1958-08-19

BANKING AND COMMERCE

[Stage Direction]
Fourth report of standing committee on banking and commerce.-Mr. Cathers.


Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, by unanimous consent I move:
That Bill No. S-10, an act to amend the Loan Companies Act, and Bill No. S-ll, an act to amend the Trust Companies Act, be considered in committee of the whole later this day and that standing order 20(1) be suspended in relation thereto.
These are the bills which have just been reported back from the committee.


[Stage Direction]
Motion agreed to.


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I beg leave to table, in English and in French, copies of a report on supply for the fiscal year ended March 31, 1958.
May I say, Mr. Speaker, that in relation to the resolution which stands on the order paper as No. 9, this report on supply will furnish the house with the complete information it requires as to the supply for the fiscal year that ended March 31 last, indicating the estimates and the way in which the amount appropriated was provided, whether by appropriation acts or governor general's warrants. It will be seen on examination that this report, I think, supplies the house with all the information that is required in its approach to resolution No. 9.
Copies of this report on supply will be available to hon. members forthwith at the distribution office, Mr. Speaker.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I should like to ask the Minister of Justice if he has any
comment to make on a statement reported to have been made by the warden of Collins Bay penitentiary in connection with the riot last Sunday to the effect that he, Mr. Richmond, the warden, denied that any prisoners had been segregated and said he had no idea where justice minister Fulton got the idea that 113 prisoners had been isolated as reported to the house yesterday morning by the Minister of Justice, when he said that 113 inmates were actually segregated as those being involved in the riot.


Hon. E. D. Fulton (Minister of Justice):: Yes, Mr. Speaker. The explanation is, I think, that when my remarks of yesterday were quoted to the warden it was implied to him that I had used the word "segregated" in the sense of prisoners who were segregated as punishment. In my statement yesterday I did say that 113 inmates were actually segregated as being involved in the riot. This however referred to the physical separation of those participating in the riot from the rest of the prison population, at the time of the riot. The figure of 113 is the number of inmates who were separated when the shock force entered the grounds of the institution and contained the rioting inmates in one corner of the walled area.
The article in this morning's Globe and Mail, however, implies that segregation was used in the sense of continuing segregation. This is not the case. The degree of participation of those involved, and who were segregated in the sense I have just mentioned, will be determined in the investigation that is expected to start tomorrow. Segregation as punishment will be carried out only after the investigation is completed and the guilt of those participating has been determined.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. Hazen Argue (Assiniboia):: Can the
Minister of Transport say what progress is being made by the board of transport commissioners in its program toward equalization of freight rates in general, and in particular the progress toward equalization of commodity rates? I ask this question because the royal commission made its report as long ago as 1951, and we are anxiously awaiting some further progress.
3756	HOUSE OF
Inquiries of the Ministry


Hon. George H. Hees (Minister of Transport):: I wish to thank the hon. member for Assiniboia for giving me notice of his intention to ask this question. Since the beginning of 1958 the transport board has held hearings on certain commodity rate scales and further hearings are scheduled for this fall. The railways have been required by the board to file certain additional information, and the board is hopeful that substantial progress will be made in the equalization of commodity rates before the end of this year.


Hon. Lionel Chevrier (Laurier):: May I ask
a supplementary question. When that report is made, will there be other classifications of freight rates to be equalized under the authority of the order in council?


George Harris Hees: I shall speak to the chairman of the board of transport commissioners, Mr. Speaker, and get an exact report for the hon. member.


Hazen Robert Argue: I wonder if the minister could say whether the hearings to which he refers will be held at various places across the country or whether they will be held in Ottawa.


George Harris Hees: I believe the hearings will be held, as usual, across the country, but again I shall speak to the chairman of the board of transport commissioners and get an exact answer for the hon. member tomorrow.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I ask
the Minister of Labour if he can reply to the question I asked yesterday in his absence, and which had to do with whether or not the non-operating unions of the railways or the railways themselves had indicated any acceptance or rejection of the conciliation board report?


Hon. Michael Starr (Minister of Labour):: I have had no correspondence or any indication whatever, Mr. Speaker, from either party to the dispute.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: I wish to address a question to the minister responsible for the renaissance of official philatelic art in Canada, the Postmaster General. As the society of philatelic Americans is holding 

its sixty-fourth annual convention in Montreal on September 18, this being the first convention of this society to be held outside the United States, and in view of the minister's announced policy of philatelic rejuvenation in Canada and search for ideas and inspiration to this end, would the minister inform the house if representatives of his department will be attending this gathering of philatelists?


Hon. W. M. Hamilton (Postmaster General):: I want to thank the hon. member for giving me notice of his question. We are happy that recent developments and improvements in our Canadian postal service have caused this organization to come to Canada. I will be opening their meeting myself and will be in contact with them. In addition, one of my senior officials will be present throughout the meetings.



CANADIAN PACIFIC STEAMSHIPS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: I have a question which I should like to direct to the Minister of Labour. Could the minister indicate what action has been taken by the three unions on the west coast with respect to the suggestion of the Canadian Pacific that the dispute between its B.C. coast shipping service and the three unions be referred to arbitration?


Michael Starr: read the article in the newspaper, Mr. Speaker, but I have received no reaction from the unions to that suggestion.



ST. LAWRENCE SEAWAY WELLAND CANAL    TRANSFER OF CONTROL AND OPERATION TO SEAWAY AUTHORITY

[Stage Direction]
On the orders of the day:
Mr. W. H. McMillan (Welland):: I should like to direct a question to the Minister of Transport. I should like to know whether the government has decided to turn over to the St. Lawrence seaway authority control and operation of the Welland ship canal.


George Harris Hees: The Welland ship canal will come under the authority of the St. Lawrence seaway authority later this year.


William Hector McMillan: I have a supplementary question. Will that apply to the lands owned by the federal government and held in connection with the canal?


George Harris Hees: I would think so, Mr. Speaker, but I will check with the officials concerned and let the hon. member know.



STATEMENT ON AVAILABILITY OF NEW &quot;PARLIAMENTARY GUIDE&quot;

[Stage Direction]
On the orders of the day:
Hon. Henri Courlemanche (Secretary of State):: In regard to the question asked by the hon. member for Bonavista-Twillingate in the House of Commons on August 13, in connection with the publication of the Parliamentary Guide, may I say that I was in touch with the publisher and was informed that the Parliamentary Guide is issued yearly and that the 1958 copy was issued in February, 1958. This copy does not contain the list of members elected in March, 1958. The 1959 issue of the guide is expected to be printed and issued in December, 1958.



EMERGENCY GOLD MINING ASSISTANCE ACT

[Stage Direction]
AMENDMENTS TO EXTEND APPLICATION AND '	INCREASE AMOUNT
Hon. Paul Comiois (Minister of Mines and Technical Surveys) moved: the third reading of Bill No. C-53, to amend the Emergency Gold Mining Assistance Act.
Motion agreed to and bill read the third time and passed.



BROADCASTING


[Stage Direction]
The house resumed, from Monday, August 18, consideration in committee of the following resolution-Mr. Nowlan-Mr. Sevigny in the chair:
That it is expedient to introduce a measure to establish a board of broadcast governors to regulate broadcasting in Canada; to provide that the expenditure of the board shall be paid out of money appropriated by parliament therefor and also to provide for the continuance of a corporation known as the Canadian Broadcasting Corporation for the purpose of operating a national broadcasting service in Canada; and to provide further for the payment, remuneration, salaries and fees of the officers and employees thereof.
Mr. Fisher:: Mr. Chairman, it was most pleasant to hear the introduction of this resolution by the minister, especially when he used that quotation from what I like to call the professor patron of the Conservative party in Canada, namely Professor Creighton. The group here welcome the legislation, and we are looking forward to the actual bill itself in order to see what its substance will be.
After referring a number of times to the bill as being extremely important, the Leader of the Opposition made the point that his party would like the bill to go to a select committee of the house before being moved 57071-3-238
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through its final stages, to have an examination made there. We are not convinced that that is the right point of view at this particular time. Broadcasting in all its aspects has been very well covered by parliamentary committees and by royal commissions.
We have had a very thorough outline set up for us in this royal commission. One of the key points is that the powers of the board of broadcast governors and the kind of regulation framework that is to be allowed them would need to be known before we really know whether committee work would be useful. Rather than having the bill referred to the committee at this time I think it might be much better to have the bill passed, the board of broadcast governors set up and the board given some opportunity to introduce the regulations that are going to come into effect, because I think the regulations are the key.
Speaking for those in this group, we have been concerned about the war of propaganda carried on for some years against the C.B.C. and for the private interests. I believe all members have received some of the latest proofs of this propaganda war in the form of communications from radio station CHWO at Oakville, Ontario, and the private broadcasters who are at their old game of maligning certain people. I notice here, for instance, a reference to the cabinet secretary, Mr. Bryce, which I can only describe as unfortunate.
This particular kind of propaganda on the part of private broadcasters seems to have been caused by the reactivation of the Canadian radio league or, as it is now known, the Canadian broadcasting league, which has already been sending out literature in connection with what they consider the future Canadian broadcasting set-up should be.
The conclusion I draw from the criticisms of the Oakville station is that it is wrong to have a lobby to protect the C.B.C. but it seems to be all right to have a lobby to protect the private stations. I often wonder whether many people realize how powerful a lobby the private stations have had in this Canada of ours. This is clearly illustrated when one thinks of the Sifton newspaper interests, the Thomson newspaper interests and the daily newspaper interests with all their ramifications. The complaints of the private broadcasters have been brought home very firmly for many years but what happened when the royal commission on broadcasting began to look into the matter? Those who have read any of the publications of Mr. Fowler, the head of that royal commission, will be perfectly aware that this

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man is not out to socialize tor the sake of socialism; he is not out to keep any national organization going at all. Those who have any doubt as to his devotion to free enterprise should look at what he has written in the past on the combines investigation legislation and its effect on companies.
This gentleman, however, undertook this chore and came up with a report. At the time of his appointment the members of this group vigorously protested, because we thought he was so completely in what we would tend to call the other camp that his conclusions would almost certainly be against the C.B.C. and perhaps for altogether ending the C.B.C.'s existence. Instead we have this report in which we note some very interesting recommendations, and I would like to read one recommendation which I imagine some members will have missed in connection with the private radio stations. This appears at page 144 of the report, and reads as follows:
-once a licence was granted to a private station operator there was little effective control over the manner in which he used the licence. At all events, there is no record of any licence ever being suspended, revoked or unrenewed on the grounds of a poor performance by the licensee. Since, in human affairs, the continuation of such perfection is unlikely, we recommend that in future the standards of performance of private stations should be more effectively checked, that those who give inadequate public service or shabby performances under their franchises should be warned, and that the licences of those who fail to make substantial improvements after such warnings should be cancelled. To put the matter briefly, we think that the presence of private elements in our broadcasting system should be clearly accepted as valuable and permanent; but that the performance level of private stations should be a high one to justify the grant to them of valuable public rights-higher in fact than it has been, with some notable exceptions, in the past.
I think that puts the point very clearly about which we and many others were so concerned, namely the feeling that the fetters would be completely taken off, where they existed, for the private stations, and that the national network and the national programming of the C.B.C. would go into limbo. It has certainly been a complete and pleasant surprise to many of us to see indications of the way in which the government is moving.
I remember that last year during the election campaign one member of the government was in a certain community, and after his departure radio and television interests in the area were rubbing their hands and saying, "Well, we won't have to worry about the C.B.C. any more. We got the tip that it is going to get the axe." I believe that explains the general reaction of surprise and pleasure on the part of both the official opposition and

ourselves at the direction in which the government is moving.
One criticism of the Fowler report which contained some accurate observations was that written by Mr. I. Norman Smith in the Ottawa Journal of July 8, 1958. He dealt with the C.B.C. leadership and pointed out that the recommended board of broadcast governors would set up a chairman who would not have continuing experience; that is to say, the longest term he would probably have would be three years. Mr. Smith also raised very strongly another significant question. It is recommended he would work two days a week, and Mr. Smith questioned whether a part-time chairman would be really able to carry out the duties of supervising such a sprawling and many-faceted operation as broadcasting in Canada. Mr. Smith went on to draw the moral that probably this was the very question which led to the resignation of Mr. Dunton. He was speculating, of course, and there is no reason to believe that is so, but in this editorial he went on to say:
-it seems to me the uncertainty facing C.B.C. probably was a factor in his resignation. And I am certain that that uncertainty will stand in the way of finding the best possible man as his successor.
The Fowler report was full of good analysis and suggestion, but it came up with an utterly cockeyed recommendation as to the leadership of Canadian radio. The Conservative government should lose no time in disowning that particular recommendation of a commission established by its Liberal predecessors.
Well, we will wait and see if the government is going to disown that recommendation, but it does raise a point. We need perhaps more continuity in the board of broadcast governors and more full time leadership, let us say, from the chairman of that board than is indicated in the sample act that has been presented by the commission. I hope the government is giving serious consideration to this question.
One phase of the matter our group is hoping will be cleared up in the future is the question of political broadcasts. I should simply like to review the situation at the present time as far as the C.B.C. is concerned. To me the national aspect of the C.B.C. and its political broadcasts are among the more important educational features and functions carried out by broadcasting. It is my contention that the C.B.C. has not shown a great deal of leadership in this field. Its impartiality has led it to become much more dull and dreary than is necessary. I should like to read a paragraph from an interesting article which sets out some comments on the matter:
To begin with, during election periods, free political time is divided between the parties, and programs which at other times bring together

opposing points of view are eliminated. Normally the C.B.C. discussion programs, press conferences, etc., are very effective, and often they reveal real differences between party points of view. Certainly they are by far the most interesting type of political broadcast and frequently the discussion they stir up continues long after particular shows. But not only does the C.B.C. cancel its most effective political education programs during election time, it also takes special pains to ensure that the single-party election broadcasts will be as uninspiring as possible. It prohibits, specifically, r'all political broadcasts incorporating any device which would be considered theatrical, such as dramatic skits."
I do not know, but I thought we did have a little bit of theatre and drama in the last election campaign which the C.B.C. did not control, but perhaps that may all have been to the good. The article goes on to say:
Furthermore, the use of the following is also prohibited:	Aim clips, slides, music, animation,
cartoons and still photographs (unless they show only "individual persons" who are "members of the party sponsoring the broadcast"). If these restrictions were imposed on public affairs broadcasts between elections there would probably be a mass suicide of C.B.C. talks producers within a month.


Mr. Pickersgill:: Mr. Chairman, I wonder if the hon. gentleman would identify the article for the record. He may have done so but I failed to catch it.


Douglas Mason Fisher: The article is by Professor Kenneth McNaught. It is entitled "The Failure of Television in Politics" and appeared in the August 1958 issue of the Canadian Forum. This may appear to be unrelated to the resolution but I bring it up for the following reason. The C.B.C. has carried out its function in this respect but many have been critical of its political broadcasts. I certainly have been critical of it as far as its regulatory functions and political broadcasts are concerned. As the Fowler report pointed out, the corporation has never revoked a licence and has never put its foot down with respect to regulations concerning private stations.
We hope two things will come out of the new organization. We hope the C.B.C. will be given encouragement, being one step further removed from popular political criticism in the sense that it is now to be a bit more free in its programming. We also hope the board of broadcast governors will really fill the regulatory role the C.B.C. failed to fill in going after private stations for their level of performance and the amount of commercials they carry in relation to program time. If these two things develop from this new establishment I believe this government will merit the very strong approval of the Canadian people.
One of the keys to the future will be how the regulations will apply to the private stations with respect to their requirement to
57071-3-238}
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take network programs, and how much they will be allowed to import from other countries. The Leader of the Opposition made reference to this last night. If you have followed the proposals of the C.A.R.T.B. through the years you will know that in essence that is what they are after. They are seeking freedom from anything that prohibits them from making more money.
The Leader of the Opposition said there is nothing wrong with that. I suggest there could be something very much wrong with this if outright commercialism and a materialistic approach in this regard leads to an abuse or almost a sabotage of a valuable public service. If the board of governors in its regulations which will be developed under this legislation can bring about a degree of real control and a certain amount of inspiration, I believe this rather nasty and puling controversy that has gone on for 15 or 20 years between private broadcasting interests on the one side and the C.B.C. on the other will just disappear. In that regard I hope the C.A.R.T.B. can give some kind of leadership to the private stations.
Those of us who have listened to radio across this country know that in some areas you get a concentration of excellent radio and television service. I think of how fortunate Winnipeg is as far as its radio reception is concerned. I doubt if you could find a place in the country where radio covers events more thoroughly or in a more stimulating fashion; yet in other places devoid of the stimulation of competition radio seems to vegetate and produce nothing but programs featuring the fifty-ninth and sixtieth most popular records on the hit parade and a succession of rather jazzy commercials.
The focus of our discussion is not really before us at present, however, and we will be better able to refer to these matters when we have seen the bill and what it spells out. After the bill comes down, if it proves to be as satisfactory as we think it is going to be we will be eager to learn who will be the personnel of the board of broadcast governors, and we trust they will establish regulations that will really mean something and will carry out most of the recommendations of the Fowler commission.
The one point that has not been mentioned to any great extent is the question of the financing of the C.B.C. We know that is perhaps the toughest of all the problems, because it is the place where the corporation has seemed to be most vulnerable to every person. The news that a certain program cost $15,000 or $50,000 to produce always seems staggering; but when you see in the Fowler commission how this is related to

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an estimated program based upon $15 a year for a television set, or you see it in terms of 4 cents per family, it does not seem nearly so bad. When you see the concentration of criticism-and we have had those enemies of the C.B.C. firing at it in all its aspects- it makes one conscious of how tough it is going to be to build up a financing system for the corporation and for the board of broadcast governors that will have general approval and not be sniped at all the time.
It was very noticeable that when the last mimeographed report of the C.B.C. came out newspapers across the country were throwing darts at the corporation for its lavishness and tremendous expenditures. Well, the Fowler commission, and I hope this government, recognize that you cannot have good television programming unless you do spend money. In essence, I do not think Canadians are as cheap as some of the public comments or some of the public men and the newpapermen in the country. I think we are prepared to pay for good programming, and we trust that the financing set-up will be a long-term one. We hope the minister does what he promised earlier, namely get rid of the excise tax on tubes. We do not know what to suggest in connection with the question of licence fees, but licence fees do not seem feasible at the present time. We shall look very closely at the particular point of financing.


The Chairman:: Shall the resolution carry?


Mr. Fraser:: I would like to say one word. Every Saturday evening the C.B.C. puts on a wrestling program from Maple Leaf Gardens and from other places. I like to watch these matches and I know thousands across Canada like to watch them because clean wrestling is really worth while. In many instances when a winner is declared you see the winner go up and kick the man who is down, or the loser will kick the winner. I think some of this rough stuff should be eliminated from television. I do not think it is good for our young people. I know of one instance where a boy in high school was kicking another boy, and he was upbraided by the teacher. He said, "I saw it on television".


Joseph Pierre Albert Sévigny: I regret to interrupt the hon. member, but I do not think his comments are relevant to the resolution now under discussion. The hon. member is discussing the content of the programs of the C.B.C. which has nothing to do with the present resolution. I must inform the hon. member that his comments are out of order.


Gordon Knapman Fraser: I quite agree with you, Mr. Chairman, but I wanted to make them.


Mr. Godin:: Mr. Chairman, if I rise it is only for a moment to speak more on a point of order than on the subject matter of the resolution itself. For two days we have been discussing a certain resolution placed before the house. Certain members have made reference to further study of a bill which so far has only been indicated by the Minister of National Revenue. Nowhere do we find that the government is under the obligation to present a bill to implement what is contained in the resolution. Yesterday the Minister of National Revenue made reference to the fact that a bill would be presented. He said, as reported at page 3749 of Hansard:
I trust, Mr. Chairman, that the committee will see fit to pass this resolution at as early a date as possible, so that the bill can be brought down and the details of the legislation considered by hon. members.
Other hon. members have made reference to a future bill, but I feel that the matter of legislation concerning broadcasting in Canada is so important that it should be introduced properly in the house. Possibly everyone in the house should rely on the words of the Minister of National Revenue, but on other occasions in the house we have seen contradictions as to what was the obligation of the government under certain circumstances. It comes to mind that a short while ago certain members of the cabinet felt that the government should not be in a position to decide on the NORAD agreement, and a day later we found that the government-


Donald Methuen Fleming: Order.


Mr. Mcllraiih:: He is in order.


Joseph Pierre Albert Sévigny: I must ask the hon. member to relate his remarks to the present resolution.


Osias.-J. Godin: Mr. Chairman, on the point of order raised by the Minister of Finance, I feel I am now discussing the propriety of amending the resolution so it will take care of a problem. At times we are informed that the house will have something to say about certain things, and at other times that the consent of the house will not be required. That is why I feel it is pertinent to recall those instances when that problem arose. It was only for that purpose that I referred to the NORAD agreement which was dealt with in this house some time ago. It relates to the importance of this measure.
I further realize that it is essential today for the present government and the Minister of National Revenue to have the benefit of the work done in the past by the previous government, and especially the Fowler report. It seems to me everyone should agree

that this resolution should refer to legislation to be placed before the house. For my part, I intend to rely on the bill which will be presented so that I may further study this very important Canadian problem. Therefore, Mr. Chairman, I would like to move an amendment to the resolution as follows:
That the resolution be amended by inserting the words: "to introduce a measure" after the word "expedient" and before the word "to" where they appear in the first line thereof.


Joseph Pierre Albert Sévigny: Is it the pleasure of the house to adopt the motion?


Mr. Nowlan:: Of course, Mr. Chairman, if they want to waste time by moving an amendment such as this, I am perfectly happy to accept it because it is obvious-


George James McIlraith: Mr. Chairman, I want to address myself to the minister's remarks. The minister has come before this house asking it to pass a resolution to give the government leave to introduce a bill on one of the very important subjects affecting our Canadian life. Through an error or an oversight he has in fact worded his resolution so that it approves the action he proposes to take without obligating himself in any way to disclose to the house what that action is. His own speech shows the truth of what I am saying now.
When an hon. member follows the rules and procedure of the house and moves a proper motion in the manner in which it has been done today, the minister has no right to make the kind of remarks he has made. The amendment is wholly in order. It is a proper motion, and when the omission was drawn to the minister's attention last night I was surprised that he did not undertake immediately to introduce an amendment himself to deal with the matter properly. You will see, Mr. Chairman, that if the resolution is passed as it is now worded the house will be approving the establishment of a board of broadcast governors, and if you read the minister's speech that is not what he asked for at all. He asked for a bill to establish a board of broadcast governors.


George Clyde Nowlan: How would you do it without a bill? Can the hon. member tell me that?


George James McIlraith: Yes, I can tell the minister, but I do not know that I should take the time to do so. The minister should have followed the precedents of the House of Commons and not lost his temper and made the nasty remarks he has made about a member who has acted properly in moving the amendment.


Donald Methuen Fleming: He did not lose his temper at all.


Lester Bowles Pearson: If the minister feels that this is of no importance at all I suggest that he
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look at Routine Proceedings and Orders of the Day for this day. He will find that there are three other resolutions there and that in every case they begin with the words, "resolved, that it is expedient to introduce a measure." All we are asking the minister to do is to follow the normal procedure. Obviously this is an oversight resulting from some sloppy work on somebody's part, and the minister might well make the correction graciously, as he so often does.


George Clyde Nowlan: The resolution was drafted by the Department of Justice and is perfectly in order and in keeping with many other resolutions which have been brought before the house. It is true that on the order paper there are other resolutions with the words "to introduce a measure" but in those cases the purpose is to amend something. Here the purpose is to create something and the preliminary words, "to introduce a measure", are not necessary according to the best legal advice available to the government.
However, it is obviously a question of tweedledee and tweedledum, and I do not propose to debate it longer. If I showed any temper I apologize to the committee, but the matter involved something that I felt was so utterly wasteful of time that it was hardly worth mentioning, because obviously we are going to introduce a bill as soon as the resolution is passed. I am very happy to accept the amendment if the committee thinks it advisable.


John Whitney Pickersgill: The minister has said that this resolution was drafted by the Department of Justice. Can the minister tell me when the Department of Justice began drafting these resolutions? In my rather long experience they were not drafted by the Department of Justice.


George Clyde Nowlan: I could not answer that question correctly, but I know that in this instance it was drafted there.


Joseph Pierre Albert Sévigny: Is it the pleasure of the house to adopt the motion?


John Whitney Pickersgill: The amendment.


Joseph Pierre Albert Sévigny: Is it the pleasure of the house to adopt the amendment to the resolution?


[Stage Direction]
Amendment agreed to.
Joseph Pierre Albert Sévigny: Shall the resolution as amended carry?


John Whitney Pickersgill: Mr. Chairman, if I did not know the hon. member for Mackenzie River so well my feelings might have been hurt by his getting up to leave at the very moment I rose to make a few observations on this resolution. However, the hon. member for Mackenzie River and I understand each other

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and I can understand, as he knows very well what I intend to say, why he does not feel it necessary to remain.
About a month ago when the Leader of the Opposition drew the attention of parliament in a forceful manner to the delay which had taken place in bringing down this very important legislative proposal which we at last have before us, he indicated that this was a matter which should not be rushed through the house at the end of the session. It is true, as the hon. member for Port Arthur has pointed out, that this matter was very carefully considered by a royal commission which made what we on this side of the house regard as an excellent report, but from the indications in the resolution before us the government intends to deviate from the recommendations of that report in one very important particular, and that with respect to the financing of the C.B.C. I intend to address myself particularly to that point.
Before I do so I should like to recall to the committee the two suggestions made by the Leader of the Opposition last evening with respect to dealing with this matter. The first suggestion was that the bill should be given first reading, allowed to stand on the order paper, and then be reintroduced at the next session of parliament so the hundreds of thousands of Canadians who are actively interested in what legislation of this kind will effect will have an opportunity to see what is proposed and study the matter and so that we, the elected representatives of the people, and the members of the other place who also have a responsibility in this matter, will have an adequate opportunity to see that all important points of view on a subject of such great interest to so many Canadians are adequately expressed in parliament.
Even if the most pessimistic views as to the length of the session should turn out to be right, I do not believe that even in that case there will be the kind of opportunity and atmosphere in which such legislation should be considered by parliament; because I think all of us from my observation-perhaps I should speak only for myself-are getting a bit weary, and there are many other urgent matters coming before parliament toward the end of the session. Having in mind the hours we sit in the house, I cannot imagine that it would be possible to have committee meetings that would not conflict with the meetings of the house, and that would put some members who are greatly interested in this matter under the embarrassment of having to choose between two duties that we consider equally urgent.
While the rest of the speech of the hon. member for Port Arthur was admirable, I certainly do not feel I could agree with his

suggestion that there is no need to have the proposed bill go to a select committee both here and in the other place, if the ladies and gentlemen of the other place want to have such a committee. What the government is proposing is to alter in a very fundamental respect-there is one respect, at any rate, with which I think we agree-the whole structure of broadcasting in this country. This is a very important decision we are being asked to make.
My own preference would be for the first suggestion made by the Leader of the Opposition, that we should have first reading of the bill so the public will have a chance to see precisely what is in the government's mind, that the Minister of Finance should then bring in a supplementary estimate covering a period of one more year, as was done by his predecessor in 1957, and that at the next session of parliament the government, having its legislation ready, could introduce it almost at the beginning of the session and the committee could be set up and start to meet in the early stages of the session so it would not conflict with other matters. There would then be a better opportunity for really orderly consideration of this very important measure.
On the other hand, if the government are quite determined to proceed with this measure at this session I recognize, of course, that that is their right. While I would prefer they would not do it I think, so far as the official opposition is concerned, as the Leader of the Opposition indicated last night we would want to insist that the government do what they promised in the speech from the throne, that is set up a select committee and send this measure to that select committee. However, if this were done we would have to make sure the meetings of that committee were so arranged that it would be possible for those of us who want to attend to be present at those meetings without neglecting what we regard as the urgent business of our constituents here in this place.
Having said that, sir, I should like to make one or two observations about what I hope will be in the bill. I agree with the hon. member for Port Arthur that something should be done about political broadcasting. I have had quite a lot of experience in the negotiations that have gone on in recent years, and I have thought for a long time that it was a very disagreeable and very unfortunate duty that was imposed upon the Canadian Broadcasting Corporation by the existing legislation.
In so far as I am a member of the Liberal party and I have to take responsibility for it being there,-of course it was put there long before my time-I am quite willing to take that responsibility. However, I think it is unfortunate that the law as it now stands puts

the responsibility on the Canadian Broadcasting Corporation for apportioning the time for political broadcasting. I can well understand why the responsibility was put on the corporation in 1936, but I think events have shown that this is not a proper function of the broadcasting corporation.
I would hope the government, in drafting this legislation, would not impose this obligation on the board of broadcast governors, because of course, it will not be a function of the corporation in any event in the future. I would hope that we would follow in this parliament the precedent of Westminster, which we do when we have no other in connection with other matters, and that this matter will, in future, be settled by parliament itself. It does seem to me it is putting this organization, which ought to be completely independent, in a very invidious position to ask it to make decisions on this matter. No political party is ever going to be satisfied with the decisions that are made.
It seems to me it is just subjecting this body to unnecessary feeling and criticism. It is a duty for which, if they are chosen for the other function for which we want them to be chosen, they are not apt to be particularly qualified.
Now, that brings me to the next point I want to make. These points are to some extent, I admit, a repetition though in quite different language of some of the things I said on the amendment to the motion to go into supply, so I shall make them very briefly. I do say that the most important of all considerations which should be borne in mind by the government in connection with this legislation is to put every safeguard which it is possible to conceive into this legislation to make sure that the board of broadcast governors will be completely independent of the government and also of the opposition. In other words, we should ensure that this body has control of broadcasting.
It seems to me that the analogy I made the other day is a sound one, the analogy with the courts. We want this body of broadcast governors which is to control the exercise of the right of freedom of speech in this country, in what is the most important and influential of all media for the exercise of that right, to be free from any control by the occupants of the treasury benches, whoever they may be, or of any other political party. The only way we can do that, of course, is to make quite sure we appoint people with sufficient independence of character that they will not yield to any kind of pressure.
It was maintained by the Prime Minister in another debate and in another parliament that one way of achieving this was by denying to the government and to members of
Broadcasting
the government, even in a private capacity, the right to make any representations about this matter. I feel that is the wrong way of going about this. We do not deny the government access to the courts, and I do not think the government should be denied the opportunity to make representations about broadcasting any more than the members of the opposition should be. I believe any citizen should be quite free to make representations. We should have the kind of board and the kind of set-up which will make it possible for the Prime Minister, if he does not like a program, to say so publicly without anyone suspecting that he is trying improperly to influence the course of action of that board. It does happen that we have prime ministers from time to time who have good taste and good judgment and who, like the rest of us who are citizens of the country, should be free in a matter of this kind to express their views.
Now, that is a very different thing from exercising any kind of pressure, proper or improper. I am going to put forward what is not a new idea with me, and it is not one I am putting forward on behalf of the Liberal party. Here I am speaking as a private member of parliament putting forward an idea of my own. I put this idea forward to some of my former colleagues, but I did not succeed in persuading them.


Donald Methuen Fleming: It must be a good one.


John Whitney Pickersgill: It is a very good one, and perhaps I will be more successful in persuading the hon. gentlemen opposite who, as we all know, are so open-minded and who have so notably changed so many of their ideas since they were on this side of the house. It did seem to me that one way in which it might be possible to get a balance on this board of broadcast governors, a continuity which would go on regardless of changes in government, would be to provide that a substantial majority of them would be nominated by the prime minister, and that a minority of them, but a sufficient number to have some influence, would be nominated by the leader of the opposition of the day.
Since the purpose is, as the minister so well stated, to make this body responsible directly to parliament and not to the government, and to remove any suggestion that there might be any political pressure from anywhere, I put this idea forward. Frankly, sir, I do not expect that it will be accepted, but I put it forward as an honest contribution to the solution of what is a very difficult problem. I know the minister appreciates that it is a very difficult problem.

Broadcasting
I do not believe I would be breaking any confidences if I said there are times when ministers, and I suppose this is true of the present occupants of the treasury benches as it was of others, get very indignant about what is done by the broadcasting corporation. They want to do something about it. The minister who reports to parliament is sometimes under some pressure from his colleagues to do something about it. Some of them are quite indignant when he is not able to soothe their ruffled dignity in certain instances.
As I say, this is something that is sufficiently well known that it does not need any underlining. The problem, however, is a very serious one. I am very glad that the present minister is in the position he is now because I am quite confident that he, like his predecessor, is not easily pushed around. I think the present minister has a conception of the importance-partly because he belongs to the profession to which he belongs, and partly because of his temperament-of having this body independent of the government and of any possibility of pressure from the government.
All of us who are in parliament have lived in a world in which we have seen what has happened to countries where broadcasting is the instrument of government. It is almost 20 years since the free world engaged in what up to that time was the worst and most terrible conflict in history against a country the majority of whose people, I am convinced, did not want to have a war but who had been subject to propaganda by a government that had complete control of the radio and the other facilities for the expression of views in that country. Much more than half of the world we live in is controlled by governments that also control these powerful means of influencing public opinion.
The Americans, of course, approach this matter in a different way. They say the government must not own any of these stations and must not have anything to do with broadcasting, that it must be left entirely to private enterprise. In that way they feel they will be protected from any governmental propaganda through radio. We cannot use that method in Canada or at least no government has thought that was possible since the days when the Aird commission was appointed. I am glad to see-as I said, this is one of the cases where I think Mr. Bennett was right-that the present administration seems to be following that line. However, I think the government should and will want to seize every possible method ensuring that this important board is given the degree of independence that it must have

It seems to me that degree of independence will depend upon two things. It will depend upon the character and upon the tenure of the appointees.
I am inclined to agree with the criticism by Mr. I. Norman Smith to which the hon. member for Port Arthur referred. I must say it was one of the few things in the Fowler report about which I had grave reservations. I refer to the proposed shortness of tenure of the chairman of the board. I know there is a problem there. I know that it is not easy of solution. However, it is a problem that perhaps we should not discuss very much until we see what conclusion the government has reached, because otherwise we are merely being rather speculative. Nevertheless, it is a problem of the greatest possible magnitude. As everyone who has commented on Mr. Dunton's retirement has pointed out, upon the chairman will rest the prime responsibility for ensuring in the future what we have had in the past under the Canadian Broadcasting Corporation under Mr. Dunton, namely a board that could not be pushed around by anybody. That is what we want.
But there is another thing that is equally important. We do not want a board of broadcast governors who have nothing to govern except the private stations. The way in which the Canadian Broadcasting Corporation will be financed is just as important to the assurance of this independent and effective national system as is the independence of the broadcast governors. That consideration is what disturbs me greatly over the resolution introduced by the minister. I refer to the fact that it makes no provision, and indicates that no provision will be made in the legislation, for anything except the salaries and other remuneration of the officers and employees of the Canadian Broadcasting Corporation. The scheme for financing the activities of the corporation is something else again, of which up until now we have been told nothing precise.
Before the minister asks us to agree to this resolution I feel that he should indicate the scheme of financing the government is proposing to carry out. In doing so I hope he will make it very clear that it is not to be based upon annual appropriations. Of all the methods by which a government may exercise control-and in most cases we expect the government to exercise control; it is its duty; that is what it is elected for in most cases-the best way and most effective way of controlling the operations of a government department is through the financial control. But that is precisely what we do not want in this field if we are going to ensure for the corporation that independence of the

government which I have suggested is fundamental and which we all want.
I say that for this reason. If the Canadian Broadcasting Corporation is obliged to go, as government departments do, almost on bended knee to the Minister of Finance once a year in order to justify everything they have done propriation should be increased or should be and attempt to persuade him that their ap-changed, insensibly and insidiously there will be an almost irresistible temptation-I do not say that it will be yielded to-to try to please the Minister of Finance.
In view particularly of some of the views expressed by the Minister of Finance when he enjoyed the same kind of freedom to express his own views as I am enjoying at the moment, I do not think we on this side of the house would have the same confidence in having the broadcasting of this country subject to the Minister of Finance that we would in having as its trustee, as its spokesman here in this house, the Minister of National Revenue.
I say that without meaning any disrespect whatsoever for the Minister of Finance. As I say, he is perfectly entitled to his opinions; but those opinions which he expressed in the house in the past were highly unfavourable to the national system of broadcasting. It is possible, of course, that Saul has been turned into Paul and that the minister has seen the light on the road to Damascus. As a matter of fact the minister seems to have seen a great many lights since he moved over to the government side. I think he has learned a few things. However, some of us are bound to remain sceptical.
As I said the other day, Mr. Chairman, and I repeat it, I feel that in some fashion some other financial provision should be made for national broadcasting for a period of years of fixed duration on a formula that cannot be changed by the government from year to year, and that a minimum budget should be assured to the C.B.C. so they will know what they -can count on.
I thought the Leader of the Opposition made a very constructive suggestion last night when he suggested there also ought to be a maximum beyond which they would know they could not go. I know what I found in my experience as the minister in charge of the film board, if I dare to use an analogy in order to illustrate my point. When I was in charge of the film board an upper limit was put upon their appropriation and they were told not to expect any more for a period of years. That procedure had a most salutary effect on the board, which was already very well run. Having an upper limit as well as a lower limit imposes or forces a sense of 57071-3-239
Broadcasting
financial responsibility upon any organization. They are obliged to make choices. Naturally if we have good people in the C.B.C.-and good and zealous people we have -they are going to want to put on good programs. They are going to want to do everything in the best possible way. We do not want any other kind of people.
But there is a limit beyond which I do not think the taxpayers want to go, and it seems to me that it would be very desirable to follow the suggestion of the Leader of the Opposition and have both a minimum and a maximum. The great thing is that there should be certainty, and that the corporation should not have to operate in the fear that if it displeased the majority in this house or, even more serious, if it displeased the government, it might have part of its income lopped off. What would be still more serious would be that if it pleased the government it might get an extra allotment, because that is perhaps the most insidious of all the dangers.
There are many other things I would like to say on the subject, but 1 believe those are the salient points. I do not intend to repeat my remarks of the other night to the effect that the functions of this board of broadcast governors will be most difficult ones, especially in so far as they have to do with the issuing of private licences. That aspect of the matter was dealt with by the hon. member for Port Arthur. I think the two points I raised are of even greater importance, namely the assurance of the complete independence of the board and the assurance to the C.B.C. of a financial basis upon which it can count and with which it can plan over the years, which will make certain that it will not be subject to any kind of insidious pressure with respect to the getting of appropriations.


Joseph Pierre Albert Sévigny: Shall the resolution carry?


John Whitney Pickersgill: Surely, Mr. Chairmanhas the minister nothing to say?


George Clyde Nowlan: Since the hon. member for Bonavista-Twillingate has asked me whether I am going to speak, I will say that he has been most helpful and that I certainly appreciate the tone of the comments made in this debate. I do not think there is anything I can say or do at this time which would in any way assist the hon. member for Bonavista-Twillingate.
He has raised two main problems, one as to the personnel, the integrity and the independence of the board of broadcast governors. Obviously this cannot be spelled out in legislation. You could have the most drastically worded legislation in the world, but if the government wants to appoint weak men or if it makes a mistake and thinks it is appointing strong men but it turns out that

Broadcasting
they are weak, there is nothing in legislation which can prevent that. You have to leave that to experience and to the best judgment and the best intention of the government or from whatever source the recommendations may come. That source might perchance be the Leader of the Opposition, and even he might make a mistake in making a recommendation as to the personnel of this board, as might the Minister of National Revenue or the Prime Minister.
In so far as the financing is concerned, I do not think it is advisable for me to go into the details of the bill at this time. The bill is available; I am not sure that we have 265 copies at the moment, but I know 100 copies were provided this morning for immediate distribution and the rest will be distributed within an hour or two if this has not already been done. It will be much easier to deal with this matter when hon. members have seen the bill. I can tell the hon. member however, in fairness to him, that there is no long-term financial program set out in the bill, yet I think there is a very reasonable approach thereto. It is not entirely a part-time or catch as catch can method of obtaining appropriations from parliament, and I think the best way to get these questions answered is to wait for the bill to be distributed so that all hon. members of the house may study it and then raise their questions.
A question was raised last night about sending this bill to committee, and there is no doubt that we gave an undertaking that this matter should go to the committee. If the house desires it, therefore, it shall go to committee; the commitment was made. On the other hand, I would like to have the reactions of hon. members to the bill after they have seen it and considered all its aspects so that the bill may be discussed informally, and again formally, whenever it is taken up, which may possibly be tomorrow if consent is given or, if not, next week. In any event, I hope the committee is now willing to pass the resolution. The bill will be made available immediately thereafter.


John Whitney Pickersgill: There is one question of a purely factual nature which I would like to raise. Does the bill include a financial scheme?


George Clyde Nowlan: Mr. Chairman, I do not know how you spell out a scheme, but it includes a plan of financing, yes.


John Whitney Pickersgill: Thanks.


George Clyde Nowlan: The bill includes practically every matter to which reference has been made during this debate. Perhaps these matters have not in all respects been dealt with in a way satisfactory to some members

or in a way with which every member will be in complete agreement, but all the various problems and matters raised so far during this debate have been covered, or at least an attempt has been made to cover them, in the bill which is ready for distribution.
Resolution reported and concurred in.
Mr. Nowlan thereupon moved for leave to introduce Bill No. C-55, respecting broadcasting.
Motion agreed to and bill read the first time.



FINANCIAL ADMINISTRATION ACT


Donald Methuen Fleming: the second reading of Bill No. C-43, to amend the Financial Administration Act.


Mr. Benidickson:: Is the minister going to make a statement?


Donald Methuen Fleming: No, Mr. Chairman, I had not intended to make a statement on this motion for second reading of the bill. At the resolution stage preceding the bill I made an extended statement on the nature and scope of the bill. That statement is to be found in Hansard for July 29 last, beginning at page 2823, and I think I can add nothing useful to that statement at the present time. The bill is quite short, and its objects were clearly set forth in the statement I made on July 29. Any questions which arise could, I think, be more usefully dealt with at the committee stage.


William Moore Benidickson: Mr. Speaker, as the minister has stated, the details with respect to the purposes of this bill were given by him on July 29. On that occasion I also had some remarks to make with respect to the bill and as I said before it is quite obvious to me, as I am sure it is obvious to a great number of the members of this house, that this bill, coming to us at this stage of the session, is a very remarkable retreat from the position taken by the Minister of Finance in the last session of the former parliament.
In fact, I find that he has even changed his language with respect to his views on section 28 of the bill, because when we discussed the question of the necessity of bringing before parliament a discussion of governor general's warrants on January 30, January 31 and February 1 of last session, the minister and his colleague the Minister of Justice asserted with great vehemence and

conviction that this was not necessary. They even suggested it was not desirable and when the opposition pointed out that this was quite a departure from previous practice they merely indicated that they were simply bound to report to parliament that an order in council had been passed, as they said had been done, and that there would be no chance whatsoever of debating the item in committee of supply.
We know that parliament was dissolved that day and the argument was not pursued. If parliament had continued I am quite sure the two ministers who in the past had so much to say about parliamentary rights certainly would not have been allowed by the opposition to continue in that stand. I think it is quite obvious that the public themselves were not going to allow them to take that position.
Over the years invariably governor general's warrants had been brought forward subsequently for parliamentary debate. We found it extremely shocking at the time to learn that the Minister of Finance in particular, and also the Minister of Justice, who as I said had so much to say about parliamentary rights, would take that adamant stand and suggest that because the money had been spent there would be no proper opportunity given to discuss the item >'n committee of supply.
Just to illustrate the kind of somersaulting that has taken place, as the hon. member for Bonavista-Twillingate said in the previous debate and to underscore the difference between the views of my hon. friends when they sat on this side of the house and the views they espouse today, and which can be determined from their actions now that they sit on the government benches, I wish to refer to some statements made by some hon. gentlemen on previous occasions when they sat on this side of the house.
I first wish to refer to the strong language used by the present Minister of Justice in 1949 when referring to the rights of parliament to discuss any item that involved expenditure. We were discussing the Canadian Commercial Corporation on March 23, 1949, and as reported at page 1905 of Hansard of that date the hon. gentleman had this to say:
If contracts can be financed and deliveries obtained merely by descending on the consolidated revenue fund without the specific authority of this house, then certainly such operations could be continued, as long as there was money in the fund, without coming to parliament. This is one more stage in the progressive loss by this house of its control over the expenditures made by the executive.
I also remind hon. gentlemen opposite that when some direction was proposed to be 57071-3-239i
Financial Administration Act placed in the hands of the Postmaster General in 1947, the present Prime Minister with his usual eloquence used some extremely stark language in describing his views on the subject. I shall not read the lengthy speech he made, but he concluded with the following words that may be found at page 357 of Hansard of February 12, 1947:
I should like to hear the Postmaster General, with his penchant for criticism, on this side of the house if any one of us should ask for power to expend three or four hundred thousand dollars, uncontrolled by parliament. It is a dangerous principle and one which I am sure on consideration he will realize places too great power in the hands of any minister.
In April 1949 when the present Minister of Finance was sitting in opposition he was concerned about the possible dissolution of this house and a forthcoming election. He expressed concern about the government of that day exercising certain rights as are provided by the Financial Administration Act to make expenditures by governor general's warrants. He argued that the house should remain in session until the estimates of that day were passed and, as reported at page 2697 of Hansard of April 28, 1949, he said:
I submit that there is one responsibility, perhaps paramount to all others, which a free parliament cannot lightly reject. The control of parliament over the raising of money and over the expenditure of money has been historically the means by which parliament has exercised its control over the executive branch of the government. It was when parliament in days gone by acquired the exclusive right to decide how money should be raised and how money shall be spent that parliament won its conflict with monarchical power; and finally when parliament won that exclusive right, it established our present constitutional, parliamentary form of government on a secure foundation. Any departure from that principle of responsibility is a departure that will be taken with grave risk to our whole basis of government.
What a difference there is in the attitude revealed by those words and the attitude adopted by the minister last session, when he indicated that as the money had been spent there was no purpose in presenting the item to parliament. He suggested that simply advertising the matter in the Canada Gazette and tabling the report at the opening of parliament was adequate and parliamentary debate would be stifled, notwithstanding the fact that over the years an item had always been placed in the estimates in subsequent sessions to enable hon. members of this house to debate it in committee of supply.
I realize there were no governor general's warrants asked for by the previous administration after the time the Financial Administration Act was amended in 1951. The precedents that exist of course existed prior to the enactment of section 28 in the form in which we have it today. However, I looked up the debates of the public accounts

Financial Administration Act committee of 1951, because it is that committee that is chiefly and zealously concerned about our rights in committee of supply. So there will be no doubt that this was under consideration at that time I want to draw the attention of hon. members of the house to pages 70 and 71 of the minutes of proceedings of the public accounts committee. The witness before the committee on that occasion was the then deputy minister of finance, Dr. Clark. He was being questioned by the then financial critic of the official opposition of that day, the then private hon. member for Greenwood, the present Minister without Portfolio (Mr. Mac-donnell). This is the only questioning I could find recorded in those minutes with respect to section 28 but it leaves no doubt whatever that there was no thought that the passage of this new statute would in any way alter the historical practice of bringing to the committee of supply and drawing its attention to, with an opportunity for debate, items relating to governor general's warrants. The following exchange occurred:


Mr. Macdonnell:: This is in the terms of the old section, is it?


Mr. Clark:: No, there are three or four sections which have been added. I called attention yesterday to them. No. 3 will require the governor in council to publish the warrant in the Canada Gazette within thirty days after the issue of a warrant.
That was new. The present minister of Justice then asked the following question:


Edmund Davie Fulton: Are they automatically reported
upon in the public accounts?


William George Clark: In the estimates too each year they are brought before parliament-added at the end of the supplementary estimates.
The chairman then inquired if section 28 would carry. The opposition was satisfied that these would come before parliament; that was the extent of the debate on the amendment to section 28 at that time, and it was carried without further discussion.
The Minister of Finance, as he indicated in the debate that took place on February 1, the day the last parliament was dissolved, suggested that this change concerning the matter of publication in the Canada Gazette was going to be the extent of his responsibility with respect to governor general's warrants. Hon. members who were not in the house at that time may not be familiar with the fact that there were two governor general's warrants issued after the election of 1957. As I have indicated, this did not please hon. members of this house who were familiar with the practice of this parliament, nor was it satisfactory to people across the country who felt this was indeed a new and drastic departure and something for which the government should be rebuked.
The following is typical of some of the editorial comment that resulted from the
[Mr. Benidickson.l
decision of the two ministers at that time. The Victoria Daily Times on March 6, 1958, had this to say:
It seems incredible, but when the Diefenbaker government was asked, in the closing hours of the last parliament, whether it would submit its warrants to the next parliament it replied that it would not.
This official announcement was made on February 1 by Mr. Davie Fulton, Minister of Justice, and Mr. Donald Fleming, Minister of Finance.
They said the government would adhere strictly and narrowly to the letter of the law. The law does not require the government to do more than publish its warrants in the Canada Gazette and this the present government intended to do.
As I say, this was typical of the comment made. I am not going to read other comment in a similar vein, but an election campaign was on. I wonder now whether we would have this legislation if the government had been elected with the present majority in the election of 1957. In any event, an election campaign was on, and the Prime Minister was sensitive to the impropriety of this stand that had been taken by the minister. He announced that if he were prime minister in the new parliament he would reverse this decision, and any warrants that were issued by the existing administration would be submitted to the subsequent session of parliament. This, of course, received a fair amount of favourable comment as the original decision received unfavourable comment. The Halifax Chronicle-Herald of April 30 had this to say regarding the Prime Minister's decision:
This is good. The expenditure of public funds through governor general's warrant without subsequent parliamentary approval, as was done early this year, was unprecedented and, for many Canadians who jealously guard parliament's rights, it must have been a bit disturbing. They will now feel better with the knowledge that the manner in which these funds were spent is to be given special scrutiny.
Therefore I say we have this amendment to the Financial Administration Act because the Minister of Finance has retreated from the position he took last session, and because of the commitment of the Prime Minister and the necessity of the Prime Minister to reverse his ministers during the election campaign.
In introducing the resolution the minister is reported at page 2823 of Hansard as saying that he felt this amendment had to come forward because the wording of the act, that has remained virtually unchanged since provision for the use of special warrants was made shortly after confederation, has been found in some respects to be lacking in clarity. How different is that face-saving statement made in introducing this legislation from the stand he took on February 1, 1958, as reported at page 4185 of Hansard,

when he said this when we were criticizing him for departing from the practice of giving an opportunity in supply for debate on governor general's warrants:
It is crystal clear that when that governor general's warrant was issued by order in council last summer it had, by the force of a statute, the Financial Administration Act, the quality of an appropriation, an appropriation in that respect having the same legal effect as an appropriation by an item in the appropriation bill passed by this parliament.
I remind the house of the debate in the public accounts committee when the Financial Administration Act was last amended, and the assurance of the deputy minister of finance that there was no intention of changing the practice of bringing those items into the book of estimates.
When we assembled this morning, Mr. Speaker, and before the orders of the day were called, the Minister of Finance tabled a very comprehensive document consisting of 69 pages, with respect to the resolution that also appears on the order paper dealing with the governor general's warrants of 1957-58. This document contains the type of detail that we usually find in our book of estimates. Presumably, probably this afternoon, we are going to be called upon to debate the resolution to which this extensive document relates. I protest, Mr. Speaker, at the lack of consideration of the Minister of Finance in providing this detail at such a late stage in the session.


Mr. Speaker:: I thought when the hon. member went on that perhaps he was confusing two debates. We do have the item on the order paper to which he has just referred, and part of what he has already said relates to that item. I would ask him to try to confine himself to the principle of the bill now before us for second reading. He will have an opportunity to deal with the other matter later.


William Moore Benidickson: I shall endeavour to do that. I simply wanted quickly to draw attention to the relationship of the resolution which is to be discussed later and the bill which is before us at the moment. This bill is establishing, in the words of the Minister of Finance, a clear-cut practice with respect to governor general's warrants. As a result, after the passage of this bill there will be presented to us, as authorized in this bill, a resolution with respect to the warrants of 1957.
I simply say that in the previous debate at the resolution stage of this bill, in previous debates this session on the appropriation acts, we have made it very clear that we would not only insist on getting the details of the governor general's warrants and having
Financial Administration Act an opportunity to debate them, but that we felt the minister should indicate to us in detail the breakdown of the $73.6 million which is the difference between the unappropriated items appearing in the book of estimates for 1957-58 and the governor general's warrant of February 7, 1958.


Donald Methuen Fleming: Mr. Speaker, I do not wish to interrupt my hon. friend. I hope we are going to make headway with this bill. But surely his remarks now are remarks which pertain to resolution No. 9 on the order paper today and not to the bill which is before the house now. There will be ample opportunity for my hon. friend to say whatever he wishes, that may be in order, on that resolution, but surely that is the place for such remarks as he is now making.


William Moore Benidickson: I am anticipating. Of course this item is going to be called, and I am indicating to hon. members what a difficult job they are all going to have, as the result of this legislation, in dealing with the resolution that is consequent upon the passage of this bill that is now up for second reading.


Donald Methuen Fleming: It is not consequent upon the present bill at all.


William Moore Benidickson: Mr. Speaker, in view of the importance of this particular legislation I indicated at the resolution stage that I felt it should be considered by the public accounts committee. The previous amendment to the Financial Administration Act was submitted to the public accounts committee as I have indicated. Since the resolution debate of July 29 we have had meetings of the public accounts committee. We had the Auditor General present, and he outlined to us the importance of the historic parliamentary practice of examining expenditures in supply. We discussed to some extent the subject of governor general's warrants and how much more convenient it would have been if this particular statute had been officially before the public accounts committee. There would have been no holdup in connection with the passage of this bill because, as I say, the debate on the resolution stage took place on July 29, 1958.
The public accounts committee is still sitting. This is August 19 and we are on second reading. The bill should have been studied by the public accounts committee. It could have been reported back to the house within a matter of a few days, but even that opportunity was denied us.
I have no quarrel with respect to the other sections of the bill before us. I simply point out that the chief interest is with

Financial Administration Act respect to the minister's statement that this amendment is needed to clarify the procedure under which we, in previous years and even this session, have dealt with governor general's warrants. I repeat that the minister did not think there was any need for clarification some time ago. Certainly if one examines the precedents for many years past there was an invariable practice in the house under the previous administration of presenting their warrants for discussion and debate by members of the house, and that could have been done last session.
With respect to those of August, 1957 there was every indication when we passed the Financial Administration Act in 1951 that that practice would not be departed from, and I say that fortunately we are being given this opportunity, which was denied last session, because an election campaign intervened and the present administration was not returned the last time with a substantial majority that would have eliminated the necessity of another election.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. McGee in the chair.
Clause 1 agreed to.
On clause 2-Payments urgently required.
Herbert Wilfred Herridge: Would the minister mind giving the house an illustration of what type of circumstances would require the application of this clause?


Donald Methuen Fleming: Clause 2 has been proposed with a view to modernizing the language of section 28 of the Financial Administration Act. Section 28 has persisted in its present form virtually since confederation. One change that was made when the act was reviewed some five years ago was to provide for the publication in the Canada Gazette of the governor general's warrants, "special warrants" as they are called in the section.
The language of section 28, dating back as I have indicated almost to confederation, contemplated that resort would be had to the issue of special warrants in cases where an accident happened to a public work or building when parliament is not in session and an expenditure for the repair or renewal thereof is urgently required, or where any other matter arises when parliament is not in session in respect of which an expenditure not foreseen or provided for by parliament is urgently required for the public good. The section goes on to provide with respect to the second case for the steps that may be taken in such a case where no appropriation has been made by parliament for the situation which has arisen.
[Mr. Benidickson.l
In the amendment that is now before the house it is proposed that the language be modernized. Obviously the case that appears in second place in the language of the present act is very much more important and very much more likely to happen than the first one. Nowadays the happening of an accident to a public work or building is not the kind of situation that is most likely to give rise to the need for issuance of governor general's warrants. That dates back to the sort of circumstances that were no doubt in the minds of our predecessors in parliament nearly 90 years ago.
What is proposed now in the amendment is that we put the situation in which governor general's warrants should be used in these terms, "where a payment is urgently required for the public good when parliament is not in session" and no other appropriation is available. In other words, that is the proper ground. It is already provided for in the section, and it is felt that if we put the case in that form we do not need any longer the opening words of the present section 28 in relation to an accident.
My hon. friend asks about the circumstances under which resort might be had to the issuance of a special warrant. I think I can best answer his question by referring to the situation in which the governor in council found himself last August when two warrants were issued. Parliament had made an appropriation in the previous spring, that was exhausted by the beginning of the summer, to provide for the maintenance of Hungarian refugees. We were confronted with a situation in the middle of the summer of 1957 where either we had to recommend to His Excellency the issuance of a special warrant or there just would not have been any money at all to provide food and shelter for these refugees coming into the country. As parliament had not made that provision, and as we felt it our duty to do so, we recommended the issuance of a special warrant and that step was taken.
I do not think I need to go further than that into the history of the issuance of warrants. There have been many warrants issued over the years, but I think I can best answer my hon. friend's question by that concrete example in recent times.


John Whitney Pickersgill: I should like to ask the
minister one question. The change in this wording will never be used by the present government as an excuse not to repair wharves?


Donald Methuen Fleming: I hope the present government will always exercise sufficient foresight to make adequate provision for the repair of wharves in the normal way in the estimates.


John Whitney Pickersgill: That is just what I am afraid of. Wharves sometimes happen to get destroyed when parliament is not in session, and I hope there is no thought that in those circumstances the government would not act.


[Stage Direction]
Clause agreed to.
Clauses 3 and 4 agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read the third time? Now, by leave?


Some hon. Members:: Agreed.


Donald Methuen Fleming: the third reading of the bill.
Motion agreed to and bill read the third time and passed.
At one o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.

Donald Methuen Fleming: the second reading of Bill No. C-50, to amend the Customs Tariff.


William Moore Benidickson: Is the minister going
to make any comments about the amendments?


Donald Methuen Fleming: No, that was not
my intention. The bill simply follows the resolutions which were before the committee of ways and means on three occasions, and before the committee at some length on August 12 and 13. The bill simply follows verbatim the amendments that were set forth in the resolutions that were reported upon favourably by the committee of ways and means.


William Moore Benidickson: The minister referred to a favourable report from the committee on the resolutions, Mr. Speaker. He, of course, remembers that there was a division in the committee. I am one who does not believe in too much repetition in matters of this kind. The minister and I sat together on the rules committee, and we were somewhat concerned about this kind of thing.
However, at the resolution stage there is an opportunity for general probing, shall I say, on behalf of the opposition, who have not the full information that is naturally available to the administration with respect to legislation for which they have planned and with which they have dealt for some period of time.
Customs Tariff
I do not want to repeat some of the general assertions I made at the resolution stage. There are some of us who feel very keenly that in the bills that follow budget resolutions there is a tendency which we deplore and which we feel will reduce our general volume of trade by reason of the restrictions and so on that are proposed therein. I was not fully satisfied during the committee stage with the minister's explanation or what I thought was a lack of frankness in describing some of the developments that result from negotiations because of our membership in GATT. I pointed out to the minister, and I do not want to repeat it, that in 1955 and 1956 a very substantial and comprehensive statement was given by the former minister of trade and commerce with respect to the negotiations of consequence relating to Canada that had taken place as a result of the annual conference of countries who belong to this trade association.
I felt the minister gave the impression to the committee during the last stage of this debate that there was nothing obligatory- perhaps there is not anything obligatory-at any stage, but certainly he indicated that it was not even the practice to report anything that was not a new negotiation in relation to our association with these many nations in GATT.


Donald Methuen Fleming: I do not think my hon. friend is correctly stating what I sought to convey to the committee of ways and means. He was asking why a long list had not been set forth in the manner of 1955-


William Moore Benidickson: And 1956.


Donald Methuen Fleming: -and I indicated the reason. I made quite clear also, Mr. Speaker, what were the results of the negotiations that preceded the introduction of the various resolutions respecting the Customs Tariff that were before the committee of ways and means. I stated there had been no change in the United States tariff, but I indicated the numerous changes proposed in the Canadian tariff as the result of our negotiations with the United States on the recommendations that had been made by the tariff board in its various reports. These were fully before the committee of ways and means on August 12 and 13.


William Moore Benidickson: I do not in any way object to the intervention of the minister, although we are on second reading of the bill. If I am inaccurate in any way at any time I want to be corrected. The point I was endeavouring to make was that we did have, in 1955 and in 1956, a general and comprehensive statement from the then minister of trade and commerce, Mr. Howe, with respect not only to the original negotiations, which I thought

Customs Tariff
were overly emphasized in the committee in our last discussion, but the renegotiations.
I have, since that debate, reread Hansard for June 14, 1955, page 4751, when Mr. Howe tabled, for the benefit of the house, those documents which I think were very informative and very important to the country at large.
I said in referring to that point when we last discussed this matter, I think on August 13, that I thought the Minister of Finance overly emphasized the necessity of informing parliament about the year's activities with respect to this important trade relationship when he referred to the matter of new negotiations.
In 1955, as found at page 4750 of Hansard, the then minister of trade and commerce said he was reporting not only upon the entrance of a new trade partner in the GATT agreement, which was at that time Japan, but that he was in the second place reporting upon the giving of effect to the desire of some other countries to renegotiate certain increases in tariff rates bound under the general agreement; and third, to renegotiate increases in certain Canadian tariff rates which are bound to other countries under the agreement.
The point I want to put before the minister is this. This is a method of operation that I think should be followed by the government. The minister is equally responsible with the Minister of Trade and Commerce for matters of this kind. He indicated that in 1957 he had no report, but he suggested that this was owing to the fact that there were no new negotiations. I believe there were some renegotiations in 1957. I suggest to him that this is a practice he might very properly follow, because there was great value to the businessmen of the country in knowing what its administrators were doing in this important field of trade.
I remind my hon. friend that we heard from some of his colleagues that they intended to be very frank with parliament if they assumed the responsibilities of administration. I recall a very vivid headline in connection with a speech by his colleague the Minister of Transport when he said "We will not be high and mighty like the Liberals; we will inform parliament about everything that goes on". I suggest to him that a pattern was introduced that very well could be followed, namely the pattern introduced by Mr. Howe in 1955 and 1956 after the Geneva conferences, of reporting very fully to the House of Commons. That in turn permits general information to be obtained by the businessmen concerned relating to our important negotiations in this particular field.
In order to indicate, particularly to new members of the house, just how widespread

are some of these things, I wish to refer to a newspaper editorial. I confess that this particular reference impressed me because, although I come originally from western Canada and now reside in Ontario, I had not completely realized just how much some trade concession in one place in its quid pro quo affects another part of our very vast land. On August 6, just a few days ago, a most interesting editorial in the Halifax Chronicle-Herald commented upon our trade situation. The minister had given an indication that he felt obliged, perhaps owing to some commitments made by the Prime Minister in the election campaign, to revise our commitments under GATT with respect to fruit and vegetable importations, largely those from the United States. May I just very briefly quote from this editorial in the Halifax Chronicle-Herald to this effect:
An agreement made under GATT in 1947 provides Canada with a market quota of 400,000 cattle a year in the United States. It has been a boon to the beef industry of this country. But in that same agreement we had to reciprocate with concessions which included a fixed low tariff on American fresh fruits and vegetables.


Donald Methuen Fleming: Mr. Speaker, I do not know how my hon. friend can use this editorial by way of illustration. There is nothing in this bill that affects the tariff on fresh fruits and vegetables at all. My hon. friend is referring to pending negotiations which were mentioned in the budget speech, but there is nothing in the bill before us that touches that subject whatsoever.


William Moore Benidickson: Mr. Speaker, you will recall that when we were at the resolution stage on the three or four resolutions-I think it was three-that resulted from the budget announcements, we had a division in this house as to relevancy in committee of the whole. There were precedents for and against the decision which was taken by a majority at that time. But I suggest to my hon. friend that he will not likely find precedents for the discussion of an amendment to a budget bill as restrictive as that under discussion at the resolution stage in committee of the whole.
I assure my hon. friend that at this stage of debate in this session I am only going to use this reference as an analogy in order to indicate the importance of the House of Commons getting full information with respect to trade treaty matters that come into the legislation subsequently, as they are coming before us at this stage.


Mr. Speaker:: Order. The hon. member who has the floor of course appreciates the fact that this debate is on the second reading of Bill No. C-50 which, when second reading has been disposed of, will go to committee

where an opportunity will be provided to discuss the many details of the bill. So far as there is any principle involved in this amendment to the customs tariff, it should be the subject of our debate at this stage rather than specific items in the bill or matters extraneous to the bill. It perhaps is not easy to define the principle of a bill which is made up of a great many individual items, but I trust that the hon. member who has the floor will bear in mind what I have said in proceeding with his argument.


William Moore Benidickson: Yes, Mr. Speaker. I am simply pointing out the fact that when we come to the detail stage we shall find that some of the points which we must resolve at that time in committee are points that result from our position under the GATT arrangement. The minister, of course, indicated that when we were at the resolution stage. My point in a general principle discussion was that I myself had been somewhat surprised as to the ramifications of some of the decisions that are made in these trading negotiations.
I think after just a very few words more all members of the committee will realize what I have in mind. I indicated that I have a background in western Canada. I am quoting from a maritime paper. I am indicating that when an administration proposes to change some of the trading relationships that it has entered into under this extremely important trade agreement, namely GATT, some of the results are not obvious. That observation of course, would apply to many of the customs tariff items that are part of the bill that is before us at the present time. I was going to continue to quote from this editorial which says that under the same agreement, namely GATT, we had to reciprocate with concessions which included a fixed low tariff agreement for United States fruits and vegetables. It says:
There is a clamor in Canada now to have this duty raised and, in return, U.S. cattlemen are demanding at Washington that the tariff on Canadian livestock be increased. There is no way for Canada to win. In fact, in negotiating tariff boosts it stands to become the biggest loser-and in this case, Nova Scotia-
This is what surprised me, Mr. Speaker.
-Nova Scotia would suffer again quite heavily. If sales to the U.S. were cut down, the Canadian market would be flooded with beef raised on the vast ranges of the western provinces and this at a time when farmers of this province are being encouraged . . . Ottawa should make sure that, in trying to satisfy one group now demanding more tariff protection for its product, it does not bring harm, and possibly even greater harm, to another.
I have introduced that statement to illustrate to members of the house how interlocking are some of these tariff changes such
Customs Tariff
as are provided in this bill. I have the feeling that the minister has not yet given adequate consideration to making Canadians as fully informed as they should be even after negotiating, of the negotiations which have taken place.
I might say to the minister in all frankness that I have never been to Geneva; I have never been a participant in one of these trade discussions over there, even though I was associated with the minister of finance as a parliamentary assistant for a while. I should perhaps be better informed if I had been able to attend such discussions, but I do realize that in the administration there are people who believe that even after negotiation we as Canadians should get our information from the annual report of GATT itself.
Since the debate at the resolution stage I have made some inquiries, and we did discuss at the resolution stage the information available to United States citizens. As a result of my inquiries I have some information as to the type of details which are given to all those who are interested in these trade items in the United States. For instance, I have in my hand the foreign commerce weekly which is an official document issued by the United States department of commerce dated July 21, 1958, and in this document there is full and complete information for the public of that country with respect to the concluded negotiations under our GATT trading arrangements. They have even duplicated that type of effort in that the state department seemingly does the same thing. The other document in my hand is entitled, "Department of State Bulletin" and is dated August 4, 1958. On the frontispiece it says it is the official weekly record of United States foreign policy, and on page 215-


Mr. Speaker:: Order. I must say I have very grave doubts that the line followed by the hon. member has anything to do with the question before the house.


William Moore Benidickson: On the contrary-


Mr. Speaker:: I took him to be relating the bill to our obligations under GATT, and that is well and good; but his line seems to be at this moment a criticism of the government for its actions in not giving information or something of that kind, which appears to be a little off course.


William Moore Benidickson: If I may say so, Mr. Speaker, I think it is right on course in that we are being asked to adjudicate and resolve a question with respect to trade negotiations which have taken place, and which modify or alter our trading agreements under GATT.

Customs Tariff
I am saying that in other legislatures more information is available to those who have anything to do with a decision such as that which we are very shortly to be called upon to make. I indicated that in 1955 and 1956 the former minister of trade and commerce made a very full statement as an appendix to Hansard before we came to this stage in debate. I am also saying that this information is made known not only to the legislators in the country to our south but is also made known to everybody as the result of wide distribution of a public document. The second document to which I referred was the department of state bulletin and on page 215 it says:
Renegotiations under GATT Concluded with Five Countries
I am not going to pursue that because Canada is not named as one of those five countries, but I am saying that the policy which was available to either the Minister of Trade and Commerce or the Minister of Finance, as laid down by Mr. Howe in 1955 and 1956, was a good one and should be followed here. We should have annually a report from either of these ministers indicating the negotiations which have been concluded and then, when we are asked at this stage to bring down judgment on the legislation presented to us, we would have the information which seems to have been lacking from 1957 to the present date in 1958.


Mr. Speaker:: Are we ready for the question?


Lester Bowles Pearson: Mr. Speaker, I am sorry the minister has not seen fit to deal with the point raised by my hon. friend from Kenora-Rainy River.


Donald Methuen Fleming: How could I do that without closing the debate?


Lester Bowles Pearson: The question was put, and that is why I got up; Mr. Speaker said, "Are you ready for the question?", so obviously the Minister of Finance was not going to speak.


Donald Methuen Fleming: We discussed this ad nauseam last week.


An hon. Member:: Ad nauseam to whom?


William Moore Benidickson: Only to the minister.


Lester Bowles Pearson: We now have evidence which confirms the view we held and which certainly makes our previous discussion ad nauseam. The minister at that time said, with respect to these negotiations under GATT for the amendment of our Customs Tariff, that he could not give the house or the committee detailed information as to the concessions which were given and received. In other words we would not be able to ascertain-


Donald Methuen Fleming: That is not what I said.


Lester Bowles Pearson: -what we gave and what we received. It was all lumped together in the schedules. The minister said the difficulty in giving this information was that it would be giving the details of the negotiations. Of course no one has the right to ask for such details. But when the negotiations are completed, even if there are negotiations under GATT all the information should be made available to the house. The minister agreed that if there were new negotiations they should be revealed to the house but that if they were merely annual renegotiations, that was something else. He went on to say-I think he will agree that this is an accurate statement of what he said-that the course he proposed had been followed by the previous government.
It is quite clear from what my hon. friend the member for Kenora-Rainy River said and from the evidence he adduced, that in 1955 and 1956 this information was given to the house even when it concerned not a new negotiation but a renegotiation. The house at that time was able to ascertain before it voted on a bill of this kind exactly what we had given under GATT and what we had received as a result of these negotiations. That is not only the course which was followed in this parliament by the previous government but it is the course followed in the United States. As my hon. friend pointed out, they have gone to great pains in the United States to announce negotiations which are about to take place and to give information on all of the results of those negotiations when they have been concluded.
This matter is of extreme importance for the reason I shall mention in a moment. If my hon. friend maintains the position he has taken we may well find that when we are negotiating with the United States that the information to which we are entitled arising out of that negotiation-the detail of what we gave and get-can be obtained only from the United States, and not in the form in which we are entitled to receive it from our own government. That is the point, and it is an important one.
When the minister took the stand he did the other night that information on this matter can be given to this house only if it is a new negotiation under GATT, I think we on this side of the house are entitled to say that in doing so the minister was following a course that has not been followed in the past and was withholding from us information to which we are entitled.


Donald Methuen Fleming: Mr. Speaker-


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


Donald Methuen Fleming: Mr. Speaker, the Leader of the Opposition apparently has set about distorting the remarks I made in this house last week. I cannot imagine anything more unprofitable than to start in today, at this stage of the proceedings, with a repetition of the discussion which was carried on last week at great length in the committee of ways and means when the resolution was before the house.
My remarks on this subject are all on record, and I cannot see that any sensible purpose would be served by reviewing the whole subject again. But let this be clear for my hon. friends to understand if they will. The negotiations with the United States under the terms of GATT with respect to all the items that were bound under GATT and included in the bill now under discussion were all carried on with a view simply to freeing Canada's hands to make such changes as would be required to give effect to the recommendations of the tariff board, or such of them as it might be proposed to put into effect. This was not a negotiation in which we were asking for some concessions on the part of the United States with respect to its tariff in return for changes in the Canadian tariff. This was a negotiation in all cases- and when I say all cases I mean zinc, iron and steel, and pipes and tubes; all three of those-carried on simply with a view to freeing Canada's hands. We were not seeking concessions on the part of the United States with respect to tariff changes on their part. We were simply seeking on their part that they should concede to us the right to make such changes as were proposed, and what is laid before parliament in the series of resolutions now embodied in this bill is simply the result of these negotiations involving on the part of the United States no change whatever in their tariff, involving no more on their part than agreeing to untie Canada's hands with respect to such of those items as were bound on Canada's part-


William Moore Benidickson: Mr. Speaker, would the minister permit a question?


Donald Methuen Fleming: -and involving on Canada's part an attempt to negotiate a package deal. I have used the expression "package deal" with regard to some of these negotiations. The house has been given the fullest information as to the changes that Canada acquired the right to make as a result of these negotiations, the unbinding of items. It is all before parliament. It could not be reported sooner because, as I said days
Customs Tariff
and days ago, these negotiations were completed just before the budget was brought down, and the house has had all this information since June 17.
Now, I hope what I have said will put the matter in its true light and true focus. The house has all the information. The information is all before the house. There is nothing to report as far as action on the part of the United States with respect to its tariff is concerned because there is no change in its tariff.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rea in the chair.
On clause 1-Definitions.
William Moore Benidickson: Mr. Chairman, I should like to make a few additional comments on clause 1. Hon. gentlemen know that at the second reading stage I was entitled to make some remarks and the minister was entitled to reply. I could not, of course, make an additional speech at that stage. I did ask the minister if he would permit me to ask a question, but he either did not hear me or did not feel it was a proper time to permit an interruption.
In any event I wish to point out on this important matter involving several of the items we will subsequently discuss that on August 13, 1958, as reported at page 3480 of Hansard, the House of Commons may have obtained some information from the minister with respect to these negotiations that were concluded, but the house received it only after several hon. members asked for it and after some probing on the part of hon. members of the opposition. The point I wish to make is that in 1955 and 1956 there seemed to be a co-operative attitude and an established pattern of reporting to this house in a comprehensive way about all our negotiations under these important trade treaty arrangements. The minister did give us some information about the negotiations that took place with the United States as reported at page 3480, but it came only as the result of probing by the opposition.
In his major remarks in reply at the second reading stage the minister said these negotiations did not involve a change in the United States tariff and then, of course, he indicated the reason to be that Canadian changes in tariff had both increases and decreases that affected the United States. I say those are negotiations of consequence to Canadian industry. I say that after they had been concluded and prior to a debate in this house, unlike the practice followed in 1955 and 1956, we should not find it necessary to have to probe for this information. I suggest

Customs Tariff
that as an annual event it should be included in a report from the Minister of Trade and Commerce or, in the case of bilateral trading largely conducted by the Minister of Finance and his officials and their opposite numbers in the United States, either he or the Secretary of State for External Affairs should make this information available.
Such information as we do have was not voluntarily given and was obtained only as a result of questioning. In 1955 and 1956 we had a comprehensive report, and I suggest that is a good practice for the future. We know nothing about the things we have not asked about. Those of us who sit over here are busy watching this, that and the other thing, and we have no day to day contact with the negotiations. The Minister of Finance or his colleague the Minister of Trade and Commerce should give this kind of information to the house as a routine proposition. I suggest he give consideration to that for the future.


Joseph Pierre Albert Sévigny: Shall clause 1 carry?


Lester Bowles Pearson: Just before it carries, since the minister seemed to think I misunderstood completely what he said the other night and may have misled the house in connection with the remarks he made on page 3480 of Hansard, I again quote exactly what he had to say in regard to those negotiations and concessions which were made. The minister said:
But with respect to the items of the Canadian tariff we have obtained a concession on the part of the United States that gave us liberty to make the changes in our tariff that are embodied in the resolutions now before the committee, so far as those items had previously been bound, and have undertaken to make certain changes in our tariff as the quid pro quo to the United States: so what we bring before the committee now is a complete package, and the results of those negotiations are fully embodied in the terms of the resolutions.
Therefore we did receive concessions and we made concessions. It is our contention that when this is done under GATT, even though it may not have meant a change in the United States tariff itself, there were concessions given and concessions received as the result of this bargaining, that we should be told in advance of the bill what those concessions are. That is the point we are trying to make.


[Stage Direction]
Clause agreed to.
On clause 2-Schedule A amended.
John Whitney Pickersgill: Mr. Chairman, paragraph (d) of clause 2 is the paragraph that relates to the wool tariff, and I would like once again to express the opposition of this party to the increase. If I am mistaken in this I would ask the minister to correct me. I do

not want to take up the time of the committee or prolong the proceedings by repeating the arguments that I have had two opportunities to make, once on the budget and once on the resolution, about this matter. Therefore, in order to register the opposition that my hon. friends and I take to this increase in the wool tariff, sir, I move that clause 2 be amended by striking out paragraph (d) and relettering paragraph (e) as paragraph (d).
Amendment negatived: Yeas, 17; nays, 44.


Joseph Pierre Albert Sévigny: I declare the amendment lost.


[Stage Direction]
Clause agreed to.
Clauses 3 and 4 agreed to.
On the schedule.
William Moore Benidickson: We did have some discussion on some of those items, and I do not propose to repeat that discussion. But the Minister of Finance indicated there was one item that involves the import of automobile parts that was the subject of recent negotiations with the United States as a result of our relationship with that country under GATT. We had some discussion on August 13 about the remarks of the Minister of National Revenue to a delegation of unemployed members of the united auto workers' association which indicated that this government was actually attempting, by tariff increases, to improve the opportunity for manufacturing in Canada rather than the reverse. Now, these were concessions. These items permit the import of certain items into Canada at lower rates of duty. Has my hon. friend consulted with his colleagues since that time? The Minister of National Revenue is not in his seat.


Donald Methuen Fleming: Mr. Chairman, that is not the normal form of question. This is a government measure.


William Moore Benidickson: No. I meant that it
seemed to be contrary to the information that had been given out publicly on that occasion by another member of the government.


Donald Methuen Fleming: No, Mr. Chairman; I think there is no conflict here at all. The Minister of National Revenue is perfectly well aware of this item, as indeed are all members of the government. It is a government measure. I pointed out in a previous lengthy discussion of this matter that the Canadian automotive chamber of commerce and the Canadian automotive parts association had both signified that they favoured the change that was being made in the tariff in this respect.


William Moore Benidickson: Of course at that stage, Mr. Chairman, I pointed out that the associations referred to by the Minister of Finance are largely subsidiaries of United States companies, and I have no doubt that as a result of suggestions that would be made to them by their principals in the United States they might want to facilitate the import of some of those items at lower tariff rates.


Donald Methuen Fleming: Does my hon. friend suggest seriously that Canadian manufacturers of automobiles have at any time in the past sought reductions in the tariff against imports of automobiles or parts from abroad? If so, I think he is the first one who has ever suggested that.


William Moore Benidickson: For convenience of manufacture I think some of the principals, because of the fact that they are owned by United States corporations, might very well make that suggestion. But apprehension about this general policy was indicated at the conference of the unemployed from Windsor, Oakville and other places, as I mentioned previously in the debate, and since the Minister of National Revenue spoke for the government I wondered whether or not the Minister of Finance had any further comment to make.
Schedule A agreed to.
Schedule B agreed to.


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


Hazen Robert Argue: Next sitting of the house.



LOAN COMPANIES ACT


Donald Methuen Fleming: that the house go into committee to consider Bill No. S-10, to amend the Loan Companies Act.
Motion agreed to and the house went into committee, Mr. Sevigny in the chair.
On clause 1-Department.


William Moore Benidickson: Mr. Chairman, the banking and commerce committee discussed not only this bill but Bill No. S-ll respecting trust companies. The bills are similar in form. I think we all concluded there were two main changes involved in the amendments. One would permit these companies to borrow 12J times the amount of their paid up capital stock and reserve, compared
Loan Companies Act
with a limitation of 10 times that amount under the present legislation. The second point in the amending bill which I regard as of importance is that henceforth it will be open to these companies in making their annual reports to the Department of Insurance to use amortized value instead of market value with respect to their holdings of federal and provincial bonds.
To deal first with the latter point, the utilization of amortized value, toward the end of our committee discussion this morning I think the superintendent of insurance expressed himself as being rather a market value man. May I say that I share his view. As a depositor, shareholder or under any other circumstances I should like to think that under ordinary circumstances the legislation provided for a report based on market value. As a layman in this field I think I could understand such a report better than one based on amortized value. However, we had evidence that the insurance act permits insurance companies to use amortized value. We know that when the Bank of Canada and the commercial banks prepare their reports they use amortized value.
I was particularly impressed by the fact that in the case of the majority of our large trust companies, which are not incorporated under federal statute but obtain the right to do business under provincial legislation, no such restriction exists as has been provided in our legislation. As a result, it seems difficult to deny the proposed amendment although personally I should like to see market value used as the basis in these annual reports.


Donald Methuen Fleming: I am sure my hon. friend appreciates that the market value will still be included in the annual report.


William Moore Benidickson: I was just going to say that the superintendent of insurance indicated that, as he was a market value man, he and his department would be very concerned about market values in such reports. Not only the amortized value but also the market value will be reported annually. While the amortized value will be the effective value with relation to the amount of borrowing permitted in proportion to capital and reserve, the superintendent of insurance as an efficient government administrator will be receiving reports including market values and will be concerned about them from the point of view of the public interest with respect to the administration of these companies.
As far as the other item is concerned, we do not propose to oppose the bill because we feel that so many other institutions engaged in business analogous to that of a trust or loan company and operating under provincial or federal jurisdiction are already

Trust Companies Act
free in respect of the relationship of their borrowings to their capital and reserves. The superintendent of insurance said that he felt for the present, and I would judge for the immediate future, it would be very unwise to make the opportunity to borrow any greater by further increasing the ratio between borrowings and shareholders' interests in such corporations.
But he did indicate he approved of the present bill, and so far as I know those associated with me are prepared to support the proposed recommendations.


Mr, Regier:: On second reading of these bills we expressed some serious reservations about them. However, after looking very carefully over what happened in the other place in connection with these bills, and after the very careful explanations that were given by the superintendent of insurance in the committee this morning, in the main we intend to support this amendment that is now requested. I should like to point out that it is my opinion that as Canada has grown in population and as our economy has expanded, there has not been an equal growth in the financial structure of Canadian trust companies or Canadian loan companies. Their capitalization has not developed along with the growth of the country and therefore has inevitably led, over the process of time, to repeated requests on the part of these companies for permission to increase the multiplying factor.
I think that since we have in Canada only a limited number of these institutions, and they have developed to the stage where they occupy a very responsible place in the economic well-being of Canadians, those men who are responsible in these corporations may well pay a little bit of attention to the future. If we are not going to have new trust and loan companies functioning on the Canadian scene, then they ought to give serious consideration to a broadening of their base and the issuance of more shares so that there will be more risk capital involved on which to build the superstructure that circumstances and events inevitably will call for building. Had we financial houses such as they have south of the border, we could never support an amendment of this kind because it would be harmful to do so. There would be a risk involved. However, since we have in Canada evolved a system of a relatively limited number of chartered banks, trust companies, loan companies and the like and since it therefore behooves us to do whatever we can to help these organizations to perform their proper functions, we will support this bill.

Our quarrel certainly is not with the stability of these organizations. I believe this amendment will provide protection for the people of Canada in its overall effect. The only point I wish to make is that I do not believe the basic pattern has developed as rapidly as the needs of the Canadian nation should have made it develop. I hope some attention is going to be paid to that.


[Stage Direction]
Clause agreed to.
Clauses 2 to 15, inclusive, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported.
The Aciing Speaker (Mr. Rea): When shall this bill be read a third time? Now, by leave?
Some hon. Members:: Agreed.


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



TRUST COMPANIES ACT


Donald Methuen Fleming: that the house go into committee to consider Bill No. S-ll, to amend the Trust Companies Act.
Motion agreed to and the house went into committee, Mr. Sevigny in the chair.
On clause 1-Department.


William Moore Benidickson: In discussion in the banking and commerce committee this morning, Mr. Chairman, when we had available the superintendent of insurance who supervises and reports on this type of corporation on behalf of the public, we concluded that the principle of the bill and the major consequences were identical with those in the bill that we have just passed. With the object of avoiding repetition, I certainly would have no further remarks to make. I think that anything I said relating to this bill could equally be applied to the bill that has just been up for consideration in this committee.


[Stage Direction]
Clause agreed to.
Clauses 2 to 15, inclusive, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Rea):: When shall this bill be read a third time? Now, by leave?


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



INCOME TAX ACT

Donald Methuen Fleming: the second reading of Bill No. C-39, to amend the Income Tax Act.


William Moore Benidickson: Is the minister going to make a statement? It is a very large bill. There are a number of amendments of which we did not have notification in the budget resolution.


Donald Methuen Fleming: Mr. Speaker, I do not think there is any statement that I can usefully make at this time. Several weeks ago in committee of ways and means the house had an opportunity of debating, and did debate at some length, the resolution which was the forerunner of the present bill. As the house is aware, in that connection the practice of the house calls for resolutions on the important matters affecting the balance of ways and means. The annual bill to amend the Income Tax Act, of course, always includes a great number of amendments that are not foreshadowed in the formal resolution that is introduced with the budget and is reviewed in committee of ways and means.
In the budget speech I indicated that the bill this year would be a lengthy one and would embrace a large number of amendments. The bill is a large one, Mr. Speaker, but while the amendments are many in number, they are all of an individual or particular nature, with the several exceptions that we debated fully in the committee of ways and means. I therefore think that anything I might have to say could be more usefully reserved for the committee stage of the bill if there are questions to be asked or points to be raised on the clauses of the bill when we are in committee of the whole.


Mr. L. D. Creslohl (Cartier):: Under the rules of the house, Mr. Speaker, this perhaps will afford me my last opportunity of again appealing to the minister to think in the general terms of the gift of $10,000 which is proposed as not benefiting husbands or wives in the provinces of Quebec. We have discussed this matter several times and I wish that I could have been convinced, either by the minister or by anyone else in the house, that the provision proposed would extend the same benefits to husbands and wives in the province of Quebec as it extends to husbands and wives throughout the rest of Canada. I had hoped that since we last discussed the matter the minister might have submitted it to the Department of Justice for a legal opinion, which I certainly would have been delighted to accept, that the measure benefits the people of the province of Quebec.
Income Tax Act
The minister may have been under a misapprehension with respect to the question of community as to property in the province of Quebec. I should like to point out to the minister than even when husbands and wives are not common as to property in the province of Quebec, they cannot benefit by this provision. I should like the minister again to look at article 1265 of the civil code of the province of Quebec. Husbands and wives, whether separate or whether common as to property, cannot confer benefits upon each other inter vivos. They cannot make any gifts to each other.
Under the legislation before the house it is intended that a husband or wife should have the right to make a gift of $10,000 to each other under the conditions which the law provides. That is possible-and I repeat -in every other province except the province of Quebec. I have mentioned this matter several times previously but since this is the last opportunity that I have of appealing to the minister I ask him to consider carefully the suggestion that he is, perhaps quite unintentionally, discriminating against husbands and wives in the province of Quebec. Since I come from that province I am deeply concerned about the matter. I therefore again urge the minister not to discriminate, even unintentionally, against husbands and wives in the province of Quebec who are just as deserving as are husbands and wives throughout the rest of Canada.


William Moore Benidickson: Mr. Speaker, this is also a bill that was preceded by a resolution. It also was preceded by some announcements in the budget speech of the minister when he introduced the budget resolution. In consequence, we have had some opportunity to discuss his intentions and, may I say, also some of his omissions in the legislation that is now brought before us. However, much and all as we are trying to facilitate passage of some of this legislation that has had a fair amount of previous debate and discussion, I do not think he would expect us to overlook some of the omissions in the bill that is before us.
It is a very large bill. We were given information to that effect and to the effect only that it was going to be large in wordage. I think most of us realize that a great deal of it is simply a matter of administrative requirement and legal language. We are all a bit surprised at some of the things that are not in this bill. When the new administration was given the overwhelming mandate for which they asked the people in several of the election campaigns in the past, notably the last one, I think we expected more from the present minister. He has always taken an

Income Tax Act
interest in this particular statute. I cannot recall that when he was sitting in opposition he ever failed to make some remarks, usually lengthy ones, when this particular statute was up for amendment in a budget bill. Most notably, of course, we remember the last time that the Minister of Finance (Mr. Fleming) when he was sitting as an independent member expressed his personal views.


Donald Methuen Fleming: Not as an independent member.


William Moore Benidickson: As a private member. I used the word "independent" because I realize that today my hon. friend must associate himself with approximately 20 colleagues and that they must speak with one concerted voice. I do not know whether that is what is limiting the minister in this particular bill which is not particularly noteworthy in its changes or whether he has just not been able to sell his propositions to his colleagues. With the vast number of private members who are behind him and who would give him such assurance today of ready support for any of the propositions that he would advance in legislation of this kind I would have thought that the bill would not be so nondescript as it is.
The tax foundation had this to say about the present amendments to the Income Tax Act in an article by their director contained in the last issue of their bulletin, which was most helpful and was provided to the people across the country who subscribe to this authoritative magazine:
The 1958 income tax bill is an oddly assorted collection of bits and pieces, most of them minor changes which are to the advantage of the taxpayer. Many of the larger matters on which briefs had requested revisions remain untouched. However some of the changes give substantial relief in limited situations, a good many of those in the latter class of course Implementing proposals put forward in the budget speech.
I do not want to unnecessarily refer to the items we discussed previously, which were referred to in the budget speech and were subsequently adopted at the resolution stage, but if my hon. friend the minister, when he sat on this side of the house, was ever consistent and vehement and often very comprehensive in his analysis of the reasons for his views, it was with respect to the necessity of increasing the personal exemptions under this act.
I find from examination of this bill nothing which is related to that aspect of the matter, and I believe perhaps the last time the minister spoke, as always with great clarity and, I think, conviction-and there is no doubt that he was not one who left back doors open for the possibility of changing his mind

-was on January 24, 1956. The public had great expectations from the minister when he assumed office, as a result of the views he had expressed, and at page 474 of Hansard the minister is reported, and in fact I recall listening to him at this time, as having said the following:
-the present exemptions from income tax, $1,000 for single persons and $2,000 for married persons, are entirely inadequate and should be increased.
He had a great deal to say beyond those words in an explanatory vein and he gave advice to this house with respect to this point but, for the sake of brevity, I will not repeat his words at this time. However, this is a notable omission from the first budget of this minister when he has had an opportunity to fulfil some of the very clear and obvious indications from his speeches in the past. I am sure that the public expected the fulfilment of some of these policies if the minister ever assumed the role he now has.
There are other notable omissions from the bill presently before us. We can find nothing here about faster write-offs of new plants. I would have thought-although this was advocated by such influential colleagues of the minister as the Minister of Transport (Mr. Hees)-that this would have been something which would have particularly appealed to the minister at a time when our economy was in the doldrums. I would have thought it would have had an exceptional appeal for him and for his advisers, particularly when such enactments were being provided in some important countries suffering from a similar economic decline as that suffered in Canada today. I have previously mentioned that the United Kingdom felt this would be a useful fillip to their declining capital investment and to their economy as a whole in 1958, but since making those remarks I have found that in a desire to give a stimulus and a shot in the arm to the small business community of the United States, the country to the south of us has approved tax cuts confined to small business. In particular such measure relates to the encouragement of business investment in the year 1958, when things have been slow, by the intensive acceleration of depreciation.
In the New York Times of July 22 last it was indicated that such legislation was being introduced in the house of representatives and although I do not have the clipping with me, in the Sunday issue of the New York Times of last week it was stated that this particular tax proposal had received the approval of the United States Congress. As I have indicated, this related to small business, but in brief fashion I would like to indicate that the proposal was that the allowance would apply only to the first

$10,000 invested. It was intended that it would apply particularly to investment in the current year and would provide for a 20 per cent depreciation of capital investment allowance in addition to the regular ones at a time when the economy was moving at a slow pace.
In the case of taxpayers who provided a joint return, the opportunity would go from $10,000 to $20,000 and this was something which I thought had worked out before when the economy was following a down turn and which would have commended itself to the Minister of Finance when bringing down his budget in 1958. There is, however, nothing along these lines in the bill before us.
I also found that the tax foundation had reviewed our situation with respect to this downturn in general business activity and had circularized a great number of businessmen in Canada asking them what in their opinion would be most likely, tax-wise, to encourage them to do the things in 1958 which would be prone to stimulate our economy. It was said in reply, of course, that in the first instance a general tax reduction would probably leave for them some funds which in turn could be introduced into the capital investment and development streams and would stimulate the economy but secondly, they suggested an increase in depreciation allowances.
As a further criticism of what is not in this bill, I would say we were rather surprised that we were not at this time amending, and it is not proposed that we should amend, the sections of the Income Tax Act which refer to our tax abatement in respect of the provinces. I can think of nothing which has been done, no other measure with proper regard to the economic situation which might have stimulated capital investment to such a degree as if the new administration had carried out its announced intention of calling the provinces together to give them a better deal-


Donald Methuen Fleming: Mr. Speaker, my friend is obviously discussing something completely foreign to this bill. My friend is talking about an entirely different act, namely, the Federal-Provincial Tax-Sharing Arrangements Act, which has nothing to do with the Income Tax Act. Surely my hon. friend is completely out of order in discussing dominion-provincial conferences on this measure and at this stage.


William Moore Benidickson: On the contrary, Mr. Speaker, I suggest my hon. friend the Minister of Finance knows the premier of Ontario exceedingly well, and one of the approaches of the premier of Ontario has been to get a greater share of tax abatement
Income Tax Act
in the income tax field. I introduced this subject for that reason because I suggest that if the private investment of the country has slackened as we all know it has and if the provinces-


Donald Methuen Fleming: Mr. Speaker, I must register my objection to my hon. friend going on in this way. This is not the budget debate but a debate on the principle of the bill to amend the Income Tax Act. It has nothing to do with dominion-provincial relations or with the Federal-Provincial TaxSharing Arrangements Act.


The Acting Speaker (Mr. Rea):: I was listening to the remarks being made by the hon. member for Kenora-Rainy River and I am inclined to agree with the Minister of Finance that he is straying away from this particular bill. I should also like to have him bear in mind that this is second reading of this bill in which we are discussing the principle and we do not wish to become engaged in a discussion of individual clauses.


William Moore Benidickson: Mr. Speaker, I am not referring to individual clauses. I recall very well that you were in the chair in committee when we were discussing the resolution that preceded the introduction of this bill. I know you have given careful consideration to the debates that have taken place before you came to the house and since your coming here including those that took place on second reading of bills of this kind amending the Income Tax Act. Attention was drawn at all stages by my hon. friends who sit opposite from me today and without protest when we were on the other side when something was omitted from a bill that properly could be included in the bill providing it was relevant to the bill itself. I suggest tax relationships with the provinces are related to this bill. I do not wish to pursue it unduly although I would at a normal stage of the session but I do want to say that in addition to private business this is an area where there could have been accelerated depreciation for capital investment. This is another area which could have been taken advantage of by the administration if it really wanted to do more than sit out the period of-yes, I shall use the word "depression"-we are now suffering under.


Donald Methuen Fleming: Mr. Speaker, with respect, surely my hon. friend can adhere to the principle of this bill. This bill is simply one to amend the Income Tax Act. It has nothing to do with the broad question of dominion-provincial relations or the provisions of an entirely different act, the Federal-Provincial Tax-Sharing Arrangements Act.

Income Tax Act


The Acting Speaker (Mr. Rea):: I will have to ask the hon. member for Kenora-Rainy River to speak to this bill more closely. "We must not wander into a discussion of other subjects covered by other acts.


William Moore Benidickson: Mr. Speaker, if you
examine the Income Tax Act I believe you will find the close relationship between tax abatement with respect to income that might be collected by the federal government and the relationship of the federal government with the provinces. However, I indicated that that was to be dealt with in a brief way and I have said all that I intend to say.
You will agree, Mr. Speaker, that the Income Tax Act has reference to opportunities under our tax laws for facilitating a larger degree of equity ownership in certain of our Canadian corporations by reason of tax encouragement vis-a-vis those companies that might be controlled in the United States. Contrary to much that we have heard from my hon. friends opposite in the past I find nothing in this bill to deal with this particular subject. I find there is nothing to encourage processing in Canada of some of our primary products. Having regard to the recommendations of the Gordon commission which suggested one line to be followed would be tax concessions I would have felt that particularly in a year when our economy was not strong we might have found something in this bill along those lines.
I wish to return to a discussion of the attitude of the present Minister of Finance. One of the items he always criticized and invariably deplored at this very stage in debate, second reading, in the past when an amendment came forward with respect to the Income Tax Act was that our provisions in this statute permitted the Department of National Revenue, the tax collecting organization, to withdraw at source from salaried taxpayers what he thought was an unnecessary amount of tax in consequence of which he always pointed to the fact that after the tax year was over it was necessary to make refunds to a rather impressive percentage of the total number of persons who had paid tax at source. I find nothing in this bill to fulfil the aspirations of my hon. friend the minister in this respect.
I have heard in the past complaints from a great number of hon. members who are still in the House of Commons and who in former days were representing particularly farming communities, and largely from Ontario, to the effect that some of the provisions of the Income Tax Act were unduly harsh with respect to taxpayers. I think of the hon. member for Huron (Mr. Cardiff) who was with us a moment ago, the hon. member for

Middlesex East (Mr. White) and the hon. member for Brant-Haldimand (Mr. Charlton) who represent farming communities. Over a period of years in this house they said we had provisions in the income tax law that were unduly favouring the administration not giving the proper benefit of the doubt to the taxpayer. I see nothing in this amending bill which indicates either that they have approached the minister with respect to these matters once the Conservative party took over the administration of this country or, if they have, that the minister himself has shown a warm response to the representations they may have made.
In the relatively recent past I believe greater attention is being paid by members of the public generally to the possibility of giving a tax break to women who are working outside their homes for a normal business day but who could not do so unless they were hiring someone to assume some of their domestic responsibilities at home. This subject is increasing in importance. I realize it has complications but I am sure the minister will admit that more attention has been focussed on this question in recent months than in recent years. It does involve difficulties but I know that representations were recently made in a forceful way by the Canadian federation of business and professional women's clubs. I would hope before another budget is presented to the house the minister would give this matter most careful consideration.


Mr. J. P. Deschateleis (Maisonneuve-Rose-mont):: Mr. Speaker, I have followed with the greatest interest the expose made by the hon. member for Cartier (Mr. Crestohl). This is not the first time the hon. member has raised in this house the question of the status of husbands and wives in the province of Quebec. Liberal hon. members representing constituencies in that province share the same views. If I remember correctly, and I think the Minister of Finance will recall that, on a previous occasion when we discussed this matter we suggested to him that he should get a legal opinion from the Min-iser of Justice as to whether a husband and wife in the province of Quebec would benefit under section 41. The Minister of Finance has failed to follow our advice. It seems to us, Mr. Speaker, that the Minister of Finance would like to discriminate against husbands and wives in the province of Quebec.


Donald Methuen Fleming: Shame on you!


Jean-Paul Deschatelets: Otherwise he would
have sought legal advice; he would have arranged matters so that husbands and wives in the province of Quebec would obtain the

same privileges as husbands and wives in other provinces of this country.
There is no reason, Mr. Speaker, why we should let this matter stand as it is because, if we did we would not be doing our duty to the husbands and wives in the province of Quebec.
The Minister of Finance is learned in the law. He knows very well that according to article 1265 of the civil code of the province of Quebec husbands and wives of that province will not benefit under this section. I shall now read article 1265 of the civil code in French. It reads as follows:
Apres le mariage, il ne peut 6tre fait aux conventions matrimoniales contenues au contrat, au-cun changement (pas mSme par don mutuel d'usu-fruit, lequel est aboli).
Les epoux ne peuvent non plus s'avantager entre vifs si ce n'est conformement aux dispositions de la loi qui permettent au mari, sous certaines restrictions et conditions, d'assurer sa vie pour le ben6-fice de sa femme et de ses enfants.
For the benefit of the Minister of Finance, I am going to read the article in English:
After marriage, the marriage covenants contained in the contract cannot be altered, (even by the donation of usufruct, which is abolished), nor can the consorts in any other manner confer benefits inter vivos upon each other, except in conformity with the provisions of the law, under which a husband may, subject to certain conditions and restrictions, insure his life for his wife and children.
We have told the Minister of Finance repeatedly that husbands and wives in the province of Quebec were not covered by section 41. He failed to follow the advice and suggestions that we have given to him in good faith to go to the Minister of Justice and try to find a way to ensure that husbands and wives in the province of Quebec would receive the same privileges from section 41 as husbands and wives in the other provinces will receive. We do not like discrimination. We like to be treated the same as other people are treated and, therefore, Mr. Speaker, I would like to move, seconded by the hon. member for Cartier (Mr. Crestohl):
That this bill be not read a second time until further consideration is given to the possibility of making the tax-free gifts from husband to wife effective in the province of Quebec to the same extent as in the rest of Canada.


Mr. Speaker:: Before reading the amendment may I say that after looking it over I have some doubts as to its propriety. However, as it has reached this point I certainly do not intend to make any ruling. I simply wish to leave this caveat on the record in case this amendment is cited to me some time later as a precedent.


Mr. Speaker:: The question is on the main motion; is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rea in the chair.
On clause 1-Maintenance where recipient living apart from spouse.
William Moore Benidickson: I was simply going to
speak about procedure, Mr. Chairman. I hope you will give the committee your usual consideration. This is a long bill with a lot of involved paragraphs. I do not believe it should take a great deal of time in going through the committee, but would you do as we have often done with these bills with long sections and endeavour to call the subsections?


Charles Edward Rea: Does the committee agree that we will break these clauses down into smaller sections?


Donald Methuen Fleming: I suggest that
that be done where it is requested. I think that in many cases it will not be necessary, but if there is a request for it on any clause I am sure there would be no objection taken.


Charles Edward Rea: Shall clause 1
carry?


Osias.-J. Godin: I should like to avail myself
of the opportunity to address the house at this time as we are about to discuss this bill on second reading. I should like to be as brief as possible, although I realize the importance and significance of this bill in the eyes of the Canadian public. On behalf of those people whom I represent, I would be pleased to make remarks concerning two problems which have come to my attention.


Donald Methuen Fleming: By his words, Mr. Chairman, the hon. member indicates that he considers he is speaking on second reading of the bill.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: This is what he
said. The house has given second reading to the bill. On the motion for second reading, we had a discussion on various matters pertaining to the bill. Now we are in committee. Could we not proceed with the clauses of the bill?


Charles Edward Rea: Discussion in committee must pertain to the clauses as we come to them; it is not a general discussion.


Osias.-J. Godin: I realize, Mr. Chairman, the
remarks of the Minister of Finance may have been a little premature because it is my intention to refer to certain principles in the bill because it is my understanding that we can have a general discussion of the principles-


Charles Edward Rea: Order; they are
discussed on second reading, not in committee of the whole. In committee of the whole, the clauses are discussed, not the principle of the bill. If the hon. member has certain things he desires to bring up, he can discuss them when we come to those clauses.


Osias.-J. Godin: The matters which I wish to
discuss are definitely treated in the specific sections, and therefore I shall reserve my remarks for those occasions.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Repayment of loan by shareholder.
William Moore Benidickson: Has this any relationship to section 8 (2) which I think says that a loan is deemed to be a dividend under certain circumstances? Will this section also be revised? What about the dividend tax credits?


Donald Methuen Fleming: There is no amendment to section 8, subsection 2 of the act. I think my hon. friend may have in mind a point that is dealt with later in the bill.


William Moore Benidickson: On subsection 2 of clause 3, may I say this. In front of the minister I see some officials who will recall some past correspondence with which I am now only hazily familiar. I am thinking particularly of some correspondence from Consolidated Mining and Smelting Company. Does this clause correct the objection or at least respond to the appeal that was made by them from time to time?


Donald Methuen Fleming: Does my hon. friend mean Hudson Bay Mining and Smelting Company?


William Moore Benidickson: No. I am sure it originated from Consolidated Mining and Smelting Company because I recall that the former hon. member for Kootenay East was very much interested in this subject.


Donald Methuen Fleming: I am told that the company to which my hon. friend has referred does not strike the chord of memory.


William Moore Benidickson: In other words, this subsection will be helpful to the extent that the deduction is for current services but does not exceed $1,500?


Donald Methuen Fleming: That is correct.


[Stage Direction]
Clause agreed to.
Clauses 4 and 5 agreed to.
On clause 6-
William Moore Benidickson: I have a question to ask on clause 6. This is just a matter of drafting and I do not profess to have any special knowledge of this matter. However, as I was looking through the basic act I wondered what happens when, as provided under clause 6, subsection (1) of section 15 is repealed. Do we then start out with section 14 (2) or is there some general drafting provision that provides that section 14 (2) would automatically become section 14 (1) without our so stating in this clause?


Donald Methuen Fleming: Section 14, subsection 2 of the act will simply remain in its present form. Subsection (1) is being repealed here really because the section, in the light *of recent jurisprudence, has virtually no effect.


William Moore Benidickson: Quite so. But what I meant was this. When we utilize, as we do, the annual consolidation, will the section 14 in the new consolidation simply start with subsection (2)?


Donald Methuen Fleming: As has been done in other consolidations, it will show section 14 (1) as repealed.


William Moore Benidickson: Oh, it will be shown as repealed; I understand.


[Stage Direction]
Clause agreed to.
Clause 7 agreed to.
On clause 8-Lease-option, hire-purchase agreement.
William Moore Benidickson: Would the minister give us some examples of the expansion that is possible under this amendment?


Donald Methuen Fleming: I shall be glad to say a word about this matter, Mr. Chairman. As hon. members will see, clause 8 of the bill extends over several pages. It is concerned with the rules to be applied in relation to lease-option and hire-purchase
Income Tax Act
agreements. Clause 8 provides for a complete revision of section 18 of the act which deals with lease-option and hire-purchase agreements. In some agreements the lessee is required to pay substantial amounts designated as rental payments and is given the option to purchase the property for a nominal sum at the end of the designated period. It is frequently obvious that the so-called rental payments are really instalments of the purchase price. Section 18 of the act provides that these agreements are to be regarded as purchase agreements. On some points the present legislation has been found to be obscure if not ambiguous. The proposed new section 8 is somewhat longer because it spells out in greater detail what is to be done in a variety of circumstances.
I can assure the house that it is the opinion of the government that these elaborations contained in clause 8 do not change the accepted interpretations of the present law. I believe that those taxpayers who are affected by the section will be pleased to have the rules specified more clearly.
The proposed revision includes two substantive changes. It contains special provision for cases where the lessor and the lessee are not dealing at arm's length, thus bringing the section in line with the other rules in the act covering other purchases and sales that are not at arm's length and blocking a possible loophole.
The second and more significant change is a provision that section 18 of the act will not apply at all in many cases. The specific provisions in this regard contained in the proposed new subsection 4 should remove from the application of this section all those cases where it is reasonably clear that the rent being paid is really rent and that no part of it is paid on account of the purchase price.


William Moore Benidickson: Mr. Chairman, in relation to these clauses we sometimes have a recommendation or at least a proposition that it would be applicable to either the current taxation year or an earlier year. I notice that this provision is to be applicable to 1957. Generally it is the current year to which such a provision is applied. Is there some reason for dating it back a year?


Donald Methuen Fleming: In this respect I think my hon. friend has misconceived the purport. If he will look at page 7 he will find that subsection (2) of section 8 provides that this section is applicable in computing income for the 1958 or any subsequent taxation year. If he is looking at the last line of page 6, he will see that the expression used is "leasing or hiring of property entered

Income Tax Act
into after 1957". It is therefore quite clear that it applies to the current taxation year.


William Moore Benidickson: I may say frankly that it is a few days since I made my examination of the bill, and things have been proceeding rather fast. I apologize to my hon. friend. I am just speaking now from a note that I made. But if he will look at the right hand page on which appears the explanatory note with respect to page 3, he will find that it states as follows:
It also provides that certain new lease-option, hire-purchase or other leasing or hiring arrangements entered into after 1957 will not be subject to these rules.
That is what prompted me to ask the question.


Donald Methuen Fleming: The wording is "entered into after 1957"; that is to say, anything from and after January 1, 1958.


William Moore Benidickson: I understand.


[Stage Direction]
Clause agreed to.
Clauses 9 and 10 agreed to.
On clause 11-Charitable donations.
William Moore Benidickson: I made some remarks on the resolution stage with respect to this matter of charitable donations deductions. A change is being made which will have the effect of widening the percentage amount of the deduction of taxable income applicable for a corporation. 1 continue to think that further consideration should be given to the position of an individual and, in particular, the averaging over a longer period of time to encourage individuals to make contributions of certain large capital investments in such things as universities. Universities frequently require large donations; they would like to go ahead with their capital programs and they appeal to an individual, who says, "Well, I must consider the income tax benefit related to this donation. If I tell you right now that I can give you in the coming year what you probably expect from me, I might find that all of it would not be subject to charitable donation deduction." I believe the averaging is for only two years, but certain contributions are expected from individuals for education generally, and I particularly have in mind that these capital requirements are often of a very large nature although they may not always be recurring donations. On the other hand, the individual also has the annual, continuing and repetitive types of donations.
In view of my remarks, therefore, it seems to me that some consideration should be given to perhaps extending the period over which individuals might average their donations.


Donald Methuen Fleming: I believe the problem cannot be an acute one because in connection with most of the campaigns by charities for building purposes the custom is now well established whereby they invite contributions payable over a three-year period so that funds are available during the course of construction. I am sure my hon. friend will agree that that is now the well established procedure.


Osias.-J. Godin: I trust I am in order at this stage in discussing certain items with respect to exemptions. I do not wish to be forced to repeat my remarks paragraph by paragraph as called in the house, because this would be very laborious and the house would not have the benefit of my full remarks on clause 11. These remarks pertain to the various paragraphs of the clause-


Donald Methuen Fleming: Mr. Chairman, I think we are all bound by the rules of procedure in committee. If my hon. friend's remarks are relevant to the clauses he can break them up and deal with each clause as it is called.


Charles Edward Rea: The hon. member will have to stay within the clauses.


Osias.-J. Godin: It may be relevant to know that if it is desired to discuss a problem pertaining to subsection (1) it also relates to the clause from which it derives as well as to the title, etc. I think the remarks I have to make perhaps should be deferred until we reach subsection (2).


Donald Methuen Fleming: My friend may not understand that the original section is not brought within the scope of the relevant discussion on a measure of this kind except to the extent to which the bill proposes an amendment thereto.


Mr. Caron:: Are we not discussing clause 11? If I understand the remarks of the hon. member for Nickel Belt they are covered by clause 11. He wishes to discuss them at the start, not only on subsection (1) or subsection (2) but also as they affect the whole clause 11. As I understand the rules, he is within his rights to do so.


Osias.-J. Godin: Mr. Chairman, I shall be very brief, but I wish to discuss a matter pertaining to exemptions which are beneficial to certain citizens of Canada. I have in mind the amendment whereby the exemption is increased to 10 per cent in the case of corporations wishing to make donations to certain enumerated persons in Canada. We in the Liberal group of course appreciate the intention here but I am amazed to note that this government is prepared to increase

exemptions for a person prepared to make a donation to a municipality but, on the other hand, it does not see fit to exempt those Canadians who wish to become home owners. I feel they should be recognized to some degree by the alleviation of the heavy taxes which they pay to the municipalities.


Donald Methuen Fleming: There is nothing in the clause with respect to that matter.


Charles Edward Rea: No, that is not referred to in the clause; there is nothing with respect to municipal taxes.


Osias.-J. Godin: It may be that the act does not provide specifically for that measure. It does, however, grant to people in Canada certain exemptions if they give money to municipalities. Those corporations wishing to make donations to their municipalities would have their exemptions increased up to 10 per cent of their revenue, and if the minister will refer to line 15 on page 8 he will see that this is so. Since that amendment has been made to the act, I am entitled to discuss the matters which refer to those citizens who pay money yearly to municipalities but who are not included in this exemption contained in the amendment now presented to the house.


Donald Methuen Fleming: There is no amendment here in that respect. The only amendment before the house in this bill under clause 11, subsection (1) is to increase from 5 to 10 per cent the income of corporate taxpayers which may be deducted if given to charities.


William Moore Benidickson: Including a municipality.


Donald Methuen Fleming: That is the only change made in this clause. My hon. friend referred to the language which has been used in the act and he is seeking to mount thereon an argument in relation to payment of taxes to municipalities by municipal taxpayers. That is an entirely different subject, and is completely foreign to the matter under discussion.


William Moore Benidickson: Mr. Chairman, I wish to say a few words on the point of order in support of the hon. member for Nickel Belt. My remarks will not take more than a moment but I see it is five o'clock and there is another matter to be discussed.


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



BURRARD INLET TUNNEL AND BRIDGE COMPANY

[Stage Direction]
The house in committee on Bill No. S-4, respecting the Burrard Inlet Tunnel and Bridge Company-Mr. Taylor-Mr. Rea in the chair.
On clause 1-Remuneration to directors.
Joseph Pierre Albert Sévigny: Hon. members may find the amendments made to this bill on page 437 of Votes and Proceedings of Thursday, August 14, 1958, as reported by the standing committee on railways, canals and telegraph lines. Shall clause 1 as amended carry?


Frank Howard: Mr. Chairman, as hon. members of the committee will appreciate, the ownership of this company with one slight exception rests in the hands of four municipal councils, that is the corporation of the district of North Vancouver, the corporation of the city of North Vancouver, the corporation of the district of West Vancouver and the city of Vancouver. In the standing committee it was requested that an attempt be made to ascertain the views of the four municipalities which in effect own the company with respect to the proposal in the bill. I wonder whether the sponsor of the bill could indicate what answers have been received individually from the four municipalities, what were the opinions expressed and whether there was any division of opinion in each respective municipal council with respect to the proposal in the bill?


Mr. Taylor:: Mr. Chairman, when this bill reached the committee a resolution was passed in the following terms:
That this committee do not proceed with the bill at this time but that Mr. Taylor, sponsor of the bill be asked to communicate with the corporation of the district of North Vancouver, the corporation of the city of North Vancouver, the corporation of the district of West Vancouver and the city of Vancouver to ascertain the views of these municipal councils with respect to the bill.
Pursuant to that resolution I wrote to each of the bodies mentioned. My letter dated July 26, 1958, reads as follows:
Dear Sirs:
Re: Bill S-4-An act respecting the Burrard Inlet Tunnel and Bridge Company.
A resolution was passed by the railway committee of the House of Commons, relating to the above company. The resolution requested that I communicate with each of you to ascertain the views of each council with respect to this bill.
I went on to say:
When I was requested to assist with this matter, it was my understanding that the board of directors of the company had unanimously requested amendment to the charter of the company, enabling the shareholders in general meeting to make provision

Private Bills
ior payment to directors. The directors are all known to me and many of them have had long experience in municipal affairs.
Even if the bill is passed, it would not necessarily mean that directors' fees were to be paid. Whether or not they are to be paid is a matter for the shareholders to decide. It might well be that councils this year will be in favour of payment of such fees, while next year's councils may be opposed. In such event, directors' fees would not be paid in any year the shareholders were opposed to payment. Complete control over the situation lies with the local councils, who are the shareholders.
I understand that no director is a shareholder and the directors might not necessarily be holders of proxies at any annual meeting. The bill is so drafted that the directors cannot as directors vote themselves a fee.
Mr. Halford Wilson informs me that the Vancouver city council has considered this matter and that no one has opposed passage of the bill. It matters little to me whether the bill is passed or not, but I only hope that local politics will not be drawn into the federal arena. The bill has passed the Senate and has passed second reading here. I can only presume that the bill will not meet any further objection in the event that each council approves the bill in principle.
Pursuant to the request of the committee I trust that you will communicate with me as early as possible respecting your council's views.
In reply to my letter I received a communication from the district of West Vancouver dated August 7, 1958, to which was attached a certified copy of the actual resolution passed in council which reads as follows:
Resolved that: The council of the corporation of the district of West Vancouver which is a shareholder in the capital stock of the Burrard Inlet Tunnel and Bridge Company hereby approves of Bill S-4, respecting the Burrard Inlet Tunnel and Bridge Company and respecting the payment to the directors of remuneration and certain expenses as therein provided and hereby directs that a duly certified copy of their resolution passed on this 28th day of July, 1958, be given to the standing committee of the House of Commons on railways, canals and telegraph lines.
The resolution is certified by the acting municipal clerk of the district of West Vancouver and is dated July 28, 1958.
I also received a telegram from Reeve Richards of the West Vancouver council bearing date July 29, 1958, which reads as follows:
West Vancouver Council Monday evening unanimously passed resolution approving of Bill S-4 re Burrard Inlet and Bridge Company. Certified copy of resolution being air mailed to secretary of railway committee.
I have just read to the committee the text of the resolution herein referred to. I also received a telegram from the solicitor and counsel for the company. That telegram is dated August 5, 1958, and reads as follows:
Bridge company bill approved yesterday-
That would be August 4. I continue:
-by North Vancouver city council.

I received a further telegram from counsel for the company dated July 29, 1958, in which he stated:
Resolution was adopted July twenty-ninth by council of city of Vancouver approving Bill S-4 respecting payment remuneration and certain expenses to directors of Burrard Inlet Tunnel and Bridge Company. Certified copy sent to secretary of standing committee-
I understand that each council has reported to the chairman of the standing committee and each has approved the bill with the exception of the council of the district of North Vancouver. That is the best answer I can give at the moment. The hon. member for Peterborough is not in the house at the moment. I attempted earlier to obtain copies of the actual resolutions passed by the other councils but I have been unsuccessful in this endeavour. I may state, however, that I have personally seen these copies.


Mr. Drysdale:: Mr. Chairman, when I
originally spoke on this bill 1 opposed it as sponsored by my friend the hon. member for Vancouver-Burrard. I did so at that time because the purpose of the bill as set forth was to provide for the payment of remuneration to directors whereas, according to the shareholdings outlined by the hon. member for Vancouver-Burrard, the actual objective of the bill was to establish payment for municipal councillors who were in effect doing jobs beyond the usual scope and call of their work. In my opinion, Mr. Chairman, they were merely acting in the function of councillors operating in a committee.
When the hon. member spoke on July 4 he made one or two statements which left a certain amount of doubt in my mind. For example, at page 1943 of Hansard he said:
No director is a shareholder, and thus a director is not entitled to vote unless he acts as proxy.
There was no indication at that particular time as to whether or not the respective shareholders in the company, which are the various communities surrounding Vancouver, gave a blanket proxy, or what type of proxy they gave to the members serving as directors. The directors, as pointed out by the hon. members, are members of the various municipal councils, one councillor coming from the city of Vancouver, one from West Vancouver, two from the city of North Vancouver and two from the district of North Vancouver. Since they were acting by proxy, I had a certain amount of doubt as to the authority of the particular directors and whether or not the respective councils had approved the matter or the bill, as suggested by the hon. member. To a certain extent my suspicions were confirmed at page 1943 of Hansard

in the statement of the hon. member for Vancouver-Burrard where he said:
I feel that the directors have been most fair in considering the welfare of the shareholders. The directors could have drafted the bill in such a way as to have provided that they alone could have set the amount to be paid to them by way of remuneration but if hon. members will peruse the draft bill they will see that it is the shareholders and the shareholders only who have the power to determine the amount to be paid.
As the hon. member said in committee, a reference was made to the respective municipalities and municipal councils in order to ascertain that they were aware of this amendment to the bridge company bill which would in effect have given an additional stipend to municipal councils. This was particularly important to me because the municipal act of British Columbia forbids the payment of such extra amounts. When the matter was referred to the councils it was revealed that payments had been made for three previous years and in fact I believe the mayor of the city of North Vancouver questioned the legality of the payments. Therefore, upon receiving the reports from the various municipal councils, we were able to interrogate the solicitor acting in this particular matter, as well as the sponsor of the bill, and my change in attitude occurred at that time when I was assured that the municipal councils had been aware of the particular alterations and in fact three of the councils had approved the proposed change. Also, as the hon. member mentioned, the compulsory aspect of the bill itself, saying that the directors shall be paid a certain amount, was altered so that the word "may" which gave a certain discretion to the municipal council, was inserted.
Again, I must say in all fairness to the sponsor and the solicitor representing the directors of this particular company, that it was pointed out that the payments which had allegedly been illegally made were merely a matter of expenses as far as the commission and the board of directors were concerned and, in the opinion of the solicitor, were legally made.
Accordingly, Mr. Chairman, since there is every indication in this bill and in the attendant newspaper publicity that the particular municipalities are now aware and will be made aware of the fact that when they are granting proxies for this particular company they are in effect authorizing payments of certain amounts of money to the directors, I feel that this will provide the necessary warning as far as the respective councillors are concerned to enable them to decide whether or not they wish to grant this extra amount of money to the council members. Accordingly, Mr. Chairman, I feel that I can now support the principle of this 57071-3-240
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bill since I feel that the notice has been brought to the respective councillors and it is within their discretion, as the hon. member for Vancouver-Burrard said, whether or not they wish to grant any or what amount of remuneration.


Mr. Browne (Vancouver-Kingsway):: Mr. Chairman, I am sure we all agree that this bill has received very careful consideration. I was pleased to note the amendment which was made in the committee which certainly removes any doubt that when we were directing that any fee should be paid to the directors of this company we were only empowering the shareholders to pay the directors if they so wished. I certainly think this is a recognized principle and there should be no argument about it.
I personally have not been able to find out any reason why this house should be concerned about it because we are not, as I say, directing payment to the directors; we are only authorizing the shareholders to pay them as they see fit. That, as I pointed out on second reading of this bill, is done by every tunnel and bridge company in Canada. I looked through most of those companies which have been incorporated since confederation and I have found that there has not been any instance where there is no provision for the payment of directors. Therefore, for those reasons I feel that we can certainly pass this bill at the present time.


Mr. Broome:: I supported this bill on second reading and I still support it more firmly owing to the changes which were made by the committee on railways, canals and telegraph lines. They are good amendments. They provide that the municipalities concerned may pay the directors. By the elimination of the word "shall" the bill has been made a much better bill. I think the committee is to be congratulated on having brought in this amendment.
As hon. members know, the bill has been tossed about in municipal politics and there are divergent views but I have taken the stand that it is not our right to tell the municipalities that they shall or shall not pay directors when they come to us to ask for permission to pay them.
The directors of this bridge company have done an outstanding job since they took it over, I believe, in 1951. At that time it was practically bankrupt. They have paid off all of their indebtedness and I believe last year passed on to the municipalities dividends of some $250,000.
The operation of the bridge and the company does take a lot of their time, and it has been the policy of other boards to pay

Private Bills
municipal representatives, at least boards connected with the city of Vancouver, so that this does not vary in any way from the previous policy as carried out by the municipality of Vancouver.
I agree with the hon. member for Van-couver-Kingsway who supported that policy on second reading, and I would agree with my hon. friends from Burnaby-Richmond and Coast-Capilano who wanted further information in regard to this bill to make sure that the provision for payment would be fully under the control of the municipalities concerned. They were in agreement, and the hon. member for Skeena was also concerned in that regard. Mr. Chairman, there is really no reason why this bill cannot be passed by the committee now and the privilege given to the municipalities concerned to handle their affairs in regard to this enterprise in the way they deem best in their own interests.


[Stage Direction]
Clause agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall this bill be read the third time? By leave, now?


Some hon. Members:: Agreed.


John Russell Taylor: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



STANMOUNT PIPE LINE COMPANY

Mr. M. D. Morton (Davenport) moved: the second reading of Bill No. S-14, respecting Stanmount Pipe Line Company.
He said: Mr. Speaker, perhaps the house would be interested in some information outlining the purposes of the bill. Stanmount Pipe Line Company is now a wholly owned subsidiary of Imperial Oil Company Limited. It was incorporated by special act of the parliament of Canada on June 28, 1955, being chapter 78 of the statutes of that year, with the power to construct interprovincial and/or international pipe lines for the transportation of oil in the provinces of Ontario, Manitoba, Saskatchewan and outside Canada.
The object of the amendment is to extend the powers of the company in order to construct interprovincial pipe lines for the transmission of gas and also to extend the area in which the company may construct interprovincial pipe lines for the transportation of both oil and gas to anywhere in Canada. Although the company has no specific area in mind, it has carried on substantial explorations recently, as the company has stated to
[Mr. Broomed
me in letters of June 27 and July 18 of this year, and it desires to have this power or capacity in reserve. The company has stated it has recently drilled and abandoned a well in Prince Edward Island and is now drilling a second well there in search of crude oil. In New Brunswick surveys are now being conducted and the company plans to drill in that province in 1958. In the province of Quebec it has drilled and abandoned five wells in the search for crude oil. In the northwest part of British Columbia new oil discoveries are being explored and they give encouragement to a further search for oil there and also in the Northwest Territories and the Yukon.
The company feels that it would like to have the capacity to develop interprovincial pipe lines in areas in which it has not got the capacity to do so now. I should point out that the granting of this capacity at the present time does not give the company the power to go ahead and build pipe lines. It must appear before the board of transport commissioners and secure permission to build any particular pipe line it has in mind. This amendment really gives the company the capacity to do that.
The company feels that at the present time reserves of oil in Canada are well in excess of production but the limiting factor is markets which would indicate also the need of a pipe line. It might be of interest to know that in the last 11 years the Canadian oil industry has grown to a greater extent than any other oil industry in any other area in the world. Since world war II capital investment in the oil industry has totalled some $4,800 million.
It might also be interesting to note, in comparing our production with that of other countries, that although our industry is growing we still only produce three per cent of the crude oil in the world and we only have one per cent of known reserves. In 1957 the free world used some 15 million barrels of crude oil daily and petroleum has become the largest commodity of world trade.
I bring these facts to the attention of the house in order to show the importance of the oil industry in Canada compared with the same industry in other countries and to point out the necessity of this industry having regard to the development of our country. Stanmount Pipe Line Company is one of the companies that intends to extend the industry in Canada by investing further money in the industry which will aid the development of our country and assist in providing employment for our people, something we are all hoping to encourage. For these reasons I strongly urge that we give favourable consideration to the passing of this amendment.

If there are any questions for which I do not have the answers today I can inform hon. members that they will be answered by officials of the company who will be appearing before the standing committee on railways, canals and telegraph lines to which the bill will be referred.


Hazen Robert Argue: Mr. Speaker, second reading of this bill is being moved in the dying days of this session and I would submit that there is little chance at this time for members to give adequate consideration to the measure. The sponsor has said that the Stanmount Pipe Line Company is now wholly owned by Imperial Oil Limited. This is another instance of what often happens to what is ostensibly an independent company at the time of incorporation. After it is incorporated it is bought out step by step by one of the big oil companies. I think hon. members should be very careful before they extend to Imperial Oil Limited a further monopoly of and vested interest in the oil resources of Canada. Imperial Oil is one of those companies that is not basically Canadian. It is part of an international cartel and I suggest that parliament should not give Imperial Oil this further control over the oil resources of Canada.
The sponsor of the bill has told us that there is no immediate need for it to be passed, that parliament is being asked to pass the measure on the basis of the speculation that oil may be discovered in Prince Edward Island, New Brunswick or Quebec. There is no certainty that if the bill is passed a pipe line will be built in the near future. I think we would be wise to wait until the next session of parliament to deal with this measure, at which time we could deal with it more adequately.
The Borden royal commission on energy, so the Prime Minister (Mr. Diefenbaker) informed the house, is making an interim report to parliament on the oil and gas resources of Canada. I think it would be wise for the members of parliament to look at this interim report before passing on a measure such as this. The interim report has not yet been made public, and I do not know whether or not it is in the hands of the government. It would seem sensible, before we provide for the incorporation of a pipe line to carry either gas or oil anywhere within Canada or to export gas and oil, that we should have the advantage of seeing the interim report of the Borden commission because it is likely to provide a valuable guide to members of this house.
There is a war on in Canada between Imperial Oil Limited and the so-called independent companies. The independent oil 57071-3-240i
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companies which are developing the oil resources of the prairie provinces are most anxious to extend their markets into either the United States or eastward to the Montreal area. The independent oil companies, the smaller oil companies, are the companies that are today developing the oil resources of this nation, but Imperial Oil Limited, which is part of an international cartel, is opposing the bringing of independent oil to the Montreal area. I am afraid that once the powers of this company are extended Imperial Oil may be able to use those powers or any charters which may be given, not really to develop the resources of this country but to further impede the development of the independent companies.
As I have said before, I see no reason why parliament should be asked to pass on this measure at this time, in the light of the pending report from the Borden commission; in view of the fact that this is a further extension of the oil cartel and because of the action of Imperial Oil in blocking oil development and the extension of the market for Canadian oil. I would think that in the best interests of the development of our national resources in an orderly way, this measure should be opposed at this time.


Mr. E. L. Morris (Halifax):: The sponsor of this bill now before us, Mr. Speaker, has made reference to Stanmount's oil exploratory activities in the province of Prince Edward Island and, as expected this year, in thp province of New Brunswick. I think that before this session of parliament concludes those of us who are concerned with the future of alternative sources to oil in the production of energy in Canada should make some statement in the house concerning the alternative methods of fuel use and of energy production in Canada. While on balance we will in most cases, I think, support this bill, I believe this is particularly necessary for those of us who come from areas whose economic livelihood is based at this time not preeminently on oil exploration but upon the future prospects of coal.
It is true, Mr. Speaker, that one out of every seven dollars which is now being spent in the creation of new physical assets in this country comes from the expenditure of firms which are engaged in either the discovery, production, transportation or processing and marketing of energy in any of its forms. Some economists have estimated that this amount spent in the creation of new physical assets by these firms will rise to one dollar in every four dollars within the next generation. Those of us who are concerned more particularly with coal and generally with the other alternative means of energy production such as oil and natural

Private Bills
gas, feel that we should record why it is we can support a bill of this kind looking towards the extension of Stanmount's capacity to carry on the exploratory work with an even mind and without too much preoccupation by the government of this country with the extension of these alternative sources of energy. With all this expenditure, one dollar in every seven, Canada has never been and is not today self-sufficient in usable energy. Some economists measure a nation's national growth by the amount of usable energy which it possesses.
In 1950, eight years ago, we were then importing nearly two-thirds of all our fuel needs in this country. In 1955, the last year for which all the relevant statistics are available, I believe we spent $438 million on foreign exchange for the purchase of various fuels, including oil. If we were to account fully for our balance of payments on account of energy we should, I suggest, have to allow for the purchase of machinery and equipment used in energy import and also for payment to non-residents for such things as interest and dividends. We are, therefore, spending in this country today a large sum of money to import energy in some of its forms. We can measure our national growth, not only by the customary criteria of the gross national product, the growth of population, average wages, the increasing standard of living, but by the increasing use of energy, the use of coal, oil and natural gas, wood and water on Canada's farms, in her factories, in her homes, in her stores and in her mines. Those of us who are sent to this house to protect, defend and champion the cause of coal production do not want to be narrow-minded in our vision on this matter. We want to see the country prosper, and with it the people whom we represent and whose livelihoods depend in a larger part upon coal than they do at this time upon oil or natural gas.
A farmer in Canada can harvest today with power-driven equipment 30 times the acreage he could harvest by the use of hand tools at the time of confederation. A farmer in Canada today can harvest 30 acres for every acre he harvested in 1867. Paper mill operators turn out 10 times as much today as they did in the same period of time in 1900 as a result of the use of energy. To raise a ton of ore took two hours as recently as 1930; it now takes less than 50 minutes.
Mr. Speaker, some of us in the house are concerned with oil and natural gas but it would be understandable that in passing, at what we believe to be a late date in this session, or in giving support to a bill such as one asking for an extension of legislative capacity for Stanmount Oil, we are naturally concerned with coal. If I may be permitted

to enliven the declining hours of this afternoon's sitting, may I say that we are of a mind that there is no fuel like an old fuel.


Some hon. Members:: Oh, oh.


Edmund Leverett Morris: It was the extensive possession of coal reserves which gave the first preeminence to the Ruhr valley. We do not need to go this far afield-


Mr. Speaker:: I was just about to remind the hon. member that he was getting a little bit away from the Stanmount Pipe Line Company.


Edmund Leverett Morris: Very well, Mr. Speaker. If I may therefore speak only for one moment on the relative percentages of the production of total energy occupied by coal and petroleum, I should like to remind the house that a splendid report prepared by John Davis for the royal commission on Canada's energy prospects envisages that by 1980, 45 per cent of the total energy in Canada will result from the use of petroleum whereas the figure today is 42 per cent, and that for natural gas it will be 25 per cent as compared with the present figure of 4 per cent. Yet for quantitative purposes there are broad indications why it is that coal constituency members can support the extension of oil exploration and research in this country, for the prospects for the use of all forms of energy including coal are excellent. We therefore look forward to a growth in that area of energy production that especially animates us, along with the increase in. the use of oil and natural gas.


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


Mr. John Palleii (Peel):: In rising to speak on the bill, Mr. Speaker, I should like to express my appreciation to the hon. member for Halifax (Mr. Morris) for his little bit of leaven in the loaf. I think that is something that we shall perhaps be using on many platforms in the weeks to come. At the moment I would think that we might get back to the bill in question.
As was indicated by the sponsor, when this company was originally incorporated it was for the purpose of building a line which would originate south of the Canada-United States border and then come up into Canada and for the purpose at that time of developing what were hoped to be reserves.
As the sponsor has said, the company never went into operation but it desires to reorganize. This is something of which I think the house might well take cognizance. It is an indication of faith in the future of the country that this company wishes to reorganize, no matter who owns or controls

it. In order to keep pace with the development of the country they suggest that gas might now be added to the commodities they can carry. This is a recognition of the fact that gas is now attaining a position of importance in the energy picture in this country. But more than that, as was pointed out by the hon. member for Assiniboia (Mr. Argue) when he indicated to the house the ownership of this company, it is an indication by a large company of faith in the development of the future of this country. He will probably say "Yes, to the shareholders' profit". However, I point out to him that without people of vision in this country there would be no jobs in this country; and without people who reorganize companies and who go ahead and develop the country, there would be no work for the people in the country.
In my riding I have a large labour element and there is not one of those who are responsible who will not be the first to admit that fact. For that reason they support the free enterprise system very radically and strongly in my riding, I may say. I might point out to the hon. member for Assiniboia that he cannot becloud the issue on any bill or any matter before this house simply by saying that it is for the profit of a company. These people do these things for profit, certainly. But along with that motive they also create jobs for workers whom the hon. member professes to represent. You know, Mr. Speaker, many of the arguments of the C.C.F. group remind one of what Bassanio said in the Merchant of Venice:
Gratiano speaks an infinite deal of nothing, more than any man in all Venice. His reasons are as two grains of wheat hid in two bushels of chaff; you shall seek all day ere you find them, and when you have them, they are not worth the search.


Hazen Robert Argue: That is your contribution for the whole session.


John Cameron Pallett: Perhaps it is a great deal more worth while than any I have heard from that group and perhaps more lasting also.


Hazen Robert Argue: I have heard that for years.


John Cameron Pallett: On the bill in question, Mr. Speaker, may I say this. It is a step that a company wishes to take. They have assessed the situation and they come to us, because they were incorporated originally under an act of this parliament, to assist them not in any pecuniary fashion but merely in an administrative fashion, by adding this commodity. It is for that reason, Mr. Speaker, that I stand in my place and suggest that we give to this bill the measure of support that it deserves.


Some hon. Members:: Question.
Private Bills


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


An hon. Member:: On division.
Motion agreed to on division, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.



MID-CONTINENT PIPELINES LIMITED

Mr. P. B. Rynard (Simcoe East) moved: the second reading of Bill No. S-15, respecting Mid-Continent Pipelines Limited.
He said: This is a very simple bill respecting Mid-Continent Pipelines Limited which was incorporated in this house in 1953. When it was incorporated it was to carry gas and oil anywhere in Canada. The company now seeks permission to build a 30-inch pipeline from Edmonton down to just southwest of Chicago.
This pipe line will pass through Edmonton down through Camrose and across the Alberta border into Saskatchewan, will go along by Moose Jaw and Regina and will cross into North Dakota in the area of Northgate; it will cross from North Dakota into the state of Minnesota near the twin cities of St. Paul and Minneapolis, close to Rochester, and will then cross the Mississippi river just below the city of La Crosse and into the state of Wisconsin. It will then cross the state of Wisconsin and will go into the state of Illinois and will end at or near Joliet, which is southwest of Chicago.
It will be a 30-inch pipe line with storage facilities at both ends, and will have four pumping stations. The Canadian section will be built, owned and operated by MidContinent Pipelines Limited and the United States section will be built, owned and operated by a United States company which is a wholly owned subsidiary of Mid-Continent Pipelines and the majority of whose directors will have to be residents of Canada.
The complete control of this pipe line will therefore rest with Mid-Continent; the pipe line will be a carrier pipe line only, carrying oil from western Canada where we have a large exportable surplus of approximately twice the amount of oil we can use today and where, according to all forecasts, in the next ten years we will still have twice the amount of oil we can use. Detailed economic and geological studies of this area point out that last year the United States reserves for the first time dropped below their reserves in the previous year, 1956. Over the last ten years there has been a gradual decline in the ratio of United States reserves to increased consumption. Studies of the greater Chicago area show that the area uses approximately

Private Bills
an increase of 5.5 per cent per year as compared with the level across the United States of 4.5 per cent.
All the factors point to the fact that it is getting harder for the United States to find oil. Not only is it getting more expensive to pump but oil surveys show that the MidContinent Pipelines feel this is a great field for our exportable surplus of oil, particularly in Alberta and the other western provinces.
The initial output will be approximately 150,000 barrels per day and will gradually increase to 300,000 barrels per day. On the present schedule that will amount to $250 million in terms of United States dollars per year, and I am sure every member of this house will be very proud and glad to know that this would approximately equal one-quarter of our adverse trade balance.
In order to facilitate this project MidContinent Pipelines seeks certain amendments. Firstly, under clause 1 they have an authorized 5 million shares of no par value; they have issued 200,000 shares of paid up capital at 50 cents a share, amounting to $100,000. It is their purpose to further finance the project and further shares are to be issued for this purpose at not less than $1 per share.
To avoid preferred treatment for present shareholders, one out of every two issued shares is to be cancelled so that $100,000 of paid up capital of 100,000 shares is to have an average price of $1 per share. The unissued increase of 100,000 shares is so that the authorized capital will be restored to the usual 5 million shares.
We ask for three changes so that we can operate in order to sell this oil across the border:	Firstly, the capacity to operate
within and without Canada-21 of the 23 pipe line companies have already been granted this facility. Secondly, the addition of the words "extraprovincial and/or international" which are common to pipe line acts. Only two of the 23 pipe line companies are limited to interprovincial operation. Thirdly, we ask for the deletion of the proviso reading, "Provided that all pipe lines for transmission and transportation of oil and gas shall be located entirely within Canada". This has been looked after in chapter 37 of the 1957 and 1958 statutes on petition of Alaska-Yukon Pipelines and Mid-Continent seeks to have this proviso similarly deleted so that it may have complete control of this international oil line.
Before construction can start, however, permission must be obtained after an exhaustive and detailed public investigation by the board of transport commissioners. The licence to export the oil must also be obtained from the Minister of Trade and Commerce (Mr. Churchill) .
[Mr. Rynard.j
I am accordingly pleased to move that this bill be now read a second time and referred to the committee on railways, canals and telegraph lines for examination and report.


Herbert Wilfred Herridge: Mr. Speaker, as an old enemy of this legislation I wish to say a few words at this time. This bill has appeared under various names and on each occasion it has had a different sponsor. In 1952 it was introduced as Boundary Pipelines and in 1957 when it was introduced it was renamed or rechristened-in any event it was converted in the meantime-to MidContinent Pipelines Limited. At that time it was very strongly opposed by all members of the group with which I have the honour to be associated.


Mr. Speaker:: I regret to have to interrupt the hon. member, but the hour for consideration of public and private bills having now expired, the house will now revert to the business which was interrupted at five o'clock.



INCOME TAX ACT

[Stage Direction]
The house resumed consideration in committee of Bill No. C-39, to amend the Income Tax Act-Mr. Fleming (Eglinton)-Mr. Rea in the chair.
At six o'clock the committee took recess.

AFTER RECESS

The committee resumed at eight o'clock.
On clause 11-Charitable donations.
Osias.-J. Godin: Mr. Chairman, when this discussion was interrupted at five o'clock I was referring to the amazement on the part of the people of Canada concerning the provisions of this clause which increases to 10 per cent the exemption in the case of corporations wishing to make donations to municipalities. This will undoubtedly assist some municipalities. It is the source of equal amazement that individuals who give moneys to municipalities will receive no additional relief whatsoever. In the face of certain references to meetings with municipal organizations the government appears to be suggesting that our municipalities should make every effort possible now to live off the charity they may be able to obtain from certain people who may be in a position to make substantial donations.
I ask hon. gentlemen of this committee in what way this can assist the ordinary citizen in our many municipalities who owns a home and requires services for which he is willing to pay? There must be equality of treatment in taxation. Costs differ as

between municipalities and in the case of mining municipalities such as my own costs are high because of the terrain. I submit it will be with surprise that the Canadian people will realize that some wealthy corporations will be able to obtain greater tax relief through making donations in the form of charitable gifts to municipalities whereas the ordinary people of Canada will receive no additional benefit.
In closing my remarks I wish to refer to the exemption to be granted for payments made for ambulance fees to a licensed private hospital. This is relevant to the clause-


Donald Methuen Fleming: Mr. Chairman, can we not deal with that when the next clause is called?


Osias.-J. Godin: I shall be pleased to do that, sir.


Donald Methuen Fleming: Mr. Chairman, I wish to make a comment on what has been said. The hon. member for Nickel Belt has quite misconceived the effect of the clause with which we are dealing. There is no change made in the definition of the word "charity" by this bill. All that this clause does is to enlarge from 5 to 10 per cent the proportion of the income of corporations which when contributed to charities may be deducted from income for tax purposes. The existing section in the act has long made provision for gifts to charities, and among permissible gifts to charities are gifts that may be made to the crown in the right of the province or to a municipality. These are voluntary gifts to municipalities, the kind of gifts that people sometimes make as memorials; for instance, memorial parks, memorial gardens, memorial fountains and memorial recreation facilities. That is the sort of thing with which the clause deals and all the amendment does is simply to enlarge from 5 to 10 per cent the proportion of income which when given by a corporation to charities may be deducted from income for tax purposes. It does not touch the definition of charity at all.


William Moore Benidickson: Mr. Chairman, when we last discussed this item just before the rules put us on another subject at five o'clock we were for the first time considering an amendment to section 27 of the Income Tax Act. I indicated at that time I wanted to rise in defence of the rights of the hon. member for Nickel Belt under the rules to discuss at this time something that was not proposed before with respect to an amendment to section 27.
First of all I would point out to the Minister of Finance that with respect to this and other bills which he has recently sponsored
Income Tax Act
in this chamber we have been reasonably lenient. I hope we have recognized at all times that at previous stages consideration has been given to some of the objections that might obtain among the public. But in objecting at this stage to the right of the hon. member for Nickel Belt to discuss a possible amendment to section 27 of the Income Tax Act I feel the Minister of Finance was adopting an unwise procedure. I should like to remind the hon. gentleman that I cannot recall in recent years as I have watched him very carefully in discussions on this type of legislation that either on the introduction of the first clause or on the introduction of an amending clause that referred to an important section of the act was the minister himself or any hon. member of his group denied an opportunity to discuss this kind of measure fairly thoroughly.
But he cannot have it both ways. If we are fairly lenient to the minister in restraining our debate when the Speaker is in the chair, as I think we have been in connection with this bill, surely when we come to a discussion of the individual clauses of the bill the minister will not want us to be particularly restrained if there is a real semblance of relevance with respect to the amendment of any section we are concerned with.
The minister was always very vocal when he was on this side of the house. I want the minister to try to return the consideration that we have shown toward him in the last couple of days in discussing some of his legislation. I think we have been reasonably expeditious in our consideration of it. I just want to relate this little story that I recall about one of New York's taxi drivers. A passenger looked at the meter and he saw the exact amount that he was supposed to pay and he paid it. He saw that the taxi driver's chin dropped quite a bit and he asked, "Is that not correct?" The taxi driver said, "Yes, it is correct but it is not right". I want the minister to look at past debates and I want the new members of the house to look at past debates with respect to budget matters and I think they will find there has not been very much abuse with respect to relevancy in regard to items in committee of the whole after second reading. Certainly, he should not have been so stringent in objecting to the remarks that the hon. member for Nickel Belt intended to make at five o'clock because he proved to the minister that his remarks were brief and very much to the point in connection with section 27 of the bill.


Osias.-J. Godin: Mr. Chairman, in view of the remarks of the Minister of Finance may I ask him a question? I recall that in the budget

Income Tax Act
speech he emphasized the fact that the donations made by corporations in Canada which would qualify for the exemption would go in some cases to municipalities. The minister stated that the donations to municipalities should be for monuments and parks only. Is that so, or if a corporation feels that it would like to dispose of certain extra funds and it gave moneys to a municipality can it obtain an exemption by sending the receipt to the proper department? Where in this law can the minister indicate that those donations are only for monuments and parks?


Donald Methuen Fleming: Mr. Chairman, I did not say they were only for monuments and parks. That is the common case of a charitable gift to a municipality. The clause makes provision for gifts by any taxpayer.


William Moore Benidickson: Because of the new form of solicitation for charitable funds which might be destined to a municipal source, would not this provision basically require that they should involve a housing proposition that is to be sponsored by municipality?


Donald Methuen Fleming: It is not confined to that at all. There is reference to housing corporations in line 11.


Lester Bowles Pearson: I should like to ask the minister a question on this clause. If the question was asked before five o'clock when I was not here I apologize. I take it the purpose of this amendment is to encourage charitable donations from corporations, and that the minister may have had in mind that this would even encourage special donations from corporations for educational purposes, foundations, scholarships and that kind of thing. In assessing the possible effectiveness of this amendment it would be interesting if the minister could give us some information as to the percentage of corporation earnings, in the last year for which figures are available, which have been deducted as directed to charity.


William Moore Benidickson: A little over one per cent.


Donald Methuen Fleming: I gave that information when we were in committee of ways and means on the budget resolutions respecting the Income Tax Act amendments. I shall be glad to give the figure to the Leader of the Opposition. In 1954 the total charitable donations by corporations indicated in their income tax returns amounted in round figures to $25 million, or 1.2 per cent of the income of those corporate taxpayers; in 1955, $27,600,000, or 1.1 per cent of their income; in 1956, $32 million, or one per cent of their income. As the Leader of the Opposition indicated at the outset of his remarks, on

June 17, I laid some emphasis, in announcing this particular resolution, on the encouragement that I hoped it would give to corporations in particular to support universities.
There are certain charitable causes that naturally have more appeal to philanthropy of the individual than to corporate philanthropy; support of churches I gave as one example. I did make a very strong appeal on that occasion to the corporations to give active support, and much enlarged support, to the universities.


Lester Bowles Pearson: Mr. Chairman, corporate contributions to education in some countries have gone farther than they have in Canada. I am thinking of the United Kingdom and the United States. Perhaps this amendment -though it may not have any immediate effect because it is quite a jump from under two per cent to 10 per cent-will achieve the objective the minister and the government have in mind in making the change to encourage corporations to assist education in this country, higher education especially, as they are gaining so much themselves from the results of higher education. As we all know, if there is any activity in this country which needs financial help at the moment, it is higher education. I am sure we all hope that this amendment, though it may not have any immediate practical effect, will be an encouragement to corporations to make progress. If they cannot reach 10 per cent, perhaps they can reach five per cent before long.


Donald Methuen Fleming: I think it is well to bear in mind that although the average is much below the existing five per cent, undoubtedly some corporations have been contributing up to the full five per cent, and they no doubt will be prepared to go beyond five per cent. Indeed, we have had indications to that effect, and we hope that their example will be followed by some others that have not been quite so generous in their charitable donations.


William Moore Benidickson: I cannot readily recall but if in a past year corporations have overspent the five per cent opportunity can they average it under the Income Tax Act?


Donald Methuen Fleming: They can to the
extent they exceed the maximum. They can apply it in the next year.


William Moore Benidickson: But hitherto, if in the taxing year they had given more in the way of charitable donations than five per cent of their taxable income there was no opportunity to transfer the balance forward to the next taxing year?


Donald Methuen Fleming: Yes, they have the right to do that, to carry the excess forward into the next succeeding year.


[Stage Direction]
Subclause agreed to.
On subclause (2).
Osias.-J. Godin: Mr. Chairman, it may be of some assistance if I inform the minister as to the value or lack of value of this amendment in paragraph (vi) in certain areas of northern Ontario, and especially in the riding of Nickel Belt. It will be very difficult for the taxpayer to realize why exemptions for certain types of transportation to hospitals should be limited to ambulance services or an ambulance.
In my riding there are no ambulance services and no hospitals except private clinics operated by certain companies. Furthermore, if you were to use an ambulance to travel from certain parts of my riding to the hospitals in the adjacent riding of Sudbury it would be necessary to travel for two days. The people who live in the lumbering communities in my riding and who are not receiving large salaries periodically, on the occasion of grave illness, must be rushed by plane or train to the nearest hospitals in Sudbury which would take roughly four to five hours. This is very costly compared with what people have to pay who live in well organized municipalities where there are hospital and ambulance services.
My people will be very disappointed to realize that this exemption is primarily meant to benefit the people in the metropolitan area of Sudbury rather than those people who live some distance away and to whom the cost of transportation to hospital means something. An ambulance account may be $5 or $10 at the very most but poor people living in remote areas must travel by train or plane to hospital and the heavy expense they incur is not covered by this clause.
For these reasons I feel that it will be a great surprise to the people of my riding when they realize that the amendment is meant to benefit only some of the taxpayers of the country.


William Moore Benidickson: Mr. Chairman, there was considerable discussion of this matter at the resolution stage and I thought the hon. member for Burin-Burgeo made a very important contribution to the debate at that time as has the hon. member for Nickel Belt now. I confess that when I looked at the resolution and certainly when I looked at the proposed amendment in the bill I felt, without meaning any offence to the Minister of Finance, that there was an undue Toronto complex in the design of this amendment. I see that the Prime Minister is in the house. I know that
Income Tax Act
he represents a remote and vast northern area like I do and as does the hon. member for Nickel Belt. The Prime Minister will know that in our sections of the country we have not got ambulances and that our people on occasion find themselves faced with an emergency where they have to engage the most available type of transportation. Transportation is not by ambulances such as the Minister of Finance would be familiar with in Toronto. It might very well be a taxi.
From my experience in the past I have found that taxi companies assume a great risk in transporting sick persons. There may be some chance of damage to the vehicle caused by the sickness but they always provide a car. I find that the air transport companies do the same thing. There is never any hesitation in making this type of ambulatory service available. It is always made available as soon as possible after the call is received.
I think the clause is unduly restrictive. I know that the availability of formal ambulances is increasing not by reason of the fact that there is any profit in buying an ambulance and making the service available to people in a certain community but largely by reason of the fact that funds have been made available by service clubs which realize that in small communities an ambulance service would not be commercially sound as a business venture. Service clubs have made ambulances available in such communities in the same way as they have sometimes made fire protection services available.
I am worried about the wording of this clause and I am a little worried about the experience of the Minister of Finance. I see he is discussing the matter with the Prime Minister and I think he will get some good counsel from him because he is well acquainted with some of the remote sections of northern Canada. I think we could readily provide an amendment to cover those who live in remote areas and, when they require immediate ambulatory service, are faced with an excessive charge. I know the worries of the officials of the department. They fear that people in urban areas will want to travel back and forth to a hospital by taxi and claim entitlement for a tax deduction. But in giving consideration to that element I think they have overlooked the very oppressive financial cost imposed upon people in remote areas who on occasion require this essential service. I think we could very readily amend the clause so that people who live in remote areas may claim exemption once, twice or more often in a year for the cost of what we know in cities as an ambulance but which in their case involves the
57071-3-241

Income Tax Act
use of an airplane, boat or taxi because the ambulances we see on the streets of our cities are not available to them.


Herbert Wilfred Herridge: I wish to support the remarks of the hon. member for Kenora-Rainy River and his suggestion to the minister that meaning of the word "ambulance" should be widened. At the present time it is far too restrictive. I am sure the hon. member has spoken from experience very similar to mine. My constituency is isolated and there is a lot of logging and mining. On occasion I have helped to bring out an injured man 9 or 10 miles on a pack horse. On another occasion I had to hire four men to carry an injured man a distance of 9 or 10 miles on a stretcher. On other occasions we have had to use launches over a considerable distance and in other cases logging trucks in order to transport people some 20 or 30 miles to hospital. On all these occasions there is an excessive cost. The purpose of the use of horses or individuals or vehicles is to get the man injured in the woods or mines to a hospital. There are a good number of locations in my constituency where there are no road facilities but only trails. These accidents occur in the course of timber cruising, prospecting and on some occasions trapping.
I cannot see why persons who live in urban areas should have a preference over those people who live in the backwoods. In the majority of cases they can hire a licensed ambulance. In the northern end of my constituency, injured lumbermen, injured miners, trappers or prospectors, are taken to hospital in what would be, from the point of view of this bill, quite unconventional ways. However, the expenditure in connection with that transportation is quite often treble the cost of taking a person to a hospital in a licensed ambulance over paved highways.
I do urge the minister to give some consideration to the representations made at the resolution stage, and again now, by the hon. member for Kenora-Rainy River with respect to giving those persons who live in the isolated and more or less undeveloped areas of Canada the same rights and opportunities under the law as those who live under different circumstances and who have an opportunity to use the vehicles mentioned in this bill.


William Moore Benidickson: When I made reference to the Prime Minister, I failed to mention that there is some form of free service to the sick in his province of Saskatchewan in so far as air ambulance service is concerned. However, I am sure he will be equally sympathetic to those in other provinces who are situated in a remote area and have not the advantage of a similar government

scheme. I feel this is very serious. I do not like to see in legislation anything that might in a transitory way appear to be a bit of window dressing, and ambulance service being included among the things that would be available for tax deduction in certain cases.
The hon. member for Kootenay West knows some of these vast areas as I do, and the situations are different with individual taxpayers. I have respect for the tax officials who have to examine the type of tax items that come before them. I think they have as generous a heart as any of us in this chamber. On the other hand, when a tax claim comes in they are inclined to define very rigidly what is an ambulance. This is what I fear. I think an ambulance is a vehicle that is clearly definable in large urban centres, but it certainly is not the kind of vehicle that, in many parts of my riding, would be used to bring sick persons down to the infrequent hospitals that exist in the area. I think the minister should reply to this.


Alexis Pierre Caron: I want to say a word on this subject. As this clause is written, there is no limit fixed in so far as transportation by ambulance is concerned. It may be five miles, 10 miles, 50 miles or 200 miles, and so long as the person is being transported to a hospital the cost of the ambulance is deductible for income tax purposes. Suppose a man has been hurt in the woods above Maniwaki. When he arrives at the hospital in Maniwaki it may be claimed he needs the attention of a neurologist. The nearest one is in Montreal, so they take the man to Montreal at a cost of $50 or $60. This amount will be deductible for income tax purposes, but the department will refuse to allow deduction of the cost of transportation from the more remote areas by train, by boat or by any other kind of vehicle. I think there is something which is not quite right about this clause. The department will allow the cost of transportation if the person is moved by ambulance, but if it is not an ambulance the department will not allow the amount even though it may be less than the cost of an ambulance.


William Moore Benidickson: Would it be possible for the minister to indicate whether or not in his opinion he believes the officials of the Department of National Revenue would be satisfied, provided this section is not abused by the taxpayer, that "ambulances" as defined in this section means such conveyance under emergency medical situations as have arisen, as conveyance by airplane, by boat or even by commercial vehicle?


Osias.-J. Godin: The minister may appreciate it if I relate to him the fact that "ambulance" undoubtedly does not include a taxicab. However, because of the long distances in my riding, which I mentioned earlier, it has been known on occasion that childbirth has occurred in taxicabs. Possibly this is a case where the mode of transportation became at once the ambulance and the hospital.


Mr. Denis:: It would be all right it if were made to read "by ambulance which is used for transportation".


Donald Methuen Fleming: There was a full discussion of this matter a month ago when the resolution was before the committee of ways and means. I would say this was one of the matters discussed until it was threadbare.
I remind the committee, without repeating all the things that were said on that occasion, that this is the first time in the history of federal legislation that any expenditures for transporting ill persons to hospitals have been permitted to be included within the scope of medical expenses which are deductible from income within the rules laid down by the Income Tax Act. This is the first time and I could at least, I think, ask my hon. friend from Kenora-Rainy River why he did not show, in the earlier days when he was helping to shape the policy of this department, the same concern that he is exhibiting tonight? It would have been helpful in those days to have some assistance from him in seeking to bring about measures of this kind, as some of us then on the other side of the house were endeavouring to do.
I indicated a month ago when this was under discussion that this is the first step into this field. Transportation is limited to an ambulance because it is relatively easy for officers of the department to verify. I indicated at that time in reply to questions that air ambulances, of course, were included. The definition is not confined to surface ambulance at all. This matter will be studied in the light of experience, and there is no intention on the part of the department to give the new clause a hard or rigid interpretation. The matter will be under review, and experience will guide those responsible for shaping policy in this respect.


William Moore Benidickson: I wonder if the minister would not consent to a very slight amendment to this section. Would there be anything wrong in suggesting perhaps the words "ambulator^ vehicle" instead of "ambulance", because I assure him that ambulance, as we understand it in the urban areas is not available in some of these vast areas. I would even consent if the minister had some limitations as to the frequency of use of 57071-3-241J
Income Tax Act
these vehicles for such a purpose. I was wondering about the wording, "for transportation by ambulatory vehicle to or from a public or licensed private hospital"; would the minister consent to that?


Donald Methuen Fleming: I believe that would be more restrictive than the present wording.


Osias.-J. Godin: In view of the remarks of the minister, Mr. Chairman, may I suggest that possibly this clause could be amended to satisfy all circumstances just by striking out the word "ambulance" and adding the words "proven necessary transportation to a licensed hospital." That is what is no doubt meant by the legislation, unless the minister is now prepared to admit to this house that if this government brings in any new legislation, it will only do so in a form that is half right.


Mr. Habel:: I want to ask the minister a question. What would be the situation in a case where an ambulance would be hired? For instance, suppose that the new section is in effect and a man hired an ambulance in some distant place, or rather hired an ambulance for a sick person to be taken to Toronto from a northern point. The cost of the ambulance might be anywhere from $100 to $200 or $250. Would he be allowed to deduct that amount?


Donald Methuen Fleming: Obviously a case like that would be examined very closely in order to make sure that there was not an attempt to abuse the section. If a man in urgent need of hospital attention chose to drive past seven or eight hospitals on the way and to take himself off on a long trip, I would think that the department might be disposed to question whether part of the bill would qualify within the terms of the section.


Joseph-Alphonse-Anaclet Habel: On that very point, Mr. Chairman, may I say that I have in mind a case where a man was taken to a hospital on a Sunday night. The doctor in charge of the hospital called the specialist in Toronto and was told that the patient had to be taken to Toronto by the first possible conveyance. He had to be taken by T.C.A. It cost two fares, as the patient had to be transported on a stretcher, plus the fare of a nurse. In other words, it cost less to send him by plane than it would have cost to send him by ambulance. Still the minister does not want to include transportation other than by ambulance.


Donald Methuen Fleming: This clause fixes no limit on the permissible amount. In the

Income Tax Act
case that my hon. friend was putting to me, it is a question of what is bona fide in a particular case.


Joseph-Alphonse-Anaclet Habel: What I am trying to point out is the fact that, even with a nurse, it costs less to send the person by plane than it does to send him by ambulance. Yet the minister does not want to include transportation by plane.


Donald Methuen Fleming: In such a case there has never been any right in the past to make any deduction whatever, no matter what type of vehicle a man might use.


Joseph-Alphonse-Anaclet Habel: That does not justify the situation.


William Moore Benidickson: My hon. friend referred to the past and said that he is proposing an improvement. But surely after the lengthy discussion that takes place before these amendments are advanced he would want the best possible improvement. I am thinking in terms of an injury that might take place in one of the forests of the country, as often happens, in a region that is rather remote. If the injury is serious, medical attention would be absolutely necessary under the circumstances. In advancing this proposal I do not think the minister has approached the matter with his usual open mind with a view to getting the best possible improvement in the existing statute. I wonder whether the minister has given his final word on this matter. I know he is a good draftsman himself and he has in front of him some officials who I think could improve on this amendment and give effect to what he had in mind. I think he does not want a little bit of window dressing that would apply to some of our big cities and big towns with respect to this amendment. I think he would want something that was generally applicable across the country; and I do not think this amendment is so applicable.


Alexis Pierre Caron: Has a definition been given to the department as to what an ambulance is according to this law? There is the ordinary definition of the word "ambulance", but will there be a wider definition of the word "ambulance" for the purpose of the law?


William Moore Benidickson: What is an ambulance
likely to be?


Donald Methuen Fleming: The act does not
define "ambulance". I think the hon. member was not in the house a short time ago when I said that the department would not be giving a hard interpretation to this provision. It is the sort of problem that we shall have under examination and as to which we shall
(Mr. Fleming (Eglinton).]
be guided in the future in the light of the experience we have with this clause.


Charles Edward Rea: Shall subsection
(2) carry?


William Moore Benidickson: We are discussing subsection (2) of this clause 11 of the amending bill. It deals in a general way with deductions possible on health grounds. We have opposed vigorously the restrictions that seem to relate to this item of ambulance cost. I should like to refer the committee to a discussion which we had earlier and which was originated, I think, by the hon. member for Welland when he pointed out that, particularly among the poorer people of the land, those whose income does not make it necessary for them to pay income tax, possibly the best fiscal change which could be made by the administration for them in the matter of expenditures for drugs would be the elimination of the sales tax on drugs. I am sure that the minister and those in front of him associated with this responsibility will give this matter consideration. But in the present year we are finding that several provinces are taking advantage of the hospital insurance proposition which was introduced by the previous administration and followed up by the present administration, and which has been acceded to by a number of provinces. I know that Manitoba, with which I am closely associated by reason of residence slightly to the east of the provincial boundary, from July 1 has participated in and taken advantage of the availability of the offer of the federal government hospital insurance scheme originally made possible by the previous administration.
When we discuss this item with respect to deductions from income tax I am concerned as to the position of taxpayers in that province in relation to those in other provinces such as British Columbia, Saskatchewan and Alberta with regard to either expenditures for insurance or fees for insurance vis-a-vis expenditures for hospital costs when they arise. What changes, if any, are likely to be necessary in administration with respect to hospital costs, say, in Manitoba for persons who could have had, prior to July 1, an assessment against them for per diem costs but which I understand for basic services would no longer be assessed against them by reason of the federal-provincial operation of our hospitalization plan?


Donald Methuen Fleming: We went over this subject at very great length a month ago in committee of ways and means. There is nothing in this clause which touches upon hospital costs at all. The words "hospital costs" do not appear in it. That will continue to be covered by the law as it is.


William Moore Benidickson: This is the only opportunity on which I can ask the minister questions as to his intentions with regard to the administration of this clause. Would the minister say whether or not after July, 1958, those persons in Manitoba who from that time on may abandon Blue Cross for the Manitoba medical scheme and who may decide to pay such premium as the province assesses against them so that they may be recorded as members of the scheme, will continue to be able to go to the hospital if necessary and to get from the hospital an assessment of the amount of the bill which they would have been asked to pay had they not been hospitalized under the new scheme? Would the minister answer the question?


Donald Methuen Fleming: Mr. Chairman, I dealt with that question at very great length when the matter was before the committee of ways and means a month ago. I must repeat that there is nothing in this clause which affects the question in the slightest. If my hon. friend is interested in following up the matter he will see that I dealt with it at very considerable length in the committee of ways and means.


Mr. Horner (Jasper-Edson):: I would like to take a moment of the committee's time to commend the Minister of Finance upon this whole subclause (2) and particularly on subparagraph (vi). I think he is to be commended for the wording used.
I have practised medicine in the bush country and in my particular area it is necessary to service a district covering 70 miles. I have personally made trips over such distances and ambulances have had to be sent up to outlying areas. This is going to be of tremendous benefit to those people who, until now, have had to pay out substantial sums without being able to deduct the cost from their incomes.
With respect to the arguments put forward by several members on the definition of an ambulance and as to whether they should have wheels on them or not, that is trying to define something too finely. I am very happy with the minister's explanation that the department is going to leave it open so that there might be a little room for adjustment if necessary. It is certainly a great thing for the people of my constituency; they will be greatly benefited thereby and that goes for the other paragraphs in this subclause. In these days of increased costs of drugs, artificial limbs and other services, this amendment is really going to help those people who need help most, people who are not in the high income brackets and who usually have to put out substantial amounts of money. I am sure they will be very appreciative of this relief from income tax.
Income Tax Act


Leon David Crestohl: I would like to address myself to the words appearing at the top of page 9 with respect to subclause (2), paragraph (viid), which reads as follows:
-for laboratory, radiological or other diagnostic procedures or services together with necessary interpretations, for maintaining health-
Could the minister tell us what he means by "necessary interpretations"? Would that include therapeutic treatment or massages? Does the wording "for the purposes of maintaining health" cover these items? What is the intention? Would the minister give us some interpretation of the word "interpretations"?


Donald Methuen Fleming: I should be glad to endeavour to interpret the word "interpretations". We have in mind here such things as radiological services where they involve the taking of X-rays which would necessarily include the interpretation of or the reading of the X-ray plates.


William Moore Benidickson: I have one observation to make, and I think this applies to subclause (3) but I judge, Mr. Chairman, that you are allowing a fairly wide debate on this clause and are not calling the subclauses.
I see that the application of deduction for medical expenses applies only to expenses of this nature after June 17, 1958, which was the date of the budget. The minister was more lenient with respect to charitable donations from corporations and I wonder how he justifies drawing the line at June 17, 1958 for individuals who may have had medical expenses such as those now being allowed for deduction. I think he probably should have allowed them for the taxation year, and as I say I find that with respect to charitable donations from corporations the date was set at an earlier time. How does the minister reconcile the two?


Donald Methuen Fleming: Are we on subclause (2) or subclause (3)?


William Moore Benidickson: Subclause (2); I was ahead of the game.


Osias.-J. Godin: Mr. Chairman, I would like at this time to move an amendment to clause 11, subclause (2), paragraph (vi) as follows:
That clause 11, subelause (2), paragraph (vi) be amended by striking out the words "by ambulance" therefrom.


Donald Methuen Fleming: I submit to you, Mr. Chairman, that the amendment is out of order. If the argument of the hon. member who has introduced this motion is tenable it means that the effect would be to subtract something from the revenues of the crown and to disturb to that extent the balance

Income Tax Act
of ways and means. It is on that basis that I submit the amendment is clearly out of order.


Osias.-J. Godin: I submit on the point of order that if this amendment does anything it creates revenue for the government and in no way decreases government revenue.


Charles Edward Rea: I feel that this amendment would very much widen the scope of the clause and I therefore feel it is out of order.
Shall subclause (3) carry?


Donald Methuen Fleming: On subclause (3)
I was asked a question by the hon. member for Kenora-Rainy River.
The reason for selecting the date June 17, 1958, is very obvious, Mr. Chairman, because we are introducing here a number of new elements that enter into the definition of medical expenses. In order to qualify the taxpayers must be able to produce their receipts and it would not be possible or reasonable to expect receipts to be provided prior to that date.


[Stage Direction]
Clause agreed to.
Clause 12 agreed to.
On clause 13-Dividends received by corporations.
William Moore Benidickson: Mr. Chairman, on this clause as a whole, has the administration formed any opinion as to the estimated tax forsaking involved? The explanatory not says it makes less restrictive the conditions. Is the tax loss under this clause of any consequence?


Donald Methuen Fleming: No, Mr. Chairman, this amendment is not a revenue matter.


[Stage Direction]
Clause agreed to.
Clauses 14 and 15 agreed to.
On clause 16.
Donald Methuen Fleming: Mr. Chairman, there is an amendment to clause 16. All the amendments are reproduced in yesterday's Votes and Proceedings, on pages 1 and 2 of the appendix thereto. The amendment I now put forward is to be found on page 1 and I would ask my colleague the Minister of National Health and Welfare to move this amendment.


Mr. Monteith (Perth):: I move:
That Bill No. C-39, an act to amend the Income Tax Act, be amended by striking out lines 17 and 18 on page 11 thereof and substituting therefor the following:
"subsection (3) of section 8 and section 81, deemed to have received from such corporation in the year, to the extent that the dividends so"


William Moore Benidickson: Mr. Chairman, I thought perhaps the minister would make an explanation as to the reason for the amendment.


Some hon. Members:: Why?


William Moore Benidickson: If you listen you will find out.


Donald Methuen Fleming: Mr. Chairman, the effect of this amendment is to insert the words "subsection (3) of section 8 and" in line 17 of clause 16 of the bill. Paragraph (a) in which these words are being inserted in this amendment deals with the 20 per cent dividend tax credit allowed on dividends received by individuals from Canadian corporations. As explained in the explanatory note opposite clause 16, the purpose of the clause is to delete a reference to section 8 of the act so that certain loans which are deemed to be dividends will not qualify for the 20 per cent dividend tax credit. However, this deletion of the reference to the entire section 8 does more than was intended. This amendment will reinstate a reference to subsection 3 of section 8.
Subsection 3 of section 8 deals with amounts paid by a corporation in respect of an income bond or income debenture that is deemed to have been received by a taxpayer as a dividend. Since these payments are deemed to be dividends the taxpayer receiving them has been entitled to a 20 per cent dividend tax credit in respect of them. The amendment to the bill that is now proposed will permit this to continue.


William Moore Benidickson: I am sure the hon. member for Wentworth and the hon. member for Durham, like myself, were very pleased to have that explanation, Mr. Chairman.
Clause as amended agreed to.
On clause 17.


William Moore Benidickson: On this clause, Mr. Chairman, I am a little concerned about the relationship between the reference to January 1, 1957, and August 14, 1956. Would the minister explain?


Donald Methuen Fleming: Mr. Chairman, I believe the explanatory note is quite clear on this point. The amendment to the 1956 act carries out the announcement that I made on December 6 last that corporations carrying on business in Ontario whose fiscal year ended in 1957 would not be allowed a 7 percentage points tax abatement on that portion of their profits earned before January 1, 1957. I pointed out at that time that unless this step were taken corporations whose fiscal year did not coincide with the calendar year and whose fiscal year began before and ended after January 1, 1957, would receive a windfall but for this provision.


[Stage Direction]
Clause agreed to.

On clause 18-Deduction where income from business carried on in foreign country.
Mi. Fleming (Eglinion):	Hr. Chairman,
there is an amendment to subclause 6 of clause 18. It is simply to change "1958" to "1957" in line 15 on page 13. I would ask my colleague the Minister of National Health and Welfare to move it.
Jay Waldo Monteith: I move:
That Bill No. C-39, an act to amend the Income Tax Act, be amended by striking out line 15 on page 13 thereof and substituting therefor the following:
"(6) This section is applicable to the 1957 and subsequent".


William Moore Benidickson: Mr. Chairman, could the minister explain why this is in the public interest?


Donald Methuen Fleming: Mr. Chairman, this amendment merely substitutes the year 1957 for the year 1958. This provides that the new optional formula for computing foreign tax credits made available by clause 18 will be applicable commencing in 1957 instead of 1958. This is being proposed because the shortcomings of the old formula first began to affect corporations seriously in 1957 when Ontario re-entered the corporation income tax field and Quebec first extended its corporation income tax to banks and insurance companies.


William Moore Benidickson: Mr. Chairman, I frankly do not understand the effect of this amendment. I have every confidence that the minister is advancing it in all good taste. We have not had too much notice of it and I simply want to indicate that when we are confronted on the floor of the house with these amendments some of us are not too well informed about them.
There was just a little suggestion across the house that we were delaying this bill. For a bill consisting of some 30-odd pages I think we are giving it rather expeditious passage. I am sure that some of the answers that are provided by the minister are of as much interest to hon. members opposite as they are to us and to the public, as well.
Clause as amended agreed to.
Clauses 19, 20 and 21 agreed to.
On clause 22:


William Moore Benidickson: On clause 22, Mr. Chairman, has there been much change with which I and other hon. members of the committee are not familiar with respect to the composition of the income tax appeal board? How many members are on the board? Are there any vacancies? What is the situation in this respect?
Income Tax Act


Donald Methuen Fleming: The only change that has occurred in the personnel and composition of the income tax appeal board since my hon. friend went out of office arose from the lamented death of the chairman the late Fabio Monet, Q.C.


William Moore Benidickson: Has he been replaced?


Alexis Pierre Caron: Does this change mean that they will have to deal with other kinds of taxation besides income tax?


Donald Methuen Fleming: Yes. The occasion for this is the fact that under the Estate Tax Act, when it comes into effect, appeals under its terms will go to this board. Therefore, since its functions are being enlarged to include appeals in estate tax questions, it will hereafter be known, on the adoption of this clause, as the tax appeal board.


William Moore Benidickson: But the number of persons on the board is not being increased by this bill; is that right?


Donald Methuen Fleming: Not by this bill.


[Stage Direction]
Clause agreed to.
Clauses 23 and 24 agreed to.
On clause 25.
Donald Methuen Fleming: Here again there is an amendment which reads as follows:
That Bill C-39, an act to amend the Income Tax Act, be amended by striking out line 10 on page 16 thereof and substituting therefor the following:
"of subsection (3) of section 8 and section 81"
I ask my colleague, the Solicitor General, to move this amendment.


Mr. Balcer:: I so move.


Alexis Pierre Caron: What is the amendment?


Donald Methuen Fleming: The amendments are all to be found in yesterday's Votes and Proceedings.


Alexis Pierre Caron: I have it, but it does not seem very clear to me.


Donald Methuen Fleming: This amendment is the same as that moved in connection with clause 16 on page 11. It reinstates the reference to subsection 3 of section 8 so that payments on income bonds or income debentures that are deemed to be dividends will continue to qualify for the 20 per cent dividend tax credit.


William Moore Benidickson: Will the minister explain the difference between the bill as presented to us and the amendment? What was overlooked when the bill was drawn?


Donald Methuen Fleming: Mr. Chairman, I would not say anything was overlooked. I have just given the explanation. It is the same explanation as I gave for the previous

Income Tax Act
amendment. Instead of leaving out all reference to section 8 of the act, it reinstates the reference to subsection 3 of section 8 of the act.
Clause as amended agreed to.
On clause 26-Employer's payment to pension plan.


Donald Methuen Fleming: Mr. Chairman,
again there is an amendment to clause 26, line 21, as follows:
That Bill C-39, an act to amend the Income Tax Act, be amended by striking out line 21 on page 16 thereof and substituting therefor the following:
"an amount not less than the amount of the special payment to ensure that all the"
I ask my colleague to move this amendment.


Léon Balcer: I so move.


William Moore Benidickson: I think, Mr. Chairman, we all realize the circumstances. The bill is introduced in the house; it is printed and made available to the public. Between the time of the publication of the bill and its discussion in this committee it has had consideration by the public at large and the administration decided that certain amendments were desirable. I think it should be explained.


Donald Methuen Fleming: I shall be glad to explain any of those amendments.


William Moore Benidickson: Thank you.


Donald Methuen Fleming: This particular amendment to clause 26 is introduced for greater certainty. As will be seen from the explanatory note, clause 26 deals with special payments made on the recommendation of an actuary to augment an employees' pension fund. There is the possibility that the wording, without this amendment, might be interpreted to mean that any payment into the fund of an amount less than the special payment recommended by the actuary would not qualify as a deduction. This amendment will make it clear that while the employer may not deduct more than the amount recommended by the actuary, he may nevertheless deduct payments which are for a lesser amount than that recommended by the actuary.


Herbert Wilfred Herridge: I should like to ask the minister a question on this clause. Can the minister inform the committee when this long-awaited blue book on pension plans is going to be issued to which the Department of National Revenue has given consideration for some years.


Donald Methuen Fleming: I am afraid I will have to ask my hon. friend to direct his
(Mr. Fleming (Eglinton).]
question to my colleague, the Minister of National Revenue. It comes under his department.


William Moore Benidickson: On that point, I do not know whether the hon. member for Kootenay West wishes to press his question. I realize that the regulations do become the responsibility of the Minister of National Revenue. Have we a new set of regulations yet?	-
As I recall it, the previous administration discussed for some time the desirability of a new codification of those amendments in the little blue pamphlet that was available. Is it available yet to those who are affected by it?


Donald Methuen Fleming: I think the two hon. members are discussing two different things. The blue book that the hon. member for Kootenay West was asking for is to be a sort of manual or book of instructions.


Herbert Wilfred Herridge: That is right.


Donald Methuen Fleming: The hon. member for Kenora-Rainy River is asking about regulations.


Herbert Wilfred Herridge: The book I am speaking of was conceived by the former minister of national revenue and his officials and it has been disowned as illegitimate.
Clause 26 as amended agreed to.
On clause 27.-Payments to widow, etc. of contributor.


Alexis Pierre Caron: Mr. Chairman, may we have an explanation of what subclause 2 means. I do not quite understand the section.


Donald Methuen Fleming: Mr. Chairman, the explanatory note here is quite ample; indeed, the explanatory notes which have been written on this bill are much fuller than is usually the case. I direct my hon. friend's attention to the explanatory note. He will see that the act at present provides that a portion of the proceeds of certain pension plans shall be free of tax but this exemption applies only when the pension is received by the retired employee himself. The new subsection provides that this exemption for a portion of the proceeds shall also apply where the pension continues to be paid to the widow or other dependant of the deceased employee. It is definitely a provision that widens the benefits that the act permits.


Alexis Pierre Caron: Will it affect those pensioners who are not contributing to a pension fund? For instance, will it affect judges who are receiving pensions from the government but were not contributors to a pension fund?


Donald Methuen Fleming: Mr. Chairman, the answer is that it does not apply. I am referring now to section 77, subsection 2 of the act, which reads:
This section has no application in respect of a payment received by a taxpayer out of or under a superannuation or pension fund or plan if the taxpayer made no payment into or under the fund or plan.


Alexis Pierre Caron: Section 77?


Donald Methuen Fleming: Yes, of the act.


[Stage Direction]
Clause agreed to.
Clause 28 agreed to.
On Clause 29.
Alexis Pierre Caron: What is meant by provision for deduction at the source of the tax imposed on a refund of premiums under a registered retirements savings plan? Does that refer to government plans established throughout the country?


Donald Methuen Fleming: The act provides for a 15 per cent tax on a refund of premiums under a registered retirement savings plan and this proposed new subsection simply provides for deduction of that tax at the source.


Alexis Pierre Caron: If the premiums have been
refunded?


Donald Methuen Fleming: The tax applies only where there has been a refund of the premiums.


John Whitney Pickersgill: Does this clause have reference to the change made in Mr. Harris' last budget to provide for individuals' savings plans?


Donald Methuen Fleming: Yes. The tax was
imposed in that legislation but there was no provision made for deduction at the source and that is the occasion now for the proposed amendment.


William Moore Benidickson: My hon. friend referred to the tax. I am sure he meant the tax deduction opportunity.


Donald Methuen Fleming: No, I meant the tax.


[Stage Direction]
Clause agreed to.
Clause 30 agreed to.
On clause 31-Bonus payments.
William Moore Benidickson: I wonder whether the
minister would make a statement about the views that I know that he has expressed, as well as the hon. member for Greenwood when he was chief financial critic of the Conservative party in opposition, and also the former member for Calgary South. I also refer to the 1956 convention of the Conservative party. Certain views were expressed about what should be done with respect to
Income Tax Act
depletion allowances. Would the minister comment on what progress has been made? Is the whole thing stalled by reason of the appointment of the Borden commission? When may we expect the act to be amended in the light of the views that my hon. friend and his party have always expressed?


Donald Methuen Fleming: There is nothing in this clause dealing with the subject about which my hon. friend is asking me.


Charles Edward Rea: Subclause 2.


Herbert Wilfred Herridge: I want to repeat remarks I have made on the same or similar sections in recent years. I understand that this clause and the section in the present act provide exemptions for mining development and the development of gas and oil properties and that the purpose is to promote and stimulate production. I have never been able to understand why the application of this principle is limited to mining development and the development of gas and oil production. If the principle is sound I cannot see why it should not be applied to farmers and to those who are interested in the conservation of timber and increasing Canada's forestry production. I know that the matter has certain complications but if a farmer spends his capital to clear land of timber, to drain land and bring it into production or to irrigate land to bring it into production I think that farmer should receive exactly the same consideration for increasing the production of the country as is extended to mining companies and companies developing oil and gas.
The same consideration should apply to those who are conserving timber holdings, who have to build roads for the development of those holdings and who also build roads, trails and fire guards for forest fire protection. Such expenditure is a long term expenditure which in most cases does not bring about an immediate profit or return to the operator. It is an investment in the future in the same way as the investment in clearing, draining or irrigating land. The investment in forest roads, in building roads, trails and fire guards is an investment in the conservation of timber having in view the continuous and permanent production of a forest crop.
I have mentioned this matter before on a number of occasions. I am not suggesting that we can expect to have an amendment inserted in the bill tonight but I do ask the minister to give consideration to the extension of the principle applied in this clause to farming development and forest development and conservation. These people are increasing the production of the country just as production is increased by the mining

Income Tax Act
companies and oil and gas companies that take advantage of the legislation. I should like the minister to give me his opinion of my suggestion and to tell me whether consideration is being given to a sound application of the principle under proper safeguards to the farming and forestry industries.


Donald Methuen Fleming: I have taken due note of my hon. friend's remarks, as I have of his remarks to the same effect in earlier sessions. Perhaps he will permit me to point put that section 83A of the Income Tax Act which is being amended here has nothing to do with anything except mining companies *or companies engaged in exploration for or refining of oil or gas.


Herbert Wilfred Herridge: I could not get my remarks in anywhere else.


[Stage Direction]
Clause agreed to.
Clause 32 agreed to.
On clause 33-"Cash method." of computing income.
William Moore Benidickson: What grievances does this correct? What complaints have been made about the legislation hitherto that will be avoided by the passing of this clause?


Donald Methuen Fleming: I think the explanatory note to this clause is quite clear. Taxpayers who compute their income on the cash basis may not deduct certain reserves allowed to taxpayers who compute their income on an accrual basis. It is simply carrying through the difference between the accrual basis and the cash basis.


[Stage Direction]
Clause agreed to.
On clause 34.
William Moore Benidickson: Would the minister
similarly answer my question with respect to clause 34? What grievance or inconvenience or impropriety does this correct?


Donald Methuen Fleming: I cannot do better than the explanatory note. I think it is very clear and ample.


[Stage Direction]
Clause agreed to.
On clause 35-Amalgamation defined.
William Moore Benidickson: Under clause 35 we have 6 or 7 pages of statute law that involves the amalgamation of corporations. In view of the prolixity in the statute that is going to be provided, and in view of the fact that in the past the minister has always been one who wanted to reduce the content of our Income Tax Act, I think probably a little explanation is due to the committee.


Donald Methuen Fleming: Clause 35 of the bill, Mr. Chairman, introduces new legislation with respect to amalgamations. It is desirable

that there should be clear and ample legislation governing the various features affecting income tax liability that arise when corporations amalgamate. The provisions here set forth in some detail are the clear statutory enactments that will govern these various questions that are bound to arise when corporations amalgamate.
The proposed new section 851 codifies the practice that has been followed in dealing with cases where there have been mergers of the type defined therein as amalgamations. This type of merger is possible under Ontario and Manitoba laws governing corporations and from time to time the taxation division has been required to deal with tax consequences of such amalgamations. It is desirable to state specifically the rules so that those who are contemplating an amalgamation may have more certainty in advance concerning their position.
The proposed section also provides four rules beneficial to the new corporations that are contrary to the practice previously followed. These are: first, the proposed subsection 3 permits a new corporation, under certain circumstances, to deduct drilling, exploration and development expenses incurred by its predecessors; second, any tax-paid undistributed income of a predecessor corporation at the time of amalgamation is carried forward as tax-paid undistributed income of the new corporation; third, where the predecessor corporations had undistributed income on hand at the end of 1949, but did not avail themselves of the opportunity to pay the 15 per cent tax thereon permitted by section 105, subsection 1, the new corporation will be given the right to pay the 15 per cent tax as though it had had a 1949 surplus of the same amount; fourth, where a predecessor corporation did not take advantage of section 105, subsection 2, which permits paying the 15 per cent tax on amounts matching its dividends, the new corporation will be allowed to regard those dividends as though it had paid them if it wishes to pay 15 per cent tax.


[Stage Direction]
Clause agreed to.
Clauses 36 to 38, inclusive, agreed to.
On clause 39.
William Moore Benidickson: Could the minister explain the reason for this amendment beyond the explanatory note to clause 39?


Donald Methuen Fleming: Mr. Chairman, my hon. friend is quite familiar with the provisions dealing with the tax on undistributed income on hand at the end of 1949. The new subsection permits a corporation which now has less undistributed income on hand than

it had at the end of 1949 to elect to pay the 15 per cent tax on the undistributed income now on hand.


William Moore Benidickson: Is there an amendment to this clause?


Donald Methuen Fleming: It is to subsection 4. There is an amendment here which I shall ask my colleague the Solicitor General to move.


Léon Balcer: I move that clause 39 be amended:
(a)	by adding thereto, immediately after line 28 on page 29 thereof, the following:
'(5) Paragraphs (a) and (b) of subsection (3) of section 105 of the said Act are repealed and the following substituted therefor:
"(a) if the election was made under subsection
(1)	or (la), the amount of the tax as estimated by the corporation in the election, and
(b)	if the election was made under subsection
(2)	, (2a), or (2b), the amount of the tax that the corporation elected to pay." '
(b) by striking out line 29 on page 29 thereof and substituting therefor the following:
'(6) Subsections (4) and (5) of section 105 of the said Act are'; and (c) by adding thereto, immediately after line 42 on page 29 thereof, the following:
'"(5) Where the estimated amount of tax under subsection (1) or (la) that was paid with an election was in excess of or less than the amount payable under that subsection, tax shall be deemed to have been paid under this part on an amount equal to the lesser of
(a)	100/15 of the estimated amount of tax so paid, or
(b)	the amount on which the corporation was entitled, at the time the election was made, to elect under subsection (1) or (la), as the case may be, to be assessed and to pay tax." '
'(7) Subsections (7) and (8) of section 105 of the said Act are repealed and the following substituted therefor:
Payment of deficiency.
" (7) Where an election was made under subsection (1) or (la), the corporation shall, within 30 days from the day of mailing of the notice of assessment, pay to the Receiver General of Canada an amount equal to the amount by which the tax payable exceeds the tax as estimated in the election, whether or not an objection to or an appeal from the assessment is outstanding, and shall, in addition, pay interest on that amount at 6 per cent per annum from the day of the election until the day of payment whether or not it was paid within the period of 30 days.
Time tax deemed to have been paid.
(8) Where the balance of the tax payable under subsection (1) or (la) has been paid within 30 days of the day of mailing of the notice of assessment and interest, if any, payable under subsection (7) has also been paid within that time, the whole amount of the tax payable shall be deemed to have been paid under this part on the day of the election." '


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 40.
Donald Methuen Fleming: There is an amendment to subsection 1. The amendment is to change the word "declaration" in line 6 to
Income Tax Act
the word "payment". I ask my colleague the Solicitor General to move it.


Léon Balcer: I so move.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 41.
Charles Edward Rea: Shall subclause 1 of clause 41 carry?


Alexis Pierre Caron: On division.


William Moore Benidickson: I think someone has properly said "on division". There was considerable discussion of this subject at the resolution stage, and on another aspect of it we had a division in the house today. We, in the opposition group, feel very strongly about this. I feel that the Minister of National Revenue perhaps explained very well the reason for this amendment to the Income Tax Act. On page 2136 of Hansard for July 10, 1958, the Minister of National Revenue said this:
From what I have seen in my limited practice-
I assume he was speaking as a lawyer.
-and I am sure others in English-speaking provinces have seen it too, a husband will deed a property to his wife as joint tenant. Perhaps they build a home when the husband retires and they create a joint tenancy. Then the husband dies and in the course of events it is suddenly found that there is a gift tax because the property is owned by the husband and the wife had not put any money into it. Time and time again complications have arisen because of the gift tax and gift tax assessments. It is to avoid cases such as that that this section is designed. It refers to the home of the husband and wife.
We did debate this question fairly thoroughly at the resolution stage, and in deference to the committee I do not want to repeat what I said at that time. However, I feel that there is much lacking in the section as it is designed. This is indeed a very general practice with respect to home ownership. This proposes that only when a land title transaction has taken place in the 1958 taxation year or subsequently will anyone get any benefit from this provision. Because of the very thorough review that was given to this particular proposition on July 10 and July 11 in our debate, while I felt that not very many members of the government party, although it is very large, actually spoke formally here in this chamber. I must say frankly that I had hopes that in caucus or by the utilization of other means they would have impressed upon the Minister of Finance the desire to amend this particular section. I felt ftiat the hon. member for Medicine Hat spoke in a clear way, as reported at page 2157 of Hansard, when he described the land titles holdings of this

Income Tax Act
nature with which most of us in Ontario and in western Canada are familiar. As to his part of the country he said:
We have . . . adopted the practice of joint tenancies in that part of the country and we have found that the principle of joint tenancy is becoming more and more popular.
He went on to say that with respect to joint tenancy in Alberta, should the husband die within a few years after the establishment of a joint tenancy, if the widow had not contributed or could not prove that she had contributed in a direct monetary way to the acquisition of this joint property, she would be subject to an income tax claim because of the gift tax provision. The Minister of National Revenue, who knows about these things, indicated that this matter was being raised steadily in his department. He indicated to the house that he felt that this provision would avoid all that difficulty. With the limitation that the clause applies only to joint tenancies in 1958 and onward, I suggest to the committee that we are not correcting the situation which was described by the Minister of National Revenue.
I raised the question on the resolution stage first of all as to whether our taxpayers across the land are likely to know about this situation before they die. Then I raised the question as to whether those who do know something about it are going to be obliged to go through all the legal rigmarole to transfer the existing joint titles back to the ownership of the person who could prove that he alone had contributed to the acquisition of the property and then the further rigmarole of bringing that property back into joint ownership in order to take advantage of the provision of this act.
I am disappointed that among the amendments that are presented to us tonight and as they appear in Votes and Proceedings of yesterday there is not one that relates to this particular section. I think that those members who have spoken recognize the problem. I am disappointed particularly that the private members on the government side who are familiar with this situation, such as the hon. member for Medicine Hat and I think the hon. member for Bow River, who also spoke about the growing tendency of this form of ownership of the home residence between husbands and wives, have not been able to persuade the minister to change this provision.


Charles Edward Rea: Shall clause 41
carry?


An hon. Member:: On division.
Clause agreed to on division.
Clauses 42 and 43 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the said bill be
read a third time? By leave, now?


Lionel Chevrier: Next sitting of the house.



FINANCE


Donald Methuen Fleming: that the house go into committee to consider the following resolution:
That It is expedient to introduce a measure to approve certain expenditures authorized in respect of the fiscal year ended on March 31, 1958, including those provided for by the special warrants issued by the governor general pursuant to orders of the governor in council of August 16, 1957 (P.C. 1957-1111), August 19, 1957 (P.C. 1957-1134) and February 7, 1958 (P.C. 1958-222), but not including the expenditures authorized by appropriation acts for that fiscal year; and to authorize the application of certain amounts in the accounts of the said fiscal year.
Motion agreed to and the house went into committee, Mr. Rea in the chair.


Donald Methuen Fleming: Mr. Chairman, this resolution contemplates the introduction of a bill which will be the final appropriation act for the fiscal year 1957-58. Today I tabled the report on supply for the fiscal year ended March 31, 1958. In that document we have set forth in great detail the position with respect to supply for the fiscal year ended March 31, 1958. If hon. members will have regard to that document, perhaps I can briefly use it as the basis for my remarks now.
Hon. members will see in the summary on the inside of the cover of the document that the total amount of all items which required to be voted-that is to say, excluding the items that we call the statutory items-amounted to $3,650,734,476. That is the amount left that required to be voted. It leaves out the statutory items in the estimates, the supplementary estimates and the further supplementary estimates (1) and (2), and also omits five items introduced by the former government in the spring of 1957 which were given continuing effect for the balance of the fiscal year. They are items 663, 664, 665, 666 and 667, and they are the ones which related to an increase in social security payments. By the form in which they were submitted in the supplementary estimates they were given effect, when adopted, for the full fiscal year.
Then there were two governor general's warrants to which reference was made earlier today which were passed in August, 1957,

one pertaining to assistance for the Hungarian refugees and the other to increased payments to veterans.
We also have to take into account the fact that both parliaments which sat in the fiscal year 1957-58 passed a number of interim supply measures. They are referred to in the same summary under the six appropriation acts which are enumerated.
What we have done in preparing this report on supply is therefore to take the estimates as tabled in the house, excluding statutory items, that is to say, all other estimates whether in the original estimates or the supplementary estimates or the further supplementary estimates No. 1 or the further supplementary estimates No. 2, and those are shown running through the entire document in the aggregate sum of $3,650,734,476.
In the next four columns we have shown how the supply was provided to meet each of these items. In the first of the four columns we show the amounts which were authorized in the various appropriation acts of which I have indicated there were six. The second column indicates the amount authorized by governor general's warrants with respect to each of these items. The third column lists eleven items which are of what is known as a transfer nature. These are items which represent moneys expended for which it is now necessary to provide, by transfer, for charging to another account. In the fourth column we have the total. There is a final column at the right-hand side of the page which accounts for the difference. In other words, it indicates the reductions made by the governor general in council except where indicated.
That brings me back, Mr. Chairman, to a comment upon the figures. Hon. members will see in the summary a figure of $114,065,172, which is the total of two reductions. They are composed in the first place of items 180, 184 and 399, and in the second place, of reductions effected by the governor general in council prior to the issuance of special warrants on February 7 by which supply was provided for the balance of the fiscal year to March 31, after the dissolution which occurred on February 1.
Those who sat in the last parliament will recall that reductions were made on three items in the estimates of the Minister of Justice, namely 180, 184 and 399 in the committee of supply.
As to the item aggregating $112,795,172, representing reductions effected by the governor general in council, I would like the committee to have this explanation. The final column of the report shows in its aggregate form on page 69 a figure of $109,420,117. The
Finance-Special Warrants difference between that figure and the figure of $114,065,172 represents the aggregate of the two figures-


William Moore Benidickson: Would the minister permit a question?


Donald Methuen Fleming: May I finish-the decreases of $2,728,000 which appears in the summary and $1,917,055, which also appears in the summary. If hon. members have had a little difficulty in following these figures, I think if they look at the record in the morning they will be quite clear.
What the house is asked to do is to approve the supply which was released, whether in the form of appropriations made by the house or appropriations made by governor general's warrants. In the second place, the house is asked to approve eleven transfer items aggregating $110,042,595. The house is not asked to approve the actual expenditure as such.
The public accounts committee at the 1959 session of parliament will have its full rights with respect to all expenditures made in the fiscal year 1957-58 as audited by the Auditor General as they have with respect to expenditures made in any fiscal year. There will be the full right of review of all expenditures.
This statement, with the assistance of the report on supply which I have given will, I think, give complete information as to the three governor general's warrants and as to how the money appropriated by those three warrants was applied. This gives the government an opportunity to fulfil the undertakings which were given to the house by the Prime Minister and also by myself at the opening of the present session and also by the Prime Minister during the election campaign that a full accounting would be made to the house with respect to those appropriations made by governor general's warrants and that the house would have a full opportunity of reviewing all sums released to the government by way of supply, whether by appropriation bill or by governor general's warrant.


William Moore Benidickson: Mr. Chairman, I realize we are approaching the time for adjournment, but I just want to say, as I said this morning, that this very extensive document of some 69 pages was made available to us only after the opening of today's session. In summary, it indicates something which I do not think had been previously drawn to our attention, namely that there were items of supply not yet authorized amounting to $110 million-odd. Then there is a column of the difference relating to reductions by the governor general in council, except where indicated, which-as the minister has outlined- amounts to $109 million. The previous item-

Finance-Special Warrants


Donald Methuen Fleming: Will my hon. friend permit me to interrupt? He is taking a wrong figure there. The reductions that were made aggregate the figure of $114,065,172.


William Moore Benidickson: Where is that produced in
our summary?


Donald Methuen Fleming: That is composed of two figures. One is the figure of $73.6 million which represents savings effected in budget items and the other is an amount of $40.5 million represented by savings from loans. If my hon. friend will follow the statement I made he will see how the figure of $114,065,172 which represents reductions made by the governor in council is reconciled with the total in the final column of $109,420,117.


William Moore Benidickson: I simply want to say that I quite understand that the item of $114,065,172 appears on page 2 of the summary. The figures I referred to in my remarks before I was interrupted were the final totals on page 69 of this long document that became available only this morning. With respect to supply I referred to items not yet authorized of $110,042,599 and then in the final column to the right of the document that all hon. members now have available to them, but as I said rather late, there is a figure $109 million.


Some hon. Members:: Ten o'clock.


William Moore Benidickson: I realize it is ten o'clock and I appreciate the indulgence of the committee. May I move the adjournment of the debate now simply by saying this. On page 69 of the document which reached us only this morning many figures are to be found. As everybody knows I was personally engaged in debate all day today and have not had an adequate opportunity to study the
details of the report. I feel it is adequate in its detail but I do complain now as I did this morning that its delivery was rather late.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I inquire what the business is for tomorrow and Thursday?


Howard Charles Green: Mr. Speaker, tomorrow we shall commence with two third readings, one the act to amend the Customs Tariff and the other the act to amend the Income Tax Act; then we shall continue with this debate which was under way at ten o'clock and then take supply, the departments of mines and technical surveys, fisheries and national health and welfare.
On Thursday we plan to commence with the estimates which are described as privy council. That includes the federal district commission, I believe. Hon. members should also be prepared to take citizenship and immigration, national revenue and finance.


Lionel Chevrier: Mr. Speaker, I wonder if I could get some indication from the house leader concerning what we likely would be considering on Monday?


Jay Waldo Monteith: We won't be here.


John Whitney Pickersgill: Another dissolution?


Hazen Robert Argue: That is quite possible.


Howard Charles Green: We will be taking legislation on Monday but at the moment I cannot say what particular items will be called.


[Stage Direction]
It being seven minutes after ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on August 4.

[Stage Direction]
The following answers, deposited with the Clerk of the house, are printed in the official report of debates pursuant to standing order 39:
i/anse-aux-canards wharf, gaspe county,

Mr. Fisher: 1.	How many homes have been built, or the building arranged for, under the National Housing Act, since June, 1957, in Fort William, Port Arthur, Nipigon, Beardmore, Geraldton, Longlac, Nakina, Hornepayne, Schreiber, White River, Manitouwadge, Pickle Crow, Cameron Falls, and Marathon?
2.	What is the total value of the housing for each place in this period, and what is the amount of the loans for each place approved by Central Mortgage and Housing Corporation, and provided by either Central Mortgage and Housing Corporation or private institutions?
Answer by: Hon. Howard C. Green (Minister of Public Works):
1 and 2:


N.H.A. LENDING ACTIVITY, JUNE 1957 TO JUNE 1958 INCLUSIVE
[Stage Direction]
Locality Beardmore . ..	Units	Total value	Amount of loan
Cameron Falls			
Fort William Geraldton ....	. 427	4,639,874.	4,119,493.
Hornepayne .. Longlac				
Manitouwadge	.. 1	12,000.	11,016.Marathon .... Nakina 	. 1	11,100.	10,150.Nipigon	. 2	25,000.	21,879.Pickle Crow .	Port Arthur . Schreiber ....	.. 165	2,199,386.	1,876,413.White River ..	. ...	596	$6,887,360.	$6,038,951.
Wednesday, August 20, 1958

[Stage Direction]
Fourth report of standing committee on banking and commerce.-Mr. Cathers.