regard. I can give the house the time honoured assurance that the passing of this bill will not prejudice the rights and privileges of hon. members to criticize any item in the estimates when it comes up for consideration in committee of supply, and the usual undertaking is hereby given that such rights and privileges will be respected, not curtailed or restricted in any way as a result of the passing of this measure.


Mr. Pearson:: May I ask the minister a
question? What provision will be made to ensure that we shall have the same rights of discussion of the warrants of last year?


William Moore Benidickson: Five hundred and forty-four million dollars.


Donald Methuen Fleming: I think the hon.
gentleman will recall that much of those estimates had already been approved.


William Moore Benidickson: Oh no.


Donald Methuen Fleming: Oh yes. There
had already been enactment of approval of some of those items, and more than half of the total had already been approved in committee of supply, although the usual appropriation bill based on them had not been passed. The hon. gentleman will recall that there were altogether five appropriation bills dealing with interim supply. The house had already appropriated a minimum of ten-twelfths of every item and eleven-twelfths of some items. In addition, the estimates of the Post Office Department had been appropriated in full and, further, the committee of supply had already given approval to a very substantial portion of the other items.


Harold Edward Winch: Were all the expenditures
approved in the last house approved also in the other place?

Interim Supply


Donald Methuen Fleming: The hon. member understands that the appropriation bills were passed in both houses and received royal assent. In other words, those five interim supply bills I have mentioned were duly enacted in the constitutional manner. Then, of course, there were the statutory items which take effect anyway.


Harold Edward Winch: But all the matters discussed
toward the end of 1he last parliament were not approved in both houses, and there was no approval of the expenditures for either February or March of the previous budget.


Donald Methuen Fleming: I thought I made that clear. Parliamentary appropriation on account of those items by means of interim supply bills had, by joint action of both houses and with the royal assent, appropriated by statute a minimum of ten-twelfths of all items and eleven-twelfths of some. The estimates of the Post Office Department had been appropriated in full in April 1957. Then, with respect to the other items I have mentioned here, the committee of supply had given approval to them though the house had not been called upon to pass the usual appropriation bill on that portion which had been approved.


William Moore Benidickson: It was not given the chance.


Donald Methuen Fleming: If hon. members opposite wish to go back and begin raising issues which, one had thought, had to some extent been disposed of, that can be dealt with, but I thought I gave the house a clear assurance yesterday that in the provision which the governor general in council made in strict accordance with the provisions of the Financial Administration Act to meet the needs of government and provide the sums urgently required for the public good for the balance of the fiscal year to March 31, nothing had been done that was not included in the estimates, and that provision would be made this year at this session in due course for as much review as hon. members may wish of any appropriation made by governor general's warrant. The matter is as plain as that. The items which are embraced under the governor general's warrants were fully published in the Canada Gazette for all to see; we did not even wait for the conclusion of the period named in the Financial Administration Act for such publication, but published those governor general's warrants as quickly as was possible to get them in each case into the next issue of the Canada Gazette.
I would remind the house also that parliament has been called to meet at the earliest possible date after the election, indeed, two days too early for one hon. member; that

the estimates were tabled on the earliest possible date after the convening of parliament; that the date up to which needs were provided for by warrant was the earliest date by which parliament could be expected to assume its task of providing for those needs by interim supply bill, and that with the leave of the house this is the earliest date upon which the government could possibly have asked hon. members to proceed to vote sums by way of interim supply.
Having completed that review may I just say a few words in the hope that they may be of assistance to new members of the house with respect to today's procedure. Procedure with regard to a vote of interim supply can sometimes be a little confusing or even baffling to those who have not witnessed it before. May I just touch briefly upon the stages through which we propose asking the house to pass this measure.
We are now in committee of supply, and if the committee sees fit to report the resolution now, it will be reported to the house, read twice and agreed to. Then I shall move that the house resolve itself into committee of ways and means, and in that committee I shall move a resolution similar to the one now under consideration in the committee of supply. If and when that resolution is reported to the house it will be read twice and concurred in. Then I shall move for leave to introduce a bill, which will be the first appropriation bill of this session, for the actual vote of the moneys now under consideration. The house will be asked to give first and second reading to that measure. It will then go into committee of the whole and back to the house for third reading.
I have gone into this matter at somewhat greater length than is usual on motions for interim supply in view of the questions that have been involved, and in order to clarify the situation as far as I am able. Normally these interim supply motions are dealt with -and this has been true over the years- in a matter of five or ten minutes, hon. members realizing that all their rights to discuss any question in the book of estimates are preserved until that time when, in committee of supply, in the normal consideration of the estimates, any particular item is reached.


William Moore Benidickson: Mr. Chairman, may I say that those associated with me will certainly be enthusiastic in joining with the Minister of Finance in complimenting you on this first occasion when you preside in committee of the whole. We, also, are well aware of your family tradition of parliamentary activity. We have great confidence in the impartial

administration which you will always provide in this office and our greatest felicitations go forward to you.
We have heard from the Minister of Finance, very properly, an excellent expose of the position in which we are now placed in dealing with some of these matters. A very important question is whether or not the items under governor general's warrant No. 1 which amounted to $544 million and which properly belong to the former fiscal year are items to be referred to specifically on another occasion. The minister has said that in the new governor general's warrants Nos. 2 and 3, with the exception of the T.C.A. item, there is nothing we cannot readily find in the book of estimates tabled yesterday.


Donald Methuen Fleming: Mr. Chairman, I can make that clear at once to my hon. friend. In fact, I thought I had mentioned it. Every item included in the governor general's warrant of February 7, 1958 is to be found in either the estimates or the supplementary estimates of the fiscal year 1957-58.


William Moore Benidickson: We, of course, had no opportunity to deal with the details of those estimates with the exception perhaps of those things my hon. friend referred to, the estimates of the Post Office Department and to some extent the Department of National Defence and one or two others. Would my hon. friend indicate to the committee whether or not a similar privilege would be afforded us to examine some of these expenditures respecting warrant number one in the committee of supply as we proceed?


Donald Methuen Fleming: I pointed out
yesterday and I repeat that the items included in the warrant are all set forth in full in the Canada Gazette and I gave the assurance to the house yesterday and I repeat it today that any hon. member who wants any information or who wishes to discuss any of those items will have the opportunity to do so in committee of supply. That is not a matter of the same urgency as is the other with respect to 1958-59, but as I indicated yesterday that opportunity will certainly be afforded to all hon. members in committee of supply.


William Moore Benidickson: I think all hon. members will welcome that statement from the Minister of Finance and by consent we can as we go into supply on items in this year's estimates doubtless have some reference in our debates with tolerance to some of the items that by unusual circumstances were in last year's estimates and not passed by this house in the normal way. In that respect I would just like to say that I quarrel a little
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bit with the Minister of Finance when he says he has followed what has been the traditional practice of our Canadian parliament in this respect particularly with regard to governor general's warrants. With all deference to him I say this is not so. With the exception of some supplementary estimates in 1940 we never before had a dissolution of this house without parliament being given the opportunity to examine and pass the major estimates of expenditure proposed in a democratic parliament.
As I have indicated, this government dealt with $544 million by governor general's warrants last February.


Donald Methuen Fleming: In February.


William Moore Benidickson: Yes, in February. That
had never been done before in the history of any Canadian parliament.
It is not the intention of the official opposition today to delay the adoption of this resolution especially in view of the undertaking that was given yesterday and today by the Minister of Finance. We understand that we will be given a full opportunity at a later stage to review in detail and discuss not only the governor general's warrants applicable to the fiscal year commencing April 1 but, with tolerance and agreement, the governor general's warrant that is applicable to the last session. I merely wish to point out that the amounts authorized by these warrants are unprecedented. Never before has anything of this equivalent been allowed to pass in a Canadian parliament.
While we are discussing interim supply at this time most of our thoughts are directed to the presentation yesterday of the estimates in toto. They, too, are unprecedented. Never before have we had a government in peace time or at any other time ask for expenditures of the size and degree of those that were presented yesterday by the Minister of Finance.
We all, I think, are loath to have directed to our attention some of the remarks we have made in the past but I feel I am duty bound to remind the Minister of Finance that he had some very stirring remarks to make when he sat on this side of the house-


Gordon Minto Churchill: Very helpful, too.


William Moore Benidickson: -about this incessant
growth in expenditures by government departments. I recall that when the minister was the private member for Eglinon, speaking at a nomination meeting for one of his colleagues who is a senior member of this house, the hon. member for York East, he had this to say:
A Progressive Conservative government would chop $500 million from Canada's tax bill by 'sound and accurate budgeting'-

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Donald Methuen Fleming: What year?


William Moore Benidickson: 1953. This statement is
reported in the Toronto Telegram of June 30, 1953. My hon. friend has introduced expenditures in these estimates of unprecedented proportions and 1 ask him to consider some of the thoughts he presented to the house in days gone by.
Indeed, the official financial critic of his party, the hon. member for Greenwood, should also be referred to for the guidance of the present Minister of Finance and some of the suggestions he has made in this house in fairly recent days noted. I have here what the hon. member for Greenwood said:
I am not going to weary you-*
He said, speaking to the house-
-with a long dissertation on government spending.


Donald Methuen Fleming: Date?


William Moore Benidickson: March 19, 1957, in the budget debate. He continued:
Everyone who is not a moron knows that government expenditures could be cut down.
My hon. friend is proposing to this committee expenditures on a considerably enlarged basis even though his leader had some important things to say in this respect.


Donald Methuen Fleming: We also made some cuts, you know.


William Moore Benidickson: They do not show up in the over-all total.


Gordon Minto Churchill: Are you going to follow the example of the hon. member for Greenwood and not weary the house?


William Moore Benidickson: The Prime Minister had some interesting comments to make in this regard and I am thinking especially of a headline I have in front of me which reads: End Spending Orgy at Ottawa is Pledge of Mr. Diefenbaker
The article says in part:
A Progressive Conservative government would certainly chop-
As the Minister of Finance himself has said-
-$500 million from the expenditures of the government of Canada.


Donald Methuen Fleming: Date?


Gordon Minto Churchill: 1953?


William Moore Benidickson: Yes, 1953.


Gordon Minto Churchill: You are living in the past.


William Moore Benidickson: If you would like to be brought up to date I can refer to a statement made by the Prime Minister in 1957:
In 1957 Mr. John Diefenbaker accused the Liberal administration of picking the Canadian taxpayers' pockets far beyond the needs of government.

On that basis some acclaim has been given to my hon. friends opposite by the public but I believe they will deplore and regret the fact that the principles enunciated at that time have not been put into practice when given the opportunity.
However, we in this party are very interested in the proposals of the government with respect to expenditures that may have some relation to stimulation of the economy at the present time. In this respect I am sorely disappointed in the book of estimates which I perused in some haste within the last few hours.


Donald Methuen Fleming: Does that mean the hon. gentleman wishes that there were more expenditures provided for in the book of estimates?


William Moore Benidickson: For a temporary and passing phase with respect to things that would stimulate the economy of this country and about which we heard a great deal in the recent election campaign, yes.


Donald Methuen Fleming: Does that mean that the hon. gentleman advocates an increase in the sums provided for expenditure in the estimates?


William Moore Benidickson: I would like my hon. friend again to look at the table which was attached to the book of estimates and which I am sure had his approval. I would like him to look particularly at column 13, which refers to buildings and works, including land, construction or acquisition of property. He shows there that the increase in proposed expenditures in this particular category, having regard to the economic situation in this country, has gone up by only $6 million. It is $380 million in the new book of estimates as against $374 million for the last fiscal year. I draw this to the attention of the hon. gentleman and ask that he reconcile it with some of the grandiose propositions with respect to bolstering the economy through public works expenditures, which we heard about very recently.
The public works program contained in the estimates, as I calculate it, will amount to $685 million. This calculation is based on a rapid examination of the figures presented yesterday. It may require some corrections and I am sure the minister will inform me and the committee if these figures are not correct. As I calculate it, the figure represents budgetary provisions for buildings and works, including land-and I refer again to columns 13 and 14 of this table presented by the minister-of $430 million. Secondly, I add reference to loans and advances to certain government departments and crown companies, amounting to about $200 million; and,

thirdly, other budgetary provisions for the trans-Canada highway and the grade crossing fund of $55 million. If we compare this program with those of the previous years we find that the total amount spent in 1956-57 was about $600 million; in 1957-58, $595 million, as compared with $685 million in the book of estimates before us at the moment. The increase for this year is only $85 million as compared with 1956-57.
Having regard to the lapse of time of two years and the inflationary process which has developed in that time, I suggest to the minister that this is not the type of announcement that he was presenting to the electorate in the recent campaign. That is why I am led to the conclusion that the special works program visualized and presented to the public of this country by the Prime Minister during the election campaign either does not exist or has not been included in the main estimates for consideration now. Are we to expect that supplementary estimates of great significance are later to be presented to this house? Before we are ready to adopt another bill of this kind, as the minister indicated yesterday we will be called upon to do about June 1, we would like to have a precise statement on this very important issue, and we expect it from the Minister of Finance.
We would like also to have more detailed information on the public works program announced by the Prime Minister in a press release dated February 18 of this year, which I have in front of me. We would like to know in particular to what extent this program was of a new or of a special character designed to meet unemployment, and to what extent it was part of the normal program which would have been carried out by any government irrespective of the current economic situation.
I just draw my hon. friend's attention to the fact that if he looks at the Prime Minister's press release he will find something that I think will trouble his mind as it has mine. For instance, the Prime Minister indicated that out of a total expenditure for trans-Canada highway on an annual basis, proposed at $46 million, $23 million would be spent in the first quarter of this year. In this country we do not normally make this proportion of expenditure on highways in the first quarter of a calendar year. In the same press release the Prime Minister also announced a public investment program of $280 million for the last quarter of the fiscal year 1957-58. We would welcome, and indeed we request, a statement on the part of the Minister of Finance before the next motion of this kind, which will soon come before us, to show how this program was carried out in the first quarter of 1958. We would also like to know what were the new projects which were 57071-3-6
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initiated during that period and which were not included in the estimates prepared by the previous administration.
I quite understand, as I think most members of the committee do, that we have not exactly before us fraction items of expenditures. I think the minister has been very fair in explaining that. In reading Hansard I think we shall find we are not voting an exact fraction of the total amount of the expenditures set out in the blue book of estimates. I think that is true with respect to the warrants also.


Donald Methuen Fleming: Will my hon.
friend enlarge on that? I do not quite follow him.


William Moore Benidickson: I am concerned somewhat about the warrants ihemselves and the relationship of the amounts of money asked for in the warrants-shall I say the fraction relationship-to the total amounts of the books of estimates. Will my hon. friend indicate?


Donald Methuen Fleming: Yes; I thought I made that clear yesterday. The warrant of April 9 was intended to make provision for the needs of April. The May warrant was intended to make provision for the first 16 days of the month of May.	.


William Moore Benidickson: I feel we should receive from the minister a fairly clear indication of the difference between the amounts asked for and reported in the Canada Gazette as governor general's warrants and, shall I say, a fraction, one twelfth or two-twelfths, or whatever it may be, of what appears in the book of estimates which members of parliament received.


Donald Methuen Fleming: Does my hon.
friend wish me to do that now?


William Moore Benidickson: No, I am sure the minister will do it in reply.


Donald Methuen Fleming: I can clear it up in a moment. There are 520 items in the estimates and on all of these, except the 42 I mentioned earlier this afternoon, disbursements proceeded simply on the normal basis, prorated month by month. As to the 42, there were those special situations of the four categories which I mentioned yesterday, and those observations apply both to the 42 items mentioned specifically in the interim supply bill today and the same items in the governor general's warrants. They are the same items in both cases. Otherwise, everything proceeded on a pro rata basis.


William Moore Benidickson: I think, in addition, the minister should inform the committee about, shall I say, his estimate or something up to date because it is a long time since we have

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had anything very authoritative from the minister that has not been in the newspapers with respect to an item that is not in these estimates, a possible deficit for the Canadian National Railways. This is not included in the astronomical figures we see as the total proposed expenditure or cost of government in this country.
Would he also perhaps indicate to us what his expectation is for the coming fiscal year with respect to the old age pension deficit not provided for by taxes, specially provided by statute, to cover that item? Another very notable omission in this presentation of government costs, in my opinion, is the question of an estimate of the likely federal expenditure in the coming fiscal year on hospital insurance. I think, too, that probably the minister has ready now some supplementary estimates. I think it would be appropriate that we hear something about those.
In addition to that, I think all of us know that we are in serious times, more difficult times than we have experienced in some years, and this will result in declining revenues, particularly when those revenues are based on the income of our individual Canadian citizens. I feel that that demands from the minister a new estimate beyond what he provided last December with respect to the possible income of this administration, not only in the past year but in the immediate future. We hear estimates from various sources and we can only go on those estimates because the minister has been unusually silent since his baby budget about advising and taking into his confidence this House of Commons concerning the balance sheet of this government of Canada. We hear predictions that our deficit may be very substantial indeed. I believe that, in reply, the minister should revise some of the advice he has been giving to the House of Commons.


Lester Bowles Pearson: My hon. friend, the member for Kenora-Rainy River, has covered our interest in this matter rather thoroughly. I have only one additional question which I am sure the minister would be glad to answer. On January 30, 1958, page 4019 of Hansard, he said this:
I think at March 31 government operations for the year,-
that is last year.
-thanks to prudent management, will show a respectable surplus.
I wonder if the minister is still of that opinion.


Donald Methuen Fleming: I think I should follow the constitutional course of reserving the answer to that question until the budget is brought down.


Lester Bowles Pearson: This is last year.


Donald Methuen Fleming: The same answer holds good.


Mr. Fisher:: It was peculiarly fitting that the Secretary of State for External Affairs should make a statement today on the Premium Iron Ores case. This is the topic that I planned to deal with, and it happens that this statement is one more of the peculiarities connected with this strange and interesting case which I plan to review rather thoroughly. I shall conclude with some questions.
The peculiarities, so far as I am concerned, begin with the fact that I find myself arguing along the same lines as such reactionary institutions, in my view, as the Toronto Globe and Mail. Aside from that, this Premium Iron Ores case has a great deal of interest for me and my area. If this test case should be won by the United States government it could affect a great number of corporations operating in my constituency. The case, in essence, is one brought in the United States tax court against Premium Iron Ores, the sales agency for Steep Rock iron, and two United States citizens, the charge being that their company and they, themselves, were liable for taxation in the United States, even though we have a convention with the United States to avoid double taxation, and even though these men and the company paid their taxes in Canada.
Steep Rock iron mine presents a very interesting story, beginning in 1939. It was really begun by people from the city of Port Arthur. They found three very large high grade deposits of iron underneath a large lake. In order to get the mine under way they required a considerable amount of capital. Unfortunately they were not able to raise that in Canada. In 1940 they approached two Cleveland financiers, Cyrus Eaton and Frank Daley, and they began inquiries as to whether or not they could get United States capital through this particular group. In July, 1942, Mr. Eaton undertook to raise $7.5 million, to provide a program, to look after relationships with the federal and provincial governments, and to work out a sales system for Steep Rock iron ore.
On September 11, 1942, the Department of National Revenue, income tax division, issued the following ruling so far as the general setup and financing of Steep Rock iron mine and Premium iron ores were concerned:
The setup re financing as contained in the memorandum of September 8, 1942, is aceptable and no tax will arise against any entity by reason of the fact that 2 million shares of the company are valued at one cent a share on the books of the sales company.

With regard to the position of the sales company under the Excess Profits Tax Act, the ruling was:
"The sales company will be exempt from tax for the same period as the operating company and will be allowed the same rate of depletion on net profits realized. In effect, this means that the rate of taxation of the sales company will be the same as that of the operating company."
In other words, both Steep Rock and Premium Iron Ores, the sales company, were exempt for three years from taxation dating from the day operations were commenced.
That is a point to remember in connection with this case. Mr. Eaton, working as the head of an investment house and also as the United States citizen most interested in putting Steep Rock into production, managed to get the Canadian government to undertake the building of a spur line and construction of a dock at Port Arthur. The total expenditure by the government was $2.5 million. He managed to get the Ontario hydro to undertake an expenditure of $1.5 million to instal hydro lines. This group managed to get an agency of the United States government, Reconstruction Finance Corporation

rather ironically this institution was begun by that free enterpriser, President Herbert Hoover, and yet we find it taking this rather socialistic attitude-to lend $5 million to this Canadian company to get it under way. The whole approach required the co-operation of the United States government, the Canadian government and the provincial government. They were all closely intertwined, and the conclusion one may come to is that the Canadian government at the time and the United States government at the time were interested in seeing this mine in operation. Of course, if you look at the year, 1942, you can understand why.
The tax convention to avoid double taxation was brought up to date a year before the arrangements were completed for the start of Steep Rock iron mine through this $5 million loan from Reconstruction Finance Corporation. The mine experienced considerable difficulty during its early operations largely due to flooding and the spreading of silt, but it finally managed to get going fairly well in 1944-45.	[DOT]
By the end of the war it was recognized as one of the premium propositions. Indeed it was sort of the great leader of iron ore operations in Canada. The company was accepted as a Canadian company, Steep Rock Iron Mines. So was its sales agency. It was being taxed in Canada. Both of them were being taxed in Canada. Things went along in that way until 1947 when something occurred owing to a peculiarity of the United States tax system. I should not say a peculiarity; it is part of their law and we 57071-3-6i
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must respect it. They have a provision in their tax code that anyone that is able to present the gist of an idea as an informer to the tax authorities which leads to conviction and collection of taxes and penalty is able to collect up to 25 per cent of the penalty and the taxation collected.
What happened in this particular case was that in 1947 an informer came forward to the United States taxing authorities, laying information against Premium Iron Ores, arguing that because they did not have to pay taxes for those first three years under the Canadian tax arrangement the United States government should come in and tax the company for those years because the company happened to have at the head of it, men who had offices in Cleveland. The claim was not asserted until 1953. In other words, from 1947 to 1953 the claim seems to have been under investigation. I think you will recognize that is a very long period. It certainly is of perhaps more than incidental interest that the claim was not proceeded with until the United States government changed at the beginning of 1953. When the claim was proceeded with, it was recognized, of course, that Canada was involved and out of the general discussions came the information that the Canadian authorities had cooperated very fully with the United States authorities. We have the word of one of the witnesses at the tax trial, referring to this period when the investigation was taking place in Canada. The agent concerned said this:
So far as I know, there has never been a prior instance where a revenue agent secured the assistance of a foreign government in assessing tax liability. I met with the director of national revenue and his subordinates. They assigned a Canadian assessor to work with me. Whatever information was available to the assessor was in turn furnished to me. We called on the Royal Bank of Canada and the Canadian assessor asked the manager of the bank to produce records pertaining to Premium Iron Ores Limited. The Toronto investigation took a period of seven months.
That is the end of the quotation from the testimony of this United States agent in the court. We happen to know that that investigation lasted for more than seven months and covered such places as far apart as Winnipeg and Nova Scotia. All through this period before a charge had been laid in United States courts, before a claim was asserted, Canadian officials were co-operating with United States officials in connection with a company that at that particular time was paying taxes in Canada as a Canadian company. The justification for this co-operation is something that we cannot understand very clearly at the present time. The

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Canadian government of course, had representations. For example, they had this representation from the local of the United Steelworkers of America and Steep Rock Lake, Ontario. It was sent to Hon. Milton F. Gregg, Hon. Walter Harris and Hon. Lester B. Pearson. This resolution condemns the role played by Canada in co-operating with the United States authorities. One of the phrases used in the resolution reads as follows:
Whereas, the United States taxing authorities are harassing Consolidated Premium Iron Ores Limited, a Canadian corporation, by claiming taxes from it based on transactions which the Canadian taxing authorities have either taxed or specifically exempted from tax, and
Whereas, we do not believe that it is in the best interest of the employees of Steep Rock Iron Mines Limited, the local community or the economy of Ontario and Canada for United States taxing authorities to harass a Canadian corporation by claiming taxes on Canadian income which have been specifically exempted from tax by the Canadian government.
The concern expressed by such organizations, unions, by representatives of the company, finally led to the government on November 28 of 1956 presenting an aide-memoire from the Canadian ambassador to the Secretary of State. I have checked up on the definition of an aide-memoire and it appears it is used in situations where very powerful but at the same time informal presentation of opinion is given to the foreign country to whom the memoire is sent. The gist of this aide-memoire from the Canadian ambassador to the Secretary of State is in the last paragraph:
The Canadian government, therefore, feel that the United States government should not take from the assistance it obtained from Canadian officials the inference that Canada supports this claim to tax the company because, on the contrary, it is felt that the facts show that when the Canadian government, as a war measure to increase essential production, agreed to exempt this company from income and excess profits tax for a period of three years, it was not contemplated that there would be any United States tax applicable to these operations of the company which the Canadian and the United States governments were both trying to accelerate in the joint interest of the two countries.
In other words this aide-memoire sent to the Canadian ambassador by our prime minister of 1956 covers almost exactly the same argument put forward by the resolution that I have read from the union on the scene of Steep Rock Iron Mines. The peculiar effect of this aide-memoire is this. One would tend to think that this would make a strong impression on the United States authorities and might even lead to their decision not to proceed. But we find this:
Under date of December 20, 1956, the Department of State in Washington stated in writing to the foreign affairs committee, as follows:

The effect of the Premium Iron Ores tax case on our international relations with Canada is, of course, a matter of concern to the state department. You may be interested, therefore, in the Canadian official response to the action.
In preparing the United States case, our internal revenue officials received the co-operation of Canadian officials. Throughout this period of preparation and co-operation, no formal representation or objection was made by the Canadian government.
On May 26th, shortly before the case was to be tried, the Canadian ambassador discussed it with the acting secretary of state. During his interview, the ambassador emphasized he had not been instructed to make representations of any kind.
On November 29, 1956, the Canadian ambassador-
At the same time this aide-memoire was given to the United States State Department.
-left with the department of state an aide-memoire on the subject.
Since the Canadian government has not sought representation in connection with the case, either before or after it was brought to the court, the department of state has had no reason to take further action in this regard.
In other words, despite what we may think of the force of this aide-memoire which was dispatched by the former prime minister the department of state advised the United States foreign affairs committee that really this was in effect no representation at all.
The next point in connection with this case developed when the government changed hands. Of course, with a new government in Canada representations were made to this government to take up this case and to stop what in effect could be double taxation if it was successful. On December 23, 1957 the Canadian charge d'affaires delivered a statement to the U.S. secretary of state as follows:
The Canadian government Is desirous of avoiding any misapprehension concerning its position in this matter. Accordingly, the Canadian government would wish the United States government to be aware that the views contained in the aide-memoire presented by the Canadian embassy on November 28, 1956 and in the statement made by the previous Prime Minister in the Canadian House of Commons on April 9, 1957 are very strongly shared by the present Canadian government. For reference purposes the relevant extract from the House of Commons debates for April 9, 1957 is attached.
This extract deals with the question put by the hon. member for Kamloops to the minister of national revenue at that time, the Hon. J. J. McCann, and to the Right Hon. Louis St. Laurent, who was prime minister at that time, and the substance of this interjection is contained in Mr. St. Laurent's last remark as follows:
Mr. Speaker, the position was taken that there was a question of fact that was now submitted to the court, and if as a consequence of the court's finding on the evidence relating to that question of fact it was felt that the real intent of the treaty with respect to the avoidance of double taxation was not being carried out, there would have to be reconsideration of its terms.

I think it will be agreed that that sounds very much like the statement which was read today by the Secretary of State for External Affairs.
This was the representation made by the present government on December 23, 1957. The next date which is of any interest in this case is when the United States tax court came out with its decision. The judge filed his decision on April 23, 1957 and the petitioners, that is to say Premium Iron Ores Limited, Mr. Eaton and Mr. Daley won their case and the interesting thing about this whole judgment is that it is built around the fact that it is not right for the United States tax authorities to proceed against this company because of the tax convention and the protocol between the United States and Canada. In other words we have a United States judge standing up for Canada's position as far as this treaty and the tax convention are concerned and so the judge ruled against the United States tax authorities. The tax authorities thereupon appealed to the whole body of judges of the tax court who ruled against the United States tax authorities. Since then it has been indicated that the United States tax authorities are going to take this case to an appellate court and there is an indication that if they lose there they are going to take it to the supreme court.
That possibility raises an interesting point. If they do take it to the supreme court and should win, as I understand the position from Americans, that means that it has the force of law and no further appeals are available. It also means the penalties must be applied to these two people and to the company and that raises the question that if this should happen will our Canadian authorities then reimburse this company and reimburse these men for the taxes which have been paid in Canada in connection with these operations?
There is, however, a much more interesting point because we hear today from the Secretary of State for External Affairs that on February 28 the United States state department asked the Canadian government what the Minister of National Revenue meant on February 1 when he made a statement in this house in connection with Premium Iron Ores Limited. In effect his statement was that this present government stood behind Mr. St. Laurent's aide-memoire. The statement read by the Secretary of State for External Affairs said that in the course of clarifying observations the Canadian government took the opportunity to review the considerations on which their decision in this matter had been based, and what the minister had in mind in his answer to a question was that the
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Canadian government would wish in due course to study the court of appeal judgment in relation to the facts in the case as to whether the terms of our double taxation convention have been interpreted in the sense we intended them to have at the time when they were indicated and, if not, to consider whether these terms require revision.
We have this relatively strong statement on the position of the Minister of National Revenue, saying in effect that the Canadian government treats this matter very seriously and that it may undertake a complete revision of the double taxation policy, then on March 27, 1958-that is a month after the Canadian government made this representation-we find the United States internal revenue service stating in a letter to the senate committee on foreign affairs-the top officials of the United States revenue department

that J. G. McEntyre, the Canadian deputy minister of national revenue, had agreed with the position taken by the United States. We are not exactly sure as to what is that position with which Mr. McEntyre agreed but we do have the peculiar situation where, before a tax claim is even asserted, United States tax officials through the advice of our Canadian tax officials are being allowed to examine the books and go into the banks and look at the records of many people in this country, people who are actually Canadian citizens. This is something, of course, which our party has been bringing forward for a number of years in order to make income tax records more open and yet we find that our bill is always voted down and it is said that that would be a tremendous violation of Canadian personal freedom. Yet we find that United States tax snoopers can come up here and spend extensive periods of intensive investigation and they seem to be encouraged by Canadian tax officials.
Furthermore, we now have a statement dated one month after our present government has stated it takes a very serious view of the matter to the effect that our Canadian deputy minister of national revenue has agreed with the position taken by the United States.
I have to agree, in fairness to the deputy minister, that we do not know the position the United States has taken, but it seems that it could very easily be the position that these companies, with United States' capital operating in Canada at present, which are taxed by the Canadian government, can also be taxed in certain cases by the United States government. If this is so it is a very serious situation and its seriousness is exemplified by the tremendous number of editorials one reads in such sterling right wing

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papers as, the Financial Post, the Winnipeg Tribune and the Montreal Gazette.
I would therefore like to suggest to the ministers concerned that they give us some information on the position really taken by their government at the present time in connection with this matter. Do they not think that this has been an invasion of Canadian sovereignty; do they not think it peculiar that the state department receives an aide-memoire through our external affairs department which states something very strongly and at the same time we have another leak to the United States through our Department of National Revenue into the United States treasury which seems to operate completely to one side? There appears to be a lack of rapport in this whole case as between the Department of External Affairs and the Department of National Revenue.
One thing I think we need to know is whether the Canadian government will consider reimbursing these people for taxes already deducted if double taxation does come into effect as the result of the position taken by the United States appeal or supreme court. I think this is something which is quite important because it is, in essence, a test case. 1 do not feel at all ashamed in bringing it forward because I believe it will have a very serious effect on the operations of the particular corporations involved in my part of the country. At the present time Steep Rock Iron Mines is not having an easy time of it; we are losing miners from the Atikokan community and there is not as much ore as possible being shipped. The blow to that company and to its sales agencies from an adverse decision could be extremely serious and could even lead to a shutting down of the mine. I think, therefore, that this is a case which deserves an explanation from the Minister of National Revenue as to the part played in the negotiations by the officials of his own department.


Mr. Regier:: Mr. Chairman, I wish to assure the Minister of Finance that we are doing all we possibly can to expedite the passage of interim supply; I will attempt to say as little as I feel needs to be said.
We in this group were very pleased indeed at the assurance which the minister gave yesterday that time would be allowed later for a full discussion of the remaining estimates of the 1957-58 fiscal year and, especially, for a discussion of the issuing of Governor General's warrants. We are very pleased indeed at the new attitude which the Minister of Finance has adopted since this matter was last taken up in the house on February 1. I can assure him we shall have some very serious considerations to bring forward at that time.

I was a little amused at the reference made by the spokesman for the Liberal party on the size of the estimates for the year 1958-59. We in our group have long realized that the population and the problems of Canada are growing and that the responsibilities of government have to grow along with them. When we consider the change in the value of money we have never been particularly surprised or horrified to find we are confronted with a growing gross national expenditure. I must, however, point out at this time that though the government's expenditures are obviously increasing there is some suspicion that the government's gross income may be declining. For the federal government that is not an overly serious matter because the dominion government has at its disposal ways and means of operating on an income which is less than its expenditure. I am referring to the principle of deficit financing, and many indications have already been given that we may have to meet a very heavy outlay by this means.
I should like to refer now to some of the expenditures which the Minister of Finance makes and which are, I believe, made directly by his department, namely the assistance given to another level of government, municipal government. The assessment notices from municipalities, in our province at least, are now being mailed to homeowners, and our people back home are going to view with some concern the growing expenditures of the federal government and the growing costs of municipal government. They will realize that while the federal government has ways and means of meeting such growing expenditures in a time of recession their local municipal government has no such easy, or comparatively easy, remedy. The only remedy available to municipal governments is to add to an already high tax burden on Canadian homes, Canadian farms and other Canadian real estate. The situation which exists in my own province applies, I think, throughout Canada. It is very serious indeed, and unless some action is forthcoming shortly to provide relief -and I do not say that the federal government alone is responsible, because some, at least of the provincial governments should be able to do more-we may one of these days be faced with a mass resignation of our municipal elected officers throughout the nation and I am sure none of us would like to see that happen.
I call to mind again, as I have done before in this house, what the Minister of Finance and his colleagues in the government had to say on this subject when they were members of the opposition. I do not wish to delay the committee too much, but I must read again

one sentence by the present Minister of Finance as reported on page 4788 of Hansard, of May 17, 1954:
The federal government, with its abundant sources, should be devising ways of helping the municipalities to meet these urgent demands for necessary but costly services which they are financially unable to provide.
And on page 4789 he said:
There must be, in my submission, an opening of the eyes of the federal government to the way in which they are increasing the burdens and the difficulties of the municipalities.
And the Minister without Portfolio, then the hon. member for Greenwood, on the same day, at page 4786, said:
It is no answer to shrug off the municipalities.
I was very pleased indeed to learn that on February 7 last during the election campaign, six days after dissolution, the municipalities of Canada presented a brief to the federal cabinet. I understand from the newspaper reports that the cabinet listened to the brief for 90 minutes, and that subsequently there were several announcements. I wish to refer to what is possibly the most important announcement, as reported in the Gazette, datelined Ottawa, February 7. This is a Canadian Press dispatch reading.
Prime Minister Diefenbaker said today he plans to call an informal federal-municipal conference this year to discuss the financial plight of Canadian municipalities.
That indicated a slight change of heart, because last fall we pleaded with the Minister of Finance to admit municipalities to a dominion-provincial conference, and the most we could get out of him was an agreement that they might attend as observers. Later on in the session he said: "We respect the constitution", indicating that there was something in the British North America Act which might prevent the federal government from holding serious discussions with municipal governments. I am very pleased that the Prime Minister, as reported in the Globe and Mail of February 8, announced at the same time that he planned to call for a new deal in financing at a dominion-provincial-municipal conference, and I am very pleased to say that he has now found room under the British North America Act to call it, unless he was wrongly reported, a dominion-provincial-municipal conference. In any event, the Prime Minister said, he planned to hold a dominion-municipal conference before 1959. Our newspapers out west said the Prime Minister had promised to hold an informal dominion-municipal conference.
The reason I am raising this matter at this time is because I notice in the speech from the throne only a claim that the government has helped municipalities, meaning I
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suppose that they have done so by helping provincial governments. But there is nothing in the speech from the throne to indicate that the Minister of Finance or the government have any serious intention of implementing any early action to increase the aid which they plan to give to municipal governments.
At the conference between the municipalities and the cabinet on February 7 the following point was raised as reported in the Gazette of February 8:
Pending a permanent solution of the problems of municipalities the federal government should take interim measures to assist municipal governments.
I realize that that is not an easy matter. The problem involves our whole constitutional arrangement. I am keenly interested in this matter and have pointed out the needs of the municipal governments in this house for a number of years. I would like to point out to the minister that we have operated under the British North America Act for some 91 years. In many respects and especially with regard to those aspects that apply to financial resources of municipal governments the British North America Act belongs to the horse and buggy days.
In nine years we will be observing our one hundredth anniversary as a nation. I appeal to the minister to use his influence to arrange a dominion-provincial-municipal constitutional conference which would . explore the possibilities of finding agreement between the various regions of Canada, the diversified interests of Canada and the several levels of government in Canada so that at an early date and not later than our one hundredth anniversary we might be able to announce a new constitutional arrangement which would supply adequate resources to those levels of government that are charged with the heaviest responsibilities of government.
It is very easy for us in our ivory tower here to claim that we need over $6,000 million a year to run this government. It is relatively simple to find ways and means to obtain the money that we intend to spend.
I have yet to find a government that thinks any of its expenditures could reasonably be reduced. However, I plead with the government to acknowledge that this is the time to indicate to those of our people who are active in the real business of making democracy work on the home front, these willing public spirited citizens who sacrifice much more of themselves in the common welfare than many of us do as members of the federal house, that relief will be provided. Let us not wait for some possible future dominion-provincial conference to reach a solution which will be an interim

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solution at best because most of these agreements operate for only five-year periods.
I hope the minister will offer the municipal governments some hope and encouragement at an early date and will not say to us again at some future time, "We respect the constitution," because it has been pointed out over the years by many of us in this house and also by the Canadian Federation of Mayors and Municipalities in its briefs that the Minister of Finance could relieve the financial plight of our municipalities in many ways without violating even the spirit of the British North America Act.
I wish the minister would say at this time what the government has in mind when it refers to a dominion-provincial-municipal conference and also what it has in mind when it refers to an informal dominion-municipal conference.


Donald Methuen Fleming: Mr. Chairman, I have just a brief word to say. First of all I should like to extend to my friend the hon. member for Kenora-Rainy River my personal congratulations on his selection as financial critic of the official opposition and say that I know his experience with the Department of Finance will enable him to render to the house and to the official opposition very high service in that capacity. I have already indicated indirectly to him that the services of the department are at his disposal to supply any factual information he may require at any time in the discharge of his responsibilities.'


William Moore Benidickson: May I thank the minister for that courtesy already given earlier today.


Donald Methuen Fleming: Mr. Chairman, I do not propose to deal at length with the various matters touched on by the hon. gentlemen who have spoken. In the case of most of their comments which were of a financial nature I believe the budget or the stage of consideration of the items themselves in committee of supply in due course would be a better place to do so.
With respect to the dominion-provincial conference I think that is a matter on which my friend the hon. member for Burnaby-Coquitlam should address his inquiry to the Prime Minister.


Herbert Wilfred Herridge: Mr. Chairman, I want to take this opportunity to bring a matter to the attention of the house which is of serious concern to the people of southeastern British Columbia. As hon. members who have been here for a number of years know I never raise a matter unless it is one of public importance and necessary at the time. Also I might say I promised a lot of organizations and people in southeastern British Columbia, including

people in Kootenay West, Kootenay East and in the Okanagan valley, that I would raise this matter in the house at the first opportunity and that is why I do so now.
The question which concerns me is that of the reduction of passenger train service between Vancouver and Medicine Hat by the Canadian Pacific railway commencing this year. It has caused a great deal of concern to business and people generally throughout the whole area. This train service serves a rich and productive area which last year produced in the neighbourhood of $300 million worth of goods. It is the centre of a large coal, mining, smelting and lumbering industry. The interesting aspect of this matter is that this is one of the wealth producing areas of the Canadian Pacific railway. As a matter of fact I wish the Minister of Transport were here because I would say for his information that in my area he is now being referred to by many people as the minister of diminishing transport.
The C.P.R. owns 51 per cent of the stock of the Consolidated Mining and Smelting Company right in the very area where people are being denied at the present time satisfactory passenger train service from which the railway makes a large percentage of its net profit. For many years we have had a highly satisfactory passenger train service running between Vancouver and Medicine Hat, a first-class train carrying sleeping and dining cars, coaches, baggage and mail cars and so on. It was viewed favourably and supported by people throughout the area but since the beginning of the year the Canadian Pacific railway has installed what is known as a Budd car service which consists of one car with a single engineer in the cab. It has the advantage that it does make an excellent connection with trains Nos. 2 and 3 to Medicine Hat, but it has many other disadvantages. I think what the people are asking for is not unreasonable and that is why I have no hesitation in bringing their representations to the house.
This matter has been discussed at chambers of commerce meetings. All the chambers of commerce in the whole southeastern area of British Columbia have taken very strong exception to this reduction in passenger service. It has been discussed by farmers, organizations, by municipal councils and by all the trade unions in the area. I think I can truthfully say that not only all these organizations but 100 per cent of the people of the southeastern area of British Columbia object very much to being served with this Budd car service at this time. It is a long train journey from Vancouver to Medicine Hat or even to Nelson. It is an overnight journey whichever

way you go and it is a great discomfort to older people because there is no place to lie down. It is a great discomfort to people with families and to children. I have travelled on the train. It is most uncomfortable indeed to have to sit up overnight and suffer that inconvenience, 'particularly to those who are old, people with children and persons who are ill. In addition to that the meal service is very poor indeed. You have to get a sandwich and a cup of coffee from a newsboy. On several occasions even the supplies of food have completely run out before the train reached Vancouver. It is a most inadequate service for a wealth-producing area such as the southeastern portion of British Columbia.
In addition, there are certain other disadvantages. Our country cannot be satisfactorily served by air every day in the winter. During 1957 the planes that were supposed to land at Castlegar were unable to land for something over 80 days. That presents quite a problem to persons who have to go to the coast, persons who are ill and things of that sort. I wish to read a letter which was written by the chairman of the board of the Kootenay lake general hospital. This gentleman was a former official of the Consolidated Mining and Smelting Company. The letter is addressed to the board of transport commissioners for Canada, Ottawa, Ontario, and is dated April 28, 1958. It reads:
Gentlemen:
At the last meeting of the board of directors of the Kootenay lake general hospital, the matter of the passenger train service here was of concern to members, and a resolution was unanimously passed protesting the inadequacy of the present train service, and asking that the board of transport commissioners be notified of this protest, and informed that the lack of service is an obstacle in the way of good patient care.
As you know, train service to and from Nelson is presently confined to a twice-weekly service westward with stopover at Penticton, and a daily service to and from the east. Both these services are day coach only with no separate or private accommodation of any kind.
At fairly frequent intervals it becomes necessary for patients from this hospital to be transported to other facilities-usually at the coast. These patients are sometimes mentally disturbed, sometimes urgent accident cases, sometimes suffering from a communicable disease. In nearly all cases privacy and quiet are recommended conditions for their travelling comfort and well-being. In the case of communicable disease, of course, privacy is a necessity for the protection of other travellers. Recently a patient suffering from a communicable disease had to be taken to the coast by private car as no other means of transportation was available.
Air transport is an alternative for accident cases when weather conditions are favourable, but neither mentally ill persons nor those suffering from communicable disease are permitted to travel by plane.
The overnight train stop at Penticton, with consequent moving of stretcher cases and considerable
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delay in reaching the desired medical attention at the coast is also a serious factor.
The board of directors fully appreciates the difficulties under which train service is maintained in this area, but feels it is their duty to point out the serious inadequacies of the present drastically curtailed service when sick persons require transportation.
It is asked that you give this matter your considered attention and do all in your power to press for improved rail passenger service for Nelson.
Yours truly,
E. M. Stiles, Chairman of the Board
That deals with the passenger train service, Mr. Chairman, which lacks sleeping car and refreshment car accommodation. Under present circumstances, owing to certain actions on the part of certain persons unknown at the present time, the service has been somewhat curtailed between Vancouver and Nelson although, I understand, at the wish of the attorney general of British Columbia. The men operating on the road cannot understand why it is possible to run freight trains daily and yet it is not possible to run a passenger train daily. However, I am not going to deal with that aspect of the question because it is one that is somewhat unusual and somewhat abnormal. But we are concerned about this running of a Budd car over this long length of railway through our territory.
When the Minister of Transport was in Nelson and peregrinating around my constituency during the election he was met by representatives of the municipal council, trade unions, chambers of commerce and other organizations. In conversation with them I understand he admitted he had no power under the act to compel the Canadian Pacific railway to improve the service. I am sure the former minister of transport will correct me if I am incorrect in this. This is a reduction of service and it does not impose upon the company the necessity to ask the board of transport commissioners for permission. On that basis you can reduce it to almost zero and still not contravene the act. I am of the opinion that there should be an amendment to the act in that respect, and I intend to introduce a private bill, when we get over the first hurried days of the session, suggesting an amendment of that type.
The minister did say that he would-and as I indicated yesterday this was his political trump on that occasion-consult with Messrs. Crump and Rump. Apparently he has not been very successful. In his answer to my question yesterday he rather indicated to me that the matter has been sort of satisfactorily settled. I think there has been some improvement with respect to the handling of express, some livestock and things of that

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sort. The basic complaint still rests there and that is why I am rising today at the request of the people whom I have mentioned. I do not think these people are asking too much. We recognize the difficulties. You cannot ask people to run trains for nothing, without patronage and things of that sort. The patronage is diminishing daily because of the nature of the service. I do urge the minister to do everything in his power, to go into this matter again with the appropriate officials of the Canadian Pacific railway, to see whether this train could not also include a sleeping car and a dining car or a cafe car. If the train consisted of a sleeping car, a cafe car and a coach, the service of the district would be improved and there would be comfort there for old people, people with families, mentally and physically ill people and for the public generally.
I have said all I wish to say at this time, Mr. Chairman. I made these few remarks at the request, as I said before, of a large number of organizations and in support of the opinions of 100 per cent of the people who reside in southeastern British Columbia.


William Hector McMillan: Mr. Chairman, in presenting his budgetary statement on December 6 the Minister of Finance said that he would accept the former minister's estimates of income and in spite of further proposed principal expenditures he expected a budgetary surplus of $106 million. Can the minister tell the committee whether those figures now stand? If not, what was the situation at the end of the 1957-58 budgetary year?
I would expect the minister to be approximately right in his predictions because they were made after two-thirds of the fiscal year had passed; but it is right that we should know something about the past year before we appropriate money for this year. On December 6 the minister predicted savings in deductions of $64 million. Yesterday I thought he mentioned that this amounted to $73.6 million. I should like to ask him what these savings were.
I have heard the minister on many occasions refer to the waste and extravagance of former governments, when the Hon. Mr. Harris and the Hon. Mr. Abbott were ministers of finance. I think he made these criticisms more in the light of the fact that the estimates were up in those particular years. This year, if one looks over the estimates that were tabled on Tuesday, one finds a substantial increase in almost every department. I know that the estimates of the Department of National Defence have decreased by $6.8 million. It is also true
[Mr. Herridge.l
that the minister's own department shows a decrease in expenditure of $18 million, but his department benefits to the extent of over $100 million as a result of the change in the federal-provincial tax sharing agreement with the province of Ontario. If we took all those tax sharing agreements and totalled them up I calculate that he would have an increase in expenditure of $31 million in his department instead of a decrease of $18 million.
In the past I have heard the minister refer to the large number of civil servants as an example of waste and extravagance. Last year the former secretary of state, during the consideration of her estimates, admitted to me that the number of civil servants was up over the preceding year. I should like to ask the minister if he has been successful in effecting a reduction in the number of civil servants this year.
There has been an increase of over $6.5 million in interest alone on our public debt. This is shown in these estimates. This represents an increase of about 40 cents for every man, woman and child in Canada. I feel that this is only the beginning. It suggests to me that the poor old taxpayer in Canada is going to have a tough time in the years ahead. Being told by the Minister of Finance the charges on the public debt does not inform us of the amount of the public debt itself and this, in my opinion, is unprecedented. I believe that he must know the debt in order to calculate the interest on it, and he should reveal the amount at this time.
In any event this house should be favoured with a statement on the 1957-58 budgetary year before we vote money for the current fiscal year. As the people's representatives we have been kept in the dark long enough. Any government which respects the rights of parliament and the rights of the people should tell us how we stood at the end of the last fiscal year before asking us to vote money for this fiscal year. They should not leave so much to surmise. We should be able to obtain a clear idea concerning how much this government is spending to run our country, and we should also be told how much the unemployment insurance fund has been depleted since they took office last June.


Erhart Regier: I wonder if the minister would be good enough to repeat his answer. The loud speaker system does not seem to be working properly and no one heard his reply concerning a contemplated dominion-municipal conference.


Donald Methuen Fleming: What I said to the hon. member was that that was a question that I thought should be more properly directed to the Prime Minister.


Douglas Mason Fisher: I notice the minister of mines is in the house, and I wonder if he would answer a question which has something to do with the supply that would be passed for his department? Representations have been made by the geologists association of Canada that some emergency steps be taken by his department with regard to the employment of undergraduates who are training as geologists. I wonder if the minister could give me any information on that?


Donald Methuen Fleming: That matter is under consideration.


William Moore Benidickson: I think the hon. member for Welland is entitled to a reply to the very pertinent questions he raised.


Donald Methuen Fleming: The hon. member for Welland has been in this house for some time and knows that the matters he has raised are appropriate to the budget and will be dealt with there.


William Moore Benidickson: At least the item he raised concerning the $73.6 million, to which my hon. friend referred yesterday, I think should be broken down and explained to the committee.


Donald Methuen Fleming: That is in the estimates of 1957-58, and not in the estimates of 1958-59. This is the sort of thing that could be properly dealt with when an accounting is given to the house in respect of the revenues and expenditures for the year 1957-58 at the time the budget is introduced.


William Hector McMillan: Is it not possible to tell us our standing at the end of March 31? Are we in the red or in the black?


Donald Methuen Fleming: I have answered that question, Mr. Chairman.
Resolution reported and concurred in.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Sevigny in the chair.
Donald Methuen Fleming: Resolved, that towards making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending March 31st, 1959, the sum of $626,292,380.09 be granted out of the Consolidated Revenue Fund of Canada, as set forth in the resolution concurred in this day in the committee of supply.
Resolution reported and concurred in.
Mr. Fleming (Eglinton) thereupon moved for leave to introduce Bill No. C-6, for granting to Her Majesty certain sums of money for the public service of the financial year ending the 31st March, 1959.
Ways and Means
Motion agreed to and bill read the first time.


Mr. Speaker:: When shall the bill be read a second time? By leave now?


Some hon. Members:: Agreed.


Mr. Speaker:: By unanimous consent.


Donald Methuen Fleming: the second reading of the bill.


William Moore Benidickson: Mr. Speaker, I reiterate that I feel that the hon. member for Welland (Mr. McMillan) should at this time receive an answer from the Minister of Finance (Mr. Fleming) to two or more very important and interesting questions that he raised. One had a direct reference to the minister's own remarks yesterday afternoon when he referred to what he said was an underexpenditure of $73.6 million from the estimates for last year tabled in the house. I think the other one is a very interesting and desirable question and that is the recent expenditures on or costs of unemployment insurance or the diminution of that fund.


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


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sevigny in the chair.
On clause 1.
William Moore Benidickson: Surely the minister can answer that very simple question as to what items are involved in the $73.6 million to which he himself made reference yesterday. I am sure he could break it down.


Donald Methuen Fleming: I think my hon. friend probably could not have heard my response to that question. The $73.6 million has nothing whatever to do with this bill. It has nothing to do with the appropriation for the fiscal year 1958-59; it relates to the estimates for the year 1957-58.


William Moore Benidickson: I agree. But my hon. friend will also agree that in his remarks yesterday, when he indicated to the house that he proposed to bring this legislation forward, he suggested that he had reduced expenditures by $73.6 million. I suggest that he merged his remarks yesterday when he was giving advice to us that he had this legislation in mind for today and I think we are entitled, in common courtesy, to an answer.


Donald Methuen Fleming: I never mentioned this subject in my remarks on this bill. The remarks I made yesterday were made on motions to indicate the procedure that the government proposes to the house with

Ways and Means
respect to both financial years 1957-58 and 1958-59. Today's proceedings relate entirely to the year 1958-59. With regard to the matters raised by the hon. member tor Welland, I have given my answer that we should follow the constitutional course and give that information when the budget is introduced.


Mr. Mcllrailh:: Why did you not follow
the constitutional course yesterday?


Donald Methuen Fleming: I gave the house the proper information yesterday.


William Hector McMillan: We are into a new year, Mr. Chairman and I certainly think the minister should tell us whether we had a deficit or a surplus before we start in appropriating money for a new year. I think he should tell us whether we had a deficit or a surplus last year. I think that is the only reasonable thing to expect. I think if a businessman ran his business in this way he would not be in business very long. I certainly think the minister could give us that information.


Harold Edward Winch: We in this group recognize the importance of passing money which is required for the service of Canada. This bill takes care of certain aspects of that matter. Irrespective of some of the numerous questions that many of us would have liked to ask we are at this time accepting the complete assurance of the Minister of Finance as to the right of all members to question expenditures that have been made subsequent to February 1. In view of the assurance that has been given to us by the minister, to which assurance we shall hold him in the days which are to follow, we are not in any way whatsoever going to block the speedy passage of money required at this time. We take this position to a major extent because we want to see come forward necessary legislation which is required in the interests of the economy of Canada and which we understand must go through fairly speedily if it is not going to be blocked by the fact that the other house is not sitting. Therefore on the assurance given by the Minister of Finance that all questions and all estimates are open, we raise no further objection to this bill going through at this time.


[Stage Direction]
Clause agreed to.
Clauses 2 to 6 inclusive agreed to.
Schedules A to E inclusive agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Donald Methuen Fleming: the third reading of the bill.


Mr. Speaker:: When shall the bill be read a third time? By leave now?


Some hon. Members:: Now.


Mr. Speaker:: Before accepting the minister's motion for third reading, may I ask the house for its consent to put the two motions together. We have been in the habit of moving third reading and then of moving a further motion that the bill be now passed and that the title be as on the order paper. I have considered this practice at the last session and again at this session and have conferred with the officers of the house. There is no provision in our rules for anything further than a third reading and as far as the rules are concerned when a bill has received its third reading it is passed. This second motion, or fourth motion as it really is after the first, second and third readings, that the bill pass and that its title be as on the order paper is an historical relic as far as I can find out and one which has been abandoned in other parliaments.
I would suggest if the house is willing, therefore, that the motion be accepted in the form that the said bill be now read a third time and do pass and if at any time there appears to be any reason for adding an additional motion we could revert to the practice. In the meantime it would be an economy of time.


Lionel Chevrier: In so far
as we on this side of the house are concerned, Mr. Speaker, there is no objection to the suggestion.


Harold Edward Winch: We
accept the suggestion, Mr. Speaker, but would like it made quite clear that what you have now announced would not at any time remove the right and privilege of members to speak on the principle on the third reading of the bill.


Mr. Speaker:: It would not, of course, affect the rights of the house when third reading is called in any way at all; it just eliminates an apparently unnecessary motion. Is it agreed that we follow this practice?


Some hon. Members:: Agreed.
Bill reported, read the third time and passed.



UNEMPLOYMENT INSURANCE


Michael Starr: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the temporary extension of the seasonal

benefit periods under the Unemployment Insurance Act for a six weeks period, from May 18, 1958, to June 28, 1958.
Motion agreed to and the house went into committee, Mr. Sevigny in the chair.


Michael Starr: Mr. Chairman, the purpose of this bill is to extend the six weeks period from May 17 to June 28 as the period in which seasonal benefits may be paid. We are proposing a life span of only six weeks for this legislation because it is intended to meet a situation which we believe will not recur.
As hon. members know, unemployment reached a postwar high during last winter and while the situation has considerably and markedly improved in recent weeks there still exists something of a special problem in that there remain people in our labour force who need further protection pending a firmer upturn in economic activity. We believe this upturn is now in evidence and that is why we are at this time proposing this short-term legislation which will, without disrupting the existing formula, provide the flexibility we need to meet this particular set of circumstances.
This measure will place additional purchasing power in the hands of those who most need it. We estimate that some 200,000 claimants will benefit from this legislation to the extent of close to $14 million. I would like to note that in the five months beginning December 1, 1957, and I think this will answer a question asked in the house earlier, almost $230 million were paid out in unemployment insurance benefits but in spite of these heavy expenditures the unemployment insurance fund had at the end of March a remarkably healthy balance of more than $740 million. We feel that this fund is therefore in a sound position to yield this extra protection which we feel should be provided and thus continue to do the job it was intended to do.
In further explanation of this bill I would like to emphasize both what it is proposed to do and what it is not proposed to do. Perhaps for the benefit of those who are not familiar with our unemployment legislation I could best begin by explaining what seasonal benefit is and also its relation to regular benefit.
Seasonal benefit was brought into being in 1950 after a decade of experience with unemployment insurance which had revealed two weaknesses in the regular benefit formula. Firstly, there was a large number of Canadian workers who simply did not work long enough each year in insurable employment to ever be able to qualify for regular benefits and, secondly, there were many whose
Unemployment Insurance regular benefits became exhausted during the winter months, the very time when it was most difficult to get another job. The seasonal benefit idea was to lower the normal qualifying requirements for a limited period and thus provide unemployed workers with a better bridge with which to span the gap between jobs, a gap that was causing a good deal of hardship to many Canadians through the years.
Last autumn we improved the structure of this bridge when we lengthened the seasonal benefit period by one month at each end. Where it was previously from January 1 to April 15 we extended it to from December 1 to May 15 and now we are proposing another temporary improvement to meet a special situation.
I would like to make it quite clear at this time that this bill does not constitute a blanket addition of six weeks of benefits for those who are now drawing seasonal benefits and I must emphasize that benefit payments also have to be based on prior contributions, but it does mean that those who have not exhausted all their entitlement by May 17 will be able to go on drawing benefits until they do exhaust their entitlement, or until June 28. But for this legislation all seasonal benefit payments would, of course, cease on May 17, this week.
Perhaps a few examples will help to illustrate the categories of claimants who will be entitled to additional protection from this measure. Let us take persons who became unemployed early in February. Those claimants had 24 contributions since the previous March 31-that is, March 31, 1957-and on the basis of five weeks of benefits for every six weeks of contributions they were able to qualify for 20 weeks of seasonal benefits, effective February 9. Under the present legislation payments to these claimants would cease on May 17 even though they had used up only 14 of their possible 20 weeks. The bill we are proposing will enable them to go on drawing the other six weeks of their entitlement. Thus, he receives his full 20 weeks to which he is entitled because of his contribution.
Another category of claims which will benefit from the legislation affects those who become unemployed and who claim benefit on or about May 17 but who are unable to qualify for regular benefit. Such claims could under this measure be considered for seasonal benefit provided the claimant had not already exhausted the seasonal benefits claimed since December 1, 1957. Under the present legislation there would be no possibility of qualifying for seasonal benefit on failure to qualify for regular benefit because this benefit period would end this week on May 17.

Unemployment Insurance
A third example would be a claimant who earlier in the year had been drawing seasonal benefit but who had found work again before exhausting all his entitlement. Suppose he becomes unemployed again. Under present legislation he would be unable to draw his unused entitlement because the seasonal benefit period would be over on May 17. Under this bill, however, he would be able to receive payment either until his entitlement was used up or until June 28. With this example I think it would be clear that claimants who would not be entitled to further payment as a result of this legislation are those who have already been paid all the seasonal benefit to which they are entitled. A claimant who earlier established his right to 20 weeks seasonal benefit and who has already been paid 20 weeks seasonal benefit will not receive further payment and, as I have noted, benefit is based on prior contributions.
There are two other small points I should like to note in regard to this bill. One is that no waiting period would have to be served in respect to these additional weeks established as a result of this extension. The other is that this bill applies equally to those engaged in the fishing industry who were covered this year for the first time by special regulations under the act.
In conclusion I should like to say again that this bill is a temporary bill designed to solve a temporary problem. It is, in fact, a re-affirmation of an aim we have often enunciated, namely that Canadian workers shall not suffer hardships because of unemployment that occurs through no fault of their own.


Mr. Martin (Essex East):: Mr. Chairman, the minister who has just spoken said that this particular measure was one designed to cover a situation which-to use his own language-he believed would not occur again. I am sure all of us in this house would agree with the minister in hoping that the situation which brought this bill into being will not occur again. However, the Prime Minister, when he spoke yesterday, said at the conclusion of his speech as reported on page 42 of Hansard:
First, we meet the problem of unemployment by again removing the difficulties inherent in the extension of the payments.
He was referring to the measure which has just been introduced by the hon. minister. I am sure the minister himself will be the first to recognize that this particular measure does not in any way meet the problem of unemployment. This is an amendment designed to give assistance to men and women in our country who are without work and


who need financial assistance in order to maintain themselves and their families. In no circumstances can anyone be justified in saying, as the Prime Minister observed yesterday, that this is a measure designed, to use his own words again, to meet the problem of unemployment. The fact is that the measure before us does not touch the problem of unemployment except in the way I have mentioned.
We are therefore obliged to bring to the attention of the government at this time, as was done by my leader yesterday, the fact that the foremost domestic problem in Canada at this moment is that there are about six hundred thousand men and women out of work. This does represent a very serious situation and the government, having the responsibility, has a definite obligation to give leadership in this matter, a leadership which, if it is given, will be warmly supported, I am sure, by every hon. member in this house who shares the view of the Prime Minister expressed during the election that unemployment was a social disaster.
The fact that the unemployment insurance fund lost $131 million in the last fiscal year and-if my estimate is correct-a further $40 million in April, 1958, is in itself an indication of the seriousness of unemployment in our country. An examination of the statement of revenues and expenditures of the unemployment insurance fund over the period of the last two months spells out in an emphatic way the extent of this problem in Canada. I have before me certain reported expenditures by way of benefit payments through supplementary and seasonal benefits provided under the amendment of last fall. I find that in the month of December last the total supplementary and seasonal benefits paid out were $2 million. In the month of January they rose to $12 million-I am now using round figures-in the month of February to $15 million, and in the month of March last to almost $20 million. Those are figures having to do with supplementary and seasonal payments.
The situation is even more serious when examined in the light of the total benefit payments including supplementary and seasonal payments as well as ordinary payments provided for under the Unemployment Insurance Act. For instance, in the month of September last it was $13 million; in October, $16 million; in the month of November, $18 million, close to $19 million; in the month of December, $31 million, close to $32 million; in the month of January, $60 million; in the month of February, $63 million and in the month of March, $72 million. Again I use round figures.


Michael Starr: Mr. Chairman, may I draw to the attention of the hon. member who is now quoting these figures that he is taking the ordinary column, say, in the month of December, amounting to $29 million and then adding the total to it to make it $60 million. Actually, he should be taking the ordinary figure of $29 million and adding to it the supplementary figure of $2 million to get $31 million.


Paul Joseph James Martin: My hon. friend could be correct but he will not deny that the figure for-


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: Some hon. members applaud but I am sure they have not fully appreciated the point the minister has made. The fact is that the figure for the month of March is some $72 million and my hon. friend will remember that in the month of February last year I suggested to him that the estimates which I had made at that time based upon the figures then presented suggest that the total expenditures could reach the figure of same $73 million at the end of March of this year. The report now indicates that this is the situation.
These figures in themselves reflect the seriousness of the problem in Canada. It does not mean, of course, that the jobless figures are identical with the implications involved in these figures but it does indicate that at the present time the unemployment problem in Canada continues to be an extremely serious one. I suggest it is the first and most important problem on the domestic level facing Canada and the government and parliament at this time.
This particular measure is not in any way going to relieve the pressure or improve the situation. The government, along with the other factors in the Canadian economy and the Canadian people, will have to resort to measures other than this if the government is going to be able to say it has made some serious reduction in the level of unemployment in Canada.
In 1955 when we had a situation not comparable to this, but one in which there were a lot of people out of work and when the then minister of labour proposed measures of this sort, hon. members opposite were insistent in reminding the government of that day that with regard to unemployment it had a highly important and direct obligation. The present Minister of Transport, for instance, said in 1955, and his words can be found on page 76 of Hansard for that year:
Unemployment Insurance
Despite this evidence, however, the government seems to persist-well, it does not 'seem', it persists-simply to duck its responsibilities in this matter, so far as the citizens of Canada are concerned.
The hon. gentleman was talking about unemployment, as the context of his remarks will show. I suggest to the government today that those words of the Minister of Transport are much more applicable now than they were then. The same is true of the words of the distinguished new Minister of Citizenship and Immigration as found at page 138 of Hansard for 1955 when she said:
They-
The unemployedcannot live even on 100 per cent-
-of regular benefits. While I do not want to comment on the fairness of that characterization I say to the minister if those words were applicable then they are certainly applicable today. Nobody can live on even 100 per cent of seasonal benefits and certainly these benefits in themselves will not provide work for men and women who need it.
In my own community of Windsor, as the Minister of Labour knows, there are still many thousands of men and women out of work as there are all over this country. Inasmuch as this measure will assist some it will be welcomed, but the fact is, and the country should know it, this amendment will not assist the majority of the unemployed in Canada.
We also have the statement of the present Minister of Transport in 1955, as reported at page 143 of Hansard, when he said:
There is no use in the minister saying the government is doing everything it can. I say that everything you can do is not being done. You are trying to find them jobs, but you cannot find them jobs. A man finds himself without credits and without a job. He has a family and he has to eat, and so does his family. What are you going to do for him? I want to know that.
That, too, is the question which I know the Minister of Labour for whom I have the greatest respect will understand is in the minds of many thousands of men and women throughout Canada as well as in the minds of hon. members of this house as we begin the discussion of this matter.
What we should have from the government is a clear statement indicating what steps it proposes to take if it believes it can take steps to relieve this situation. We know the difficulties involved but yesterday we were given the impression by the Prime Minister that the government was tackling this problem and that the bottom had been reached. However there is no real evidence before this house that the bottom of unemployment in Canada has been reached.

Unemployment Insurance There is evidence to the contrary and we have good reasons for suspecting that in a period when unemployment should be somewhat reduced we are likely to find increased unemployment, that is during the months of July and August. It is estimated, I understand, that possibly as many as 300,000 people will be out of work at that time.
This government has not yet presented us with a program by which this problem could be resolved. I suggest that at this stage the government might well look at the remarks made by the Leader of the Opposition when speaking about this matter during the course of the federal election on February 12 when he said:
In order to provide special incentives for work to be carried on in the winter months whenever possible, a Liberal government would set an example to private enterprise and to provincial and local governments by recognizing that winter joblessness is a real cost to the community and it is therefore sound economics to carry on some kinds of work even though they are more expensive in the winter. Whenever appropriate, therefore, we would provide in federal contracts the payment of adequate extra costs where work is done in the winter; and we would oiler effective grants in aid to the municipalities and local authorities to enable them to do the same.
I mention that as the kind of approach the government could take as a means of dealing with this problem. What have we been told in that connection? We were told by the Prime Minister that a program of public works could do the job. No one will deny that a properly conceived program of public works could put a considerable number of men and women in this country to work but certainly not the program enunciated by the Prime Minister just prior to the last general election, one which is not in fact a public works program at all. That has been said repeatedly but this is the place now to examine it and to unmask this synthetic and alleged program of public works.
I ask the government to tell us during the course of this debate how many men and women have been put to work as a result of the operation of this public works program to date? How many men and women will be put to work as a result of the expenditure of $1,185 million during the course of the present fiscal year? How many men were put to work as a result of the expenditure for three months of some $270 million involved in this program which was announced with all of the powerful propaganda available to the government at the beginning of this election?
When we examine this program we find it is not an emergency program at all. The program announced by the Prime Minister represented items that had been for the most

part contained in the estimates of the previous administration. It included the St. Lawrence seaway representing $106 million; the Canadian National railways, $140 million; the Department of Public Works, $145 million; national harbours board, $38 million; Department of Transport, $244 million; Central Mortgage and Housing Corporation, $308 million; and crown corporations, $72 million.
All of these items are the ordinary annual estimates for the departments or the crown corporations I have named. They are not materially different from those tabled by the former administration for 1957. In fact, they come surprisingly close to the same figure so that we on this side of the house say with confidence that that particular program of public works, designed to relieve unemployment, could not possibly have been used for that purpose. If hon. gentlemen opposite disagree, I ask them to tell us how many individuals, in addition to those normally engaged in those particular enterprises of the crown, have been employed as a result of the enunciation of this policy. If the answer is not to be given or if it is in the negative, what steps does the government propose to take to try and do something about this problem of unemployment?
There are many things that the government can do, and about some of those I would like to say something in a few moments. I suggest to the Minister of Labour, who carries this measure for the government at this time, that he and the government should give very careful consideration to the proposal made by the Leader of the Opposition, a proposal which is being seriously examined in the United States, where they likewise have a problem which, in terms of unemployment, is not quite as serious as ours. I might say to the Minister of Labour one thing he could do that would help some in my own constituency, as I am sure it would help in his, is to abolish completely, for instance, the tax on automobiles. That would help considerably. There are many other things the government could do. I am not placing this on the doorstep of the Minister of Labour alone because it is a responsibility that belongs to the government as a whole. In spite of its boasts, in spite of the mandate given to it by the people of Canada, this government has not given any evidence of a program designed to meet this national problem of unemployment in Canada at this time.
I have said that the particular measure before us, commendable to the extent that it goes, does not in any way provide assistance to anything like a substantial proportion of those individuals who are now in receipt of unemployment insurance or whose benefits

are running out. I do not know what the exact figure is of those who are on unemployment benefits at this time, but I suggest to the Minister of Labour that this particular measure will not give assistance to a quarter of the men and women who are now in receipt of unemployment insurance. I suggest further that there will be great disappointment that the extension contemplated in this measure will not include those whose benefits run out prior to May 17. If that is the situation-and I understood the Minister of Labour to indicate that that was the situation-this extension will actually only benefit those who have any credits on May 17, or who have been able to file a claim for seasonal periods following their regular benefit period. If this is the situation, and I believe it is, I am sure the minister will appreciate that there will be great disappointment in the country.
I think we should have a clear statement on this point from the minister so that we can get a true appreciation of this amendment which, in so far as providing assistance to individuals who come within its compass are concerned, will be welcomed by us. We should not underestimate the help provided nor should we exaggerate the benefits proposed. I would ask the minister to tell us at some point in our discussion how many persons have established seasonal benefit claims for the period from December 1, 1957 to May 15, 1958. I would also like to ask him what was the aggregate amount of seasonal benefits paid to such persons. We would be able to derive some impression of this particular measure if we get from the minister the answers that he should be able to give us. I know he will give us answers but I suggest to him-I know he does not want to mislead the public or this house; he is not that kind of man-that he should give us a clear and concise statement indicating precisely what the cost of this is going to be. Is it going to be $9 million; is it going to be $14 million; is it going to be $30 million? From this answer we shall be able to make a deduction as to the likely number of individuals who, at
Unemployment Insurance least in part, will get some assistance from the amendment proposed in the resolution before the house.
I submit to the minister that those are very important considerations if we are to discharge our responsibility in this matter. As the minister said, the Unemployment Insurance Act-introduced, incidentally, by another administration in 1940-was amended in 1950 to provide for the first time for the payment of supplementary benefits during the period of January 1 to March 31. As my hon. friend said, advantage was taken of the experience of the operation of the act to deal with this particular traditional mid-winter problem which we have in Canada, though abnormally greater this year.
Four classes of seasonal benefit payments were established by the 1950 amendment. For a proper understanding of the measure before us we should clearly understand what those four classes were. We should also recognize the importance of maintaining the integrity of the unemployment insurance fund which is contributed to mainly by two groups of the Canadian people, the employee and the employer, with a smaller contribution by the people as a whole through the government. It is a fund to which a limited number of Canadian citizens contribute; it is a fund, the integrity of which we wish to see maintained. The time has come when we should carefully examine this situation in the light of this important objective.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I inquire what is the business for tomorrow?


Howard Charles Green: Mr. Speaker, tomorrow we shall continue with this measure and then go on with the measure amending the National Housing Act, and then resume the debate on the throne speech.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, May 15, 1958