1958-01-28

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates (3) for the financial year ending March 31, 1958, was presented by Hon. Donald M. Fleming (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, on November 27 last I tabled in the house verbatim reports of the proceedings of the dominion-provincial conference, and I said at that time that the final printed form of the proceedings would be distributed to each hon. member of this house in due course.
With the leave of the house I would now like to table two copies of the printed form in English. Copies are being distributed today to all members. The French text of the proceedings will not be completed for about a week, but in view of the fact that we are discussing this matter during the course of this week I thought hon. members would like to have copies of the English text.



TABLING OF LETTER FROM PREMIER OF NEW BRUNSWICK

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, yesterday the hon. member for Bonavista-Twillingate asked for copies of correspondence with the provinces which has not yet been tabled, arising from the dominion-provincial conference. I have now received word from the premier of New Brunswick, and by leave of the house I should like to table two communications between Hon. Hugh John Flemming and myself.


Mr. Pickersgill:: Would the Prime Minister agree to having that exchange published as an appendix to Hansard?


Mr. Speaker:: Is it agreed that this document just tabled may be printed as an appendix to Hansard?


Some hon. Members:: Agreed.
[For text of documents above referred to, see appendix, page 3946.]



ATOMIC ENERGY


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, the hon. member for Essex West asked me a question as to whether or not a report requested by the U.A.W. international union on the construction of an atomic energy plant at Monroe, Michigan, had been received and, if so, was I satisfied that the public safety is assured.
The reactor referred to is a large power reactor being built on the shore of lake Erie near Monroe, Michigan. A permit for the construction of this reactor was issued by the United States atomic energy commission in August of 1956. The commission pointed out, however, that the permit was conditional since the design details were not final, and it emphasized that a licence for operation would not be granted until the commission was satisfied as to the safety of the reactor. Later, as a result of opposition to the construction permit, the commission scheduled public hearings on the safety aspects of the reactor. These hearings have recently been completed and as yet no decision has been announced by the commission.
The Canadian government, through the atomic energy control board, has been following this project closely since its inception. Information has been obtained from the atomic energy commission, and Canadian representatives have attended the public hearings in Washington. The board's advisers have pointed out that there is no hazard in construction operations, and they are of the opinion that a reactor of the contemplated type can be designed so as to be capable of safe operation. They have pointed out, however, that until details of the final design are available a full assessment of the safety of this project is not possible.

Inquiries of the Ministry
Representations have been made to the United States government setting out the interest of the Canadian government in this matter and its desire to be kept informed of the progress in the design of this reactor. Further representations will be made if it appears that operation might result in a hazard to the Canadian public.



PUBLIC BUILDINGS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, may I take this
opportunity to reply to a question asked me by the hon. member for Essex West. The hon. member asked me on two occasions, the last of which was on January 13, if I had received any communications with respect to assistance in building an auditorium in Windsor.
I have to depend on the officials in these matters. The files have been searched and no record of such a communication has been found. However, the Minister of Finance received a letter from the hon. member for Essex East on October 18 to which the Minister of Finance replied, and he referred the request to the Minister of Northern Affairs and National Resources. For the purpose of the record I am tabling this correspondence.



INQUIRY AS TO ERECTION OF NEW ARMOURIES

[Stage Direction]
On the orders of the day:
Mr. W. A. Tucker (Roslhern):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Has any decision yet been made in regard to the building of a new armoury in the city of Saskatoon?


Hon. G. R. Pearkes (Minister of National Defence):: Yes, Mr. Speaker. Plans are now being submitted for an armoury at Saskatoon, and those plans are under consideration.


Mr. J. A. Byrne (Kootenay East):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Has the whole study of the armoury question now been completed, as the minister indicated to me several weeks ago? If so, are plans going ahead to build an armoury at Kimberley?


George Randolph Pearkes: Mr. Speaker, plans have not been completed, and I am afraid I cannot advise every hon. member in the house whether or not armouries are to be built in their constituencies.


John Whitney Pickersgill: Mr. Speaker, can the minister now tell us whether they are going ahead with the armoury at St. John's, Newfoundland?


George Randolph Pearkes: I think the previous answer applies to the hon. member's question.


Mr. D. R. Mitchell (Sudbury):: I should like to direct a question to the Minister of National Defence. Has the minister reconsidered his decision, and will he now proceed with the construction of an armoury in Sudbury? Is he aware also that the land has been donated and is now held by the town for this purpose only?


Mr. Speaker:: Order. Perhaps I should say what I said the other day when hon. members were inquiring as to whether or not post offices would be built in each of their ridings and various parts thereof. The same situation applies to armouries. It would be impossible obviously for the house to spend enough time to answer all these questions. I suggest that some of them be put on the order paper or taken up by direct communication with the minister concerned.



WINNIPEG


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to address a question to the Postmaster General. I wonder if he is yet in a position to answer my question of January 11, as to when he expects the new post office in Winnipeg will be officially opened?


Hon. W. M. Hamilton (Postmaster General):: Yes, Mr. Speaker, we expect that the new post office in Winnipeg will be opened about mid-May. The exact date is uncertain, but mid-May is quite close to it. May I mention, Mr. Speaker, that since the post office in Vancouver will be opened only two months before the date for Winnipeg, although the contracts were let some five and a half months apart, it shows the excellent work done by the Department of Public Works in the last few months in speeding up the completion of the building in Winnipeg.


Stanley Howard Knowles: May
I say that I would like to thank the minister for the answer he has given me. I did have a supplementary question when I raised this matter on January 11, which was as to who would be there to open this building; but since the date indicated is after the date of the next election, I will no longer ask that question.


Mr. Mcllraiih:: He won't be there.

Inquiries of the Ministry GRAIN



REQUEST TOR NEGOTIATIONS WITH JAPAN

[Stage Direction]
On the orders of the day:
James Allen (Jim) Byrne: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. Having regard to the serious loss of employment in the coal mines of the Crowsnest pass area, where first class coking and metallurgical coal is produced, would the minister consider sending a top level mission, including government, union and mining officials, to Japan in an effort to negotiate a deal with the Japanese to purchase from us a portion of their four million ton annual import requirements, because I am told that the Japanese are very much interested in the purchase of this type of coal?


Hon. Gordon Churchill (Minister of Trade and Commerce):: I thank the hon. member for having given me notice of this question, which deals with a very important feature of our trade relations with Japan. I have not yet given consideration to the suggestion of a top level mission such as the hon. member has outlined, but the whole field of our trade with Japan has been under study and review, and it may be that the hon. member's suggestion could be given consideration at some time in the future.


James Allen (Jim) Byrne: May I ask the minister to make that future just as soon as possible, because the main mine to which I have referred will be closing down at the end of this month. I do know that the Japanese are very much interested in this coal, but they have certain fears respecting a mining tax which is in force in British Columbia.



REPORTED ORAL REPLY FROM UNITED


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hai):: I should like to direct a question to the Minister of Finance. According to this morning's Gazette the United States has made an oral reply to the Canadian note protesting the restriction of oil imports. Would the minister inform the house as to the views expressed by the United States in that oral reply?


Hon. Donald M. Fleming (Minister of Finance):: I have not seen the article in question and have not been made acquainted with any oral reply. However, I shall look into it to see if there is anything in the newspaper report.



REQUEST FOR INTERIM PAYMENT ON

[Stage Direction]
1956-57 crop
On the orders of the day:
Mr. A. M. Nicholson (Mackenzie):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. In view of the fact that last year on January 30 an interim payment of 10 cents a bushel was announced on the 1955-56 wheat crop, and on February 2, 1956 a 10-cent interim payment on the 1954-55 crop, will the minister be able to announce an interim payment on the 1956-57 crop before the end of January?


Gordon Minto Churchill: This is another matter of very great interest and concern to people in Canada, particularly to the western farmers, and I think we will be able to do just as well as the former government.


Stanley Howard Knowles: No
better?


Mr. H. R. Argue (Assiniboia):: I should like to direct a question to the Minister of Trade and Commerce arising out of his earlier statement that interim payments on the 195556 wheat crop would likely be made within a few days. Can the minister say whether or not the government has given consideration to including in the interim payments deficiency payments, so farmers may obtain substantially higher total interim payments this year than they did last year, thus helping to meet the very grave agricultural depression on the prairies?


Gordon Minto Churchill: Mr. Speaker, this is another question which contains an expression of opinion and attempts to give some information to the house. I think the hon. member intended to refer to the 1956-57 crop, did he not?


Hazen Robert Argue: That is correct.


Gordon Minto Churchill: He mentioned 1955-56. I have not given consideration, at the moment, to the suggestion he has put forward.



AIRPORTS


[Stage Direction]
On the orders of the day:
Hon. George H. Hees (Minister of Transport):: Mr. Speaker, the hon. member for Moose Jaw-Lake Centre inquired on Friday last about representations regarding the establishment of a new intercity airport to serve the two cities of Moose Jaw and Regina.
3898	HOUSE OF
Inquiries of the Ministry I have not been able to locate in the departmental records any representations dealing with this specific project, though at an earlier stage I believe there were certain representations received relating to the question of possible relocation of the present Regina airport. These latter representations have received full study on the part of the department but have not led to any decision on our part to abandon the present airport at Regina, which appears quite suitable to serve the future needs of that city.


Mr. Louis Lewry (Moose Jaw-Lake Centre):: Mr. Speaker, may I ask a supplementary question. Could the minister advise if he has received a letter from the Moose Jaw chamber of commerce in connection with the establishment of an intercity airport?


George Harris Hees: No, Mr. Speaker.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I would like to address a question to the Postmaster General. I do wish he would continue to wear his bright red waistcoat. When he does we can see him easily, and we consider it a symbol of the parliamentary mail box into which we can drop inquiries. Incidentally, Mr. Speaker, we also consider it a touch of colour in the otherwise vulpine Victorian vista opposite. Now for my question.
In view of the numerous protests from philatelists, more commonly known as stamp collectors, concerning the alleged elimination of plate numbers from further issues of stamps, and since because the minister's estimates were passed by the last parliament we are denied the normal opportunity to interrogate or irritate the minister, or the minister the opportunity to reply, would the minister under these circumstances make a statement concerning the procedures of the philatelic branch of his department, for the information of the house and the country, having regard to and being guided by memories of his relentless quest for complete information on postal affairs when a member of the opposition?


William McLean Hamilton: Mr. Speaker, I do feel that under normal circumstances this would be a question better dealt with on the estimates. As the hon. member has pointed out, my estimates will not be before the house this year; therefore with your permission I might just say a word or two in reply to the question. I want first to thank my hon. friend for having given me notice of this subject.


The hon. member referred to numerous protests from philatelists regarding this situation. I might say we have also had commendation from philatelists. The house will remember that by action of the last government plate numbers on stamps were eliminated. When we studied the situation it became apparent that philatelists were very desirous of having these plate numbers included on the sheets, and we sought a way in which they could be made available to them.
This was accomplished by continuing the printing of these plate numbers on the margins of sheets of stamps but cutting them off the sheets which were designed for ordinary sale in post offices across Canada, thus eliminating delays and confusion at stamp wickets which had brought criticism from the public in the past. However, these same stamps, printed from exactly the same plates, in every way identical but with the plate block numbers left on, are available to philatelists through the philatelic section here in Ottawa under exactly the same conditions as have prevailed for a number of years in the past. The philatelic section to which the hon. member makes reference has been designed and devoted completely to the convenience and assistance of philatelists in obtaining the desired stamps directly from the post office.
One further point on which comment has been made has been the question of deposits. I might emphasize the fact that the philatelic section sells these stamps at their face value without any deposit whatsoever being required. There is a deposit system for those who wish automatic forwarding of new stamps as they are issued, but that is not a requirement to buy from the philatelic section.
I think that would cover the ground which interests the hon. member, Mr. Speaker.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. H. J. Murphy (Wesimorland):: Mr. Speaker, I should like to direct a question to the Prime Minister. Will the Prime Minister inform the house when the government will set up a body independent of the government to regulate private radio interests to remedy the existing situation, in which the judge in the Canadian Broadcasting Corporation versus private radio disputes is indeed a party to the dispute?


John George Diefenbaker: Mr. Speaker, this is a matter of government policy, to be announced in due course.

Inquiries of the Ministry



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr, D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. Has the minister ascertained the source, said to be Canadian, of the original information used by a United States tax informer to initiate United States internal revenue income tax claims against Consolidated Premium Iron Ores and Mr. Cyrus Eaton? If not, will he have this matter checked?


Hon. G. C. Nowlan (Minister of National Revenue):: Mr. Speaker, the hon. gentleman was good enough to send me a copy of his question this morning. I rather regret the terminology used in the question. I do not think I should be answering it, or that I should be taken as accepting the wording, because I do not think the activities of either Consolidated Premium Iron Ores or of Mr. Cyrus Eaton are such as would require an investigation or the services of a tax informer in recording them. In other words, whatever their activities may have been, I am sure they are a matter of record, and are not such as would require the services of informers which suggests that something fraudulent might be inferred.
Subject to that, I can say that the Canadian government or the Department of National Revenue have no knowledge whatsoever of the services of any informer in connection with this matter, or in connection with any other matter which might come within the purview of the United States tax authorities. Whether they use informers or whether they do not is a matter of which I personally have no knowledge, and neither does the government. Therefore obviously, Mr. Speaker, we could not check. I am sure the house will agree that we would have no right whatsoever to check this matter or seek information thereon, and therefore the answer to both parts of the question is in the negative.



HEALTH INSURANCE


[Stage Direction]
On the orders of the day:
Hon. J. W. Monteith (Minister of National Health and Welfare):: Mr. Speaker, yesterday the hon. member for Essex East asked me whether a communication had been received within the past week from the province of New Brunswick on the subject of hospital 96698-247
insurance. At the time I indicated the probability that such a letter had been received, but I now find that I was mistaken. The department has no record of any letter from New Brunswick on this subject since my communication to the province on January 10 indicating the government's intention to introduce an amendment to the hospital insurance act during the next session of parliament.
I might also answer the question put to me yesterday by the hon. member for Winnipeg North Centre on this subject. The hon. member asked me whether I had heard from the province of Manitoba, or from any minister of the province of Manitoba as to whether Manitoba is prepared to join in the plan and, if so, on what date operations would commence.
I would inform the hon. member that in a letter dated January 14 Hon. R. W. Bend, minister of health and public welfare for Manitoba, informed me of his province's intention to participate in the program. Mr. Bend gave no indication as to when Manitoba's plan would commence, but expressed doubt that it would be ready to operate by July 1 of this year.



UNEMPLOYMENT ASSISTANCE


[Stage Direction]
On the orders of the day:
Jay Waldo Monteith: Mr. Speaker, I should like to clarify an answer I gave to the hon. member for Shelburne-Yarmouth-Clare yesterday. At that time he asked me whether the province of Nova Scotia had yet signified its intention to sign an agreement under the Unemployment Assistance Act. I may say that Nova Scotia has been in touch with us on this matter but has given no firm commitment.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. G. R. McWilliam (Norlhumberland-Miramichi):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. In view of the minister's statement on January 21 outlining the reasons why no practical way has yet been found to include smelt nets as insurable under the fishermen's insurance plan, will the minister have the interdepartmental committee make a further study of the situation?


Hon. J. A. MacLean (Minister of Fisheries):: I will be glad to take the hon. member's suggestion under consideration.

Inquiries of the Ministry
NATIONAL DEFENCE	POSTAL SERVICE



CIVILIAN EMPLOYEES


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of National Defence. Can the minister make a statement on whether or not civilian employees of his department are being laid off? What is the policy of the department? Has the minister any statistics on this point?


George Randolph Pearkes: Mr. Speaker, I believe the question is prompted by a press report which appeared yesterday following an interview with a gentleman in Toronto who is well known to the hon. member who has asked the question.
As far as the policy of the Department of National Defence is concerned, no directive has gone out from national defence headquarters ordering any cut-back of civilian employees of the department. No formal request or objections or representations have been received from the national defence employees' association, with the exception that they asked that no action be taken in connection with the dismissal of employees from Renous in New Brunswick, where a board was assembled and found that some of the positions could be dispensed with. As a result of those representations, orders were issued that there be no dismissals during the winter.
With respect to the total number of civilian employees in the Department of National Defence, at December 31, 1956, there were 54,192 civilian employees. On December 31, 1957, there were 54,188, a decrease of four in the 12 months. I think that is a clear indication of the policy of the department.


Stanley Howard Knowles: May
I ask the minister a supplementary question. Does the decrease of four mean that only four persons were dismissed during the year, or is that a net figure taking into account dismissals and hirings? If so, could the minister give the figures as to the total number who have been dismissed and the total number hired?


George Randolph Pearkes: That represents the total, with a net loss of four. Employees are continually changing their positions. Some are leaving for personal reasons and others are leaving in order to get better remuneration. There is a continual changeover. When we have an establishment of over 54,000 it is obvious that there must be a great many fluctuations.
[Mr. MacLean.l



WEST FERRIS TOWNSHIP


[Stage Direction]
On the orders of the day:
Mr. J. R. Garland (Nipissing):: Mr. Speaker, I should like to direct a question to the Postmaster General. Will the minister give immediate consideration to the request of the township of West Ferris as contained in the township's request to the minister dated January 23, with respect to postal service in that area?


William McLean Hamilton: Mr. Speaker, I will be very glad indeed to look into the matter at the earliest possible opportunity, keeping in mind the fact that this community was recently granted substantial improvement in its local mail service.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Stanley Haidasz (Trinity):: Mr. Speaker, I should like to ask the Minister of Finance what his attitude is toward the resolution adopted by the city council of Toronto on January 20, 1958, requesting that the Minister of Finance take the necessary steps to enable municipal governments to issue debentures which, in respect to interest thereon, will be free of income tax, thereby helping municipalities to provide the people of Canada with the necessary municipal services in the fields of education, roads, and other essential services.


Donald Methuen Fleming: I am not aware that any such resolution has been received by the department, but I shall make inquiries.



NEW BRUNSWICK


[Stage Direction]
On the orders of the day:
Mr. A. J. MacEachen (Inverness-Richmond):: May I direct a question to the Minister of Mines and Technical Surveys, or in his absence to his parliamentary assistant. My question is based on the statement of the executive board of the united mine workers, district No. 26, that the New Brunswick Power Commission has reduced its orders for coal owing to the Beechwood hydro development. Can the minister assure the house that steps are being taken to preserve coal markets against government supported hydro projects?


Mr. Raymond O'Hurley (Parliamentary Assistant to the Minister of Mines and Technical Surveys):: I shall be pleased to take notice of the hon. member's request, and I shall consult with the minister and the dominion coal board and give an answer tomorrow.



ALBERTA


[Stage Direction]
On the orders of the day:
Raymond Raymond: Yesterday the hon. member for Bow River asked the following question:
According to press reports 82 men were laid off at one of the mines in Drumheller last week, and one of the large mines in Canmore is closing because of lack of orders. Can the minister tell the house what plans the government has in mind for increasing the markets for coal so the distressed coal industry of Alberta may get some relief?
It is my understanding that the press report in regard to the shutting down of one of the mines at Drumheller is correct. The combination of surplus oil and gas with an unusually mild fall and winter has reduced consumption of domestic coal and has produced, at an unusually early time, the condition of seasonal surplus which has been chronic in this field. These seasonal fluctuations in supply and demand have been matters that are not amenable to any control by government.
In respect to the report of the mine at Canmore, the subvention assistance provided by government enabled this mine to maintain operations last year and the present position is at this time under sympathetic study by the dominion coal board, who have met with the mine operators and whose full membership are now in session in Ottawa. It is my opinion that the report of closing is premature, and that the government will be able to forestall a shut-down by accepting the recommendations of the board.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Hugh Proudfool (Poniiac-Timiskaming):: I should like to direct a question to the Minister of Mines and Technical Surveys, but in his absence I will direct it to his parliamentary assistant. In view of the threatened closure of the New Calumet mine because of the depressed prices for base metals, will the government give the mine a monthly subsidy as it did for Britannia mines in order to maintain employment?
Inquiries of the Ministry


Raymond Raymond: I shall take this question as notice, Mr. Speaker.



FORT WILLIAM


[Stage Direction]
On the orders of the day:
Kon. Michael Starr (Minister of Labour):
I would like to answer a question directed to me by the hon. member for Fort William on January 25 last. The establishment of a course in pipe-line welding at Fort William is not a new development in Canada. Special classes of this nature have been operating in British Columbia, Alberta, Saskatchewan and Manitoba during the past three years, and the costs of such training have been shared equally with the provincial governments under the provisions of schedule M of the vocational training agreement, as authorized by the Vocational Training Coordination Act.
The primary reason for establishing such classes was to provide suitable work for unemployed Canadians and at the same time avoid the necessity of continuing to import pipe-line welders from the United States. Some special classes in the prairie provinces have been discontinued, but a continuing program of training for pipe-line welders has been established at Nanaimo, British Columbia.
Last spring a special course in welding was organized in Windsor, and plans are under way to renew this project. The training program at the lakehead is new. The establishment of these classes will not only provide suitable employment for unemployed persons but will also help to meet the shortage of welders for the installation of gas and oil pipe lines in Ontario.
Mr. Mclvor:: Thank you. Good work.


Mr. D. M. Fisher (Port Arthur):: I would like to ask a supplementary question of the minister, as to whether he has received any representations to alter the operations of schedule M so this type of welding class could be held in the evening for the retraining of people who are employed during the day.


Mr. Starr:: I am not aware of any such representations having been made.



NON-OPERATING RAILWAY UNIONS    PROTEST OVER CONCILIATION BOARD CHAIRMAN

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, may I ask the Minister of Labour if he is yet in a position to say whether the government has decided

Inquiries of the Ministry to make a change in the chairmanship of the conciliation board which is to deal with the dispute between non-operating employees and Canada's major railways?


Michael Starr: No decision on this matter has been arrived at as yet, Mr. Speaker.



PARLIAMENT BUILDINGS


[Stage Direction]
On the orders of the day:
Mr. Irvin Sluder (Swift Current-Maple Creek):: I should like to direct a question
to the Minister of Public Works which has to do with facilitating entrance to this building. In the minister's absence perhaps the question should be directed to his parliamentary assistant.
Would the Minister of Public Works, as an employment measure, give consideration to the feasibility of constructing a passage or tunnel from the sidewalk level in front of the main entrance to these parliament buildings, to pass through and under the driveway and peace tower stairway and connect with the basement entrance, to facilitate employees and members of parliament entering without encountering the daily traffic hazards in front of this building?



ANNOUNCEMENT OF PRESENTATION OF PORTRAIT OF D'ARCY MCGEE

[Stage Direction]
On the orders of the day:
Mr. Speaker:: With the leave of the house
perhaps I might make an announcement. The D'Arcy McGee association has offered to present to the House of Commons a portrait of D'Arcy McGee, one of the fathers of confederation. Arrangements have been made for the ceremony to receive the presentation tomorrow at one o'clock, immediately after the noon adjournment in the Hall of Honour, at the library end. I thought I had better mention this today rather than tomorrow, so that members could hold themselves free for that ceremony.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Douglas Mason Fisher: I should like to direct a question to the Minister of National Revenue. Has the minister any statement to make on the threatened strike in Montreal, which may cripple C.B.C. television services there? ,5	,


George Clyde Nowlan: I have been anticipating this
question for two or three days, so for a change I have a statement prepared. I am advised by the Canadian Broadcasting Corporation as follows.
The situation has arisen in connection with a claim by members of the international alliance of theatrical stage employees in Montreal that some employees should not handle both scenery and properties in television studios as they had been doing for some time, or should have additional pay for so doing. This question was pending last week in the procedure for dealing with grievances as provided in the collective agreement between the union and the corporation.
On Saturday a group of 41 employees, not waiting for the outcome of the legal grievance procedure, refused to do part of their normally assigned duties. They were informed that they would be dismissed if they did not carry out their work as usual, which they continued to refuse to do. There has been no lock-out. Other employees in this category, however, have failed to report for work since the incidents on Saturday.
The corporation feels that a strike in this matter would be illegal. Discussions are continuing at the present time, with the outcome still uncertain.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. D. F. Brown (Essex West):: May I direct a question to the Minister of Labour. Has the minister received a reply to his inquiry, of which he advised me on January 23, from the officials of the unemployment insurance commission as to whether medical and hospital premiums could be paid out of funds established by the Unemployment Insurance Act in addition to the regular benefits to which the unemployed are presently entitled?


Michael Starr: No, Mr. Speaker, I have received no information on this matter.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. T. A. M. Kirk (Shelburne-Yarmouth-Clare):: I should like to ask the Minister of Trade and Commerce if he recalls my request made on Saturday last that this gift of $1J million worth of Canadian flour to the Middle

East be transported in Canadian-manned and Canadian-registered vessels. Last Saturday the minister told me he would take the matter under advisement, and I would like to ask if he has reached a decision on this matter.


Gordon Minto Churchill: Not yet, Mr. Speaker.


TRANS-CANADA HIGHWAY SASKATCHEWAN  REQUEST FOR SECOND EAST-WEST ROUTE
[Stage Direction]
On the orders of the day:
Hazen Robert Argue: I would like to address a question to the Prime Minister in the absence of the Minister of Public Works.
Could the Prime Minister say what consideration has been given to the requests made by the province of Saskatchewan for a co-operative highway building program to include a second east-west highway so that Saskatchewan may be able to retain within the province the services of the very large highway construction building units which were built up last year? As the Prime Minister knows, Saskatchewan has now completed its section of the highway.


John George Diefenbaker: I would prefer that this question wait until the return of the Minister of Public Works. He is in the city today but was held up on a matter which made it impossible for him to be here at the opening of the house. Naturally the question should be directed to him, and there will be no harm done by delaying the reply until his return.



PENSIONS


[Stage Direction]
On the orders of the day:
Henry Joseph Murphy: Would the Prime Minister inform the house what progress is being made in the reconsideration of the Canadian National Railways pension scheme, which the Prime Minister termed wholly inadequate while he was in Moncton on May 4. I may point out that he made this promise-


Some hon. Members:: Order.


John George Diefenbaker: I am glad to see that my hon. friend reads dependable literature.


Henry Joseph Murphy: Does the Prime Minister still treat this as an unimportant matter and a waste of time?
Inquiries of the Ministry


John George Diefenbaker: Mr. Speaker, at no time did the Prime Minister ever hold that view.


Henry Joseph Murphy: Yes, he did.


John George Diefenbaker: But my hon. friend was part of a group which over the years must have held that view, because during that time he was silent.


Stanley Howard Knowles: Mr. Speaker, may I ask a supplementary question of the Prime Minister. In view of his reference to what the member for Westmorland was reading as "dependable literature", may I ask if we can depend upon that promise being fulfilled?


Some hon. Members:: No answer.


Mr. Sinclair:: There are your election
promises, down the drain.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. E. G. McCullough (Moose Mountain):: would like to ask the Minister of Northern Affairs and National Resources if he has finalized any agreement with the province of Saskatchewan on his proposals for the development of northern roads; and could the minister say whether or not he has received any representations from the province of Saskatchewan requesting that an early agreement be reached on this very important matter?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, the question of northern roads has been under consideration between the province of Saskatchewan and the federal government for several months now, and I hope that in due course an announcement will be made.



NOVA SCOTIA-NEW BRUNSWICK-STATUS OF AGREEMENTS ON THERMAL PLANTS

[Stage Direction]
On the orders of the day:
Hon. Jean Lesage (Monlmagny-LTslel):: May
I ask the Minister of Northern Affairs and National Resources if an agreement has been signed by either New Brunswick or Nova Scotia on thermal power plant development, and the building of transmission lines program in the Atlantic provinces?


Francis Alvin George Hamilton: No, Mr. Speaker, but I think I can inform the house that all discrepancies of viewpoint have now been removed and that I expect a signature to be coming forward any day now from the two provinces.

Dominion-Provincial Relations


Jean Lesage: Would the minister mind repeating his reply?


Francis Alvin George Hamilton: I was saying that all differences between the federal government and the two provinces concerned have been removed and we expect shortly to table the two agreements.


Jean Lesage: Can we expect the minister to table those agreements before the dissolution of parliament?


Francis Alvin George Hamilton: Mr. Speaker, a great deal depends on the opposition.


John Whitney Pickersgill: May I ask the minister whether he has yet heard from the premier of Newfoundland?


Francis Alvin George Hamilton: Yes, Mr. Speaker, a telegram was brought to me at five o'clock yesterday, which I have now answered.



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

[Stage Direction]
The house resumed, from Monday, January 27, consideration in committee of the following resolution-Mr. Fleming-Mr. Courte-manche in the chair:
That it is expedient to introduce a measure to provide for financial assistance to the Atlantic provinces by authorizing the payment, out of the consolidated revenue fund, for each of the four fiscal years commencing on the first day of April, 1958, of an annual grant of seven and one-half million dollars to each of the provinces of Nova Scotia, New Brunswick and Newfoundland, and an annual grant of two and one-half million dollars to the province of Prince Edward Island, and also to provide as an interim measure that in its application to the fiscal year commencing on the first day of April, 1958, the definition of "standard individual income tax'' in the Federal-Provincial Tax-Sharing Arrangements Act, shall for the purposes of that act and any agreements made thereunder be read and construed as if for the words "10 per cent" therein there were substituted the words "13 per cent".
Jean Lesage: Mr. Chairman, on Saturday the Minister of Finance when tabling the telegram which had been sent by the Prime Minister to the premiers of the 10 provinces indicated-and this can be found on page 3795 of Hansard-indicated how the sum of money mentioned in the telegrams would be divided among the provinces in the fiscal year commencing April 1. Yesterday he had a table printed in Hansard also giving the distribution of this amount between the various provinces, and this table can be found at page 3850 of Hansard for yesterday.
I cannot understand how there could be such variation between the figures the Minister of Finance mentioned on Saturday and those he indicated yesterday. For instance, on Saturday Prince Edward Island was led
[Mr. Hamilton (Qu'Appelle) .1
to believe that apart from the special Atlantic provinces grant it would receive an additional $370,000 as an increase under the fiscal arrangements. According to the figures tabled yesterday, which can be found, as I said, at page 3850 of Hansard, the increase for Prince Edward Island has completely disappeared.
In the case of British Columbia, the Minister of Finance announced on Saturday an increase of $5,563,000; but according to the figures produced yesterday this amount has decreased to $2,842,000. The total amount of the increase, $62 million, remained approximately the same on Monday as it was on Saturday, but with Quebec and Ontario each getting approximately $1 million more than was announced on Saturday.
I ask the Minister of Finance how Saturday's figures were prepared. How was it possible to mislead provincial premiers to such an extent, especially those of British Columbia and Prince Edward Island? Was it in order to get a better press throughout the country so it would be known that all provinces without exception would benefit from this new deal? Who did the arithmetic for Saturday's figures? Was it the Minister of Finance alone, or was he helped by his officials? What faith can the country have in a minister of finance who at an interval of only two days announces to this house and to the country two different sets of figures without explanation-


Donald Methuen Fleming: The explanation was given yesterday, but you were not here to hear it.


Jean Lesage: I am going to deal with that explanation, and show how weak it is. We know, of course, that on Saturday the Minister of Finance had forgotten the stabilization payments being received in 1957 and 1958 by British Columbia and Prince Edward Island. But how could he forget those payments? I am afraid he was in such a hurry to try to obtain political advantage that he was not prepared on Saturday, as he was not prepared at Mont Tremblant. He has not done his home work, at the risk of misleading the provincial governments and the country as a whole.
As to the variation in the figures between Saturday and yesterday for the other eight provinces, what explanation has the minister given?


Donald Methuen Fleming: I gave it twice yesterday. Apparently you were not here.


Jean Lesage: I will quote that explanation from page 3874 of Hansard. Answering a question put to him by the hon. member for Winnipeg North Centre the minister had this to say:
The other eight provinces receive benefit from the fact that British Columbia and Prince Edward

Island do not now take their full share byreason of the prior application of the stabilization principle.
That is not a satisfactory answer. It is not and it cannot be the explanation.


Donald Methuen Fleming: It is.


Jean Lesage: I fail to see how the fact that British Columbia and Prince Edward Island are receiving stabilization payments during the present fiscal year can have any effect on the amounts to be paid to the other provinces in the next fiscal year. The basis of the present fiscal arrangements is not the distribution of a set or given amount. It is not a fixed amount.


Stanley Howard Knowles: He
does not know that.


Jean Lesage: Similarly, and leaving aside the special grants for the Atlantic provinces, the proposed increases in the fiscal payments to the provinces which are indicated under this resolution are not based on the distribution of a set, fixed or given amount of $62 million.
I have made calculations of my own from the table printed in Hansard yesterday. If you divide the amount of the increase for each province, less the special grants for the Atlantic provinces, by the figure of the population of each province, you arrive in each case at a figure of approximately $3.97 which seems to me-and I want to be corrected if I am wrong-to represent the estimated average yield in 1957-58 in the two so-called top provinces-Ontario and British Columbia-of 3 per cent of the federal income tax per head of population.
I should like the Minister of Finance to correct me if I am wrong, and to tell the committee what exactly is the estimated average yield in the two top provinces of 3 per cent of personal income taxes in 1957-58 per head of population.
In the table which was printed in Hansard yesterday there are two exceptions, British Columbia and Prince Edward Island. I have mentioned these already. But in the case of British Columbia, if you add to the total increase of $2,842,000 the stabilization payment of $3,046,000 you arrive at the same figure of approximately $3.97 per head of population.
This sum of $3.97 per head in each province of Canada is the increase that is proposed by this resolution, an increase which amounts to one cent a day per head of population across Canada. That is one cent a day per head of population in each province. Is that the great new deal which was offered during the election by the Tories to the provincial governments? Yes, that is the
Dominion-Provincial Relations great new deal imposed upon the provinces by a telegram from the Prime Minister.
According to other calculations I have made, of the $18.8 million increase that would go to Quebec, $5.7 million would go to the provincial government as equalization payment. I stand to be corrected, and I would like the Minister of Finance to correct me if I am wrong.


An hon. Member:: His officials are not here.


Jean Lesage: The amount of $5.7 million would go to the provincial government as equalization payments, and the taxpayers who are subject to double taxation would be partially relieved to the extent of $13.1 million. Now, this 13 per cent reduction in the federal rates will take effect on April 1,
1958.	It will have its effect for nine months of the year 1958; but the taxpayers of Canada and of course those who live in Quebec will be filing their income tax returns for the whole of the calendar year 1958. Does this mean that the reduction to be allowed to taxpayers for 1958 will be the existing 10 per cent plus 75 per cent of the additional 3 per cent, that is to say 12J per cent, for the year 1958? That, of course, will not make any easier the preparation of income tax returns.
And what about 1959? After all, the increase will be valid only until April 1, 1959. Thus the reduction for Quebec taxpayers in 1959 instead of being 12J per cent will be only 10.75 per cent for the whole of the year
1959.	What is the answer to that problem? How is this going to work? This is the kind of result one achieves when he tampers on an interim basis with well established policy.
I have another question, this time about the stabilization angle. On July 16, 1956, the then minister of finance, Mr. Harris, as recorded at page 5990 of Hansard of that date, said when presenting the resolution to give effect to the present arrangements:
-the bill will provide for:-(4) a provincial revenue stabilization payment to any province when the yield of the present proposal falls below certain floors
Of course the guarantee at that time was based on the yield at the standard rates, and for personal income tax it was 10 per cent. My question to the present Minister of Finance is this. Will the guarantee be amended as if the standard rate of the personal income tax for 1957-58 had been 13 per cent? This is important, because a decline in the yield of direct taxes in 1958-59 coupled with the reductions in income tax announced by the Minister of Finance in December would have the effect of decreasing, possibly

Dominion-Provincial Relations to a substantial degree, the benefits the provinces could derive from the proposed measure.


Donald Methuen Fleming: That point was dealt with yesterday in my remarks.


Jean Lesage: No, it was not. I checked Hansard very carefully, and I find it was not dealt with.


Donald Methuen Fleming: You had better read it again.


Jean Lesage: My question is, is this 13 per cent going to apply as the floor for 1957-58? I ask that question because under the policies followed by the present government everybody knows that the revenues of the government in 1958-59 are bound to decline.


Donald Methuen Fleming: You mean as a result of a reduction in tax rates.


Jean Lesage: Yes, coupled with the economic difficulties which were brought about by the policies of the present government.
At the beginning of my remarks I said the Minister of Finance had misled the provincial governments and the country as a whole on Saturday last. Well, I really do not blame the Minister of Finance. He is such a good friend of mine I would rather be tempted to pity him. The person who is to blame is the Prime Minister, who scuttled the federal-provincial conference.


Donald Methuen Fleming: Nonsense.


Jean Lesage: Why did he do that? What was the reason he gave for scuttling that conference? He said it was because we were asking questions of his government in the House of Commons, which clearly it is our duty to do. That was the only reason the Prime Minister gave for indefinitely postponing the federal-provincial conference. How ridiculous and frivolous it is. What is the Prime Minister doing now? According to what we hear in the house and see in the press of the country he is planning to scuttle parliament itself.


Gordon Minto Churchill: Nonsense.


Jean Lesage: He is planning to scuttle parliament before the estimates are voted.


Donald Methuen Fleming: Order. Mr. Chairman, this is not a discussion on the estimates, and it is not a discussion on wider issues. This is a discussion surely on a resolution before the committee. Can we not confine it to that?


Jean Lesage: The proposal before us should be part of the budget because it goes to the whole financial set-up of the country; and surely, sir, I am entitled to say that I am afraid the Prime Minister is about to scuttle this parliament by bypassing the estimates.
[Mr. Lesage.1


Donald Methuen Fleming: Mr. Chairman, on a point of order, we are not discussing any budget or the estimates. We are discussing this resolution, and I remind my hon. friends that these payments are not a charge on this year's revenues. They have nothing to do with this year's budget. They will have operation in the fiscal year that commences April 1 next.


Jean Lesage: Mr. Chairman, I will leave the subject of estimates by commenting that I hope this government is not trying to bypass the vote by this parliament of the estimates so it could spend hundreds of millions of dollars by warrant and be prepared to spend additional hundreds of millions of dollars on projects about which parliament knows nothing at all.


Donald Methuen Fleming: Mr. Chairman, may I ask for a ruling? Surely this has gone beyond all reasonable limits.


The Chairman:: Order. The hon. member will appreciate that he cannot anticipate another discussion, and I will ask him to confine his remarks to the resolution before us.


Jean Lesage: Very well, Mr. Chairman, I will respect your decision; but I will comment that the Minister of Finance should have presented this resolution and other proposals for expenditures and amendments to the taxing laws by bringing down a budget. Surely I can say this.


Donald Methuen Fleming: No, you cannot. You are clearly out of order.


Jean Lesage: However, I am not blaming the Minister of Finance for not presenting a budget, because I really believe he was prepared to present a budget.


James Sinclair: He said he was.


Jean Lesage: Yes, he said so, but I believe he was prevented from doing it by the electoralism of the Prime Minister. The preoccupation with electoralism on the part of the Prime Minister is the reason this government is taking the actions it is taking now.


An hon. Member:: Where is your leader now?


Jean Lesage: He just returned from Vancouver. Where is yours? I might say, too, that my leader made a very profitable tour, and I believe it will have its effect not only in British Columbia but also in Manitoba. When my leader speaks he is listened to because he does not dictate to the people what they should do. We are not following the practice that is followed by this government, we do not dictate, we are attempting

to convince the electorate of the soundness of our policies. This resolution is another example of a temporary device to try falsely to lure the electorate.


An hon. Member:: An election bribe.


Jean Lesage: That is what it is, an election bribe.
(Translation):
Mr. Chairman, I am very sorry that the Solicitor General (Mr. Balcer) is not in his seat at this time, because I have a few words to say about some views he expressed previously with regard to fiscal matters as opposed to his present attitude on the subject.
Mr. Chairman, I do however derive some sort of satisfaction out of this government's proposal when I think of the statements made in this house by Conservative members from Quebec in July, 1956, when Mr. Harris submitted his resolution for the implementation of the fiscal agreements we have today, and of the promises made by the Conservatives during the 1957 election campaign. These gentlemen, including the Solicitor General, could not find words strong enough to denounce as a centralizing measure the equalization formula developed by the Liberal government, although today they endorse and ratify this very formula. As witness page 5989 of the official record, on July 16, 1956 the Solicitor General made in this house the following statement:
... it must have . . .
He was referring to the government of the province of Quebec,
... it must have the power to legislate on all matters pertaining to education within the province. The power to legislate cannot operate soundly without the power to tax for the same ends, and that power cannot operate soundly if the province is at the mercy of the central government's subsidies.
The Solicitor General was outspokenly opposing the payment of subsidies to the provinces under the equalization formula then being considered by the house. Today, he is of one mind with a government which recognizes its inability to find a better solution than that of the right hon. member for Quebec East (Mr. St. Laurent), which was then applied by Mr. Harris, then minister of finance.
I say-and once again I regret that the Solicitor General is not at his desk-


An hon. Member:: We are going to page him.


Jean Lesage: I say that if the Solicitor
General was sincere in 1956, and if he has not changed his mind since-for by this time we are so used to reversals of opinion on the part of our colleagues across the way-
Dominion-Provincial Relations the only course open to him is to resign at once. Indeed, he seems even to have come up with some other formula which is satisfactory to him, for he said in the house on October 18, 1957, and I quote the record, page 134:


Hon. Leon Balcer (Solicitor General) :: Mr. Speaker, I should like to tell my hon. friend . . .
He was then referring to the hon. member for Joliette-L'Assomption-Montcalm (Mr. Breton).
. . . that I am still opposed to subsidies such as were proposed by the former government. As to his question, it seems a hypothetical one, but I am . . .


An hon. Member:: A political one.


Léon Balcer: . . . and a political one, yes. I want to tell him that the proposals of the federal government are not yet known, but I am convinced that they will be made on a very different basis than those of the former government.


Some hon. Members:: Oh! oh!
If, as early as October 18, 1957, the Solicitor General had, with the help of his colleagues from the cabinet, devised some other formula which was likely to prove satisfactory to all provinces, as well as to himself, why was it not suggested to the provinces last November? The Right Hon. Prime Minister (Mr. Diefenbaker) did not say a word about it; on the contrary, he embarked upon three diversionary proposals.
Why dilly-dally? Why not act right now? Why should a solution be imposed to the provinces by telegram? Was it not the Solicitor General who, on July 16, 1956, said in the house, as reported on page 6029 of Hansard:
In fact, the resolution moved by the hon. Minister of Finance (Mr. Harris) and upon which we are called upon to pass judgment is not the result of a conference between the federal government and the provinces; not at all. We are not being asked to ratify an agreement between the dominion government and the provinces, an agreement reached following long negotiations where every party concerned had previously examined the proposals made. On the contrary, once again the federal government acted in a centralizing and unilateral way. It called the provinces together, read out its proposal . . .
And that, Mr. Chairman, is more than was done by the present government.
. . . and asked them what they thought about it, made a few minor changes here and there and said: "Do as you wish, this is as far as we can go".
What a joke, Mr. Chairman, at a time when the present government is dictating its views to the provinces by means of unappealable telegrams. Those telegrams went out last Friday whereas the resolution was in Saturday's Votes and Proceedings and by yesterday we were being asked to consider

Dominion-Provincial Relations it so as to stop the provinces from making their reaction known. Is not this a "centralizing and unilateral procedure", if I may borrow the Solicitor General's own phrase?
How can the Solicitor General hope to be taken seriously in his province and in the country as a whole-


An hon. Member:: He never was.


Jean Lesage: -when the government
of which he is a member forcibly applies a poultice upon the provinces by means of telegrams? Does he not realize that he is being tricked by his colleagues? How does he hope to explain his political turnabout to his "political father", the provincial member for Three Rivers?
I say again, Mr. Chairman, we are dealing with a turnabout government, a government of electoral expedients and of ill-applied poultices. The Canadian people are well aware of the fact and the day will not come too soon when it will enjoy the satisfaction of again returning a sound, honest and Liberal administration.
(Text):


Walter Adam Tucker: Mr. Chairman, my main purpose in rising at this time is to ask the minister who is piloting this resolution through the committee to answer some questions which have not yet been answered.
One of the matters brought out yesterday was that the position of the Conservative party in the past has been that there should be a reallocation of the taxing powers of the federal government and the provincial governments, so that each would have its sphere of taxation and would be able to look after its own obligations under the constitution without having to resort to the federal government.
I understood, and I think the people of Canada understood, that this was the basic approach of the members of the present government when in opposition, the basic approach of their attack upon the various federal-provincial agreements that had been negotiated with the provinces by the Liberal government. I think the Minister of Finance should definitely answer this question when he deals with the matter.
When the members of the present government, the Progressive Conservatives, are following exactly the formula found in the present tax agreements, are increasing the amount of personal income tax payable to the provinces from 10 per cent to 13 per cent, and are not departing from the principle of equalization in any way at all, I ask them whether they have now decided that they cannot go any farther with the policy about which they made such a great play over the

last three or four years. In other words, have they definitely abandoned the policy with respect to which they made such an appeal over the last three or four years?
I tried to draw some conclusion from the remarks of the Minister of Finance with respect to this matter, and the only conclusion I could draw was that they have abandoned this policy, that they now propose to proceed under the policy which they criticized so bitterly when they were in opposition. If they have not abandoned their basic policy of giving the provinces some reallocation of taxation rights, what I do not understand is why they did not place some suggestion of their own policy before the conference last November.
One cannot help but wonder if they did not seize on the formula of saying they were not going to dictate anything, they were going to listen to what the provinces had to say, in order to avoid bringing any proposals of their own before that conference. In other words, if they had found a solution to the problem, as they claimed to have done when they were appealing to the people, why did they not at least lay it before the conference for consideration by the provinces and by the people of Canada?
It seems to me, Mr. Chairman, that the only inference one can draw is that they now have no policy of their own and they do not know anything they can suggest to replace the policy which they criticized when in opposition.


John Whitney Pickersgill: And which they do not understand themselves even now.


Walter Adam Tucker: It has been suggested that they do not understand it themselves. In any event they should understand the alternative policy which they professed to be ready to bring forward. Surely it would not have been any infringement on the rights of the provinces to have done so. Indeed, the provinces must have been waiting with the expectation that when at the November conference they brought forward their suggestions, they would hear the great new proposals of the Progressive Conservative party, the party that was going to respect the rights of the provinces, the party that was going to respect their autonomy, the party that was going to solve this whole question so that all provinces would be able to exercise their constitutional obligations based upon the powers the Progressive Conservatives were going to give them.
Where are these proposals? It looks to me, Mr. Chairman, as if the Progressive Conservative party is manoeuvring around to

avoid bringing forward these proposals if they have them. I doubt very much if they have them, but if they do have them then I suggest they are afraid to bring them forward. They hope somehow or other to manoeuvre the political situation in this country in such a way that they can get a verdict of the people without disclosing what they have in mind in this regard. In fairness to the people of the country I suggest that before the government ever thinks of dissolving the house and asking for a verdict of the people they should tell the people just what they really have in mind. They avoided doing so by calling this conference into session last November for the short time it sat, making no proposals themselves and now bringing forward a set of proposals which have all the earmarks of a preelection offer, without in any way bringing forward the great proposals which they were supposed to have for the provinces.
I do suggest that if they have the respect for parliament and the people of the country they claim to have they should, instead of manoeuvring around as they are doing and trying to avoid disclosing what they have in mind, give the people of the country the information they are entitled to have as to what a Tory government would do if it had an overall majority and so the power to act which it is constantly saying it would like to have. If they intend to depart from these principles which are a real protection to the maritime and prairie provinces, the weaker provinces financially, then before the people are asked to vote the government should tell them what they intend to do instead of hiding their policy under these makeshift arrangements.
I suggest to the Minister of Finance and the Prime Minister that if they go to the people without disclosing what they intend to do with regard to this matter that is so important to us, then the people of western Canada and the Atlantic provinces will be entitled to draw their own conclusions as to what they intend to do. Therefore I suggest to the Minister of Finance that the government should bring forward what it has in mind as other than an interim solution to the problem. If they intend to ask for the support of the people, let them say what they have in mind as their own policy.
There is another point on which I should like to ask the minister to give us some information. Why was such a sudden decision made? When the conference met last fall the representatives of the provincial governments were led to believe that another conference would be held early this year. Such a conference has not been held on the
Dominion-Provincial Relations perfectly flimsy excuse that it could not be held while parliament was in session, an excuse which nobody accepts as a sound reason. There was nothing to prevent the government shortening the hours of sitting of the house after Christmas to the same length as when the conference met in November, and having just the same amount of time to deal with these matters as they had in November.
As a matter of fact, they have had many opportunities. When our convention was being held it was suggested by members of the opposition parties that the house sittings be lightened so those matters could be attended to. Why did the government not arrange for the conference to meet again at that time? As a matter of fact, quite clearly they did not want another conference before the event with which they are always preoccupying themselves instead of dealing with the great problems facing the country, twice as many unemployed as we have ever had since we started to keep figures, great problems of trade, and all the rest of our problems.
No; they are concerned about getting themselves in a position where they think they may be able to snatch a verdict from the people before they disclose their policies. I suggest, Mr. Chairman, that before the people of the country place any further confidence in the members of the present government they will want to know where the government stands on these various problems. Their decision in this matter was a sudden decision-and everything shows that it was-so sudden that the government itself did not take the time to have its expert advisers work out exactly what would be coming to each province under that decision. If they had given their advisers a matter of 24 hours notice we would not have the mistakes that were admitted by the Minister of Finance. He admits that mistakes were made in figuring out the effect of the proposal, that certain clauses of the act were overlooked. He cannot make the people of the country or the members of this house believe that they would have been overlooked by the civil servants who are used to dealing with these matters.
In other words, Mr. Chairman, this is a decision taken for political purposes and announced throughout the country on the spur of the moment. This is the sort of government we have been getting, no considered judgment, no decisions other than looking to the time when a sudden dissolution of parliament can be brought about and an attempt made to snatch some sort of decision from the people without giving them the exact facts.

Dominion-Provincial Relations
I suggest that there is another reason. The minister had to admit that in making this announcement he had not taken into account important matters having to do with the decision he had just made. At page 3875 of Hansard for January 27, 1958, he said:
The figures given on Saturday morning have to be read in the light of the stabilization principle, and the figures that were put on the record this afternoon represent the final figures and take account of all the elements in the tax-sharing arrangement.
In other words, when the minister made the announcement to parliament, and when he advised the premiers as to what the government was offering, he did not take into account all the elements that were involved, according to his own admission. Does that not give an indication to the house of the haste with which they were trying to get this proposal before the people?
There is another thing. If there was one thing that the government opposite, when in opposition, found fault with it was this business of handing out propositions to the provinces without consulting them. Could there be any worse example of that attitude than what has just taken place? They called the provinces together, the provinces submitted their wishes, and according to Premier Campbell there was agreement on certain things upon the condition that another conference would be held which would deal with these matters. Then the provinces received a telegram indicating that the government was going to do certain things. I doubt very much if the government would have taken that high-handed action if they did not have some definite political advantage in mind, because by so doing they have broken with the very basis upon which they attacked the previous government.
We were told by the Minister of Finance that this decision was based upon agreement with all the provinces. In that regard I believe some attention should be paid to the attitude of the premier of Manitoba, and I should like to read from the premier's letter to the Prime Minister. He said, as reported at page 3227 of Hansard for January 11, 1958:
My colleagues and I feel that it is advisable now to restate Manitoba's position on one question which, to our surprise, took precedence over even the most basic matters with which we had hoped to deal.
I refer to the financial adjustments for the Atlantic provinces that were proposed by the federal government. At the conference itself Manitoba's position was stated as well as it could be on such short notice. You will recall that it was at federal insistence that the conference found itself having to deal with two or three specific matters, including the so-called Atlantic provinces adjustment, before the meeting broke up, while it appeared to the Manitoba representatives that

you and your ministers were unwilling, or unable, to deal with the broader question of the general financial arrangements between the federal and provincial governments.
Here was a conference called to deal with these general questions, and the premier of Manitoba said the federal government was either unable or unwilling to deal with them. Then he went on:
In any event, because of the insistence by you and your colleagues in the last hours of our two-day meeting that this specific matter had to be dealt with at that particular moment, we had no time to prepare a full and studied statement of Manitoba's position in this connection.
In other words this subject was sprung on the conference, and the federal government insisted that it be dealt with without giving the provinces an opportunity to make representations on the matter. Then Premier Campbell said this:
Our proposal will readily be seen to mean an extra $40 million for the Atlantic provinces. This extra assistance to that part of our nation would, under our plan, be available through a formula which would apply equally to all sections of Canada and which would mean that all Canadian citizens would be treated equally by our main tax-sharing arrangements.
Premier Campbell went on to point out:
We also emphasized the point that adverse weather conditions or other unfavourable circumstances might place one or all of the prairie provinces in the same position and consequently that the policy should not be termed an Atlantic adjustment but one applicable to any province of Canada where the need is established.
Surely if there is one thing that should be accepted by the government of Canada it is that any principle that is applied to one province should be applied to all provinces. It was on that basis that the provinces agreed to something being done for a part of Canada which it was said needed help. The agreement was made on the basis that it should be understood and declared that that policy should apply to all of Canada.
There has been no such declaration. All we have heard from the Minister of Finance so far is that under present circumstances the principle would not apply to other provinces in Canada. We have not had an authoritative declaration that if circumstances did result in the income of the people of other parts of Canada being reduced the principle would apply to them as a matter of law.
This is a very important declaration by the premier of Manitoba. Certainly the Prime Minister knows that a poor crop could strike down the economy of the prairie provinces and place them in a position where their governments might very well be unable to carry out their constitutional obligations, and where they would need the

same sort of principle applied to them as is being applied to the Atlantic provinces.
Why is it that we cannot have an authoritative declaration that the principle will apply to all provinces, as requested by the premier of Manitoba? Why has the premier of Manitoba not been given a definite answer? This is a matter that should be explained when the Minister of Finance answers.
Then, too, the premier of Manitoba points out that it was stated to the conference that the cost of these Atlantic settlements, the provisions in regard to unemployment insurance, and the provisions in regard to paying the extra cost if tuberculosis patients and mental cases are included in the hospital insurance plan, would come out of the general federal-provincial program. In that regard I should like to read what Premier Campbell said in his letter and I think the minister should clear this up beyond any doubt. Premier Campbell said:
You and your ministers-
This is directed to the Prime Minister-
-also declared It to be your policy that if the provinces agreed to any of these three specific items the resulting costs would have to be subtracted from whatever amount might be available for the future general dominion-provincial fiscal rearrangements which will most directly benefit municipalities and provinces.
Is it true that what we are doing at this time, although allegedly on an interim basis, in regard to any of these matters is going to affect the ultimate amount that may be distributed under the general fiscal arrangements with the provinces? If that is so, then anything we do now is another dictate to the provinces, something upon which they have not been consulted, because they have never agreed to this proposition. Now then, Mr. Chairman-


Donald Methuen Fleming: Have you read the communique?


Walter Adam Tucker: I am reading what the premier of Manitoba has said.


Donald Methuen Fleming: Have you read the communique?


Walter Adam Tucker: I have read the communique, and I do not think this matter is cleared up. All I am asking is that the Minister of Finance, when he deals with this subject, tell us definitely if the provinces agree, for example, that if tuberculosis and mental health cases are to be dealt with under the hospital insurance scheme, then that cost is going to come out of the money to be paid to the provinces under the general fiscal arrangements?
Dominion-Provincial Relations


John George Diefenbaker: I do not think my hon. friend ever read the communique, because this is in the communique, paragraph 3:
It was generally agreed that the over-all economic position of the Atlantic provinces is now such as to justify some special grants in aid to the governments of those provinces from the federal government.
I ask my friend, is he opposed to these grants to the maritime provinces?


Walter Adam Tucker: I have made it plain that we are in favour of this whole program of assisting the weaker provinces financially, because it is a Liberal program and one with which the government found fault. It was originated by a Liberal government.


John George Diefenbaker: Why didn't you bring it in?


Walter Adam Tucker: The Conservative party found fault with it. They attempted to find support in the province of Quebec by attacking this program. The Minister of Finance knows that.


Donald Methuen Fleming: The Minister of Finance does not know that.


Walter Adam Tucker: Then it was followed by attacks in Ontario, because they said Ontario was not getting enough out of the policy. They said if Ontario elected the present Prime Minister, Ontario would get $100 million more, and that was stated in the presence of the Prime Minister. He knows that he was attacking this program although it was going to help the weaker provinces financially. Of course when I am asked if I agree with what is being done, I say yes. This is in accordance with Liberal policy to help the weaker provinces financially, so of course we are in favour of it.


An hon. Member:: Then what are you talking about?


Walter Adam Tucker: We say it should apply to all provinces-


John Whitney Pickersgill: It should be applied to Saskatchewan.


Walter Adam Tucker: -without any question. Before the intervention of the Prime Minister I was dealing with three matters; let him also deal with these three matters. He was willing to deal with one. If they do decide that the tuberculosis and mental costs should be included under the hospital insurance scheme, is that going to be charged to the provinces? The Prime Minister dealt with one question, now let him deal with the others.
If there is a great deal of money spent in the policy of removing the threshold so far as assistance to the provinces in dealing with unemployed is concerned-and of course there will be a great deal of money spent in

Dominion-Provincial Relations that connection-is that going to come out of the money which ordinarily would go to help the provinces under these fiscal arrangements under decisions made at the dominion-provincial conferences? Premier Campbell said that was the stated policy of the government, and I say the government should be prepared to say whether that is true or whether they have changed their minds since the conference, because the people of this country are entitled to know what the situation is before they vote.
The next matter which I think the government should clear up without any delay and without any doubt is this. They say, "Pass this and we, if we are left in power, are some time later going to amend the Income Tax Act." This is in regard to those parts of Canada where there is double taxation; but they are avoiding taking a position on this matter with respect to what they are going to do. Why is it that they do not take the people into their confidence and say what they are going to do, instead of asking parliament to vote without knowing what is their true position?
I would therefore suggest that the people of Canada are entitled to an answer, and the Prime Minister was very ready to get up and answer me before. Let him answer this question. Have they abandoned their policy whereby they insisted that the right attitude in this matter was to reallocate the fields of taxation as between the federal government and the provinces? Have they abandoned that policy? Let him answer that, and let him also answer why there was the sudden decision to put out this proposal before the civil servants had a chance to even calculate what it would mean to each province. Why that sudden decision? Did they make the sudden decision having in mind the possible dissolution of this parliament in an attempt to snatch a decision from the people?


Some hon. Members:: Oh, oh.


Walter Adam Tucker: Hon. members can laugh, but that does not answer me. Let him also answer, in addition to that question, whether he is prepared to extend the same rights to all the provinces that he is extending in this particular instance to the Atlantic provinces and of which he is making so much. As Premier Campbell said, we of the west are glad to see the weaker provinces assisted properly as is being done in this matter, but we want to know if this policy is going to apply to all provinces. In other words, will this great Liberal policy which has given the foundation upon which the provinces can exercise their constitutional obligations, be carried forward in its entirety to all parts

of Canada, or will an attempt be made to make an election bribe out of it for one part of Canada?
The next thing I would like to raise is that I think the Prime Minister should say whether these things that were said in regard to mental and tuberculosis costs and in regard to unemployment assistance costs are going to have to come out of the amount of money the provinces might get under this policy of general fiscal arrangements.
Let the Prime Minister deal with these matters, but above all let him tell us as to the basis upon which this appeal was made to the people of Canada, namely that the Liberal party were centralizing because they were raising taxes and turning money over to the provinces, which was necessary in order for them to carry out their constitutional obligations and that there should be a reallocation of taxing powers so that each province should levy its own taxes and run its own affairs. Has this policy now been abandoned? Let him tell the pleople of Canada as to that.


Mr. Macdonald (Vancouver-Kingsway):: I
would remind the ministry in the presence of the Minister of Finance and the Prime Minister that the province of British Columbia sometimes, and this has certainly been the case in the past, feels that it is inclined to be forgotten; and remind them that there is indeed a province on the other side of the mountains. It has already been mentioned that British Columbia awoke on Saturday morning to expect a further $5| million, but on Monday morning that amount had been cut to $2.8 million; and it has been suggested that cut could be described as the "most unkindest cut of all" which occurred over this week end.
The minister has changed the formula, which is an extremely complicated one in a way, unfortunately, which favours the provinces of Ontario and Quebec unduly and which gives too little consideration to the province of British Columbia. The net advantage to the province of British Columbia has been described as $2.8 million or almost $3 million, while in the case of the province of Ontario the net advantage is going to be $22 million. The population of the province of Ontario is only four times that of the province of British Columbia, yet the expected increase under this change in formula will be about eight times our increase. In other words, in Ontario, they are receiving twice as favourable consideration under the new formula as under the old formula.
In the case of the province of Quebec, which is now going to receive an additional

Dominion-Provincial Relations
$19 million, this is approximately six times the benefit being received by the province of British Columbia, yet the population of Quebec is only three times that of my own province. So once again approximately double the consideration is being given to Quebec that is being given to British Columbia.
I therefore suggest that the minister should give consideration to this matter, and I furthermore suggest that he is treating my province in this necessary readjustment as somewhat the neglected child of confederation. As we are still at the resolution stage I suggest it is not too late for him to revise his proposals in order to do away with this inequity to my own province. I am not comparing my province with, say, the prairie provinces or the Atlantic regions, because they do have special problems of their own. But it is true to say that British Columbia, as an industrial province, is more comparable with Quebec and Ontario and, as they are comparable, I say that the more favoured treatment being given to the two central provinces is unfair and warrants reconsideration by the Minister of Finance.


George Roy McWilliam: Mr. Chairman, the
measure to provide financial assistance to the Atlantic provinces by authorizing the paying out of the consolidated revenue fund for each of the four years commencing on the 1st day of April of this year of an annual grant of $7$ million to each of the provinces of New Brunswick, Nova Scotia and Newfoundland, and an annual grant of $2J million to the province of Prince Edward Island, and also to raise from 10 per cent to 13 per cent the rate paid to the provinces under the Federal-Provincial Tax-Sharing Arrangements Act, is welcomed, I am sure, by all members of this house.


Donald Methuen Fleming: You would not think so to listen to the last three speakers.


George Roy McWilliam: My remarks, Mr. Chairman, will deal chiefly with the $7J million in equalization grants which will be paid to the province of New Brunswick. I realize it is not possible for this government to designate a set portion of this equalization grant to be paid directly to the municipalities. Nevertheless I would like to see a suggestion from this government to the provincial government that special consideration be given by the provinces to safeguard the rights of the municipalities.
The distribution of the amount under the federal-provincial tax-sharing agreements by the province of New Brunswick to its municipalities has been a bone of contention over the years, in that the municipalities have claimed they have never received their
inherent and rightful share despite all the efforts made for an equitable distribution.
From 1952 until the present time federal grants in lieu of taxation rose from approximately $8 million to $24 million, an increase to three times the 1952 amount. The municipalities received a very small share of the increased grants, despite the fact that school costs and other costs are mounting at an alarming rate, with the result that rural taxpayers in most counties in New Brunswick are finding it extremely difficult to pay municipal taxes, which are steadily rising despite all the efforts of municipal councils to keep down costs.
In the year 1951-52 the province of New Brunswick received $11,274,523 in direct payments from the federal treasury under the province's share of income tax from certain corporations and from statutory subsidies. Over the years tax rental agreement payments substantially increased with the expanding economy, and in the year 1955-56 the total amount paid in direct payments was $18,517,000.
The increase that would be received by the provinces for the fiscal year 1957-58 over the 1956-57 figure, as estimated by Mr. Harris, former minister of finance, on page 5889 of Hansard of July 16, 1956, was $114 million. This estimate showed New Brunswick as receiving $7,375,000 on yield of standard taxes and equalization payments of $14,705,-
000.	These amounts, with the statutory grant of $1,670,000, made a total of $23,759,000 estimated for New Brunswick for 1957-58. The amount tabled yesterday shows $23,490,000 paid in 1957-58.
Under the bill which will follow this resolution the province of New Brunswick will receive $7,500,000 from Atlantic adjustment grants and an interim payment based on the increase from 10 per cent to 13 per cent under the federal-provincial tax arrangements in the amount of $2,111,000, for a total of $9,611,000. This $9,611,000 together with the normal payments under the federal-provincial tax sharing agreement and the statutory subsidies will reach a total of over $30 million which will be received by New Brunswick for the fiscal year 1958-59.
When the minister closes this debate I should like him to inform me if the figure of $30 million can be considered a fairly approximate one. It is realized that it is not possible to forecast a definite figure until the federal-provincial conference on fiscal matters concludes its deliberations later this year. In the minister's statement to the house on Saturday last, he said:
All provincial treasurers are preparing budgets for the fiscal year commencing April 1 and require

Dominion-Provincial Relations
to know immediately what, if any, additional fiscal payments they may expect to receive from the dominion government during the fiscal year.
It is interesting to note what action certain provinces announced they would take if increased grants were forthcoming. Premier Campbell of Manitoba stated he would turn over to the municipalities the full amount of any increases. The premier of Nova Scotia met with municipal officials of his province and discussed the sharing of increased grants with municipalities.
No known move has been made by the government of New Brunswick in this connection. The New Brunswick union of municipalities should demand an immediate conference on this important fiscal matter.
In regard to preparing provincial fiscal budgets and the statement of the Minister of Finance that it was important for provincial treasurers to know what they could expect, the same situation applies to municipal governments, and it is hoped that the province of New Brunswick will show the same attitude to the municipalities of that province.
The Minister of Finance, speaking on the resolution, said the Atlantic equalization grants and the interim amounts of increased tax sharing payments would assist public works projects which, in turn, would relieve unemployment. If the province of New Brunswick follows this suggestion the people of Northumberland-Miramichi are looking forward to the completion of the Renous-Plaster Rock road and a highway bridge across the Miramichi river at Chatham, public works projects long overdue. The people of New Brunswick expect fair treatment to be given the lower levels of government by the province in the sharing of the extra $10 million.


Mr. Brooks:: May I point out to the hon. member that they would not have had the extra $10 million to share if his government had remained in power. He is very good at telling New Brunswick what to do, but there would have been no additional funds to hand out if it had not been for this government.


George Roy McWilliam: However it came about they are going to get this $10 million, and I am doing my duty here in trying to see that this money is used to benefit the municipalities.


Alfred Johnson Brooks: May I inform the hon. member-


Some hon. Members:: Order.


Jean Lesage: On a point of order, I believe that the Minister of Veterans Affairs will have all the opportunities he wishes to make statements on this question. He was not rising on a point of order, and he was not asking a question.


Donald Methuen Fleming: He was asking a question of the hon. member who had the floor.


Jean Lesage: He was cluttering Hansard.


Alfred Johnson Brooks: The hon. member was reading his statement. I was just asking a question.


Jean Lesage: An unnecessary remark.


George Roy McWilliam: I felt that it was a fair observation by the Minister of Veterans Affairs if he wished to raise that point, and I personally do not have any objection to his raising it. But, I repeat, I feel I owe a duty to the municipality of Northumberland and to the province of New Brunswick, and I must point out that we expect fair treatment in this regard.
This resolution has my wholehearted support, and I trust that the government of the province of New Brunswick will carry out the spirit of this resolution and in turn make equalization payments to the municipalities, towns and cities. The citizens of New Brunswick are entitled to an early announcement as to how the New Brunswick government plans to expend this money. The municipalities want to know this now because it has a very important bearing on their annual budgets and tax structures. Most of the municipalities of New Brunswick will convene their annual sessions within the next two or three weeks. Some of them, in fact, are meeting this week.
As I indicated, Mr. Chairman, I will be pleased to support the passage of this resolution and the bill based thereon.


Mr. Stuart (Charlotte):: Mr. Chairman, I have listened with interest to this debate. I was very much interested in the remarks made by my hon. friend from Northumberland-Miramichi who has just resumed his seat, though apparently some of the remarks he made did not meet with approval of other members from our province.
There is one thing I wish to deal with at this time, and that is the opening remarks of the Minister of Finance in introducing this resolution. I quote his own words, as reported at page 3847 of Hansard of yesterday's date:
Mr. Chairman, to the present resolution and to the bill which it is hoped will follow upon the passage of the resolution, the government attaches very great importance, for it looks upon this measure as one that will bring aid to the provinces and municipalities of this country, and effective aid also in meeting the problem of unemployment.
To my knowledge, Mr. Chairman, this is the first time in the history of the federal government's dealings with the provinces when assistance has been earmarked before it left the capital city. I know of no other occasion in my experience here when a

federal government has ever told the provinces for what purposes such assistance should be used, and I may add that I was here in 1945 when the premiers of the provinces were called together in conference to deal with the matter of federal-provincial tax rental agreements. This is the first case of its kind. We Liberals have always been able to boast that when these moneys were provided to the provinces they were provided with no strings attached, and were to be used for any purpose the provinces wished.
I will say before I am interrupted that every hon. member from the maritimes certainly welcomes this assistance to the maritime provinces. There can be no question about that. This represents, of course, a simple continuation of a time tested, good Liberal policy. It is nothing more or less than a continuation of good Liberal policy.


Alfred Johnson Brooks: They get the money now, though; that is the difference.


Jean Lesage: By going into deficit, yes.


Andrew Wesley Stuart: Mr. Chairman, I can well remember when my hon. friend who just interrupted sat on this side of the house and condemned the federal-provincial tax rental arrangements on every occasion when they were brought into this house. I can go back to the leaders under whom he has sat in this house, and every one of those hon. gentlemen including his present leader condemned the federal-provincial tax rental agreements.


Alfred Johnson Brooks: Quote one instance for me when I condemned them.


Andrew Wesley Stuart: I was sitting as an observer in the Senate on the occasion when one of the leaders before the one under whom you sit now put his portfolio under his arm and walked out and scuttled that conference. He scuttled it and so did Maurice Duplessis, who is now premier of the province of Quebec.


Donald Methuen Fleming: That is utterly untrue.


Andrew Wesley Stuart: That is not untrue. I was there at the time and I am only telling about an event I saw with my own eyes. The tax rental agreements had been condemned by every leader of the Tory party for years.


Donald Methuen Fleming: Mr. King adjourned the conference sine die, and that was the end of it.


Andrew Wesley Stuart: If my friend the Minister of Finance will just contain himself I will go back and refresh his memory and give him some of the background of these conferences. I did not interrupt the hon. gentleman when he was speaking. His memory may be as poor as it was when he
Dominion-Provincial Relations drafted this proposal last Saturday, because he made a bad mistake somewhere, which suggests to me that despite his ability his memory may not be as good as mine.
On every occasion since I have been here when these tax rental agreements came up for renewal those who now sit on the government side of the house sat on the opposition benches and condemned them from every angle they could. However, since the Minister of Finance is interrupting me I want to take this opportunity of pointing out to him the great difference between sitting on the government side of the house and sitting in the opposition. I propose to refer to the words used by the Minister of Finance on July 23, 1956, as recorded at page 6296 of Hansard of that date. At that time the minister, who was then the private hon. member for Eglinton, said:
There is no use, as far as Her Majesty's loyal opposition is concerned, asking us to approve a form of dominion-provincial fiscal arrangement which has not received the approval of a single provincial government.
These are the minister's own words.


Donald Methuen Fleming: And very sound, too.


Andrew Wesley Stuart: I continue:
If there could be, on the part of the federal government, a change of attitude, and after that change in attitude they will call a new conference, then fruitful results I am certain could be achieved. It would necessitate a fall session of parliament. We would be quite happy to see a fall session in order to achieve this praiseworthy object.
There was a man who was sitting in opposition as a private hon. member. We had been in session for nearly eight months, but he was prepared to come back for a special session of parliament in order to bring together the provincial governments to discuss this question. But today, when we have been sitting here for only three or four months, the same hon. member who now occupies the portfolio of Minister of Finance could not find time to call in the provinces for a discussion. It was the first time in the history of this country that we have had legislation by telegram.


Donald Methuen Fleming: Oh, how absurd!


Mr. Palleii:: What about budget by radio?


Andrew Wesley Stuart: I said "telegram". I did not say "radio" and I did not say "out at an airport" either. I said "by telegram", and that is exactly what has taken place. How the attitude can change. It was of such great importance in 1956 that the Minister of Finance was prepared to come back for a special fall session of parliament in order to call in the provincial

Dominion-Provincial Relations premiers for a discussion of the proposal, but today we have legislation by telegram.
I would like to read for the benefit of my hon. friend the Minister of Veterans Affairs the remarks made by Hon. Hugh John Flemming, premier of our province, when he came to Ottawa in 1956 to attend the federal-provincial conference held in that year, by way of illustrating to my friend the different atmosphere that prevailed in 1956 from that which the provincial premiers found prevailing as a result of the attitude of the present government. Mr. Flemming said:
We are thankful that the situation as we meet today is in decided contrast to the troubled times which formed the sombre backgrounds of other conferences. Today, we gather during a period of unprecedented economic expansion and at a time, furthermore, when international tensions are less than for a number of years. No doubt many unforeseen dangers lie ahead, and grave political problems underlie the appearance of tranquility. Nevertheless, I would submit that here and now, we who are gathered in this room, have been granted a magnificent opportunity to achieve long sought national objectives, and it is in such a spirit that our New Brunswick delegation has come to Ottawa.


Alfred Johnson Brooks: Mr. Flemming was referring to the war.


Andrew Wesley Stuart: Would you like to have the date on which these remarks were made? I was referring to the verbatim report of the proceedings of the federal-provincial conference held on Monday, October 3, 1955, some ten years after the war; and I would point out to my hon. friend that Hon. Hugh John Flemming was not premier of New Brunswick during the war. Your memory seems to be slipping since you have become Minister of Veterans Affairs.


Alfred Johnson Brooks: Not a bit.


Andrew Wesley Stuart: I suspect there is something in that. I would like to quote another paragraph from Mr. Flemming's remarks, if I may:
We should continue to profit by the experience of the years in which the tax rental agreements have been operative. Undoubtedly, much has been learned of their benefit both from a provincial standpoint and from a federal point of view. The element of fiscal control should not be lightly dropped. So to summarize briefly we favour continuation of tax rental agreements with renewal clause for protection of the province.
Until this session of parliament I have never heard either my hon. friend the Minister of Veterans Affairs or my hon. friend the Minister of Finance pay a compliment to the federal-provincial tax rental agreements. When Hon. J. B. McNair was premier of our province, and ever since, the premiers have known that it was only under the tax rental agreements that the maritimes could provide the services to the people they have provided.

They could not operate without this assistance, which was granted over the protests of Hon. George Drew and Hon. Leslie Frost, premier of Ontario, and Maurice Duplessis, the premier of Quebec.


Donald Methuen Fleming: No, it was not.


Andrew Wesley Stuart: The Minister of Finance can sit there and tell me it is not true but I know it is true.


Donald Methuen Fleming: And I say it is not true.


Andrew Wesley Stuart: I know it is true. They were opposed to it. They said they did not feel they should share the revenues of their own provinces. This was stated publicly and otherwise. The Minister of Finance may sit in this house and blatantly deny it, but to no avail because I know it is true. That has been the attitude down through the years.
I mentioned at the outset that this is the first occasion in my memory when it has ever been suggested by a minister of finance in making an announcement of this sort for what purpose the assistance was to be used. When the minister introduced this resolution he pointed out very clearly that he was most hopeful that it would be helpful in meeting the problem of unemployment.
I believe there may have been a political motive in making that suggestion. However, I was pleased to learn that the Minister of Finance has at last acknowledged that a serious unemployment situation exists in the province of New Brunswick and throughout the nation because we have been told on other occasions that it was just propaganda that was being circulated by the Liberals to try to instil fear into the Canadian people that would be most harmful to the economy of the country. Now, however, the Minister of Finance has at last acknowledged that we have a grave unemployment situation.
I can assure him that the money could be used to great advantage in the province of New Brunswick for this purpose, because in my own county today and in other counties of which I have records we have the most serious unemployment we have had in 25 years. It is most serious. I do hope it may be used for that purpose because today workers, particularly married men with families who are seeking employment and are unable to find it, certainly will appreciate having something to do so they can provide for their families during the long winter months. I for one think it might be a very good suggestion, that it would be helpful in the unemployment situation.
In his remarks in introducing the legislation yesterday the Minister of Finance tried to give the impression to those who were not

acquainted with the circumstances surrounding this most important subject that this was the first time any assistance had ever been given to the maritime provinces, or to any other part of Canada, under this tax-sharing arrangement. I should like to point out to the minister that this improvement is approximately a 12 per cent increase. The total amount given to the provinces under the tax rental agreement was $631 million, previous to this supplementary payment which has been made. That $631 million was provided to the provinces of this country by a Liberal administration.
To that the present government has added $87 million. In other words 88 per cent of the moneys provided under the federal-provincial tax rental agreement has been provided by a Liberal government and, as I stated a while ago, that amount has been provided in the face of prolonged and bitter opposition by those who now form the government, who have argued from every point of view that this system was wrong and that some other kind of system must be found to take its place. It certainly came as a great surprise to those of us sitting on this side of the house to discover as well that the Minister of Finance was using the formula adopted by his predecessor, Hon. Walter Harris, in working out additional payments, though I must say that Mr. Harris was much more careful with the figures he used than the Minister of Finance was a few days ago in the formula which the Tory members had condemned completely and entirely when they sat in the opposition.


Donald Methuen Fleming: Because it was inadequate.


Andrew Wesley Stuart: Surely the great knowledge of the Minister of Finance and his colleagues could have been used to work out a more just and a less complicated plan. I would have thought his ever present pride would have made it impossible for the Minister of Finance to admit that he was using a formula which had been worked out by the former minister of finance.
I have heard the Minister of Finance refer to the unfortunate inheritance of Liberal ideas and principles. He has referred to that so often-


Donald Methuen Fleming: Not the ideas and the principles; it was just the mess they left on the doorstep.


Andrew Wesley Stuart: May I tell him that they have served him and his government very well, not only on this occasion but on every other occasion in working out the changes which have taken place since last June 22, with the exception of the trading policies of this country which speak for themselves.
Dominion-Provincial Relations
I do regret that the provincial premiers were denied the privilege of meeting with the federal government before this take it or leave it proposition was made. I believe it would be completely out of order for the Minister of Finance to direct the provincial authorities as to the way in which he feels this money should be spent. So often in the past I have heard the Minister of Finance refer to the Liberal government as being dictatorial. Well, I can assure the minister that no more glaring example of a dictatorial attitude can be found anywhere than in this legislation by telegram, not calling the provincial premiers to the capital city and not giving them any opportunity of expressing their views in this regard. It was purely a snap proposition, something to which very little consideration was given.
I believe we must all agree that the way it was presented on Saturday would indicate that no great thought had been given to the matter. It was very obvious at that time that the press in most parts of the country in expressing their views felt that it looked as though it might be something that would be done just previous to the announcement of an election date.
Before I resume my seat I should like to put on record an editorial which appeared in the Ottawa Citizen yesterday.


Donald Methuen Fleming: That is out of order. You cannot put on the record an editorial pertaining to a current debate in parliament.


Andrew Wesley Stuart: What is that?


Donald Methuen Fleming: The hon. member cannot read editorials on what is current in parliament.


Andrew Wesley Stuart: Is the Minister of Finance the chairman of the committee at this time?


Donald Methuen Fleming: You ought to know the rules by now.


Andrew Wesley Stuart: The Minister of Finance is trying to direct the Chair.


Donald Methuen Fleming: You ought to know the rules by now.


Andrew Wesley Stuart: I should say this, Mr. Chairman. The Minister of Finance is muttering to himself and he has suggested that I should know the rules, but I want to say this since he has made that assertion. In my experience here in 12 or 13 years no one has broken the rules of this house to the same extent as the minister who sits across from me. In my experience no one has made any sillier interjections than has the Minister of Finance.


Donald Methuen Fleming: The rule is being broken by you today.

Dominion-Provincial Relations


Andrew Wesley Stuart: He is supposed to be an expert on the rules of this house. Must I wait for his direction or the direction of the Chair? I will either carry on or resume my seat. Is the Minister of Finance correct, Mr. Chairman, that I have no right to read from the editorial which appeared in the Ottawa Citizen last night?


The Acting Chairman (Mr. Rea):: The Chair cannot rule until he knows what the editorial is. He has to know what the editorial is about.


Andrew Wesley Stuart: I certainly appreciate your ruling, Mr. Chairman, and I will be guided by it. I will be only a short time; it is a short editorial.


Stanley Howard Knowles: Read the last sentence.


Andrew Wesley Stuart: I will read the last paragraph and leave out the rest. I will take the advice of the hon. gentleman.
The fiscal aid measure falls into two parts. One part is the result of agreement; the other is not. The Atlantic provinces are no doubt happy to have the assurance of adjustment grants totalling $25 million annually for the next four fiscal years. But the other provinces are left in doubt as to what final formula will emerge.


Donald Methuen Fleming: Mr. Chairman, that is just the point. On a point of order, the hon. member is seeking to read an editorial commenting on something which is under debate in this house at this moment. That is the reason I suggested to my hon. friend that he knew quite well it was out of order to read an editorial commenting on what is currently under debate in the house. That is what this editorial does. My hon. friend can argue his case, but he cannot read editorials.


Charles Edward Rea: A moment ago I waited to see what the editorial was. Of course what the Minister of Finance says is quite right. The hon. gentleman cannot read anything that pertains to the matter under debate. It is out of order in a debate to read extracts which refer to other debates during the same session or to questions not under discussion.


Andrew Wesley Stuart: If it is out of order to read the editorial I suppose it would be in order if I quoted from it instead of reading it?


Alfred Johnson Brooks: That is on a par with your reasoning. That sounds like your reasoning.


Andrew Wesley Stuart: Well, Mr. Chairman, the Minister of Veterans Affairs says that sounds like my reasoning. I have an idea that my reasoning satisfies me in pretty much the same way that his reasoning satisfies him; but sometimes when I look over at


those sitting on the treasury benches now I often wonder if anyone can find a greater magnifying glass anywhere in the world than the mirror into which those gentlemen would be looking at any time, because if I have ever seen inflation in its highest form I see it there. They take their positions so seriously. They are always right and everybody else is wrong.


John Cameron Pallett: Natural gas from the maritimes.


Donald Methuen Fleming: We are trying to do the best job possible.


Andrew Wesley Stuart: My hon. friend to your right, Mr. Chairman, mentioned natural gas in the maritimes. Let me tell him he would not have any natural gas in Ontario if it had not been for the Liberal government sitting over there. That may be a statement that is out of order, Mr. Chairman.


Donald Methuen Fleming: It is.


Andrew Wesley Stuart: It is the result of an interjection from the other side of the house.


John Cameron Pallett: The hon. member does not know the political history of Ontario.


Andrew Wesley Stuart: I know my political history. I have been here as long as the hon. member has, and I will likely be here-


Some hon. Members:: Oh, no.


Some hon. Members:: Hear, hear.


Donald Methuen Fleming: You had better be careful.


Andrew Wesley Stuart: I can assure the Minister of Finance that this vote-catching idea he has at this time does not appeal to everyone. You cannot hoodwink all the people of this country in 24 hours. It just cannot be done.


Donald Methuen Fleming: Are you going to vote against it?


Andrew Wesley Stuart: I am not voting against it. I thought I explained my reason very clearly. It is just good Liberal legislation.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: You never brought it in during 22 years.


Andrew Wesley Stuart: You have produced no other legislation of your own, either. So far as trade relations are concerned you are as far away from the goal as anyone can be. You are trying to wreck this country.


Donald Methuen Fleming: Order.


Andrew Wesley Stuart: Well, that was the result of an interjection. I am just answering my hon. friend, and he asked for it. I

try to keep in order, Mr. Chairman, but with the interjections it is a little difficult for me to do so.
I shall resume my seat with this comment. When the Minister of Finance replies I should like him to tell us honestly why the conference was not reconvened, and in doing so I should like him to take into consideration the demand he made for a special session of parliament, when he was prepared to come back to Ottawa after spending eight months here, in order that the provincial premiers might be called to Ottawa to meet the federal government and deal with the most important matter of tax rental agreements. That was on July 23, 1956. That was the hot session in Ottawa, but he was prepared to come back for another special session.
The provincial premiers were called here in November. There has been lots of time to bring them back. I should like the minister to explain in a way I can understand why they were not called back, and why steps were taken to introduce this resolution without the provincial premiers knowing anything about it until they received telegrams. To me this represents the most dictatorial attitude ever taken by any government in the history of the country. I thank you, Mr. Chairman.


Mr. Marler:: Mr. Chairman, I just want to come back this afternoon to the question I raised yesterday having to do with the discrepancy between the figures the minister gave on Saturday and those he gave yesterday in the table which was put on Hansard. During the course of my remarks last evening the minister interrupted to endeavour to explain the discrepancy between the Saturday figures and the Monday figures. As found at page 3874 of Hansard he said:
The other eight provinces receive benefit from the fact that British Columbia and Prince Edward Island do not now take their full share by reason of the prior application of the stabilization principle.
At first sight, Mr. Chairman, that explanation seems quite convincing. I say "at first sight" because if you started with the premise that it is correct it would lead you [DOT] to believe that what the minister said was right, but when you look at the table he put on Hansard yesterday you see right away that is not the explanation, nor are the facts in conformity with that explanation.


Donald Methuen Fleming: Oh, yes, they are.


George Carlyle Marler: The minister himself surely must realize that the factor of stabilization which applies to British Columbia and Prince Edward Island has nothing whatever to do in determining the amount of money that is available to the other provinces.
Dominion-Provincial Relations


Donald Methuen Fleming: Oh, yes.


George Carlyle Marler: The minister will have plenty of opportunity to complete the explanation. I have two or three minutes left, and I should like to make use of them.


Donald Methuen Fleming: I could have given the explanation without larding the record with all this.


George Carlyle Marler: Basically the additional amount payable to the other provinces arises from the increase in the yield of standard taxes for the two highest provinces, Ontario and British Columbia, and if you examine these figures you find that the increase in the yield of standard taxes for these two provinces has the effect of increasing the amount to be paid to the other eight provinces in virtue of the tax-sharing formula. They have the effect of increasing the per capita equalization amount to $41.58, as this table shows.
It is quite obvious, Mr. Chairman, that the stabilization amounts have nothing whatever to do with the amounts that go to these other provinces. The stabilization amounts may cut down the amount they receive. That view I accept; but if the Minister of Finance will read the explanation he gave which I quoted a moment ago he will see that the discrepancy between the figures he gave on Saturday and those we had yesterday has nothing whatever to do with stabilization.


Donald Methuen Fleming: Quite wrong.


George Carlyle Marler: I hope the minister will explain it in terms we can understand.


Donald Methuen Fleming: If you will give me the chance I will do it right now.


George Carlyle Marler: I suggest to the minister that the basic difficulty is that the arithmetic he used the other day was not the kind of arithmetic that went into this table. I suggest to him that the basic figures, probably the population figures, were not correct, and I do suggest that the factor of stabilization does not add one dollar to the amount which serves to determine the per capita equalization, which is the basis used to determine what amount of income tax or what by way of equalization is to go to a province.
The fact is that the explanation the minister gave does not explain this difference between the Saturday and Monday figures. I know the time is not available to the minister at the moment to give the explanation.


Donald Methuen Fleming: I would be glad to if you would allow me.


George Carlyle Marler: The minister will have plenty of opportunity to do so when the clock is not moving against him as it is now. I think the house is entitled to something much

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clearer than the rather inadequate explanations the minister has put on the record already, which are not in conformity with the principles that are involved and certainly do not explain the differences between Ontario, let us say, on Saturday and Ontario on Monday.
In fact, Mr. Chairman, the resolution itself tells us that this could not possibly be the explanation of these differences because we see, coming to the part having to do with the provinces as a whole, that the proposed change is to alter the definition of standard individual income tax so that in any agreement these words shall be construed as if the words "10 per cent" were replaced by the words "13 per cent". That makes it perfectly clear, Mr. Chairman.


Charles Edward Rea: Order. It being five o'clock it is my duty to leave the chair pursuant to standing order 15(3) in order to allow the house to proceed to the consideration of private and public bills.
Progress reported.



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[Stage Direction]
The house resumed, from Thursday, November 28,	1957, consideration of the
motion of Mr. Knowles for the second reading of Bill No. 4, to provide for minimum wages for employees.
Stanley Howard Knowles: 


Mr.   Speaker-Mr. Speaker@: I must inform the house that if the hon. member speaks now he will close the debate. The hon. member for Peel.
Mr. John Pallet! (Peel): Mr. Speaker, on the last day this bill was before the house I think I was speaking on it, and at that time I had referred to certain matters in the bill that could have been improved with proper examination. I had said there was legislation in effect in the provinces that was more explicit in its terms and in determining how the legislation should be implemented.
Since that time there has been passed in the province of Manitoba legislation of a similar type that also carries forward much the same principle found in other provincial legislation, in that it sets up a board to deal with certain areas of employment. I believe this act of the Manitoba legislature supports much of the argument I was putting forward when we were last considering this measure.
I feel it is rather significant that not many days ago in this house the hon. member for Essex East turned to the hon. member for
[Mr. Marler.l
Winnipeg North Centre and said, "If you would look at the resolution we passed at our convention you would see that you could obtain everything you wish if you followed the principles adopted at the Liberal convention." It was an interesting comment, and I would suggest that perhaps it shows that the Liberal party have become C.C.F.'ers in a hurry. I think perhaps if the hon. member for Winnipeg North Centre were to follow this suggestion made by the hon. member for Essex East he might look at this Liberal legislation passed in Manitoba.
He might not agree with the suggestion made to him, but actually there is not too much difference between the two parties who now sit opposite us in this house. I doubt if there is any difference between them at all. I think perhaps the suggestion of the hon. member for Essex East to the hon. member for Winnipeg North Centre has more in it than at that time met the eye.
The reference to the Manitoba legislation I have mentioned is found in the Labour Gazette, page 1480. The article sets out the legislation very well, and without commenting on the particulars of the legislation I suggest to the hon. member who has introduced this bill that he read it, and he will see that it is another example where a provincial legislature has seen fit to follow principles other than those he enunciated. I feel there is some merit in following the principles established by the provinces in so far as labour legislation is concerned, that is in setting up boards rather than trying to legislate to take care of the whole field of labour relations.
I believe this procedure would overcome the constitutional difficulty that was encountered by a Conservative government in 1935 when they attempted to alleviate certain labour conditions facing the country at that time. The people who were in opposition at that time, rather than attacking the measure before the house, chose to attack in another manner, that is by taking it before the courts. This measure along with others was ruled ultra vires. This method of criticism .was not unlike the procedure they now follow. They seem to prefer to do things in the unusual way rather than the usual. In any event they were successful at that time, and they prevented the people of this country from benefiting from the far-seeing legislation then introduced. This was the record of the Liberal party, and it has now taken the C.C.F. party 22 years to catch up with legislation introduced by the Conservatives 22 years ago.
It has been suggested that the form in which this legislation is could overcome the constitutional difficulty merely because it is

stated that the measure relates only to those branches of labour that are exclusively under federal jurisdiction. I feel that in this one respect the hon. member has succeeded in bringing it within that compass; but in view of the history of the Liberal party in attempting in every way it can to circumvent legislation that benefits labour, some difficulty might be encountered if this house passed the bill and it was attacked before the supreme court.
There are only two provinces whose attorneys general the Liberals could possibly persuade to make an application before the supreme court. This is one of the reasons I feel that before we in this house are asked to support a bill, undoubtedly noncontroversial in its principle but which in its details could be defective, we should have the bill thoroughly screened from its constitutional aspects.


Stanley Howard Knowles: Would the hon. gentleman permit a question?


John Cameron Pallett: Yes.


Stanley Howard Knowles: wonder if he is aware of the fact, since he apparently is one who does screen legislation from a constitutional and legal aspect, that with respect to the application of bills which are similar, the Fair Employment Practices Act and the Female Employees Equal Pay Act, neither of those pieces of federal legislation has been taken to the courts by the attorney general of any province, Liberal, Conservative or otherwise.
Mr. Pallet!: I appreciate the question. I would say to the hon. member that perhaps the people across the way have not seized this opportunity, as they did on the previous occasion.


Stanley Howard Knowles: They are not in a position to do so.


John Cameron Pallett: We are not in a position to say at what time they would like to seize this opportunity. In order to forestall any action of that sort in connection with legislation passed this year, I think we might well have it carefully screened by the legal experts of all departments. As the hon. member will perhaps recall, the last time I spoke I pointed out to him and to the house certain defects in the bill that were apparent from a casual reading. Everyone would agree with the general principle that has been suggested.
This seems to be one method by which the C.C.F. achieve success. They do not seem to be such a progressive party as they pretend, but rather they like to suggest things such as, "Everybody likes ice cream,
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so let us have an ice cream cone." You might almost say they are like the old reactionary parties-


Stanley Howard Knowles: May
I ask the hon. member another question. Was his prime minister only handing out ice cream cones during the election campaign last year when he promised that the Conservatives would introduce legislation to provide for a federal minimum wage?


John Cameron Pallett: The hon. member for Winnipeg North Centre is also one who reads the book. I think we can commend that reading to him. We can also commend to him the realization that within the short period of this parliament more promises have been implemented by this party than ever before in the history of this great dominion of ours. I say to him that if he would refrain from fully discussing so many extraneous matters, if he would prevail upon his friends who sit to his right to allow important legislation that has been introduced to be passed, then many more of the promises that were made-so far there has been 100 per cent performance in carrying out those promises-would be dealt with in the normal session.


Stanley Howard Knowles: The
government's percentage on minimum wages is zero.
Mr. Pallet!: The hon. member for Winnipeg North Centre said that the percentage on minimum wages is zero and he says that, I think, rather in a spirit of saying, "Well, I cannot get my way, so it is not going to be done at all". He knows very well that is not the situation; he knows very well that promises made on an election platform envisage that a government in the normal course will be elected for a period of from four to five years, and that these election promises and pledges are carried out over that period. I do not think he could seriously suggest that in the period this house has been sitting, namely four months, we could have carried out the election pledges and promises which were going to be carried out over a period of four years.
Surely the hon. member cannot seriously suggest that any government in four months could, first, undo the damage that has been done in 22 years and, second, carry out all the steps needed within this country in that period of time. I think he is being just a little facetious when he hopes we will seriously consider his suggestion about a minimum wage act. I say to him through you, Mr. Speaker, that we do not bring legislation before this house merely to clutter up the order paper. We bring it in after careful

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study and as much perusal as possible of concurrent legislation, with a full understanding and desire that it will be carried out-


John Whitney Pickersgill: May I ask the hon. member a question? I am sure it will come as a great relief to him.


John Cameron Pallett: The hon. member asks questions of everyone else, so I do not know why he should not ask one of me.


John Whitney Pickersgill: I am sure this will come as a great relief to him, because he is having a pretty hard struggle to keep going. The question I was going to ask him was how much careful study was made before the first version of his government's agricultural prices bill, how much study before the second version, how much study before the third version, and how soon do they think it will be before they have a fourth version?


Mr. Speaker:: Order. I am not sure that the question relates to the principle under discussion, but in any event I must interrupt the hon. member to tell him his time has expired.


Mr. J. C. Van Horne (Resiigouche-Madawaska):: It is a pleasure for me to state very frankly, Mr. Speaker, that this bill is a very long overdue measure which should have been introduced in this house a good many years ago.
I would like to take very briefly the position in one industry, the paper industry, because it is with that industry that I am most concerned within my own riding. The lack of a minimum wage law affects many thousands of people in my riding in a very adverse way. What happens with these pulp mills, of course, is that where the unions are strong and where employees are in unions they are in a position to obtain fair minimum wages, at least generally speaking. However, where our people are being exploited is where they are engaged in secondary industries, and the difficulty is that it is almost impossible to unionize and get together.
As the price of paper goes up, for instance, I have found in my riding that the prices the farmers receive for their pulpwood goes down and down, and it might be reasonably ascertained that the person who is being punished is the fellow who is not in a position to appeal to a union to press for reasonable wages. For 22 years the former government sat by indifferently and lazily, neglecting to introduce a fair minimum wage act. This has been a growing problem in this country for a good many years, and I can well remember former government members going down to my riding during election time and promising these minimum wage acts, but this is the first time I have had a chance to speak on this

subject. I congratulate the hon. member for Winnipeg North Centre for bringing this bill before the house at this time.
Right at this time in my own riding the C.N.R., for instance, is paying 70 cents an hour for snow shovellers while the C.P.R., right across on the next track, is paying something like $1.15 or $1.20 an hour. We find all through the story that it is precisely those men who are most in need of this type of protection who are expected to work for wages which are far below what might be considered necessary in order to maintain a reasonable standard of living.
I must also congratulate the government of the province of New Brunswick which, since 1952, has introduced a minimum wage act of its own. This has gone a long way toward alleviating the injustices which were perpetrated against employees in my province. Of course, so far as I can find out Liberal policies have always been against minimum wages, and it is most unfortunate that we have had to wait until this late in the day to have occasion to approve this measure.
I wish to make just one more point; that it will be found as the result of a minimum of inquiry that this bill will do no more than provide the merest form of justice to employees. The bill possibly does not go far enough, but it would be a great step forward and I sincerely urge the acceptance of this bill by the house.


Mr. G. H. Aiken (Parry Sound-Muskoka):: In principle, Mr. Speaker, I am in agreement with the bill now put forward by the hon. member for Winnipeg North Centre. It has long been recognized and believed that a minimum wage for employees in general is required. Of course we have to accept the fact in this particular instance that the bill relates only to federal employees, and those people in allied services. As has been said, in this house we cannot attempt to legislate an over-all minimum wage act, but certainly in a situation of this kind the government of Canada should take the lead and so far as it is within the legislative authority of the parliament of Canada such a minimum wage act should be brought in.
Having said these few words on the general principle of the bill, I would like to discuss in detail some of the principles as they are found in individual clauses. The first clause to which I wish to refer is clause 3 of the bill, which is the application of the bill to employees. This seems to be the customary type of clause which has been put in other acts, as the hon. member for Winnipeg North Centre has pointed out. I find the same provision and the same application in other bills which have been put forward

by the hon. member, and also in a bill put forward by the Minister of Labour in relation to the same matter.
The other section to which I should like to refer is clause 5. Clause 5 is a principle which I think was well placed in this particular bill. It does not seem at first glance that it is necessarily a part of a minimum wage bill. It merely requires an employer to provide any necessary special wearing apparel, equipment and so forth to an employee without any deduction being made in this respect. However, on more careful examination it can be seen that there might be a deduction made by an employer which could have the effect of indirectly reducing the minimum wage established by the act. In other words, where an employer felt that he could make deductions indirectly, he would be prevented from doing so by this particular clause.
I should like to refer also to the principle contained in clause 11 of the bill. I had occasion while speaking on a previous bill of a similar nature to take some objection to this type of provision. There is a great tendency to increase the burden of bookkeeping on the employer. We all know that in these days employers are required to do a good deal of bookkeeping for the government of Canada in connection with income tax deductions, workmen's compensation where it applies in the provinces, the deduction and charging of unemployment insurance, making numerous returns and the keeping of a great number of books and records for the government.
So far as this clause imposes on an employer the necessity of setting up and creating a separate set of books merely to indicate that he is paying the minimum wage of $1 an hour, I think it is wrong and I do not agree with it. I think the normal books set up at the present time to comply with the numerous government requirements should be sufficient record to show whether or not an employer is in fact paying his employees the minimum wage, particularly when the bill relates to federal government employees and employees of services and businesses allied with the federal government. In all such cases it must be recognized that fair and complete books are already kept, and I think it is unnecessary to set up any separate or additional bookkeeping system merely to prove that an individual employer is paying the minimum wage provided by the bill.
Of course in clause 12 there is provision for an extension-


Mr. Speaker:: Order. The hon. member has been allowed to proceed with the discussion of three separate clauses of the bill on the
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basis that they each introduce a principle, but I am doubtful that the principle is any more than the principle of the establishment of a minimum wage. The opportunity will more properly arise to discuss the clauses of the bill when the bill goes to committee. While I do not want to be too rigid about what is the principle of the bill and what is not, I think the hon. member is going into more detail than he should at this stage.


Gordon Harvey Aiken: Mr. Speaker, if I might speak for a moment on this point which Your Honour has raised, I would point out that the same point was raised previously in connection with another bill on which I was speaking. At that time the hon. member for Winnipeg North Centre suggested I should not be able to refer to individual clauses of the bill. After that I took the trouble to look into the question, and if Your Honour would permit me I should like to say a few words on it. I referred to the Canadian books which are available in order to find what has been the actual practice.
I do submit first, Your Honour, that every bill presented to the house is merely a number of clauses, a group of clauses. We cannot merely say this is a bill but there are no clauses in it. In order to establish the principle we have to consider the individual clauses. My understanding of the rule as it has been established by custom in the British houses of parliament and here in the House of Commons is that a member should not be permitted on second reading to discuss the clauses of a bill seriatim-and the word seriatim which I looked up in the dictionary, particularly in Murray's new English dictionary, volume 8, which is to be found in our library, is as follows: "one after another, or one by one in succession."
Mr. Speaker, I should like to suggest that the true statement of this rule is to be found in Bourinot's fourth edition at page 511. This is a Canadian book, and at page 511 it states: On the motion for second reading it is out of order to discuss the clauses seriatim.
I made a particular point, Mr. Speaker, of not discussing the clauses seriatim. I did feel that several of the sections raised individual points and principles which ought to be discussed.


Stanley Howard Knowles: Would the hon. member permit a question? Do I understand that he is suggesting that he avoids breaking the rule if instead of taking the clauses in numerical order-one, two, three, four, five, six and so on-he takes them in the order two, six, four, five, one, three or in some such order as that, other than in succession? Surely the meaning of

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the rule that the clauses shall not be discussed seriatim is that on second reading, when we are dealing with the principle oi the bill, we should not deal one by one with the mechanics required to implement that principle, or the details involved in carrying out that principle, as set out in the bill. I am listening with considerable interest to the point the hon. member is making, but it seems to me that there is a good deal of merit in the well-established practice that on second reading we should deal with the principle of the bill and leave the discussion of details until we get into committee.


Gordon Harvey Aiken: I would not go so far as to say that the rule can be circumvented merely by reversing the order of the clauses as the hon. member suggests. I think it is very well understood that the reason for this rule is that in committee we consider each of the clauses separately and the go through the bill considering it clause by clause. But if it is not proper for a member in speaking to pick out a certain clause and say, "There is a principle to be found in this clause and I wish to discuss that principle," then it would be the duty of the Speaker to call the member to order if he felt the member had gone beyond the point of discussing the principle and was merely discussing various clauses. I believe it would be a matter for the Speaker to decide at what point a member was not following the rules and was merely reversing the order, but I do not think going from clause 10 to clause 7 or 8 would necessarily be that.


Mr. Speaker:: Seeing that the hon. member has addressed himself to the remarks I made perhaps I may say that the principle to be followed is stated in Beauchesne in citation No. 656, in these words:
The second reading of a bill is that stage when it is proper to enter into a discussion and propose a motion relative to the principle of the measure. On the motion for the second reading, it is out of order to discuss the clauses of the bill.
It may be a question on which there would be a difference of opinion at any one time whether in referring to a clause you are actually discussing the clause or the principle of the bill, because the principle is of course wrapped up in the bill itself. I may say, too, I think there is no particular significance in the word "seriatim" although it is mentioned by Bourinot and it would be obviously improper to go through the clauses of the bill one after another. I called the hon. member's attention to what he had been doing because he had been doing just that to some extent. He had gone through three clauses and was about to enter into a discussion of a fourth clause, which to my mind

was a discussion of the machinery for carrying out the principle of the bill rather than a discussion of the principle involved in the bill, and that is why I raised the point.
I appreciate the attention he has drawn to Bourinot, but it seems to me you have to be guided in each case by the necessity of referring to the clause only in order to derive the principle, and if that is so it is proper to enter into a consideration of the wording of the clause but not beyond that.


Gordon Harvey Aiken: I take it, Mr. Speaker, that you have come to the conclusion that I was on the point of discussing the bill seriatim. I had just about concluded my remarks and said all I intended to say on the general principle. I thank you, Your Honour, for your ruling.


Mr. R. J. McCieave (Halifax):: Mr. Speaker, it is a pleasure to rise to speak to a C.C.F. motion with over 20 minutes to go because on three previous occasions when I rose to speak on motions, bills, resolutions and what not, sponsored by hon. gentlemen in that group I had to content myself with observations well within a two minute period, and that of course gave rise to their drawing the unjustifiable inference that I was attempting to talk out their measures. Happily today we have still 22 minutes at our disposal. I will be reasonably brief and there will still be opportunity to vote on the measure which I regard basically as a sound one.
I noticed in the November 1957 issue of Canadian Labour the following paragraphs which are germane to this debate. I am aware, Mr. Speaker, that in quoting them I am repeating what my friend the hon. member for Winnipeg North Centre has already quoted, but since the previous debate occurred approximately two months ago perhaps it would be wise to refresh our memories. I am referring to an article dealing with an appearance before the dominion government of the Canadian Labour Congress on October 21, and at page 17 these words occur:
But the dominion should not confine itself to doing as well as the best of the provinces. It should give a lead. It should, specifically, establish a legal maximum work week of 40 hours and a legal minimum wage of $1 an hour. This is not really a very drastic proposal. About 65 per cent of all plant workers in manufacturing now have a standard work week of 40 hours or less. So have all railway workers, and a host of others. The 40-hour week is, indeed, now the predominant practice, and its legal enforcement would merely give a smallish minority of workers what the vast majority already enjoy. As for the minimum wage, there must be precious few workers in industries under dominion jurisdiction who are not getting at least $1 an hour. In some

industries under provincial jurisdiction a minimum of $1 an hour might be hard to apply immediately, but in most provinces the legal minimum rates are preposterously low, and if parliament set a minimum of $1 for industries under its jurisdiction, that might provide a spur to provincial laggards.
I think in the last few lines I quoted we perhaps can find the key to this request of the Canadian Labour Congress, and also the request of the hon. member for Winnipeg North Centre, for the legislation that is now being considered and that is a spur to the provincial laggards if such there be. I would hope that if the hon. member does speak later in this debate he would answer this question. Action by this federal parliament would presumably set an example but would it necessarily follow that any provincial laggard would follow that example.
The other day while participating briefly in the debate on the measure concerning the voluntary revocable check-off I had occasion to table some information given me by the economics and research branch of the Department of Labour, which will be found at page 3776 of Hansard. In my opinion the figures set forth there are of importance in this debate. The figures show that there are
413,000	employees under federal jurisdiction. Of these 294,000 operate under some form of agreement, and I presume this means a contract reached as a result of collective bargaining. In other words, 119,000 are not employed under such agreements, and of these some 20,000 are to be found in the employ of steam railways and another 57,500 in the employ of banks.
With regard to the former I would suppose that with the passage of time an aggressive union such as the Canadian brotherhood of railway employees and other transport workers would pick up these strays and bring them within the union.
With regard to the banks, I would seriously doubt whether any bank employee is now paid a rate under $1 an hour. Of course that was not always so. In any event, the blessings of collective bargaining seem to be on their way for bank employees. I understand that already some unionization has occurred in the province of Ontario and that, once established there, unions will move to banks elsewhere. Therefore I would imagine that the figure of 294,000, which was quoted as the number being under some form of agreement-that is, having the right to bargain collectively-has attained the objective of $1 an hour at least. So far as the others are concerned, the number would not be very large indeed who are under a minimum of $1 an hour. I believe that is borne out by the remarks I quoted from the November issue of Canadian Labour.
96698-248J
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There is only one other principle of the bill to which I should like to address myself. I am mindful of Your Honour's remarks in connection with the debate which preceded my rising, namely not to get into a discussion of specific clauses, but I should like to refer briefly to clause 4 and then get away from it as quickly as possible. I do that to point out the principle on which I should like to have an answer from the hon. member for Winnipeg North Centre. I refer to clause 4(1) and (2). This clause imposes the obligation that the employees be paid a minimum wage. If we can get this bill through committee it might be better to have the obligation made much more positive; that is, that every employer shall pay a minimum wage. Otherwise, if by some mischance a union should reach an agreement with its company and agree to accept under $1 an hour, and that union should be within federal jurisdiction, under this bill it could in effect mean that the union members would be guilty of an offence against this legislation.
As a corollary to that remark I should like also to point out to the hon. member for Winnipeg North Centre that there may be a danger in imposing by legislation a policy of minimum wages. I do not think there is any danger in imposing a minimum wage of $1, but I presume that in the flux of time other figures will be substituted from time to time. The danger, as I see it, is that some industry may get into trouble. I am thinking of one example in New Brunswick where the union had to take over control of the plant, in effect become management and employee at the same time, so they could run the business; otherwise the plant would have shut down and dislocated the entire town.
I think there are such examples in different parts of Canada. I realize there are not too many. We are thankful for that, but still there are examples. If the hands of the union were fettered and the union were prevented from entering into an agreement which was best for its purpose-and it might be best for its purpose to include a wage below any minimum set by parliament- then I think you would run into certain dangers in this sort of legislation.
I may have given my friends to understand by my remarks that I am against the legislation. I am not against it, but I did want to raise two or three specific points. My first point is, are we accomplishing anything by setting the provinces an example? My second one is the point I have just made.


Mr. W. G. Beech (York South):: Mr. Speaker, as the representative of the riding of York South, where we have a very large

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percentage of working people, I rise to lend some measure of support to this bill.
In view of the examples set by the provinces I am surprised to learn that no minimum wage rate has been set by the federal government. It will be noted that under the interpretation section of this bill no distinction is made between male and female workers, which is a change from the provincial act covering this subject. I note that in the Canadian Labour Congress presentation to the cabinet it is pointed out that the maximum legal minimum wage in effect in the provinces is 75 cents for male and 65 cents for female workers.
I do not think anyone is going to quarrel with me when I say that under present-day conditions those minimums are entirely unrealistic. If those standards were in effect a very low standard of living would result. Yet there is a danger, Mr. Speaker, that a minimum wage rate may well become the maximum. There are those in the labour movement who still have doubts as to the wisdom of pressing for this type of legislation. However, this bill does provide a minimum wage of $1 an hour for both sexes, which is the figure adopted by the Canadian Labour Congress, and I assume that all aspects of the matter must have received the consideration of that body.
The explanatory note says:
The purpose ol this bill is to establish a minimum rate of wages with respect to all employees in Canada who come under federal labour jurisdiction. This bill provides that such minimum rate of wages shall be $1 per hour. The bill also provides that its terms do not affect any employee whose 'rate of wages is higher than the minimum established by this legislation.
While this purports to be the principle of the bill, the interpretation does not give any such indication. It merely goes on to say that the employer means any person, firm or corporation, and so forth. It is true that it is all covered in clause 3, which refers to the application of the act, but it does not say that this legislation shall apply only to those undertakings carried on under the legislative authority of the parliament of Canada. I point this out because the rate of $1 an hour might be all right in protected employment, such as the civil service, but it might not be satisfactory in such fields as seasonal employment where a much higher hourly rate might be necessary.
Therefore I feel that in this respect this bill does not altogether provide that those minimum rates shall apply only to all employees under federal labour jurisdiction. There should be some clarification and some insistance that that shall be so. Furthermore, the bill covers a lot of features which I feel

are removed from the minimum wage principle and might well be matters of discussion and bargaining between employer and employee. For instance, there is a reference to the question of board and lodging. I think that has already been provided for in legislation passed by the house during the present session. It has already been taken care of under a separate act. I find that there are very many clauses in the bill which tend in that direction.
I think the hon. member for Winnipeg North Centre has included in the bill a lot of things that do not apply solely to minimum wages. It is for that reason I say I can only give the bill a measure of support. I do believe that a minimum wage should be set, but I think that minimum wage should be in accord with existing conditions so that people will be assured a decent living.


Mr. John Smith (Lincoln):: Mr. Speaker, I rise to speak on the bill because I have had a great deal of experience both as a union worker and also as an employer of union men. I have had a great deal of experience with bargaining committees, negotiating committees and boards of arbitration, and also with trying to enforce minimum wage rates in the province of Ontario. As far as the matter of the minimum wage is concerned, I should like to say that I am certainly in favour of minimum wages and of workers getting all they can within reason. But we must remember that in Canada there are three levels of government, municipal, provincial and federal. In my opinion matters having to do with minimum wages are purely and simply provincial matters. After all, it is easy to pass a bill but it is another thing to enforce it.
As I have already said, I have had experience in trying to enforce the industrial standards act of the province of Ontario. If you pass a bill and say that $1 an hour is to be the minimum wage, you will surely find that in a locality where the prevailing rate is higher the prevailing rate will come down to $1. I have had that experience, and I know what I am talking about. If you go into a municipality where the prevailing rate is less than $1 you then have the problem of enforcing it.
In that case it is not the employers who cause the problem, but rather the employees. After all, they will tell you that they live in a free country and that if they want to work for 90 cents an hour they are going to do it. In order to prosecute them you must have access to payrolls and you have to bring them into court. Who is going to do that in this case? I think the only way those

matters can be attended to is by the provincial governments and through the local courts. I think it would be most unfair for us to saddle the provinces at this time with legislation of this kind unless we ourselves intend to enforce it.
As far as the unions are concerned, it is generally considered that minimum wages are not good labour legislation. I think that can be easily proven. In the constituency from which I come there is the most highly unionized city, I think, in the whole of Canada, and it is one of the best cities in which to live. You never hear anybody there talking about minimum wages because the employees all have their own union agreements, and they are carried out not by the government but by the labour organizations themselves.
While I am in favour of legislation to give people the most we can for the services they render, nevertheless I cannot see that a minimum wage for the whole of Canada is something that would be of benefit to the people. It would certainly be legislation that would be very hard to enforce. Again, who am I to say that $1 an hour should be the minimum wage in Newfoundland, some parts of the province of Quebec or Ontario or anywhere? I think all these things bear out the fact that this is really a provincial matter, and I do not feel that I can support such legislation on the federal level. I say that because I know what I am talking about. As I said, I have been connected with unions and workers for a long time and I am quite satisfied that this is not good legislation. May I call it six o'clock.


Alexander Malcolm Nicholson: No. Question.


Mr. Speaker:: Is the house agreed that I call it six o'clock?


Stanley Howard Knowles: There is a minute and a half to go.


Alexander Malcolm Nicholson: Question.


Mr. J. A. McGrath (St. John's East):: First of all, Mr. Speaker, I should like to compliment the hon. member for Winnipeg North Centre on bringing in this very important bill. At the same time, however, I should like to raise two very important points that have been suggested by the two previous speakers in the debate.
First of all, sir, there is sometimes a tendency in this country for minimum wages to turn out to be maximum wages. I can give the house an instance of that in my own province, where the minimum wage act provides that workers are to be paid a minimum rate of 70 cents per hour. I raise this point to emphasize that the whole question of
Dominion-Provincial Relations minimum wages must be considered on a regional basis. It must take into account regional difficulties, costs of living and so forth. In my opinion these important points should be studied very carefully before any such legislation is brought down.
On motion of Mr. McGrath the debate was adjourned.


Mr. Speaker:: It being six o'clock the house will revert to the business which was interrupted at five o'clock.



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

[Stage Direction]
The house resumed consideration in committee of the following resolution-Mr. Fleming-Mr. Rea in the chair:
That it is expedient to introduce a measure to provide for financial assistance to the Atlantic provinces by authorizing the payment, out of the consolidated revenue fund, for each of the four fiscal years commencing on the first day of April, 1958, of an annual grant of seven and one-half million dollars to each of the provinces of Nova Scotia, New Brunswick and Newfoundland, and an annual grant of two and one-half million dollars to the Province of Prince Edward Island, and also to provide as an interim measure that in its application to the fiscal year commencing on the first day of April, 1958, the definition of "standard individual income tax" in the Federal-Provincial Tax-Sharing Arrangements Act, shall for the purposes of that act and any agreements made thereunder be read and construed as if for the words "10 per cent" therein there were substituted the words "13 per cent".
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at eight o'clock.
Jean Lesage: Is the minister going to reply to the questions that have been asked of him?


Donald Methuen Fleming: Mr. Chairman, I shall be glad to deal with the points that have been raised if that is the wish of the committee. First of all may I touch on the matter of the telegrams concerning which the hon. member for Winnipeg North Centre asked me some questions yesterday. We have traced the telegrams, and we have a report from Canadian National Telegraphs concerning them. The 10 telegrams were duly taken by the telegraph company on Friday. We have a report indicating that, owing to an error by one of the members of the operating staff of Canadian National Telegraphs, the telegrams addressed to Hon. T. C. Douglas and Hon. D. L. Campbell did not reach their offices or destinations. They, of course, have been followed up by replacement telegrams.

Dominion-Provincial Relations That is the explanation of why the premier of Saskatchewan did not receive a telegram at the time the other premiers did.


Stanley Howard Knowles: In
other words the Minister of Finance now admits it was not a frivolous question that I asked yesterday.


Donald Methuen Fleming: I did not say it was a frivolous question. I think most of us depend upon the telegraph systems of this country to do an efficient job. We find now, on inquiry, that a member of the staff of Canadian National Telegraphs did not carry out his duty efficiently in this particular case when the 10 telegrams were handed to the company; that is the situation with regard to telegrams.
So far as the various points that were raised in discussion are concerned, Mr. Chairman, I think any extended remarks might better be reserved for second reading of the bill. I shall touch on one or two matters that were raised today in the course of discussion.
The hon. member for Northumberland urged that the payments that are going to the provinces should be earmarked for the municipalities. He was followed by another hon. member in his own party, the member for Charlotte, who contended that there should be no such thing as earmarking. Indeed, he went so far as to suggest that in saying these payments would be helpful in meeting the problem of unemployment, the government was attaching some conditions to these payments. In speaking yesterday, I said, as recorded at page 3851 of Hansard, that the grants are unconditional; that is the position in law, and that is the true essence of the situation.
I draw again to the attention of hon. members of the house that unquestionably much of the benefit of these payments will go to the municipalities. This has been indicated by various provincial governments. Having regard to the fact that municipal governments and provincial governments are very fertile creators of work in this country, we may be sure that this additional assistance to both municipal and provincial levels of government will unquestionably be productive of work.
Then, Mr. Chairman, I was asked concerning the matter from the point of view that there was some unilateral action involved here. That is not the case at all, Mr. Chairman. In proceeding with the Atlantic adjustment grants, we were taking the course which was indicated at the conference in November, which was contemplated by the conference, and which was expected by those at the conference. In the passage I read in my

remarks yesterday from the communique, Mr. Chairman, there are these words:
It was generally agreed that the over-all economic position of the Atlantic provinces is now such-
Now such. I continue:
-as to justify some special grants in aid to the governments of those provinces from the federal government.
I pointed out yesterday that it was so significant at that conference that there was this general measure of recognition of the fact that some special assistance must be provided for the Atlantic provinces. We proceeded, therefore, precisely in the manner that was approved at the conference. The governments of the four Atlantic provinces met with officials representing the federal government and arrived at the formula, and that formula was then translated into the percentages to which I referred yesterday. It then only remained to decide what should be the total sum of money provided for the Atlantic adjustment grants in aggregate. I indicated yesterday also, Mr. Chairman, that that figure was not just taken out of the air. That figure had a definite relationship to the figures that had been under discussion over the previous two years, the kind of figures that had been discussed from the time Premier Flemming first put forward the concrete proposal for the Atlantic adjustment grants.
I made it quite clear yesterday, when asked this question, that on the basis of the formula which Premier Flemming had first put forward, and which was the whole basis of the thinking in relation to the subject of Atlantic adjustment grants at the conference, only four Atlantic provinces would qualify under that formula. Now, that was recognized at the conference. Whatever the future may hold, certainly in regard to the present situation and in regard to anything in the immediately foreseeable future, it is only the four Atlantic provinces that could have justified a claim for special consideration on the basis of the kind of thinking that was back of the formula that Premier Hugh John Flemming put forward, and that found acceptance at the conference.
There has been no unilateral action in regard to the Atlantic adjustment grants. Similarly there has been no unilateral action, in the sense in which that term was used here in debate, as though it were an opprobrious term, in connection with the other part of the measure now under discussion. My hon. friends seek to make something of the fact that this measure evidently had not been worked out in great elaboration long days before. We have been living here through this session in recent weeks hoping

day by day to see some evidence of rapid progress toward conclusion of the business of the session, hoping always that this conference could be reconvened. As the days passed the problems of the provincial governments in relation to their budgets became more and more pressing, and they are very pressing at the present time. There are provincial budgets that are in the course of being reduced to final form while this measure is debated.
We felt therefore that something had to be done in this situation, faced as we were with a prolongation of this present session of parliament and the pressing needs of provincial treasurers in preparing their budgets. It seemed to us the only fair and proper course was for us to ask parliament to give approval to further assistance to the provinces on an interim basis.
I have made it quite clear from the outset that with this interim provision the provinces may count on it for this year, but that does not tie their hands. It ties the federal government's hands with regard to this year but it does not tie the hands of the provinces, and when the conference is resumed there will be full opportunity for discussion of all elements entering into the problem of arriving at fiscal settlements. This measure will, however, bring valuable assistance to the provinces at this very moment; and the need of bringing that form of assistance to the provinces is, in our view, urgent not only in the light of financial problems of the provinces but also in the light of financial problems of the municipal governments, in addition, of course, to the problem of unemployment.
There is one thing I will do my very best to clear up and that has to do with the tables of figures. Here let me say that I will do my utmost to make clear the basis upon which these figures were prepared. I realize from some of the remarks made yesterday and today, when a serious member such as the hon. member for St. Antoine-Westmount spoke in his second contribution to this discussion, that I have not made this matter clear, and if the committee will bear with me I shall do my best to do so now.
All these figures, with which we are now dealing as I indicated yesterday, are prepared on the basis of estimate. I have not, I am sure, given the house to understand that they are exact figures in any respect. The figures which were used on Saturday were figures, as I mentioned yesterday, which were incomplete because the stabilization factor had not been applied to those figures. There are at the present time only two provinces which derive any benefit from the stabilization
Dominion-Provincial Relations payments. Those two provinces are British Columbia and Prince Edward Island.
I am sure hon. members are aware of the fact that the stabilization principle operates as a floor. If the benefits derived by a province from tax yields, plus the equalization payments, do not come up to the figure established on the stabilization basis, then stabilization payments operate as a floor to protect any province from losing any benefit which it had at the conclusion of the previous quinquennial period which ended on March 31, 1957; it acts as a floor. The new formula increases the provincial share of the yield from income taxes from 10 per cent to 13 per cent; in other words, it changes the old 10-9-50 formula to 13-9-50, commencing April 1, 1958. That means that with regard to these two provinces, which were enjoying the benefit of the floor, a portion of this increase went simply to bring the total of their tax yields plus equalization benefits up to the floor.


Jean Lesage: Or over.


Donald Methuen Fleming: The portion that exceeded the floor, obviously was not the full amount of the 3 per cent additional on the tax yield. In the case of Prince Edward Island, the addition of the 3 per cent brings their aggregate at present of the tax yield plus equalization just about level with the floor-not exactly, but just about-


Jean Lesage: Nineteen thousand dollars.


Donald Methuen Fleming: There is a difference of just $19,000. In the case of British Columbia, as I mentioned yesterday, of the figure I gave on Saturday just about half goes in bringing the previous aggregate of tax yield plus equalization up to the floor, and the portion above the floor, in round figures, is $2J million. That is the explanation of the way in which the stabilization principle has operated to affect the figures which I gave to the house on Saturday.


Jean Lesage: Would the minister permit a question? It is quite all right as far as the two provinces mentioned are concerned, but how could it affect the other eight provinces?


Donald Methuen Fleming: If my hon. friend will permit me, I am just going on to deal with that other aspect of the matter. I am coming back now to what was said this afternoon by the hon. members for St. Antoine-Westmount and Montmagny-L'Islet, and I realize that the attempt I made to explain this point certainly has not made it clear or satisfactory. I want to clear up this matter because, while it might be a good debating point for us to talk about differences in the table, I am sure all hon. members want to have a clear understanding of the situation.

Dominion-Provincial Relations
The figures of which I made use on Saturday were, like the figures I placed on the record yesterday, based on estimate. Those figures took the actual amounts for the fiscal year 1956-57, and used a percentage mark-up which was thought to be reasonable for the calculation of the yields. We took a 5 per cent mark-up on the actual figures for the fiscal year 1956-57.
Now the table which was placed on the record in Hansard yesterday goes a step further and, again using the estimate, takes the figures for 1957-58 and, while they are not complete for the whole year, tries to use these figures as far as they are definitely now known and uses an estimate as to the balance. That accounts for such differences as exist in the figures for the other eight provinces.


Jean Lesage: May I ask a question on that point?


Donald Methuen Fleming: I think I will be able to make it quite clear if my hon. friend will let me complete my statement. I think it would be better if he asked his questions then.


Jean Lesage: Will the minister agree that his explanation as recorded at page 3874 of Hansard of January 24, was wrong so far as the other eight provinces are concerned?


Stanley Howard Knowles: Yes.


Donald Methuen Fleming: I am trying to give a serious explanation on this point.


Jean Lesage: This is a very serious question.


Donald Methuen Fleming: If I might proceed with my explanation, I think these things will be made quite clear. The figures which appear in yesterday's table, as the table itself indicates, are themselves based in substantial measure on estimate. If hon. members will look at the table they will see at the top there appear the words "For purposes of illustration only." There is a mistake in Hansard at the top of page 3850 of January 27. The expression used is:
Estimate of benefits to provinces under the Federal-Provincial Tax-Sharing Arrangements Act . . . as supplied to data of the fiscal year 1957-58.
The table should properly read "applied to data of the fiscal year 1957-58."
These 1957-58 figures are themselves, just as were the figures which were used in the earlier attempt to give the explanation on Saturday, to a substantial degree an estimate, and the explanation which I sought to give last night, to which my hon. friend the member for Montmagny-L'Islet has just referred, arises on my part from the fact that by a curious coincidence there are


figures on this sheet which happens to tally almost to the dollar with the aggregate of the figures I used on Saturday, but are arrived at in a quite different way.


Jean Lesage: That is quite right.


Donald Methuen Fleming: In making the statement I made last night I was not aware of the explanation as to the difference in those figures. I have made it my business to check into it since. It happened that in part it is a coincidence that the two figures are almost identical.


Stanley Howard Knowles: Just $3,000 difference.


Donald Methuen Fleming: Yes, only $3,000 out of a figure of nearly $62 million.


Stanley Howard Knowles: thought it was your addition.


Donald Methuen Fleming: It may go even further than that. The total is correct. I was given to understand by those who had reviewed the figures that the figures I was bringing into the house on Saturday to try to give the house as much information as was available at that time were substantially correct and, of course, those were the figures I gave. The figures in the table represent further elaboration and carry the total calculation as far as possible on the basis of actual figures in the year 1957-58.
I remind the committee, as I did yesterday, that the figures we have used with regard to the calculation of the benefits to the provinces from this amendment are figures which have been for the purpose of calculating totals superimposed upon the 1957-58 figures. There has been no attempt in the table to project the figures for 1958-59, because they would be entirely estimated. Therefore those who have prepared this table-and hon. members do not need to be reminded of what complicated calculations are included in this table- have gone as far as they can in clarifying the benefits under this amendment with the highest measure of actual figures and the minimum of estimate possible in an approach to this problem.
Mr. Chairman, I think that covers the review of the points which were raised in the discussion of this matter. I point out again that these are unconditional grants, but we have heard from the provinces on many occasions about the benefits which would accrue to the municipalities if the federal government would enlarge the provincial share of the tax payments which are collected from the joint fields of taxation open to federal and provincial jurisdiction, and I hope now that with this explanation the committee will see fit to approve the resolution in order

that the bill may be introduced and the uncertainty prevailing with respect to all provincial budgets which are now in course of preparation will be terminated so those governments can proceed with the immediate tasks confronting them; and that, having taken care of this immediate situation, the conference can be resumed when there is less pressure than exists at the present time, and an effort may properly be made at that conference to arrive at the goal of the conference which was set last November and in the earlier discussions-the goal, so far as we are concerned, of fiscal settlement.


James Sinclair: Mr. Chairman, I do not intend to make a speech; 1 will wait until second reading before doing that. But I do want to say quite plainly that the explanation the minister has just given for his extraordinary miscalculation between Saturday and Monday is the weakest explanation I have ever heard given in this House of Commons.
I say that because for five years I was parliamentary assistant to the minister of finance, and during that period I was able to acquire an intimate knowledge of the very great ability of that department and of the thorough and painstaking way in which the officers of that department approach fiscal problems.
I know, too, that one branch of the department has been dealing with this problem of the dominion-provincial tax agreements for almost 16 years, during which time it has studied almost every conceivable variation which has been put forward by the provinces and the federal government, even the famous axe proposal of Mr. Drew, and they are well aware of the major items in this agreement of which there are just three; tax-sharing, the equalization payments and, third, the stabilization payments.
The stabilization payments were raised mainly because of the demands made by three successive British Columbia premiers, Mr. Hart, Mr. Johnson and Mr. Bennett, and no official of the Department of Finance who ever went through any one of those negotiations would ever forget stabilization. So I say it was not the officers of the Department of Finance who made this miscalculation; it was the minister himself, with his very scanty knowledge of these affairs working, perhaps, in the seventeenth or eighteenth hour of the 18-hour day on which he prides himself, who made this miscalculation.
We would have thought much more of the minister tonight had he stood up and said, "I did it all myself". I say this because once we had seen the table we recognized the 96698-249
Dominion-Provincial Relations careful and competent work which we expect from the officials, and I say the minister is doing no good to the civil service of Canada in trying to pass off his mistake on them, any more than his chief did last week by producing a secret report in the house.
As I say, I have heard some weak explanations during my lifetime, but never before has any minister of the crown stood up and tried by insinuation to unload his errors on his department. You made that error, you and yourself alone; your department, of course, turned out the proper figures. We, of course, have confidence in those latter figures because we know they have been prepared by people who are well versed in these matters. It is going to be very hard, however, to explain to Premier Bennett and Premier Matheson why they were led up the garden path; that they have merely been misled by a mistake made by the Minister of Finance because he works such long hours.


Mr. Bell (Saint John-Alberl):: Terrific
effort.


Jean Lesage: A flimsy excuse.


Stanley Howard Knowles: Mr. Chairman, I realize that when an error has been made by the Minister of Finance he thinks that all he has to do is explain how it arose and all is well again. The fact is that it is not a very good way to win the confidence of the country for one who has to deal with these large sums of money to have to admit that he has made mistakes of the kind the Minister of Finance made in connection with this matter.
The minister keeps talking about these two sets of figures-the Saturday set and the Monday set-simply as the figures that were prepared. At no point does he say who prepared either set. I think in all fairness he should tell us. The minister was good enough to supply a number of us yesterday with a mimeographed copy of the table which he asked to have placed on Hansard* Those of us who have such copies recognize the authenticity of the work that was done in preparing this table because of certain initials which appear on the table. I am glad those initials were not placed in Hansard and that the anonymity of the civil servants doing this work was preserved in that way, but I think the minister should not attempt to tell us that it was a group of civil servants who prepared the figures he gave on Saturday.
That is not the only mistake the minister made. Perhaps the mistake he made last Saturday was that of rushing in where angels fear to tread but he made another mistake yesterday which he has now admitted. We learned from him that he forgot to apply the
3932	HOUSE OF
Dominion-Provincial Relations stabilization aspect of the formula to the figures and that that was the reason the increase for two provinces had to be reduced. Then when we asked for the explanation as to the changes with respect to the other eight provinces he said last night, as recorded at page 3874 of Hansard:
The other eight provinces receive benefit from the fact that British Columbia and Prince Edward Island do not now take their full share by reason of the prior application of the stabilization principle.
I had spent quite a few hours over the weekend refreshing my understanding of this legislation and I began to wonder if I could be as lacking in intelligence as I had to be if that statement by the minister was correct. As I understand it, the 10 per cent represents that portion of the personal income tax collected by the federal government from residents within the provinces which, by virtue of this legislation, is returned to each province. If you change that 10 per cent to 13 per cent you do not by that process simply arrive at a total sum of $62 million which is given to one group of provinces or the other. I came to the realization last night that if I understood the act at all-and I think it has now been admitted that my understanding of it is not too bad- what we have across the way is a Minister of Finance who does not understand it.


Jean Lesage: And never did.


Stanley Howard Knowles: Nevertheless he is the hon. gentleman whose job it is to administer this act. I ask the simple question that if the minister makes this kind of mistake when he is dealing with $62 million what would happen if he were dealing with a $5 billion budget?


James Sinclair: That is why we have had no budget.


Mr. Cameron:: He should go back to school.


Stanley Howard Knowles: thought I heard someone interject that the Minister of Finance should go back to school and learn how to add.


James Sinclair: How to read.


Stanley Howard Knowles: It
does appear as though the minister should go back to school and learn a few facts about arithmetic and I suggest he should not any more jump in where angels fear to tread but instead should make pronouncements on these matters only after he has consulted the officials in his department and has statements prepared by them.
The Minister of Finance takes quite a different attitude on that side of the house from the attitude he adopted when on this


side of the house. He presents a real study in political metamorphosis. When he was on this side of the house and a mistake was made on the other side of the house it was a sin of the worst type. Now it has all been changed. The Minister of Finance admits that telegrams were sent out but that two of the provincial premiers did not receive the telegrams. It .is regrettable; but it was a mistake on the part of an employee of the Canadian National Telegraphs. I resent that, Mr. Chairman. The mistake was on the part of this government in relying on a unilateral method of sending telegrams as a means of consulting the provincial premiers on a matter of such importance as this.
It should not have been dealt with other than by means of a conference. The premiers should have been called back to Ottawa even if all the government was going to do at a resumed session was tell the provincial premiers to their faces what this government was going to do. But, no, the government chose this distinctly unilateral method of sending out telegrams. They were not even telegrams that asked for replies and the government did not check to see if they were received. The minister has admitted that two provincial premiers, the premier of my province of Manitoba, and the premier of Saskatchewan, did not receive their telegrams. They learned about this through what they read in the newspapers. We have the experience of the provincial premiers learning one thing from what they read in the newspapers as a result of Saturday's announcement and learning something else from what they read in the newspapers as a result of Monday's table. I suggest that perhaps some more telegrams are necessary. Some of the provincial premiers may be still wondering just what are going to be the results of this legislation when it is passed.
The Minister of Finance finds it extremely easy to make these explanations that are satisfactory to him. He offers an explanation and that is it; we are supposed to accept his explanation. He made a mistake and forgot the stabilization aspect of the formula. He worked it out on Saturday on the basis of the 1956-57 estimates upped by 5 per cent. His officials decided it would be far better to work out these estimates on the basis of the 1957-58 experience. It is just a coincidence that the two totals are close to each other, in one case $62,203,000 and in the other $62,206,000; but here we have the minister playing around with these figures. He admits himself that the provincial treasurers are in the process of preparing their budgets and it is important to them to know what they will receive under this arrangement and yet he deals with them in this slipshod manner,

a manner which I say certainly does not win the confidence ot the provincial governments or the people of Canada, the kind of confidence that we have to have in the person who presides over this country's federal treasury.
The minister keeps on saying that this was not unilateral action. We are certainly receiving a lesson in argument by assertion. The Minister of Finance, the Hon. Donald M. Fleming, says it is not unilateral. That is it; we must accept it. Take it or leave it.


John Whitney Pickersgill: That is the language of George Orwell's "1984".


Stanley Howard Knowles: When the conference met last November it was stated by the Prime Minister that it was the intention to meet briefly and to lay nothing before it but to listen to what the provincial premiers had to say, to consider the whole matter in the light of what they said and then meet again early in the new year to discuss what would be done. There was an agreed communique to which reference has been made a number of times by the Minister of Finance, particularly to one paragraph that he likes to quote. But the following is the last sentence of that agreed communique:
It was agreed that a subsequent meeting be held as soon as possible in the new year in accordance with the proposal made by the dominion government in calling this conference.
There is no proviso there saying that it would not be done if the session of parliament lasted too long. It was a clear understanding on the part of the ten provincial premiers and the Prime Minister that the conference would meet again early in the new year. It was also said in this agreed communique, if I may go back to the penultimate paragraph:
Possible changes in the tax sharing arrangements act were discussed but it was understood that no endeavour would be made to reach conclusions on this matter prior to further consideration of the subject by the dominion government in the light of the public statements made by the provincial representatives in open sessions and the discussions which took place in committee.
The Minister of Finance knows that shortly after that conference was over Premier Campbell of Manitoba wrote the Prime Minister of Canada a letter telling him that his government was not satisfied with the atmosphere of insistence on the part of the Prime Minister in which the provincial premiers were more or less forced to come to an agreement and that there were certain changes that he felt the government should consider before reaching a decision as to the basis of the grants to the Atlantic provinces and on any other changes in the tax sharing 96698-249i
Dominion-Provincial Relations arrangements act. Through all of that correspondence it was crystal clear that there was to be another meeting in January of the federal-provincial conference. When the Prime Minister came into this house the day after the conference was over and referred to the agreed communique and tabled it in the house and told us about the conference, he said in his concluding sentence as recorded at page 1556 of Hansard of November 27, 1957:
A subsequent meeting as soon as possible in the new year will be held in accordance with the proposals made by this government in calling the conference.
The Prime Minister was talking to the House of Commons. No suggestion was made by him that this would have to be changed if the parliamentary session did not come to a conclusion at a date satisfactory to the government. I have already referred, as have other hon. members, to the correspondence exchanged between Premier Campbell and the Prime Minister of Canada. It is really a one-sided correspondence because the only letter of any length was that written by Premier Campbell on December 18. In that letter Premier Campbell, after discussing all the angles of this matter in a very commendable manner, said this:
If we are able to have this information in advance, Manitoba will be better prepared to discuss the final special Atlantic arrangements which we understand you are planning to put forward for general consideration and acceptance at the next meeting of the adjourned dominion-provincial conference in January of 1958.
This was Mr. Campbell's clear understanding, namely that there was to be a meeting in January of 1958 and he asked for consideration of his letter so those concerned would be in a position to discuss these matters when the premiers came back here in January. The letter continues:
If all the provinces are similarly informed of the adjustment formula being considered for the Atlantic provinces,-
Of course, they were all informed last Saturday, those who got the telegrams, that the matter was settled.
-our January meeting could more surely and quickly deal with the final disposition of this matter which has great importance to our friends in the Atlantic provinces now, and which may well have even greater long-term significance for other parts of Canada as well.
Yours sincerely,
Douglas Campbell.
That is the letter that Premier Campbell wrote to the Prime Minister on December 18, and in which he made it clear that it was his understanding, on the basis of the communique and on the basis of what was said at the conference, that they would be meeting

Dominion-Provincial Relations again in January. What was the Prime Minister's reply to that letter? It was as follows: Ottawa, December 21, 1957.
My dear Premier:
On my return from attending the NATO council meetings in Paris, I have received your letter of December 18 in regard to the discussion which took place at the recent dominion-provincial conference.
This is only an interim acknowledgement of your letter. My colleagues and I will wish to study carefully your further submission before commenting on it. I shall merely assure you that this matter will receive our careful attention.
Yours sincerely,
John G. Diefenbaker.
I have read the entire letter that the Prime Minister wrote to Premier Campbell. I want to come back to the substance of that letter in a moment, but I read it now to make it clear that the Prime Minister did not in any way challange Premier Campbell's statement in his letter that it was expected that they would meet in January of this year. In other words, Mr. Chairman, it was clearly understood-indeed, this was in the nature of a promise-that they would be called together again to deal with this matter. But despite many questions which we have asked and letters from other premiers, the month has just about gone by without that conference being held.
May I now come back again, Mr. Chairman,-just in order to show how unilateral this action is-to the way in which the premier of my province has been treated. Some of us will try to give him a certain kind of treatment later on this year, but at the moment he is the premier of Manitoba, trying to represent the interests of that province so far as federal-provincial arrangements are concerned.


John Whitney Pickersgill: And doing it very well.


James Sinclair: Hear, hear.


Stanley Howard Knowles: With
the support of Premier Douglas and one or two others he is doing a very good job.
On January 13 I asked the Prime Minister whether he had replied to Premier Campbell's letter of December 18. I would ask you to bear in mind that this is the most important and most substantial letter on federal-provincial matters written to this government after the conference of November 25 and November 26. When I asked the Prime Minister on January 13 whether he had yet replied, this was his answer as reported at page 3245 of Hansard:
I shall be obliged to look up the letters in question before I am in a position to answer.
Frankly, Mr. Chairman, I do not regard as a sample of very close attention to this important matter the fact that on January

13 the Prime Minister did not know whether or not he had answered Premier Campbell's important letter of December 18. A week later, nothing having been said voluntarily by the Prime Minister on this point, I asked him again whether he had replied to Premier Campbell's letter of December 18. This is the reply of the Prime Minister as found at page 3512 of Hansard of January 20:


John George Diefenbaker: Mr. Speaker, I have not had any opportunity to consider that matter since the hon. gentleman asked the question. But I think there is a paragraph in my letter, as I recollect it, saying that a further letter would be sent to Premier Campbell. That is my intention. I speak entirely from recollection. I was under the impression, as I listened to the question, that there was a portion of my letter which gave promise of a further letter.
There you have the Prime Minister on January 20 saying that it was his intention to write further to Premier Campbell in reply to his letter of December 18. But, Mr. Chairman, on Saturday of that week we were informed by the Minister of Finance, not that a letter had gone to Premier Campbell answering the lengthy and substantial case that he made on December 18 but rather that "take it or leave it" telegrams had been sent to the ten provincial premiers telling them what was going to be done. On January 25, Mr. Chairman, the day on which the Minister of Finance told us about these telegrams, I made a further reference to Premier Campbell's letter in these words which are found at page 3796 of Hansard of January 25:
Will there be any other reply by letter to Premier Campbell of Manitoba with respect to the letter he wrote the Prime Minister on December 18, in which he discussed the whole question of the relationship between changes for all the provinces and special grants for the Atlantic provinces, or will further discussion of Premier Campbell's suggestions be left until the federal-provincial conference is reconvened?


Donald Methuen Fleming: I had better not speak too positively without refreshing my memory on the contents of Premier Campbell's letter, but 1 think it will be clear that the course of action proposed by the government as indicated in the telegram is a fairly complete course of action with regard to the immediate situation. Broader questions can best be considered when the dominion-provincial conference reconvenes.
There it is, Mr. Chairman. On January 13 the Prime Minister did not know whether or not he had answered Premier Campbell's letter. On January 20 he said it was his intention to answer it. On January 25 the Minister of Finance says there will not be any other answer than this telegram to Premier Campbell, and that these broader questions that he has raised can be dealt with at the next meeting of the dominion-provincial conference. Yet the Minister of

Finance has the gall to stand up here tonight and to say that this government is not acting unilaterally in this matter.
I know that hon. members opposite find it difficult to understand that we are speaking critically of the government in relation to a piece of legislation that we are going to support. We have made that clear on this side of the house right from the start, that the provinces need this money and that we feel particularly that the Atlantic provinces should have the assistance that is envisaged in this legislation. But as my hon. friends opposite must remember from the days when they were on this side of the house that it is important not only to get things done but to do things in the right way; and the right way to deal with federal-provincial relationships is to deal with them on a basis of co-operation, consultation and of mutual knowledge and understanding as to what is going on. That is what this government has failed to do. They are flying in the face of all the language that the Minister of Finance, the Prime Minister and Mr. Drew used in 1956, when they characterized what the Liberals were doing as being one-sided, unilateral, as inflexible as the laws of the Medes and Persians and so on.
I call upon the Minister of Finance and the government not again to make the mistake that the minister made of doing his own arithmetic, of bringing in statements which are incorrect, of answering questions without knowing how this legislation operates. I call upon them also not again to deal with any matter of federal-provincial relationships without doing it on a basis of conference, consultation and full understanding between the federal government and the provinces.
The minister says this is on an interim basis only; that the hands of the provinces are not tied so far as the 1958-59 fiscal year is concerned. He says that the federal government's hands are tied, that they will have to pay out this money but that the provinces are not tied. He knows that "interim" can be a long time. I think somewhere in the book of Genesis there is a verse that got missed where Adam said to Eve as they were going out of the garden, "My dear, we are in an age of transition".
A temporary or interim period can last a long time, especially when the provinces are waiting for the federal government to reconvene this conference. The months of the 1958-59 fiscal year will add up one after another-seriatim, for the benefit of my friend the hon. member for Parry Sound-Muskoka-and by the time the conference does meet again the year will be so far gone that the discussions will have to relate to the
Dominion-Provincial Relations next year and not to this one. This is not a way to assist the provinces materially or effectively so far as their 1958-59 needs are concerned.
I make just one other comment, Mr. Chairman, and it is this. The 1956 legislation brought down by the former government, which this government is now accepting in principle right down the line, had one important thing wrong with it. We pointed this out at the time even though we voted for the legislation because we felt there had to be a continuance of federal-provincial sharing of tax revenues. But in our view the one thing that was wrong with the legislation when it was brought down was that it did not take into account the fiscal needs of provinces or areas. The so-called principle of equalization which is good, does not go that far. We feel that changes should yet be made in this legislation to recognize, as some of the previous agreements did to a certain extent, the principle of fiscal need. We are disappointed that the government does not seem to be facing up to that need and does not seem even to be giving us the assurance that the principle of equalization brought in by the Liberals will be continued without being interfered with in any way.
Therefore, Mr. Chairman, the government across the way has a great deal yet to learn about proper and adequate federal-provincial fiscal arrangements and it has a great deal to learn about co-operation and consultation, about following a course that will really keep relations between Ottawa and the provinces on a healthy basis.


Jean Lesage: Mr. Chairman, this afternoon I asked a number of questions based on the figures tabled yesterday by the Minister of Finance. I think that questions dealing with figures should be dealt with at the resolution stage when we are in committee because first of all the figures are tabled during the discussion in committee and, second, in spite of the suggestion made by the Minister of Finance a few moments ago I do not believe it is possible to discuss figures in the same way on second reading and therefore it should be done in committee.
I am going to repeat one of the questions I asked this afternoon which is based on the figures found in the table. I assure you in advance, sir, that I realize these figures are only estimates and have been produced for purposes of illustration only. I agree with all that. It is on these premises that I ask the minister this question again. What exactly is the average estimated yield in the two top provinces of the 3 per cent of the personal income tax in 1957-58 which has been used to prepare the table? Is it $3.97? What is it?

Dominion-Provincial Relations


Donald Methuen Fleming: Mr. Chairman, my hon.
friend gave me some words of warning this afternoon about making calculations in a hurry and I have heeded his warning. I will be very happy indeed to bring down the answers to his questions when there has been ample time for calculation, but I assure him that I did not make any detailed notes of his questions this afternoon nor have I attempted to work out in detail the answers to his questions. I will be glad to get that information for him. I will heed his warning most scrupulously.


Jean Lesage: Mr. Chairman, I know that the very competent officials of the Department of Finance were in the gallery this afternoon when I asked my question and they could have given the answer easily because they would have it at the tip of their fingers.


Stanley Howard Knowles: They can be brought on the floor right now.


Jean Lesage: The minister could reply right now if he was not so proud.


Mr. Baskin:: You should not talk about being proud.


Jean Lesage: Do I have a lesson in arithmetic to receive from the hon. member who just spoke?


James William Baskin: I said you should not talk about being proud.


Jean Lesage: I have learned humility during my life much more than the hon. member who just spoke. I should like to ask the Minister of Finance the following question, and surely he can answer it. Again I take him to account according to this table and I acknowledge again that the figures are only estimates and are for purposes of illustration. Taking the figures in the table-I am not inventing them-will the minister tell me what proportion of the $18,859,000 increased benefit to the province of Quebec is represented by the amount of the equalization payment? Is it, as I said this afternoon, $5.7 million?


Donald Methuen Fleming: Mr. Chairman, I will have to work that out. I will be glad to do it for my hon. friend but I have not worked it out since he asked the question this afternoon.


Jean Lesage: Again I am sura that one of the officials could answer immediately.


James Sinclair: We do not want you to work it out.


Donald Methuen Fleming: Yes, I have no doubt that he could.


Jean Lesage: Where is the hon. member for Carleton? I am sure he could answer.


Donald Methuen Fleming: My hon. friend can go ahead and put all his questions on the record. We will wait and have a look at them. I am not going to attempt to make snap answers to his detailed questions at this time.


James Sinclair: He has learned his lesson.


Donald Methuen Fleming: We shall be glad to have the hon. member's questions on the record.


Stanley Howard Knowles: Would the hon. member for Montmagny-L'lslet permit a question? Would he and the Minister of Finance not agree that it would save everybody's time if a table and two or three chairs were brought in and the minister were to request his officials to come down in front of him right now?


Jean Lesage: They are in the gallery.


Donald Methuen Fleming: In keeping with the practice that we found was observed in such situations by the former government, namely that questions involving calculation were put on the record at the resolution stage and answered on second reading, these questions will be answered in that way.


Jean Lesage: Mr. Chairman, I know very well that when I was parliamentary assistant to the minister of finance and when the hon. member for Coast-Capilano was parliamentary assistant to the minister of finance-
Mr. Pallet!: Oh, oh!


Jean Lesage: Well, I am sure the hon. member for Peel will not be a parliamentary assistant if he continues to deal with matters before the house as he has in the past. When we were parliamentary assistants to the minister of finance-


An hon. Member:: Take a bow.


Jean Lesage: -and had to deal with resolutions preceding tax bills we had the officials in front of us and with their help we were ready to give answers as they were requested from us. These officials are learned. They know how to answer immediately and they are always accurate. But, as I said, the Minister of Finance is too proud to show the people of Canada that he needs the help of the officials of his department.


James Sinclair: He told us so himself. He said he was the best minister of finance in history.


Jean Lesage: Perhaps my next question will be for the record again, but I shall try it. This afternoon I asked the minister how the 13 per cent reduction, which would apply as partial relief from double taxation to the taxpayers of Quebec, would be deducted for the tax year 1958? This proposal takes effect only on April 1, 1958. When the taxpayers

Dominion-Provincial Relations of Quebec, as well as the taxpayers in the They should have the benefit of this 13 per rest of Canada, file their income tax returns cent reduction instead of 10 per cent, and that they will file them for the calendar year benefit should begin right now, from January 1958. Will their deductions be 12J per cent 1. The people of Quebec are deprived of that or will they be 13 per cent?	benefit, those who are paying double taxation.


Donald Methuen Fleming: Mr. Chairman, I just dealt with that point in my remarks yesterday.


Jean Lesage: Not precisely.


Donald Methuen Fleming: The payments in the fiscal year are based upon the taxation year so far as these deductions are concerned. I made it quite clear that in the following session we hope to introduce an amendment to the Income Tax Act to provide for the case of any province where there is no agreement with respect to the collection of income tax,-at the present time that is the province of Quebec alone-and in that province the deduction will be increased to 13 per cent; that, of course, will apply to the full taxation year with respect to which the fiscal year payments apply, and that is the year 1958.


Jean Lesage: Since this deduction of 13 per cent will apply to the whole calendar year of 1958, and since we are already in January of 1958, why has the minister not brought forward the amendment to the Income Tax Act now, together with this resolution?


Donald Methuen Fleming: Mr. Chairman, we have not done so for the adequate reason, I submit, that we would like to conclude the business of this session some day. It is quite apparent to all concerned that that is the intention and that will be done, and the taxpayers of the one province concerned are going to receive their full benefit.


Jean Lesage: When is that? When will the amendment to the Income Tax Act be presented?


Donald Methuen Fleming: I said at the next session.


Jean Lesage: When is the next session going to be; that is a reasonable question?


An hon. Member:: You will find out.


Donald Methuen Fleming: My hon. friend found it difficult, I realize, to keep a straight face when he asked that question. I do not know precisely the date of the next election any more than he does, but I am quite sure there will be a next session. I am quite sure that the amendment will be introduced, and I am quite sure I know who will be introducing it.


Jean Lesage: That is the usual boasting of the Minister of Finance; Mr. Know-it-all, who never knows anything.
But, sir, there is one thing that is certain. While this delay occurs the people of Quebec are asked to pay more federal income tax from their pay cheques than they should.


Donald Methuen Fleming: My hon. friend knows quite well, and no member of this house knows better than he does, that when you bring a reduction into effect it does take time to work out the revisions in the tables of deductions. Most of the people in this country pay their income tax on the basis of deductions from wages and salary, and when reductions are brought about no government that has been created yet can bring those deductions into effect and have the tables all ready to put the rates of deduction into effect at once.
When we brought in a reduction in the income tax in December, it was made clear then that we would expedite, by every means in our power, the establishment of new rates of deductions, new tables, so that they would be in the hands of all persons who are charged with the duty of making these deductions. We are going to do the same thing here. Just as soon as it is possible to arrive at the revised tables of deduction in Quebec, they will be made available. In the case of any who, in advance of receiving the new revised tables of deductions, have paid at the old rate, they will be entitled to reduce their payments accordingly. If at the end of the year there is any over-payment they are, according to well established practice, entitled to a refund.


Jean Lesage: I should like now to go back to the stabilization payments. This afternoon I asked the minister if it was his intention to make the new standard rate of income tax, 13 per cent, applicable to the 1957-58 year, so far as the calculations for the basis of stabilization payments were concerned. I told him this afternoon that one of the reasons for that question was that it was quite possible, probable, as a matter of fact, that the same standard rates of taxation might very well, because of economic conditions, bring less revenue in 1958-59. Consequently, the provinces could be deprived of part of the benefit they could expect from the legislation which is proposed under this resolution. I should like to hear the Minister of Finance on this subject.


Donald Methuen Fleming: Mr. Chairman, I made it quite clear in speaking yesterday-


Jean Lesage: No, it was not clear.


Donald Methuen Fleming: The hon. member may not have understood it, but I made it clear yesterday, that the provinces are going to receive the benefit of the 1957 rate, and there is no reduction in the payments to the provinces because of the reduction brought

Dominion-Provincial Relations about by this parliament in the personal income tax rates that will be payable effective January 1, 1958.


Jean Lesage: That is not the question I asked. I asked the Minister of Finance if the new basis for the stabilization payments to be paid in the future, especially in 1958-59, would be based on this new standard rate of 13 per cent instead of the 10 per cent for 1957-58. This is important if the same standard rates yield less because of economic conditions?


Donald Methuen Fleming: I am not going to prophesy what the amount will be-


Jean Lesage: I am not asking you to
prophesy.


Donald Methuen Fleming: -but my hon. friend is well aware of the provisions in section 5 of the present act, and the application of that act to the factor about which he is talking. I have made it quite clear to him that the provinces are going to receive payments at the higher rates that were in effect in 1957. We have not made any attempt in this legislation to reduce the amounts that the provinces would receive under this legislation, by taking into account the reductions that were brought about, and which this parliament approved, in December to be effective January 1, 1958.


Jean Lesage: The standard rates which are mentioned in the act which the minister just mentioned, so far as personal income tax is concerned for 1957-58 is 10 per cent, not 13 per cent, therefore the guarantee is based on the 10 per cent standard rate of personal income tax for 1957-58. I ask him if it is going to be raised to 13 per cent for stabilization payments purposes only? It is a clear question.


Donald Methuen Fleming: The bill to follow will
introduce an amendment in the act by adding a section that will provide that, in its application to the fiscal year commencing April 1, 1958, paragraph (f) of subsection (1) of section 2 of the act shall, for the purposes of the act and any tax rental agreement, be read and construed as if for the words "10 per cent" therein, there were substituted the words "13 per cent".


Jean Lesage: I thank the minister. This is the first clear answer I have received from him and he has to read from the bill.


Mr. Hahn:: I would like to address a question to the minister relative to the figures he has proposed with respect to the province of British Columbia. There was a correction to page 3850 of Hansard of January 27 last as compared with the original statement that the

figure would be $5.5 million, and my question is: Has the province been officially advised as to what the exact figure is going to be, should it take advantage of this scheme?


Donald Methuen Fleming: Telegrams were sent to the premiers of the provinces last Friday and placed on record in the house on Saturday morning. They did not attempt to name any amount. They made it clear, apart from the Atlantic adjustment grant, that what the federal government was proposing to do to assist the provinces, as an interim measure, was to ask parliament to approve an increase from 10 per cent to 13 per cent of the standard individual income tax in the compensation payable to the provinces under the Federal-Provincial Tax-Sharing Arrangements Act. There were no figures of dollars named in the telegrams. The provinces, of course, are perfectly competent to work out their own figures and undoubtedly they have done so.
In the case of British Columbia, a message was received yesterday from Premier Bennett inquiring as to the amount and the amount was given to him in relation to the table which was placed on Hansard yesterday. So no one has been misled and I am sure no provincial premier has misunderstood. All this talk about misleading is, perfectly obviously, just poppycock.


Frederick George Hahn: Mr. Chairman, I did not use the term "misled" and I would not want the minister to pretend that I did. The reason for my suggestion was that the article in the Vancouver Sun, of which I had a copy just a moment ago, headlined the fact that British Columbia was going to receive $5.5 million from the federal government.


James Sinclair: They were misled, too.


Frederick George Hahn: The people apparently would have the wrong impression, and all I wanted to do was to make sure they understood correctly that this government had overestimated.


Alexander Malcolm Nicholson: May I add an additional word on this matter? Has the minister sent out telegrams to the premiers of the provinces of British Columbia and Prince Edward Island? Obviously mistakes occurred in the papers on Saturday. Has he followed up with telegrams to explain the mistakes that were made?


Donald Methuen Fleming: No, Mr. Chairman. These figures given on Saturday morning were figures we had at that time calculated for the information of the house with respect to the results of the proposal which had been made to the provinces. The provinces did not rely on these figures. They were not statements to the provinces.

We have the tables before us, but they are still estimates and no one can say exactly how much any province will receive in this coming fiscal year-no one can say that precisely. I have tried to make that very clear and I think I have done so. In so far as the provincial premiers are concerned, they are competent to calculate what this means to their particular province.


Alexander Malcolm Nicholson: I do not want to blame the newspapers; they were merely reporting what the minister placed on Hansard on Saturday. Since the minister made this mistake, I think he should follow up with telegrams to the premiers, taking full responsibility for it and advising the premiers.


John Whitney Pickersgill: I am not going to detain the committee very long but I have a few observations to make about the statement of the Minister of Finance this evening. As hon. members know, I have been a resident of this city and closely associated with the government of this country for 20 years.


An hon. Member:: Too long. When are you going to Newfoundland?


John Whitney Pickersgill: I do not know whether the Minister of Public Works is interested in getting this measure through, but I strongly suggest that he should indicate to the backbenchers that this is a debating society and not an athletic arena.
It is almost 22 years since this process, of which this is perhaps the most unhappy chapter, began. It began with Mr. Skelton and Professor Deutsch, in their association with the Bank of Canada, going to Winnipeg at the request of the government of Manitoba in January of 1937.


Mr. Harkness:: If this is a lecture in history, better be sure of your dates.


John Whitney Pickersgill: I think perhaps the hon. gentleman will find I am more accurate in my dates than he is in his bills. I will not have to revise them as often.


Douglas Scott Harkness: You have never given any indication of accuracy here. We would like to see a practical example.


Some hon. Members:: Order.


John Whitney Pickersgill: I will proceed to be as brief as possible and I am very grateful for the excellent co-operation I am receiving from this side of the house.


An hon. Member:: They are all asleep.


John Whitney Pickersgill: At the time this process began, the second stage of which was the appointment of the Rowell-Sirois commission, the third stage of which was the wartime tax
Dominion-Provincial Relations agreements and the fourth stage the conference of 1945-46 which the then premier of Ontario scuttled. He was for a long time the leader of the Conservative party. Then came the tax rental agreements which for the first time-


Douglas Scott Harkness: You departed from history some time ago and now you are into mythology.


Stanley Howard Knowles: rise on a point of order. Should the Minister of Agriculture not have regard to, and be guided by, the rules of this house which say that when a person wishes to speak he should rise from his seat?


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: The next stage in this process was the equalization phase introduced into this parliament by my right hon. friend from Quebec East and by the former minister of finance.


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: And for the first time in the history of this country we had equalization which applied right across the board to every province-


An hon. Member:: Except the maritimes.


John Whitney Pickersgill: I hope my right hon. friend will not object to my saying this, but I have not forgotten what he said when the Quebec provincial income tax was imposed. He said he did not see how we could be unfair to the people of any province merely because some of the members of their government were unreasonable. The former minister of finance, Mr. Harris, did a very courageous thing when he introduced this equalization proposal and he got very little appreciation for it in the province which he represented in this parliament. I want to go beyond what my right hon. friend has said and say that it is a real gratification to every one on this side of the house to see that this miserable pittance which the Minister of Finance gives Mr. Frost, instead of the $100 million for which he asked, with the minister's leader listening to Mr. Frost's request, and hearing him say "There is the man who is going to give it to us"-that is the appeal that was made all over Ontario, and I have a lot of extracts-


James Sinclair: That is true.


John Whitney Pickersgill: This 20 cents on the dollar which is now being paid by the Minister of Finance is paid exactly in accordance with the formula of Mr. Harris, the former minister of finance, and we are proud of it.


Some hon. Members:: Hear, hear.

Dominion-Provincial Relations


John Whitney Pickersgill: That is why, in spite of the high-handed, unilateral, dictatorial method used by this government, we are going to vote for this measure.
The minister has not learned much, but he does seem to have learned one thing-he has learned a bit, perhaps, today-and that is that this is an exceedingly complicated subject, and that amateurs are very wise if they get professional advice before making statements in this house. I ask every hon. member who was in the last parliament if he can imagine Mr. Harris coming into this house with a little piece of paper prepared in some hole in the corner, reading it, and then coming back two days later to apologize in a surly fashion for his mistakes. One of my hon. friends says he did not even apologize, so I will withdraw that. And can anyone imagine Mr. Abbott doing that, or Mr. Ilsley, or Mr. Ralston, or Mr. Dunning-


An hon. Member:: Or Mr. Bennett.


John Whitney Pickersgill: Yes, or Mr. Bennett. Can anyone imagine Mr. Bennett sitting up in his room in the Chateau Laurier doing his own arithmetic and bringing in his own little bit of paper and then having to apologize. Mr. Chairman-


Charles Edward Rea: Order. The hon. member for Bonavista-Twillingate has the floor, and unless there is silence we cannot hear what he has to say.


John Whitney Pickersgill: Mr. Chairman, the Minister of Finance brought in supplementary estimates today. I am relying on my memory with regard to them; I have not got the Department of Finance to give me the figures, though if I had I would use its services. The expenditures which were going to be reduced by half a billion dollars this year by this government are now $5,780 million for the current fiscal year-far higher than these extravagant expenditures which were denounced during the election campaign. The Minister of Finance, the great authority on the rights of parliament and on the right of every hon. member to the fullest possible examination of all the public accounts, has the trust of managing this huge sum of money-far and away the biggest financial trust in this country, and, as the hon. member for Winnipeg North Centre has just said, what confidence can the people of Canada have in a minister who has put on the kind of performance we saw on Saturday and again yesterday and again today.


An hon. Member:: He has your confidence.


John Whitney Pickersgill: Here is the explanation for his mistake that the minister gave yesterday as recorded on page 3874 of Hansard:

The other eight provinces receive benefit from the fact that British Columbia and Prince Edward Island do not now take their full share by reason of the prior application of the stabilization principle.
What rubbish. There is not a word of truth in it; not a tittle of truth. That is the explanation which is made. When the minister makes an egregious error he comes in and makes a statement which shows he does not understand the first thing about the matter he is bringing before the house. Then he comes to us tonight and says: I was betrayed into developing this interesting theory because, by sheer coincidence, the set of figures I gave the house erroneously on Saturday happened to add up to within $3,000 of a set of figures prepared by the department-the best estimate that the most competent people can give. It is a sorry picture of the financial management of this country which we have had in the last two days-


An hon. Member:: You are voting for a
sorry picture.


John Whitney Pickersgill: It pains me to do it, but
I think it is my duty as a responsible member of the opposition to bring this point to the attention of the public of this country.
Now, Mr. Speaker, there are one or two questions which came to my mind as I was listening to the explanations, or to what passed for explanations, which were given earlier by the Minister of Finance. The one thing I have not been able to understand- and I am not going to weary the committee by getting out the Prime Minister's many promises about how this conference was going to be called immediately after the election-is this announcement about not calling this conference earlier. There was no reason why this conference should not have been called in July when the Prime Minister was at the Calgary stampede. Probably he thought he could get more votes at the stampede. It is nonsense to talk about not calling this conference. There is no reason why it could not have been held in July and the whole thing could then have been disposed of before the session began and the benefits made available for the current fiscal year. And if they had been available for the current fiscal year, the provincial budgets about which the Minister of Finance is so solicitous-though he was not so solicitous about bringing in a budget of his own-could have been prepared on a sound basis. If that course had been taken, and the amendment brought in in October, the benefits could have been available for the fiscal year 1957-58; the provinces would have had this money now, and they could have been proceeding with a lot of useful work which would have reduced the regrettable unemployment which we now

have in this country. But the minister brings in this matter now and says it is to relieve winter unemployment, even though the payments do not start until April 1.


Mr. Small:: Why didn't your government bring it in?


John Whitney Pickersgill: I have two simple answers for my hon. friend from Danforth. The first is that we did not have unemployment a year ago on the scale we have today. The hon. member knows this well enough, and if he does not I suggest he go back to his constituency and make a few inquiries. The second thing is that last year Mr. Harris increased payments to the provinces by $114 million, while this measure increases them by $87 million.
I do not know if the minister intends to answer my question, but there is another question I should like to ask him. The minister said there have been grants to the Atlantic provinces which were agreed to by those provinces. I agree with that so far as the arrangements with the Atlantic provinces are concerned, so far as the consultations with those provinces were concerned, so far as the methods followed there were concerned. I thoroughly approve of it. I think the government did very well indeed. 1 have always tried to be fair-


Some hon. Members:: Oh.


John Whitney Pickersgill: And when I think the government has done well, I like to say so. What I should like to ask the minister is whether he considers that Mr. Campbell's statement in the final paragraph of his letter is correct; a letter which I hope he has by this time troubled to read, even though the government does not seem to be much interested in replying to it. As recorded at page 3229 of Hansard of January 11, 1958, Mr. Campbell said:
It is therefore important that all provinces see and understand the working of whatever formulas may be under consideration by your government at the present time for use in the Atlantic provinces. In our opinion copies of the different proposals that may be presented or developed in this connection should be forwarded to each province.
This letter was written on December 18 and was acknowledged before Christmas, therefore the government cannot plead that it did not have Mr. Campbell's request in plenty of time.


Mr. Maclnnis:: Stick to Newfoundland.


John Whitney Pickersgill: The hon. gentleman who interrupts may not realize that I spent 30 years of my life in Manitoba. I have a great deal of attachment to that province and there are not many people to speak for it in this house at this time.
Dominion-Provincial Relations


Jay Waldo Monteith: Thirty years in Manitoba, 22 in Ottawa and none in Newfoundland.


Mr. Nixon:: Keep quiet, children.


John Whitney Pickersgill: What I want to ask is whether the government feels that it did agree at the conference, as Mr. Campbell indicates in his letter, that these Atlantic proposals were to be passed on to all the provinces and agreed to by all the provinces because it will be recalled that in one of the extracts I read yesterday the Prime Minister indicated that this money was coming from all the taxpayers of Canada and although I do not say he did so expressly there certainly was the implication that there was to be consultation with all the provinces beforehand prior to the time when this matter would be finally brought before this house.
I do not know whether or not that is right. I did not attend these in camera sessions. But if Mr. Campbell is right, then there does seem to have been an act of bad faith on the part of the government. One thing does seem to be extremely clear about this whole business. The government, though it has accepted Mr. Harris' formula and the Liberal policy of equalization for these interim payments, still will not tell us and tell the country and reassure the people in the seven or eight provinces where it matters most whether it will for all time to come be a policy of the present government to stick to this principle of equalization. That is the most important question of all.


Stanley Howard Knowles: It
probably does not know.


John Whitney Pickersgill: Well, I gave the government the benefit of having made up its mind about that.


James Sinclair: The Minister of Finance did not know about stabilization.


John Whitney Pickersgill: This is a grim and serious matter to the people who live in the seven or eight provinces of this country that are most affected. I believe that the government owes it to the people to tell them this, to advise whether they can rely upon it. I can assure the government that if certain events that are foreshadowed take place it could save itself a lot of trouble and debate if it would make a clear,-and I do not mean "clear" in the sense in which the Minister of Finance uses it, but clear in the sense in which the rest of us use the word-simple and unequivocal statement to the effect that it intends to persist in having an equalization principle for the future at least as good as that of Mr. Harris. I think that is the most important question of all.
There is only one other thing I want to say.

Dominion-Provincial Relations


Jay Waldo Monteith: Thank goodness.


John Whitney Pickersgill: As I said yesterday, the government boasted in the speech from the throne that it was going to call a conference and meet with the provinces in the following words recorded at page 5 of Hansard of October 14, 1957:
-in order to discuss fiscal relations and to seek better understanding and arrangement of many aspects of our public finances.
Anybody who has read Mr. Campbell's letter can see how much better understanding has been created by this government. Anyone who reads the letters written by Mr. Douglas or the statement by Mr. Bennett can discover the same thing. Let us compare what these hon. gentlemen have said with what was said by the Premier of Ontario at the federal-provincial conference last November, and with these words I intend to conclude what I have to say.


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: Well, I suggest that hon. gentlemen will want to applaud even more when I finish my remarks. I propose to quote from the remarks made by honourable Leslie M. Frost, the Premier of Ontario, as recorded at page D-l of the report of proceedings of the federal-provincial conference held in Ottawa on November 25 and 26, 1957:
Now at this moment in history, because it is a moment of history, when he is no longer chairman of this conference and when he is retiring from his leadership of his party, I would like to express my admiration for him which has been well known and which I have stated here on many other occasions.
Those remarks refer to the right hon. gentleman who is now sitting in front of me. I continue:
Of course, like the Prime Minister of Quebec-
I use the word "premier", sir-
-I have disagreed with him in regard to matters of policy but I have never disagreed with him as a personality and as a great Canadian.
I remind hon. gentlemen that these are the words of the premier of Ontario. I continue:
As I say I would like today again to voice my appreciation for his ability as chairman of several conferences and meetings and my thanks for the infinite patience he has invariably shown, for his unfailing courtesy which I think sprang from Mr. St. Laurent himself and from the fact that he is, basically, a Canadian gentleman and comes from that great race, two of the attributes of which are courtesy and understanding. To him, I express appreciation for his broad and understanding views, and my personal hope is that he will have health and happiness and further usefulness in this great country which he has served so well.
What a contrast, Mr. Chairman!


Mr. Macdonnell:: Mr. Chairman-


Jean Lesage: What a contrast!


James MacKerras Macdonnell: Mr. Chairman, I feel that I owe an apology to the committee for rising at this time because I take it that the speech we have just listened to was intended to be the speech to end all speeches. That magnificent gesture which I cannot possibly imitate with which the hon. member for Bonavista-Twillingate concluded his oratorical outburst we were supposed to have regarded, I think, as inspired awe and moreover, because of the long political career of the hon. gentleman, everything he said was supposed to be accurate. I rise merely for the purpose of pointing out one singular inaccuracy.
You will remember that the former minister of citizenship and immigration undertook to say that the 1946 dominion-provincial conference was scuttled-he chose to use that unpleasant word "scuttled"-by George Drew.


James Sinclair: Ex-formula.


James MacKerras Macdonnell: I was personnally present at the time that conference ended and I have always remembered the closing scene but happily I am not going to have to rely on my memory because I have in my hand the record of the proceedings of that conference. I would like to read what happened and ask hon. members who were present to compare that with the easy free-wheeling statement made by the hon. member for Bonavista-Twillingate to the effect that George Drew scuttled the dominion-provincial conference on reconstruction of 1946.


John Whitney Pickersgill: You ask Mr. G-arson.


James MacKerras Macdonnell: Before reading from the record I would ask hon. members to bear in mind that the then prime minister, Mr. King, was in the chair. 1 am reading from page 244 of the proceedings, the last page of the record. Mr. Ilsley has been speaking and toward the end of his speech he says:
-my suggestion is that we should adjourn sine die, and that the government take into consideration the points of view that have been expressed here today, and then arrive at a decision as to the procedure to follow and the position to take.
The record then shows the following remarks to have been made by Mr. Macdonald the premier of Nova Scotia:


Alexander Barrett Macdonald: Mr. Chairman, I take it that Mr. Ilsley is not suggesting that there will not be another conference. The premier of Quebec who is not here said he would come back at any time.
I would hope that the representatives of the dominion government here stand in the same position, and are prepared to try it.


Henri Courtemanche: -

Canada-Australia Income Tax Agreement


Mr. Mackenzie King-  Mr. Speaker@: When shall the said bill be
-Gentlemen, it has been moved that the conference adjourn sine die. All those in favour of the motion will please say "aye".
Some hon. Gentlemen: Aye.


Henri Courtemanche: Those opposed please say "nay".
(No replies).


Henri Courtemanche: I declare the motion carried
unanimously.
That is where it ended and that is where it is buried without trace and you present will be able to make up your minds who scuttled that conference. I would like to say that if the hon. gentleman cares to follow through the records he will see that I had the temerity to say this to Mr. King while he was still in this house and still prime minister and if the hon. member thinks he can draw any comfort from examining what Mr. King said at the time he is welcome to do so.
There is one other thing I want to say. I can understand why hon. gentlemen opposite do not feel very comfortable at the moment. Why would they feel comfortable? They are going to have to take the most unpalatable dose they have taken yet when they vote for this legislation because they are going to know that the provincial premiers are not much interested in all the loud noises we have heard here. What they are interested in is that they are getting large sums of money to help them in preparing their budgets.


James Sinclair: Not as much as they expected.


James MacKerras Macdonnell: I want to say one third thing. After the sneers which lesser people have tried to level at the Minister of Finance, I want to say this. The Minister of Finance is not an unknown man in this house. He has been here 12 years. I defy anyone in this house who has been here over those years to deny that he has built up over those years a reputation for accuracy.


An hon. Member:: For inaccuracy.


James MacKerras Macdonnell: No, for accuracy; for knowing what he was talking about. Everybody who was in this house over those years and who is honest with himself knows that is true.


Henri Courtemanche: Shall I report the resolution?


Some hon. Members:: Agreed.
Resolution reported and concurred in.
Mr. Fleming thereupon moved for leave to introduce Bill No. 247, to amend the Federal-Provincial Tax-Sharing Arrangements Act.
Motion agreed to and bill read the first time.
read a second time?


Some hon. Members:: Now.


James Sinclair: Next sitting.



INCOME TAX


Donald Methuen Fleming: the second reading of Bill No. 170, to implement an agreement between Canada and Australia for the avoidance of double taxation with respect to income tax.
He said: Mr. Speaker, the purpose of this bill is to give legal effect in Canada to the agreement which, as a result of negotiations and subsequent exchanges, has been reached between the government of Canada and the government of Australia for the avoidance of double taxation of income. This agreement was signed at Mont Tremblant on October 1, 1957.
The provisions of this agreement are similar in their general effect to those contained in the agreements which Canada has made with the United States, the United Kingdom, Sweden, New Zealand, Ireland, Denmark, Germany, South Africa and The Netherlands.
Double taxation is to be avoided mainly by means of reciprocal tax credits according to which the country of residence gives credit for the tax imposed by the country in which the income has its source.
The extent of possible double taxation is also reduced by a reduction or binding of the rates of withholding taxes imposed at the source on certain income going abroad. On dividends the Australian rates are reduced from a maximum of 40 per cent to 15 per cent while the Canadian rate remains at 15 per cent.
As in the other agreements, taxation of the trading profits of an enterprise is limited to those profits attributable to the permanent establishment of such an enterprise. Thus, casual profits earned by companies in selling goods in a country where they have no fixed place of business are not taxed by that country. Similarly, certain specific provisions restrict the taxation of profits from the operation of ships and aircraft to the country of residence of the operator and the taxation of the remuneration of exchange teachers to the country of their normal residence.
The agreement also provides for the exchange of information upon request.
The agreement is effective, for Canadian tax, commencing with the taxation year in which the agreement comes into force, and

Dominion Succession Duty Act for Australian tax, commencing with the year of income-July 1 to June 30-in which the agreement comes into force. The agreement will come into force when the act is proclaimed by the governor in council. The agreement continues in force until March 31, 1960, and indefinitely thereafter unless notice of termination is given.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee and reported.
Mr. Speaker:: When shall the said bill be read a third time? Now?


Stanley Howard Knowles: By leave.


Mr. Speaker:: By leave.


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



DOMINION SUCCESSION DUTY ACT


Donald Methuen Fleming: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to replace the present Dominion Succession Duty Act, to provide that the tax on property passing or deemed to pass, on death, be computed by reference to the property comprising the estate of the deceased rather than the property contained in the bequests from the estate to the beneficiaries; and also to consolidate, revise and simplify those provisions of the present act that continue to be appropriate.
Motion agreed to and the house went into committee, Mr. Courtemanche in the chair.


Donald Methuen Fleming: 
James Sinclair: Mr. Chairman, the official opposition agrees, of course, with the course indicated by the minister. There is just one question I should like to ask. Since 50 per cent of succession duties go to the provinces under the tax rental agreements, can the minister say whether the provinces have been consulted about the draft of the new act and whether or not their approval has been given?


Donald Methuen Fleming: The provinces have not been consulted with regard to the bill. Whether they were consulted by the previous government during the several years when the bill was in course of preparation under the former government, I do not know. In any event, there is nothing final about the step we are taking tonight. Of course, if the provinces have any representations to make with regard to the subject we shall certainly be happy to receive them.


Mr. Richardson:: May I ask the minister a question? In view of the fact that the dominion parliament left the field of succession duties entirely to the provinces until 1941, when the war necessitated the dominion parliament entering that field, has the present government given any consideration to the desirability of now giving it all back to the provinces?


Donald Methuen Fleming: Mr. Chairman, I think my friend has his answer in the fact that we are proposing that the present succession duty be repealed at the next session in favour of this new estate tax.


Alexander Barrett Macdonald: Mr. Chairman, I think it would be fine in a way if the resolution could be carried tonight but at the same time I think it is very important that the government, in drafting a bill that they are going to present at the next session, should have the views of members of the house. Therefore I am going to have the temerity perhaps to speak for five or ten minutes on the resolution.


An hon. Member:: Not tonight.


Alexander Barrett Macdonald: Some hon. member says "not tonight". I am afraid I must call it ten o'clock.


Donald Methuen Fleming: In the hope of expediting this matter may I ask if hon. members would be willing to hear my hon. friend tonight in
Business of the House
order that the bill can be introduced and disposed of as far as any further action at this present session is concerned?


Henri Courtemanche: Is there unanimous consent?


Stanley Howard Knowles: After my colleague speaks I believe there are a few across the way who would like to have something to say. We are bringing the staff back tomorrow morning at eleven o'clock and I think we should call it ten o'clock.
Progress reported.



BUSINESS OF THE HOUSE

James Sinclair: May I ask the house leader what the business is for tomorrow.


Mr. Green:: Mr. Speaker, first we shall take second reading of the bill which received first reading this evening, described as an act to amend the Federal-Provincial Tax-Sharing Arrangements Act. Then we shall continue the debate on the resolution preceding the estate tax measure. Then we shall take second reading of the act to provide for annual vacations with pay. Hon. members should be prepared to take anything else on the order paper. I cannot say in what order the items would be called. If we reach estimates we will take the estimates of the Department of Citizenship and Immigration.


Alexander Malcolm Nicholson: On Saturday I asked the house leader when we would be concluding the business of this session and he indicated by the end of this month. As there are only three days left, can the minister indicate the plans for the next three days if it is hoped to finish on Friday?


Howard Charles Green: No, I am afraid I cannot go any farther than I have this evening.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on December 2, 1957.
[Stage Direction]
Dominion-Provincial Relations


[Stage Direction]
OFFICE OF THE PRIME MINISTER Canada
Ottawa (4),
January 3, 1958.
The Honourable Hugh John Flemming,
Premier of New Brunswick,
Fredericton, New Brunswick.
Dear Mr. Flemming:
In the absence of the Prime Minister, I wish to acknowledge your letter of December 28 with which you enclosed copy of your letter to Premier Campbell in connection with dominion-provincial matters with special reference to the situation of the Atlantic provinces.
I assure you that your letter will be brought to the attention of Mr. Diefenbaker at the earliest opportunity after his return to Ottawa.
Yours sincerely,
Alcide Paquette Secretary.
THE PREMIER Fredericton
December 28th, 1957.
The Honourable John Diefenbaker,
Prime Minister of Canada,
Ottawa, Canada.
My dear Prime Minister:
I am enclosing copy of my letter to Premier Campbell in connection with dominion-provincial matters.
As you will note it deals with some of the implications raised in his letter to you under date of December 18th.
My letter is more or less self-explanatory and is intended to make plain New Brunswick's natural concern that the matter of special adjustment grants to the Atlantic provinces should not become involved once again in the question of dominion-provincial relationships in general. Such discussions can only mean further delay for assistance which is urgently needed.
My letter also emphasizes the fact, upon which we place particular stress, that our economic disabilities have existed for generations and are not merely the result of some economic fluctuation. The chronic character of our difficulties has, of course, been repeatedly recognized by royal commissions
and other authorized bodies investigating conditions over the years.
With all good wishes for 1958.
Yours sincerely,
Hugh John Flemming
THE PREMIER Fredericton
December 27th, 1957.
Honourable Douglas Campbell,
Premier,
Province of Manitoba,
Winnipeg, Manitoba.
Dear Mr. Campbell:
I acknowledge your letter of December 20th in regard to dominion-provincial affairs and also the copy of your letter to the Prime Minister under date of December 18th last.
I have read this correspondence with great care and, while appreciating the features of Manitoba's position as set forth, I cannot help but feel concerned about the possible influence of your suggestions to the Prime Minister upon the general interests of the Atlantic provinces. I believe that this could be very unfavourable at such a critical time in the history of the relationship of the governments in this region with the national government. It is certainly our hope and, I feel, of all four governments in the region, that our special situation can be expeditiously dealt with in the manner presently being proposed by the government of Canada.
It seems to me that the significant and unique character of the situation of the Atlantic provinces resides in the protracted duration of economic disability. All provinces are subject to economic fluctuation and some more than others, but the compelling fact of our situation is that for generations our development has consistently and chronically lagged far behind the general growth of Canada. It is the extent and degree of this long term retardation which creates our special problem.
I shall be glad if you will accord these views your customary courteous and thoughtful consideration, and I am most grateful for your personal courtesy in keeping me informed.
In view of the circumstances, I am sending a copy of this letter to the Prime Minister and to the premiers of the other Atlantic provinces.
Yours sincerely,
Hugh John Flemming
[Stage Direction]
Wednesday, January 29, 1958

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates (3) for the financial year ending March 31, 1958, was presented by Hon. Donald M. Fleming (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.