1959-02-23

NATIONAL DEFENCE


Hon. Raymond O'Hurley (Minister of Defence Production):: Mr. Speaker, I have
quite a lengthy statement concerning defence production sharing with the United States. As hon. members are aware, a Canada-United States ministerial committee on joint defence has been established as the result of discussions between the Prime Minister (Mr. Diefenbaker) and the President of the United States, to consult periodically on any matters affecting the joint defence of Canada and the United States. It was envisaged that these periodic reviews would include not only military questions but also the political and economic aspects of these joint defence problems. Defence production sharing has been and will continue to be one of the subjects of concern to this committee. At the last meeting held in December, production sharing was one of the important subjects discussed.
A committee of senior officials of Canada and the United States has been established to deal with the development and production sharing aspects of our military requirements. I would like to point out that this committee includes representatives of all the departments of our government which are concerned with this highly important subject. This committee has established working groups for certain specific programs and projects. These working groups are dealing directly with prime and subcontractors, as well as with the procurement agencies of the United States government.
Within the framework of these arrangements numerous meetings have taken place with appropriate authorities of the United States government. These discussions had as a starting point the fact that the economic interdependence of the two countries in relation to defence has been accepted as a general principle by the governments concerned for some time. The Hyde Park declaration of April, 1941 and the statement of principles for economic co-operation of October, 1950, recognized that the production and resources of Canada and the United
States should be used co-operatively for defence in order to achieve the best combined results.
We are now determined to make these existing agreements effective in action. The government is taking every step open to it to ensure that Canadian manufacturers be given access to the United States defence procurement program. This has an immediate importance in relation to the Bomarc, Sage and radar programs. Working groups have been established in these areas, and frequent meetings held with the United States Air Force and prime contractors. The approach has been to identify equipment for which Canadian industry is competent to undertake production as prime contractors or as subcontractors for United States prime contractors.
Both governments are helping to establish better inter-industry contact than has existed in the past. We are also facilitating the exchange of information and personnel between United States prime contractors and potential Canadian suppliers. United States prime contractors have made visits to Canadian plants to obtain a better knowledge of Canadian capabilities. As a result, Canadian firms are already having their names placed on United States industrial and governmental tender lists. Many of our companies have already submitted technical proposals and quotations, and several contracts for engineering services, development and the manufacture of components have been placed with Canadian firms. Progress along these lines will, I am sure, become more and more evident. However, time and continuing efforts will be required to achieve our objective.
I emphasize, however, that the efforts of our government can only be directed towards the setting up of the necessary arrangements whereby Canadian industry will have equal opportunities with United States industry to participate in the production of the technical equipment which is required for defence programs of mutual interest. The real success of production sharing endeavours depends, to a large degree, upon the determination of Canadian industry vigorously to seek defence business in the United States either as prime or as subcontractors. In assuming this responsibility, Canadian industry must bear in mind that it will have to
1270	HOUSE OF
Statement on Defence Production Sharing be competitive with United States industry in terms of technical competence, delivery and price.
We must look, however, beyond immediate programs in order to work out effective arrangements for sharing in the production of future weapons related to the defence of North America. Our continuing objective is to co-ordinate the defence requirements, development, production and procurement of Canada and the United States in order to achieve the best use of our respective production resources for our common defence. The attainment of our objective will be made easier if the sharing of tasks can be initiated at the development stage. It must be recognized that in the final analysis the degree of participation by Canadian industry in the production of major weapons will be governed largely by the extent to which Canadian scientific and engineering skills are able to share in co-ordinated programs of development.
There has always been co-operation between the two countries in utilizing each other's defence production resources. Production sharing arrangements will now place greater emphasis on across the border flow of defence work. From April, 1951 to the end of 1958 Canada has placed contracts for defence equipment in the United States amounting to $590 million. The United States, on the other hand, has contracted in Canada for defence equipment totalling $540 million for the same period. In 1958 Canada placed contracts in the United States to the value of approximately $55 million, but the net value of business placed was reduced to approximately $10 million primarily as a result of the termination of the Astra and Sparrow programs, and decreases in some older contracts for aircraft equipment. In the same year the United States placed $40 million worth of contracts in Canada. These figures represent prime contracts only, and do not take into account any subcontracting which is handled by prime contractors.
Here it is true that Canada subcontracts a greater volume of work into the United States than the United States prime contractors place in Canada. Although statistics on these transactions are necessarily approximate, I believe that about an average of 20 per cent to 25 per cent of our aircraft and electronic equipment contracts are subcontracted into the United States. It is in the United States subcontract field that the greatest results can be achieved through the production sharing arrangements which we have set up in conjunction with the United States.
One of the largest contracts placed in Canada by the United States was the mutual aid purchase of CF-100 aircraft for delivery to
[Mr. O'Hurley.1

Belgium. The United States has bought 5 Caribou aircraft for evaluation purposes, and continues to buy Beaver and Otter general purpose aircraft. There are also continuing contracts being placed for R-1340 engine spares, F-86 aircraft spares and maintenance support for the United States-financed Pine-tree radar sites. Other purchases include radomes and support items for the distant early warning radar line. Not included in the foregoing figures is a recent United States contract placed in Canada covering radar sets for installation in the United States-financed Pinetree radar sites amounting to $6.5 million.
As I previously pointed out, it will take time and continuing efforts on behalf of the government and Canadian industry to make any significant headway in our recently organized production sharing arrangements. I am pleased to point out that as a result of production sharing efforts, a Canadian company has been selected for the production of wings and ailerons for the Bomarc missile. The present value of this contract is $1.7 million. Also Canadian engineers are working on the Bomarc missile for the United States prime contractor on a subcontract basis. In addition, certain other contracts covering electronic equipment have been placed in Canada. We expect as time goes on that further contracts will be placed in Canada.
As the Prime Minister has previously pointed out, the defence of North America has become a joint responsibility of both Canada and the United States, and the skills and resources of both countries must be utilized in the most economic manner.


Mr. G. J. Mcllraiih (Ottawa West):: Mr. Speaker, the house will be grateful to the minister for having made a statement on the subject of defence production, but I am sure the house is very much disappointed with the content of the statement. It was announced in the house on Friday last that the minister would be making a statement on production sharing with the United States. That announcement was contained in the Prime Minister's statement to the house that day on a very important aspect of defence.
It is not possible to comment on the minister's statement today in a detailed way, because we have not seen it; but as I followed the announcement it seemed to me that it emphasized two or three main points. First of all, the minister was very careful to point out that the companies would themselves have to go and get these orders. In other words the government had not been able to get very far in making arrangements

to protect the interests of Canadian productive capacity through sharing in the vast contracts required for the defence of this continent.
Reference was also made, and very properly so, to the fact that the ability to obtain production contracts would depend on the extent to which Canadian scientific, engineering and technical personnel had an opportunity to participate in the development programs leading up to the production stage. I can only comment with some feeling that such a statement unfortunately comes at a time when the government itself has been taking steps that cannot help but disperse Canadian scientific and technical personnel, and that there is very little hope of such personnel participating in joint development projects if scientific and technical personnel teams in this country have already been dispersed by government action.	[DOT]
The figures given of the comparative expenditures in the two countries for the last few years only tend to emphasize the extent to which production activity in this field has tended to run down. Perhaps I should say no more at this point, Mr. Speaker.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, in the context of the sweeping announcement made last Friday the statement that has now been made to the house by the Minister of Defence Production is exceedingly disappointing, and I am sure will constitute little comfort for the 14,000 people who were thrown out on the streets last Friday almost as unceremoniously as garbage is placed on the streets for collection.


Some hon. Members:: Oh, oh.


Hazen Robert Argue: We have listened to the statement of the Minister of Defence Production. There is little or nothing in it of a concrete nature. He has talked about joint committees, about working groups, about discussions that are going on. But where is the action? Where are the concrete results? They are not to be found in his statement.
The Minister of Defence Production does not talk about contracts of a sizeable nature in relation to the defence program of this continent. He talks about potential contracts. He talks about making the necessary arrangements. Then, as if to throw ice water on the possibility of Canada sharing in defence contracts with the United States in a real sense, he says that after all Canadian industry will have to compete with the Americans on a competitive basis. I think in the light of the experience we have had in the past, in the light of our knowledge of the pressure that is placed on the United
Statement on Defence Production Sharing States administration by congress, this statement is an empty one. In view of the loss to the Canadian economy occasioned by such steps as were taken last Friday, it is hollow and meaningless.
In my opinion, Mr. Speaker, this is a clear demonstration of the fact that the government has no policy, and that we are not sharing with the United States in an effective way in defence production orders. In order to illustrate how relatively insignificant the sharing to date has been, one needs only reiterate the figures given by the minister, namely that in 1958 Canada shared in prime contracts to the extent of just $40 million. This represents a very tiny proportion of the defence cost to our nation, not much more than 2 per cent of the defence cost to Canada.
The minister went on to say that we have a prime contract for the production of certain parts of the Bomarc missile, totalling $1.7 million. This, in my opinion, demonstrates to the country that the government has no policy; that this government is incapable of planning in the defence field, and that by this statement today, coupled with the statement of the Prime Minister on Friday and the lack of a firm agreement with the United States, the very sovereignty of the Canadian nation is today threatened. Our sovereignty is threatened because our government has not worked out an arrangement with the United States under which we could share in defence production in a realistic manner. I see smiles on the faces of members of the government, but I can tell them this is no smiling matter.


EXTERNAL AFFAIRS
[Stage Direction]
On the order:	Government notices of
motion:
February 20-The Secretary of State for External Affairs-The following proposed motion:-That items numbered 76 to 105, inclusive, as listed in the main estimates 1959-60, relating to the Department of External Affairs, be withdrawn from the committee of supply and referred to the standing committee on external affairs, saving always the power of the committee of supply in relation to the voting of public moneys.
Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the house.



LABOUR CONDITIONS


Hon. Paul Hellyer (Trinity):: I ask leave to move the adjournment of the house, Mr. 1272	HOUSE OF
Labour Crisis in Aircraft Industry Speaker, under standing order 26 for the purpose of discussing a definite matter of urgent public importance, namely the crisis in the aircraft industry caused by delays and confusion in air defence policy, involving mass lay-offs and threatened disintegration of this important sector of our Canadian defence production.


Mr. Speaker:: May I say that the purpose of this statement appears to me to come close to the provisions of the standing order under which leave is asked to move the adjournment, except possibly for the phraseology of the clause, "caused by delays and confusion in air defence policy." This clause is reminiscent of the first amendment on the address in reply to the speech from the throne. However, before I put the request to the house I shall be glad to hear briefly any representations as to why leave should not be granted.


Right Hon. J. G. Diefenbaker (Prime Minister):: I rose earlier, before Your Honour, for the purpose of saying this. The attitude taken by the government with reference to this motion is that if Your Honour feels it comes within the rules, the government will welcome the fullest discussion of this subject today. After all, none of us has any monopoly in our feelings for our fellow men. In that spirit I place the matter before Your Honour, firm in the belief that if the opportunity for discussion takes place it will be welcomed on the part of my colleagues and myself.


Mr. Speaker:: I am not sure whether the hon. member who is asking leave of the house would be prepared to drop the clause which reads, "caused by delays and confusion in air defence policy", which seems to me to be a subordinate clause in any event which could open the door to a wider debate than would be justified.


Paul Theodore Hellyer: I have no objection, Mr. Speaker.


Mr. Speaker:: With the request under rule 26 in the amended form, it appears to me this is a matter of urgent public importance of recent origin for which there would be no opportunity of debate until next Monday at the earliest, and therefore it appears to me to come within the rule.
I will read the request of the hon. member for Trinity again:
Mr. Speaker, I ask leave to move the adjournment of the house under standing order 26 for the purpose of discussing a definite matter of urgent public importance, namely the crisis in the aircraft industry involving mass lay-offs and threatened disintegration of this important sector of our Canadian defence production.


Has the hon. member leave of the house to proceed?


Some hon. Members:: Agreed.


Paul Theodore Hellyer: Mr. Speaker, under ordinary circumstances it would be very appropriate on this day to discuss the history, the growth and the development of the Canadian aircraft industry. It is just 50 years ago today that the first powered flight of an aircraft in the British Empire was made at Baddeck, Nova Scotia, by Hon. J. A. McCurdy in his Silver Dart. This should be a day of rejoicing. It should be a day of applause. It should be a day when we can sing our gratitude in praise of the magnificent growth and development of the industry during those 50 years.
On that day 50 years ago the sun of Canadian aviation rose in the east. Last Friday it. went down. Today we hope that what we are doing is not paying our final respects, but assisting in an early recovery. Mr. McCurdy himself, I am sure, dared not dream of the magnificent progress which has been possible in the half century since and of the far-reaching events which would take place. It is a pity that our discussions today cannot take the form of a national celebration, but rather that we should have to discuss what we believe to be a great national tragedy.
Some of us were shocked by the government's decision to cancel the Arrow program. Most of the surprise and shock was on account of the way in which it was done, with no suggestion for an alternative project to take its place. It is worth while to take a look at some of the things the Prime Minister said in his statement to the house last Friday, and I propose to do that briefly if I may. I do not intend to make a lengthy statement on defence policy, but I do think it is necessary at this time to discuss some of the contentions made by the Prime Minister in his statement and some of the inevitable consequences to the aircraft industry and to the Canadian people.
It was reassuring, first of all, to hear the Prime Minister pay tribute to the Arrow aircraft and the Iroquois engine; to hear him say that they have been a success, and that they had shown promise of fine technical performance. We believe this was a well deserved tribute to a fine team of inventors, technicians, scientists, production engineers and the whole company of men who put the aircraft together. The Prime Minister commended those who had designed the aircraft and translated the plans into reality, but then he went on to say that they had been overtaken by events; that the bomber threat had diminished, and that alternative means

of defence, presumably against bombers had been developed much earlier than had been expected.
It is difficult to understand how the threat from manned bombers could have diminished. It has, of course, been some time since those of us on this side of the house who are interested in these matters have had access to the sources which the government uses as a means of reaching its decisions, but I am sure from the information we have and from the information we can obtain from technical sources, magazines and other places, that the present inventory of Russian bombers is greater today than at any time in history. If the Prime Minister had said that it was a continuing threat, and one which remained at the present time at least unabated we might have been able to accept it, but we cannot accept the Prime Minister's statement that it is a diminishing threat unless he can give us some further details as the basis of his statement.
If the alternative means of meeting the threat to which the Prime Minister alluded is the Bomarc missile, some of us would have serious reservations about that, and we should like the Prime Minister to give us some more information about it. The Bomarc has not yet, to common knowledge, been proven, and early models have been less than satisfactory in performance. We assume that the model which the Canadian government intends to acquire is an improved version, but we should like to know what its capabilities are; we should like to know whether it is going to provide us with some semblance of security or if it is true, as some observers have suggested, that Russian bombers would be able to fly under these missiles, fly around them or perhaps, if they could jam the homing device which the missiles carry, fly safely through them. I am sure the Prime Minister has information on this subject, and we should like it to be made available to hon. members so that we would have a greater fund of knowledge on which to base our judgment.
The Prime Minister went on to say that in the middle sixties the missile would be the major threat and the long-range bomber would be relegated to a supplementary role. This is consistent with what most military observers have been telling us, but these observers have also stated that the Russians would still have an inventory of between 1,000 and 2,000 bombers capable of coming over the ice cap and presenting a threat to our national survival. We have been told repeatedly that there is a continuing requirement for manned interceptors. The Minister of National Defence himself said so on several
Labour Crisis in Aircraft Industry occasions; the supreme commander of NORAD and his deputy have also made statements to the effect that defence was needed against the manned bomber. They have gone even further and said the Arrow was required as part of the defence against the manned bomber.
Obviously, the government does not think so. In such circumstances the logical question is who is right, the experts or the government? The Prime Minister went on to say in his statement that the United States government, after full and sympathetic consideration, in consultation with the United States air force with regard to its possible use for the Arrow, had reached the conclusion that it was not economic for them to use the aircraft. Not economic, Mr. Speaker, or not politic? Perhaps our salesmen were not persuasive enough.
The statement went on to say that the CF-100 was still an effective weapon in the defence of North America against the bomber threat. The Prime Minister's statement should have been more precise. Is the CF-100 still effective against the total Russian capability as far as manned bombers are concerned? Surely the right hon. gentleman is not suggesting that? It is true it might be effective against part of the Russian inventory of bombers, but certainly it would not be effective against their recent jets. As a matter of fact the air force placed a requirement for a new version of the CF-100, to be known as the mark VI, which was to have an after-burner to increase its power and be equipped with an air to air guided missile. This was to be a stopgap between the present CF-100, now in squadron service, and the CF-105, but one of the first things the government did when it came to office one and a half years ago was to cancel this requirement.
The inconsistency of the Prime Minister's statement seemed to lie in the fact that he found it necessary to rationalize the government's decision by speaking of the very extensive cost of the Arrow. The figures he used were not figures which were common knowledge; they looked as if they had been picked from a hat. What we ask is that the Prime Minister should break down these figures in order that we may know how they have been put together and whether they do in fact represent the actual probable cost had the project been continued.
Later in his statement the Prime Minister said that defence requirements were the sole justification for defence procurement. No one, I am sure, quarrels with that thesis. Certainly in normal economic circumstances military necessity and military necessity alone should be considered. But one wonders,

Labour Crisis in Aircraft Industry when one considers that there is today more unemployment than at any time since the thirties and there is simply no absorptive capacity available to the skilled workers engaged in the aircraft industry, if it would not have been better for the government to have negotiated some of these future production sharing contracts with the United States before it cancelled this program and threw these many thousands of workers out on the street. It was the way in which it was done which in our opinion is most tragic.
The Prime Minister was very forthright in his statement. "Frankness demands", he said, "that I advise that at present there is no other work that the government can assign immediately to the companies that have been working on the Arrow and its engine". This unequivocal statement was applauded by some newspapers, and one evening paper in Toronto described it as courageous. It was not courageous but cruel. It was cruel, heartless and incredibly short-sighted.
If the government decided that the Avro Arrow was not the most important machine necessary to our defence at the present time we would be obliged to go along with that decision and it must be accepted, but the fact which cannot be accepted is that at a time when there is obviously a very urgent military requirement for some defence machinery the government should, after 18 months, simply cancel the contract overnight without giving adequate consideration as to what it should do in lieu thereof.
This lack of consideration and consultation is something we deeply deplore. We are told by the company that from last September until last Friday noon there was no effort on the part of the government to sit down with the company to decide whether or not it should proceed, whether or not it should develop some new piece of military hardware, whether or not it should produce some piece of equipment of United States design, or just what it should do. There was no effort made to sit down across a table and make plans to salvage and keep in effect the accumulated benefit of billions of dollars of expenditure and years and years of technical advance. This is an unbelievable indictment, and if it is not true we would like the Prime Minister to say so.
It is not as though the goverment has had insufficient time for consideration. It has been in office long enough to have made up its mind. Surely 18 months-or even more, 20 -is sufficient time to evaluate the military requirements of this country, to consider our place in the North Atlantic Treaty Organization, our place in NORAD, what our contribution to the total defence effort of the Atlantic
[Mr. Hellyer.l
communities should be and how best we can proceed to provide it. Certainly what we need is positive decision, and not after these intervening months a negative decision only.
Had there been consultation with the company there is an infinite variety of possibilities that could have emerged from such meetings. We would like to hear from the Prime Minister what some of the possibilities are. Surely the defence experts have given to the government some indication of the things that are available, the solutions which should be considered. An executive of the Avro complex yesterday made a statement to the press in which he indicated that the government had not bothered to consult with the company and had not sat down with the highly trained technical and skilled people there in an effort to employ their collective judgment to assist the government in this matter. He went on to cite some of the possibilities which might have been considered, and I am sure he put forward just a few of them.
First of all the government should have made some arrangement for the orderly slowing down or the orderly discharge of the workers there if it made up its mind there was no other recourse. Surely it could have considered the possibility of building some other aircraft to make available to our air division overseas. Surely it could have considered the possibility of manufacturing missiles and other defence equipment. Surely the government has been considering these questions for 18 months. Has it reached any positive decisions yet? If not, why not? This is a very serious matter indeed, and the lack of consultation is something we cannot condone.
The dislocation this decision has caused is a matter of deep and grave concern to all Canadians. It is national in scope and affects people from one end of this country to the other. It also affects industry over a very broad band of our nation. The immediate result, of course, has been a crisis which has developed as to whether or not we will be able to salvage and retain in Canada the technical personnel who have been accumulated and whose skills have been built up over the years. As early as Saturday morning there were in Toronto representatives of United States aircraft manufacturing concerns ready and waiting. They telephoned our scientific personnel offering to engage them and take them south of the border.
Some of the individual cases are tragic indeed. A number telephoned me over the week end and told of their individual circumstances. Surely these people are deserving of our consideration. I should like to place on the record just one or two instances

of the personal circumstances of people involved in this crisis. One man came out from England with his two children aged 12 and 14. He has a house on which he pays $90 a month in respect of the first mortgage and $35 in respect of the second mortgage. He has a car on which he pays $100 a month. His gas bill amounts to $22 a month, his telephone bill $5 a month and his light bill $8 a month. How can he possibly prevent personal tragedy by drawing unemployment insurance?


An hon. Member:: He will simply have to lose his car.


Paul Theodore Hellyer: An hon. gentleman has just commented that he will just lose his car.


Mr. Benidickson:: And his house.


Mr. Habel:: He will lose everything.


Paul Theodore Hellyer: He will indeed lose everything, and the hon. gentleman who first interjected made it sound a matter of no account. It is not just a matter of 300 or 400 or even 12,000 or 14,000 families who are affected. That is just the beginning. The effects have not yet spread out to the complex of subsidiary industry the probable result of which will be that another 10,000 to 20,000 families will be directly involved.
Another instance drawn to my attention concerns a chap who came from England some years ago and who has been out of work for some three weeks because of lack of seniority. He moved to Toronto from the maritimes and sold for $8,000 a house which cost him $13,500. After he was laid off he went to the bank to find out about his housing mortgage. He was referred to the bank's head office and was given until March 15 next to make a payment.
Another man told me that he did not know now which way to turn. He was practically born and raised in the aircraft industry and had lived and talked it all his life. It was the only thing he knew and understood. He is an airplane man from start to finish and now he has no place to go unless perhaps to the United States, he added. One man is in such a precarious financial position that he told me in all sincerity he must of necessity take his daughter out of high school to cut down on expenses. This is an alarming state of affairs. Another man has a son in law who recently met with a very serious accident. The son in law had his brain injured and is unable to work. This man now has as dependants his wife and daughter, his son in law and two grandchildren. He has no money. He is out of work and has no income. Where does he go from here?
These stories could be repeated time and time again, Mr. Speaker, because they are
Labour Crisis in Aircraft Industry just representative of the thousands of cases which are real and not just statistics. It reminds us of the statement the Prime Minister made not long ago, to the effect that while he was Prime Minister no person would suffer unduly because of unemployment. We seriously wish that the Prime Minister would try to live up to that very important undertaking.
One of the aspects of this situation about which we feel most strongly, Mr. Speaker, is that of our technical and scientific personnel. If I might be permitted just a moment of personal reflection, it is just about 19 years ago now when I first started out to try to learn something about the aircraft industry. At that time there was no course in aeronautical engineering in this country. There was no aircraft industry; there was no accumulation of aircraft skills, and for that reason I have followed the course of development of the industry through those years with more than casual interest. As a result perhaps I feel more keenly the present situation, because I can appreciate the almost colossal magnitude of the build-up and the improvement which have taken place in our capacity during those years. I do not think people who are not acquainted with some of the industrial and engineering aspects of the industry can appreciate as well the magnitude of this great Canadian accomplishment. It is for this reason that we urge the government immediately to consider some proposal which will salvage the situation and stop what inevitably will be a mass exodus of our most skilled and most trained people from this country.
The other night I cited the electronics industry as just an example of what will likely happen here. Last year the government cancelled the electronic requirement for this aircraft, and we saw what happened there. At once the skilled people began to leave us. I think we should commend the government on having taken some action to hold here the nucleus of the personnel under a plan which they put into effect for the winter months, but we are told now that that plan, which expires in March, has not yet been renewed. Of course it is perhaps just a temporary thing anyway.
These people cannot continue to live in a state of uncertainty. It is an awful feeling to live from week to week and month to month not knowing when your employment is going to terminate. You cannot blame young people, young scientists, for refusing to continue to live under those conditions and for making plans and accepting positions elsewhere. I saw several people over the week end who said, "This is the final blow. We have been

Labour Crisis in Aircraft Industry waiting; we have been hoping; we have been dreaming. We are Canadian through to the core; we are so proud of this achievement of ours that we could stand on the rooftops and shout, and now the whole thing is disappearing in front of our very eyes and we do not know where we go from here."
The whole electronics industry has been put in jeopardy, and just at a time when its products were beginning to make their presence felt in the markets of the world. Surely we cannot compete in world markets if we do not have the skilled technical people necessary to develop the products which are required, and surely those skills cannot be built up overnight.
The government has talked much about secondary industry. We well remember the speeches that were made about Canadian development and about the necessity of building up our secondary manufacturing. We do not want to be hewers of wood and drawers of water; we do not want to dig holes for Bomarc squadrons; we do not want to be relegated just to cutting down trees and bulldozing boulders out of the way. We want to take our part in the community of nations, and this is what the Prime Minister held out to the Canadian people.


John George Diefenbaker: Would the hon. gentleman, who is an authority on aeronautics, answer a couple of questions? The first question is, where in his estimation would markets be available for the CF-105? What explanation has he for the fact that in the United States the F-106C and the F-106D, of similar capabilities to the CF-105, had their contracts recently cancelled and production discontinued? I would like to have his opinion on that.


Paul Theodore Hellyer: Mr. Speaker, as far as the CF-105 is concerned I think there are innumerable possibilities if the government had gone after them. I am told that General-


Mr. Anderson:: Mention one.


Paul Theodore Hellyer: I am told that General Norstad has indicated an interest in having some of the CF-105's available for the Canadian air division in Europe.


Mr. Pearkes:: To whom did he indicate that?


William Anderson: That is not what C. D. Howe said.


Paul Theodore Hellyer: We are told that General
Norstad is interested. The government can tell us whether this is so or not. I heard over a week or two ago that the British were taking another look at the CF-105. Perhaps the government should have considered the possibility of trading some of the CF-105's for some British nuclear submarines. That would

have encouraged and strengthened both the mother country and Canada. I am told that had we put them into squadron production we would ultimately have been able to sell them to several of the countries of the north Atlantic alliance.


Mr. Churchill:: Who told you that?


Paul Theodore Hellyer: If that is not so let the Prime Minister tell us, but that is the informatior we have.


John George Diefenbaker: I say right now that is not so.


Paul Theodore Hellyer: Mr. Speaker, it is very difficult to tell unless you do have them in squadron service and available, because a weapon in being is so much more important than some ethereal thing on the drawing board which may be in production some years hence.


Gordon Minto Churchill: Give us your source of
information.


Paul Theodore Hellyer: As far as the other planes are concerned, I think we should stop comparing the United States F-106 with our CF-105. They are as different as a horse and buggy and a car. They were not designed to do the same job at all. They were for different military requirements. Perhaps one good reason why the United States should have cancelled their F-105 and F-106 is that they would have looked so poor beside the CF-105.
It is this aspect, Mr. Speaker, the loss of 20 years of accumulated productive capacity and potential, which is so serious. I have here an editorial from one of our independent newspapers entitled "The Beginning and the End". Someone wants to know the source. The newspaper is the Toronto Globe and Mail. I should like to read one or two paragraphs. The views expressed therein are identical with my own; therefore I am quite willing to assume responsibility for them. The editorial reads in part as follows:
And here is the irony of it. Most Canadians will recall that in the early post-war years we were not permitted to share defence production with the United States; the reason the United States gave being that we lacked the necessary know-how. So, at great trouble and cost, we acquired the know-how. Still, there was no sharing. And now, what? Now, the brilliant array of engineering and technical talent which built up this great Canadian industry will be dissipated. Now, these highly-trained men and women-the one national asset-will probably go. Where? To the United States.
This, Mr. Speaker, is a national tragedy. We are not alone on this side of the house in our view. We have some excellent support. I have here a speech prepared by the Minister of Labour for delivery later today

but marked for release anytime this afternoon. I should like to quote briefly from it, because I think we can rely on his judgment. He says:
I do not want to be dramatic. But Canada, of all countries, cannot afford to live in a world where she will not have the skill and technological knowhow to hold on to what she has got.
Truer words will never be spoken, Mr. Speaker. We agree with that statement. We want the government to show some evidence of its concern. We want the government to move and take the initiative in a positive way before it is too late to salvage the situation.
We have heard a great deal about education. I should like to repeat something I said the other night, that people coming back here from Russia have pointed out the giant strides that the Russians have taken in their educational system. More particularly, they point to the tremendous number of scientists and engineers the Russians are producing and how they are pulling ahead of us in this field. Comparisons have been drawn between our two systems, and we have been warned that we should put greater emphasis on the training of scientific personnel. For what, I ask? To export to the United States.
For generations many of Canada's brightest have been going there to seek greater opportunity after having received their education in Canada. Since the beginning of world war II the picture has changed and it has become fashionable for young Canadians to stay in their own country. Young Canadians desperately want to stay here, but they have to be able to live; and, even more important, they have to have the opportunity to create and develop. During the post-war years most young people were able to find full and satisfactory outlets for their talent and ambition in this country. Are we now going to pull the plug again?
Is this what the government means by production sharing? We have heard much of this high-sounding phrase in the past and again today. Does it mean that we are going to produce scientists and engineers and that the Americans are going to produce the equipment? Is that a fair way of production sharing?
We heard a rather lengthy statement by the Minister of Defence Production this afternoon. He did not tell us very much that we did not already know. We find that we are going to make tail fins and some wings for the Bomarcs, and we are going to get $1.7 million for that. We knew how to make tails and wings 20 years ago. What we want to make now is something far more consequential. The $1.7 million will not pay
Labour Crisis in Aircraft Industry the unemployment insurance for more than a few days for the people who have been laid oft.
So far all that has come out of the committee has been promises and pious platitudes. The statement this afternoon was positively staggering in its insignificance. There was just nothing in it at all. It reminded me of an empty cracker barrel I saw over the week end. The minister told us that time and continuing efforts will be required to achieve the desired result. That is not what we want to know. What has been going on for the last year and a half? What has the government been doing with the time it has had? Where have the ministers been when they should have been in Washington negotiating contracts and giving some thought to the future as far as our mutual defence is concerned Why was this matter not given some thought last fall when the ministers had time on their hands? The government must act at once, within the next few days, to prevent a national tragedy.
Surely the problem facing us is a great one, whether this country is to grow, develop, prosper and blossom into a great industrial giant or whether we are going to set the clock back. We not only have to talk big and speak of a great vision; we must act accordingly. Surely the vision of Canada's future is not a vision of our young scientists and engineers marching two by two to the nearest border crossing point. Canada is a land of great resources, and the greatest of these is the skill of our people. We dream of a great new country. We want to compete with the world, and to do so we must have the technological basis on which to build and expand.
National development or national disaster? That is really the choice that faces us. The government has cancelled one great Canadian project. It must present some alternative plan at once if the situation is to be saved.
Finally, Mr. Speaker, I should like to point to the fact that today a new Canadian stamp has been issued. It depicts two airplanes, one of which appears to be the CF-105 taking off into the blue yonder, and the other is the Silver Dart. There seems to be something symbolic about the fact that under the present administration there has been flown in Nova Scotia today, to celebrate the fiftieth anniversary of flight in Canada, a replica of the Silver Dart instead of one of our great Canadian aviation achievements.


Mr. Speaker:: I am sorry to interrupt the hon. member, but his time has expired.


An hon. Member:: Let him go on.


Some hon. Members:: Go ahead.

Labour Crisis in Aircraft Industry


Mr. Speaker:: Has the hon. member leave
to proceed?


Some hon. Members:: Agreed.


Paul Theodore Hellyer: I am practically finished, anyway. This stamp is a symbol of the hope of the Canadian people. If the government will take the necessary action to correct the situation before it is too late, we can take pride in this stamp issue. If it cannot, then the stamp should have been printed with the picture upside down. This complex, which has taken so many years, so much money and so much energy to develop, must not be scuttled now because of lack of application by the government.
We urge the Prime Minister to give us some assurance that our efforts today to focus attention on this problem are not in vain, that some immediate, positive, forwardlooking action will be taken to stem the flow, to stop the exodus of Canada's future from this country, and to bring about that vision of national development which he has placed before us.


George Randolph Pearkes: Mr. Speaker, I should like to assure you that I and all those who sit here and support the government regret the hardship which is imposed upon those men who are, for the time being, facing unemployment. The hon. member for Trinity (Mr. Hellyer) has pointed out to us some of the sad cases. Every effort will be made to relieve that hardship.
However, I cannot share the the dismal forebodings which have been expressed by the hon. member for Trinity. He has referred to the fact that today is the 50th anniversary of powered flight, and today a replica of the Silver Dart flew a short distance this afternoon before it met with a slight accident. Fifty years have gone by and we have advanced a very long way, but it is not the end. It is the first 50 years of powered flight, and 50 years from today we will have soared to much greater heights than ever dreamed of a few years ago. We are entering a new era; we are not closing a book. A number of years ago, I suppose, the wheelwrights and coach builders were lamenting the fact that the motor car was being introduced. Unfortunately, as one moves forward in the world hardship and suffering is imposed by those triumphs which are achieved from time to time.
I am not going to continue in that vein. I do want to express, though, my regret that there are people who are today out of work as a result of the decision the ^government

had to make. In order that there may be a proper appreciation of the reason the government had for making that decision I am going to trace briefly, with the permission of the house, the origin and development of this particular project.
We have to think of the days when we were engaged in hostilities in Korea, and had entered what was then considered to be an era of limited warfare. We were surprised that the Russians had produced their MIG-17, which demonstrated their ability to produce a turbojet aircraft. Shortly after that the knowledge leaked out that the Russians had the atomic bomb. This made it necessary for the government of the day to reassess the dangers, the threat there might be against Canada. It became very obvious to the senior officers of the Royal Canadian Air Force at that time that there would have to be a supersonic jet fighter to replace the CF-100, and that requirement would have to be met by the year 1958.
Their plans, therefore, were based on the need to get a jet fighter which would be able to engage in combat with the jet bomber which the Russians might be able to produce by that time. It was imperative that we do so, because we had no agreement with the United States. We were standing alone. The only agreement which existed at that time was that if Canada were attacked and if war broke out, the United States air force would come to our assistance. There was no plan for co-operation existing at that time; we had no over-all agreement. A study group was set up in 1952 in order to examine the requirements that Canada would have in order to be able to defend herself. A replacement for the CF-100 was considered. It was felt at that time, because we stood alone, that we should require some 9 regular squadrons and 10 auxiliary squadrons, making a total of 19 squadrons, with an estimated requirement of some 500 to 600 aircraft of the advanced type.
Now, it was realized that aircraft were costing a lot of money at that time. They were expensive. The CF-100 had been costing about three-quarters of a million each. Of course if we were going to produce some 500 or 600 of the advanced type, that would be a reasonable number for production. The government at that time authorized the sum of $30 million to go ahead with the development, in the hope that they would be able to produce an aircraft which would run about $1.5 million to $2 million per copy for a total of some 500 or 600.
A little later on, in 1955, Right Hon. C. D. Howe, speaking in this house, had this to say

about the development of this aircraft, and I quote from Hansard, page 5380, June 28, 1955:
I can say that now we have started on a program of development that gives me the shudders, a supersonic plane and a supersonic engine. I believe those weapons are certainly required as soon as they can be produced-
I miss out a line or two, and then he went on:
However, we embarked on that program and already on that program we have invested $30 million. Before we get through, it will be around $100 million. That is a program no other country has carried through successfully as yet.
This aircraft, therefore, you might almost say was born in doubt. It was realized it was going to be a very expensive project. In 1953 the development of the prototype, was authorized and it was stipulated at that time that the production of the aircraft should be in 1958. It was also confirmed in 1954 that the Russians had developed a jet bomber, and that they also had exploded a thermonuclear bomb.
By 1955, the time when Mr. Howe was speaking to the house, this program had lagged behind. Costs had been increasing, but the government approved the program in spite of the fact that it had been pointed out that the funds available, which were then some $211 million, would be insufficient to complete the development due to the increased costs of labour, raw material and the additional engineering costs. At that time the company was informed that while there were to be some 40 CF-105 airframes produced at a cost of $191 million, and 14 Iroquois engines at a cost of $70 million, it was to be understood that the program for both the airframes and the engines could be halted and abandoned at any appropriate stages if this was found to be expedient or necessary.
So even as far back as 1955 the company was informed that this was on a year to year basis. In fact about that time the government re-examined the program every six months because of the doubts which existed as to whether they were justified in expending such large sums of money. In November of that year-this is an indication of the efforts which were being made back in those days to sell this aircraft-Hon. Ralph Campney visited Washington and endeavoured to get the United States air force authorities interested in the CF-105. He received encouragement to go ahead, but received no commitment at all from the United States to purchase the aircraft.
At that time it was estimated that some $300 million would be spent for the development, and that an additional $1,544 million would be required for the equipment of some
Labour Crisis in Aircraft Industry 15 squadrons instead of 19. The government had seen that it was necessary to reduce the number of squadrons from 19 to 15 because the cost of the aircraft had gone up from the estimated $14 million to $2 million to $2,600,000 per copy. So the government expressed doubts at that time. Production was slipping, and it was fairly obvious then that the aircraft would not be ready by 1958. Therefore further modifications were made in the program.
During the period 1955 to 1956 it was learned, perhaps for the first time, that the United States were developing aircraft with somewhat similar performances. The F-100, the F-102 and subsequently the F-106 were being introduced. It is not correct to say that the F-106 is inferior to the CF-105. They do have slightly different characteristics. The United States air force officials with whom I have discussed this matter-and I have discussed it with the most senior United States air force officers-are of the opinion that the F-106 fulfils their requirements rather better than the CF-105, and the F-106 would be a great deal cheaper for them than the CF-105. Prior to about 1956 we had not been aware of the fact that the United States government were going into the production of an aircraft similar to our CF-105. So again it was emphasized that the program which was being developed on the CF-105 could be altered, or if necessary abandoned, at any time.
Early in 1957 the chiefs of staff reported that while the technical development was continuing satisfactorily, the program was again slipping in time and increasing in cost. The first flight was expected to have taken place in May of 1957. That was postponed until August 1957. In fact it took place on March 25, 1958.
Then came the change of government, and after this government had had an opportunity to review the situation they continued with the program. That was confirmed in October of that year, and it was definitely stated that it would be for one year only. The program might be reviewed at any time within that year; it might be stopped, cancelled or altered, just as the government found the requirements demanded. As I say, that was in October 1957. I can quote various statements which I myself made in this house then and subsequently which would indicate that we were continually emphasizing the fact that this development was proceeding only from stage to stage, and that it would have to be reviewed at each stage. On page 2874 of Hansard for January 4, 1958, I said:
The CF-105 is being developed as a supersonic interceptor. The start was made on this aircraft

Labour Crisis in Aircraft Industry some few years ago and this year we decided to continue for one year or more the development of this aircraft. We are not committed any further than to continue the development for another year, with the right even then of discontinuing that development should the circumstances warrant taking such a step.
Then on page 3674 of Hansard for January 23, 1958 I said:
Mr. Speaker, some years ago research work was started to develop a supersonic interceptor capable of intercepting manned bombers which might be expected in about five years' time from now-
And this was in January, 1958.
Development work has proceeded on a year to year basis. Last fall the government authorized a further year's development of that aircraft which has now become known as the CF-105.
The future of that aircraft will depend entirely on the nature of the threat. The matter is constantly under examination.
Later, on August 8, 1958, at page 3237 of Hansard, I said:
In these estimates we have allocated $175 million for the further development of this aircraft which, if it is proceeded with-and we have the right to discontinue it at any time-
I think that answers very clearly the doubt which may exist in some people's minds as to whether this company had any warning of the possibility that the development and production of the aircraft might not be proceeded with. The statement of last September, of course, made it perfectly clear. I can say that ever since I assumed this office I have been in constant touch with the officials of the company. I have seen them in London, I have seen them in Toronto, and I have seen them in my office here. Officials of the department and officers of the air force have been in continual touch with the company and have been advising the company almost daily of the progress made.


Mr. Pearson:: I wonder if the minister would permit a question? My question is: had he or any officials of his department seen the officials of the company before the announcement made last Friday, to give them some warning that this announcement was coming?


George Randolph Pearkes: The officials of the company have been in Ottawa within the last two weeks. They had seen the report in the press which had been put out, the statements by the officials of my department which were reported in the press when the estimates were tabled, clearly showing that there was enough money either to continue the development or to cancel it. There was no hesitation. There was no attempt to confuse anybody. It was clearly stated that both were possibilities.
So, after we had assumed office, it was made quite clear that we intended to continue the development of this aircraft for one more

year. During that year there were very significant changes taking place on the strategic scene. Hon. members will recall that only a little over a year ago, at the end of 1957, the first sputnik was launched, and ever since then phenomenal progress has been made in all forms of missilry in the United States, in Russia and in the United Kingdom.
About that time Mr. Khrushchev made the announcement that the manned bomber was obsolete. Now hon. members need not take his statement as full, gospel fact, but he has made a lot of statements which have proved to be remarkably correct. The indication has been that the Russians are not continuing the production of any type of bomber more advanced than that known by the code names of the Bear and the Bison, and that the numbers of Bear and Bison aircraft in the Russian inventory is extremely limited and, furthermore, that these are the only two types of Soviet bomber which could reach this continent and return again. The figure quoted by the hon. member for Trinity (Mr. Hellyer), when he said that the Russians have some 2,000 bombers, must not be taken as indicating that these 2,000 bombers could reach this continent or that more than a very small fraction of that number could ever make the return flight, even if they were not opposed.
It would therefore seem that the basis upon which this development was first begun back in 1952, namely to have an interceptor ready by 1958 to meet what in 1952, quite reasonably, was expected to be an overwhelming force of enemy bombers capable of attacking this continent, had definitely not materialized and all the information we can get from all the sources which are available to the government indicates that the threat of the manned bomber against this country is diminishing. It would therefore not seem to make sense for us to go ahead and develop an interceptor which would be ready by the end of 1961 and which could be in squadron operation by 1962, to meet a threat which would hardly exist at that time. If, in the meantime, there is a change in Russian intentions and the Russians go into the production of a new type of bomber, or even build up the numbers they now have of the Bear and Bison types, there would still be time to meet that threat.
The hon. member for Trinity asked whether an attempt had been made to sell this aircraft to the United States or to the United Kingdom. I should like to inform the hon. gentleman that I went down to Washington personally. I saw the secretary for defence, Mr. McElroy, and I did my best to interest him in this aircraft last summer. Then, when we were attending the NATO conference in Paris we did our best once again to interest the

United States in the program of the CF-105. Mr. McElroy was there on that occasion, together with Mr. Dulles and other representatives of the United States. Attending on behalf of Canada were the Secretary of State for External Affairs (Mr. Smith), the Minister of Finance (Mr. Fleming), the Minister for Defence Production (Mr. O'Hurley) and myself. We were told definitely and with finality that the United States could not include the CF-105 in its armament inventory.
I also discussed this matter with European powers. We took the matter up with the minister of defence of the United Kingdom. We have been in continuous communication with the authorities in the United Kingdom in the hope that perhaps the United Kingdom would be interested in taking over the CF-105, which would have enabled us to have continued. As recently as last week I received a telegram which confirmed again that they were not interested. They stated very definitely that they would not be able to consider the purchase of the CF-105.


Paul Theodore Hellyer: Would the minister permit a question? Would the government have gone ahead with the contract if it had been able to get a reasonable order from the United States or from the United Kingdom or some other country?


George Randolph Pearkes: The government would certainly have given most serious consideration to doing so. I am not in a position to say that they would or would not have gone ahead. It would have depended on many matters, including the size of the order and its relationship to the force of interceptors held by the United States. I merely refer to the fact that I had been to Washington personally and I had personally consulted with the minister of defence in England in order to answer the questions which were advanced by the hon. member for Trinity.
During 1958, when it was becoming obvious that neither the United States nor the United Kingdom would be interested in purchasing the CF-105, very extensive studies were carried out to see what alternatives might be adopted, how many of the CF-105 we could possibly afford to purchase and how many would be required to meet the diminishing threat.
There was some concern at that time about the range of the CF-105. We had been informed then that the ranges were 238 nautical miles flying supersonically and 347 nautical miles flying subsonically. Of course, obviously if you are going into an attack you would cruise as far as you could and only go into your supersonic speed at the last few minutes so you might say that the general operational range of the CF-105 at
Labour Crisis in Aircraft Industry that time would have been about 300 miles including some period of operating supersonically and some period of operating subsonically. That would have been the radius of action from base stations such as North Bay, St. Hubert, Bagotville and Ottawa. We were concerned about the limited range of this aircraft. We therefore concluded that the maximum number of aircraft which we would require to meet the threat would be approximately 100 operational aircraft. The figures of cost worked out to be $1,261 million as from the first of September of last year and that figure did not include the previous development costs. That seemed to be a staggering figure. Not only was that cost to be considered but we would have had to introduce-as we will have to introduce for the Bomarc or any other weapon system -the ground environment the cost of which runs into many additional millions.
After the consideration of these facts the September statement was issued. We had realized that if we were going to go into production of this aircraft the company would have to receive several months' warning so that they could get the long leads ready and be prepared to carry on with the production program overlapping the development program. October of 1958 was considered the deadline when it would be necessary to give a firm decision as to whether or not we should go into production.
The decision was announced on September 23 by the Prime Minister (Mr. Diefenbaker) when it was decided that the Astra fire control system and the Sparrow missile should be discontinued there and then because the company had suggested-and it had been suggested several times previously -that part of the great expense of this aircraft was included in the control and missile system. They had suggested they might possibly make substantial reductions in the cost of the aircraft if they had an opportunity to test out a proven fire control system and missile. This was known as the Hughes control system and the Falcon missile which had been proved in the United States. For this among other reasons permission was given to extend development for a further period in order that the company might test out and see whether these new, proven systems could be introduced into this particular aircraft and to ascertain whether material reductions in price could be made. There were other reasons as well including the international situation and the situation in the Far East which were announced by the Prime Minister at the time.
The company then came up with a new proposal in which they offered a flyaway cost at $3.75 million per copy making a total of

Labour Crisis in Aircraft Industry $345 million, with support spares and equipment amounting to $98.4 million, with missiles amounting to $42.6 million and the completion of the development of some 20 aircraft of which they expected eight would be operational amounting to another $295 million, making a grand total of $781 million for 100 aircraft.
That was a large figure and it was suggested that it would compare favourably with the CF-100. In a statement made by Mr. Crawford Gordon which appeared in the Toronto Globe and Mail he stated that this would compare with the cost of the CF-100 during production in the mid-50's. For the year 1955 the cost of production of that was $93 million whereas the estimated cost for producing the CF-105 with the cost of development, in 1959 was $160 million, and in 1960-61 was $242 million.
While I am on the question of cost perhaps hon. members would be interested in hearing exactly what has been spent on this aircraft up till now. In 1953-54, $1,067,399 was spent; in 1954-55 nearly $17 million; in 1955-56 this figure had more than doubled to $38 million; in 1956-57 the expenditures reached $65 million. In 1957-58 there was an additional expenditure of a further $115 million, and with the expenditure of $106 million in this fiscal year we have a total of actual expenditure, to the 31st January, 1959 of some $341 million dollars. Hon. members will see that the cost had been increasing each year.
The hon. member for Trinity made some reference to the Bomarc. It is difficult to give precise figures of the ranges of the Bomarc without disclosing classified information on a weapon which has been developed by the United States.


The Acting Speaker (Mr. Rea):: Order. I am sorry to interrupt the minister but his time has expired. Has the minister the unanimous consent of the house to continue?


Some hon. Members:: Agreed.


George Randolph Pearkes: I can only say that the ranges are comparable with the ranges of the CF-105. I must add that with the introduction of the Hughes-Falcon system we have been advised by the company that additional fuel tanks can be added which would give an increased range to the CF-105, with the Hughes-Falcon combination, and the additional fuel tanks, up to 354 miles supersonic and a subsonic range of 506 nautical miles.
The speed of the Bomarc is in excess of the speed of the CF-105 and the height that it can reach is higher than that which can be reached by the CF-105. The cost of the two

Bomarc stations which have been now approved, although the final location of one of those has not yet been settled, will be a total of $110.8 million, of which, according to the over-all agreement which has been reached with the United States, the United States will pay at least two-thirds.
I might add here that it is not going to be a question merely of digging holes for the Bomarc to go in, as was suggested by the hon. member. All construction work and all unit equipment will be paid for by Canada and will be bought in its entirety in Canada. This applies also to the further development of the Pinetree line, the introduction of Sage and also of the gap fillers. It is possible for an enemy bomber to get under the range of a Bomarc; it is possible for a bomber to come under the coverage of the radar and we are introducing a large number of gap fillers so as to make that impossible, they will be located to take care of the enemy bomber if it comes down so low as to avoid the arc of the major radar stations.
We have also an agreement with the United States that they will as far as possible, in a fair and reasonable way, place as many of their orders for the technical equipment, for which they are paying entirely, that is, their two-thirds of the over-all figure, with Canadian firms.
If there is to be any comparison between the manned interceptor and the Bomarc I think one can sum it up by saying that the manned interceptor would have more flexibility while the missile has a greater height and greater speed for engaging a target.
While I have indicated the extent of the cost of those two Bomarc stations as $110.8 million, to be shared on the basis of one-third to Canada and two-thirds to the United States, I think hon. members must compare that with the $781 million which Canada would have to pay if she had gone on with the CF-105. It has been felt that if we proceeded with the development of the CF-105 we should be paying a very high percentage of our defence budget into a weapon which was to meet a threat which was diminishing and which would only be a threat for a year or two after the CF-105 had gone into action.
We must take into consideration, not only the large sums of money which we have to spend on the defence of North America but also the fact that we are also in the NATO alliance and we have to keep up our commitments and other commitments in that respect. Even as far as the North American continent is concerned, we are faced with

a new menace, namely that of the oceangoing submarines which are capable of reaching our shores and of launching missile attacks from their decks. Therefore, we are carrying on with an extensive development for the protection of our coastal areas by increasing the number of destroyer escorts that we have and building an additional six of the repeat Restigouche type. The expenditure on these and the first seven Restigouche type is going to be in the neighbourhood of $350 million. We have developed the Argus aircraft which is recognized as the best marine reconnaissance submarine chaser that there is. But that faces us with a cost of $236,896,000. In addition to that, we have to consider the possibility of reequipping the air division in Europe and of re-arming the army with more modern equipment. The army has not had very much new equipment purchased for it during the past 10 years and the government announced they were going to arm the brigade overseas with the Lacrosse missiles and that again runs into a sum of $4.3 million.
We have now on order or have actually built additional air transport in order that our brigades may be able to take part in any United Nations commitments that they may be called upon to fulfil. That again is running into the large sum of $140 million. In order to meet all these requirements we have to review continually the amount of money that we can spend on air defence of this continent and also on the other commitments we have.
If we met all requirements we would be running into a budget far, far higher than the budget for which we are now providing. If we had not taken this action, if we had continued with the CF-105 we would be faced with making a complete change in our defence structure. It might have meant that we would have had to stop the building of such ships as the Restigouche and others of that type. That would throw many hundreds of men out of work from our shipyards. We might have had to cut down the strength of the army or something of that sort. You have to strike a balance.
I have tried to point out that the threat is very definitely diminishing. We are in partnership with the United States. We are playing our full part in that partnership. We are developing the warning systems right from the D.E.W. line down to the Pinetree line. We are spending large sums of money there. We have given of our air space; we have given of our territory. We are playing our full share in the mutual defence of the North American continent. The United States could not carry out the defence of their country without the
Labour Crisis in Aircraft Industry aid of Canada, without the assistance of Canadian air space, without the assistance of our warning systems, without the facilities which we can provide on the ground. We could not carry out the defence of this country if we did not work in partnership with the United States.
I mentioned at the beginning of my remarks that originally it was planned to have 500 to 600 CF-105's for the defence of Canada alone.


Paul Theodore Hellyer: Can the minister tell me if that figure is in the records because our recollection is that it was 300?


George Randolph Pearkes: The original figure in the records is between 500 and 600. The figure of 300 was given at a later date at one of the subsequent reviews. I have checked these figures very carefully. I merely mention that to give an indication of the enormous expense involved and what an utter impossibility it would be for Canada to provide for all the defence of this country. Therefore one enters into a partnership in which there should be a balanced form of defence, one partner providing certain things and the other partner providing other requirements. There should not be any attempt to try to give a small portion of every requirement there may be. Therefore I think it is perfectly reasonable that at this time we should be placing more emphasis on developing the warning systems that are of such vital importance not only to Canada but also to the United States, and also to the powers of retaliation which really are the only preventive of war today.
Therefore we can rely upon the United States which has declared that it has available a large number of interceptors and, even if we had the CF-105, would be providing interceptor defence for the greater portion of North America. We can rely upon them and provide additional facilities for them to operate, if necessary, over our country. In the meantime we do not believe that the threat is materializing. We believe that the CF-100 is capable of dealing with the bomber that the Russians can send over this country. It will be touch and go as far as combat between the CF-100 and the Bear-Bison is concerned but, as I pointed out, they have that aircraft in very limited numbers. As far as the Russian bombers described by the code name Badger are concerned, our CF-100 is quite capable of dealing with them.
I should like to emphasize one thing in closing, that we have to maintain a degree of flexibility so that we can be prepared to meet what is far more likely to be the threat in a few years time, the intercontinental missile.

Labour Crisis in Aircraft Industry


Paul Theodore Hellyer: Before the minister resumes his seat, may I ask him whether it is fair to say that the contract was cancelled primarily because of the increased costs?


George Randolph Pearkes: No, I certainly would not say that. I tried to explain all the way through my remarks that the main reasons for cancelling the CF-105 were the decreasing threat and therefore the lessening need of such an aircraft, the fact that it was taking too much of the defence dollar and that too large a proportion of our contribution toward the deterrent was being concentrated in that particular form.


Hazen Robert Argue: Mr. Speaker, I have listened with a great deal of interest to the speech just delivered by the Minister of National Defence (Mr. Pearkes). I do not think he has answered the three main questions that I believe to be in the minds of the people of Canada at this time. Those questions are: What happens to the workers who are today unemployed and out on the street? Is the government contemplating any action to provide employment for these people, highly qualified as they are in a technical sense? Has the government any plans to restore them to suitable positions in order to add to the productive capacity of the Canadian nation? I have heard of no such plan.
What is the alternative to the CF-105 for Canada's defence production industry? It is correct that the minister referred to some joint undertakings that Canada and the United States will be entering upon but I would submit that he has not answered the central question as to what happens to Canadian defence production industries.
The third question that has remained unanswered is what happens to Canadian sovereignty in the very unbalanced partnership that the government has agreed to on behalf of this country? The type of motion before the house at this time is one that I am certain any opposition party had to move if it was to carry out its responsibilities as an opposition. So it is no accident that the thought of moving the adjournment of the house to discuss the question now before us was in the minds of the C.C.F. members as it was in the minds of the Liberal members.
We came into the house with a prepared motion ready to move it if the opportunity had been ours. We would have asked leave to adjourn the house to discuss a matter of urgent public importance, namely the failure of the government to take steps to provide alternative employment for the thousands of workers in the aircraft industry before cancelling the Arrow project; the necessity of

immediate action to provide alternative employment and projects so as to prevent the addition of many thousands to the total of unemployed; to prevent the loss of technical skills that are so necessary for Canadian development; and, further, the grave threat to national sovereignty brought about by the failure of the federal government to obtain Canada's full share of defence orders for joint North American defence. That is the motion we would have moved for the consideration of the house had the opportunity arisen.
I did not have the advantage over the weekend of talking with the people in the cities of Toronto, Hamilton, Kitchener or that general area. However, it was my privilege over the weekend to go into the riding of Timiskaming and talk to a number of people in that riding. I can say to the members of this house that although northern Ontario is removed from the place of unemployment, the Avro industry, by many hundreds of miles, nevertheless the people in that area were shocked at the precipitate action of the government. They could not understand how, in a democratic society, the Prime Minister (Mr. Diefenbaker) could stand up in parliament and announce something that a few hours later would result in 14,000 Canadians losing their jobs.
We think that that is one of the aspects of this whole problem that is unforgivable. We have received telegrams from the trade unions involved. I have two in my hand to which I should like to refer. The first one was sent to me by Mr. P. Podger, business representative of the international association of machinists. It reads as follows:
The unprecedented callous action of the Diefenbaker government in cancelling the Arrow with immediate resultant loss of 13,000 plus jobs is tantamount to economic treachery. The forfeiture of Canadian sovereignty to the U.S. in our defence created by the government's decision calls for the immediate defeat of the Diefenbaker government.
I may say the people might have thought some of these things some months ago with more effect. It goes on to say:
We urge you to move motion of non-confidence immediately.
The other telegram was sent by Mr. W. Jacobs, president of the draftsmen association of Ontario. It reads:
Request you use every method available to condemn government for callous treatment of engineering and skilled tradesmen and betrayal to American interests. Government must account for failure to provide substitute work for cancelled Arrow project. Demand should be made on Washington for equitable share defence production. Failing agreement basis should only be established on our terms. If possible force government to go to people to prevent complete takeover by U.S.

That is the end of the telegram. I think the very strong wording of these telegrams, signed by responsible officials of the unions involved, shows the feeling of the Canadian people and the workers affected to the announcement that was made and the action that was taken, and particularly to the way the action was taken by this government. It is a question entirely separate and apart from whether or not Canada, in an economic sense, was able to or should have continued with the production of the CF-105. However, there is certainly condemnation of the government for making this announcement in such a manner, and putting people on the street without any consideration at all.
A statement by Crawford Gordon appeared in this morning's Globe and Mail, the first paragraph of which reads as follows:
As I indicated in my brief statement on Friday, the Prime Minister's announcement cancelling forthwith the Arrow and Iroquois programs came as a complete surprise to the company. We received no advance notice whatever of the Friday announcement itself nor did any government department seek prior consultation with the company to arrange for an orderly and gradual cease-work procedure.
It would seem to me that if the government decided to make this decision it should have been made in an orderly manner in order that the people involved in the industry may have had a better opportunity to obtain alternate employment.
What was the attitude of the government toward the development of alternate defence arrangements with the United States? It would seem to me that the government has no concrete plans, that they have not in any of their representations to the United States obtained adequate assurance that this would be a true partnership and that Canada would get its share of defence orders. The Prime Minister, in speaking in the house on Friday, had this to say, as recorded at the bottom of page 1222 of Hansard:
As for the technical equipment which is to be financed by the United States, both governments recognize the need for Canada to share in the production of this equipment. Within the principles of production sharing the United States government and the Canadian government expect that a reasonable and fair share of this work will in fact be carried out by Canadian industry. To that end a number of groups of officials representing both countries have been established to initiate the production sharing activities and to deal with the problems involved. I might add that early next week the Minister of Defence Production will make full information available to the house in this connection.
There is the statement of the Prime Minister, that within the principles of production sharing the United States government and the Canadian government expect that 66968-9-82
Labour Crisis in Aircraft Industry a reasonable and fair share of this work will in fact be carried out by Canadian industry. I say that is a statement of satisfaction by the Prime Minister; that is a statement by the Prime Minister that the partnership is working and that the United States government recognizes the principle of production sharing. This is a far cry from the attitude of the members of this government when they were on this side of the house, when they were stating in no uncertain terms that Canada's share of this production should be increased; that the government of the day should obtain greater concessions from the government of the United States.
Now we have the statement of the Prime Minister that the principles of production sharing are recognized by the United States government. This is in advance of the statement by the Minister of Defence Production (Mr. O'Hurley) which I suggest was hollow, inadequate and a great disappointment in the light of the statement that had been made by the Prime Minister last Friday. This government is satisfied, according to the record, with what I consider to be shabby treatment by the United States. The Minister of Defence Production said today that at the last meeting held in December production sharing was one of the important subjects discussed. He also said that the Hyde Park declaration of April, 1941 and the statement of principles for economic cooperation of October, 1950, recognized that the production and resources of Canada and the United States should be used co-operatively for defence in order to achieve the best combined results.
Then, he goes on in the next part of his statement to say that there has always been co-operation between the two countries in utilizing each other's defence production resources. Apparently this general satisfaction is not just general satisfaction with today's position but it is a satisfaction that goes back for a great many years, according to statements that are being made at this time.
With what does the government take such great satisfaction? Has Canada now reached a position where she obtains a large quantity of defence orders from the United States? The government is no longer in a position to point an accusing finger at the Leader of the Opposition (Mr. Pearson) and say, "Why did you not do something about it?" because the government has now been in office for 18 months. For a year and a half they have been in a position to do something about it. What have they done about it? I submit, very little.
The Minister of Defence Production in his statement this afternoon went on to say that

Labour Crisis in Aircraft Industry in 1958 Canada placed contracts in the United States to the value of approximately $55 million, but the net value of business placed was reduced to $10 million, primarily as the result of the termination of the Astra and Sparrow programs and decreases in some older contracts for aircraft equipment. In the same year, the United States placed $40 million worth of contracts in Canada. I suggest that instead of advancing this as an instance of the kind of utilization of each other's defence production resources the hon. minister talked about, this statement is a public declaration of the failure of the government to get for Canadian industry a fair proportion of defence production orders.
So I submit, in answer to the second question "What has happened to the Canadian defence industry?", the answer is obvious: the industry is in great jeopardy. A large section of the industry, apparently, if nothing else is to be done, is now going to be dismantled. Canadian technicians are being thrown on the street, with the best alternative for many of them to seek employment in a foreign country.
Mr. Speaker, this is no answer to the grave question that we are debating this afternoon. It is a question of the employment and income of Canadian workers; a question of the survival of a substantial section of Canadian industry. Yes, even more, a question of the survival, as we know it, of the basic sovereignty of the Canadian nation. In the statements of the Minister of Defence Production and the Minister of National Defence there is no compromise. In order to sweeten the statement of the Prime Minister last Friday, he made the announcement that early next week the Minister of Defence Production would make full information available to the house in this connection. I suggest that the announcement is a dud. It has fallen with a dull thud this afternoon.
How are we going to share in the production of the Bomarc missile, the production for which the CF-105 has been exchanged? We are going to make a tremendous contribution, according to the Minister of Defence Production. He says:
I am pleased to point out that as a result of production sharing efforts a Canadian company has been selected for the production of wings and ailerons for the Bomarc missile. The present value of this contract is $1.7 million.
Surely this statement by the government indicates that the United States has in fact answered a flat but emphatic "no" to the requests of this government for an adequate sharing of defence production.
What is to happen to our skilled technicians? We do not know. They are apparently going to be added to the half million

or more unemployed at present in this country. They are to be put out on the street in the winter time, when unemployment figures are the highest in the peacetime history of this country since the end of the war. The Minister of National Defence has talked to us this afternoon, but all he has given to those people is sympathy. I know they need sympathy. They need all the sympathy they can get, but they would be much happier if the hon. minister had announced a program to put them back to work in their own field.
How long have we talked in this country about the necessity of taking action to make certain we keep within our borders, so far as possible, highly trained Canadian citizens who have been educated in our universities? The government say they realize the importance of this. The Minister of Labour (Mr. Starr) realizes the importance of it. As has already been said, he is making a speech.
I do not know whether he has made it or not, but it is marked "For release p.m. Monday, February 23, 1959". Here is what he says. I wonder if he discussed this with his colleagues in the cabinet? I wonder if this has had the approval of the government? The Minister of Labour states:
I wonder if many of us realize how important it is that Canada today must have the highest level of industrial skill in the world?
Persons with the highest level of industrial skill are out on the street looking for work. They are out on the street unemployed because the Prime Minister, the leader of the Minister of Labour, has deemed that it shall be so. The Minister of Labour says:
I am not a pessimist. But I will say this. Unless we achieve a really high level of industrial skill in this country our present way of life cannot survive.
I think I might interpret that to mean that unless there is employment for the highly skilled Canadian in this society, there will be no future life for this government and for the Conservative party. The hon. minister was not short of words to repeat, emphasize and underline the same idea, he went on:
I do not want to be dramatic. But Canada, of all countries, cannot afford to live in a world where she will not have the skill and technological know-how to hold on to what she has got.
We need the political know-how in this country apparently to hold on to the skill that we have. But the Minister of Labour says that Canada cannot afford to live in a world where she will not have the skill and technological know-how to hold on to what she has got. That is the statement of the Minister of Labour, and I think that is probably the greatest indictment that will be

made of the government this afternoon. We are asked to hold on to the technical people of this country in face of the government's policy to put them on the street and force them, in many instances, to seek work in other countries.
Then what is to happen to our national sovereignty? How are we going to maintain our independence if we are to surrender the defence of this continent to the United States without insisting, as a nation, on our fair share of industrial production and our taking a full partnership in this whole matter? We in the C.C.F. party do not have the same kind of faith in the present NORAD arrangements that is held by members of other parties. When this question was being discussed in the house last year we said that in our opinion the first place to make our defence effort was through the United Nations. If it was impossible to have the kind of collective security through the United Nations that would seem to guarantee our nation the maximum amount of defence, then as a second choice we should place our partnership on a NATO basis. It should be placed on a multi-nation basis such as the North Atlantic partnership, with which Canada has co-operated for so many years. But this government said: No, although North American defence may be said to be a part of NATO, it is basically a North American show, a partnership between Canada and the United States. And so, without our European allies, we have undertaken the defence of Canada in partnership with the United States. I say that the success being made of this partnership today shows that also for North American defence we should have stayed within the general framework of NATO and not have taken on ourselves the responsibility for North Atlantic defence on the basis which has now been adopted.
This government is not standing up to the United States. This government has said it is satisfied with the principles of co-operation that have been formulated today. Yet on the basis of what has been achieved to date we receive only an insignificant part of United States defence orders. This government, which has in the past defended the cause of national sovereignty, and claimed it would maintain full employment in our country, has made an announcement which will have the effect of increasing unemployment; an announcement which shows, also, that we are not maintaining our sovereignty in this partnership; an announcement which has led to a front page editorial in the Globe and Mail declaring that the government and the cabinet is fraught with internal weaknesses. The Globe and Mail, a great supporter of this government, has said that not only 66968-9-82J
Labour Crisis in Aircraft Industry has the action taken so far been evidence of incompetence as far as defence is concerned but-going even further-that it reveals a major and widely spread internal weakness of the government; a failure not just in one but in several of its departments to look and plan ahead. The newspaper says, further:
This weakness has been apparent since the government assumed office 20 months ago, but never, in that ime, has it been so dramatically disclosed.
What is the main headline in the Globe and Mail? The headline reads: "Frost to Call 'Best Brains' to Save Avro Plant, Jobs." The premier of the province of Ontario is endeavouring to step into the situation to rescue the Canadian economy from the effects of the tragic mistakes and blunders made by the federal Conservative cabinet. This is an indication of how high in the esteem of Premier Frost is held the defence policy of this government.
I make a plea to the government, in spite of the evidence of its weakness and indecision, in spite of the great and mounting evidence that in the United States Canada is being given the brush-off, that it should say to the United States in very definite terms: either Canada is given a fair share of defence orders; either we are taken in as a full partner in this defence arrangement or the partnership is off, if this kind of shabby treatment is given to our country.


Gordon Minto Churchill: Then what do we do?


Hazen Robert Argue: You did not have to infer from that question that you are getting this kind of shabby treatment. Apparently that is just the inference in that statement. I say it is shabby treatment, and if the Minister of Trade and Commerce (Mr. Churchill) wants to admit that Canada is being kicked around, let him stand up and admit it. I am saying that from the standpoint of the interest of Canada and from the interest of most Canadians our nation is not a full partner in this arrangement, as has been stated by the Minister of National Defence today, and that along the lines of the statements made by the Prime Minister so often in the past. We say that Canada should speak up to Washington and be firm in making her legitimate requests instead of making to the Canadian people these statements which add up to an abject surrender to the United States. The evidence is contained in the figures given us by the Minister of Defence Production today.


George Randolph Pearkes: Nonsense.


Mr. Green:: May I ask a question? Does the hon. member think the contract should have been continued?
1288	HOUSE OF
Labour Crisis in Aircraft Industry


Hazen Robert Argue: I say to the Minister of Public Works (Mr. Green) that the government should have continued the contract in so far as it was necessary and in those aspects necessary to provide employment for the people involved, and if in the opinion of the military experts advising the government it became necessary to discontinue this project it should have been done, in the words of the president of the company, in an orderly fashion.


Lester Bowles Pearson: Mr. Speaker, as has already been pointed out in this debate, this is the fiftieth anniversary of the birth of the Canadian aviation industry and we must all hope in this house that this is not the first day of its decline and disappearance. I think the subject which has been brought up by us justified the adjournment of the house for its discussion. The motion is related to the aviation industry in its terms but the Minister of National Defence (Mr. Pearkes), quite properly I think, had to discuss the motion, which concerns specifically the aviation industry and what is happening to it because of the action taken last Friday, in terms of air defence policy. In doing so he gave us more information on this matter than we have received since he became Minister of National Defence, and it is unfortunate that the kind of information we got this afternoon- whether we agreed with what he said or not -should have come only after the decision had been taken to cancel this contract.
When this statement was made by the Prime Minister (Mr. Diefenbaker) last Friday and when we were told that the long awaited statement by the Minister of Defence Production (Mr. O'Hurley) would be made to us today, I think most of us felt that the statement on defence production and its integration with the United States program would have to explain at least the decision taken on Friday to cancel the Arrow contract. However, as the leader of the C.C.F. group has pointed out, it certainly gave no such explanation or no such background as would help us to understand why this decision should have been taken so suddenly. What we are all asking ourselves now is: where do we go from here in this matter so important to our defence, so important to the industrial economy of this country and so important in the light of our relations with the United States. It has been our major indictment of the government since the day this session began that it was guilty of fumbling, confusion and delay in its policies, and guilty of failure to plan ahead. There could surely not be any better example of this than the situation which now confronts us.


Hon. gentlemen opposite have been pleased from time to time in recent weeks to jeer at us in the official opposition because when the occasion seemed to require it we have spoken in favour and voted in favour of economic planning. There never was a time when economic planning was more justified and more absent than in connection with this particular business we are discussing today.
The minister gave us in some detail the background of this situation fortified with all the records that he has at his disposal and I have no quarrel with what he said in that regard. I feel that he put the background quite fairly in so far as I know anything about it, at least the background up to June of 1957, which is the only background about which I have any information. He pointed out quite rightly that the CF-105 was planned and developed as a result of a government decision at that time to have it take the place of the CF-100 in the light of conditions regarding defence as they were at that time.
I have been reading my back Hansards for those years and this matter has come up more than once in the house in the defence estimates of those years 1955, 1956 and 1957. There was an opportunity then for the opposition of that day to discuss and criticize this program and to ask questions about it, an opportunity of which they did not take any advantage at that time.


Gordon Minto Churchill: That is not right as I shall demonstrate later today in my remarks, if you wish. I have been reading Hansard, too.


Lester Bowles Pearson: I read the statements of the Prime Minister and of the Minister of National Defence who I thought would be the authorized critics in the opposition in regard to national defence at that time. Let me make it clear that I am not taking exception to what the minister said today about that background. It may very well be that conditions changed during the course of a year and a half or two years requiring some change in our defence policy but this government has been in office and in power for some 20 months now and in the light of some of the things the minister said this afternoon about the capacity or lack of capacity of this particular Arrow aircraft, and especially its radial action, I am amazed that if the government felt that way about it, it waited until February of 1959 to take this action.
The minister pointed out that during all these months it had been made quite clear to parliament and the people that the decisions taken from month to month-I believe they were reviewed every six months-were all tentative and were known by parliament, the people of Canada and the company to be

tentative, but there were statements placed on the record at that time which gave a rather different impression from that the minister created in his statement this afternoon.
The minister will remember-and I have already put this on Hansard-that in the committee on estimates which met last summer and which was privileged to have a visit from the minister, he said, as recorded at page 325 of the minutes of the proceedings of that committee of July 4, 1958:
For several years at least after the introduction of the ICBM the manned bomber will be an effective means of delivering attack with the degree of accuracy required.
At the same meeting he later went on to say:
There are important factors necessitating the use of manned interceptors in the air defence system for many years; indeed, as far as we can see into the future.
And later:
The supersonic manned interceptor is the development of a proven weapon, whereas the long range surface-to-air missile is as yet untried.
Those were statements made last summer. Then the Prime Minister in September made the statement to which the minister already referred this afternoon which was understood to alter completely the picture that the minister had painted to the committee and yet, though as the minister said this afternoon that should have been taken by the company as the end of the CF-105, the final decision was put off. In the words of the statement itself, it was put off "because there was danger in the Far East." There was danger in the Far East last September and there is danger today in both western Europe and the Middle East. If the international situation was a valid reason for not intefering with this project in September of 1958 it is an equally if indeed not a more valid reason for not interfering with it some months later in February of 1959.
The minister will remember the words he used in a speech delivered at Chilliwack in October in which he pointed out that the CF-105 was finished. I believe the words he used were, "it is obsolete before it has completed its development." Perhaps at that time the company may have had some reason to think that the project was about to be ended but in November there was a statement made by the former chief of the Canadian air staff, now the deputy director of NORAD, which again took the other view. The CF-105 in his view was an essential weapon in our armoury for defence. Certainly that statement gave the impression that perhaps reconsideration was being given to this matter by the government.
Labour Crisis in Aircraft Industry
The Minister of National Defence in the press conference he held on that very day certainly seemed to agree with the statement of Air Marshal Slemon. In contrast to the statement he made a month earlier in British Columbia the minister on November 25 in a press conference said that the R.C.A.F. would require a manned interceptor for some years to come. He is also reported in the press as having said:
What we decided last September was not to produce the Arrow under the conditions that surrounded Arrow production at that time. Let the makers re-examine the cost and then we will know where we are going.
I gathered from the minister's remarks this afternoon that the makers did re-examine the costs. I asked the minister whether the results of that re-examination were seriously considered by the government in the presence of those who made them and whether there was that kind of discussion between the government and the company which surely should have been held before any final decision was taken. I am informed-and I asked a question related to this of the minister this afternoon-that the last occasion on which Mr. Crawford Gordon of this company saw the Prime Minister was on September 16, 1958. At that time Mr. Gordon gave the Prime Minister a brief in which he warned the Prime Minister about the consequences of the termination of the contract in terms of jobs and unemployment and that he also advanced at that time a number of suggestions. One of those suggestions was that the government and the company set up a joint committee to explore the possibilities of what might be done. I ask the government whether any steps were taken to that end.
This afternoon I asked the Minister of National Defence whether the government had even discussed this termination with officials of the company before the statement of last Friday was made and all the minister was able to say in reply was that the officials of the company and of the government were going back and forth and were in contact with each other. With great respect I submit that did not answer my question.
In any event, surely this was an uncertain attitude on the part of the government. To say the least, it was uncertain because the company had some reason to believe that perhaps the government was changing its mind; that no final and irrevocable action had been taken, because if that had been done surely the company would not have been expected to learn of that decision from the columns of the press or from the radio, which we are told is what happened.
In regard to this change of atmosphere in November, arising out of statements that

Labour Crisis in Aircraft Industry had been made, there was a paragraph in the Ottawa Citizen of November 13 which I think fairly reflects the general situation. That paragraph was under the by-line of Mr. Don Brown, who had been doing a series of articles on this matter. He had been very well briefed and he said:
There is a growing feeling in the R.C.A.F. and in the aviation industry that (the government) will take another look at the situation and reinstate a production program of manned aircraft to carry the R.C.A.F. through the transition period from the manned to the guided missile.
Then we know what happened. Without warning, without discussion with the industry, without any opportunity being given to discuss these matters in parliament, rejecting the request that we had made in the opposition for a complete and searching inquiry into these defence matters, indeed, without making any reference to these requests which had been made on this side on more than one occasion, the Prime Minister issued his bleak and negative statement of last Friday, a statement which the company learned of from the columns of the press. That, Mr. Speaker, is our major indictment of the government in regard to this matter. There were no discussions, no planning, no alternative except in words in a statement, and certainly the statement of the Minister of Defence Production has provided no alternative of any kind today. The sudden, irrevocable-or perhaps it is not irrevocable, perhaps it is not too late yet-almost brutal decision which put 15,000 men out of work in a few hours was made because, said the Prime Minister, "This project was overtaken by events".
I ask the Prime Minister, did he and his government try to direct, to manage, to cushion the impact of those events so that if this decision had to be made it could have been made in a more efficient and in a better way than it was made by this sudden statement last Friday? The hon. member for Trinity (Mr. Hellyer) has already emphasized this. Could the members of the government not have got together to see if something could not have been worked out so that there would not have been this sudden dislocation in this vital defence industry?
What were the reasons given in the Prime Minister's statement as to why this had to be done, reasons which were in some respects repeated by the Minister of National Defence this afternoon? The Prime Minister said, as reported at page 1221 of Hansard:
Thus the threat against which the CF-105 could be effective has not proved to be as serious as was forecast.
The Minister of National Defence underlined and emphasized this reassuring observation this afternoon, but he did not give us

much evidence except that Mr. Khrushchev had said the manned bomber is not as dangerous as it was. I do not believe the Minister of National Defence is so naive that he is going to base the defence policy of our country on statements by Mr. Khrushchev. The Prime Minister also said, and I am quoting again from his statement of last Friday:
During 1959 and 1960 a relatively small number of modern bombers constitutes the main airborne threat.
The Minister of National Defence repeated these reassuring words this afternoon; but I would like to know the evidence for that because while this undoubtedly may be true- and I know there is much information that the minister cannot possibly give the house and we are not asking for it-I also have read all the proceedings of the hearings of the congressional committees on defence, both in the senate and in the house of representatives, dealing with this question, and some of the senior serving officers of the United States armed forces do not have that kind of reassuring view of the offence capabilities of the modern soviet bomber.
Then the Prime Minister went on in the statement to say:
It is considered that the defence system of North America is adequate to meet this threat.
That is, the threat of the bomber, not, of course, of the missile. Perhaps we will be told in plain terms what is meant by the statement that the defence system of North America is adequate to meet this threat.
I should like to quote back, if I had the time, some observations that the minister made in the estimates committee in regard to the nature of this threat and in the inevitability of some bombers getting through. The minister said this afternoon-and I am paraphrasing what he said; I hope I will not do him an injustice and if I do, I am sure he will interrupt me-if the Russians, however, change their plans and their production plans in regard to jet bombers and if they should manufacture new ones, or if they add to the Bisons and Bears which they now have, then, of course, we can alter our plans, too. No doubt by "we" he meant North America. If something is not done, Mr. Speaker, it will be too late to alter any plans in so far as the CF-105 is concerned.
Now from these statements surely we are entitled to draw the conclusion that this decision, when it was made last Friday-now, I am not talking about the way in which it was made-must have been based, as the minister himself said at the very end of his statement, on strategic considerations as well as on financial considerations. We would

like to know, because it is of vital importance in regard to this, when will the major threat be nuclear weapons, missiles rather than bombers?


George Randolph Pearkes: I can answer that right now. The best military advice we receive is that they will be a major threat by mid-1960.


Lester Bowles Pearson: The minister says the major threat will be by mid-1960 and we are in 1959 now. That is a year and two or three months from now. The major threat will be missiles and bombers would then presumably be a minor threat. But in his statement the Prime Minister said that the major threat will change to missiles by the middle 1960's. On Friday last the Prime Minister said:
It is considered that the defence system of North America is adequate to meet this threat.
That is the bomber threat as it is now. I continue:
Potential aggressors now seem more likely to put their effort into missile development than into increasing their bomber force. By the middle of 1962 the threat from the intercontinental ballistic missile will undoubtedly be greatly enhanced in numbers, size and accuracy, and the ICBM threat may be supplemented by submarine-launched missiles. By the middle sixties-
Not 1960 but by the middle sixties, from 1965 on.
-the missile seems likely to be the major threat and the long range bomber relegated to supplementing the major attack by these missiles.
That, Mr. Speaker, is a very important discrepancy between the Minister of National Defence and the Prime Minister in the analysis of this vital defence picture. Indeed, over the air on television last Friday the Prime Minister said that by the time the Arrow would be available the missile would be the major threat and because of that the Arrow would be-these were the words he used-"ineffectual and inoperative." If the Prime Minister was right Friday night and if the Arrow would have been available by 1961, then the Prime Minister could not have been right in this formal statement when he said that the missile would only be the major threat in the middle sixties.


Mr. Fulton:: He did not say "only".


George Randolph Pearkes: He said it would be the major threat in the middle sixties.


Edmund Davie Fulton: But he did not say "only" in the middle sixties.


Lester Bowles Pearson: The Minister of National
Defence has said that it will be the major threat 15 months from now.


George Randolph Pearkes: It will be and it will continue to be the major threat for many years to come.
Labour Crisis in Aircraft Industry


Lester Bowles Pearson: All right. The words of the Prime Minister and the Minister of National Defence are on the record and they will speak for themselves. But surely they do underline and emphasize what we are trying to point out here, that there has been confusion, uncertainty and fumbling not only in respect of the decision taken but the reasons for the decision. This is far too important a matter to have that kind of uncertainty.
Now, Mr. Speaker, what is to take the place of the CF-105, the Arrow, in defence against bombers which are now the major threat and will shortly be at least a supplementary or minor threat? In his statement last Friday the Prime Minister said, as found on page 1222 of Hansard:
The development of interceptor aircraft that is now proceeding in the United States and abroad is on different types.
"Different types". Presumably that would seem to explain at least in part why the CF-105 contract was terminated. I wonder whether we can get an answer to the question, what are these different types and are they being considered as alternatives to the CF-105? What new types of manned interceptors can be in the minds of the government as alternatives to the CF-105 and as alternatives to the CF-100 which is now our main defence in the field of manned interceptors against hostile bombers?
The Prime Minister said in his statement and the Minister of National Defence repeated it this afternoon that the CF-100 is still an effective weapon in the defence of North America and that presumably it can do the job so far as hostile jet bombers are concerned. If that is the case, why is it then that we are not manufacturing any more CF-lOO's? What happens when we run out of CF-lOO's? They are effective to do the job now and no provision is being made for a manned interceptor to take the place of the CF-100. But the minister was not quite as optimistic and encouraging about the effectiveness of the CF-100 when he spoke to the committee on July 6 last. As found on page 337 of the committee proceedings he is reported as saying with regard to this plane:
In a few years' time it may become obsolete, but at the present time . . . the CF-100 is capable of meeting and engaging the majority of the bombers which Russia might have available to attack this country.
Not capable of shooting down Russian bombers but capable of engaging the majority of Russian bombers which might attack this country. That does not give you the impression that the CF-100 in its present form is capable of dealing with the most

Labour Crisis in Aircraft Industry modern soviet bomber threat. On the same page the minister went on to say:
Perhaps the most efficient ones-
That is, hostile bombers.
-which the Russians will have in the very near future could not be engaged by the CF-100 in its present form; but if we can add certain other equipment to the CF-100 . . . then I believe the CF-100 will be able to engage effectively the majority of the Russian bombers.
A defence interceptor that can only engage the majority of enemy bombers surely is not one which we can rely for our defence in this country at this time. Yet we have no information as to an alternative or substitute for the CF-100. All we were told in the statement last Friday was that the Minister and his officials were giving further study to the matter. In February, 1959 they are giving further study to what will take the place of the CF-100, and it is not going to be the CF-105. If they have been engaged in these further studies, and they must have been for quite a long time, I ask the minister why these studies were not concluded before such an important decision was taken, before such an important change was announced to end the Arrow and perhaps disrupt an important section of the air industry. I ask him also, or someone else who will reply for the government, do these studies contemplate the purchase of aircraft from the United States or from the United Kingdom to replace the CF-100 or will they perhaps make possible the manufacture of another aircraft in Canada under licence? Could this perhaps have been done by A. V. Roe after cancellation of the CF-105? While these studies are taking place, what is going to happen to the aircraft industry?
This afternoon the minister gave us a good deal of information about the CF-105 some of which, I confess, was quite new and discouraging to me. He gave us a good deal of information also as to the amount of money that had been spent on the CF-105. He gave us estimates of the cost per plane, estimates which seem to have varied steadily from the first time the CF-105 was mentioned. I can understand that up to a point because as the nature of the bomber threat increased from 1953 on and as we learned more and more about the increased capability of Russian jet bombers, naturally there had to be changes made in the planning and development of a manned interceptor to meet these bombers.
But I have not yet been able to get clear in my own mind why there should be such a discrepancy between the cost per plane as given by the Minister of National Defence, let alone that given by the company, and the amount given by the Prime Minister in his
[Mr. Pearson.1
statement last Friday, which was $12 J million per plane to be reduced to $8J million per plane if certain steps were taken. Before the committee on July 5 last year, as found on page 338 of the committee proceedings, the minister agreed that an estimate of $4J million for each plane for a total of 100 was a reasonably approximate figure. Perhaps the minister will remember that. How has that figure gone up to $8J million or $12J million in the Prime Minister's statement?
The minister said also that the figure of $4.5 million of last July would be lower if more than 100 were ordered, and the company has said it would be much lower. Also on this subject of cost, on page 343 of the committee record the minister said he agreed that the Orenda Iroquois engine costs considerably less than inferior equipment built elsewhere. Of course, some hon. members will recall that an official estimate of cost was put on Hansard last year by the Secretary of State (Mr. Courtemanche) when he gave the figure for pre-production costs of $6.1 million.
Now, the CF-105 is not to fill this gap. The CF-100 is, in my view, not effective to fill this need. It may be at the present time, but it is not going to be effective much longer. If it were effective, we would not have stopped producing it. What then, apart from the study that has been given the matter, alternative can there be? Of course, it is the Bomarc, not perhaps as an alternative but as a supplement to the CF-100. The Minister of National Defence, speaking before the committee again last July, stated that the Bomarc will not replace the manned interceptor. It is supplementary to the manned interceptor and he said that was his firm conviction.
However, this particular missile which is to be supplementary to and not replace the manned interceptor may be out of date before it becomes operational in the R.C.A.F. It may be an obsolete missile before the CF-105 could ever become obsolete as a manned interceptor. Indeed, in the Ottawa Journal today there is a statement by the Canadian Press to the effect that the defence department is already thinking of the possible replacement of the Bomarc anti-aircraft missile, and this before we have got it.
Are we then, Mr. Speaker, running the risk of adding to our armoury instead of the CF-105 a missile manufactured in the United States which will not be effective for the purpose for which it is intended? The minister gave some information about it this afternoon. His figures did not, in some respects, agree with the figures I have secured

from other sources of information. His are official, of course, and we must accept them. He did not give us the range because he said it was a matter of security. The range of the Bomarc has been given in congressional hearings in very considerable detail as being between 250 and 300 miles at the present time, to go up to 400 miles with the addition of new equipment. The ceiling the minister said this afternoon, and I got this figure also from United States official sources, is about 75,000 feet. We are not informed that there is a 50 per cent chance of this missile not functioning.
If the cost is $500,000 per missile, which is the figure I was able to secure but which apparently is not correct, and there are 120 to a squadron you have a cost of $60 million for missiles for R.C.A.F. squadrons. These are one-shot missiles. This afternoon the minister said that two squadrons would cost $110 million, and this is for a new weapon which may or may not be effective but which is certainly going to be expensive. Those of us who are worried about the possibility of this United States weapon not doing the job it is supposed to do, if not replacing, supplementing the CF-100 or as some had hoped the CF-105, have certainly had our worry on that score increased if we can put any credence in a statement in an article in the Globe and Mail this morning from its Washington correspondent, Philip Deane, who said that a growing anxiety has been created in the United States as to the effectiveness of this weapon.
This supplementary weapon, these Bomarcs are not to be made in this country. We had some hope last autumn that they would be produced in Canada. When the Prime Minister was asked on September 24 at a press conference, after discussion of his statement at that time about this matter, whether Canada would produce Bomarcs for United States as well as Canadian use, the Prime Minister is reported to have replied that we would start with Canadian production only. This certainly indicated that these new weapons would be manufactured in Canada under licence. The September announcement gave us that impression because one paragraph of that announcement reads:
It is hoped that our defence industry will be able to share with United States industry in one part or another of the major programs for air defence of the North American continent, thereby providing alternative employment in the field of missiles or electronics.
Apparently nothing was done or nothing was successfully achieved in bringing about this effective sharing between Canadian and United States industries in the provision of these supplementary weapons. We have, 66968-9-83
Labour Crisis in Aircraft Industry therefore, the right to ask the government, as has already been asked this afternoon, what part is Canada to play in the industrial and employment side of the Sage program, the ballistic missile early warning system program and the Bomarc program? No light is thrown on this subject by the statement of the Minister of Defence Production this afternoon nor, except in a very minor way, by the statement of the Prime Minister last Friday.
We did learn from the Prime Minister's statement last Friday that the Bomarc would be manufactured in the United States for Canadian use and as such of course it has to fit into the United States continental defence system, with SAGE, otherwise it would not be of much use to us in Canada. In that sense, this arrangement is bound to tie us more closely to strictly United States production, United States industrial requirements. I wonder if that is why the United States is paying the cost of these Bomarc missiles for use in Canada? I understood the Prime Minister's statement to mean just that, and he will correct me if I am wrong. He said that the United States, as part of its two-thirds share of the cost of this Bomarc program will pay for, and I quote his words, "the acquisition of technical equipment". Presumably that is a reference to the Bomarc missile itself.
If that is true, is the United States likely to ever agree that missiles, paid for by the United States, will be made in Canada at any time in the future? Indeed, if they are to be weapons made in Canada for R.C.A.F. squadrons, why should the United States be asked to pay for them? Are we now, under this Bomarc arrangement, accepting for the first time mutual aid from the United States, something which we did not do during the whole course of the war? Is that the new Hyde Park agreement? If that is the case, Mr. Speaker, if the United States is going to pay for weapons used in Canada by the R.C.A.F., then one cannot help but wonder whether it would not be more consistent with our national position or national pride to turn the whole Bomarc and SAGE operation over to the United States, and do something else by way of defence which would have a Canadian character and be paid for by Canada.
If, however, I am wrong in my understanding that the technical equipment referred to in the statement of the Prime Minister is not the missile, what is it? And whatever it is, why should the United States ever be asked to transfer its production to Canada in regard to technical equipment to be paid for by the United States, and some of it at least under its control? What we want is not this kind

Labour Crisis in Aircraft Industry of arrangement. What we want is not financial help from the United States for equipment produced in Canada for Canadian forces. Surely we can take care of ourselves in that regard. What we want, and have wanted for a long time, is access to the United States market for defence equipment which can be made in Canada for United States forces; at least, give us a chance to bid on such equipment for American forces. Collective defence must mean collective production. It must mean, as the Prime Minister said in his statement, pooling of resources. If it does not mean that, and if continental defence means collective planning and operation only and not collective development of defence resources or production on a continential basis, if Canadian resources and production can be considered by the United States as insecure, then we should have a hard look at the situation and talk very frankly to Washington.
In public statements which I made in the United States-and I have been criticized in this house by the Prime Minister for making those statements-I have said that it will be quite impossible to have that kind of defence co-operation which is desirable between the two countries if we have economic and industrial conflict at the same time; and it will be quite impossible to have collective defence for one aspect of defence, and separate defence for the industrial and economic aspect of defence.
One might say that if we criticize the government for not having driven this home to the United States in connection with the CF-105 program in a way which would have secured some orders from the United States which might have made this program more economic than it otherwise would be, why did we not do this while we were in office during the earlier days of the program? The answer to that is quite a simple one. The minister of defence of that day took the question up with the defence authorities in Washington when we were beginning a prototype in the very early days of development, and he got an encouraging reaction at that time it is true. Later the reaction was not so encouraging. However, it must be clear to every hon. member of the house that the United States was not going to commit itself to a contract to purchase a weapon which had not been tested and had not been flown. Once the CF-105 showed itself to be the effective weapon which the Prime Minister's statement said it was, that was the time to take the matter up in a very vigorous way on the highest governmental level with the authorities in Washington.
The minister said he discussed this matter in Washington. He said he discussed it in


Paris at the NATO meeting, at which I believe he and his colleague from Washington took advantage to have a meeting of the joint committee of defence ministers. But if the minister on that occasion was not successful, and if it was decided by the government that it would be impossible to go ahead with the CF-105 program without some kind of order which would cushion expenditure for Canada, then I hope it was made perfectly clear to the authorities in Washington that if that was their final and irrevocable decision in respect of a weapon which was now admitted to be a going concern we would have to review very seriously the whole question of continental economic and industrial collective defence.


Gordon Minto Churchill: May I ask the Leader
of the Opposition (Mr. Pearson) a question?


Lester Bowles Pearson: Yes, certainly.


Gordon Minto Churchill: After that review, would the hon. member advocate going as far as is proposed by the hon. member for Assiniboia (Mr. Argue) ?


Lester Bowles Pearson: Mr. Speaker, there is no way by which we in Canada can dissociate, or should try to dissociate, ourselves from the United States in the defence of our country, of our continent, and of the free world. It is obviously impossible, even if it were desirable, which it is not. The Minister of National Defence said today, and I was amazed to hear him say it, that some years ago we stood alone in the defence of this program. They were the words he used, "We stand alone". He also said there was no planning for continental defence in those years-


George Randolph Pearkes: No agreement.


Lester Bowles Pearson: No formal treaty or agreement. Perhaps I might remind the hon. minister in regard to that rather shattering statement that we have never stood alone in regard to collective defence at any time since world war II. We were among the leaders in building up an Atlantic system of collective defence, which included the United States. As the hon. minister and other hon. members of the government have more than once told us, there was a North American region of NATO. And NATO was founded in 1950. If there was a North American region of NATO in 1950, how can he say that we stood alone in regard to continental defence? Of course, we do not stand alone, and we cannot stand alone.
I am not suggesting that we should go to the United States and say that if they do not do a certain thing we will withdraw from the NATO alliance or the western association, or anything like that. Of course that would

be ridiculous. But I do suggest to the government that they let the United States authorities know in no uncertain terms that rather than continue the process of tying our defence resources to the United States in such a way that we get only tag ends of orders and nothing else, instead of allowing Canadian squadrons to be armed with missiles made in the United States and paid for by the United States taxpayer, we might have to see whether we can work out a new system of defence planning and development, or at least explore the possibility of co-operation in this field with Great Britain and the European members of the North Atlantic alliance.
We cannot possibly divorce ourselves from United States contact. The hon. gentlemen opposite are always the first to state that we should be moving our lines of contact across the Atlantic. I wonder whether the Minister of National Defence has considered the possibility of replacement of the CF-105 with British production and some kind of agreement in regard to continental defence? If we cannot be successful with the United States, surely that would be the second best alternative.
The normal, natural and sensible thing to do is to work out the kind of continental arrangements which we had with the United States during the war, which worked very successfully. For some years after the war that arrangement was not necessary in the way it was during the war, because we were building up NATO and building up the kind of armament development under NATO which emphasized the importance of the western European front. Then a few years ago it became quite clear-and the Canadian delegates of the NATO council were among those who did their best to make it clear-that perhaps the most important NATO front was North America. I think that became clear once the Russians were able to develop jet bombers followed by intercontinental ballistic missiles. Once it became clear that the Russians had the capacity to attack the industrial production of the United States, the Canadian arctic became the NATO major front, and from that day on the United States should have been aware of that fact, not only in planning and operation but in industry and production, and I hope it is not too late to make them aware of it yet.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Lester Bowles Pearson: Mr. Speaker, when we rose at six o'clock I was discussing one very important aspect of this question, namely, the 66968-9-83J
Labour Crisis in Aircraft Industry relation between the defence industries of the two countries and the necessity of making collective defence mean more than the placing of Canadian air squadrons under NORAD.
In his statement last Friday the Prime Minister said that the government intends that Canadian forces shall be well trained and well equipped for the Canadian share of these tasks in a balanced collective defence. It does not seem to me possible that we should be able to achieve this ideal of an appropriate Canadian share in a balanced collective defence if we do not have a Canadian defence industry including an aircraft production industry, and it does not seem to me we shall be able to have such an industry if our scientists, our engineers and our technicians leave this country to take up employment in the United States. When the Prime Minister makes a statement such as I have mentioned, we ask ourselves: what is to be the Canadian share in this balanced collective defence? Is what we are now proposing to do by the cancellation of this contract and in the working out of alternative methods of defence, the course for which we are particularly qualified, or are we from now on merely adding our bit to what is predominantly a United States effort? Does the United States government accept, as it used to accept at the NATO council meetings in Paris in earlier years when we were talking about NATO forces with regard to continental defence, this concept of balance, this concept of togetherness in the development of defence resources and in the manufacture and development of defence equipment, or does it merely accept this concept in terms of operation and planning? The worries we have had on this score-worries which have been increasing over the years-must, I think, be much greater now in the light of the decision which the government has found it necessary to make and in the light of the statement made by the Minister of National Defence which gives us so little hope of sharing in any real way in continental defence resources and defence projects.
The Prime Minister's statement attempted to apply this principle of balanced collective defence to the co-operation between the two countries in the use of nuclear warheads for defence, tactical weapons. I do not think that attempt was a success. The statement had a good deal to say about this subject, and no subject could be much more important. The Prime Minister said in his statement that we did not intend in this country to produce or manufacture nuclear weapons. We on this side certainly have no quarrel with that. As I said the other day in the short statement I made following the Prime Minister, it is
1296	HOUSE OF
Labour Crisis in Aircraft Industry bad enough in this world to have three countries manufacturing nuclear weapons of mass destruction; it would be infinitely worse if this were to be extended. There is no reason I know why Canada should get into the field of manufacturing nuclear warheads or nuclear weapons of any kind.
The Prime Minister told us in his statement that questions connected with the acquisition of nuclear warheads were being studied but that no agreement had yet been reached with the United States. I wonder why it has not yet been possible to reach an agreement with the United States? Any search for such an agreement, according to the Prime Minister's statement, should reflect certain basic considerations. The first of these-and I am paraphrasing the statement -was that we should continue the international effort to ban nuclear weapons within an acceptable disarmament agreement. I would say that with regard to this we are entirely in agreement.
The Prime Minister also said that under any such agreement with the United States, or, I assume, with any other country the necessity of Canadian forces having the most modern and effective weapons must be recognized. We also agree with that. Then the Prime Minister's statement went on to say that because of the importance of limiting the spread of nuclear weapons to other countries-and I am paraphrasing the statement, not quoting it-the ownership and the custody of nuclear warheads should remain in United States hands and the requirements of United States legislation would apply.
I think perhaps I should quote that particular paragraph because it seems to me to be of very great importance indeed. The statement reads:
Believing that the number of nuclear weapons at the independent disposal of individual nations should be limited, we consider it is expedient that the ownership and custody of nuclear warheads should remain with the United States.
With that statement, Mr. Speaker, we do not agree. We think on this side of the house that if nuclear warheads for defence weapons such as the Bomarc or for missiles which could not be used for anything but defensive purposes are supplied to Canadian squadrons or to Canadian formations they should be under Canadian control, and that arrangements to this end should at least be attempted with the United States authorities.
This does not involve the manufacture of such weapons. It does not involve the installation of manufacturing capacity for such weapons. But surely, as I have said before, it is an intolerable position to say in respect of a Canadian squadron on a


Canadian establishment using Canadian weapons that nuclear warheads, if they are to be made available, should be under other than Canadian control while perhaps on the same airfield the same weapons, used by a United States squadron, would be under United States control.
That seems to me to be a position which is not acceptable and I hope that arrangements can be made by which the United States legislation can be altered to make this aspect of continental defence as well as some others truly continental. Surely that is possible. I know the difficulties and I know the arguments that will be advanced against it to the effect that if the United States makes this kind of arrangement for Canada she may have to make it for other countries but I suggest there is no country in the world which is being asked to work so closely with the United States in defence matters as Canada, and quite rightly, and that that co-operation in defence which is recognized by NORAD under the joint command should also be recognized by this change in the United States legislation.
Those are some of the things that have been worrying us about the decision that the government has taken, about the way that decision was taken, about the length of time it took the government to reach this decision and about the way it has been announced.
I repeat that it seems to us almost impossible to understand that 20 months after the government has taken office it has come to the conclusion that this Canadian development should cease and that having come to that conclusion after 20 months it should have announced it in the way it did last Friday without warning to those concerned.
Earlier this afternoon when I suggested that hon. gentlemen opposite when in opposition did not seem to have taken exception to this, worried too much about it or asked questions about it, the Minister of Trade and Commerce (Mr. Churchill) indicated that at that time he had shown some uneasiness about it and would be able to quote from Hansard to that effect. If the minister felt that way at the time and if other members of the present government shared his feeling about the development of the CF-105 it is all the more difficult to understand why, having come into office, they did not at once take this matter under consideration. It took this government only two or three weeks to put Canadian air defence squadrons under NORAD but it has taken it 20 months to decide to cancel this Canadian air development.
The matter has been expressed very effectively indeed in an editorial I have in my

hand. These will be my closing words and it is perhaps appropriate that they should come from an editorial which appeared in the Toronto Globe and Mail of February 21, 1959, in which it is stated:
The Prime Minister's judgment on the Arrow and its future must as we have said be accepted.
I hope that that judgment can even now be reconsidered. The editorial continues:
The fact remains, however, that the government has no program or policy by which to put anything in its place. It is on this fact, we believe, that the government's decision-and the consequences thereof-must ultimately be judged.
We, Mr. Speaker, are quite happy to judge it on that consideration and when it is judged on that consideration I am certain it will be condemned by the people of this country.


John George Diefenbaker: Mr. Speaker, at the expense of reiteration I refer to the fact that the motion before the house is asking authority to move the adjournment of the house for the purpose of discussing a definite matter of urgent public importance involving mass layoffs and the threatened disintegration of the aircraft industry in Canadian defence production. Speaking on behalf of the government this afternoon, instead of relying on the technicalities of the rules which no doubt would have given rise to considerable argument, I stated that we welcomed the opportunity for the discussion in order to clarify many of those things which in the course of the last two or three days have been encumbered by misrepresentations and conclusions not warranted by the facts.
I sat here this afternoon and listened with interest to the speakers who have participated in the discussion on behalf of the opposition. While in general they have indulged in continuing criticism it is interesting to observe that when they had the opportunity of offering suggestions as to what might have been done in regard to this question none was forthcoming-


Some hon. Members:: Oh, oh.


John George Diefenbaker: We are now hearing, Mr. Speaker, the same old chorus, the same old songsters singing the same old song. They sing it because they had nothing to present but criticism. Hon. gentlemen opposite found themselves in rather a difficult position. The allies of recent date of economic and social planning found themselves separated this afternoon when even the Leader of the Opposition (Mr. Pearson) found himself unable to accept some of the statements made by the hon. member for Assiniboia (Mr. Argue) in respect of the question of United States dominance of Canada.
Labour Crisis in Aircraft Industry
I intend simply to remove immediately one or two misapprehensions concerning matters which I feel should be clarified. This afternoon we listened with interest to the hon. member for Assiniboia dealing with the question respecting the cancellation of this contract. As I listened to the hon. gentleman I wondered if my recollection of his former words was correct and so I looked back and found an interesting statement attributed to that hon. gentleman at page 1062 of Hansard of November 13, 1957, when he directed a question of some interest to me in the following language:
Has the attention of the Prime Minister been drawn to the reported statement of Lieutenant General Simonds that if the $300 million wasted on that dead duck the CF-105 had been used to stockpile Canadian wheat in Europe it would have been spent to much greater advantage?
The voice of November 1957, is a different voice from that of February 23, 1959. The hon. gentleman then went on to say:
Has the Prime Minister considered a substantial reduction in current military expenditures and would he consider using any moneys thus saved to stockpile wheat in Europe, or otherwise to give economic assistance to the free nations?
Mr. Speaker, to which voice shall we listen? Which is the voice of authority, the one in 1957 when it described the CF-105 as a dead duck, or the voice of today?
As I listened to my hon. friend the Leader of the Opposition I observed that he too found himself in some difficulties today. He had expressed a different point of view at other times. I was not quite able to follow him today as to whether he is for or against the CF-105 being continued. He spoke on both sides of that question; whereas, only a few months ago in a statement he made at Edmonton, Alberta, as reported in the Edmonton Journal of October 3, 1958, he said:
We decided when in office two and one-half years ago to go ahead with the CF-105 and review it year by year in the light of developments.
Then, he went on to say this:
The Liberal government had reviewed its decision every six months. Had the Liberals been in office when the first ICBM was fired Mr. Pearson said, "this would have been a major factor in possible revision of our decision."
Then, he went on to say:
The Conservative government should have cancelled the Arrow production order this fall instead of waiting until next spring. How much is going to be spent on the Arrow between now and then?


Lester Bowles Pearson: On a point of order, Mr. Speaker, this particular quotation was put on the record once before by my hon. friend. It will be found on page 56 of Hansard of January 19. I rose at that time and denied it. I said I had the text of what I said,

Labour Crisis in Aircraft Industry which did not bear out the press statement quotation. I also said I had denied it to the press a day or two after it appeared and the Prime Minister accepted my word on that occasion and now he is dragging it up again.


John George Diefenbaker: I notice there were no denials at the time.


Lester Bowles Pearson: There was a denial at the time, Mr. Speaker, as I have just said.


John George Diefenbaker: Well, I am reading from the Canadian Press again as reported in the Ottawa Journal of that day:
He said the Conservative government should have cancelled the Arrow production order this fall instead of waiting until next spring. How much is going to be spent on the Arrow between now and then?
The hon. gentleman now says-and naturally I accept his denial-


Lester Bowles Pearson: On a point of order I said it on January 19 last and the Prime Minister accepted it then and he had better accept it now.


John George Diefenbaker: I must necessarily accept it and of course I do, but I still refer to the fact that the Canadian Press carried that story and one or two other newspapers.


Mr. Martin (Essex East):: Mr. Speaker, I rise on a point of order. When one hon. gentleman rises in his place, as the Leader of the Opposition did some weeks ago, and denies a statement, under our rules it is not open to any hon. member, by any device whatsoever, to refuse to accept the statement of an hon. member who speaks against an alleged statement, and the Prime Minister is now resorting for the second time to a course which is a violation of the rules of the house.


John George Diefenbaker: Mr. Speaker, possibly I might read another portion of that and see whether or not it too is denied:
Liberal Leader Pearson, speaking to the Liberal association of Alberta, urged a thorough re-examination of Canada's defence policy and its economic implications. He suggested Canada may be getting in too deep.
Does he deny saying that?


Lester Bowles Pearson: Mr. Speaker, I do not deny that at all. Under this government we are getting in too deep.


John George Diefenbaker: Mr. Speaker, the only definition that I can give to the expression that Canada is getting in too deep is that expenditures such as the CF-105 represent too great a contribution to one phase of defence and place Canada in a position where it cannot properly discharge its responsibilities otherwise. I go further. As he spoke this afternoon he made much of United States

influence. How he spoke of it in those lachrymose tones. Well, he said that we had never had anything like this before.


Lester Bowles Pearson: Quite true.


John George Diefenbaker: In fact, since we heard him this afternoon he said the same thing over the national radio. I got the speech twice, once this afternoon and again this evening and he went on to say that never before had there been anything like this cost-sharing of the Bomarc. It is not heard of:	This is mutual aid. You remember
those words. How foreign it was to him that the United States should be spending money in Canada or sharing in our defence. Well, sir, in building the D.E.W. line they did not share with us; they paid it all. Did it shock the sensibilities of those hon. gentlemen then, when the United States came into Canada and instead of Canada participating in her own defence and paying the costs of this line for radar defence, the United States paid it all? But, then, he went on to say that this thing had never been heard of before. We have got to put a stop to it. On the Pinetree line the distribution of expenditures as between Canada and the United States is exactly the same percentage as it is in connection with Bomarc.
I wonder why statements such as these should be made, why there should be such shock exhibited on the part of the Leader of the Opposition who referred to this outrageous thing, the United States coming into Canada and contributing by way of mutual aid. This has been the course followed during the last several years, during the period when he was a minister of the crown.
Having cleared away some of this underbrush, may I now proceed to say something more. It is interesting to see his attitude with respect to the CF-105 and the cancellation of this project. He did not say what he was reported to have said at Edmonton to the Liberal association but, I call witnesses on this behalf respecting the tremendous change that has taken place in the last two years, the technical revolution, the like of which has never taken place in the history of mankind. In the intervening years since the CF-105 was first considered on the drawing table we have had the sputnik and the lutnik. We have also had the ICBM. We have had tremendous changes in the last few years. The hon. member for Trinity referred to the fact that it is 50 years ago today that the Silver Dart was flown, the first flight within what is now the British commonwealth of nations. There have been tremendous changes in those 50 years, but nothing like the changes in the last few years.

I am not condemning the Liberal government for what it did in laying the foundation of the CF-105. It did so on the basis of the information that it had at that time. It had no realization, nor did mankind anywhere in the free world, of the vast potentialities in nuclear weapons. Indeed, only last evening I was reading Kissinger on "Nuclear Weapons and Foreign Policy". He pointed out this fact, that as late as 1947 Admiral Chester Nimitz said, "There will be no ICBM's in [DOT] my lifetime." At the same time it was stated that if there were any continental missiles at all or any long distance missiles they would not within the lifetime of man.

this was the viewpoint of the navy of that day-go beyond the distance of a thousand miles.
I am not condemning the last government for its stand. We may disagree on many things. In the large field of the maintenance of our security and freedom there is much range for disagreement as to the means taken, but no disagreement as to the objective. Who was the man who, above everyone else, had a viewpoint with regard to the CF-105? That man was the Right Hon. C. D. Howe, to whom the hon. member for Trinity (Mr. Hellyer) has referred in the most eulogistic terms on more than one occasion. What did Mr. Howe say the other day in Toronto? I quote from the Globe and Mail of February 21:
The man who promoted the Arrow program in the St. Laurent government said yesterday he was sorry to see it abandoned. C. D. Howe, former production minister, emerging from a directors' meeting at Bay street offices of Rio Tinto Mining Company of Canada, commented: "I am sorry to see a program abandoned that interested me very much", he said. He said the costs of the program were a terrible load and the present government must have decided the costs were too great. "The cost of the Arrow certainly astonished me", said Mr. Howe.
The former production minister, who now calls himself a private citizen with private interests, defended the initial decision to proceed with the Arrow, a decision reached after the joint chiefs of staff-
I emphasize these words.
-convinced Mr. Howe the controversial plane was vital to the country's defence.
He went on to say:
"It seemed like the right thing to do at the time. We were convinced the plane would be needed for at least ten years." However, he admitted yesterday, that rapid development of electronics and guided missiles overtook the Arrow.
Now, sir, there is the viewpoint of the man who actually brought it into being, who was convinced by the chiefs of staff that it was the proper course to follow. He is a private citizen today, and I emphasize again that the statement he made was that "the rapid development of electronics and guided missiles overtook the Arrow".
Labour Crisis in Aircraft Industry
There is another thing I have been impressed with today, the degree to which one person in this country has been entirely forgotten. Continue the expenditure, they say. Why was it stopped? Well, sir, it was stopped for the reason that the chiefs of staff, who advise in their wisdom and on the basis of the best information they can secure, determined that it did not make sense to expend the amount in question on behalf of this phase of defence, having regard to the developments of missiles and the like in the last few years.
One of the most interesting things I have deduced from what was said today is this. Regardless of the advice of the chiefs of staff and their general view that this aircraft would to all intents be obsolete by the time it became available for squadron service, apparently those sitting opposite would have the government squander nearly $800 million of the taxpayers money, not to secure adequate defence but simply to carry on a project that in the light of events, whatever the justification at the beginning or subsequent decisions made, was presumed and intended to be reviewed at the end of each six months or one year.
I start with this. Do not tell me that it was an easy decision for the government to make. Do not tell me that we did not have full realization that in taking this step there would be many who would condemn. Governments have responsibilities. Governments must carry them out regardless of the immediate popular reaction. Governments have a responsibility to do that which they believe to be right on the basis of the best information they have available, that information weighed in the light of the experience of each of the individuals making up that government and having regard to all the circumstances. I say, that as long as I am in this position, whatever the consequences may be, if a decision requires to be made that may not have a popular reaction at the moment, if that is the right course to take then it must be taken by any government with a sense of responsibility.
I intend to trace in general the events of the last few years. I mentioned the technological changes that have taken place. I mentioned as well that other viewpoints were expressed. Only today I noted in a newspaper published last Saturday a reference to the fact that one former member of the house took a strong stand some years ago. I refer to the former leader of the C.C.F. in this house. Several years ago he said that the Arrow would be obsolescent before it was operational. However, that was not the view of the government of the day. No one is

Labour Crisis in Aircraft Industry criticizing that decision now. But when in the light of events, with all the factors before them, ministers of the crown decide that a course is necessary to be taken, then that course, if right and proper, denies them any retreat to a position similar to that in which governments in Europe found themselves during the 1930's. They refused to take courses which they knew were right, as their prime ministers subsequently admitted, because they were afraid of the political consequences that would follow such action.
In that connection I think I can do no better than to refer to an editorial in the Christian Science Monitor of January 31. Similar arguments are taking place in the United States. The title of the article is, "Put Defence Above Politics." The article reads as follows:
A wise man once said that military questions are too serious to leave to generals. Democratic nations have found it well to place defence under civilian control. Under this system political leaders resolve differences among military experts.
Then it goes on to summarize what I believe is the attitude that we must take, and I think that in the days ahead the Canadian people will more and more realize that we have taken a course that is the only one in accord with our responsibilities. The article continues:
Defence is too serious a matter to leave to partisan politics . . . The nation can afford whatever is really required for defence. Indeed, it cannot afford anything less.
Then it goes on:
But let us also recognize that strong forces are operating which would push defence expenses to unnecessary and wasteful levels . . . Perspective is essential.
It finally ends up with this:
We are not wholly satisfied with the administration's defence program, but it is a considered program and it deserves questioning on specific points, not alarmist or partisan attacks.
I think that is fair; that fairly expresses the situation. Again I say, let no one say that in making a decision such as this we did it without much thought. We gave this decision weeks of consideration. In order to justify the expenditure of the taxpayer's money for defence it is necessary that it be actually useful just now, or potentially useful in the future and necessary for maintaining a potentially useful defence unit in the country.
I realize that defence production is an important weapon in the battle against unemployment. However, I say with all the seriousness that I can put at my command, that the production of obsolete weapons as a make-work program is an unjustifiable expenditure of public funds. These changes have been made in other countries. Only last summer the United Kingdom found it

necessary to cancel further work on the Saunders-Roe SR-177, a supersonic fighter which had reached an advanced stage of development. The United States cancelled out two of its aircraft, the F-106C and the F-106D. Then, in the United Kingdom, the government's decision was announced by the minister of supply in these words:
While this aircraft commends general recognition as an excellent and unique design in its class, unfortunately it no longer fits into the particular pattern of the United Kingdom defence program.
I am not going to repeat what I said on an earlier occasion, but the President of the United States dealt with this matter in his address to congress. He went on to say that major national security outlays would be projected at $48.5 billion for the current budget. The problem, he pointed out-and I am dealing now not with his words but the conclusion based thereon-posed by rapidly increasing costs of complicated new weapons is a subject which should be emphasized. He revealed that the over-all cost of each Atlas missile will average $35 million, and that they are now buying bombers which actually cost their weight in gold. Then, summarizing what he said a little later on: a striking example of the switch to new weapons was revealed in the total expenditures on missiles, negligible less than a decade ago which will soar into $7 billion in the current fiscal year. I should like now to quote from the monthly letter of the National City Bank:
The process of selection inevitably has been painful for suppliers of discontinued weapons. One way to avoid dislocations and political repercussions would be to continue spending more on everything, good and poor weapons.
This was the position in which we found ourselves. The changes that have taken place in the last eight or nine years, particularly since 1946, have been such that the plans of a few years ago have been outflown by the changes in aircraft techniques during that period.
Now, an argument was raised today, generally by the Leader of the Opposition and specifically by the hon. member for Assiniboia, to the effect that in what we had done-I think the words were-there was abject surrender to the United States. I say to the Leader of the Opposition-


Lester Bowles Pearson: I made no such statement.


John George Diefenbaker: No; I say to the Leader of the Opposition that when the outrageous statement was made by the member for Assiniboia, that we should say to the United States-which is joined with us in defence; which provided us with the entire expenditure of $300 million for the D.E.W. line; with that percentage of the expenditure on

the Pinetree line I mentioned a while ago, and the other line-that in collaborating together in defence we should say to them, unless you buy everything we want you to take, you will not get any bases in Canada, well, what would that mean? It would mean withdrawal from NORAD. What would our relationship be within NATO? I believe that we must strongly advocate and press upon the United States, as we have the necessity, as the Leader of the Opposition said, of the fullest co-operation in connection with production. We must do that forcibly, strongly and continually, to the end that we receive in Canada, being joined in defence, a fair and just distribution of the expenses being made jointly.
I believe that to say to the United States, on whose shoulders rests in large measure the maintenance of the freedom not only of our country but generally throughout the free world today, either you do this or you get out, is not in keeping with the responsibilities of that hon. gentleman. Indeed it could not be countenanced for a moment on the part of any nation to a friendly nation joined together in North America by the bonds of geography, common tradition and common dedication. This may sound all right in certain quarters, but it is that kind of irresponsibility that has brought about the transition from former greatness to the present numerical content of those who support that type of statement.
We need to press constantly upon the United States the necessity for giving to us, as I said a moment ago, a fair and just distribution. The Minister of National Defence (Mr. Pearkes), the Secretary of State for External Affairs (Mr. Smith) and the Minister of Defence Production (Mr. O'Hurley), have been in constant communication with their counterparts in the United States. We have not achieved everything that we want. We are not satisfied. We shall continue to press, and forcibly press.
One of the things of which I was convinced more than anything else in my tour around the world was this: Those who are joined in freedom must maintain unity with the fullest respect for the rights of each other. Economic strength must be maintained if we are to meet that challenge which in the last several months has become even more direct, particularly since Mr. Khrushchev's speech to the council during the latter days of January.
What have we done in connection with our sovereignty? As far as the DEW line is concerned, we have taken over, as was said the other day, its operational control. We are taking over the airfields in the north, and in the course of the next two or three years,
Labour Crisis in Aircraft Industry these airfields will be operated by us. We are ensuring that our sovereignty over the northern area shall be maintained.
They used to speak of the vision I had of northern Canada. I spoke of the tremendous possibilities of the north, not only for defence but for economic strength and stability, and there were those who said we build from igloo to igloo. In the last few weeks we find that some 70 million acres of potential oil lands and mineral lands in the north have been taken over, thereby indicating that a major source of Canada's wealth is in that area. We must continue to assert there our sovereignty and this we are now doing, particularly, first, by occupying these radar stations in the north and, secondly, through the instrumentation of resource development in those areas.
May I say in addition that when they speak of this expenditure of some $7 million or $8 million for the CF-105 we should provide our own defence unless the United States provides it on the basis we want. Is it possible for 17 million souls to be able to make a contribution in respect of these costly weapons, these tools of defence, and endeavour at the same time to maintain a similar expenditure to that of a nation of ten times our population?
Having dealt with that, let me speak for a moment of the CF-105. The Leader of the Opposition was quite fair this afternoon when he said there were certain facts which we did not have before us. One of those facts I think will, when known by the Canadian people, begin to give them an appreciation of the areas which would have been defended by the CF-105. Most people that I have talked to have been under the impression that the CF-105 would constitute an instrument capable of protecting our northern areas. The vast unpopulated north would have available to it an air force which would be able to defend Canada against any potential aggressor. I am now reading from an article which appears in the current issue of the Atlantic Advocate. It is entitled "Aviation's Year of Decision". It deals with the CF-105, and it says this:
National pride is considerably involved and is, perhaps the greatest single force behind the Arrow program, as at present outlined . . . Avro is not by any means the whole Canadian aircraft industry. Its employment figures are about one-fourth the industry's total.
Then it goes on to deal with the various types of aircraft manufactured by de Havil-land and Canadair.
The supersonic speeds of today's bombers, and the interceptors to meet them, make this vision of air "patrol" a thing of the past. The Arrow probably has a flight time of an hour, including climb to required altitude and a few minutes of
1302	HOUSE OF
Labour Crisis in Aircraft Industry
combat. This means that its operating range from base is not much more than 500 miles.
The minister placed on the record today a general indication of the area which would be protected against attacks at supersonic speeds. On the other hand, we have available to us the Bomarc, whose area of defence and defensive action is not far removed from that of the CF-105, but the difference in expenditure has been clearly set out. The cost of the Bomarc missile to Canada, as compared to the $781 million of the CF-105, is approximately $110.8 million. That represents something that must be taken into consideration, all things being equal and the defensive properties of each being about the same.
The Leader of the Opposition mentioned a while ago, in so far as the statement is concerned, that he gave no indication of the things he generally said, and I accept that. But I think I ought to point out to him too that he gave a press conference in the city of Vancouver on September 26, and he was asked there what he thought about the CF-105. He said he was not familiar enough with the details to say if Canada was justified in apparently scrapping the CF-105 Arrow fighters. The hon. member said it appeared from the government's statement that it intended to scrap the plane after next spring. Then he said-this is not the Canadian Press report of the Edmonton speech; this is the Vancouver Sun report of September 26- that it would be very difficult to justify the government's action in spending about $100 million on Arrows until next spring if it were only to keep jobs open. The hon. gentleman-


Lester Bowles Pearson: Why did you not scrap it and save $100 million?


John George Diefenbaker: at that time-


Paul Theodore Hellyer: Mr. Speaker, may I-


Some hon. Members:: Sit down.


Paul Theodore Hellyer: Would the Prime Minister permit me a question?


John George Diefenbaker: Surely.


Paul Theodore Hellyer: The Prime Minister said that the expenditure of the Canadian taxpayers' money on defence procurement could not be justified as a make-work program, if I understood him correctly. I wonder if the Prime Minister saw Philip Deane's article in the Globe and Mail this morning which said that the United States government adopted the Bomarc as a weapon of North American defence, not so much because of the missile's military merits but to avoid shutting down an aircraft firm? My question is this. Does the Prime Minister think that the spending


of the Canadian taxpayers' money is justified on the procurement of a United States make-work program?


John George Diefenbaker: Apparently the hon.
gentleman has not been in here during the last while. I have been discussing that situation and I dealt with the division of responsibility as between the United States and Canada at length. In so far as Mr. Deane's article is concerned, I am not going to say it has no basis, but certainly the information that we have from the chiefs of staff is far removed from the views of Deane.
There has been much said about the tremendous surprise which arose over the fact that we acted as we did. I have not the time to quote from the various newspapers and periodicals across this country in connection with this matter. However, if the hon. gentlemen are interested, they will read in the October 25 last issue of MacLean's magazine a clear interpretation of the statement which I made on September 23, 1958, to which I am going to make reference. Indeed, even before that there were editorials regarding this matter. The London Free Press of April 28, 1958, said this:
The decision, which may be made shortly, is whether to order this aircraft into production with a view to re-equipping our first-line R.C.A.F. fighter squadrons. It is the most expensive single decision ever to confront the defence department in peacetime. Its ultimate cost would not be far short of Canada's expenditure on the St. Lawrence seaway.
That was an understatement. Then it went on on the basis of the latest estimates which were brought forward.
It may be fine for our national ego to boast that we can design and produce a fighter plane of the Arrow's undoubted capabilities, but how large a price are we willing to pay for national pride?
And the article continues in that way.
The Victoria Times in an editorial on October 20, 1958, said the inside story of the supersonic fighter aircraft, the Avro Arrow, "emerges from an interesting intramural dispute among the editors of Maclean's magazine." The article goes on to say that the decision to be made is one which has to be based on no other consideration than that of value.
The Montreal Star of November 13, 1957 said:
The appalling cost of this aircraft is enough to stagger government ministers and serious people everywhere. We are a middle power with a budget and an industry to match. If this alone were not enough to give us pause, there is also the fear that the dawning of the missile era has already made the Arrow obsolete. The chief reason for building the Arrow is the fleet of bombers which the Russians are known to possess. Now we are

made painfully aware that they may be well on the way to supplanting their own bombers with long-range missiles.
The article concludes in this way:
But if our military experts feel that it was a noble try that has lost primary importance in a changing concept of war, Canada will have no alternative but to decide that the CF-105 be set aside for other projects, no matter how painful this may be to the large segment of industry that had a stake in its development.
The Winnipeg Free Press dealt with this on January 13, 1959:
With the opening of parliament only a few days away the Avro Aircraft company has offered its Arrow interceptor to the government at what looks, at least, like a new low price. Last fall the government decided against putting the Arrow into full production, but delayed making a final decision until March 31. The government has since been under heavy and unrelenting pressure from the aircraft industry and other interested parties to change its mind and next March bring in a decision favourable to the manufacturers of the Arrow.
The Free Press, which has never been noticed for its adherence to views expressed on this side of the house, went on to say:
The government doubts, with reason, whether an aircraft like the Arrow, which cannot stop intercontinental missiles, will be worth the high cost involved.
Then, again, the Toronto Telegram, on June 16, carried this U.P.I. dispatch from Washington:
United States defence officials said today the main reason for the continued refusal of the United States to buy Canada's Avro CF-105 fighter plane is that the Arrow cannot fly at top speed long enough.
The Arrow is capable of speeds above 2,000 miles an hour only in short bursts.
The officials said further that the United States could hardly buy the Arrow from Canada when it has suspended production at home of two very similar aircraft.
I mention these things because editorials have appeared throughout the country since last September which clearly indicated that any one reading the statement which I made, and to which I am going to make reference, realized that the major reason for the continuance of the program was the fact that at the time we were faced with a serious situation in the far east. The Leader of the Opposition says the situation is serious today having regard to what is taking place in the west Berlin area and the fact that Mr. Macmillan has found it necessary to go to Moscow and there endeavour to come to some understanding of the attitude of mind of Mr. Khrushchev, particularly since the latter has made some statements recently which could not but cause fear to freedom-loving people everywhere.
The situation is serious, but whatever that situation may be today the fact remains that on the best advice we have, the CF-105,
Labour Crisis in Aircraft Industry which would not be in production until the date mentioned by the Minister of National Defence would not if it were in production today meet the potential threat as it is placed before us by those who have knowledge and experience of military affairs.
I made that clear when I issued the press release on September 23. I said at that time:
The government has concluded that missiles should be introduced into the Canadian air defence system and that the number of supersonic interceptor aircraft required for the R.C.A.F. air defence command will be substantially less than could have been foreseen a few years ago, if in fact such aircraft will be required at all in the 1960's in view of the rapid strides being made in missiles by both the United States and the U.S.S.R. The development of the Canadian supersonic interceptor aircraft, the CF-105 or the "Arrow", was commenced in 1953 and even under the best of circumstances it will not be available for effective use in squadrons until late in 1961. Since the project began, revolutionary changes have taken place which have made necessary a review of the program in the light of anticipated conditions when the aircraft comes into use. The preponderance of expert opinion is that by the 1960's manned aircraft, however outstanding, will be less effective in meeting the threat than previously expected.
I went on to say this, as contained on page 3 of the statement:
The government believes, however, that to discontinue abruptly the development of this aircraft and its engine, with its consequent effects upon the industry, would not be prudent with the international outlook as uncertain and tense as it is. As a measure of insurance, with present tensions as they are, therefore, the government has decided that the development program for the Arrow aircraft and Iroquois engine should be continued until next March, when the situation will be reviewed again in the light of all the existing circumstances at that time.
We have continued to review it, and in no way has there been any suggestion that the course which was outlined in the presentation in November should be altered at this time. I said at that time-and this was the opinion of other Canadians-that we recognized the accomplishments and the technical quality of the work done, but that to continue vast expenditures on aircraft and equipment which military and other expert opinion does not support as the best way to achieve the defence essential to our security, would not only be wasteful but unjustifiable. I also said this:
The government deeply regrets the unemployment that will be involved in the termination of the Astra and Sparrow projects and in the Avro plant at Malton. It is hoped that our defence industry will be able to share effectively with the United States industry in one part or another of the major programs in the air defence of the North American continent and thereby provide alternative employment.
That was clear. Has there been anyone who has had any doubt since? I referred to an article in Maclean's magazine of October 25 by a distinguished member of the press

Labour Crisis in Aircraft Industry gallery, Mr. Blair Fraser. In an editorial in the same issue, the following also appears:
Most Canadians, we feel sure, approve the government's decision to suspend production of the very good but very obsolete fighter aircraft, the Arrow. It was a logical military decision-a decision on military affairs, arrived at for military reasons.
And that, we trust, is the only basis on which this country will ever make a military decision. For a while, as the cabinet pondered its choice and even after the choice was made, some people seemed to think other factors ought to have entered into it.
However, it was generally accepted. No one misunderstood-and I intend to refer to the Avro management in a moment.
Ever since last fall there has been evidence of a continuing lobbying, of pressure to influence this government to reconsider what was to all intents and purposes a clear and perspective decision.
I wish now to draw attention to an article by Clark Davey which appeared in the Toronto Globe and Mail of January 9, 1959, reporting on a delegation representing 35,000 Canadian aircraft workers composed of members of the united auto workers and the international association of machinists, which delegation was led by Canadian Labour Congress president Claude Jodoin and which met with the Minister of National Defence in Ottawa. The report indicates that the delegation found no great encouragement in what the minister had to tell them and goes on to state:
Earlier today, many members of the same delegation had joined civic and political leaders from Port Arthur and Fort William in urging Public Works Minister Green to act to keep the Canadian Car Company Limited plant, an Avro subsidiary, in Fort William.
That is another reference to an Avro subsidiary. One could also refer to another in Cape Breton, Dosco. When I read what the president of Avro says regarding unemployment I would like him to transmit some of his views in connection with some of the subsidiaries.
What did the labour leaders say, as reported by Clark Davey? Did they have any misunderstanding? In the same report we find the following:
The labour leaders said they felt only the optimistic statements of Avro president Gordon had kept the skilled workers with the company.
That indicates that since last fall, as is the fact, the Avro corporation has continued to lead its workers to believe that there was going to be a change. That was made clear on that occasion. It was also made clear that no hope was being held out even though the situation and the critical nature of the adjustments necessary were then and are now fully realized by the government.
[Mr. Diefenbaker.l

Was there any doubt that this was not going to be proceeded with? I read from an article by Charles Lynch in the Ottawa Citizen:
It's been a bad week in parliament for the A. V. Roe Company, the British industrial giant whose Canadian interests have a way of getting into the news.
Biggest newsmaker in the company's array is Avro Aircraft, of Malton, Ontario, whose future rides on the government's decision about the CF-105 Arrow supersonic jet fighter.
Prime Minister Diefenbaker's latest statement on the 'disagreeable course' facing the government has been widely interpreted as another nail in the Arrow's coffin.


George James McIlraith: Mr. Speaker, would the hon. gentleman permit a question? Would he give us the date of that article?


John George Diefenbaker: Labour Crisis in Aircraft Industry manager. I want to be restrained in what I have to say in this regard. My hon. friends say that we should have announced this before we announced it in parliament. What would they have said if they had read that outside of parliament we had made a determination? The company had no misunderstanding whatsoever. I say that its attitude in letting out thousands of workers, technical workers and employees, on Friday, was so cavalier, so unreasonable, that the only conclusion any fair-minded person can come to is that it was done for the purpose of embarrassing the government.
They knew at the beginning, as the Leader of the Opposition said today, that this matter would be considered year by year. I remember Mr. Campney, the then minister of national defence during the years, saying on one occasion that this matter would be reconsidered from time to time. They knew it was being reconsidered; they realized last fall, after the September press release, what the situation was. They took the stand, as I see it, that they would keep up a continuing pressure, in the words of one of the editorials to which I have referred. They have offered no alternative that was reasonable, responsible or in keeping with realities.
Of course, it is very easy to arouse people to demand for continuance and this is understandably so. I say that companies have responsibilities, as have governments. Was there any justification to say to everybody, "You are out", and today announce, if the press is correct, that some 2,500 are called back? What was the reason for that precipitate action? Was it necessary? In the estimates it was shown that a further amount of some $50 million was to be expended. Provision is made, in the event of cancellation of the agreement, that the company shall receive separation pay. All of the employees will be entitled to approximately three weeks salary or wages. Why rush them out on Friday afternoon if it was not for some purpose other than the benefit of those employees? They knew it was coming. I will not say they knew the exact date but they knew what the decision was and it was unchangeable. If they had given some consideration, the consideration that is expected from reasonable employers, of their employees; if they had communicated then as one would expect they would, the last thing in the world that I would ever anticipate was that, having received notice and still having available to them the sum of some $50 million provided for in the estimates, they would let those people out and cause that reaction among people, a reaction that can be understood and one for which I have the deepest sympathy. Because of that condition, the expectation

naturally was that those trained employees that had been with the company for a long while, most of them qualifying for either the three weeks separation pay or holiday pay, would not have been told, "You are out this afternoon".
I hope that this company will place before us such alternatives as have not yet been placed before us. If they are realistic, and in accordance with responsible financial husbandry, every consideration will be given to the maintenance of this industry. No government can be expected to provide every opportunity for every business. You would expect that this company, having had during the years since 1945 government contracts continuously, would since September last have endeavoured itself to make some provision to cushion against the prospective impact of the discontinuance of the CF-105.
I am not going to say much more. We will meet them. I reiterate that. If a practicable suggestion is made that will maintain these technologically trained men in employment, it will receive our fullest consideration. We will also give consideration to any suggestions that may be made to alleviate the particularly disastrous conditions under which various employees find themselves as a result, not of our action- for that action we gave notice of last September-but the precipitate, unwarranted and unjustifiable action on Friday last of discharging these employees who had been faithful over the years, without regard to any consideration. At the same time the heads of that company knew that there was available millions of dollars until March 31 and that these dollars might have been used in order to alleviate the condition of these people who would be removed from their jobs in consequence of the cancellation of the CF-105. Instead, the company felt that it could act in a way that no one can justify. I say once more that their action was not a proper solution to the problem raised by these events of the greatest importance to the government and the people of Canada.
Naturally we regret the action that had to be taken by the government but our responsibility is to all the people of Canada. We will take any action which will alleviate the situation and in so acting let it be perfectly clear that we do not intend in any way, as was suggested today by the Leader of the Opposition, to change the decision that the CF-105 is cancelled. It is no longer considered as a defensive measure, having regard to the developments that have taken place in the technological field and particularly in intercontinental missiles during the last year or year and a half.

In the settlement of the terminal charges now under discussion between the companies and the department, consideration may be given to actions of alleviation. We look forward to any action which will help us to do that which was referred to by the hon. member for Trinity this afternoon, to maintain in Canada the technologically trained. The responsibility in that connection cannot go further than that the government must determine the question as to the practicability of the defence weapon being produced and, having done that, with all the results that flow from it, no one can but be deeply moved. I for one repeat what I have said so often, that if there is any alternative, if there is any action that may be taken, if there is the embodiment of a practical idea placed before us that will achieve amelioration of the results, we are open at all times to that and to other suggestions.
We have set up a special employment office at Malton under the national employment service. We shall undertake the sending out of lists and classifications of laid-off workers to employers across the country. We shall cooperate in every way to provide for those who were employed there to the end that, while the decision must stand, our action will be designed to assure fairness and equity to those who through no fault of their own find themselves unemployed.
In so far as the statement made by the Minister of Defence Production is concerned, the fight on behalf of extension of our share of production will continue and will be forcibly brought to the attention of the United States, for cost sharing and production sharing must go hand in hand. In other words, we in Canada will continue to demand that in our joint defence Canadian industry shall receive its fair share. One hon. member said today that there are strong lobbies in the United States against such action. That is natural, but I think when you weigh a question such as joint contribution on the scales of equity and survival itself the nations must realize that each has a responsibility to the other. The weakening of our industrial organization in Canada by the failure to provide Canadian industry with the opportunity to compete fairly and squarely for contracts in respect of our joint efforts must be avoided at all costs.
That is about all I intend to say. We are doing everything we can. We are endeavouring to approach the problem, as we have in the past, with that proper degree of responsibility to Canada for its defence and survival and at the same time to ensure that no Canadian shall suffer so long as the corporation, in respect of which this discussion
Labour Crisis in Aircraft Industry has taken place, is able to provide that alternative which will assure reason and responsibility in the expenditure of public money.


George James McIlraith: Mr. Speaker, we have listened to the Prime Minister (Mr. Diefenbaker) make a very lengthy speech on this subject. The Prime Minister is a man of great forensic ability. I have not nearly his forensic ability but I hope that to the extent to which I have any such ability I will use it to better purpose than he has done tonight. In the few minutes at my disposal I shall try to discuss some of the relevant matters pertaining to the motion now before the house and to do the best I can to be relevant to the motion.
Now, it is interesting that the motion is for the adjournment of the house:
-for the purpose of discussing a matter of urgent public importance, namely the crisis in the aircraft industry involving mass layoffs and threatened disintegration of this important segment of our Canadian defence industry.
Not a word was said by the Prime Minister about the threatened disintegration of this important segment of defence industry. The Prime Minister instead took a great part of the time allotted to him to read newspaper clippings and the opinions of reporters, very fine gentlemen, reporting in the newspapers across this country, and also the opinions of the leaders of labour unions to prove that the company should have known since last September that this contract was to be terminated.


An hon. Member:: They should have, too.


George James McIlraith: An hon. member, a supporter of the government, says, "They should have, too." That may be, but let me point out that apparently the reporters knew the Prime Minister of Canada. They knew better than to rely on his statement of last September, when he said something quite different.
Apart from all that, the Minister of National Defence (Mr. Pearkes), as recently as November 25, said-and I am referring to the press conference statement-that the R.C.A.F. would require a manned interceptor for some years to come. This statement was made right after similar comment by Air Marshal Slemon. I quote the Minister of National Defence:	What we decided last
September was not to produce the Arrow under the conditions which surrounded Arrow production at that time, but to re-examine the cost and then we would know where we were going. That was his statement, and I have no criticism of him for having made the statement at that time in that way. However, I do have criticism for the Prime Minister now, tonight, seeking to indicate that the

Labour Crisis in Aircraft Industry company should have known since last September that this contract was to be cancelled.


Edmund Davie Fulton: May I ask the hon. gentleman a question?


George James McIlraith: I have very little time
allocated to me, and perhaps the hon. member could ask his question at the end of my remarks.


Edmund Davie Fulton: I was going to ask if the hon. gentleman is aware of the statement of his leader on January 19, when the Leader of the Opposition (Mr. Pearson) said-


George James McIlraith: I would prefer not to hear the hon. gentleman.


Edmund Davie Fulton: I am sure you would prefer not because it would be very embarrassing.


George James McIlraith: The hon. member would use up the 15 minutes at my disposal to deal with this question. Perhaps I take myself too seriously, but I feel this subject is worth debating in this house at this time, and I want to spend my time in debating the subject.
The Prime Minister said very little about the thousands of men out of work. He placed the blame on the company. Then, he referred to that great man, the Right Hon. C. D. Howe, and a statement he made about the discontinuation of the production of the CF-105. Let me tell the Prime Minister that had that great man been the minister of defence production we would not have had this clumsy termination in this way. We would not be seeing the defence production capacity of Canada dissolved and disintegrated by the clumsy actions of the ministry.


George Randolph Pearkes: How did you handle the velvet glove?


An hon. Member:: What is a million?


Mr. Speaker:: Order; the hon. member has only a few minutes and I trust the house will give him a hearing, particularly those members who are out of sight.


George James McIlraith: The whole part of this motion having to do with the disintegration of this segment of defence production capacity has not been dealt with by the government during this debate. They have stayed clear of it. I get the impression that it is because they do not understand the problems inherent in that. The Prime Minister spent a great deal of his time in blaming the company for not coming forward to him with suggestions as to what should be done. I always had the view that the responsibility for defence production and for our defence policy was the responsibility of the government.


The first proceeding this afternoon was the statement by the Minister of Defence Production (Mr. O'Hurley), a little statement on production sharing. Let me read a sentence from that statement;
It must be recognized that in the final analysis the degree of participation hy Canadian industry in the production of major weapons will be governed largely by the extent to which Canadian scientific and engineering skills are able to share in co-ordinated programs of development.
That statement is very true. I shall give the minister credit for the statement, but perhaps many others had a share in producing it. The manner in which the government has dealt with this matter since September has resulted in the dispersal of the very scientific and engineering skills about which the Minister of Defence Production spoke when he was making his statement this afternoon. The loss to this country is tragic because it is not going to be possible to share fully in defence production because you will have exported to the United States the scientific and engineering personnel. This is the serious consequence of the clumsy way in which this action has been handled.


Mr. Macdonnell:: What utter nonsense.


George James McIlraith: The Minister without Portfolio refers to that as "utter nonsense". Does he realize that this utter nonsense-


James MacKerras Macdonnell: Read what C. D. Howe
said; it is all there.


George James McIlraith: I wish that great man were here today because a great many people would be much happier. There would not have been the ineptness there has been in the handling of this matter; it would have been handled properly. I would recall to your mind that of all the number of contracts that had to be terminated during the last great war when defence weapons and technology were changing so rapidly, there was never a termination in a way that dispersed the scientific and engineering personnel from this country as this action will do.
If the Minister without Portfolio wants to belittle this aspect of the subject, let me just take one sentence, the lead sentence from an article in the Globe and Mail of today. The heading is, "Only 12 Engineers Called to Work". Let me read this:
Only 12 of the 4,000 engineers employed at Malton by Avro Aircraft Limited and Orenda Engines Limited will be called to work today.
Now, when you are talking about a collection of 4,000 engineers in this country, gathered together, with their technical training, you are talking about a very important factor in the productive capacity of the country. When suddenly 3,988 of that assembly are left without work, what is going

to happen? They are going to seek other work of a comparable nature, and the place they are likely to get it under the circumstances in which we are, is the United States of America. When they procure work in the United States of America how are you going to carry on your share of production in anything but the simpler articles?
The whole tenor of the Prime Minister's remarks ignored that facet of the problem. He did not deal with it at all. He tried to show that the termination was known to the company, and quoted union leaders who came here seeking the assurance of work for their men, and he indicated from that that the union leaders knew it was being terminated. Does it not merely prove the union leaders were doing what it was their duty to do, namely to seek work for their personnel, and what other more proper humanitarian interests could they have than that? Surely, that is what it proves; it is not what the Prime Minister sought to indicate it proves.
To indicate the seriousness of this matter, I take it that there was no controverting of the statements this afternoon that the government had not been meeting with A. V. Roe with a view to trying to find a method of using at least part of this scientific and highly trained engineering and technical personnel in other productive capacities which would meet up to date requirements of defence, the latest strategic type of weapons, and so on. They did not deign to meet with them. In the statement of the president of A. V. Roe this point was made:
Since the Prime Minister's original announcement September 23, which cast doubt on the future of the program, the company has repeatedly proposed to various government departments and even to Mr. Diefenbaker himself alternate programs for the useful employment of the technical resources that have been assembled at Malton and which are second to none in the western world.
However, the government has not seen fit to discuss these matters or consult with us in any way.
The Prime Minister did not address himself to that statement of the president of the company.


Gordon Minto Churchill: He said it was incorrect.


George James McIlraith: He did not tell us which ministers discussed the programs or when the discussions took place.


Mr. Pickersgill:: Or what suggestions the government made.


George James McIlraith: He did not deal with that at all, and it is apparent from the whole handling of the subject and the debate we have had today that the government have addressed themselves to the question of whether or not they should terminate the
Labour Crisis in Aircraft Industry contract, and not to the larger question of what they should or should not do to preserve and make use of this section of great skill and ability to its best advantage for defence purposes.
The lead editorial in the Toronto Globe and Mail this morning is rather interesting. It is right on the front page in the left-hand column, and I am sure hon. members have read it. It begins:
The Diefenbaker government's decision to end the Arrow aircraft and Iroquois engine development program-without having anything to put in its place-reveals a major, and widely spread, internal weakness of that government; a failure, not just in one but in several of its departments, to look and to plan ahead. This weakness has been apparent since the government assumed office 20 months ago; but never, in that time, has it been so dramatically disclosed.
I want not only to quote those words but to assume responsibility for quoting them and so make them my own. I hear the ministry laughing at this matter. Does the ministry realize that what they have done is to dissolve this whole segment of the productive capacity of Canada? I know that the Minister of Agriculture (Mr. Harkness) does not understand that, but I do wish he would possess himself of patience and let some of the hon. members who are concerned with some of these matters deal with them.


Mr. Harkness:: If I did not understand it better than you, I would not speak on it.


George James McIlraith: The minister thinks that is a smart remark, but I will not engage in personalities with him. That is the whole attitude of the present government, to seek to engage in personalities and go on with their election campaigning, instead of dealing with the question before the house. The editorial I quoted goes on to say something else which I think the Minister of Agriculture should listen to:
True enough, Prime Minister Diefenbaker assures us that there will be "greater opportunities" than in the past for Canadian industry to participate in the production of military equipment for North American defence. But we have been getting such promises for many years-without anything acceptable in the way of fulfilment. Now, it would seem, the situation is going to become even worse; not merely will our defence plants fail to get U.S. orders, but they will shut down completely, with U.S. plants taking over their job of supplying Canadian requirements.
No part of that was dealt with in the statement of the Minister of Defence Production (Mr. O'Hurley) today.
This (as his political opponents are already noting) is the exact opposite of what Mr. Diefenbaker pledged in his 1958 election campaign-a greater development of a more independent Canada by, and for, Canadians. How has the Prime Minister

Labour Crisis in Aircraft Industry been brought to such a humiliating position? By the bad planning and bad advice of people around him.
Tonight he went on to throw a smoke screen up and tell us about the oil development in the north. But he did not tell us what his government's action was in making it less possible for us to defend that area and that oil development. That is the subject matter before this house tonight for discussion, yet he sought to throw up his famous smoke screen. It is all very well for him to seek to divert attention, but there are times when he should settle down to the business of being responsible to the house for the administration of the business of Canada, and to forget that he is campaigning all the time, through the leadership of his party, for election. That is my criticism.
I regret I have had to abbreviate parts of my remarks more than I would have wished, although I do recognize that some of the government's supporters think I have had too much time in saying what I have said. But I did want to seek to pinpoint one very important aspect of the matter before
the house, and to point out the complete weakness of the government's position, not only in fumbling the whole matter of the termination of the contract and showing clumsiness in the handling of it but in failing to appreciate the importance of defence production and industrial preparedness, both in the gen-neral economy of the country and in our whole defence system.



BUSINESS OF THE HOUSE

Mr. Chevrier:: Mr. Speaker, may I ask the leader of the house what he intends to do tomorrow?


Howard Charles Green: Mr. Speaker, I did give the order of business on Friday afternoon. If the hon. member for Laurier wishes, I will repeat it now.


Lionel Chevrier: Not if it is the same order.


Howard Charles Green: It may be we shall take estimates on Friday, and if so it will be the estimates of the Department of Citizenship and Immigration.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.

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


Mr. Howard: For each of the years, 1955, 1956, 1957 and 1958, and with respect to the railway system of the Canadian National Railways:	(a) What was the
total number of passengers carried? (b) How many passengers travelled on passes? (c) What was the total number of miles travelled by people on passes? (d) What is the actual or estimated loss of revenue represented by those who travelled on passes?
Answer by: Hon. George H. Hees (Minister of
Transport):
(a)	1955, 16,811,280; 1956, 15,989,368; 1957, 13,920,236; 1958, not yet available.
(b)	, (c) and (d). Not available.



C.B.C. TELEVISION COSTS, OPENING OF PARLIAMENT

Mr. Howard: 1.	What was the cost to the Canadian Broadcasting Corporation of televising the opening of (a) the first session of the 23rd parliament; (b) the first session of the 24th parliament; (c) the second session of the 24th parliament?
2.	Were any Canadian Broadcasting Corporation personnel from points other than Ottawa used for any of these openings?
3.	If so, how many people were used, where did they come from and what was the cost for each opening?
Answer by: Hon. George C. Nowlan (Minister
of National Revenue):
1.	(a) The opening of the first session of the 23rd parliament formed part of the television coverage of the royal visit, 1957. This coverage, which lasted five days, was planned and executed as one integrated production and separate costs are, therefore, not available.
(b)	Live television coverage of the opening of the first session of the 24th parliament included two integrated presentations:
May 12, 1958: election of Speaker, 10:55 a.m.-12:00 noon.
May 12, 1958: opening of parliament, 2:45 p.m.-4:30 p.m.
The same personnel and equipment were used for both presentations and the total cost was $29,000.
(c)	The opening of the second session of the 24th parliament was covered on film January 15, 1959, and broadcast in half-hour film presentations with live commentary over both the English and French T.V. networks. The estimated cost of this coverage is $6,500.
2.	Yes.
3. (a) Personnel from most C.B.C. production centres were in Ottawa at the time of the opening of the first session of the 23rd
Questions
parliament. Owing to the integrated broadcast coverage of the royal visit, 1957 it is not possible to segregate personnel or their costs specifically to the opening of the first session of the 23rd parliament.
(b)	Two employees from Toronto and five from Montreal were used in televising the opening of the first session of the 24th parliament. The cost of travelling and subsistence was approximately $500.
(c)	Ten employees from Toronto were used in film coverage of the opening of the second session of the 24th parliament, and the cost of travelling and subsistence is estimated at $800.



CBFT TELEVISION STATION, MONTREAL

Mr. Howard: Since January 1, 1959, what has been the percentage each day, of (a) live; (b) filmed or nonlive, telecasts shown over the Canadian Broadcasting Corporation television station CBFT channel, 2, at Montreal?
Answer by: Hon. George C. Nowlan (Minister of National Revenue):
		(a)	(b)
Date	Live	FilmJ anuary	l..	
25.6	74.411	2	
11.0	89.011	3	
11.0	89.011	4..	
2.8	97.211	5 .	
12.9	87.1if	6	
16.5	83.5ii	7..	
10.8	89.2if	8	
17.0	83.0"	9..	
11.0	89.011	10	
11.0	89.011	11..	
3.8	96.2"	12.	
13.4	86.613..	
36.0	64.011	14..	
16.5	83.5a	15..	
15.6	84.411	16..	
11.0	89.0a	17..	
11.0	89.011	18..	
3.0	97.0tt	19..	
13.4	86.6a	20..	
17.0	83.0ii	21..	
11.0	89.0n	22 .	
17.0	83.011	23	
11.0	89.0a	24..	
11.0	89.0it	25..	
4.0	96.0ii	26	
13.4	86.6ii	27..	
16.0	84.0ii	28..	
11.0	89.0ii	29..	
17.0	83.0ii	30..	
11.0	89.0ii	31	
11.0	89.0MARITIME COAL	PRODUCTION	ASSISTANCE
Question No. 161-Mr. Robichaud:
1. What was the total amount authorized for loans under the Maritime Coal Production Assistance Act?

Questions
2.	How much of this amount has been committed 5. How much is left to be loaned?
in the form of loans?	6. When does the Maritime Coal Production Assist-
3.	To which companies and in what amount to ance Act expire?
each company?	Answer by: Hon. Paul Comlois (Minister of
4.	What amount has been repaid on each loan? Mines and Technical Surveys):
1. $10,000,000.
2.	$ 9,997,100.67.
3.	Avon Coal Co., Ltd., Minto, N.B	 $	375,000.00
82,000.00
333.000.	00
132.000.	00
620.000.	00

 $	1,542,000.00
Crawford Contractors Ltd., Minto, N.B	
Dominion Coal Co. Ltd., Sydney, N.S	
S. J. Doucet Sons, Ltd., Inverness, N.S	
Four Star Collieries Ltd., Bras d'Or, N.S..	$	100,000.00
69,320.00
42,000.00
D.W. & R.A. Mills Ltd., Minto, N.B	 $	305,850.00
214,000.00
V. C. McMann Ltd., Minto, N.B	 $	8,175.00
28,017.00
4.	Avon Coal Co., Ltd	 $	375,000.00
82,000.00
333.000.	00
132.000.	00
620.000.	00
Crawford Contractors Ltd	
$	140,000.00Dominion Coal Co., Ltd	
$	7,500,000.00S.	J. Doucet Sons, Ltd	
$	47,738.67Four Star Collieries, Ltd	
$	100,000.00
69.320.00
42,000.00
D.W. & R.A. Mills, Ltd	 $	303,850.00
214,000.00
V. C. McMann, Ltd	 $	8,175.00
28.017.00
140,000.00
7,500,000.00
47,738.67
$	211,320.00
$	519,850.00
$	36,192.00
repaid in full, repaid in full, repaid $222,000.00. repayments not due yet. repayments not due yet.
repayments not due yet.
repaid $1,278,278.70.
repaid $2,786.04.
repaid in full, repaid $49,000.00. repayments not due yet.
repaid in full, repaid $50,000.00.
repaid in full, repayments not due yet.
5.	$2,899.33.
6.	October 31, 1959.



PITHEAD COAL PRODUCTION COST, N.S.

Mr. Robichaud: What was the pithead cost of producing a ton of coal in Nova Scotia for 1955, 1956, 1957 and 1958?
Answer by: Hon. Paul Comlois (Minister of Mines and Technical Surveys):
1955, $9.96; 1956, $9.98; 1957, $10.66; 1958, not yet available.
(The pithead costs are derived from reports received from the coal companies of Nova Scotia. The calculation of the cost for each year is made up from the reports of the individual companies whose fiscal year ends in that particular year.)

Tuesday, February 24, 1959



NATIONAL DEFENCE


Donat Raymond: Mr. Speaker, I have
quite a lengthy statement concerning defence production sharing with the United States. As hon. members are aware, a Canada-United States ministerial committee on joint defence has been established as the result of discussions between the Prime Minister (Mr. Diefenbaker) and the President of the United States, to consult periodically on any matters affecting the joint defence of Canada and the United States. It was envisaged that these periodic reviews would include not only military questions but also the political and economic aspects of these joint defence problems. Defence production sharing has been and will continue to be one of the subjects of concern to this committee. At the last meeting held in December, production sharing was one of the important subjects discussed.
A committee of senior officials of Canada and the United States has been established to deal with the development and production sharing aspects of our military requirements. I would like to point out that this committee includes representatives of all the departments of our government which are concerned with this highly important subject. This committee has established working groups for certain specific programs and projects. These working groups are dealing directly with prime and subcontractors, as well as with the procurement agencies of the United States government.
Within the framework of these arrangements numerous meetings have taken place with appropriate authorities of the United States government. These discussions had as a starting point the fact that the economic interdependence of the two countries in relation to defence has been accepted as a general principle by the governments concerned for some time. The Hyde Park declaration of April, 1941 and the statement of principles for economic co-operation of October, 1950, recognized that the production and resources of Canada and the United
States should be used co-operatively for defence in order to achieve the best combined results.
We are now determined to make these existing agreements effective in action. The government is taking every step open to it to ensure that Canadian manufacturers be given access to the United States defence procurement program. This has an immediate importance in relation to the Bomarc, Sage and radar programs. Working groups have been established in these areas, and frequent meetings held with the United States Air Force and prime contractors. The approach has been to identify equipment for which Canadian industry is competent to undertake production as prime contractors or as subcontractors for United States prime contractors.
Both governments are helping to establish better inter-industry contact than has existed in the past. We are also facilitating the exchange of information and personnel between United States prime contractors and potential Canadian suppliers. United States prime contractors have made visits to Canadian plants to obtain a better knowledge of Canadian capabilities. As a result, Canadian firms are already having their names placed on United States industrial and governmental tender lists. Many of our companies have already submitted technical proposals and quotations, and several contracts for engineering services, development and the manufacture of components have been placed with Canadian firms. Progress along these lines will, I am sure, become more and more evident. However, time and continuing efforts will be required to achieve our objective.
I emphasize, however, that the efforts of our government can only be directed towards the setting up of the necessary arrangements whereby Canadian industry will have equal opportunities with United States industry to participate in the production of the technical equipment which is required for defence programs of mutual interest. The real success of production sharing endeavours depends, to a large degree, upon the determination of Canadian industry vigorously to seek defence business in the United States either as prime or as subcontractors. In assuming this responsibility, Canadian industry must bear in mind that it will have to
1270	HOUSE OF
Statement on Defence Production Sharing be competitive with United States industry in terms of technical competence, delivery and price.
We must look, however, beyond immediate programs in order to work out effective arrangements for sharing in the production of future weapons related to the defence of North America. Our continuing objective is to co-ordinate the defence requirements, development, production and procurement of Canada and the United States in order to achieve the best use of our respective production resources for our common defence. The attainment of our objective will be made easier if the sharing of tasks can be initiated at the development stage. It must be recognized that in the final analysis the degree of participation by Canadian industry in the production of major weapons will be governed largely by the extent to which Canadian scientific and engineering skills are able to share in co-ordinated programs of development.
There has always been co-operation between the two countries in utilizing each other's defence production resources. Production sharing arrangements will now place greater emphasis on across the border flow of defence work. From April, 1951 to the end of 1958 Canada has placed contracts for defence equipment in the United States amounting to $590 million. The United States, on the other hand, has contracted in Canada for defence equipment totalling $540 million for the same period. In 1958 Canada placed contracts in the United States to the value of approximately $55 million, but the net value of business placed was reduced to approximately $10 million primarily as a result of the termination of the Astra and Sparrow programs, and decreases in some older contracts for aircraft equipment. In the same year the United States placed $40 million worth of contracts in Canada. These figures represent prime contracts only, and do not take into account any subcontracting which is handled by prime contractors.
Here it is true that Canada subcontracts a greater volume of work into the United States than the United States prime contractors place in Canada. Although statistics on these transactions are necessarily approximate, I believe that about an average of 20 per cent to 25 per cent of our aircraft and electronic equipment contracts are subcontracted into the United States. It is in the United States subcontract field that the greatest results can be achieved through the production sharing arrangements which we have set up in conjunction with the United States.
One of the largest contracts placed in Canada by the United States was the mutual aid purchase of CF-100 aircraft for delivery to
[Mr. O'Hurley.1

Belgium. The United States has bought 5 Caribou aircraft for evaluation purposes, and continues to buy Beaver and Otter general purpose aircraft. There are also continuing contracts being placed for R-1340 engine spares, F-86 aircraft spares and maintenance support for the United States-financed Pine-tree radar sites. Other purchases include radomes and support items for the distant early warning radar line. Not included in the foregoing figures is a recent United States contract placed in Canada covering radar sets for installation in the United States-financed Pinetree radar sites amounting to $6.5 million.
As I previously pointed out, it will take time and continuing efforts on behalf of the government and Canadian industry to make any significant headway in our recently organized production sharing arrangements. I am pleased to point out that as a result of production sharing efforts, a Canadian company has been selected for the production of wings and ailerons for the Bomarc missile. The present value of this contract is $1.7 million. Also Canadian engineers are working on the Bomarc missile for the United States prime contractor on a subcontract basis. In addition, certain other contracts covering electronic equipment have been placed in Canada. We expect as time goes on that further contracts will be placed in Canada.
As the Prime Minister has previously pointed out, the defence of North America has become a joint responsibility of both Canada and the United States, and the skills and resources of both countries must be utilized in the most economic manner.


George James McIlraith: Mr. Speaker, the house will be grateful to the minister for having made a statement on the subject of defence production, but I am sure the house is very much disappointed with the content of the statement. It was announced in the house on Friday last that the minister would be making a statement on production sharing with the United States. That announcement was contained in the Prime Minister's statement to the house that day on a very important aspect of defence.
It is not possible to comment on the minister's statement today in a detailed way, because we have not seen it; but as I followed the announcement it seemed to me that it emphasized two or three main points. First of all, the minister was very careful to point out that the companies would themselves have to go and get these orders. In other words the government had not been able to get very far in making arrangements

to protect the interests of Canadian productive capacity through sharing in the vast contracts required for the defence of this continent.
Reference was also made, and very properly so, to the fact that the ability to obtain production contracts would depend on the extent to which Canadian scientific, engineering and technical personnel had an opportunity to participate in the development programs leading up to the production stage. I can only comment with some feeling that such a statement unfortunately comes at a time when the government itself has been taking steps that cannot help but disperse Canadian scientific and technical personnel, and that there is very little hope of such personnel participating in joint development projects if scientific and technical personnel teams in this country have already been dispersed by government action.	[DOT]
The figures given of the comparative expenditures in the two countries for the last few years only tend to emphasize the extent to which production activity in this field has tended to run down. Perhaps I should say no more at this point, Mr. Speaker.


Hazen Robert Argue: Mr. Speaker, in the context of the sweeping announcement made last Friday the statement that has now been made to the house by the Minister of Defence Production is exceedingly disappointing, and I am sure will constitute little comfort for the 14,000 people who were thrown out on the streets last Friday almost as unceremoniously as garbage is placed on the streets for collection.


Some hon. Members:: Oh, oh.


Hazen Robert Argue: We have listened to the statement of the Minister of Defence Production. There is little or nothing in it of a concrete nature. He has talked about joint committees, about working groups, about discussions that are going on. But where is the action? Where are the concrete results? They are not to be found in his statement.
The Minister of Defence Production does not talk about contracts of a sizeable nature in relation to the defence program of this continent. He talks about potential contracts. He talks about making the necessary arrangements. Then, as if to throw ice water on the possibility of Canada sharing in defence contracts with the United States in a real sense, he says that after all Canadian industry will have to compete with the Americans on a competitive basis. I think in the light of the experience we have had in the past, in the light of our knowledge of the pressure that is placed on the United
Statement on Defence Production Sharing States administration by congress, this statement is an empty one. In view of the loss to the Canadian economy occasioned by such steps as were taken last Friday, it is hollow and meaningless.
In my opinion, Mr. Speaker, this is a clear demonstration of the fact that the government has no policy, and that we are not sharing with the United States in an effective way in defence production orders. In order to illustrate how relatively insignificant the sharing to date has been, one needs only reiterate the figures given by the minister, namely that in 1958 Canada shared in prime contracts to the extent of just $40 million. This represents a very tiny proportion of the defence cost to our nation, not much more than 2 per cent of the defence cost to Canada.
The minister went on to say that we have a prime contract for the production of certain parts of the Bomarc missile, totalling $1.7 million. This, in my opinion, demonstrates to the country that the government has no policy; that this government is incapable of planning in the defence field, and that by this statement today, coupled with the statement of the Prime Minister on Friday and the lack of a firm agreement with the United States, the very sovereignty of the Canadian nation is today threatened. Our sovereignty is threatened because our government has not worked out an arrangement with the United States under which we could share in defence production in a realistic manner. I see smiles on the faces of members of the government, but I can tell them this is no smiling matter.



EXTERNAL AFFAIRS


[Stage Direction]
On the order:	Government notices of
motion:
February 20-The Secretary of State for External Affairs-The following proposed motion:-That items numbered 76 to 105, inclusive, as listed in the main estimates 1959-60, relating to the Department of External Affairs, be withdrawn from the committee of supply and referred to the standing committee on external affairs, saving always the power of the committee of supply in relation to the voting of public moneys.
Mr. Speaker:: Pursuant to section 2 of standing order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the house.


LABOUR CONDITIONS
Paul Theodore Hellyer: I ask leave to move the adjournment of the house, Mr. 1272	HOUSE OF
Labour Crisis in Aircraft Industry Speaker, under standing order 26 for the purpose of discussing a definite matter of urgent public importance, namely the crisis in the aircraft industry caused by delays and confusion in air defence policy, involving mass lay-offs and threatened disintegration of this important sector of our Canadian defence production.


Mr. Speaker:: May I say that the purpose of this statement appears to me to come close to the provisions of the standing order under which leave is asked to move the adjournment, except possibly for the phraseology of the clause, "caused by delays and confusion in air defence policy." This clause is reminiscent of the first amendment on the address in reply to the speech from the throne. However, before I put the request to the house I shall be glad to hear briefly any representations as to why leave should not be granted.


John George Diefenbaker: I rose earlier, before Your Honour, for the purpose of saying this. The attitude taken by the government with reference to this motion is that if Your Honour feels it comes within the rules, the government will welcome the fullest discussion of this subject today. After all, none of us has any monopoly in our feelings for our fellow men. In that spirit I place the matter before Your Honour, firm in the belief that if the opportunity for discussion takes place it will be welcomed on the part of my colleagues and myself.


Mr. Speaker:: I am not sure whether the hon. member who is asking leave of the house would be prepared to drop the clause which reads, "caused by delays and confusion in air defence policy", which seems to me to be a subordinate clause in any event which could open the door to a wider debate than would be justified.


Paul Theodore Hellyer: I have no objection, Mr. Speaker.


Mr. Speaker:: With the request under rule 26 in the amended form, it appears to me this is a matter of urgent public importance of recent origin for which there would be no opportunity of debate until next Monday at the earliest, and therefore it appears to me to come within the rule.
I will read the request of the hon. member for Trinity again:
Mr. Speaker, I ask leave to move the adjournment of the house under standing order 26 for the purpose of discussing a definite matter of urgent public importance, namely the crisis in the aircraft industry involving mass lay-offs and threatened disintegration of this important sector of our Canadian defence production.


Has the hon. member leave of the house to proceed?


Some hon. Members:: Agreed.


Paul Theodore Hellyer: Mr. Speaker, under ordinary circumstances it would be very appropriate on this day to discuss the history, the growth and the development of the Canadian aircraft industry. It is just 50 years ago today that the first powered flight of an aircraft in the British Empire was made at Baddeck, Nova Scotia, by Hon. J. A. McCurdy in his Silver Dart. This should be a day of rejoicing. It should be a day of applause. It should be a day when we can sing our gratitude in praise of the magnificent growth and development of the industry during those 50 years.
On that day 50 years ago the sun of Canadian aviation rose in the east. Last Friday it. went down. Today we hope that what we are doing is not paying our final respects, but assisting in an early recovery. Mr. McCurdy himself, I am sure, dared not dream of the magnificent progress which has been possible in the half century since and of the far-reaching events which would take place. It is a pity that our discussions today cannot take the form of a national celebration, but rather that we should have to discuss what we believe to be a great national tragedy.
Some of us were shocked by the government's decision to cancel the Arrow program. Most of the surprise and shock was on account of the way in which it was done, with no suggestion for an alternative project to take its place. It is worth while to take a look at some of the things the Prime Minister said in his statement to the house last Friday, and I propose to do that briefly if I may. I do not intend to make a lengthy statement on defence policy, but I do think it is necessary at this time to discuss some of the contentions made by the Prime Minister in his statement and some of the inevitable consequences to the aircraft industry and to the Canadian people.
It was reassuring, first of all, to hear the Prime Minister pay tribute to the Arrow aircraft and the Iroquois engine; to hear him say that they have been a success, and that they had shown promise of fine technical performance. We believe this was a well deserved tribute to a fine team of inventors, technicians, scientists, production engineers and the whole company of men who put the aircraft together. The Prime Minister commended those who had designed the aircraft and translated the plans into reality, but then he went on to say that they had been overtaken by events; that the bomber threat had diminished, and that alternative means

of defence, presumably against bombers had been developed much earlier than had been expected.
It is difficult to understand how the threat from manned bombers could have diminished. It has, of course, been some time since those of us on this side of the house who are interested in these matters have had access to the sources which the government uses as a means of reaching its decisions, but I am sure from the information we have and from the information we can obtain from technical sources, magazines and other places, that the present inventory of Russian bombers is greater today than at any time in history. If the Prime Minister had said that it was a continuing threat, and one which remained at the present time at least unabated we might have been able to accept it, but we cannot accept the Prime Minister's statement that it is a diminishing threat unless he can give us some further details as the basis of his statement.
If the alternative means of meeting the threat to which the Prime Minister alluded is the Bomarc missile, some of us would have serious reservations about that, and we should like the Prime Minister to give us some more information about it. The Bomarc has not yet, to common knowledge, been proven, and early models have been less than satisfactory in performance. We assume that the model which the Canadian government intends to acquire is an improved version, but we should like to know what its capabilities are; we should like to know whether it is going to provide us with some semblance of security or if it is true, as some observers have suggested, that Russian bombers would be able to fly under these missiles, fly around them or perhaps, if they could jam the homing device which the missiles carry, fly safely through them. I am sure the Prime Minister has information on this subject, and we should like it to be made available to hon. members so that we would have a greater fund of knowledge on which to base our judgment.
The Prime Minister went on to say that in the middle sixties the missile would be the major threat and the long-range bomber would be relegated to a supplementary role. This is consistent with what most military observers have been telling us, but these observers have also stated that the Russians would still have an inventory of between 1,000 and 2,000 bombers capable of coming over the ice cap and presenting a threat to our national survival. We have been told repeatedly that there is a continuing requirement for manned interceptors. The Minister of National Defence himself said so on several
Labour Crisis in Aircraft Industry occasions; the supreme commander of NORAD and his deputy have also made statements to the effect that defence was needed against the manned bomber. They have gone even further and said the Arrow was required as part of the defence against the manned bomber.
Obviously, the government does not think so. In such circumstances the logical question is who is right, the experts or the government? The Prime Minister went on to say in his statement that the United States government, after full and sympathetic consideration, in consultation with the United States air force with regard to its possible use for the Arrow, had reached the conclusion that it was not economic for them to use the aircraft. Not economic, Mr. Speaker, or not politic? Perhaps our salesmen were not persuasive enough.
The statement went on to say that the CF-100 was still an effective weapon in the defence of North America against the bomber threat. The Prime Minister's statement should have been more precise. Is the CF-100 still effective against the total Russian capability as far as manned bombers are concerned? Surely the right hon. gentleman is not suggesting that? It is true it might be effective against part of the Russian inventory of bombers, but certainly it would not be effective against their recent jets. As a matter of fact the air force placed a requirement for a new version of the CF-100, to be known as the mark VI, which was to have an after-burner to increase its power and be equipped with an air to air guided missile. This was to be a stopgap between the present CF-100, now in squadron service, and the CF-105, but one of the first things the government did when it came to office one and a half years ago was to cancel this requirement.
The inconsistency of the Prime Minister's statement seemed to lie in the fact that he found it necessary to rationalize the government's decision by speaking of the very extensive cost of the Arrow. The figures he used were not figures which were common knowledge; they looked as if they had been picked from a hat. What we ask is that the Prime Minister should break down these figures in order that we may know how they have been put together and whether they do in fact represent the actual probable cost had the project been continued.
Later in his statement the Prime Minister said that defence requirements were the sole justification for defence procurement. No one, I am sure, quarrels with that thesis. Certainly in normal economic circumstances military necessity and military necessity alone should be considered. But one wonders,

Labour Crisis in Aircraft Industry when one considers that there is today more unemployment than at any time since the thirties and there is simply no absorptive capacity available to the skilled workers engaged in the aircraft industry, if it would not have been better for the government to have negotiated some of these future production sharing contracts with the United States before it cancelled this program and threw these many thousands of workers out on the street. It was the way in which it was done which in our opinion is most tragic.
The Prime Minister was very forthright in his statement. "Frankness demands", he said, "that I advise that at present there is no other work that the government can assign immediately to the companies that have been working on the Arrow and its engine". This unequivocal statement was applauded by some newspapers, and one evening paper in Toronto described it as courageous. It was not courageous but cruel. It was cruel, heartless and incredibly short-sighted.
If the government decided that the Avro Arrow was not the most important machine necessary to our defence at the present time we would be obliged to go along with that decision and it must be accepted, but the fact which cannot be accepted is that at a time when there is obviously a very urgent military requirement for some defence machinery the government should, after 18 months, simply cancel the contract overnight without giving adequate consideration as to what it should do in lieu thereof.
This lack of consideration and consultation is something we deeply deplore. We are told by the company that from last September until last Friday noon there was no effort on the part of the government to sit down with the company to decide whether or not it should proceed, whether or not it should develop some new piece of military hardware, whether or not it should produce some piece of equipment of United States design, or just what it should do. There was no effort made to sit down across a table and make plans to salvage and keep in effect the accumulated benefit of billions of dollars of expenditure and years and years of technical advance. This is an unbelievable indictment, and if it is not true we would like the Prime Minister to say so.
It is not as though the goverment has had insufficient time for consideration. It has been in office long enough to have made up its mind. Surely 18 months-or even more, 20 -is sufficient time to evaluate the military requirements of this country, to consider our place in the North Atlantic Treaty Organization, our place in NORAD, what our contribution to the total defence effort of the Atlantic
[Mr. Hellyer.l
communities should be and how best we can proceed to provide it. Certainly what we need is positive decision, and not after these intervening months a negative decision only.
Had there been consultation with the company there is an infinite variety of possibilities that could have emerged from such meetings. We would like to hear from the Prime Minister what some of the possibilities are. Surely the defence experts have given to the government some indication of the things that are available, the solutions which should be considered. An executive of the Avro complex yesterday made a statement to the press in which he indicated that the government had not bothered to consult with the company and had not sat down with the highly trained technical and skilled people there in an effort to employ their collective judgment to assist the government in this matter. He went on to cite some of the possibilities which might have been considered, and I am sure he put forward just a few of them.
First of all the government should have made some arrangement for the orderly slowing down or the orderly discharge of the workers there if it made up its mind there was no other recourse. Surely it could have considered the possibility of building some other aircraft to make available to our air division overseas. Surely it could have considered the possibility of manufacturing missiles and other defence equipment. Surely the government has been considering these questions for 18 months. Has it reached any positive decisions yet? If not, why not? This is a very serious matter indeed, and the lack of consultation is something we cannot condone.
The dislocation this decision has caused is a matter of deep and grave concern to all Canadians. It is national in scope and affects people from one end of this country to the other. It also affects industry over a very broad band of our nation. The immediate result, of course, has been a crisis which has developed as to whether or not we will be able to salvage and retain in Canada the technical personnel who have been accumulated and whose skills have been built up over the years. As early as Saturday morning there were in Toronto representatives of United States aircraft manufacturing concerns ready and waiting. They telephoned our scientific personnel offering to engage them and take them south of the border.
Some of the individual cases are tragic indeed. A number telephoned me over the week end and told of their individual circumstances. Surely these people are deserving of our consideration. I should like to place on the record just one or two instances

of the personal circumstances of people involved in this crisis. One man came out from England with his two children aged 12 and 14. He has a house on which he pays $90 a month in respect of the first mortgage and $35 in respect of the second mortgage. He has a car on which he pays $100 a month. His gas bill amounts to $22 a month, his telephone bill $5 a month and his light bill $8 a month. How can he possibly prevent personal tragedy by drawing unemployment insurance?


An hon. Member:: He will simply have to lose his car.


Paul Theodore Hellyer: An hon. gentleman has just commented that he will just lose his car.


William Moore Benidickson: And his house.


Joseph-Alphonse-Anaclet Habel: He will lose everything.


Paul Theodore Hellyer: He will indeed lose everything, and the hon. gentleman who first interjected made it sound a matter of no account. It is not just a matter of 300 or 400 or even 12,000 or 14,000 families who are affected. That is just the beginning. The effects have not yet spread out to the complex of subsidiary industry the probable result of which will be that another 10,000 to 20,000 families will be directly involved.
Another instance drawn to my attention concerns a chap who came from England some years ago and who has been out of work for some three weeks because of lack of seniority. He moved to Toronto from the maritimes and sold for $8,000 a house which cost him $13,500. After he was laid off he went to the bank to find out about his housing mortgage. He was referred to the bank's head office and was given until March 15 next to make a payment.
Another man told me that he did not know now which way to turn. He was practically born and raised in the aircraft industry and had lived and talked it all his life. It was the only thing he knew and understood. He is an airplane man from start to finish and now he has no place to go unless perhaps to the United States, he added. One man is in such a precarious financial position that he told me in all sincerity he must of necessity take his daughter out of high school to cut down on expenses. This is an alarming state of affairs. Another man has a son in law who recently met with a very serious accident. The son in law had his brain injured and is unable to work. This man now has as dependants his wife and daughter, his son in law and two grandchildren. He has no money. He is out of work and has no income. Where does he go from here?
These stories could be repeated time and time again, Mr. Speaker, because they are
Labour Crisis in Aircraft Industry just representative of the thousands of cases which are real and not just statistics. It reminds us of the statement the Prime Minister made not long ago, to the effect that while he was Prime Minister no person would suffer unduly because of unemployment. We seriously wish that the Prime Minister would try to live up to that very important undertaking.
One of the aspects of this situation about which we feel most strongly, Mr. Speaker, is that of our technical and scientific personnel. If I might be permitted just a moment of personal reflection, it is just about 19 years ago now when I first started out to try to learn something about the aircraft industry. At that time there was no course in aeronautical engineering in this country. There was no aircraft industry; there was no accumulation of aircraft skills, and for that reason I have followed the course of development of the industry through those years with more than casual interest. As a result perhaps I feel more keenly the present situation, because I can appreciate the almost colossal magnitude of the build-up and the improvement which have taken place in our capacity during those years. I do not think people who are not acquainted with some of the industrial and engineering aspects of the industry can appreciate as well the magnitude of this great Canadian accomplishment. It is for this reason that we urge the government immediately to consider some proposal which will salvage the situation and stop what inevitably will be a mass exodus of our most skilled and most trained people from this country.
The other night I cited the electronics industry as just an example of what will likely happen here. Last year the government cancelled the electronic requirement for this aircraft, and we saw what happened there. At once the skilled people began to leave us. I think we should commend the government on having taken some action to hold here the nucleus of the personnel under a plan which they put into effect for the winter months, but we are told now that that plan, which expires in March, has not yet been renewed. Of course it is perhaps just a temporary thing anyway.
These people cannot continue to live in a state of uncertainty. It is an awful feeling to live from week to week and month to month not knowing when your employment is going to terminate. You cannot blame young people, young scientists, for refusing to continue to live under those conditions and for making plans and accepting positions elsewhere. I saw several people over the week end who said, "This is the final blow. We have been

Labour Crisis in Aircraft Industry waiting; we have been hoping; we have been dreaming. We are Canadian through to the core; we are so proud of this achievement of ours that we could stand on the rooftops and shout, and now the whole thing is disappearing in front of our very eyes and we do not know where we go from here."
The whole electronics industry has been put in jeopardy, and just at a time when its products were beginning to make their presence felt in the markets of the world. Surely we cannot compete in world markets if we do not have the skilled technical people necessary to develop the products which are required, and surely those skills cannot be built up overnight.
The government has talked much about secondary industry. We well remember the speeches that were made about Canadian development and about the necessity of building up our secondary manufacturing. We do not want to be hewers of wood and drawers of water; we do not want to dig holes for Bomarc squadrons; we do not want to be relegated just to cutting down trees and bulldozing boulders out of the way. We want to take our part in the community of nations, and this is what the Prime Minister held out to the Canadian people.


John George Diefenbaker: Would the hon. gentleman, who is an authority on aeronautics, answer a couple of questions? The first question is, where in his estimation would markets be available for the CF-105? What explanation has he for the fact that in the United States the F-106C and the F-106D, of similar capabilities to the CF-105, had their contracts recently cancelled and production discontinued? I would like to have his opinion on that.


Paul Theodore Hellyer: Mr. Speaker, as far as the CF-105 is concerned I think there are innumerable possibilities if the government had gone after them. I am told that General-


William Anderson: Mention one.


Paul Theodore Hellyer: I am told that General Norstad has indicated an interest in having some of the CF-105's available for the Canadian air division in Europe.


George Randolph Pearkes: To whom did he indicate that?


William Anderson: That is not what C. D. Howe said.


Paul Theodore Hellyer: We are told that General
Norstad is interested. The government can tell us whether this is so or not. I heard over a week or two ago that the British were taking another look at the CF-105. Perhaps the government should have considered the possibility of trading some of the CF-105's for some British nuclear submarines. That would

have encouraged and strengthened both the mother country and Canada. I am told that had we put them into squadron production we would ultimately have been able to sell them to several of the countries of the north Atlantic alliance.


Gordon Minto Churchill: Who told you that?


Paul Theodore Hellyer: If that is not so let the Prime Minister tell us, but that is the informatior we have.


John George Diefenbaker: I say right now that is not so.


Paul Theodore Hellyer: Mr. Speaker, it is very difficult to tell unless you do have them in squadron service and available, because a weapon in being is so much more important than some ethereal thing on the drawing board which may be in production some years hence.


Gordon Minto Churchill: Give us your source of
information.


Paul Theodore Hellyer: As far as the other planes are concerned, I think we should stop comparing the United States F-106 with our CF-105. They are as different as a horse and buggy and a car. They were not designed to do the same job at all. They were for different military requirements. Perhaps one good reason why the United States should have cancelled their F-105 and F-106 is that they would have looked so poor beside the CF-105.
It is this aspect, Mr. Speaker, the loss of 20 years of accumulated productive capacity and potential, which is so serious. I have here an editorial from one of our independent newspapers entitled "The Beginning and the End". Someone wants to know the source. The newspaper is the Toronto Globe and Mail. I should like to read one or two paragraphs. The views expressed therein are identical with my own; therefore I am quite willing to assume responsibility for them. The editorial reads in part as follows:
And here is the irony of it. Most Canadians will recall that in the early post-war years we were not permitted to share defence production with the United States; the reason the United States gave being that we lacked the necessary know-how. So, at great trouble and cost, we acquired the know-how. Still, there was no sharing. And now, what? Now, the brilliant array of engineering and technical talent which built up this great Canadian industry will be dissipated. Now, these highly-trained men and women-the one national asset-will probably go. Where? To the United States.
This, Mr. Speaker, is a national tragedy. We are not alone on this side of the house in our view. We have some excellent support. I have here a speech prepared by the Minister of Labour for delivery later today

but marked for release anytime this afternoon. I should like to quote briefly from it, because I think we can rely on his judgment. He says:
I do not want to be dramatic. But Canada, of all countries, cannot afford to live in a world where she will not have the skill and technological knowhow to hold on to what she has got.
Truer words will never be spoken, Mr. Speaker. We agree with that statement. We want the government to show some evidence of its concern. We want the government to move and take the initiative in a positive way before it is too late to salvage the situation.
We have heard a great deal about education. I should like to repeat something I said the other night, that people coming back here from Russia have pointed out the giant strides that the Russians have taken in their educational system. More particularly, they point to the tremendous number of scientists and engineers the Russians are producing and how they are pulling ahead of us in this field. Comparisons have been drawn between our two systems, and we have been warned that we should put greater emphasis on the training of scientific personnel. For what, I ask? To export to the United States.
For generations many of Canada's brightest have been going there to seek greater opportunity after having received their education in Canada. Since the beginning of world war II the picture has changed and it has become fashionable for young Canadians to stay in their own country. Young Canadians desperately want to stay here, but they have to be able to live; and, even more important, they have to have the opportunity to create and develop. During the post-war years most young people were able to find full and satisfactory outlets for their talent and ambition in this country. Are we now going to pull the plug again?
Is this what the government means by production sharing? We have heard much of this high-sounding phrase in the past and again today. Does it mean that we are going to produce scientists and engineers and that the Americans are going to produce the equipment? Is that a fair way of production sharing?
We heard a rather lengthy statement by the Minister of Defence Production this afternoon. He did not tell us very much that we did not already know. We find that we are going to make tail fins and some wings for the Bomarcs, and we are going to get $1.7 million for that. We knew how to make tails and wings 20 years ago. What we want to make now is something far more consequential. The $1.7 million will not pay
Labour Crisis in Aircraft Industry the unemployment insurance for more than a few days for the people who have been laid oft.
So far all that has come out of the committee has been promises and pious platitudes. The statement this afternoon was positively staggering in its insignificance. There was just nothing in it at all. It reminded me of an empty cracker barrel I saw over the week end. The minister told us that time and continuing efforts will be required to achieve the desired result. That is not what we want to know. What has been going on for the last year and a half? What has the government been doing with the time it has had? Where have the ministers been when they should have been in Washington negotiating contracts and giving some thought to the future as far as our mutual defence is concerned Why was this matter not given some thought last fall when the ministers had time on their hands? The government must act at once, within the next few days, to prevent a national tragedy.
Surely the problem facing us is a great one, whether this country is to grow, develop, prosper and blossom into a great industrial giant or whether we are going to set the clock back. We not only have to talk big and speak of a great vision; we must act accordingly. Surely the vision of Canada's future is not a vision of our young scientists and engineers marching two by two to the nearest border crossing point. Canada is a land of great resources, and the greatest of these is the skill of our people. We dream of a great new country. We want to compete with the world, and to do so we must have the technological basis on which to build and expand.
National development or national disaster? That is really the choice that faces us. The government has cancelled one great Canadian project. It must present some alternative plan at once if the situation is to be saved.
Finally, Mr. Speaker, I should like to point to the fact that today a new Canadian stamp has been issued. It depicts two airplanes, one of which appears to be the CF-105 taking off into the blue yonder, and the other is the Silver Dart. There seems to be something symbolic about the fact that under the present administration there has been flown in Nova Scotia today, to celebrate the fiftieth anniversary of flight in Canada, a replica of the Silver Dart instead of one of our great Canadian aviation achievements.


Mr. Speaker:: I am sorry to interrupt the hon. member, but his time has expired.


An hon. Member:: Let him go on.


Some hon. Members:: Go ahead.

Labour Crisis in Aircraft Industry


Mr. Speaker:: Has the hon. member leave
to proceed?


Some hon. Members:: Agreed.


Paul Theodore Hellyer: I am practically finished, anyway. This stamp is a symbol of the hope of the Canadian people. If the government will take the necessary action to correct the situation before it is too late, we can take pride in this stamp issue. If it cannot, then the stamp should have been printed with the picture upside down. This complex, which has taken so many years, so much money and so much energy to develop, must not be scuttled now because of lack of application by the government.
We urge the Prime Minister to give us some assurance that our efforts today to focus attention on this problem are not in vain, that some immediate, positive, forwardlooking action will be taken to stem the flow, to stop the exodus of Canada's future from this country, and to bring about that vision of national development which he has placed before us.


George Randolph Pearkes: Labour Crisis in Aircraft Industry some few years ago and this year we decided to continue for one year or more the development of this aircraft. We are not committed any further than to continue the development for another year, with the right even then of discontinuing that development should the circumstances warrant taking such a step.
Then on page 3674 of Hansard for January 23, 1958 I said:
Mr. Speaker, some years ago research work was started to develop a supersonic interceptor capable of intercepting manned bombers which might be expected in about five years' time from now-
And this was in January, 1958.
Development work has proceeded on a year to year basis. Last fall the government authorized a further year's development of that aircraft which has now become known as the CF-105.
The future of that aircraft will depend entirely on the nature of the threat. The matter is constantly under examination.
Later, on August 8, 1958, at page 3237 of Hansard, I said:
In these estimates we have allocated $175 million for the further development of this aircraft which, if it is proceeded with-and we have the right to discontinue it at any time-
I think that answers very clearly the doubt which may exist in some people's minds as to whether this company had any warning of the possibility that the development and production of the aircraft might not be proceeded with. The statement of last September, of course, made it perfectly clear. I can say that ever since I assumed this office I have been in constant touch with the officials of the company. I have seen them in London, I have seen them in Toronto, and I have seen them in my office here. Officials of the department and officers of the air force have been in continual touch with the company and have been advising the company almost daily of the progress made.


Lester Bowles Pearson: I wonder if the minister would permit a question? My question is: had he or any officials of his department seen the officials of the company before the announcement made last Friday, to give them some warning that this announcement was coming?


George Randolph Pearkes: The officials of the company have been in Ottawa within the last two weeks. They had seen the report in the press which had been put out, the statements by the officials of my department which were reported in the press when the estimates were tabled, clearly showing that there was enough money either to continue the development or to cancel it. There was no hesitation. There was no attempt to confuse anybody. It was clearly stated that both were possibilities.
So, after we had assumed office, it was made quite clear that we intended to continue the development of this aircraft for one more

year. During that year there were very significant changes taking place on the strategic scene. Hon. members will recall that only a little over a year ago, at the end of 1957, the first sputnik was launched, and ever since then phenomenal progress has been made in all forms of missilry in the United States, in Russia and in the United Kingdom.
About that time Mr. Khrushchev made the announcement that the manned bomber was obsolete. Now hon. members need not take his statement as full, gospel fact, but he has made a lot of statements which have proved to be remarkably correct. The indication has been that the Russians are not continuing the production of any type of bomber more advanced than that known by the code names of the Bear and the Bison, and that the numbers of Bear and Bison aircraft in the Russian inventory is extremely limited and, furthermore, that these are the only two types of Soviet bomber which could reach this continent and return again. The figure quoted by the hon. member for Trinity (Mr. Hellyer), when he said that the Russians have some 2,000 bombers, must not be taken as indicating that these 2,000 bombers could reach this continent or that more than a very small fraction of that number could ever make the return flight, even if they were not opposed.
It would therefore seem that the basis upon which this development was first begun back in 1952, namely to have an interceptor ready by 1958 to meet what in 1952, quite reasonably, was expected to be an overwhelming force of enemy bombers capable of attacking this continent, had definitely not materialized and all the information we can get from all the sources which are available to the government indicates that the threat of the manned bomber against this country is diminishing. It would therefore not seem to make sense for us to go ahead and develop an interceptor which would be ready by the end of 1961 and which could be in squadron operation by 1962, to meet a threat which would hardly exist at that time. If, in the meantime, there is a change in Russian intentions and the Russians go into the production of a new type of bomber, or even build up the numbers they now have of the Bear and Bison types, there would still be time to meet that threat.
The hon. member for Trinity asked whether an attempt had been made to sell this aircraft to the United States or to the United Kingdom. I should like to inform the hon. gentleman that I went down to Washington personally. I saw the secretary for defence, Mr. McElroy, and I did my best to interest him in this aircraft last summer. Then, when we were attending the NATO conference in Paris we did our best once again to interest the

United States in the program of the CF-105. Mr. McElroy was there on that occasion, together with Mr. Dulles and other representatives of the United States. Attending on behalf of Canada were the Secretary of State for External Affairs (Mr. Smith), the Minister of Finance (Mr. Fleming), the Minister for Defence Production (Mr. O'Hurley) and myself. We were told definitely and with finality that the United States could not include the CF-105 in its armament inventory.
I also discussed this matter with European powers. We took the matter up with the minister of defence of the United Kingdom. We have been in continuous communication with the authorities in the United Kingdom in the hope that perhaps the United Kingdom would be interested in taking over the CF-105, which would have enabled us to have continued. As recently as last week I received a telegram which confirmed again that they were not interested. They stated very definitely that they would not be able to consider the purchase of the CF-105.


Paul Theodore Hellyer: Would the minister permit a question? Would the government have gone ahead with the contract if it had been able to get a reasonable order from the United States or from the United Kingdom or some other country?


George Randolph Pearkes: The government would certainly have given most serious consideration to doing so. I am not in a position to say that they would or would not have gone ahead. It would have depended on many matters, including the size of the order and its relationship to the force of interceptors held by the United States. I merely refer to the fact that I had been to Washington personally and I had personally consulted with the minister of defence in England in order to answer the questions which were advanced by the hon. member for Trinity.
During 1958, when it was becoming obvious that neither the United States nor the United Kingdom would be interested in purchasing the CF-105, very extensive studies were carried out to see what alternatives might be adopted, how many of the CF-105 we could possibly afford to purchase and how many would be required to meet the diminishing threat.
There was some concern at that time about the range of the CF-105. We had been informed then that the ranges were 238 nautical miles flying supersonically and 347 nautical miles flying subsonically. Of course, obviously if you are going into an attack you would cruise as far as you could and only go into your supersonic speed at the last few minutes so you might say that the general operational range of the CF-105 at
Labour Crisis in Aircraft Industry that time would have been about 300 miles including some period of operating supersonically and some period of operating subsonically. That would have been the radius of action from base stations such as North Bay, St. Hubert, Bagotville and Ottawa. We were concerned about the limited range of this aircraft. We therefore concluded that the maximum number of aircraft which we would require to meet the threat would be approximately 100 operational aircraft. The figures of cost worked out to be $1,261 million as from the first of September of last year and that figure did not include the previous development costs. That seemed to be a staggering figure. Not only was that cost to be considered but we would have had to introduce-as we will have to introduce for the Bomarc or any other weapon system -the ground environment the cost of which runs into many additional millions.
After the consideration of these facts the September statement was issued. We had realized that if we were going to go into production of this aircraft the company would have to receive several months' warning so that they could get the long leads ready and be prepared to carry on with the production program overlapping the development program. October of 1958 was considered the deadline when it would be necessary to give a firm decision as to whether or not we should go into production.
The decision was announced on September 23 by the Prime Minister (Mr. Diefenbaker) when it was decided that the Astra fire control system and the Sparrow missile should be discontinued there and then because the company had suggested-and it had been suggested several times previously -that part of the great expense of this aircraft was included in the control and missile system. They had suggested they might possibly make substantial reductions in the cost of the aircraft if they had an opportunity to test out a proven fire control system and missile. This was known as the Hughes control system and the Falcon missile which had been proved in the United States. For this among other reasons permission was given to extend development for a further period in order that the company might test out and see whether these new, proven systems could be introduced into this particular aircraft and to ascertain whether material reductions in price could be made. There were other reasons as well including the international situation and the situation in the Far East which were announced by the Prime Minister at the time.
The company then came up with a new proposal in which they offered a flyaway cost at $3.75 million per copy making a total of

Labour Crisis in Aircraft Industry $345 million, with support spares and equipment amounting to $98.4 million, with missiles amounting to $42.6 million and the completion of the development of some 20 aircraft of which they expected eight would be operational amounting to another $295 million, making a grand total of $781 million for 100 aircraft.
That was a large figure and it was suggested that it would compare favourably with the CF-100. In a statement made by Mr. Crawford Gordon which appeared in the Toronto Globe and Mail he stated that this would compare with the cost of the CF-100 during production in the mid-50's. For the year 1955 the cost of production of that was $93 million whereas the estimated cost for producing the CF-105 with the cost of development, in 1959 was $160 million, and in 1960-61 was $242 million.
While I am on the question of cost perhaps hon. members would be interested in hearing exactly what has been spent on this aircraft up till now. In 1953-54, $1,067,399 was spent; in 1954-55 nearly $17 million; in 1955-56 this figure had more than doubled to $38 million; in 1956-57 the expenditures reached $65 million. In 1957-58 there was an additional expenditure of a further $115 million, and with the expenditure of $106 million in this fiscal year we have a total of actual expenditure, to the 31st January, 1959 of some $341 million dollars. Hon. members will see that the cost had been increasing each year.
The hon. member for Trinity made some reference to the Bomarc. It is difficult to give precise figures of the ranges of the Bomarc without disclosing classified information on a weapon which has been developed by the United States.


The Acting Speaker (Mr. Rea):: Order. I am sorry to interrupt the minister but his time has expired. Has the minister the unanimous consent of the house to continue?


Some hon. Members:: Agreed.


George Randolph Pearkes: I can only say that the ranges are comparable with the ranges of the CF-105. I must add that with the introduction of the Hughes-Falcon system we have been advised by the company that additional fuel tanks can be added which would give an increased range to the CF-105, with the Hughes-Falcon combination, and the additional fuel tanks, up to 354 miles supersonic and a subsonic range of 506 nautical miles.
The speed of the Bomarc is in excess of the speed of the CF-105 and the height that it can reach is higher than that which can be reached by the CF-105. The cost of the two

Bomarc stations which have been now approved, although the final location of one of those has not yet been settled, will be a total of $110.8 million, of which, according to the over-all agreement which has been reached with the United States, the United States will pay at least two-thirds.
I might add here that it is not going to be a question merely of digging holes for the Bomarc to go in, as was suggested by the hon. member. All construction work and all unit equipment will be paid for by Canada and will be bought in its entirety in Canada. This applies also to the further development of the Pinetree line, the introduction of Sage and also of the gap fillers. It is possible for an enemy bomber to get under the range of a Bomarc; it is possible for a bomber to come under the coverage of the radar and we are introducing a large number of gap fillers so as to make that impossible, they will be located to take care of the enemy bomber if it comes down so low as to avoid the arc of the major radar stations.
We have also an agreement with the United States that they will as far as possible, in a fair and reasonable way, place as many of their orders for the technical equipment, for which they are paying entirely, that is, their two-thirds of the over-all figure, with Canadian firms.
If there is to be any comparison between the manned interceptor and the Bomarc I think one can sum it up by saying that the manned interceptor would have more flexibility while the missile has a greater height and greater speed for engaging a target.
While I have indicated the extent of the cost of those two Bomarc stations as $110.8 million, to be shared on the basis of one-third to Canada and two-thirds to the United States, I think hon. members must compare that with the $781 million which Canada would have to pay if she had gone on with the CF-105. It has been felt that if we proceeded with the development of the CF-105 we should be paying a very high percentage of our defence budget into a weapon which was to meet a threat which was diminishing and which would only be a threat for a year or two after the CF-105 had gone into action.
We must take into consideration, not only the large sums of money which we have to spend on the defence of North America but also the fact that we are also in the NATO alliance and we have to keep up our commitments and other commitments in that respect. Even as far as the North American continent is concerned, we are faced with

a new menace, namely that of the oceangoing submarines which are capable of reaching our shores and of launching missile attacks from their decks. Therefore, we are carrying on with an extensive development for the protection of our coastal areas by increasing the number of destroyer escorts that we have and building an additional six of the repeat Restigouche type. The expenditure on these and the first seven Restigouche type is going to be in the neighbourhood of $350 million. We have developed the Argus aircraft which is recognized as the best marine reconnaissance submarine chaser that there is. But that faces us with a cost of $236,896,000. In addition to that, we have to consider the possibility of reequipping the air division in Europe and of re-arming the army with more modern equipment. The army has not had very much new equipment purchased for it during the past 10 years and the government announced they were going to arm the brigade overseas with the Lacrosse missiles and that again runs into a sum of $4.3 million.
We have now on order or have actually built additional air transport in order that our brigades may be able to take part in any United Nations commitments that they may be called upon to fulfil. That again is running into the large sum of $140 million. In order to meet all these requirements we have to review continually the amount of money that we can spend on air defence of this continent and also on the other commitments we have.
If we met all requirements we would be running into a budget far, far higher than the budget for which we are now providing. If we had not taken this action, if we had continued with the CF-105 we would be faced with making a complete change in our defence structure. It might have meant that we would have had to stop the building of such ships as the Restigouche and others of that type. That would throw many hundreds of men out of work from our shipyards. We might have had to cut down the strength of the army or something of that sort. You have to strike a balance.
I have tried to point out that the threat is very definitely diminishing. We are in partnership with the United States. We are playing our full part in that partnership. We are developing the warning systems right from the D.E.W. line down to the Pinetree line. We are spending large sums of money there. We have given of our air space; we have given of our territory. We are playing our full share in the mutual defence of the North American continent. The United States could not carry out the defence of their country without the
Labour Crisis in Aircraft Industry aid of Canada, without the assistance of Canadian air space, without the assistance of our warning systems, without the facilities which we can provide on the ground. We could not carry out the defence of this country if we did not work in partnership with the United States.
I mentioned at the beginning of my remarks that originally it was planned to have 500 to 600 CF-105's for the defence of Canada alone.


Paul Theodore Hellyer: Can the minister tell me if that figure is in the records because our recollection is that it was 300?


George Randolph Pearkes: The original figure in the records is between 500 and 600. The figure of 300 was given at a later date at one of the subsequent reviews. I have checked these figures very carefully. I merely mention that to give an indication of the enormous expense involved and what an utter impossibility it would be for Canada to provide for all the defence of this country. Therefore one enters into a partnership in which there should be a balanced form of defence, one partner providing certain things and the other partner providing other requirements. There should not be any attempt to try to give a small portion of every requirement there may be. Therefore I think it is perfectly reasonable that at this time we should be placing more emphasis on developing the warning systems that are of such vital importance not only to Canada but also to the United States, and also to the powers of retaliation which really are the only preventive of war today.
Therefore we can rely upon the United States which has declared that it has available a large number of interceptors and, even if we had the CF-105, would be providing interceptor defence for the greater portion of North America. We can rely upon them and provide additional facilities for them to operate, if necessary, over our country. In the meantime we do not believe that the threat is materializing. We believe that the CF-100 is capable of dealing with the bomber that the Russians can send over this country. It will be touch and go as far as combat between the CF-100 and the Bear-Bison is concerned but, as I pointed out, they have that aircraft in very limited numbers. As far as the Russian bombers described by the code name Badger are concerned, our CF-100 is quite capable of dealing with them.
I should like to emphasize one thing in closing, that we have to maintain a degree of flexibility so that we can be prepared to meet what is far more likely to be the threat in a few years time, the intercontinental missile.

Labour Crisis in Aircraft Industry


Paul Theodore Hellyer: Before the minister resumes his seat, may I ask him whether it is fair to say that the contract was cancelled primarily because of the increased costs?


George Randolph Pearkes: No, I certainly would not say that. I tried to explain all the way through my remarks that the main reasons for cancelling the CF-105 were the decreasing threat and therefore the lessening need of such an aircraft, the fact that it was taking too much of the defence dollar and that too large a proportion of our contribution toward the deterrent was being concentrated in that particular form.


Hazen Robert Argue: Mr. Speaker, I have listened with a great deal of interest to the speech just delivered by the Minister of National Defence (Mr. Pearkes). I do not think he has answered the three main questions that I believe to be in the minds of the people of Canada at this time. Those questions are: What happens to the workers who are today unemployed and out on the street? Is the government contemplating any action to provide employment for these people, highly qualified as they are in a technical sense? Has the government any plans to restore them to suitable positions in order to add to the productive capacity of the Canadian nation? I have heard of no such plan.
What is the alternative to the CF-105 for Canada's defence production industry? It is correct that the minister referred to some joint undertakings that Canada and the United States will be entering upon but I would submit that he has not answered the central question as to what happens to Canadian defence production industries.
The third question that has remained unanswered is what happens to Canadian sovereignty in the very unbalanced partnership that the government has agreed to on behalf of this country? The type of motion before the house at this time is one that I am certain any opposition party had to move if it was to carry out its responsibilities as an opposition. So it is no accident that the thought of moving the adjournment of the house to discuss the question now before us was in the minds of the C.C.F. members as it was in the minds of the Liberal members.
We came into the house with a prepared motion ready to move it if the opportunity had been ours. We would have asked leave to adjourn the house to discuss a matter of urgent public importance, namely the failure of the government to take steps to provide alternative employment for the thousands of workers in the aircraft industry before cancelling the Arrow project; the necessity of

immediate action to provide alternative employment and projects so as to prevent the addition of many thousands to the total of unemployed; to prevent the loss of technical skills that are so necessary for Canadian development; and, further, the grave threat to national sovereignty brought about by the failure of the federal government to obtain Canada's full share of defence orders for joint North American defence. That is the motion we would have moved for the consideration of the house had the opportunity arisen.
I did not have the advantage over the weekend of talking with the people in the cities of Toronto, Hamilton, Kitchener or that general area. However, it was my privilege over the weekend to go into the riding of Timiskaming and talk to a number of people in that riding. I can say to the members of this house that although northern Ontario is removed from the place of unemployment, the Avro industry, by many hundreds of miles, nevertheless the people in that area were shocked at the precipitate action of the government. They could not understand how, in a democratic society, the Prime Minister (Mr. Diefenbaker) could stand up in parliament and announce something that a few hours later would result in 14,000 Canadians losing their jobs.
We think that that is one of the aspects of this whole problem that is unforgivable. We have received telegrams from the trade unions involved. I have two in my hand to which I should like to refer. The first one was sent to me by Mr. P. Podger, business representative of the international association of machinists. It reads as follows:
The unprecedented callous action of the Diefenbaker government in cancelling the Arrow with immediate resultant loss of 13,000 plus jobs is tantamount to economic treachery. The forfeiture of Canadian sovereignty to the U.S. in our defence created by the government's decision calls for the immediate defeat of the Diefenbaker government.
I may say the people might have thought some of these things some months ago with more effect. It goes on to say:
We urge you to move motion of non-confidence immediately.
The other telegram was sent by Mr. W. Jacobs, president of the draftsmen association of Ontario. It reads:
Request you use every method available to condemn government for callous treatment of engineering and skilled tradesmen and betrayal to American interests. Government must account for failure to provide substitute work for cancelled Arrow project. Demand should be made on Washington for equitable share defence production. Failing agreement basis should only be established on our terms. If possible force government to go to people to prevent complete takeover by U.S.

That is the end of the telegram. I think the very strong wording of these telegrams, signed by responsible officials of the unions involved, shows the feeling of the Canadian people and the workers affected to the announcement that was made and the action that was taken, and particularly to the way the action was taken by this government. It is a question entirely separate and apart from whether or not Canada, in an economic sense, was able to or should have continued with the production of the CF-105. However, there is certainly condemnation of the government for making this announcement in such a manner, and putting people on the street without any consideration at all.
A statement by Crawford Gordon appeared in this morning's Globe and Mail, the first paragraph of which reads as follows:
As I indicated in my brief statement on Friday, the Prime Minister's announcement cancelling forthwith the Arrow and Iroquois programs came as a complete surprise to the company. We received no advance notice whatever of the Friday announcement itself nor did any government department seek prior consultation with the company to arrange for an orderly and gradual cease-work procedure.
It would seem to me that if the government decided to make this decision it should have been made in an orderly manner in order that the people involved in the industry may have had a better opportunity to obtain alternate employment.
What was the attitude of the government toward the development of alternate defence arrangements with the United States? It would seem to me that the government has no concrete plans, that they have not in any of their representations to the United States obtained adequate assurance that this would be a true partnership and that Canada would get its share of defence orders. The Prime Minister, in speaking in the house on Friday, had this to say, as recorded at the bottom of page 1222 of Hansard:
As for the technical equipment which is to be financed by the United States, both governments recognize the need for Canada to share in the production of this equipment. Within the principles of production sharing the United States government and the Canadian government expect that a reasonable and fair share of this work will in fact be carried out by Canadian industry. To that end a number of groups of officials representing both countries have been established to initiate the production sharing activities and to deal with the problems involved. I might add that early next week the Minister of Defence Production will make full information available to the house in this connection.
There is the statement of the Prime Minister, that within the principles of production sharing the United States government and the Canadian government expect that 66968-9-82
Labour Crisis in Aircraft Industry a reasonable and fair share of this work will in fact be carried out by Canadian industry. I say that is a statement of satisfaction by the Prime Minister; that is a statement by the Prime Minister that the partnership is working and that the United States government recognizes the principle of production sharing. This is a far cry from the attitude of the members of this government when they were on this side of the house, when they were stating in no uncertain terms that Canada's share of this production should be increased; that the government of the day should obtain greater concessions from the government of the United States.
Now we have the statement of the Prime Minister that the principles of production sharing are recognized by the United States government. This is in advance of the statement by the Minister of Defence Production (Mr. O'Hurley) which I suggest was hollow, inadequate and a great disappointment in the light of the statement that had been made by the Prime Minister last Friday. This government is satisfied, according to the record, with what I consider to be shabby treatment by the United States. The Minister of Defence Production said today that at the last meeting held in December production sharing was one of the important subjects discussed. He also said that the Hyde Park declaration of April, 1941 and the statement of principles for economic cooperation of October, 1950, recognized that the production and resources of Canada and the United States should be used co-operatively for defence in order to achieve the best combined results.
Then, he goes on in the next part of his statement to say that there has always been co-operation between the two countries in utilizing each other's defence production resources. Apparently this general satisfaction is not just general satisfaction with today's position but it is a satisfaction that goes back for a great many years, according to statements that are being made at this time.
With what does the government take such great satisfaction? Has Canada now reached a position where she obtains a large quantity of defence orders from the United States? The government is no longer in a position to point an accusing finger at the Leader of the Opposition (Mr. Pearson) and say, "Why did you not do something about it?" because the government has now been in office for 18 months. For a year and a half they have been in a position to do something about it. What have they done about it? I submit, very little.
The Minister of Defence Production in his statement this afternoon went on to say that

Labour Crisis in Aircraft Industry in 1958 Canada placed contracts in the United States to the value of approximately $55 million, but the net value of business placed was reduced to $10 million, primarily as the result of the termination of the Astra and Sparrow programs and decreases in some older contracts for aircraft equipment. In the same year, the United States placed $40 million worth of contracts in Canada. I suggest that instead of advancing this as an instance of the kind of utilization of each other's defence production resources the hon. minister talked about, this statement is a public declaration of the failure of the government to get for Canadian industry a fair proportion of defence production orders.
So I submit, in answer to the second question "What has happened to the Canadian defence industry?", the answer is obvious: the industry is in great jeopardy. A large section of the industry, apparently, if nothing else is to be done, is now going to be dismantled. Canadian technicians are being thrown on the street, with the best alternative for many of them to seek employment in a foreign country.
Mr. Speaker, this is no answer to the grave question that we are debating this afternoon. It is a question of the employment and income of Canadian workers; a question of the survival of a substantial section of Canadian industry. Yes, even more, a question of the survival, as we know it, of the basic sovereignty of the Canadian nation. In the statements of the Minister of Defence Production and the Minister of National Defence there is no compromise. In order to sweeten the statement of the Prime Minister last Friday, he made the announcement that early next week the Minister of Defence Production would make full information available to the house in this connection. I suggest that the announcement is a dud. It has fallen with a dull thud this afternoon.
How are we going to share in the production of the Bomarc missile, the production for which the CF-105 has been exchanged? We are going to make a tremendous contribution, according to the Minister of Defence Production. He says:
I am pleased to point out that as a result of production sharing efforts a Canadian company has been selected for the production of wings and ailerons for the Bomarc missile. The present value of this contract is $1.7 million.
Surely this statement by the government indicates that the United States has in fact answered a flat but emphatic "no" to the requests of this government for an adequate sharing of defence production.
What is to happen to our skilled technicians? We do not know. They are apparently going to be added to the half million

or more unemployed at present in this country. They are to be put out on the street in the winter time, when unemployment figures are the highest in the peacetime history of this country since the end of the war. The Minister of National Defence has talked to us this afternoon, but all he has given to those people is sympathy. I know they need sympathy. They need all the sympathy they can get, but they would be much happier if the hon. minister had announced a program to put them back to work in their own field.
How long have we talked in this country about the necessity of taking action to make certain we keep within our borders, so far as possible, highly trained Canadian citizens who have been educated in our universities? The government say they realize the importance of this. The Minister of Labour (Mr. Starr) realizes the importance of it. As has already been said, he is making a speech.
I do not know whether he has made it or not, but it is marked "For release p.m. Monday, February 23, 1959". Here is what he says. I wonder if he discussed this with his colleagues in the cabinet? I wonder if this has had the approval of the government? The Minister of Labour states:
I wonder if many of us realize how important it is that Canada today must have the highest level of industrial skill in the world?
Persons with the highest level of industrial skill are out on the street looking for work. They are out on the street unemployed because the Prime Minister, the leader of the Minister of Labour, has deemed that it shall be so. The Minister of Labour says:
I am not a pessimist. But I will say this. Unless we achieve a really high level of industrial skill in this country our present way of life cannot survive.
I think I might interpret that to mean that unless there is employment for the highly skilled Canadian in this society, there will be no future life for this government and for the Conservative party. The hon. minister was not short of words to repeat, emphasize and underline the same idea, he went on:
I do not want to be dramatic. But Canada, of all countries, cannot afford to live in a world where she will not have the skill and technological know-how to hold on to what she has got.
We need the political know-how in this country apparently to hold on to the skill that we have. But the Minister of Labour says that Canada cannot afford to live in a world where she will not have the skill and technological know-how to hold on to what she has got. That is the statement of the Minister of Labour, and I think that is probably the greatest indictment that will be

made of the government this afternoon. We are asked to hold on to the technical people of this country in face of the government's policy to put them on the street and force them, in many instances, to seek work in other countries.
Then what is to happen to our national sovereignty? How are we going to maintain our independence if we are to surrender the defence of this continent to the United States without insisting, as a nation, on our fair share of industrial production and our taking a full partnership in this whole matter? We in the C.C.F. party do not have the same kind of faith in the present NORAD arrangements that is held by members of other parties. When this question was being discussed in the house last year we said that in our opinion the first place to make our defence effort was through the United Nations. If it was impossible to have the kind of collective security through the United Nations that would seem to guarantee our nation the maximum amount of defence, then as a second choice we should place our partnership on a NATO basis. It should be placed on a multi-nation basis such as the North Atlantic partnership, with which Canada has co-operated for so many years. But this government said: No, although North American defence may be said to be a part of NATO, it is basically a North American show, a partnership between Canada and the United States. And so, without our European allies, we have undertaken the defence of Canada in partnership with the United States. I say that the success being made of this partnership today shows that also for North American defence we should have stayed within the general framework of NATO and not have taken on ourselves the responsibility for North Atlantic defence on the basis which has now been adopted.
This government is not standing up to the United States. This government has said it is satisfied with the principles of co-operation that have been formulated today. Yet on the basis of what has been achieved to date we receive only an insignificant part of United States defence orders. This government, which has in the past defended the cause of national sovereignty, and claimed it would maintain full employment in our country, has made an announcement which will have the effect of increasing unemployment; an announcement which shows, also, that we are not maintaining our sovereignty in this partnership; an announcement which has led to a front page editorial in the Globe and Mail declaring that the government and the cabinet is fraught with internal weaknesses. The Globe and Mail, a great supporter of this government, has said that not only 66968-9-82J
Labour Crisis in Aircraft Industry has the action taken so far been evidence of incompetence as far as defence is concerned but-going even further-that it reveals a major and widely spread internal weakness of the government; a failure not just in one but in several of its departments to look and plan ahead. The newspaper says, further:
This weakness has been apparent since the government assumed office 20 months ago, but never, in that ime, has it been so dramatically disclosed.
What is the main headline in the Globe and Mail? The headline reads: "Frost to Call 'Best Brains' to Save Avro Plant, Jobs." The premier of the province of Ontario is endeavouring to step into the situation to rescue the Canadian economy from the effects of the tragic mistakes and blunders made by the federal Conservative cabinet. This is an indication of how high in the esteem of Premier Frost is held the defence policy of this government.
I make a plea to the government, in spite of the evidence of its weakness and indecision, in spite of the great and mounting evidence that in the United States Canada is being given the brush-off, that it should say to the United States in very definite terms: either Canada is given a fair share of defence orders; either we are taken in as a full partner in this defence arrangement or the partnership is off, if this kind of shabby treatment is given to our country.


Gordon Minto Churchill: Then what do we do?


Hazen Robert Argue: You did not have to infer from that question that you are getting this kind of shabby treatment. Apparently that is just the inference in that statement. I say it is shabby treatment, and if the Minister of Trade and Commerce (Mr. Churchill) wants to admit that Canada is being kicked around, let him stand up and admit it. I am saying that from the standpoint of the interest of Canada and from the interest of most Canadians our nation is not a full partner in this arrangement, as has been stated by the Minister of National Defence today, and that along the lines of the statements made by the Prime Minister so often in the past. We say that Canada should speak up to Washington and be firm in making her legitimate requests instead of making to the Canadian people these statements which add up to an abject surrender to the United States. The evidence is contained in the figures given us by the Minister of Defence Production today.


George Randolph Pearkes: Nonsense.


Howard Charles Green: May I ask a question? Does the hon. member think the contract should have been continued?
1288	HOUSE OF
Labour Crisis in Aircraft Industry


Hazen Robert Argue: I say to the Minister of Public Works (Mr. Green) that the government should have continued the contract in so far as it was necessary and in those aspects necessary to provide employment for the people involved, and if in the opinion of the military experts advising the government it became necessary to discontinue this project it should have been done, in the words of the president of the company, in an orderly fashion.


Lester Bowles Pearson: Mr. Speaker, as has already been pointed out in this debate, this is the fiftieth anniversary of the birth of the Canadian aviation industry and we must all hope in this house that this is not the first day of its decline and disappearance. I think the subject which has been brought up by us justified the adjournment of the house for its discussion. The motion is related to the aviation industry in its terms but the Minister of National Defence (Mr. Pearkes), quite properly I think, had to discuss the motion, which concerns specifically the aviation industry and what is happening to it because of the action taken last Friday, in terms of air defence policy. In doing so he gave us more information on this matter than we have received since he became Minister of National Defence, and it is unfortunate that the kind of information we got this afternoon- whether we agreed with what he said or not -should have come only after the decision had been taken to cancel this contract.
When this statement was made by the Prime Minister (Mr. Diefenbaker) last Friday and when we were told that the long awaited statement by the Minister of Defence Production (Mr. O'Hurley) would be made to us today, I think most of us felt that the statement on defence production and its integration with the United States program would have to explain at least the decision taken on Friday to cancel the Arrow contract. However, as the leader of the C.C.F. group has pointed out, it certainly gave no such explanation or no such background as would help us to understand why this decision should have been taken so suddenly. What we are all asking ourselves now is: where do we go from here in this matter so important to our defence, so important to the industrial economy of this country and so important in the light of our relations with the United States. It has been our major indictment of the government since the day this session began that it was guilty of fumbling, confusion and delay in its policies, and guilty of failure to plan ahead. There could surely not be any better example of this than the situation which now confronts us.


Hon. gentlemen opposite have been pleased from time to time in recent weeks to jeer at us in the official opposition because when the occasion seemed to require it we have spoken in favour and voted in favour of economic planning. There never was a time when economic planning was more justified and more absent than in connection with this particular business we are discussing today.
The minister gave us in some detail the background of this situation fortified with all the records that he has at his disposal and I have no quarrel with what he said in that regard. I feel that he put the background quite fairly in so far as I know anything about it, at least the background up to June of 1957, which is the only background about which I have any information. He pointed out quite rightly that the CF-105 was planned and developed as a result of a government decision at that time to have it take the place of the CF-100 in the light of conditions regarding defence as they were at that time.
I have been reading my back Hansards for those years and this matter has come up more than once in the house in the defence estimates of those years 1955, 1956 and 1957. There was an opportunity then for the opposition of that day to discuss and criticize this program and to ask questions about it, an opportunity of which they did not take any advantage at that time.


Gordon Minto Churchill: That is not right as I shall demonstrate later today in my remarks, if you wish. I have been reading Hansard, too.


Lester Bowles Pearson: I read the statements of the Prime Minister and of the Minister of National Defence who I thought would be the authorized critics in the opposition in regard to national defence at that time. Let me make it clear that I am not taking exception to what the minister said today about that background. It may very well be that conditions changed during the course of a year and a half or two years requiring some change in our defence policy but this government has been in office and in power for some 20 months now and in the light of some of the things the minister said this afternoon about the capacity or lack of capacity of this particular Arrow aircraft, and especially its radial action, I am amazed that if the government felt that way about it, it waited until February of 1959 to take this action.
The minister pointed out that during all these months it had been made quite clear to parliament and the people that the decisions taken from month to month-I believe they were reviewed every six months-were all tentative and were known by parliament, the people of Canada and the company to be

tentative, but there were statements placed on the record at that time which gave a rather different impression from that the minister created in his statement this afternoon.
The minister will remember-and I have already put this on Hansard-that in the committee on estimates which met last summer and which was privileged to have a visit from the minister, he said, as recorded at page 325 of the minutes of the proceedings of that committee of July 4, 1958:
For several years at least after the introduction of the ICBM the manned bomber will be an effective means of delivering attack with the degree of accuracy required.
At the same meeting he later went on to say:
There are important factors necessitating the use of manned interceptors in the air defence system for many years; indeed, as far as we can see into the future.
And later:
The supersonic manned interceptor is the development of a proven weapon, whereas the long range surface-to-air missile is as yet untried.
Those were statements made last summer. Then the Prime Minister in September made the statement to which the minister already referred this afternoon which was understood to alter completely the picture that the minister had painted to the committee and yet, though as the minister said this afternoon that should have been taken by the company as the end of the CF-105, the final decision was put off. In the words of the statement itself, it was put off "because there was danger in the Far East." There was danger in the Far East last September and there is danger today in both western Europe and the Middle East. If the international situation was a valid reason for not intefering with this project in September of 1958 it is an equally if indeed not a more valid reason for not interfering with it some months later in February of 1959.
The minister will remember the words he used in a speech delivered at Chilliwack in October in which he pointed out that the CF-105 was finished. I believe the words he used were, "it is obsolete before it has completed its development." Perhaps at that time the company may have had some reason to think that the project was about to be ended but in November there was a statement made by the former chief of the Canadian air staff, now the deputy director of NORAD, which again took the other view. The CF-105 in his view was an essential weapon in our armoury for defence. Certainly that statement gave the impression that perhaps reconsideration was being given to this matter by the government.
Labour Crisis in Aircraft Industry
The Minister of National Defence in the press conference he held on that very day certainly seemed to agree with the statement of Air Marshal Slemon. In contrast to the statement he made a month earlier in British Columbia the minister on November 25 in a press conference said that the R.C.A.F. would require a manned interceptor for some years to come. He is also reported in the press as having said:
What we decided last September was not to produce the Arrow under the conditions that surrounded Arrow production at that time. Let the makers re-examine the cost and then we will know where we are going.
I gathered from the minister's remarks this afternoon that the makers did re-examine the costs. I asked the minister whether the results of that re-examination were seriously considered by the government in the presence of those who made them and whether there was that kind of discussion between the government and the company which surely should have been held before any final decision was taken. I am informed-and I asked a question related to this of the minister this afternoon-that the last occasion on which Mr. Crawford Gordon of this company saw the Prime Minister was on September 16, 1958. At that time Mr. Gordon gave the Prime Minister a brief in which he warned the Prime Minister about the consequences of the termination of the contract in terms of jobs and unemployment and that he also advanced at that time a number of suggestions. One of those suggestions was that the government and the company set up a joint committee to explore the possibilities of what might be done. I ask the government whether any steps were taken to that end.
This afternoon I asked the Minister of National Defence whether the government had even discussed this termination with officials of the company before the statement of last Friday was made and all the minister was able to say in reply was that the officials of the company and of the government were going back and forth and were in contact with each other. With great respect I submit that did not answer my question.
In any event, surely this was an uncertain attitude on the part of the government. To say the least, it was uncertain because the company had some reason to believe that perhaps the government was changing its mind; that no final and irrevocable action had been taken, because if that had been done surely the company would not have been expected to learn of that decision from the columns of the press or from the radio, which we are told is what happened.
In regard to this change of atmosphere in November, arising out of statements that

Labour Crisis in Aircraft Industry had been made, there was a paragraph in the Ottawa Citizen of November 13 which I think fairly reflects the general situation. That paragraph was under the by-line of Mr. Don Brown, who had been doing a series of articles on this matter. He had been very well briefed and he said:
There is a growing feeling in the R.C.A.F. and in the aviation industry that (the government) will take another look at the situation and reinstate a production program of manned aircraft to carry the R.C.A.F. through the transition period from the manned to the guided missile.
Then we know what happened. Without warning, without discussion with the industry, without any opportunity being given to discuss these matters in parliament, rejecting the request that we had made in the opposition for a complete and searching inquiry into these defence matters, indeed, without making any reference to these requests which had been made on this side on more than one occasion, the Prime Minister issued his bleak and negative statement of last Friday, a statement which the company learned of from the columns of the press. That, Mr. Speaker, is our major indictment of the government in regard to this matter. There were no discussions, no planning, no alternative except in words in a statement, and certainly the statement of the Minister of Defence Production has provided no alternative of any kind today. The sudden, irrevocable-or perhaps it is not irrevocable, perhaps it is not too late yet-almost brutal decision which put 15,000 men out of work in a few hours was made because, said the Prime Minister, "This project was overtaken by events".
I ask the Prime Minister, did he and his government try to direct, to manage, to cushion the impact of those events so that if this decision had to be made it could have been made in a more efficient and in a better way than it was made by this sudden statement last Friday? The hon. member for Trinity (Mr. Hellyer) has already emphasized this. Could the members of the government not have got together to see if something could not have been worked out so that there would not have been this sudden dislocation in this vital defence industry?
What were the reasons given in the Prime Minister's statement as to why this had to be done, reasons which were in some respects repeated by the Minister of National Defence this afternoon? The Prime Minister said, as reported at page 1221 of Hansard:
Thus the threat against which the CF-105 could be effective has not proved to be as serious as was forecast.
The Minister of National Defence underlined and emphasized this reassuring observation this afternoon, but he did not give us

much evidence except that Mr. Khrushchev had said the manned bomber is not as dangerous as it was. I do not believe the Minister of National Defence is so naive that he is going to base the defence policy of our country on statements by Mr. Khrushchev. The Prime Minister also said, and I am quoting again from his statement of last Friday:
During 1959 and 1960 a relatively small number of modern bombers constitutes the main airborne threat.
The Minister of National Defence repeated these reassuring words this afternoon; but I would like to know the evidence for that because while this undoubtedly may be true- and I know there is much information that the minister cannot possibly give the house and we are not asking for it-I also have read all the proceedings of the hearings of the congressional committees on defence, both in the senate and in the house of representatives, dealing with this question, and some of the senior serving officers of the United States armed forces do not have that kind of reassuring view of the offence capabilities of the modern soviet bomber.
Then the Prime Minister went on in the statement to say:
It is considered that the defence system of North America is adequate to meet this threat.
That is, the threat of the bomber, not, of course, of the missile. Perhaps we will be told in plain terms what is meant by the statement that the defence system of North America is adequate to meet this threat.
I should like to quote back, if I had the time, some observations that the minister made in the estimates committee in regard to the nature of this threat and in the inevitability of some bombers getting through. The minister said this afternoon-and I am paraphrasing what he said; I hope I will not do him an injustice and if I do, I am sure he will interrupt me-if the Russians, however, change their plans and their production plans in regard to jet bombers and if they should manufacture new ones, or if they add to the Bisons and Bears which they now have, then, of course, we can alter our plans, too. No doubt by "we" he meant North America. If something is not done, Mr. Speaker, it will be too late to alter any plans in so far as the CF-105 is concerned.
Now from these statements surely we are entitled to draw the conclusion that this decision, when it was made last Friday-now, I am not talking about the way in which it was made-must have been based, as the minister himself said at the very end of his statement, on strategic considerations as well as on financial considerations. We would

like to know, because it is of vital importance in regard to this, when will the major threat be nuclear weapons, missiles rather than bombers?


George Randolph Pearkes: I can answer that right now. The best military advice we receive is that they will be a major threat by mid-1960.


Lester Bowles Pearson: The minister says the major threat will be by mid-1960 and we are in 1959 now. That is a year and two or three months from now. The major threat will be missiles and bombers would then presumably be a minor threat. But in his statement the Prime Minister said that the major threat will change to missiles by the middle 1960's. On Friday last the Prime Minister said:
It is considered that the defence system of North America is adequate to meet this threat.
That is the bomber threat as it is now. I continue:
Potential aggressors now seem more likely to put their effort into missile development than into increasing their bomber force. By the middle of 1962 the threat from the intercontinental ballistic missile will undoubtedly be greatly enhanced in numbers, size and accuracy, and the ICBM threat may be supplemented by submarine-launched missiles. By the middle sixties-
Not 1960 but by the middle sixties, from 1965 on.
-the missile seems likely to be the major threat and the long range bomber relegated to supplementing the major attack by these missiles.
That, Mr. Speaker, is a very important discrepancy between the Minister of National Defence and the Prime Minister in the analysis of this vital defence picture. Indeed, over the air on television last Friday the Prime Minister said that by the time the Arrow would be available the missile would be the major threat and because of that the Arrow would be-these were the words he used-"ineffectual and inoperative." If the Prime Minister was right Friday night and if the Arrow would have been available by 1961, then the Prime Minister could not have been right in this formal statement when he said that the missile would only be the major threat in the middle sixties.


Edmund Davie Fulton: He did not say "only".


George Randolph Pearkes: He said it would be the major threat in the middle sixties.


Edmund Davie Fulton: But he did not say "only" in the middle sixties.


Lester Bowles Pearson: The Minister of National
Defence has said that it will be the major threat 15 months from now.


George Randolph Pearkes: It will be and it will continue to be the major threat for many years to come.
Labour Crisis in Aircraft Industry


Lester Bowles Pearson: All right. The words of the Prime Minister and the Minister of National Defence are on the record and they will speak for themselves. But surely they do underline and emphasize what we are trying to point out here, that there has been confusion, uncertainty and fumbling not only in respect of the decision taken but the reasons for the decision. This is far too important a matter to have that kind of uncertainty.
Now, Mr. Speaker, what is to take the place of the CF-105, the Arrow, in defence against bombers which are now the major threat and will shortly be at least a supplementary or minor threat? In his statement last Friday the Prime Minister said, as found on page 1222 of Hansard:
The development of interceptor aircraft that is now proceeding in the United States and abroad is on different types.
"Different types". Presumably that would seem to explain at least in part why the CF-105 contract was terminated. I wonder whether we can get an answer to the question, what are these different types and are they being considered as alternatives to the CF-105? What new types of manned interceptors can be in the minds of the government as alternatives to the CF-105 and as alternatives to the CF-100 which is now our main defence in the field of manned interceptors against hostile bombers?
The Prime Minister said in his statement and the Minister of National Defence repeated it this afternoon that the CF-100 is still an effective weapon in the defence of North America and that presumably it can do the job so far as hostile jet bombers are concerned. If that is the case, why is it then that we are not manufacturing any more CF-lOO's? What happens when we run out of CF-lOO's? They are effective to do the job now and no provision is being made for a manned interceptor to take the place of the CF-100. But the minister was not quite as optimistic and encouraging about the effectiveness of the CF-100 when he spoke to the committee on July 6 last. As found on page 337 of the committee proceedings he is reported as saying with regard to this plane:
In a few years' time it may become obsolete, but at the present time . . . the CF-100 is capable of meeting and engaging the majority of the bombers which Russia might have available to attack this country.
Not capable of shooting down Russian bombers but capable of engaging the majority of Russian bombers which might attack this country. That does not give you the impression that the CF-100 in its present form is capable of dealing with the most

Labour Crisis in Aircraft Industry modern soviet bomber threat. On the same page the minister went on to say:
Perhaps the most efficient ones-
That is, hostile bombers.
-which the Russians will have in the very near future could not be engaged by the CF-100 in its present form; but if we can add certain other equipment to the CF-100 . . . then I believe the CF-100 will be able to engage effectively the majority of the Russian bombers.
A defence interceptor that can only engage the majority of enemy bombers surely is not one which we can rely for our defence in this country at this time. Yet we have no information as to an alternative or substitute for the CF-100. All we were told in the statement last Friday was that the Minister and his officials were giving further study to the matter. In February, 1959 they are giving further study to what will take the place of the CF-100, and it is not going to be the CF-105. If they have been engaged in these further studies, and they must have been for quite a long time, I ask the minister why these studies were not concluded before such an important decision was taken, before such an important change was announced to end the Arrow and perhaps disrupt an important section of the air industry. I ask him also, or someone else who will reply for the government, do these studies contemplate the purchase of aircraft from the United States or from the United Kingdom to replace the CF-100 or will they perhaps make possible the manufacture of another aircraft in Canada under licence? Could this perhaps have been done by A. V. Roe after cancellation of the CF-105? While these studies are taking place, what is going to happen to the aircraft industry?
This afternoon the minister gave us a good deal of information about the CF-105 some of which, I confess, was quite new and discouraging to me. He gave us a good deal of information also as to the amount of money that had been spent on the CF-105. He gave us estimates of the cost per plane, estimates which seem to have varied steadily from the first time the CF-105 was mentioned. I can understand that up to a point because as the nature of the bomber threat increased from 1953 on and as we learned more and more about the increased capability of Russian jet bombers, naturally there had to be changes made in the planning and development of a manned interceptor to meet these bombers.
But I have not yet been able to get clear in my own mind why there should be such a discrepancy between the cost per plane as given by the Minister of National Defence, let alone that given by the company, and the amount given by the Prime Minister in his
[Mr. Pearson.1
statement last Friday, which was $12 J million per plane to be reduced to $8J million per plane if certain steps were taken. Before the committee on July 5 last year, as found on page 338 of the committee proceedings, the minister agreed that an estimate of $4J million for each plane for a total of 100 was a reasonably approximate figure. Perhaps the minister will remember that. How has that figure gone up to $8J million or $12J million in the Prime Minister's statement?
The minister said also that the figure of $4.5 million of last July would be lower if more than 100 were ordered, and the company has said it would be much lower. Also on this subject of cost, on page 343 of the committee record the minister said he agreed that the Orenda Iroquois engine costs considerably less than inferior equipment built elsewhere. Of course, some hon. members will recall that an official estimate of cost was put on Hansard last year by the Secretary of State (Mr. Courtemanche) when he gave the figure for pre-production costs of $6.1 million.
Now, the CF-105 is not to fill this gap. The CF-100 is, in my view, not effective to fill this need. It may be at the present time, but it is not going to be effective much longer. If it were effective, we would not have stopped producing it. What then, apart from the study that has been given the matter, alternative can there be? Of course, it is the Bomarc, not perhaps as an alternative but as a supplement to the CF-100. The Minister of National Defence, speaking before the committee again last July, stated that the Bomarc will not replace the manned interceptor. It is supplementary to the manned interceptor and he said that was his firm conviction.
However, this particular missile which is to be supplementary to and not replace the manned interceptor may be out of date before it becomes operational in the R.C.A.F. It may be an obsolete missile before the CF-105 could ever become obsolete as a manned interceptor. Indeed, in the Ottawa Journal today there is a statement by the Canadian Press to the effect that the defence department is already thinking of the possible replacement of the Bomarc anti-aircraft missile, and this before we have got it.
Are we then, Mr. Speaker, running the risk of adding to our armoury instead of the CF-105 a missile manufactured in the United States which will not be effective for the purpose for which it is intended? The minister gave some information about it this afternoon. His figures did not, in some respects, agree with the figures I have secured

from other sources of information. His are official, of course, and we must accept them. He did not give us the range because he said it was a matter of security. The range of the Bomarc has been given in congressional hearings in very considerable detail as being between 250 and 300 miles at the present time, to go up to 400 miles with the addition of new equipment. The ceiling the minister said this afternoon, and I got this figure also from United States official sources, is about
75,000	feet. We are not informed that there is a 50 per cent chance of this missile not functioning.
If the cost is $500,000 per missile, which is the figure I was able to secure but which apparently is not correct, and there are 120 to a squadron you have a cost of $60 million for missiles for R.C.A.F. squadrons. These are one-shot missiles. This afternoon the minister said that two squadrons would cost $110 million, and this is for a new weapon which may or may not be effective but which is certainly going to be expensive. Those of us who are worried about the possibility of this United States weapon not doing the job it is supposed to do, if not replacing, supplementing the CF-100 or as some had hoped the CF-105, have certainly had our worry on that score increased if we can put any credence in a statement in an article in the Globe and Mail this morning from its Washington correspondent, Philip Deane, who said that a growing anxiety has been created in the United States as to the effectiveness of this weapon.
This supplementary weapon, these Bomarcs are not to be made in this country. We had some hope last autumn that they would be produced in Canada. When the Prime Minister was asked on September 24 at a press conference, after discussion of his statement at that time about this matter, whether Canada would produce Bomarcs for United States as well as Canadian use, the Prime Minister is reported to have replied that we would start with Canadian production only. This certainly indicated that these new weapons would be manufactured in Canada under licence. The September announcement gave us that impression because one paragraph of that announcement reads:
It is hoped that our defence industry will be able to share with United States industry in one part or another of the major programs for air defence of the North American continent, thereby providing alternative employment in the field of missiles or electronics.
Apparently nothing was done or nothing was successfully achieved in bringing about this effective sharing between Canadian and United States industries in the provision of these supplementary weapons. We have, 66968-9-83
Labour Crisis in Aircraft Industry therefore, the right to ask the government, as has already been asked this afternoon, what part is Canada to play in the industrial and employment side of the Sage program, the ballistic missile early warning system program and the Bomarc program? No light is thrown on this subject by the statement of the Minister of Defence Production this afternoon nor, except in a very minor way, by the statement of the Prime Minister last Friday.
We did learn from the Prime Minister's statement last Friday that the Bomarc would be manufactured in the United States for Canadian use and as such of course it has to fit into the United States continental defence system, with SAGE, otherwise it would not be of much use to us in Canada. In that sense, this arrangement is bound to tie us more closely to strictly United States production, United States industrial requirements. I wonder if that is why the United States is paying the cost of these Bomarc missiles for use in Canada? I understood the Prime Minister's statement to mean just that, and he will correct me if I am wrong. He said that the United States, as part of its two-thirds share of the cost of this Bomarc program will pay for, and I quote his words, "the acquisition of technical equipment". Presumably that is a reference to the Bomarc missile itself.
If that is true, is the United States likely to ever agree that missiles, paid for by the United States, will be made in Canada at any time in the future? Indeed, if they are to be weapons made in Canada for R.C.A.F. squadrons, why should the United States be asked to pay for them? Are we now, under this Bomarc arrangement, accepting for the first time mutual aid from the United States, something which we did not do during the whole course of the war? Is that the new Hyde Park agreement? If that is the case, Mr. Speaker, if the United States is going to pay for weapons used in Canada by the R.C.A.F., then one cannot help but wonder whether it would not be more consistent with our national position or national pride to turn the whole Bomarc and SAGE operation over to the United States, and do something else by way of defence which would have a Canadian character and be paid for by Canada.
If, however, I am wrong in my understanding that the technical equipment referred to in the statement of the Prime Minister is not the missile, what is it? And whatever it is, why should the United States ever be asked to transfer its production to Canada in regard to technical equipment to be paid for by the United States, and some of it at least under its control? What we want is not this kind

Labour Crisis in Aircraft Industry of arrangement. What we want is not financial help from the United States for equipment produced in Canada for Canadian forces. Surely we can take care of ourselves in that regard. What we want, and have wanted for a long time, is access to the United States market for defence equipment which can be made in Canada for United States forces; at least, give us a chance to bid on such equipment for American forces. Collective defence must mean collective production. It must mean, as the Prime Minister said in his statement, pooling of resources. If it does not mean that, and if continental defence means collective planning and operation only and not collective development of defence resources or production on a continential basis, if Canadian resources and production can be considered by the United States as insecure, then we should have a hard look at the situation and talk very frankly to Washington.
In public statements which I made in the United States-and I have been criticized in this house by the Prime Minister for making those statements-I have said that it will be quite impossible to have that kind of defence co-operation which is desirable between the two countries if we have economic and industrial conflict at the same time; and it will be quite impossible to have collective defence for one aspect of defence, and separate defence for the industrial and economic aspect of defence.
One might say that if we criticize the government for not having driven this home to the United States in connection with the CF-105 program in a way which would have secured some orders from the United States which might have made this program more economic than it otherwise would be, why did we not do this while we were in office during the earlier days of the program? The answer to that is quite a simple one. The minister of defence of that day took the question up with the defence authorities in Washington when we were beginning a prototype in the very early days of development, and he got an encouraging reaction at that time it is true. Later the reaction was not so encouraging. However, it must be clear to every hon. member of the house that the United States was not going to commit itself to a contract to purchase a weapon which had not been tested and had not been flown. Once the CF-105 showed itself to be the effective weapon which the Prime Minister's statement said it was, that was the time to take the matter up in a very vigorous way on the highest governmental level with the authorities in Washington.
The minister said he discussed this matter in Washington. He said he discussed it in


Paris at the NATO meeting, at which I believe he and his colleague from Washington took advantage to have a meeting of the joint committee of defence ministers. But if the minister on that occasion was not successful, and if it was decided by the government that it would be impossible to go ahead with the CF-105 program without some kind of order which would cushion expenditure for Canada, then I hope it was made perfectly clear to the authorities in Washington that if that was their final and irrevocable decision in respect of a weapon which was now admitted to be a going concern we would have to review very seriously the whole question of continental economic and industrial collective defence.


Gordon Minto Churchill: May I ask the Leader
of the Opposition (Mr. Pearson) a question?


Lester Bowles Pearson: Yes, certainly.


Gordon Minto Churchill: After that review, would the hon. member advocate going as far as is proposed by the hon. member for Assiniboia (Mr. Argue) ?


Lester Bowles Pearson: Mr. Speaker, there is no way by which we in Canada can dissociate, or should try to dissociate, ourselves from the United States in the defence of our country, of our continent, and of the free world. It is obviously impossible, even if it were desirable, which it is not. The Minister of National Defence said today, and I was amazed to hear him say it, that some years ago we stood alone in the defence of this program. They were the words he used, "We stand alone". He also said there was no planning for continental defence in those years-


George Randolph Pearkes: No agreement.


Lester Bowles Pearson: No formal treaty or agreement. Perhaps I might remind the hon. minister in regard to that rather shattering statement that we have never stood alone in regard to collective defence at any time since world war II. We were among the leaders in building up an Atlantic system of collective defence, which included the United States. As the hon. minister and other hon. members of the government have more than once told us, there was a North American region of NATO. And NATO was founded in 1950. If there was a North American region of NATO in 1950, how can he say that we stood alone in regard to continental defence? Of course, we do not stand alone, and we cannot stand alone.
I am not suggesting that we should go to the United States and say that if they do not do a certain thing we will withdraw from the NATO alliance or the western association, or anything like that. Of course that would

be ridiculous. But I do suggest to the government that they let the United States authorities know in no uncertain terms that rather than continue the process of tying our defence resources to the United States in such a way that we get only tag ends of orders and nothing else, instead of allowing Canadian squadrons to be armed with missiles made in the United States and paid for by the United States taxpayer, we might have to see whether we can work out a new system of defence planning and development, or at least explore the possibility of co-operation in this field with Great Britain and the European members of the North Atlantic alliance.
We cannot possibly divorce ourselves from United States contact. The hon. gentlemen opposite are always the first to state that we should be moving our lines of contact across the Atlantic. I wonder whether the Minister of National Defence has considered the possibility of replacement of the CF-105 with British production and some kind of agreement in regard to continental defence? If we cannot be successful with the United States, surely that would be the second best alternative.
The normal, natural and sensible thing to do is to work out the kind of continental arrangements which we had with the United States during the war, which worked very successfully. For some years after the war that arrangement was not necessary in the way it was during the war, because we were building up NATO and building up the kind of armament development under NATO which emphasized the importance of the western European front. Then a few years ago it became quite clear-and the Canadian delegates of the NATO council were among those who did their best to make it clear-that perhaps the most important NATO front was North America. I think that became clear once the Russians were able to develop jet bombers followed by intercontinental ballistic missiles. Once it became clear that the Russians had the capacity to attack the industrial production of the United States, the Canadian arctic became the NATO major front, and from that day on the United States should have been aware of that fact, not only in planning and operation but in industry and production, and I hope it is not too late to make them aware of it yet.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
Lester Bowles Pearson: Mr. Speaker, when we rose at six o'clock I was discussing one very important aspect of this question, namely, the 66968-9-83J
Labour Crisis in Aircraft Industry relation between the defence industries of the two countries and the necessity of making collective defence mean more than the placing of Canadian air squadrons under NORAD.
In his statement last Friday the Prime Minister said that the government intends that Canadian forces shall be well trained and well equipped for the Canadian share of these tasks in a balanced collective defence. It does not seem to me possible that we should be able to achieve this ideal of an appropriate Canadian share in a balanced collective defence if we do not have a Canadian defence industry including an aircraft production industry, and it does not seem to me we shall be able to have such an industry if our scientists, our engineers and our technicians leave this country to take up employment in the United States. When the Prime Minister makes a statement such as I have mentioned, we ask ourselves: what is to be the Canadian share in this balanced collective defence? Is what we are now proposing to do by the cancellation of this contract and in the working out of alternative methods of defence, the course for which we are particularly qualified, or are we from now on merely adding our bit to what is predominantly a United States effort? Does the United States government accept, as it used to accept at the NATO council meetings in Paris in earlier years when we were talking about NATO forces with regard to continental defence, this concept of balance, this concept of togetherness in the development of defence resources and in the manufacture and development of defence equipment, or does it merely accept this concept in terms of operation and planning? The worries we have had on this score-worries which have been increasing over the years-must, I think, be much greater now in the light of the decision which the government has found it necessary to make and in the light of the statement made by the Minister of National Defence which gives us so little hope of sharing in any real way in continental defence resources and defence projects.
The Prime Minister's statement attempted to apply this principle of balanced collective defence to the co-operation between the two countries in the use of nuclear warheads for defence, tactical weapons. I do not think that attempt was a success. The statement had a good deal to say about this subject, and no subject could be much more important. The Prime Minister said in his statement that we did not intend in this country to produce or manufacture nuclear weapons. We on this side certainly have no quarrel with that. As I said the other day in the short statement I made following the Prime Minister, it is
1296	HOUSE OF
Labour Crisis in Aircraft Industry bad enough in this world to have three countries manufacturing nuclear weapons of mass destruction; it would be infinitely worse if this were to be extended. There is no reason I know why Canada should get into the field of manufacturing nuclear warheads or nuclear weapons of any kind.
The Prime Minister told us in his statement that questions connected with the acquisition of nuclear warheads were being studied but that no agreement had yet been reached with the United States. I wonder why it has not yet been possible to reach an agreement with the United States? Any search for such an agreement, according to the Prime Minister's statement, should reflect certain basic considerations. The first of these-and I am paraphrasing the statement -was that we should continue the international effort to ban nuclear weapons within an acceptable disarmament agreement. I would say that with regard to this we are entirely in agreement.
The Prime Minister also said that under any such agreement with the United States, or, I assume, with any other country the necessity of Canadian forces having the most modern and effective weapons must be recognized. We also agree with that. Then the Prime Minister's statement went on to say that because of the importance of limiting the spread of nuclear weapons to other countries-and I am paraphrasing the statement, not quoting it-the ownership and the custody of nuclear warheads should remain in United States hands and the requirements of United States legislation would apply.
I think perhaps I should quote that particular paragraph because it seems to me to be of very great importance indeed. The statement reads:
Believing that the number of nuclear weapons at the independent disposal of individual nations should be limited, we consider it is expedient that the ownership and custody of nuclear warheads should remain with the United States.
With that statement, Mr. Speaker, we do not agree. We think on this side of the house that if nuclear warheads for defence weapons such as the Bomarc or for missiles which could not be used for anything but defensive purposes are supplied to Canadian squadrons or to Canadian formations they should be under Canadian control, and that arrangements to this end should at least be attempted with the United States authorities.
This does not involve the manufacture of such weapons. It does not involve the installation of manufacturing capacity for such weapons. But surely, as I have said before, it is an intolerable position to say in respect of a Canadian squadron on a


Canadian establishment using Canadian weapons that nuclear warheads, if they are to be made available, should be under other than Canadian control while perhaps on the same airfield the same weapons, used by a United States squadron, would be under United States control.
That seems to me to be a position which is not acceptable and I hope that arrangements can be made by which the United States legislation can be altered to make this aspect of continental defence as well as some others truly continental. Surely that is possible. I know the difficulties and I know the arguments that will be advanced against it to the effect that if the United States makes this kind of arrangement for Canada she may have to make it for other countries but I suggest there is no country in the world which is being asked to work so closely with the United States in defence matters as Canada, and quite rightly, and that that co-operation in defence which is recognized by NORAD under the joint command should also be recognized by this change in the United States legislation.
Those are some of the things that have been worrying us about the decision that the government has taken, about the way that decision was taken, about the length of time it took the government to reach this decision and about the way it has been announced.
I repeat that it seems to us almost impossible to understand that 20 months after the government has taken office it has come to the conclusion that this Canadian development should cease and that having come to that conclusion after 20 months it should have announced it in the way it did last Friday without warning to those concerned.
Earlier this afternoon when I suggested that hon. gentlemen opposite when in opposition did not seem to have taken exception to this, worried too much about it or asked questions about it, the Minister of Trade and Commerce (Mr. Churchill) indicated that at that time he had shown some uneasiness about it and would be able to quote from Hansard to that effect. If the minister felt that way at the time and if other members of the present government shared his feeling about the development of the CF-105 it is all the more difficult to understand why, having come into office, they did not at once take this matter under consideration. It took this government only two or three weeks to put Canadian air defence squadrons under NORAD but it has taken it 20 months to decide to cancel this Canadian air development.
The matter has been expressed very effectively indeed in an editorial I have in my

hand. These will be my closing words and it is perhaps appropriate that they should come from an editorial which appeared in the Toronto Globe and Mail of February 21, 1959, in which it is stated:
The Prime Minister's judgment on the Arrow and its future must as we have said be accepted.
I hope that that judgment can even now be reconsidered. The editorial continues:
The fact remains, however, that the government has no program or policy by which to put anything in its place. It is on this fact, we believe, that the government's decision-and the consequences thereof-must ultimately be judged.
We, Mr. Speaker, are quite happy to judge it on that consideration and when it is judged on that consideration I am certain it will be condemned by the people of this country.


John George Diefenbaker: Mr. Speaker, at the expense of reiteration I refer to the fact that the motion before the house is asking authority to move the adjournment of the house for the purpose of discussing a definite matter of urgent public importance involving mass layoffs and the threatened disintegration of the aircraft industry in Canadian defence production. Speaking on behalf of the government this afternoon, instead of relying on the technicalities of the rules which no doubt would have given rise to considerable argument, I stated that we welcomed the opportunity for the discussion in order to clarify many of those things which in the course of the last two or three days have been encumbered by misrepresentations and conclusions not warranted by the facts.
I sat here this afternoon and listened with interest to the speakers who have participated in the discussion on behalf of the opposition. While in general they have indulged in continuing criticism it is interesting to observe that when they had the opportunity of offering suggestions as to what might have been done in regard to this question none was forthcoming-


Some hon. Members:: Oh, oh.


John George Diefenbaker: We are now hearing, Mr. Speaker, the same old chorus, the same old songsters singing the same old song. They sing it because they had nothing to present but criticism. Hon. gentlemen opposite found themselves in rather a difficult position. The allies of recent date of economic and social planning found themselves separated this afternoon when even the Leader of the Opposition (Mr. Pearson) found himself unable to accept some of the statements made by the hon. member for Assiniboia (Mr. Argue) in respect of the question of United States dominance of Canada.
Labour Crisis in Aircraft Industry
I intend simply to remove immediately one or two misapprehensions concerning matters which I feel should be clarified. This afternoon we listened with interest to the hon. member for Assiniboia dealing with the question respecting the cancellation of this contract. As I listened to the hon. gentleman I wondered if my recollection of his former words was correct and so I looked back and found an interesting statement attributed to that hon. gentleman at page 1062 of Hansard of November 13, 1957, when he directed a question of some interest to me in the following language:
Has the attention of the Prime Minister been drawn to the reported statement of Lieutenant General Simonds that if the $300 million wasted on that dead duck the CF-105 had been used to stockpile Canadian wheat in Europe it would have been spent to much greater advantage?
The voice of November 1957, is a different voice from that of February 23, 1959. The hon. gentleman then went on to say:
Has the Prime Minister considered a substantial reduction in current military expenditures and would he consider using any moneys thus saved to stockpile wheat in Europe, or otherwise to give economic assistance to the free nations?
Mr. Speaker, to which voice shall we listen? Which is the voice of authority, the one in 1957 when it described the CF-105 as a dead duck, or the voice of today?
As I listened to my hon. friend the Leader of the Opposition I observed that he too found himself in some difficulties today. He had expressed a different point of view at other times. I was not quite able to follow him today as to whether he is for or against the CF-105 being continued. He spoke on both sides of that question; whereas, only a few months ago in a statement he made at Edmonton, Alberta, as reported in the Edmonton Journal of October 3, 1958, he said:
We decided when in office two and one-half years ago to go ahead with the CF-105 and review it year by year in the light of developments.
Then, he went on to say this:
The Liberal government had reviewed its decision every six months. Had the Liberals been in office when the first ICBM was fired Mr. Pearson said, "this would have been a major factor in possible revision of our decision."
Then, he went on to say:
The Conservative government should have cancelled the Arrow production order this fall instead of waiting until next spring. How much is going to be spent on the Arrow between now and then?


Lester Bowles Pearson: On a point of order, Mr. Speaker, this particular quotation was put on the record once before by my hon. friend. It will be found on page 56 of Hansard of January 19. I rose at that time and denied it. I said I had the text of what I said,

Labour Crisis in Aircraft Industry which did not bear out the press statement quotation. I also said I had denied it to the press a day or two after it appeared and the Prime Minister accepted my word on that occasion and now he is dragging it up again.


John George Diefenbaker: I notice there were no denials at the time.


Lester Bowles Pearson: There was a denial at the time, Mr. Speaker, as I have just said.


John George Diefenbaker: Well, I am reading from the Canadian Press again as reported in the Ottawa Journal of that day:
He said the Conservative government should have cancelled the Arrow production order this fall instead of waiting until next spring. How much is going to be spent on the Arrow between now and then?
The hon. gentleman now says-and naturally I accept his denial-


Lester Bowles Pearson: On a point of order I said it on January 19 last and the Prime Minister accepted it then and he had better accept it now.


John George Diefenbaker: I must necessarily accept it and of course I do, but I still refer to the fact that the Canadian Press carried that story and one or two other newspapers.


Paul Joseph James Martin: Mr. Speaker, I rise on a point of order. When one hon. gentleman rises in his place, as the Leader of the Opposition did some weeks ago, and denies a statement, under our rules it is not open to any hon. member, by any device whatsoever, to refuse to accept the statement of an hon. member who speaks against an alleged statement, and the Prime Minister is now resorting for the second time to a course which is a violation of the rules of the house.


John George Diefenbaker: Mr. Speaker, possibly I might read another portion of that and see whether or not it too is denied:
Liberal Leader Pearson, speaking to the Liberal association of Alberta, urged a thorough re-examination of Canada's defence policy and its economic implications. He suggested Canada may be getting in too deep.
Does he deny saying that?


Lester Bowles Pearson: Mr. Speaker, I do not deny that at all. Under this government we are getting in too deep.


John George Diefenbaker: Mr. Speaker, the only definition that I can give to the expression that Canada is getting in too deep is that expenditures such as the CF-105 represent too great a contribution to one phase of defence and place Canada in a position where it cannot properly discharge its responsibilities otherwise. I go further. As he spoke this afternoon he made much of United States

influence. How he spoke of it in those lachrymose tones. Well, he said that we had never had anything like this before.


Lester Bowles Pearson: Quite true.


John George Diefenbaker: In fact, since we heard him this afternoon he said the same thing over the national radio. I got the speech twice, once this afternoon and again this evening and he went on to say that never before had there been anything like this cost-sharing of the Bomarc. It is not heard of:	This is mutual aid. You remember
those words. How foreign it was to him that the United States should be spending money in Canada or sharing in our defence. Well, sir, in building the D.E.W. line they did not share with us; they paid it all. Did it shock the sensibilities of those hon. gentlemen then, when the United States came into Canada and instead of Canada participating in her own defence and paying the costs of this line for radar defence, the United States paid it all? But, then, he went on to say that this thing had never been heard of before. We have got to put a stop to it. On the Pinetree line the distribution of expenditures as between Canada and the United States is exactly the same percentage as it is in connection with Bomarc.
I wonder why statements such as these should be made, why there should be such shock exhibited on the part of the Leader of the Opposition who referred to this outrageous thing, the United States coming into Canada and contributing by way of mutual aid. This has been the course followed during the last several years, during the period when he was a minister of the crown.
Having cleared away some of this underbrush, may I now proceed to say something more. It is interesting to see his attitude with respect to the CF-105 and the cancellation of this project. He did not say what he was reported to have said at Edmonton to the Liberal association but, I call witnesses on this behalf respecting the tremendous change that has taken place in the last two years, the technical revolution, the like of which has never taken place in the history of mankind. In the intervening years since the CF-105 was first considered on the drawing table we have had the sputnik and the lutnik. We have also had the ICBM. We have had tremendous changes in the last few years. The hon. member for Trinity referred to the fact that it is 50 years ago today that the Silver Dart was flown, the first flight within what is now the British commonwealth of nations. There have been tremendous changes in those 50 years, but nothing like the changes in the last few years.

I am not condemning the Liberal government for what it did in laying the foundation of the CF-105. It did so on the basis of the information that it had at that time. It had no realization, nor did mankind anywhere in the free world, of the vast potentialities in nuclear weapons. Indeed, only last evening I was reading Kissinger on "Nuclear Weapons and Foreign Policy". He pointed out this fact, that as late as 1947 Admiral Chester Nimitz said, "There will be no ICBM's in [DOT] my lifetime." At the same time it was stated that if there were any continental missiles at all or any long distance missiles they would not within the lifetime of man.

this was the viewpoint of the navy of that day-go beyond the distance of a thousand miles.
I am not condemning the last government for its stand. We may disagree on many things. In the large field of the maintenance of our security and freedom there is much range for disagreement as to the means taken, but no disagreement as to the objective. Who was the man who, above everyone else, had a viewpoint with regard to the CF-105? That man was the Right Hon. C. D. Howe, to whom the hon. member for Trinity (Mr. Hellyer) has referred in the most eulogistic terms on more than one occasion. What did Mr. Howe say the other day in Toronto? I quote from the Globe and Mail of February 21:
The man who promoted the Arrow program in the St. Laurent government said yesterday he was sorry to see it abandoned. C. D. Howe, former production minister, emerging from a directors' meeting at Bay street offices of Rio Tinto Mining Company of Canada, commented: "I am sorry to see a program abandoned that interested me very much", he said. He said the costs of the program were a terrible load and the present government must have decided the costs were too great. "The cost of the Arrow certainly astonished me", said Mr. Howe.
The former production minister, who now calls himself a private citizen with private interests, defended the initial decision to proceed with the Arrow, a decision reached after the joint chiefs of staff-
I emphasize these words.
-convinced Mr. Howe the controversial plane was vital to the country's defence.
He went on to say:
"It seemed like the right thing to do at the time. We were convinced the plane would be needed for at least ten years." However, he admitted yesterday, that rapid development of electronics and guided missiles overtook the Arrow.
Now, sir, there is the viewpoint of the man who actually brought it into being, who was convinced by the chiefs of staff that it was the proper course to follow. He is a private citizen today, and I emphasize again that the statement he made was that "the rapid development of electronics and guided missiles overtook the Arrow".
Labour Crisis in Aircraft Industry
There is another thing I have been impressed with today, the degree to which one person in this country has been entirely forgotten. Continue the expenditure, they say. Why was it stopped? Well, sir, it was stopped for the reason that the chiefs of staff, who advise in their wisdom and on the basis of the best information they can secure, determined that it did not make sense to expend the amount in question on behalf of this phase of defence, having regard to the developments of missiles and the like in the last few years.
One of the most interesting things I have deduced from what was said today is this. Regardless of the advice of the chiefs of staff and their general view that this aircraft would to all intents be obsolete by the time it became available for squadron service, apparently those sitting opposite would have the government squander nearly $800 million of the taxpayers money, not to secure adequate defence but simply to carry on a project that in the light of events, whatever the justification at the beginning or subsequent decisions made, was presumed and intended to be reviewed at the end of each six months or one year.
I start with this. Do not tell me that it was an easy decision for the government to make. Do not tell me that we did not have full realization that in taking this step there would be many who would condemn. Governments have responsibilities. Governments must carry them out regardless of the immediate popular reaction. Governments have a responsibility to do that which they believe to be right on the basis of the best information they have available, that information weighed in the light of the experience of each of the individuals making up that government and having regard to all the circumstances. I say, that as long as I am in this position, whatever the consequences may be, if a decision requires to be made that may not have a popular reaction at the moment, if that is the right course to take then it must be taken by any government with a sense of responsibility.
I intend to trace in general the events of the last few years. I mentioned the technological changes that have taken place. I mentioned as well that other viewpoints were expressed. Only today I noted in a newspaper published last Saturday a reference to the fact that one former member of the house took a strong stand some years ago. I refer to the former leader of the C.C.F. in this house. Several years ago he said that the Arrow would be obsolescent before it was operational. However, that was not the view of the government of the day. No one is

Labour Crisis in Aircraft Industry criticizing that decision now. But when in the light of events, with all the factors before them, ministers of the crown decide that a course is necessary to be taken, then that course, if right and proper, denies them any retreat to a position similar to that in which governments in Europe found themselves during the 1930's. They refused to take courses which they knew were right, as their prime ministers subsequently admitted, because they were afraid of the political consequences that would follow such action.
In that connection I think I can do no better than to refer to an editorial in the Christian Science Monitor of January 31. Similar arguments are taking place in the United States. The title of the article is, "Put Defence Above Politics." The article reads as follows:
A wise man once said that military questions are too serious to leave to generals. Democratic nations have found it well to place defence under civilian control. Under this system political leaders resolve differences among military experts.
Then it goes on to summarize what I believe is the attitude that we must take, and I think that in the days ahead the Canadian people will more and more realize that we have taken a course that is the only one in accord with our responsibilities. The article continues:
Defence is too serious a matter to leave to partisan politics . . . The nation can afford whatever is really required for defence. Indeed, it cannot afford anything less.
Then it goes on:
But let us also recognize that strong forces are operating which would push defence expenses to unnecessary and wasteful levels . . . Perspective is essential.
It finally ends up with this:
We are not wholly satisfied with the administration's defence program, but it is a considered program and it deserves questioning on specific points, not alarmist or partisan attacks.
I think that is fair; that fairly expresses the situation. Again I say, let no one say that in making a decision such as this we did it without much thought. We gave this decision weeks of consideration. In order to justify the expenditure of the taxpayer's money for defence it is necessary that it be actually useful just now, or potentially useful in the future and necessary for maintaining a potentially useful defence unit in the country.
I realize that defence production is an important weapon in the battle against unemployment. However, I say with all the seriousness that I can put at my command, that the production of obsolete weapons as a make-work program is an unjustifiable expenditure of public funds. These changes have been made in other countries. Only last summer the United Kingdom found it

necessary to cancel further work on the Saunders-Roe SR-177, a supersonic fighter which had reached an advanced stage of development. The United States cancelled out two of its aircraft, the F-106C and the F-106D. Then, in the United Kingdom, the government's decision was announced by the minister of supply in these words:
While this aircraft commends general recognition as an excellent and unique design in its class, unfortunately it no longer fits into the particular pattern of the United Kingdom defence program.
I am not going to repeat what I said on an earlier occasion, but the President of the United States dealt with this matter in his address to congress. He went on to say that major national security outlays would be projected at $48.5 billion for the current budget. The problem, he pointed out-and I am dealing now not with his words but the conclusion based thereon-posed by rapidly increasing costs of complicated new weapons is a subject which should be emphasized. He revealed that the over-all cost of each Atlas missile will average $35 million, and that they are now buying bombers which actually cost their weight in gold. Then, summarizing what he said a little later on: a striking example of the switch to new weapons was revealed in the total expenditures on missiles, negligible less than a decade ago which will soar into $7 billion in the current fiscal year. I should like now to quote from the monthly letter of the National City Bank:
The process of selection inevitably has been painful for suppliers of discontinued weapons. One way to avoid dislocations and political repercussions would be to continue spending more on everything, good and poor weapons.
This was the position in which we found ourselves. The changes that have taken place in the last eight or nine years, particularly since 1946, have been such that the plans of a few years ago have been outflown by the changes in aircraft techniques during that period.
Now, an argument was raised today, generally by the Leader of the Opposition and specifically by the hon. member for Assiniboia, to the effect that in what we had done-I think the words were-there was abject surrender to the United States. I say to the Leader of the Opposition-


Lester Bowles Pearson: I made no such statement.


John George Diefenbaker: No; I say to the Leader of the Opposition that when the outrageous statement was made by the member for Assiniboia, that we should say to the United States-which is joined with us in defence; which provided us with the entire expenditure of $300 million for the D.E.W. line; with that percentage of the expenditure on

the Pinetree line I mentioned a while ago, and the other line-that in collaborating together in defence we should say to them, unless you buy everything we want you to take, you will not get any bases in Canada, well, what would that mean? It would mean withdrawal from NORAD. What would our relationship be within NATO? I believe that we must strongly advocate and press upon the United States, as we have the necessity, as the Leader of the Opposition said, of the fullest co-operation in connection with production. We must do that forcibly, strongly and continually, to the end that we receive in Canada, being joined in defence, a fair and just distribution of the expenses being made jointly.
I believe that to say to the United States, on whose shoulders rests in large measure the maintenance of the freedom not only of our country but generally throughout the free world today, either you do this or you get out, is not in keeping with the responsibilities of that hon. gentleman. Indeed it could not be countenanced for a moment on the part of any nation to a friendly nation joined together in North America by the bonds of geography, common tradition and common dedication. This may sound all right in certain quarters, but it is that kind of irresponsibility that has brought about the transition from former greatness to the present numerical content of those who support that type of statement.
We need to press constantly upon the United States the necessity for giving to us, as I said a moment ago, a fair and just distribution. The Minister of National Defence (Mr. Pearkes), the Secretary of State for External Affairs (Mr. Smith) and the Minister of Defence Production (Mr. O'Hurley), have been in constant communication with their counterparts in the United States. We have not achieved everything that we want. We are not satisfied. We shall continue to press, and forcibly press.
One of the things of which I was convinced more than anything else in my tour around the world was this: Those who are joined in freedom must maintain unity with the fullest respect for the rights of each other. Economic strength must be maintained if we are to meet that challenge which in the last several months has become even more direct, particularly since Mr. Khrushchev's speech to the council during the latter days of January.
What have we done in connection with our sovereignty? As far as the DEW line is concerned, we have taken over, as was said the other day, its operational control. We are taking over the airfields in the north, and in the course of the next two or three years,
Labour Crisis in Aircraft Industry these airfields will be operated by us. We are ensuring that our sovereignty over the northern area shall be maintained.
They used to speak of the vision I had of northern Canada. I spoke of the tremendous possibilities of the north, not only for defence but for economic strength and stability, and there were those who said we build from igloo to igloo. In the last few weeks we find that some 70 million acres of potential oil lands and mineral lands in the north have been taken over, thereby indicating that a major source of Canada's wealth is in that area. We must continue to assert there our sovereignty and this we are now doing, particularly, first, by occupying these radar stations in the north and, secondly, through the instrumentation of resource development in those areas.
May I say in addition that when they speak of this expenditure of some $7 million or $8 million for the CF-105 we should provide our own defence unless the United States provides it on the basis we want. Is it possible for 17 million souls to be able to make a contribution in respect of these costly weapons, these tools of defence, and endeavour at the same time to maintain a similar expenditure to that of a nation of ten times our population?
Having dealt with that, let me speak for a moment of the CF-105. The Leader of the Opposition was quite fair this afternoon when he said there were certain facts which we did not have before us. One of those facts I think will, when known by the Canadian people, begin to give them an appreciation of the areas which would have been defended by the CF-105. Most people that I have talked to have been under the impression that the CF-105 would constitute an instrument capable of protecting our northern areas. The vast unpopulated north would have available to it an air force which would be able to defend Canada against any potential aggressor. I am now reading from an article which appears in the current issue of the Atlantic Advocate. It is entitled "Aviation's Year of Decision". It deals with the CF-105, and it says this:
National pride is considerably involved and is, perhaps the greatest single force behind the Arrow program, as at present outlined . . . Avro is not by any means the whole Canadian aircraft industry. Its employment figures are about one-fourth the industry's total.
Then it goes on to deal with the various types of aircraft manufactured by de Havil-land and Canadair.
The supersonic speeds of today's bombers, and the interceptors to meet them, make this vision of air "patrol" a thing of the past. The Arrow probably has a flight time of an hour, including climb to required altitude and a few minutes of
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Labour Crisis in Aircraft Industry
combat. This means that its operating range from base is not much more than 500 miles.
The minister placed on the record today a general indication of the area which would be protected against attacks at supersonic speeds. On the other hand, we have available to us the Bomarc, whose area of defence and defensive action is not far removed from that of the CF-105, but the difference in expenditure has been clearly set out. The cost of the Bomarc missile to Canada, as compared to the $781 million of the CF-105, is approximately $110.8 million. That represents something that must be taken into consideration, all things being equal and the defensive properties of each being about the same.
The Leader of the Opposition mentioned a while ago, in so far as the statement is concerned, that he gave no indication of the things he generally said, and I accept that. But I think I ought to point out to him too that he gave a press conference in the city of Vancouver on September 26, and he was asked there what he thought about the CF-105. He said he was not familiar enough with the details to say if Canada was justified in apparently scrapping the CF-105 Arrow fighters. The hon. member said it appeared from the government's statement that it intended to scrap the plane after next spring. Then he said-this is not the Canadian Press report of the Edmonton speech; this is the Vancouver Sun report of September 26- that it would be very difficult to justify the government's action in spending about $100 million on Arrows until next spring if it were only to keep jobs open. The hon. gentleman-


Lester Bowles Pearson: Why did you not scrap it and save $100 million?


John George Diefenbaker: at that time-


Paul Theodore Hellyer: Mr. Speaker, may I-


Some hon. Members:: Sit down.


Paul Theodore Hellyer: Would the Prime Minister permit me a question?


John George Diefenbaker: Surely.


Paul Theodore Hellyer: The Prime Minister said that the expenditure of the Canadian taxpayers' money on defence procurement could not be justified as a make-work program, if I understood him correctly. I wonder if the Prime Minister saw Philip Deane's article in the Globe and Mail this morning which said that the United States government adopted the Bomarc as a weapon of North American defence, not so much because of the missile's military merits but to avoid shutting down an aircraft firm? My question is this. Does the Prime Minister think that the spending


of the Canadian taxpayers' money is justified on the procurement of a United States make-work program?


John George Diefenbaker: Apparently the hon.
gentleman has not been in here during the last while. I have been discussing that situation and I dealt with the division of responsibility as between the United States and Canada at length. In so far as Mr. Deane's article is concerned, I am not going to say it has no basis, but certainly the information that we have from the chiefs of staff is far removed from the views of Deane.
There has been much said about the tremendous surprise which arose over the fact that we acted as we did. I have not the time to quote from the various newspapers and periodicals across this country in connection with this matter. However, if the hon. gentlemen are interested, they will read in the October 25 last issue of MacLean's magazine a clear interpretation of the statement which I made on September 23, 1958, to which I am going to make reference. Indeed, even before that there were editorials regarding this matter. The London Free Press of April 28, 1958, said this:
The decision, which may be made shortly, is whether to order this aircraft into production with a view to re-equipping our first-line R.C.A.F. fighter squadrons. It is the most expensive single decision ever to confront the defence department in peacetime. Its ultimate cost would not be far short of Canada's expenditure on the St. Lawrence seaway.
That was an understatement. Then it went on on the basis of the latest estimates which were brought forward.
It may be fine for our national ego to boast that we can design and produce a fighter plane of the Arrow's undoubted capabilities, but how large a price are we willing to pay for national pride?
And the article continues in that way.
The Victoria Times in an editorial on October 20, 1958, said the inside story of the supersonic fighter aircraft, the Avro Arrow, "emerges from an interesting intramural dispute among the editors of Maclean's magazine." The article goes on to say that the decision to be made is one which has to be based on no other consideration than that of value.
The Montreal Star of November 13, 1957 said:
The appalling cost of this aircraft is enough to stagger government ministers and serious people everywhere. We are a middle power with a budget and an industry to match. If this alone were not enough to give us pause, there is also the fear that the dawning of the missile era has already made the Arrow obsolete. The chief reason for building the Arrow is the fleet of bombers which the Russians are known to possess. Now we are

made painfully aware that they may be well on the way to supplanting their own bombers with long-range missiles.
The article concludes in this way:
But if our military experts feel that it was a noble try that has lost primary importance in a changing concept of war, Canada will have no alternative but to decide that the CF-105 be set aside for other projects, no matter how painful this may be to the large segment of industry that had a stake in its development.
The Winnipeg Free Press dealt with this on January 13, 1959:
With the opening of parliament only a few days away the Avro Aircraft company has offered its Arrow interceptor to the government at what looks, at least, like a new low price. Last fall the government decided against putting the Arrow into full production, but delayed making a final decision until March 31. The government has since been under heavy and unrelenting pressure from the aircraft industry and other interested parties to change its mind and next March bring in a decision favourable to the manufacturers of the Arrow.
The Free Press, which has never been noticed for its adherence to views expressed on this side of the house, went on to say:
The government doubts, with reason, whether an aircraft like the Arrow, which cannot stop intercontinental missiles, will be worth the high cost involved.
Then, again, the Toronto Telegram, on June 16, carried this U.P.I. dispatch from Washington:
United States defence officials said today the main reason for the continued refusal of the United States to buy Canada's Avro CF-105 fighter plane is that the Arrow cannot fly at top speed long enough.
The Arrow is capable of speeds above 2,000 miles an hour only in short bursts.
The officials said further that the United States could hardly buy the Arrow from Canada when it has suspended production at home of two very similar aircraft.
I mention these things because editorials have appeared throughout the country since last September which clearly indicated that any one reading the statement which I made, and to which I am going to make reference, realized that the major reason for the continuance of the program was the fact that at the time we were faced with a serious situation in the far east. The Leader of the Opposition says the situation is serious today having regard to what is taking place in the west Berlin area and the fact that Mr. Macmillan has found it necessary to go to Moscow and there endeavour to come to some understanding of the attitude of mind of Mr. Khrushchev, particularly since the latter has made some statements recently which could not but cause fear to freedom-loving people everywhere.
The situation is serious, but whatever that situation may be today the fact remains that on the best advice we have, the CF-105,
Labour Crisis in Aircraft Industry which would not be in production until the date mentioned by the Minister of National Defence would not if it were in production today meet the potential threat as it is placed before us by those who have knowledge and experience of military affairs.
I made that clear when I issued the press release on September 23. I said at that time:
The government has concluded that missiles should be introduced into the Canadian air defence system and that the number of supersonic interceptor aircraft required for the R.C.A.F. air defence command will be substantially less than could have been foreseen a few years ago, if in fact such aircraft will be required at all in the 1960's in view of the rapid strides being made in missiles by both the United States and the U.S.S.R. The development of the Canadian supersonic interceptor aircraft, the CF-105 or the "Arrow", was commenced in 1953 and even under the best of circumstances it will not be available for effective use in squadrons until late in 1961. Since the project began, revolutionary changes have taken place which have made necessary a review of the program in the light of anticipated conditions when the aircraft comes into use. The preponderance of expert opinion is that by the 1960's manned aircraft, however outstanding, will be less effective in meeting the threat than previously expected.
I went on to say this, as contained on page 3 of the statement:
The government believes, however, that to discontinue abruptly the development of this aircraft and its engine, with its consequent effects upon the industry, would not be prudent with the international outlook as uncertain and tense as it is. As a measure of insurance, with present tensions as they are, therefore, the government has decided that the development program for the Arrow aircraft and Iroquois engine should be continued until next March, when the situation will be reviewed again in the light of all the existing circumstances at that time.
We have continued to review it, and in no way has there been any suggestion that the course which was outlined in the presentation in November should be altered at this time. I said at that time-and this was the opinion of other Canadians-that we recognized the accomplishments and the technical quality of the work done, but that to continue vast expenditures on aircraft and equipment which military and other expert opinion does not support as the best way to achieve the defence essential to our security, would not only be wasteful but unjustifiable. I also said this:
The government deeply regrets the unemployment that will be involved in the termination of the Astra and Sparrow projects and in the Avro plant at Malton. It is hoped that our defence industry will be able to share effectively with the United States industry in one part or another of the major programs in the air defence of the North American continent and thereby provide alternative employment.
That was clear. Has there been anyone who has had any doubt since? I referred to an article in Maclean's magazine of October 25 by a distinguished member of the press

Labour Crisis in Aircraft Industry gallery, Mr. Blair Fraser. In an editorial in the same issue, the following also appears:
Most Canadians, we feel sure, approve the government's decision to suspend production of the very good but very obsolete fighter aircraft, the Arrow. It was a logical military decision-a decision on military affairs, arrived at for military reasons.
And that, we trust, is the only basis on which this country will ever make a military decision. For a while, as the cabinet pondered its choice and even after the choice was made, some people seemed to think other factors ought to have entered into it.
However, it was generally accepted. No one misunderstood-and I intend to refer to the Avro management in a moment.
Ever since last fall there has been evidence of a continuing lobbying, of pressure to influence this government to reconsider what was to all intents and purposes a clear and perspective decision.
I wish now to draw attention to an article by Clark Davey which appeared in the Toronto Globe and Mail of January 9, 1959, reporting on a delegation representing 35,000 Canadian aircraft workers composed of members of the united auto workers and the international association of machinists, which delegation was led by Canadian Labour Congress president Claude Jodoin and which met with the Minister of National Defence in Ottawa. The report indicates that the delegation found no great encouragement in what the minister had to tell them and goes on to state:
Earlier today, many members of the same delegation had joined civic and political leaders from Port Arthur and Fort William in urging Public Works Minister Green to act to keep the Canadian Car Company Limited plant, an Avro subsidiary, in Fort William.
That is another reference to an Avro subsidiary. One could also refer to another in Cape Breton, Dosco. When I read what the president of Avro says regarding unemployment I would like him to transmit some of his views in connection with some of the subsidiaries.
What did the labour leaders say, as reported by Clark Davey? Did they have any misunderstanding? In the same report we find the following:
The labour leaders said they felt only the optimistic statements of Avro president Gordon had kept the skilled workers with the company.
That indicates that since last fall, as is the fact, the Avro corporation has continued to lead its workers to believe that there was going to be a change. That was made clear on that occasion. It was also made clear that no hope was being held out even though the situation and the critical nature of the adjustments necessary were then and are now fully realized by the government.
[Mr. Diefenbaker.l

Was there any doubt that this was not going to be proceeded with? I read from an article by Charles Lynch in the Ottawa Citizen:
It's been a bad week in parliament for the A. V. Roe Company, the British industrial giant whose Canadian interests have a way of getting into the news.
Biggest newsmaker in the company's array is Avro Aircraft, of Malton, Ontario, whose future rides on the government's decision about the CF-105 Arrow supersonic jet fighter.
Prime Minister Diefenbaker's latest statement on the 'disagreeable course' facing the government has been widely interpreted as another nail in the Arrow's coffin.


George James McIlraith: Mr. Speaker, would the hon. gentleman permit a question? Would he give us the date of that article?


John George Diefenbaker: Labour Crisis in Aircraft Industry manager. I want to be restrained in what I have to say in this regard. My hon. friends say that we should have announced this before we announced it in parliament. What would they have said if they had read that outside of parliament we had made a determination? The company had no misunderstanding whatsoever. I say that its attitude in letting out thousands of workers, technical workers and employees, on Friday, was so cavalier, so unreasonable, that the only conclusion any fair-minded person can come to is that it was done for the purpose of embarrassing the government.
They knew at the beginning, as the Leader of the Opposition said today, that this matter would be considered year by year. I remember Mr. Campney, the then minister of national defence during the years, saying on one occasion that this matter would be reconsidered from time to time. They knew it was being reconsidered; they realized last fall, after the September press release, what the situation was. They took the stand, as I see it, that they would keep up a continuing pressure, in the words of one of the editorials to which I have referred. They have offered no alternative that was reasonable, responsible or in keeping with realities.
Of course, it is very easy to arouse people to demand for continuance and this is understandably so. I say that companies have responsibilities, as have governments. Was there any justification to say to everybody, "You are out", and today announce, if the press is correct, that some 2,500 are called back? What was the reason for that precipitate action? Was it necessary? In the estimates it was shown that a further amount of some $50 million was to be expended. Provision is made, in the event of cancellation of the agreement, that the company shall receive separation pay. All of the employees will be entitled to approximately three weeks salary or wages. Why rush them out on Friday afternoon if it was not for some purpose other than the benefit of those employees? They knew it was coming. I will not say they knew the exact date but they knew what the decision was and it was unchangeable. If they had given some consideration, the consideration that is expected from reasonable employers, of their employees; if they had communicated then as one would expect they would, the last thing in the world that I would ever anticipate was that, having received notice and still having available to them the sum of some $50 million provided for in the estimates, they would let those people out and cause that reaction among people, a reaction that can be understood and one for which I have the deepest sympathy. Because of that condition, the expectation

naturally was that those trained employees that had been with the company for a long while, most of them qualifying for either the three weeks separation pay or holiday pay, would not have been told, "You are out this afternoon".
I hope that this company will place before us such alternatives as have not yet been placed before us. If they are realistic, and in accordance with responsible financial husbandry, every consideration will be given to the maintenance of this industry. No government can be expected to provide every opportunity for every business. You would expect that this company, having had during the years since 1945 government contracts continuously, would since September last have endeavoured itself to make some provision to cushion against the prospective impact of the discontinuance of the CF-105.
I am not going to say much more. We will meet them. I reiterate that. If a practicable suggestion is made that will maintain these technologically trained men in employment, it will receive our fullest consideration. We will also give consideration to any suggestions that may be made to alleviate the particularly disastrous conditions under which various employees find themselves as a result, not of our action- for that action we gave notice of last September-but the precipitate, unwarranted and unjustifiable action on Friday last of discharging these employees who had been faithful over the years, without regard to any consideration. At the same time the heads of that company knew that there was available millions of dollars until March 31 and that these dollars might have been used in order to alleviate the condition of these people who would be removed from their jobs in consequence of the cancellation of the CF-105. Instead, the company felt that it could act in a way that no one can justify. I say once more that their action was not a proper solution to the problem raised by these events of the greatest importance to the government and the people of Canada.
Naturally we regret the action that had to be taken by the government but our responsibility is to all the people of Canada. We will take any action which will alleviate the situation and in so acting let it be perfectly clear that we do not intend in any way, as was suggested today by the Leader of the Opposition, to change the decision that the CF-105 is cancelled. It is no longer considered as a defensive measure, having regard to the developments that have taken place in the technological field and particularly in intercontinental missiles during the last year or year and a half.

In the settlement of the terminal charges now under discussion between the companies and the department, consideration may be given to actions of alleviation. We look forward to any action which will help us to do that which was referred to by the hon. member for Trinity this afternoon, to maintain in Canada the technologically trained. The responsibility in that connection cannot go further than that the government must determine the question as to the practicability of the defence weapon being produced and, having done that, with all the results that flow from it, no one can but be deeply moved. I for one repeat what I have said so often, that if there is any alternative, if there is any action that may be taken, if there is the embodiment of a practical idea placed before us that will achieve amelioration of the results, we are open at all times to that and to other suggestions.
We have set up a special employment office at Malton under the national employment service. We shall undertake the sending out of lists and classifications of laid-off workers to employers across the country. We shall cooperate in every way to provide for those who were employed there to the end that, while the decision must stand, our action will be designed to assure fairness and equity to those who through no fault of their own find themselves unemployed.
In so far as the statement made by the Minister of Defence Production is concerned, the fight on behalf of extension of our share of production will continue and will be forcibly brought to the attention of the United States, for cost sharing and production sharing must go hand in hand. In other words, we in Canada will continue to demand that in our joint defence Canadian industry shall receive its fair share. One hon. member said today that there are strong lobbies in the United States against such action. That is natural, but I think when you weigh a question such as joint contribution on the scales of equity and survival itself the nations must realize that each has a responsibility to the other. The weakening of our industrial organization in Canada by the failure to provide Canadian industry with the opportunity to compete fairly and squarely for contracts in respect of our joint efforts must be avoided at all costs.
That is about all I intend to say. We are doing everything we can. We are endeavouring to approach the problem, as we have in the past, with that proper degree of responsibility to Canada for its defence and survival and at the same time to ensure that no Canadian shall suffer so long as the corporation, in respect of which this discussion
Labour Crisis in Aircraft Industry has taken place, is able to provide that alternative which will assure reason and responsibility in the expenditure of public money.


George James McIlraith: Mr. Speaker, we have listened to the Prime Minister (Mr. Diefenbaker) make a very lengthy speech on this subject. The Prime Minister is a man of great forensic ability. I have not nearly his forensic ability but I hope that to the extent to which I have any such ability I will use it to better purpose than he has done tonight. In the few minutes at my disposal I shall try to discuss some of the relevant matters pertaining to the motion now before the house and to do the best I can to be relevant to the motion.
Now, it is interesting that the motion is for the adjournment of the house:
-for the purpose of discussing a matter of urgent public importance, namely the crisis in the aircraft industry involving mass layoffs and threatened disintegration of this important segment of our Canadian defence industry.
Not a word was said by the Prime Minister about the threatened disintegration of this important segment of defence industry. The Prime Minister instead took a great part of the time allotted to him to read newspaper clippings and the opinions of reporters, very fine gentlemen, reporting in the newspapers across this country, and also the opinions of the leaders of labour unions to prove that the company should have known since last September that this contract was to be terminated.


An hon. Member:: They should have, too.


George James McIlraith: An hon. member, a supporter of the government, says, "They should have, too." That may be, but let me point out that apparently the reporters knew the Prime Minister of Canada. They knew better than to rely on his statement of last September, when he said something quite different.
Apart from all that, the Minister of National Defence (Mr. Pearkes), as recently as November 25, said-and I am referring to the press conference statement-that the R.C.A.F. would require a manned interceptor for some years to come. This statement was made right after similar comment by Air Marshal Slemon. I quote the Minister of National Defence:	What we decided last
September was not to produce the Arrow under the conditions which surrounded Arrow production at that time, but to re-examine the cost and then we would know where we were going. That was his statement, and I have no criticism of him for having made the statement at that time in that way. However, I do have criticism for the Prime Minister now, tonight, seeking to indicate that the

Labour Crisis in Aircraft Industry company should have known since last September that this contract was to be cancelled.


Edmund Davie Fulton: May I ask the hon. gentleman a question?


George James McIlraith: I have very little time
allocated to me, and perhaps the hon. member could ask his question at the end of my remarks.


Edmund Davie Fulton: I was going to ask if the hon. gentleman is aware of the statement of his leader on January 19, when the Leader of the Opposition (Mr. Pearson) said-


George James McIlraith: I would prefer not to hear the hon. gentleman.


Edmund Davie Fulton: I am sure you would prefer not because it would be very embarrassing.


George James McIlraith: The hon. member would use up the 15 minutes at my disposal to deal with this question. Perhaps I take myself too seriously, but I feel this subject is worth debating in this house at this time, and I want to spend my time in debating the subject.
The Prime Minister said very little about the thousands of men out of work. He placed the blame on the company. Then, he referred to that great man, the Right Hon. C. D. Howe, and a statement he made about the discontinuation of the production of the CF-105. Let me tell the Prime Minister that had that great man been the minister of defence production we would not have had this clumsy termination in this way. We would not be seeing the defence production capacity of Canada dissolved and disintegrated by the clumsy actions of the ministry.


George Randolph Pearkes: How did you handle the velvet glove?


An hon. Member:: What is a million?


Mr. Speaker:: Order; the hon. member has only a few minutes and I trust the house will give him a hearing, particularly those members who are out of sight.


George James McIlraith: The whole part of this motion having to do with the disintegration of this segment of defence production capacity has not been dealt with by the government during this debate. They have stayed clear of it. I get the impression that it is because they do not understand the problems inherent in that. The Prime Minister spent a great deal of his time in blaming the company for not coming forward to him with suggestions as to what should be done. I always had the view that the responsibility for defence production and for our defence policy was the responsibility of the government.


The first proceeding this afternoon was the statement by the Minister of Defence Production (Mr. O'Hurley), a little statement on production sharing. Let me read a sentence from that statement;
It must be recognized that in the final analysis the degree of participation hy Canadian industry in the production of major weapons will be governed largely by the extent to which Canadian scientific and engineering skills are able to share in co-ordinated programs of development.
That statement is very true. I shall give the minister credit for the statement, but perhaps many others had a share in producing it. The manner in which the government has dealt with this matter since September has resulted in the dispersal of the very scientific and engineering skills about which the Minister of Defence Production spoke when he was making his statement this afternoon. The loss to this country is tragic because it is not going to be possible to share fully in defence production because you will have exported to the United States the scientific and engineering personnel. This is the serious consequence of the clumsy way in which this action has been handled.


James MacKerras Macdonnell: What utter nonsense.


George James McIlraith: The Minister without Portfolio refers to that as "utter nonsense". Does he realize that this utter nonsense-


James MacKerras Macdonnell: Read what C. D. Howe
said; it is all there.


George James McIlraith: I wish that great man were here today because a great many people would be much happier. There would not have been the ineptness there has been in the handling of this matter; it would have been handled properly. I would recall to your mind that of all the number of contracts that had to be terminated during the last great war when defence weapons and technology were changing so rapidly, there was never a termination in a way that dispersed the scientific and engineering personnel from this country as this action will do.
If the Minister without Portfolio wants to belittle this aspect of the subject, let me just take one sentence, the lead sentence from an article in the Globe and Mail of today. The heading is, "Only 12 Engineers Called to Work". Let me read this:
Only 12 of the 4,000 engineers employed at Malton by Avro Aircraft Limited and Orenda Engines Limited will be called to work today.
Now, when you are talking about a collection of 4,000 engineers in this country, gathered together, with their technical training, you are talking about a very important factor in the productive capacity of the country. When suddenly 3,988 of that assembly are left without work, what is going

to happen? They are going to seek other work of a comparable nature, and the place they are likely to get it under the circumstances in which we are, is the United States of America. When they procure work in the United States of America how are you going to carry on your share of production in anything but the simpler articles?
The whole tenor of the Prime Minister's remarks ignored that facet of the problem. He did not deal with it at all. He tried to show that the termination was known to the company, and quoted union leaders who came here seeking the assurance of work for their men, and he indicated from that that the union leaders knew it was being terminated. Does it not merely prove the union leaders were doing what it was their duty to do, namely to seek work for their personnel, and what other more proper humanitarian interests could they have than that? Surely, that is what it proves; it is not what the Prime Minister sought to indicate it proves.
To indicate the seriousness of this matter, I take it that there was no controverting of the statements this afternoon that the government had not been meeting with A. V. Roe with a view to trying to find a method of using at least part of this scientific and highly trained engineering and technical personnel in other productive capacities which would meet up to date requirements of defence, the latest strategic type of weapons, and so on. They did not deign to meet with them. In the statement of the president of A. V. Roe this point was made:
Since the Prime Minister's original announcement September 23, which cast doubt on the future of the program, the company has repeatedly proposed to various government departments and even to Mr. Diefenbaker himself alternate programs for the useful employment of the technical resources that have been assembled at Malton and which are second to none in the western world.
However, the government has not seen fit to discuss these matters or consult with us in any way.
The Prime Minister did not address himself to that statement of the president of the company.


Gordon Minto Churchill: He said it was incorrect.


George James McIlraith: He did not tell us which ministers discussed the programs or when the discussions took place.


John Whitney Pickersgill: Or what suggestions the government made.


George James McIlraith: He did not deal with that at all, and it is apparent from the whole handling of the subject and the debate we have had today that the government have addressed themselves to the question of whether or not they should terminate the
Labour Crisis in Aircraft Industry contract, and not to the larger question of what they should or should not do to preserve and make use of this section of great skill and ability to its best advantage for defence purposes.
The lead editorial in the Toronto Globe and Mail this morning is rather interesting. It is right on the front page in the left-hand column, and I am sure hon. members have read it. It begins:
The Diefenbaker government's decision to end the Arrow aircraft and Iroquois engine development program-without having anything to put in its place-reveals a major, and widely spread, internal weakness of that government; a failure, not just in one but in several of its departments, to look and to plan ahead. This weakness has been apparent since the government assumed office 20 months ago; but never, in that time, has it been so dramatically disclosed.
I want not only to quote those words but to assume responsibility for quoting them and so make them my own. I hear the ministry laughing at this matter. Does the ministry realize that what they have done is to dissolve this whole segment of the productive capacity of Canada? I know that the Minister of Agriculture (Mr. Harkness) does not understand that, but I do wish he would possess himself of patience and let some of the hon. members who are concerned with some of these matters deal with them.


Douglas Scott Harkness: If I did not understand it better than you, I would not speak on it.


George James McIlraith: The minister thinks that is a smart remark, but I will not engage in personalities with him. That is the whole attitude of the present government, to seek to engage in personalities and go on with their election campaigning, instead of dealing with the question before the house. The editorial I quoted goes on to say something else which I think the Minister of Agriculture should listen to:
True enough, Prime Minister Diefenbaker assures us that there will be "greater opportunities" than in the past for Canadian industry to participate in the production of military equipment for North American defence. But we have been getting such promises for many years-without anything acceptable in the way of fulfilment. Now, it would seem, the situation is going to become even worse; not merely will our defence plants fail to get U.S. orders, but they will shut down completely, with U.S. plants taking over their job of supplying Canadian requirements.
No part of that was dealt with in the statement of the Minister of Defence Production (Mr. O'Hurley) today.
This (as his political opponents are already noting) is the exact opposite of what Mr. Diefenbaker pledged in his 1958 election campaign-a greater development of a more independent Canada by, and for, Canadians. How has the Prime Minister

Labour Crisis in Aircraft Industry been brought to such a humiliating position? By the bad planning and bad advice of people around him.
Tonight he went on to throw a smoke screen up and tell us about the oil development in the north. But he did not tell us what his government's action was in making it less possible for us to defend that area and that oil development. That is the subject matter before this house tonight for discussion, yet he sought to throw up his famous smoke screen. It is all very well for him to seek to divert attention, but there are times when he should settle down to the business of being responsible to the house for the administration of the business of Canada, and to forget that he is campaigning all the time, through the leadership of his party, for election. That is my criticism.
I regret I have had to abbreviate parts of my remarks more than I would have wished, although I do recognize that some of the government's supporters think I have had too much time in saying what I have said. But I did want to seek to pinpoint one very important aspect of the matter before
the house, and to point out the complete weakness of the government's position, not only in fumbling the whole matter of the termination of the contract and showing clumsiness in the handling of it but in failing to appreciate the importance of defence production and industrial preparedness, both in the gen-neral economy of the country and in our whole defence system.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I ask the leader of the house what he intends to do tomorrow?


Howard Charles Green: Mr. Speaker, I did give the order of business on Friday afternoon. If the hon. member for Laurier wishes, I will repeat it now.


Lionel Chevrier: Not if it is the same order.


Howard Charles Green: It may be we shall take estimates on Friday, and if so it will be the estimates of the Department of Citizenship and Immigration.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.

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


Mr. Howard: For each of the years, 1955, 1956, 1957 and 1958, and with respect to the railway system of the Canadian National Railways:	(a) What was the
total number of passengers carried? (b) How many passengers travelled on passes? (c) What was the total number of miles travelled by people on passes? (d) What is the actual or estimated loss of revenue represented by those who travelled on passes?
Answer by: Hon. George H. Hees (Minister of
Transport):
(a)	1955, 16,811,280; 1956, 15,989,368; 1957, 13,920,236; 1958, not yet available.
(b)	, (c) and (d). Not available.



C.B.C. TELEVISION COSTS, OPENING OF PARLIAMENT

Mr. Howard: 1.	What was the cost to the Canadian Broadcasting Corporation of televising the opening of (a) the first session of the 23rd parliament; (b) the first session of the 24th parliament; (c) the second session of the 24th parliament?
2.	Were any Canadian Broadcasting Corporation personnel from points other than Ottawa used for any of these openings?
3.	If so, how many people were used, where did they come from and what was the cost for each opening?
Answer by: Hon. George C. Nowlan (Minister
of National Revenue):
1.	(a) The opening of the first session of the 23rd parliament formed part of the television coverage of the royal visit, 1957. This coverage, which lasted five days, was planned and executed as one integrated production and separate costs are, therefore, not available.
(b)	Live television coverage of the opening of the first session of the 24th parliament included two integrated presentations:
May 12, 1958: election of Speaker, 10:55 a.m.-12:00 noon.
May 12, 1958: opening of parliament, 2:45 p.m.-4:30 p.m.
The same personnel and equipment were used for both presentations and the total cost was $29,000.
(c)	The opening of the second session of the 24th parliament was covered on film January 15, 1959, and broadcast in half-hour film presentations with live commentary over both the English and French T.V. networks. The estimated cost of this coverage is $6,500.
2.	Yes.
3. (a) Personnel from most C.B.C. production centres were in Ottawa at the time of the opening of the first session of the 23rd
Questions
parliament. Owing to the integrated broadcast coverage of the royal visit, 1957 it is not possible to segregate personnel or their costs specifically to the opening of the first session of the 23rd parliament.
(b)	Two employees from Toronto and five from Montreal were used in televising the opening of the first session of the 24th parliament. The cost of travelling and subsistence was approximately $500.
(c)	Ten employees from Toronto were used in film coverage of the opening of the second session of the 24th parliament, and the cost of travelling and subsistence is estimated at $800.



CBFT TELEVISION STATION, MONTREAL

Mr. Howard: Since January 1, 1959, what has been the percentage each day, of (a) live; (b) filmed or nonlive, telecasts shown over the Canadian Broadcasting Corporation television station CBFT channel, 2, at Montreal?
Answer by: Hon. George C. Nowlan (Minister of National Revenue):
		(a)	(b)
Date	Live	FilmJ anuary	l..	
25.6	74.411	2	
11.0	89.011	3	
11.0	89.011	4..	
2.8	97.211	5 .	
12.9	87.1if	6	
16.5	83.5ii	7..	
10.8	89.2if	8	
17.0	83.0"	9..	
11.0	89.011	10	
11.0	89.011	11..	
3.8	96.2"	12.	
13.4	86.613..	
36.0	64.011	14..	
16.5	83.5a	15..	
15.6	84.411	16..	
11.0	89.0a	17..	
11.0	89.011	18..	
3.0	97.0tt	19..	
13.4	86.6a	20..	
17.0	83.0ii	21..	
11.0	89.0n	22 .	
17.0	83.011	23	
11.0	89.0a	24..	
11.0	89.0it	25..	
4.0	96.0ii	26	
13.4	86.6ii	27..	
16.0	84.0ii	28..	
11.0	89.0ii	29..	
17.0	83.0ii	30..	
11.0	89.0ii	31	
11.0	89.0MARITIME COAL	PRODUCTION	ASSISTANCE
Question No. 161-Mr. Robichaud:
1. What was the total amount authorized for loans under the Maritime Coal Production Assistance Act?

Questions
2.	How much of this amount has been committed 5. How much is left to be loaned?
in the form of loans?	6. When does the Maritime Coal Production Assist-
3.	To which companies and in what amount to ance Act expire?
each company?	Answer by: Hon. Paul Comlois (Minister of
4.	What amount has been repaid on each loan? Mines and Technical Surveys):
1. $10,000,000.
2.	$ 9,997,100.67.
3.	Avon Coal Co., Ltd., Minto, N.B	 $	375,000.00
82,000.00
333.000.	00
132.000.	00
620.000.	00

 $	1,542,000.00
Crawford Contractors Ltd., Minto, N.B	
Dominion Coal Co. Ltd., Sydney, N.S	
S. J. Doucet Sons, Ltd., Inverness, N.S	
Four Star Collieries Ltd., Bras d'Or, N.S..	$	100,000.00
69,320.00
42,000.00
D.W. & R.A. Mills Ltd., Minto, N.B	 $	305,850.00
214,000.00
V. C. McMann Ltd., Minto, N.B	 $	8,175.00
28,017.00
4.	Avon Coal Co., Ltd	 $	375,000.00
82,000.00
333.000.	00
132.000.	00
620.000.	00
Crawford Contractors Ltd	
$	140,000.00Dominion Coal Co., Ltd	
$	7,500,000.00S.	J. Doucet Sons, Ltd	
$	47,738.67Four Star Collieries, Ltd	
$	100,000.00
69.320.00
42,000.00
D.W. & R.A. Mills, Ltd	 $	303,850.00
214,000.00
V. C. McMann, Ltd	 $	8,175.00
28.017.00
140,000.00
7,500,000.00
47,738.67
$	211,320.00
$	519,850.00
$	36,192.00
repaid in full, repaid in full, repaid $222,000.00. repayments not due yet. repayments not due yet.
repayments not due yet.
repaid $1,278,278.70.
repaid $2,786.04.
repaid in full, repaid $49,000.00. repayments not due yet.
repaid in full, repaid $50,000.00.
repaid in full, repayments not due yet.
5.	$2,899.33.
6.	October 31, 1959.



PITHEAD COAL PRODUCTION COST, N.S.

Mr. Robichaud: What was the pithead cost of producing a ton of coal in Nova Scotia for 1955, 1956, 1957 and 1958?
Answer by: Hon. Paul Comlois (Minister of Mines and Technical Surveys):
1955, $9.96; 1956, $9.98; 1957, $10.66; 1958, not yet available.
(The pithead costs are derived from reports received from the coal companies of Nova Scotia. The calculation of the cost for each year is made up from the reports of the individual companies whose fiscal year ends in that particular year.)

Tuesday, February 24, 1959