1959-06-30

Right Hon. J. G. Diefenbaker (Prime Minister):: Yesterday the Leader of the Opposition brought up a question as to the sittings of the house over Dominion day. I suggest, subject to the approval of the house, that instead of proceeding by a formal motion we might agree to sit tomorrow morning in the usual way from eleven o'clock until one o'clock, and then at one o'clock the adjournment could be made until Thursday at 11 a.m.


Mr. Speaker:: Does the house give unanimous approval to the proposal made by the Prime Minister?


Some hon. Members:: Agreed.


Mr. Speaker:: It will be in order, then, and recorded in Hansard, that when the house adjourns tomorrow at one o'clock we rise until 11 a.m. the following day.



HEALTH INSURANCE


Hon. A. J. Brooks (Minister of Veterans Affairs):: Mr. Speaker, in his unavoidable absence from the house my colleague, the Minister of National Health and Welfare, has asked me to make a brief announcement on his behalf. This is a particularly pleasant duty for me, since it involves a matter which will be of great benefit to the people of my home province of New Brunswick.
On Saturday last Mr. Monteith joined with Hon. J. H. Mclnerney, minister of health and social services for New Brunswick, in signing an agreement under the Hospital Insurance and Diagnostic Services Act. Taking effect on Wednesday, July 1, this agreement will provide comprehensive hospitalization coverage for every resident of New Brunswick. As such I know it will be welcomed by all hon. members as a further important step in bringing this vital health protection to Canadians throughout the country.


Hon. Paul Martin (Essex Easi):: The announcement made by the Minister of Veterans Affairs does not, of course, come as a surprise
66968-9-3344
to members of this house because it appeared in the press yesterday or on Saturday, I forget which. I, at least, heard it over the radio on Saturday, I think it was.
We all welcome this announcement that the province of New Brunswick has decided to enter the hospital insurance scheme. I wonder if the minister could tell us whether or not the agreement provides for the province of New Brunswick taking advantage not only of the offer to extend financial assistance in respect of diagnostic services in hospitals but also for diagnostic services outside? As the minister knows, not all the provinces have agreed to the federal proposal for diagnostic services for outpatients. It would be interesting to know whether or not the province of New Brunswick has gone a step further than the province of Ontario, and accepted both offers from the federal government.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, the announcement made by the Acting Minister of National Health and Welfare will meet with the approval of Canadians generally. It means that the majority of the provinces have now provided a progressive hospitalization program in co-operation with the federal government under the national act. This is one instance of federal-provincial co-operation which has brought great benefit in the field of health services to Canadians generally. With this demonstration of the success of the act I hope the government will soon embark on a further extension of this act-


Some hon. Members:: Order.


Hazen Robert Argue: -to provide additional national health insurance legislation to include the payment of medical services-


Some hon. Members:: Order.


Mr. Speaker:: Order. Apparently the house considers, as I do, that the hon. member is going beyond the scope of the announcement.


Alfred Johnson Brooks: Mr. Speaker, in reply to the question asked by the hon. member for Essex East I might say that in addition to the basic list of services to patients in hospitals required by the federal act, the plan embodies a broad range of outpatient services. These include laboratory procedures as specified by the commission and furnished by

Inquiries of the Ministry the provincial laboratories, services lor emergency diagnosis and treatment of injuries resulting from accidents, diagnostic and treatment services required for medical rehabilitation and other diagnostic and treatment services as specified by the commission. I believe that answers the hon. member's question.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I should like to ask the Prime Minister a question. In view of the fact that the bill amending the Combines Investigation Act is bound to have important consequences on the Canadian economy, and that those immediately concerned with this legislation including consumers and producers associations and groups would not have sufficient time before the end of this session to make representations about the bill, will the government postpone its consideration by parliament until the beginning of next session, when it could be referred to a committee as has been suggested by many individuals and groups?


John George Diefenbaker: Mr. Speaker, the Minister of
Justice is away today and I am unable to give a final answer to the question asked by the hon. gentleman. However, I do feel that this legislation, important as it is, having been considered over a number of years, should be proceeded with at this session. As to the general question of its submission to a committee, I notice that the hon. gentleman would ask for that only in the event that the legislation did not proceed at the present session.


Paul Joseph James Martin: No, no. We asked that the other day.


John George Diefenbaker: I feel that any further elucidation might well await the return of the Minister of Justice.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. Can the minister say whether a meeting of the continuing committee dealing with food for peace which on May 7 the minister announced

would likely be convened by the end of June has been called, and if not when such a meeting will take place?


Hon. Gordon Churchill (Minisier of Trade and Commerce):: Yes, Mr. Speaker, the committee was called together in Washington. The Leader of the Opposition asked this question of me just the other day. I thought I had the reply available to give him this morning, but I do not locate it in my papers. I propose giving a report on that matter; perhaps I might do that tomorrow.


Gordon Minto Churchill: Mr. Speaker, I have located the answer I mentioned just a minute ago. The Leader of the Opposition asked me a question on June 24 with regard to the Washington meeting on the export of surplus farm products. The wheat utilization committee established by the food for peace conference, on which I reported to the house on May 7 last, held its first meeting on June 15-17 in Washington.
Membership of the committee comprises Argentina, Australia, Canada, France and the United States. The FAO is represented in an observer adviser capacity. The representation at this meeting was at the same level as the preministerial meeting of senior officials held last April. The Canadian delegation on this occasion was led by Mr. John H. English, deputy minister of trade and commerce, and included officials from the departments of trade and commerce, agriculture, finance and external affairs and from the Canadian wheat board.
The purpose of this meeting was chiefly organizational. The principal outcome was the establishment of procedures for the operations of the committee, and guide lines concerning concessional sales of wheat to apply in the selection of recipient countries and the determination of minimum commercial quotas.
Possible schemes of market development and the setting up of national food reserves were also discussed. In this connection a working group at the embassy level was appointed to study and report on these two items for consideration at the next meeting of the committee.
The administrative procedures of the committee were left simple and flexible. The office of the administrator of the U.S. foreign agricultural service will serve as a permanent focal point of contact. The committee will normally convene in the spring and fall of each year at a place to be decided by the committee.
It is expected that the next meeting of the committee will be held next fall in Washington.


Hazen Robert Argue: I have a supplementary question. Can the minister say whether at this meeting any consideration was given to the United States disposal policy with regard to feed grains, particularly its policy of disposing of barley for strategic materials bartered under public law 480 and the way in which this policy has interfered with the Canadian market for barley in the United Kingdom?


Gordon Minto Churchill: I think, Mr. Speaker, all subjects relating to the disposal of surplus grain were under consideration at that meeting.


Hazen Robert Argue: Can the minister say whether the United States gave a satisfactory reply with respect to the invasion by the United States of Canada's market for barley in the United Kingdom?


Gordon Minto Churchill: I am not certain with regard to that point but the matter will be looked into most thoroughly. The hon. member for Assiniboia sometimes uses some rather astounding adjectives which would cause alarm in people who were inclined to be a little nervous, but I shall examine his statement with some care and let him know what the situation is.


Lester Bowles Pearson: I should like to ask a supplementary question, and I hope my adjectives will not alarm the minister. At this particular meeting were the increased barter transactions in agricultural products of the United States since last November brought to the attention of the United States delegate to this committee?


Gordon Minto Churchill: Oh, yes, Mr. Speaker. All these matters were under consideration. One of the great values of this wheat utilization committee is that there will be close consultation with regard to all matters dealing with the disposal of surplus food. There will be an avoidance of difficulties among exporting nations when this knowledge is available to them, and available in advance. I think nothing but good is going to come from the meetings of this committee. Heretofore surplus disposal transactions have been carried on and exporting countries have perhaps heard about them after they were completed. Now the hope is, and I believe it will be fulfilled, that proposed surplus disposal projects will be announced to the committee. There will be consultation and there will be an opportunity for all the exporting nations to participate in some of these projects. That is a great advance over what has prevailed in the past.
Inquiries of the Ministry


Lester Bowles Pearson: May I ask the minister whether he proposes to use this committee to inform the United States in advance of surplus agricultural disposal policies of the Canadian government before they are put into effect?


Gordon Minto Churchill: Oh, I would think so. In fact over the last two years we have maintained very close co-operation with our opposite numbers in the United States concerning transactions having to do with the disposal of grain. We have done the same with Australia, and it has worked very satisfactorily. I see no reason why that should not be done under these circumstances.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. G. R. McWilliam (Norlhumberland-Miramichi):: I wish to direct two questions to the Minister of Fisheries. Has the minister arrived at a decision in connection with the request of Miramichi salmon drift net fishermen for the elimination of the two weeks lift period for this season? Also, can the minister advise the house whether any plans have been formulated to date toward rendering assistance to Miramichi salmon drifters and lobster fishermen who suffered extreme losses of boats, nets and gear in the recent tragic storm?


Hon. J. A. MacLean (Minister of Fisheries):: In connection with the first question may I say that any change in the regulations will require an order in council. I am making a recommendation designed to meet this situation, but it is not in the exact terms of the question asked by the hon. member. However, very shortly I hope to be in a position to add to my reply to this question in more definite terms.
With regard to the second question may I say this. As the hon. member is aware, the Department of Fisheries provides a subsidized insurance system for fishermen with regard to boats and lobster traps. In many cases I believe insurance was carried. Ever since the storm occurred all available men from my department have been in the area to assess claims so that any claims payable may be made as quickly as possible. There are, of course, cases in which insurance was not carried, but I must say that in connection with a disaster of this type, the first responsibility rests with the provincial level of government. However, I am sure that any requests which may come through that channel for assistance would be very sympathetically considered by this government.

Inquiries of the Ministry UNEMPLOYMENT INSURANCE



ADVISORY COMMITTEE


[Stage Direction]
On the orders of the day:
Paul Joseph James Martin: May I ask
the Minister of Labour if he is now in a position to say whether the vacancies on the advisory committee of the unemployment insurance commission have been filled as the result of nominations by the labour organizations concerned and the Department of Labour?


Hon. Michael Starr (Minister of Labour):: All the names have not been submitted yet and the matter has not been finally completed. However, we expect to make the appointments within the next few days.


Paul Joseph James Martin: May I ask the
minister if he has offered the members who resigned, Mr. Burt, Mr. Andras and Mr. Mar-chand, the opportunity of continuing in their function?


Michael Starr: I wrote letters to the Canadian Labour Congress and the Canadian and Catholic Confederation of Labour asking them to submit names for consideration.



DOMINION-PROVINCIAL CONFERENCE REQUEST FOR AGENDA OF FORTHCOMING MEETING

[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, in the absence of the Minister of Finance may I ask the Prime Minister whether he will inquire of the Minister of Finance if it will be possible to make a statement to the house tomorrow on the agenda of the forthcoming dominion-provincial conference?


John George Diefenbaker: I will try to have that available tomorrow. I hope the Minister of Finance will be back from his enforced absence in the company of the Queen. If he is not, I hope I shall be in a position by Thursday to make such a statement.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisla-Twil-lingate):: I should like to ask the Minister of Citizenship and Immigration if a decision has yet been reached about the Hungarian refugee who was detained in Toronto and whose case was under consideration some little time ago and referred to in the house.
[Mr. MacLean (Queens).)


Hon. Ellen L. Fairclough (Minister of Citizenship and Immigration):: No, Mr. Speaker, the matter has not been concluded as yet, and no decision has been reached. (Translation):



INQUIRY FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. Alexis Caron (Hull):: Mr. Speaker, may I direct a question to the Secretary of State. Is he in a position to give me, very shortly, particulars about the questions I asked on the 22nd?


Hon. Henri Courtemanche (Secretary of State):: Mr. Speaker, as soon as I receive the information requested by the hon. member for Hull, I shall table it.
(Text):



MARITIME COAL PRODUCTION ASSISTANCE ACT


Hon. Paul Comtois (Minister of Mines and Technical Surveys) moved: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Maritime Coal Production Assistance Act to extend the application of the act to coal producers in all parts of Canada; to provide that the aggregate principal amount of loans made to coal producers under section 6 of the act shall be increased from ten to twenty million dollars and that the aggregate principal amount of loans made to any one coal producer under the same section shall be increased from seven and one-half to twelve million dollars; to extend the operation of the act from the 31st day of October, 1959 to the 31st day of October, 1964; and to authorize certain amendments to the agreement made under the act with the Dominion Coal Company Limited for the purpose of varying the terms of repayment of principal and interest as provided under section four thereof.
Motion agreed to and the house went into committee, Mr. McCleave in the chair.


Mr. Comiois:: Mr. Chairman, the resolution submitted states, in brief, that it is expedient to extend the provisions of the existing Maritime Coal Production Assistance Act by an amendment to that legislation.
The Maritime Coal Production Assistance Act was studied and passed by parliament in 1949, and provided a fund of $10 million that could be advanced to coal producers in the Atlantic provinces in the form of interest bearing loans to be spent to increase the efficiency of coal production by means of mechanization. The act provided that no loans could be made after October 31, 1959 which, in effect, limited the period to 10 years.

Under this act the operators have been given the opportunity of obtaining loans that might not have been readily available from the usual financial sources. Those who have negotiated loans have also benefited from the special depreciation allowances on the capital cost set out in the act. Since the inception of the act 15 loans have been approved to various coal operators, in the amount of $9,997,101, thus using practically all the funds allotted under the legislation. Of the 15 loans, five have been repaid in full and all others are in good standing as to repayments of capital and payment of interest to May 31, 1959 under the terms of the agreement covering each loan. These loans have all borne interest at rates approved by the Minister of Finance.
Annual reports with respect to the operations under this legislation have been submitted to parliament. The last report covering the operations for the year ending March 31, 1959 was tabled on Monday, April 13, and members will find full details therein of the position of the fund at the close of the fiscal year.
This legislation has been a distinct success in its assistance to coal operators. While costs of producing coal have risen along with costs in all other phases of industry, the help given by the mechanization projects financed under the act has had the effect of increasing the efficiency of mining coal, with the result that the increases in cost have not been as great as they would have been without this help.
The operation of this act has been closely followed by the Dominion Coal Board, and the board have recommended (a) that the provisions of the present act should be extended for a further period of 10 years; (b) that since the funds provided have been exhausted, a further $10 million be made available, and (c) that the assistance be made available to all coal producers in Canada. It is therefore proposed to introduce an amendment to the present legislation which will:
1.	Make it a national act so it will apply to all coal mine operators in Canada;
2.	Increase the aggregate amount of loans that may be made by another $10 million;
3.	Extend the time limit by five years to October 31, 1964;
4.	Increase the amount which may be loaned to one operator from $7,500,000 to $12,000,000.
The amendments proposed will also provide authority for a revision of the agreement made under the act between Her Majesty and the Dominion Coal Company Limited. Representations were made by the company last year for some changes in the schedule set out in the agreement of repayments on their loan of $7,500,000. These representations were
30, 1959	5269
Maritime Coal Production Assistance Act considered, and it was deemed advisable under existing circumstances to alter the schedule of repayments under the agreement. This revision will:
1.	Allow the company to make no further repayments until June 30, 1963, at which time they will again commence repayment at six month intervals based on 30 cents per net ton of production.
2.	Increase the interest rate to 4 per cent per annum from 3J per cent per annum as from July 1, 1957.
In 1957 Bill No. C-54 was introduced authorizing amendments to the original act, intending to meet the representations made by the company. This bill was passed by this house on August 18, 1958. Unfortunately the provisions of this amendment did not fully cover the difficulties, and it remains necessary to clarify the matter by further amendment. The proposed revision provides that the total loan to this company will be fully repaid by June 30, 1970, as set out in the terms of the legislation.
In conclusion, Mr. Chairman, I would repeat my earlier statement that this legislation has been of great assistance to our coal producers in modernizing their methods, in promoting stability in production, and in helping Canadian coal to meet the intensified competition from other fuels. It is our belief that the extension of the assistance in time, in funds, and particularly to all operators across Canada, is timely and will be of even greater benefit to the industry.


Mr. Robichaud:: Mr. Chairman, we of the official opposition have followed with interest the statement just made by the minister in introducing the legislation having to do with amending the Maritime Coal Production Assistance Act.
As was stated by the minister, the purpose of the present amendments to the Maritime Coal Production Assistance Act is first to extend the application of the act to coal producers in all parts of Canada. Mr. Chairman, we welcome this change, which has been made necessary by the present position of the coal market in this country. I would like the minister to tell us before this resolution is passed if it is the intention of the government to change the name of this act, or will it remain under the name of the Maritime Qoal Production Assistance Act? The minister has stated that the act will now be applicable to Canada as a whole, and 1 wonder if it is the intention of the government to change the name of the act.
The minister has also stated that the purpose of this amendment is to increase from $10 million to $20 million the fund made available for loans under this act. As the minister has stated, this act has been beneficial to the coal industry. It has made
5270	HOUSE OF
Maritime Coal Production Assistance Act possible the modernization of our coal mines which in turn has made it possible to increase production without a corresponding increase in cost.
In answer to a question I asked in this house on February 23, 1959 we were given the details of the loans made under the present act, and as the minister has said five of these loans have been repaid in full. I may note at this point that four of these loans which have been repaid were made to coal producers in the province of New Brunswick.
I also note that it is the intention of this amendment to make it possible for any one coal producer to increase his loan from $7,500,000 to $12,000,000. I presume that the purpose of this amendment is to make possible a further loan to the Dominion Coal Company for the purchase of a washing plant. I hope the Dominion Coal Board will see fit to recommend to the government that such a loan be granted. It is urgently needed by the company concerned in order to make it possible for this company to compete in the coal market.
The amendment to this act which we are asked to pass will also, as the minister has stated, include a further amendment to the present legislation. We know that this act was amended in 1958, but apparently there was an omission at that time in that the government or those who prepared the amendment failed to realize that the loan made to the Dominion Coal Company could not be extended under the existing terms of the act. We will definitely support the amendment which will make possible the extension of the present loan.
Mr. Chairman, the minister has made it clear that this legislation has been a distinct success in providing assistance to coal operators. This is legislation which was introduced by the previous administration. It has been of great benefit to the coal producers of this country and, as I said at the outset, we of the official opposition will be pleased to support this bill. Before this resolution is passed, however, the minister might inform the house if any further action has been taken following the announcement by the Prime Minister on March 17, when he said that a thorough study of the long term market prospects for coal was urgently required and that meetings were to be held with the government of Nova Scotia and the coal companies concerned. I hope the minister is now in a position to inform the house what action is being taken in this regard.
We in the official opposition realize the importance of this amendment, also, inasmuch as it is likely to benefit the marketing of [Mr. Robichaud.l

coal in this country. It is unfortunate that coal production has decreased very substantially during the month of May, as shown by figures recently released by the dominion bureau of statistics. In fact Canadian coal output slumped 32 per cent in May, to 562,000 tons from 823,114 tons a year earlier, according to these figures. Moreover, this decrease in the production of Canadian coal took place during a period when landed imports were 21 per cent higher, at 1,308,543 tons as against 1,079,754 tons in May of last year. I hope the minister and the government will look into this matter very seriously, as it may have a very serious effect on the marketing of Canadian coal.
We shall wait until we see this bill, but I repeat that on this side of the house we will support it in principle and do everything in our power not to delay its passage.


Mr. Peters:: We in the C.C.F. group also support this resolution, but would like to point out several things which we think are missing. First of all, this is the second time in a period of a year when the Maritime Coal Production Assistance Act has been amended, and I think this is another example of Conservative policy with regard to all matters of major importance; no consideration has been given to the long term problems involved and no care has been taken to relate this bill to other acts which are similar in character. For example, a short while ago we passed a national energy act and this present bill, which is concerned with coal production, should obviously come within the scope of that act.
The present amendment adds another $10 million to the fund available under the act, which was set up to assist coal production in the maritime provinces and to help modernize mining equipment. We are pleased that the minister has seen fit to extend this assistance to all Canada, but unless the bill is extended in scope and further amended it can never become a national fuel act and can play no part in any Canadian national fuel policy. We suggest that the minister should consider setting up a national fuel production board which would concern itself with all forms of fuel and come within the scope of the national energy act. However, we welcome the decision to make this additional money available, because mining conditions in the maritimes are becoming increasingly more difficult and the need for improved and more modern machinery to take care of deep and dangerous mining conditions is constantly increasing.
We welcome also the decision to make this act national in coverage, because these same problems are arising in all the coal production areas of this country. We think the $20

million which is now to be available will probably be sufficient to modernize the remaining mines in Canada, but once again I urge the minister to give serious consideration to setting up a national fuel board and bringing this and other acts of a similar nature within the jurisdiction of that board so they might be studied in the light of a national fuel policy which would take into consideration all the forms of energy available to us so these resources could be utilized in the best possible way to the advantage of the Canadian people.


Joseph-Roland Comtois: There was a question asked by the hon. member for Gloucester about the name of the new act. This new act will be named the Coal Production Assistance Act. We thought it would be fitting to change the name. A question was also asked about the amendment which is being made to the act, and if I remember well it was about the maximum loan now to be permitted. In the event that a loan is granted to the Dominion Coal Company we must extend the maximum to $12 million, because the first loan granted to the company was $7,500,000 and if the act were not amended the highest loan which could be granted would remain at $7,500,000. That is why we wish to amend the act. Under the first act, the maximum was $7,500,000, and so, in order that this loan may go through, if it does go through, we must raise the limit from $7,500,000, to $12 million.
The other questions will be answered when the bill is discussed. I thank the hon. member for Timiskaming for his suggestion, which will be studied and considered. That is all I have to say at the present time.


Mr. Regier:: Is the minister able to tell us whether the coal producers of Alberta, British Columbia or Saskatchewan have asked for this amendment? If so, can he tell us if there has been any indication as to which of the provinces is likely to take advantage of the legislation?


Joseph-Roland Comtois: Yes, Mr. Chairman. Every coal producer in Canada may take advantage of the new act and apply for a loan.


Erhart Regier: I understand that every producer will be able to take advantage of it, but has the minister received any indication from the coal producers of Alberta, British Columbia or Saskatchewan to the effect that they do intend to take advantage of the act? If so, in what province are the mines located that intend to take advantage of it?


Joseph-Roland Comtois: I cannot give details, but if my understanding is correct two or three mine operators have advised us that they intend to apply for loans.
66968-9-335
Length and Mass Units Act


Erhart Regier: Can the minister say if these mines are in Alberta, British Columbia or Saskatchewan.


Joseph-Roland Comtois: I cannot say, but I shall obtain that information.
Resolution reported and concurred in.
Mr. Comiois thereupon moved for leave to introduce Bill No. C-68, to amend the Maritime Coal Production Assistance Act and to authorize certain amendments to the agreement made under that act with Dominion Coal Company Limited.
Motion agreed to and bill read the first time.


The Acting Speaker (Mr. McCleave):: When shall the said bill be read a second time?


Joseph-Roland Comtois: Later this day, if the house agrees.


Hédard-J. Robichaud: Provided the bill is available so we can have a look at it.


Joseph-Roland Comtois: Of course.


The Acting Speaker (Mr. McCleave):: Shall the bill be read a second time later this day?


Some hon. Members:: Agreed.



LENGTH AND MASS UNITS ACT


Gordon Minto Churchill: the second reading of Bill No. S-20, to amend the Length and Mass Units Act.
He said: Mr. Speaker, I have just a short statement to make with regard to this very small amendment. The Length and Mass Units Act is chapter 164 of the Revised Statutes of Canada, 1952. This act was passed in 1951. At that time the hon. member for Ottawa West gave a learned discourse to the house on what is a highly technical subject. For those who would be interested in reading that discussion it may be found at page 3474 of Hansard for May, 1951.
In the act the Canadian yard and the Canadian pound were related to the international metre and the international kilogram. This did away with the necessity of having specific physical copies representing the Canadian yard and the Canadian pound. This action had two main advantages; the Canadian weights and measures system was tied directly to the most satisfactory international system of measurement, and the most permanent standards of length and mass in the world became the basis of the Canadian units of measurement.

Length and Mass Units Act
The ratio defining the Canadian pound was taken as the original conversion factor relating both the United Kingdom pound and the United States pound to the kilogram. However, in 1951 it was recognized that the English pound had decreased somewhat in size, creating a difference between it and the United States pound. At that time it could not be foreseen what ratio would be chosen by the United Kingdom and the United States to unify their two pounds. In using the originally accepted ratio relating the pound to the kilogram in the 1951 legislation the need for later revision of the act was foreseen when the United Kingdom and the United States reached agreement.
Over the last three or four years discussions have taken place among these countries to endeavour to resolve the existing differences. A major part in those discussions has been carried on by Dr. L. E. Howlett of the national research council of Canada. An agreement was reached and announced on January 1, 1959 relating to the international yard and the international pound and giving the figures. The international yard equals .9144 metre and the international pound equals .45359237 kilogram. This then necessitated a change in the Length and Mass Units Act altering the last two figures after the decimal point from 43 as now appears in the act to 37. No change is required for the yard-metre ratio but this slight alteration is required for the relationship of the pound-kilogram. The change is significant only in measurements of the highest precision, and does not affect ordinary commerce and industry.


Mr. G. J. Mcllraiih (Otiawa Wesi):: Mr. Speaker, the legislation with which we are dealing is of highly important significance to those working in certain types of advanced scientific work, but has no significance in ordinary trade and commerce. I think it is well to draw to the attention of the house a little of the background of the legislation.
Canada's units of measurement of length and mass had been governed by the weights and measures legislation. We had accepted the standards which we obtained from the British government in 1873. It is interesting to observe that by 1951 the variation in the standards concerned were of such significance as to be important in certain advanced scientific work. It is an indication of the development of this field in Canada and indeed an indication of the development in some of the advanced technology in our production field arising out of developments subsequent to the war that such fine adjustments became of significance.

In 1951 the standards were taken out of the Weights and Measures Act and a separate act was created defining those standards in terms of the international metre and kilogram, and also providing in the Weights and Measures Act that our Canadian national research council should be charged with maintaining our Canadian unit for industrial and trade purposes.
I was glad to hear the minister acknowledge what I and I think all hon. members who have studied this subject will regard as the very splendid work being done in this field by the national research council division headed by Dr. Howlett. It is outstanding work and the type of work of which I think the Canadian government and the Canadian people will be proud.
The actual legislation itself, as I understand it, involves agreement among a great many of the trading countries in the world as to this more precise measurement. In 1951 we did not have that final agreement bringing in the main, the United States and the United Kingdom governments and ourselves together on the precise unit. As I understand this legislation, we now have that agreement and the legislation merely puts in legislative form the result of that agreement. Actually, as I understand it, it reduces the weight of our pound by six one hundred millionths of a kilogram. I think that is the correct way of expressing it.
It will be seen that reduction is of scientific significance only. However, it is interesting that over the 80 years during which we were on the other standard in this respect there was a variation in the British standard bar but during that time there was practically no variation in the international metre. It is one of those things which are perhaps easy for the scientist to explain but which are rather difficult for the layman like myself to follow.
There is, of course, an advantage in this legislation, namely that of getting a scientifically accurate unit. There is also a further advantage in that this indicates that we have obtained international agreement among many nations on this subject. I should be glad if the minister, in his closing remarks, would indicate the countries which will be adopting this standard. I think there are some seven or eight of them, as was indicated in the other place.


Gordon Minto Churchill: If the hon. member has them readily available perhaps he would not mind giving them. I have not that information in front of me.


George James McIlraith: I have it here somewhere among my papers but I have not it at hand at the moment.


Gordon Minto Churchill: I forgot to bring that information down with me.


George James McIlraith: In the explanatory note to the Weights and Measures Act-and the amendments to that act are merely consequential on the amendment we are making to this act-they are indicated. I think they should be placed on the record. There is, of course, the other larger question involved in this matter, namely that of having the metric or some standard unit adopted throughout the world. However, that is another question and I will not develop it here. I hope the minister will continue to see what progress can be achieved in having a more uniform and simpler system adopted by more and more countries of the world. As I say, that is perhaps another question and we can at this point perhaps leave the matter at that.
I do not think I have anything more to say on this particular bill. I think the amendments to the Weights and Measures Act are consequential on this one and perhaps it will not be necessary, as far as I am concerned, to repeat my remarks on that bill.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. McCleave in the chair.
On clause 1-Mass.
Hazen Robert Argue: Can the minister tell us how many countries in the world have been party to the international agreement which I understand superseded the change that is contemplated in this legislation? The morning press carries a story pointing out the leadership that Dr. L. E. Howlett of the national research council has given in this field, and the way in which Canada has acted as a mediator to bring more closely together the nations which have used or still use different standards of weights and measures. Can the minister tell us just how extensively changes similar to this are being made in other countries?


Gordon Minto Churchill: My information is that the international agreement was arrived at among Canada, New Zealand, the United States, the United Kingdom, South Africa and Australia. I thank the hon. member for drawing attention to the article in the Globe and Mail this morning which carries a summary of some of the work that has been done by Dr. Howlett over the last few years and gives an indication of his continuing endeavours to achieve these standards of measurement and standards of weight that will be accepted throughout the world. I think it is a highly desirable objective.
66968-9-335J
Length and Mass Units Act


Hazen Robert Argue: On that point may I say this, though I am not certain that it is completely relevant to this measure. There have been many reports from time to time that Canada might adopt the metric system for the sale of our grain. I am wondering whether there has been any change or any contemplated change from the standard bushel as we have known it in order to bring transactions throughout the world on a more similar basis.
As the minister knows, a great deal of thought has been given to this matter. Some of the commercial interests in the grain business are anxious that this be done. There are many people who support this step being taken. I know there are certain impediments, but I am wondering if the minister can say whether this further step toward international agreement with regard to weights and measures is likely to be taken by Canada.


Gordon Minto Churchill: My attention has been drawn to the subject matter referred to. I do not know of any immediate steps that are likely to be taken, but in any case it would have to be a matter of consultation among Canada, the United States and the United Kingdom if the change to the metric system was to be made for the grain trade. The metric system, of course, is legal in Canada and there is no problem there. However, the problem would be in getting international agreement for that purpose. I do not know to what extent the matter is being pursued currently, but there would be an advantage in international trade if the standards were the same.


Mr. Chevrier:: Are there not a number of countries which have adopted the metric system? It has been brought to my attention that at a recent convention in Canada there was a resolution adopted recommending the metric system. Has the minister any ideas on whether it would be advisable for our country to join those other countries which have found it advisable to follow the metric system? I understand that since the last war the metric system has been officially recognized in nine countries. The point of my intervention is whether the minister or the department has given any consideration to this matter.


Gordon Minto Churchill: I have not the information at hand. I know that discussions have been carried on along that line. I think the same problem was raised when the hon. member for Ottawa West was introducing this act in the house in 1951. However, I have not the answer to the hon. gentleman's question.


Robert Jardine McCleave: Shall clause 1 carry?

Weights and Measures Act


George James McIlraith: Just before we leave that clause may I say this. There has been quite a development on that point since the act concerned was introduced and dealt with by the house in 1951. I wonder whether the minister would follow the subject up, and perhaps we could deal with it on some other item of business before the house on another occasion. It seems to me that this is something that should be followed up. I am quite sure there has been considerable development internationally on the subject since 1951.


Gordon Minto Churchill: I will follow it up, and the
opportunity will arise when the estimates of the department come before the house again.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Hon. Gordon Churchill (Minister of Trade
and Commerce) moved the second reading of Bill S-21, to amend the Weights and Measures Act.
He said: Mr. Speaker, this is consequential upon the amendment just made by the bill altering the Length and Mass Units Act. The Weights and Measures Act is chapter 292 of the Revised Statutes of Canada, 1952, and was passed in 1951. The bill was introduced on that occasion and piloted through the house by the hon. member for Ottawa West (Mr. Mcllraith). Anyone interested in reading the debate at that time will find the reference at page 3780 of Hansard for June 6, 1951.
One of the fundamental changes dealt with the primary standards of length and mass. With the enactment of the Length and Mass Units Act, while the standard unit of extension, that is length, and the standard unit of weight remained the yard and the pound respectively, their values were henceforth to be determined in terms of the international metre and the international kilogram. The relationship of both has now been established by international agreement, as I mentioned a few moments ago, among Canada, New Zealand, the United States of America, the United Kingdom, South Africa and Australia, and is to be implemented by legislation in the countries concerned.
The value for the yard established by the agreement is that at present incorporated in the Length and Mass Units Act. The value
[The Acting Chairman.]
for the pound is changed by approximately one part in 7J million. If hon. members will refer to schedule 3 of chapter 292 of the statutes they will see the details set out there showing the former relationship of the pound as expressed in kilograms and we are now making a change in the last two figures from "43" to "37", so that the new relationship will be 45,359,237.
100,000,000
As the Weights and Measures Act incorporates the values in the Length and Mass Units Act, the amendment to the latter in the pound-kilogram relationship must be carried forward to the Weights and Measures Act. Additionally, the Weights and Measures Act incorporates schedules for metric equivalents, and those relating to the pound will therefore require revision.
The physical reproductions of the yard and pound values, known as "reference standards", are calibrated and certified by the national research council. From these "local standards" are calibrated and certified for the use of the weights and measures laboratory and field inspection staff. The amendment is a technical one, and does not affect the practical administration of the Weights and Measures Act.
(Translation):
Lionel Chevrier: Mr. Speaker, the minister will allow me to say a few words in French in connection with the metric system about which I asked a question a few moments ago because there was brought to my attention a recommendation submitted at the convention of the Canadian Association of Geographers in May 1958, which favoured the adoption of the metric system by geographical and geological organizations in Canada. I would like to make a few brief remarks in connection with that recommendation and read the resolution without, I am sure, in the least delaying the passing of this bill.
According to my information:
The metric system has the incomparable advantage, from the scientific and practical points of view, to be the only one based on the decimal system of which all geometrical, electrical, calorific, mechanical, optical and mass units as well as their sub-units logically derive from one another and are interrelated on the aforesaid basis by decimal multiples and sub-multiples.
Hence, because of its very clarity, consistency and efficiency, the metric system has, since its creation in 1801, rapidly become the most popular system of measurement in the world. It is now applied in the whole of Europe (except for the British Isles); in all countries of Central and South America (except for a few islands, or English and American zones); in most of the more important Asiatic countries, among which Japan since April 1951, India since June 1957, the Philippines, Indonesia, Indochina, without mentioning China, which

is about to decide to adopt it; in all French, Spanish, Portuguese, Belgian and independent territories of Africa, save the English colonies.
As a matter of fact, it is significant in this respect that former English colonies like India and the Sudan, Palestine (Israel and Jordan) should have officially adopted the metric system as soon as they became independent.
Thus, not only is the metric system in current use by more than 11 billion people, that is more than 60 per cent of the entire world population of 21 billion people, but it is also gaining ground every year. Even in countries traditionally attached to the English system, the metric system has become practically the only one in use and recognized by most scientific branches such as medicine and pharmacology; botany, zoology, paleontology and crystallography; astrophysics and globe physics,
mineralogy, geology, oceanography and glaciology,_
as an example in this field, the Journal of Glaciology of London has adopted the metric system as the only official one in its pages,-meteorology,- temperature readings by radio observation are given the world over in centigrade degrees. Finally, in the military field, in May 1957, the American army decided to adopt the metric system to be on a par with most of the great armies of the world.
Finally is it necessary to emphasize that all measurements related to research work carried out under the international geophysical year programme will be published by all nations without exception in the metric system only.
In view, on the one hand of the superiority of the metric system in that it is the only system whose units in every class or category and in their relationships are all based on decimals and, on the other hand, of all the mentioned facts concerning its more and more exclusive use and establishing It as the only scientific system of measurement which IS truly universal, it is suggested that all members of the Canadian Association of Geographers as well as all scientific bodies represented there, accept the principle of henceforth submitting in the metric system all measurements involved in their work or at least of writing them down together with their English system equivalents.
1.	To provide for wider circulation and immediate understanding in international scientific circles, of works published in Canada, thus avoiding tiresome measurement adjustments to readers of such works.
2.	In order that, on a long term basis, the use of the metric system in sciences may provide a desirable transition before the final and general extension of the metric system throughout Canada.
Mr. Speaker, I wanted to emphasize this resolution, or rather this recommendation which was unanimously adopted in 1958, not only to bring the matter to the minister's attention, but also to ask him, as I was saying, whether it would not be desirable to consider going over to the metric system in Canada. Of course, after reading the above resolution which, as we all realize, is quite technical, I shall not attempt to discuss its pros and cons. All I ask of the minister is that, in view of the fact that so many coun-
Weights and Measures Act tries in the world are considering adopting this system, would it not be wise for us, in Canada, at least to consider the matter and to determine, as is claimed in this resolution passed in 1958 by the convention of the Canadian Association of Geographers, whether we should act upon this recommendation?
I therefore ask the minister, before we are through with his bill, to kindly let us have his views on this proposal.


Mr. L. J. Pigeon (Jolielie-L'Assompiion-Montcalm):: Mr. Speaker, some weeks ago I suggested to the House of Commons that it should consider the possibility of adopting the metric system nationally. I find that the hon. member for Laurier (Mr. Chevrier) has seized upon my idea. At any rate, the suggestions I then made when we were discussing research on a resolution introduced by a member on the government side still holds good.
The metric system is in force today in a great number of countries. In fact, 60 per cent of the world population are using the metric system. I submit that the use of the metric system at the national level would help promote our trade.
At this stage of my remarks, Mr. Speaker, I would like for a few moments, to show the advantages incidental to the use of the metric system in the economic field. In the first place, it would promote and develop trade with the countries using the metric system. The exports towards these countries represent 20 per cent of the total value of the Canadian exports.
Second, if we adopted the metric system the existing confusion between the different definition of the Canadian and American land and gallon would disappear. Besides, it should be noted that should we adopt the metric system our trade with the United States or Great Britain would not be affected since this system of measurement is legal in both countries, even though it is not yet compulsory nor official.
United States: MS (optional) an Act passed on July 28, 1866 adhesion to the agreement on the meter in 1875. Great Britain: (optional)-an Act passed on August 26, 1897 adhesion to the agreement on the meter in 1884.
In the scientific field, the metric system would make Canadian scientific works accessible to scientific groups in the whole world.

Weights and Measures Act
The metric system has always been used in educational institutions, universities, research laboratories, and even, I think, in the national research council.
I am surprised to find that the hon. member for Laurier is now supporting the suggestion I put forward recently, because during many years he served as a minister of the crown, and in that capacity he certainly had an opportunity to influence his distinguished colleagues towards the adoption of the metric system by his government.
All I ask at this stage is that the Minister of Trade and Commerce (Mr. Churchill) consider extending the use of the metric system on a national basis. It is not a matter of making undue haste, but I am merely promoting the idea. I am sure the minister will be pleased to consider the suggestions I have just put forward.


Mr. Samuel Boulanger (Drummond-Arthabaska):: Mr. Speaker, may I direct a question to the hon. member?


Lionel Chevrier: Mr. Speaker, I would not like the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) to get a false impression from the remarks I made a moment ago. I would not want the hon. member to believe for one moment that I have been borrowing one of his ideas. If it is his idea, let him take full credit for it. My only purpose in rising-
(Text):


The Acting Speaker (Mr. McCleave):: Order. Is the hon. member for Laurier rising on a point of order or a qeustion of privilege?


Lionel Chevrier: I am not rising on either, Mr. Speaker. I am rising to deal with the matter which is now before the house and to give an explanation of certain remarks made by the hon. gentleman who has just taken his seat. However, if the Chair thinks I am out of order I believe I can make these remarks on second reading of the bill. I thought I could save time by making them now.


The Acting Speaker (Mr. McCleave):: These remarks are being made on second reading of the bill. If the hon. member is making them by way of explanation the Chair will grant the privilege of making a brief explanation.


Lionel Chevrier: That is the purpose of my remarks.
(Translation):
Mr. Speaker, I only wanted to point out to the house that I had not the least
intention to take the credit that another member deserved in regard to the discussion of the adoption of the metric system.
I wished only to draw the attention of the Minister of Trade and Commerce (Mr. Churchill) to the possibility of studying the adoption of the metric system.
I do not want to hurt in any way the feelings of the hon. member for Joliette-L'Assomption-Montcalm, but I must tell him that it is not a new idea, for it has been submitted on many occasions-


Mr. Johnson:: For many centuries.


Lionel Chevrier: I do not know if the idea goes back many centuries, but it has been suggested quite a long time ago.
In regard to the occasions that I could have had myself to discuss that matter when I was a member of the cabinet, may I say to the hon. member that, if I understand the matter correctly, its adoption requires an international agreement. In my opinion, Canada would have to study the adoption of that system and enter into an agreement with the other countries, as the bill now before us has been adopted following some agreement.
I wanted simply to reassure the hon. member. Instead of being his competitor in so far as the adoption of that system is concerned, I will support wholeheartedly, in so far as I understand the bill now before us, any measure the purpose of which would be not only to study that system, but also to promote its adoption in this country, and this perhaps after we have entered into agreements with the other countries that are interested in it.


Louis-Joseph Pigeon: Mr. Speaker, I am happy to hear the hon. member for Laurier speak in that manner-
(Text):


The Acting Speaker (Mr. McCleave):: Order. The hon. member has already spoken once in this debate. The Chair erred in allowing the hon. member for Laurier to continue at great length for a second time, and I would ask hon. members to refrain from further carrying on that particular discussion.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I have a small point which has struck me. We are in a somewhat fortunate position in having this measure piloted through the house by the Minister of Trade and Commerce, because I understand he was formerly a teacher of mathematics. I have listened to the argument of the hon. member for Laurier suggesting that this government look into the question of an international agreement for the use of the metric system in Canada. Before second reading passes I

am sure the minister with his knowledge will be only too pleased to inform us lesser lights in the house of the scientific reasons for the advantage in using the metric system in Canada, the commercial value of using the metric system and, shall I say, the economic arguments against its adoption at this stage.


The Acting Speaker (Mr. McCleave):: 1
would inform the house that if the minister speaks now he will close the debate on second reading.


Gordon Minto Churchill: Mr. Speaker, I have listened with interest to the remarks of the various hon. members on this bill and have taken note of the emphasis placed on the importance of attempting to get universal adoption of the metric system. I have heard about this ever since I first started school and learned that there were such things as metres and grams.
The hon. member for Kootenay West has misjudged my background. I am no mathematician of note at all. In fact I had some difficulty with mathematics in my college years. Prior to that I was successful, but it got rather involved at the college level and I find it a bit involved at this particular level at which Dr. Howlett is very proficient. I think we can rest assured that our people in the national research council will pursue the objective which is in the minds of hon. members. I note that another meeting on the international level is to be held in Paris in October, 1960, where Dr. Howlett will have some suggestions with regard to a new method of measurement based on the wave length of a particular light.


George James McIlraith: Wave length of light as a unit of measurement?


Gordon Minto Churchill: Yes, using that as a unit of measurement. From what has been done already in these international conferences, I think public opinion will be formed favourable to the universal adoption of the metric system, but it is a long, slow process and has been going on throughout my lifetime.
In conclusion, Mr. Speaker, this particular bill is simply suggesting an amendment which is consequential upon the one which we passed earlier.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. McCleave in the chair.
On clause 1.
Mr. Broome:: I would just like to spend one and a half minutes on this measure. I have listened with a lot of interest and my remarks may be a little bit out of order, but I hope you will show me some leniency,
Weights and Measures Act Mr. Chairman. There is one industry in Canada which is entirely on the metric system, as the same industry is in the United States and the United Kingdom, and that is the industry which manufactures ball bearings, thrust bearings, needle bearings, and so on. I believe the optical industry is also very much on the metric system. But it is much easier for an undeveloped country to change to the metric system than it is for a country which is well industrialized, because we have a background of machinery, equipment, measuring apparatus, customs, and so on, set up which would make it very difficult to change to the metric system even though it is perhaps advisable. I think there ought to be a lot of study put into the subject, and the growth toward the metric system will be by industrial application and not any over-all legal measure.


George James McIlraith: Mr. Chairman, I do not want to develop an argument as to the merits of the metric system at this point, but I think the hon. member for Joliette-L'Assomption-Montcalm did not fully understand some aspects of the matter, according to his remarks in relation to the speech made by the hon. member for Laurier. It is perfectly legal to use the metric system in Canada if anyone wants to, but the difficulty does not arise out of the definitions of the units of length and mass. The difficulty is in the field of commercial relationships which put this country with the United States and the United Kingdom, which in the main do not use the metric system. There is a problem there which involves agreement with those countries with which we have such a high volume of trade. It is not just a simple matter of deciding what we would want for internal use in this country, but of deciding on the implications in relation to those countries with which we do a great volume of commercial trade and have a great exchange in a wide range of products.
For instance, the volume of trade with the United States is very large, and much machinery and equipment is bought from the United States where the metric system is not used. The same is true of the United Kingdom. So it is a matter of seeking to work out some international agreement, and not something where, if one wishes to criticize the former government, one can say, "Why was this not achieved?" It is not within the exclusive jurisdiction of the government to achieve it and I could not, even if I wished to, criticize this government for not having achieved that result, assuming we decided it was wholly a desirable objective. It is not quite as simple as that. That is all I wanted to say about that point,

Weights and Measures Act but I thought in fairness I should draw that to the attention of the committee.
There is a very interesting little sidelight to this Weights and Measures Act which may be of interest to hon. members. In the 1873 legislation there were standards which are referred to in schedule IV of the 1951 Weights and Measures Act. One copy was with the minister of inland revenue, as he was then called, and a parliamentary copy was left with the Speaker of the other place, the Speaker of the Senate. The 1951 act relieved the Speaker of the obligation of retaining the parliamentary copy of the bronze bar and the platinum-iridium weights which were described in the Weights and Measures Act of 1873, and now puts them in the custody of the national research council where I presume they remain, and I assume the minister would not wish to have them placed elsewhere at this time. It is interesting to note that such a duty was placed in those years on the Speaker of the Senate, a responsibility which we now regard as a matter of important scientific precision.


William Arnold Peters: I suggest to the minister that he give some consideration to including in a measure of this nature a provision with respect to the sizes of various things. I am particularly concerned about the sizes of clothes and shoes. We speak of getting things down to measurements as definite as those outlined in this bill, yet one can walk into a store to buy a pair of shoes size 10 and be given size 9 or size 11 or anything else. Manufacturers of children's clothes are notorious in this respect. For instance, a pair of child's over-alls, size 6-


Gordon Minto Churchill: I hesitate to interrupt the hon. member-*


Robert Jardine McCleave: think the hon. member has made his point, but of course he is out of order and I would ask him to refer to something more strictly related to the Weights and Measures Act.


William Arnold Peters: I assume that these sizes are measurements of some description and that they must relate in some remote way to this particular consideration which we are discussing-


Robert Jardine McCleave: The
hon. member is continuing in the same vein, and I must ask him to change the topic or resume his seat.


Lionel Chevrier: I do not want to pursue this question of the metric system to any extent because, strictly speaking, it is not germane to the bill, although it can be discussed under the bill. I wish merely to ask whether the minister is aware of the resolution which was passed in 1958 by the Canadian association of geographers recommending that con-

sideration, at least, be given to the adoption of the metric system, and to inquire whether the government has given this recommendation any consideration.


Gordon Minto Churchill: My attention has been drawn to that resolution, but I am not at the moment prepared to state that we are recommending any action based on it.


Lionel Chevrier: Would it not be a matter for the government to decide rather than the research council?


Gordon Minto Churchill: I should like to consult with the national research council before answering that question.
(Translation):


Louis-Joseph Pigeon: Mr. Chairman, I just want to refer to an item published in the Montreal paper Le Devoir, of May 22, 1959, which says the following:
Canada isolated by its obsolete system of measurement.
Ottawa.-Canada and the United States will eventually be isolated if they fail to adopt the metric system and retain their obsolete system of measurement. That is what professor L. E. Howlett, of the national research council maintained yesterday before the Senate committee on banking and commerce. For the past ten years, stressed professor Howlett, we have seen an astonishing number of conversions to the metric system, especially in India and in continental China.
Mr. Chairman, a few moments ago the hon. member for Laurier (Mr. Chevrier) read some notes. I would have liked to know their source or rather by whom they were written. The hon. member for Laurier has drawn practically all his notes from the La Revue canadienne de geo-graphie volume XII, numbers 3 and 4 of July and December 1958 respectively. He practically read the whole of a recommendation that the geographical and geological organizations of Canada adopt the metric system, which was submitted to the convention of the Canadian Association of Geographers by Dr. Michel Brochu, of the University of Paris.
I would have liked the hon. member for Laurier to tell us that he was reading notes written by Dr. Michel Brochu which were published by La Revue canadienne de geographie.
(Text):


Robert Jardine McCleave: Order. We are getting away from the main point of the discussion in committee. Perhaps I should read the clause under discussion:
Item 2 of schedule II to the Weights and Measures Act is repealed and the following substituted therefor:
" (2) The standard unit of weight for Canada is the pound-
And so on. I would ask the hon. member to confine his remarks to the clause.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On the title.
William Arnold Peters: Before this measure passes I should like to ask the minister whether this matter of sizes is not related to this consideration of weights and measures.


Gordon Minto Churchill: It is a part of measurement, yes, but it is not remotely related to this particular alteration which is before us today. And I might point out to the hon. member that if we ranged as widely as he would like to on every bill brought before the House of Commons we would never finish the business of the house. His questions can quite properly be asked when the estimates of the Department of Trade and Commerce relating to this particular matter are before the committee.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.


Gordon Minto Churchill: the second reading of Bill No. S-22 to amend the Export Credits Insurance Act.
He said: Mr. Speaker, I have a statement to make which will last about 12 minutes. If you would permit me to continue past one o'clock I should be able to complete it.
The purpose of the proposed amendment is to enable the Export Credits Insurance Corporation, when authorized by the governor in council, to provide direct guarantees to lenders for export transactions and to buy, sell and make loans on guaranteed export paper. I think it might be helpful if I were to review briefly how the corporation operates, what it does, and what its experience has been. The corporation's main function is to insure Canadian exporters against non-payment by foreign buyers of goods and services. It in effect insures the foreign account receivable. The corporation is also authorized to insure sales of Canadian-produced goods by foreign subsidiaries of Canadian companies, and goods shipped on consignment or for exhibition purposes.
This insurance is provided by the government because there are no private commercial concerns offering similar protection. In all other countries where export credits insurance is available a similar service is
Export Credits Insurance Act provided by the government or with government backing. The corporation insures against risks of non-payment by foreign buyers.
These risks are by no means inconsiderable.	The corporation insures both consumer goods sold on short credit terms extending to 30, 60 and 90 days, and also capital goods where payments may be spread over a number of years. One of the basic principles of insurance is that there be a broad spread of risk. Accordingly the corporation generally requires its policyholders who export consumer goods to insure all their export sales made during a twelvemonth period, excluding sales made to the United States of America or sales made against irrevocable letters of credit. In the case of capital goods an individual policy is issued to cover the specific contract of sale.
The provision of export credits insurance in no way subsidizes the exporter, for he pays an appropriate premium for the insurance protection and still has to compete in the markets of the world on the basis of quality, price, credit terms and services rendered. In considering applications for insurance the board of directors of the corporation must exercise reasonable prudence and cannot take on liabilities in any one foreign country which may be too high in relation to the corporation's capital, which is $20 million, or in relation to the credit standing of the importer or the importing country. However, where the board of directors is of the opinion that the insurance would impose on the corporation a liability for a term or an amount in excess of that which the corporation would normally undertake in relation to any one contract, exporter, commodity or country, and the transaction is deemed to be in the national interest, the governor in council may authorize the corporation to insure under section 21 of the act.
The recently tabled annual report of the corporation gives a clear and detailed statistical summary of the corporation's operations and experience. Since the first policy was issued in 1945 export sales of $680 million have been insured, including $215 million authorized under section 21. Claims of $9.6 million have been paid and recoveries of $6.6 million have been obtained. Net claims and operating expenses to December 31, 1958, totalled $4.2 million. Premiums of $4.3 million have been received, so that over the past 14 years the corporation has operated on an almost exactly break-even basis with a surplus on operations of only $136,000. The interest on invested capital,

Export Credits Insurance Act which amounted to $3.6 million, makes up the bulk of the underwriting reserve which now stands at $3.7 million.
One of the problems involved in export trade is that of financing. An exporter of general commodities who sells his goods on short credit terms extending to perhaps 90 days as a rule has no difficulty arranging financing. Financing for such exports is readily available from the chartered banks. With the backing of an export credits insurance policy an exporter can often arrange for an increase in his line of credit or for accommodation on more favourable terms, since he can assign to his bankers the proceeds of any loss payable under his policy. The bank knows that if a foreign bill is not met by the buyer the corporation will have to pay under the policy.
In the case of capital goods, however, particularly where sales to underdeveloped countries are concerned, financing is more of a problem. Manufacturers of heavy equipment selling to domestic buyers in Canada are accustomed to receiving payment in cash on delivery, with the buyer obtaining his funds in the capital market or from financial institutions. In less developed countries it is frequently impossible for the buyer to finance domestically his imports of capital goods, because the local financial institutions and capital market are themselves underdeveloped and because many of these countries suffer from a chronic shortage of foreign exchange. Sales may be possible only if the supplier offers credit. For heavy equipment the credit period required often runs to a matter of years. The need for credit for the foreign buyers and the willingness of competing suppliers to grant extended credit terms obliges the Canadian exporter to sell on similar terms if he hopes to win orders.
With the backing of export credits insurance the Canadian chartered banks have generally found it possible to finance the capital goods business of Canadian exporters. However, it is reported that on some occasions chartered banks have found it difficult to provide the financing required by Canadian exporters, partly because of other commitments on the part of the banks, partly because of the size of the loans, or the terms required. In most countries of the world which are exporters of capital goods there are government facilities in addition to export credits insurance to assist in capital goods financing. Assistance provided by these government institutions includes the provision of either unconditional guarantees or rediscount facilities, or a combination of both.
It is now proposed that the Export Credits Insurance Act be amended to provide similar facilities to Canadian exporters of capital
	. j _! 'H
goods. Accordingly the proposed amendments would empower the government to authorize the export credits insurance corporation to give direct guarantees to lenders covering export transactions, and to buy and sell guaranteed instruments, and to lend money on the security of these guaranteed instruments in a manner similar to the arrangements provided by section 11 of the National Housing Act.
The corporation will administer the new facilities, acting as an agent of the government of Canada and directed by instruction of the governor in council, in the same manner as it now operates under section 21 of the act.
The new facilities will help to provide Canadian exporters of capital goods with export credits on terms broadly similar to those available to exporters in other countries. In this connection, the government is keeping in touch with the export credit terms being offered elsewhere through its missions abroad, and more particularly through the membership of the Export Credits Insurance Corporation in the Berne union. The union is an organization composed of credit insurers representing most of the major capital goods exporting countries. It provides a forum in which the export credits insurance practices of member countries can be reviewed and kept in line with one another.
The house will be interested to know that at the recent 16th annual general meeting of the Berne union held in Amsterdam on June 12 of this year, Mr. H. T. Aitken, who is the head of our export credits insurance corporation, was elected president of the Berne union, which is a compliment to him and an honour to Canada.
The direct guarantees proposed under the amendment will be applicable both to those transactions which are insurable by the corporation under section 13 or by the corporation upon instruction of the governor in council under section 21. The guarantees will be applicable to export paper issued in connection with contracts involving the export of goods or services for amounts of not less than $250,000, approximately, and involving payment periods of at least two years. Guarantees will be unconditional and cover the financed portion of the export contract, normally not more than 80 per cent of the contract price. The guarantees will be effective only after delivery of the goods by the exporter and acceptance of the goods by the buyer.
These guarantees may be provided in the currency of the contract of sale. Sales of capital goods, particularly to Latin American countries, are as a rule in United States dollars. It is felt that the provision of

guarantees in that currency would assist the exporter very materially in his financing arrangements.
Generally these transactions would be covered during the predelivery period by an export credits insurance policy, which policy would become superseded by the guarantee after delivery of the goods by the exporter and acceptance by the buyer. An important feature of the guarantee provision is that it should permit exporters to obtain non-recourse financing from lenders. This arrangement in turn should make it possible for exporters to finance a larger volume of business. In providing unconditional guarantees the corporation will be taking on added risks. An appropriate fee will be charged to cover these added risks.
It is proposed that the guarantees may be extended to all lenders, not only commercial banks. Further, it is proposed that the corporation be empowered to endorse the guaranteed export paper in order to enhance its negotiability.
In addition to the guarantees the proposed amendment would permit the corporation, when authorized by the governor in council, to purchase instruments guaranteed by it, lend money to the holder of a guaranteed instrument upon the security thereof, and sell a guaranteed instrument to any person. It is felt that the provision of such authority will assist in making funds more readily available to Canadian exporters of heavy equipment.
Under section 21 of the present act the liability of the corporation under contracts of insurance issued and outstanding at any time is limited to $200 million. The proposed amendment does not involve any change in this sum. The aggregate of the liability of the corporation under insurance policies issued under section 21 and of all the guarantees issued under the proposed amendments is not to exceed the limit of $200 million presently authorized. It is expected that a greater volume of export business will be facilitated by the new provisions, but individual guaranteed transactions will not increase total liabilities outstanding since when a guarantee becomes effective, an insurance policy is replaced.
Finally, as is the case under the present act, all orders in council made under the proposed amendment would be laid before parliament.


George James McIlraith: There is just one question I should like to ask the minister before he takes his seat. I understood him to say that the liability under the contracts of insurance provided under section 21 and the liability of importers under the guaranteed instruments shall remain the same; that is to say, shall remain the same
Export Credits Insurance Act gross. I understood him earlier in his remarks to say that the bill provided for the crown or the corporation as agent of the crown buying and selling the guaranteed paper. There is no limit on the buying and selling, as I understand it.


Gordon Minto Churchill: No; no limit has been set on that.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 2.30 p.m.
George James McIlraith: Mr. Speaker, the Export Credits Insurance Act, which it is proposed to amend by the bill now before us for second reading, is undoubtedly one of the most important acts we have in force affecting our trade; and bearing in mind the importance of our foreign trade in the general prosperity of the country it is indeed a most important matter for all Canadians. The bill seeks to add to the act a wholly new principle. The act, as hon. members know, provides for the insurance of contracts for payment with respect to the export of goods from this country. There are certain other subsidiary items like services and so on that may also be insured.
The bill before the house provides for the crown through the corporation to buy and sell guaranteed instruments and to guarantee instruments used in the export of products from Canada. There is, of course, a great need for helping the export industry to finance its business. That is undoubtedly a great need in the export trade field today and one which should be met. So we start with a very important piece of legislation being amended and an important step being taken to meet a need that in my opinion is urgent in our commercial world today.
But before discussing the bill in detail I want to raise a preliminary matter that I think should be raised. Under the act it is provided that the limit of liability of the crown is $200 million with respect to the insurance contracts provided for in the act. Under the bill provision is made for doing three things. The first is to guarantee the payment of an instrument given by an importer to an exporter. This is the guarantee factor. The second is the purchase of guaranteed instruments, and the third is the sale of guaranteed instruments.
I have two points I wish to raise. One is that while under the act there is a ceiling limite of $200 million with respect to the relevant clause of the act which provides for

Export Credits Insurance Act insurance by the corporation with the approval of the governor in council, the purpose of the guarantee is a wholly new purpose, and under the liability which is being created by clause 5 of the bill now before us in what will be section 21B of the new act the liability of the importers under all outstanding guaranteed instruments is limited so that the total liability shall not at any time exceed $200 million.
My first point is that this is a wholly new purpose for which possible liability may be incurred or a charge may be made on public funds. The second point is that the bill provides for three separate purposes. The first is a guarantee of instruments, and there is a limit which is the same as the limit under the insurance provisions in the existing act. In addition, however, there is the necessary buying and selling of the guaranteed paper and that buying and selling operation has no limit whatever. It is possible over a period of years to have bought paper to the amount of hundreds of millions of dollars. In other words the limitation of $200 million in the bill is only a limitation on the outstanding guaranteed instruments, but there is no limitation whatever on the losses in the buying and selling or the amount of the buying and selling. It would be possible over a period of years, depending on how quickly guaranteed instruments are replaced, to buy say $1 billion worth of paper, and it is theoretically possible to have a loss of $1 billion. I use that theoretical illustration to make my point. I do not suggest for a minute that there is a probability of that happening at all, but I wanted to make that point.
For these two reasons I am at a loss to understand why the bill was not preceded by a resolution and introduced in the House of Commons rather than being introduced in the other place. In that connection I think I can content myself with reading section 54 of the British North America Act, which is in these words:
54. It shall not be lawful for the House of Commons to adopt or pass any vote, resolution, address, or bill for the appropriation of any part of the public revenue, or of any tax or impost, to any purpose that has not been first recommended to that house by message of the Governor General in the session in which such vote, resolution, address, or bill is proposed.
The significance, of course, of having a resolution is that there is an opportunity for a further committee stage. My point is that the bill provides for the appropriation of a part of the public revenue to a purpose that has not been first recommended to the house by a message from the Governor General. Second, if it is held that bill does not provide for expenditure for a new purpose, then my


further point is that there is an increased liability created by the bill. I thought I should properly raise that preliminary point so that our rights in this important constitutional matter would be preserved and not eroded through any oversight.
Dealing with the substance of the bill itself, I think it is well for us to recall a little of the history of the legislation on this subject. In 1944 the Export Credits Insurance Act was first passed by parliament, having been introduced by the previous government. The bill as it then stood provided for the creation of the corporation which was to engage in insuring exports, with certain limitations on the risks. In addition the bill contained a very interesting feature in that under certain circumstances, upon the recommendation of the Minister of Trade and Commerce and the Minister of Finance, the corporation could make direct loans to countries to which we might export goods.
In 1945 there was an amendment which provided for an increase in the lending provision whereby the amount the Canadian government could lend foreign governments for the purpose of buying exports from this country was increased to $750 million. This amount of money was lent to various countries, and I think the farsightedness of the government of that day in this treatment of our export trade certainly benefited Canada greatly. It was a remarkably successful policy.
Perhaps the best indication of just how sucessful this 1944-45 legislation was can be partially found in the fact that our total export trade in 1946 was about $4,266 million and by 1956 it had increased to about $10,574 million. This type of farsighted legislation was a help to exporters and at the same time helped other countries which were devastated in the war to re-establish their currencies so they could buy these exports. This policy certainly paid off for this country, if I may use such a phrase.
This act was amended from year to year. It was amended in 1946 to extend the risks that could be insured. It was amended in 1948 to permit the government to have the corporation, with the approval of the governor in council, make loans that were otherwise beyond the amount that the corporation would normally lend to any one exporter or to any one country. This provision was helpful and increased the development of the corporation. Then in 1954 there was a further amendment. One of the main things that amendment did was to increase the capital. In 1957 there was a rather useful amendment which extended the coverage so that in addition to insuring commodities and capital

goods, coverage could be provided for engineering services, goods sent out of the country for exhibition purposes and goods sent out of the country on consignment. In 1958 the present government further amended the bill to increase the amount of insurance the corporation could have outstanding at any one time. This amount was increased from $100 million to $200 million.
In his remarks this morning the minister, as I recall it, did not deal particularly with that phase of the matter. In view of the reasons he gave one year ago for asking for the increase in the liability the corporation could incur, and in view of the fact that he has come back so soon thereafter in effect to reduce the amount the corporation will have available for insurance purposes, I am wondering if the minister, when he closes this debate would clarify that point. In other words, this has been a very good piece of legislation, a very successful piece of legislation; yet the minister is in effect, by this bill, asking that the volume of business the corporation can do be reduced; that is in so far as the insurance aspect is concerned.


Mr. Benidickson:: Because of the new
purposes.


George James McIlraith: Because of the new purposes for which the gross amount may be spent. I ask the minister, therefore, if he would develop that point in his closing remarks at this stage of the legislation.
There are some other aspects of the bill to which I think the attention of the house should be drawn. Up to this point the scheme of the direction of the corporation has been by a statutory requirement that the Minister of Finance, the deputy minister of trade and commerce and the governor of the Bank of Canada be directors of the company and that four additional directors serve with them. I notice that this bill provides that the governor of the Bank of Canada be not included as a director of the corporation. The minister did not deal with that very important change. The corporation has been well directed and well run, and I for one am apprehensive as to the significance of the removal of the governor of the Bank of Canada from the board of directors of the corporation. I would hope the minister would clarify the reason for that change before we are asked to approve the principle.
There is another aspect of the bill before us. The minister carefully set out the need of exporters for financing in their operations; that is, as export trade has become more competitive there is a need for exporters to be able to give longer term credit to purchasers and this makes it difficult to finance their operations. I am in accord with his
Export Credits Insurance Act expression of the need in trade circles for that kind of assistance. This amendment puts the Export Credits Insurance Corporation into the business of buying, selling and guaranteeing the export paper, if I may use that term.
Now, we recently had before this house legislation setting up in Canada a corporation for the purpose of financing exports, discounting export paper if you will. I thought that legislation was particularly significant in our trade development, and very important. I should like to know whether the minister intends that this crown corporation should compete in the field of buying export paper with the export finance corporation recently set up by private legislation.
Then there is another aspect of this matter that concerns me. If I heard the minister correctly before the luncheon adjournment, I believe he said it was the intention to use the guarantee provisions of this bill only in cases where the amount of the transaction exceeded $250,000 and the term of the guarantee exceeded two years, I think I heard him correctly on that point.
That raises an interesting point. If we are to develop trade it is our total trade which must be developed. A very important factor there is not only the big exporters but the smaller manufacturing exporters in particular, because the expansion must come in that area as well as in the area referred to by the minister. In dealing with the minister's estimates a few days ago I raised a matter in connection with that point and asked him to examine the possibility of taking measures that would assist exporters, particularly the smaller exporters, in the very large potential market in the United States. I am sorry to see him limit the new legislation to what I might describe in general terms as big business. It seems to me that the need for financing is just as great in the smaller industrial business in Canada as it is in the big industrial business and if you are to legislate on this particular subject we should provide for all our manufacturers and exporters the benefit of the assistance or facilities we are providing. That distinction made by the minister seemed to be quite unrealistic.
There is one other criticism I have of this measure. I have spoken in rather enthusiastic terms of the present act, the Export Credits Insurance Act. Indeed, some members would think I had been very laudatory of the farsightedness of the former government in bringing it in, and I have spoken of the great benefits it has brought to this country. I for one am sorry to see the minister now come forward with legislation which will divert that corporation from its

Export Credits Insurance Act main purpose of insuring the exports of this country. It seems to me that the corporation has functioned well. There is such a need for continuation of the insurance of export credits that it is unfortunate that this legislation has provided for what in effect is an entirely new business namely the guaranteeing of export paper, or the actual buying and selling of the export instruments being done through this corporation. I would have thought if the crown were to engage in that business it should have done it by a separate corporation, because it is a separate function altogether.


William Moore Benidickson: Like the export-import bank of the United States.


George James McIlraith: That is really embarking upon an operation similar to that of the export-import bank of the United States referred to by my colleague from Kenora-Rainy River (Mr. Benidickson), and it is another field altogether. As a matter of fact, I am not sure whether the corporation should be wholly a crown corporation or whether the crown has explored the possibility of bringing more private enterprise into this field. However, I am in complete accord with the need for action in this field at this time.
I do hope the minister has considered that point thoroughly, and if he has that he will explain more fully to the house why he chose this approach to the problem rather than making provision by separate legislation for a separate corporation, because it is really a new field. It is an international commercial banking operation in which the minister is now engaging.
There is another problem about the bill which is before us. I do not know to what extent I may refer to proceedings in the other place, but when this bill was before a committee in the other place it became apparent from the explanations given that what was intended, although the bill does not provide this, was mainly the guaranteeing of export credit paper, and that this would facilitate the exporters' financing of that paper once it was guaranteed. While there is no explanation as to how that was to be facilitated, it is self-evident that it will facilitate it to some extent; but in a period of tight money-I hope not to get into further argument with the Minister of Finance on this particular aspect of it and using that term in the sense that the commercial banks, by reason of bond holdings and for other reasons have not large sums of money available for lending purposes- it is difficult to see how the mere guaranteeing of the paper will particularly assist the exporter to finance through the banks.


Therefore I think if the guarantee aspect of the proposal is to be successful the minister ought to explain to us a little more fully how it is to be successful, because in a tight money period it is not necessarily the security of the loan which is the problem with the commercial banks, but the availability of funds to loan.
A second point in that connection is the long term of the guarantee. The Canadian banks, which are both commercial banks and savings banks combined, have always sought to keep very large portions of their funds in short term securities or loans. They have been very careful about that and have done a very good job over the years. This legislation provides only for the guaranteeing of long term paper. If that is so, then this measure is not going to help the exporters finance through the banks. That again leads us to the question, in what way, then, is a long term export paper guarantee going to help the exporter to finance?
Then there is the whole operation of the buying and selling of the paper. Notwithstanding what was said in the committee in the other place, where the whole emphasis was laid on the guaranteeing of the paper rather than on the matter of buying and selling the paper, I am still of the opinion that the corporation is going to find itself in the position of buying and selling large quantities of these guaranteed instruments. I noticed that in his remarks this morning the minister said relatively little about the buying and selling of such paper but a great deal about the guaranteeing of it. If the corporation is to engage in this commercial banking operation of buying and selling such paper, then surely if that is to become the main purpose of the legislation it is another operation altogether from the insuring of risks.
Those are questions which are outstanding in my mind, Mr. Speaker, which I hope the minister will deal with at some length. While he will see that I have been critical of the bill, I am wholly in accord with the purpose sought to be served by the bill and the minister's assessment of the need for some sort of assistance to exporters.
Before I conclude my remarks I must just add one further thing which I think ought to be said. I appreciate very much the minister acknowledging the honour which has been done to Canada by the election of the president of our Export Credits Insurance Corporation to be head of the Berne union. This is an acknowledgment of the splendid services of that officer, and it is also a courtesy and an honour to this country that I am happy to join in acknowledging.


Hazen Robert Argue: Mr. Speaker, we are pleased that this bill has been introduced, because not only does it seek to continue the Export Credits Insurance Act but it also provides amendments for the purpose of expanding the activities of that corporation.
Canada at this time is facing serious difficulties in the export of a great many commodities. We realize that we are facing difficulties in the export of lead and zinc, copper, wheat and oil, although the difficulties in that direction seem to have been lessening in recent days because of actions taken by the United States government. Nevertheless, with regard to a great many commodities Canada is finding export sales increasingly difficult to obtain.
We are all aware that the Soviet union is engaged in a growing trade offensive, but that country does not have to rely in any sense upon private institutions to make commercial transactions in the commodities available for export. Rather, the Soviet union is able to enter the market by means of long term contracts and by means of credits at very low rates of interest which enable her to undercut markets which might otherwise be those of Canada or of some other western nations. Private enterprise in the ordinary sense of those words is unable to compete with this growing expansion in world trade on the part of the Soviet union.
We see extraordinary statements made from time to time by the Canadian Manufacturers' Association and by leading businessmen in this country advocating an expansion of public credit to enable corporations to develop their business in the export field. As a matter of fact, the measure now before us is a good socialist measure. It provides a public corporation to undertake business which private enterprise is either unwilling or unable to engage in. Those who wish to put forward their private enterprise views will say, of course, that this is merely a measure to assist ordinary business establishments. Be that as it may, it is an expansion of the area of government activity. It is necessary according to the government and it is necessary according to the official opposition, and we in this group believe that the Export Credits Insurance Act has been of value to Canada in the past and that with these amendments it will be of greater value in the years ahead.
There are a number of clauses to which one might refer at some length in the course of detailed study, but I do notice that there has been some change in the board of directors. Now the bill states:
There shall be a corporation to be known as Export Credits Insurance Corporation, consisting of
Export Credits Insurance Act those persons as members who for the time being are the deputy minister of trade and commerce and the deputy minister of finance.
The old section read as follows:
There shall be a corporation to be known as Export Credits Insurance Corporation, consisting of those persons as members who for the time being are the deputy minister of trade and commerce, the deputy minister of finance and the governor of the Bank of Canada.
So by this amendment the government is dropping as a member of the board of directors the governor of the Bank of Canada.


William Moore Benidickson: Why?


Hazen Robert Argue: It will be very interesting to know why he is being dropped. Is it because he does not see eye to eye with the government in regard to the purpose of this measure? Is it because of some difference with the Minister of Trade and Commerce as to the policy which is being followed? Or is it, perhaps, that he is too busy, that he is overworked, that he has more things to do than he is able to do? I ask this question because we had this same gentleman before another committee in his capacity as a member of the committee having to do with investment funds of the unemployment insurance commission.


Mr. Speaker:: Order. I would ask the hon. gentleman whether the position of an official, his engagement or his views, have anything to do with the principle of this bill. It might be asked, furthermore, that the hon. member is referring to proceedings in a committee which has not yet reported, and that is a second question; but the reason I intervened was to ask the hon. member to justify his reference to an official as a matter which is involved in the principle of the bill before us.


Hazen Robert Argue: But this bill provides that this official is to be dropped from the board of directors. He has been a member of the board, and now he is being dropped.


William Moore Benidickson: It was statutory before.


Hazen Robert Argue: It was statutory before, and I am now asking for an explanation. The change is made in the first clause of this bill, section 3 of the existing act.


Mr. Speaker:: I think a discussion of that kind would be more appropriate in committee. It is an incident of the bill. I do not want to prevent the hon. member from discussing a matter which he feels relevant, but that could be done in committee. After all, he is discussing a detail of one clause.


Hazen Robert Argue: I understood your point to be that there is really no reference to this gentleman in this bill and that his private opinion expressed in some other place has no

Export Credits Insurance Act bearing on it. But I was merely seeking to find out why this gentleman was being dropped from the board, and I was wondering whether it is because he is too busy. We know, or we have reason to believe, that most of his investment activities in connection with the unemployment insurance fund at least were done by telephone, and if he is too busy to engage in the work of this corporation that is a perfectly good and sound reason for dumping him from the board of directors in this case.
In any event we are pleased to see this legislation being continued, and we are glad to see it is being extended. We think the expansion of this legislation is very necessary, because unless Canada is exceedingly aggressive in the export field a great danger to our economy is likely to develop. Perhaps before the passage of this measure I should ask the minister whether or not its provisions will facilitate the extension of credit in regard to the sale of Canadian commodities, and I refer in particular to Canadian wheat. I have in my hand a Canadian Press report of May 20 which states that a $28 million sale of Canadian wheat to Poland is being financed by West Germany because proper credit facilities are not available in Canada. At a time when the international market for wheat is exceedingly competitive, when it is difficult to obtain sales, even with the provision of credit, it seems a rather startling piece of information that a $28 million sale of Canadian wheat to Poland must be financed in Germany because no such financing is available in this country.
This measure can be of help to our nation, and we hope that with the passage of this amendment it will be used to the maximum.


William Moore Benidickson: Mr. Speaker, I do not wish to speak at length in connection with this measure because the views of this party were very well expressed by the hon. member for Ottawa West.
This amendment represents an extension of the field of government participation from insurance to finance to encourage our exports, and I am sure all hon. members of the house would approve of that objective. I share with the hon. member for Ottawa West curiosity as to how this function can be reconciled with the initiation of private enterprise in this field, as evinced by legislation which we have had before us during the current session. In addition, if this is likely to be an impressive field I share with the hon. member a desire to question the minister as to why we are including in an insurance act this additional function which seems to be so closely related to the export-import bank function of our neighbour to the south.

That raises a question as to why, if this is to foe an impressive function, this bill does not in any way increase the total financial liability under the act, which was set at a maximum of $200 million. If the government is to go into a new field, and if this new field is to accomplish anything, surely it cannot be accomplished solely by endorsing a certain amount of paper without requiring over a period of operation an actual requirement for financial resources. No request has been made for an increase in financial resources.
I note from the annual report that the liabilities under section 21 of the act were $51 million and those under section 13 were $84 million as at December 31, 1958. I do not think the minister brought us up to date as to the current position with respect to liabilities particularly under section 21, and I wish he would do so.
This bill was introduced in the other place. The banking and commerce committee of the other place examined Mr. A. W. Thomas, assistant general manager of the Export Credits Insurance Corporation, who in his initial statement to that body on Wednesday, June 10, 1959, as reported at page 7 of the evidence of the committee, said:
-the substance of the hill is in this matter of guarantee. The responsibility is going to be taken by the government and not by the corporation, for we are an insurance corporation.
I believe that highlights the suggestion of the hon. member for Ottawa West that if the statute we are now amending is essentially related to insurance, there is some merit in thinking about the possibility of separating the two functions. That would not be done here and I do not think we propose to divide the house on that point, but I feel that the minister should consider the advantages of there being two acts providing for a separation of functions, particularly when the assistant general manager of the company asserts that decisions with respect to matters of this kind are going to be government decisions rather than decisions of the corporation itself.
Another question that has concerned me in connection with the new sphere of activity suggested under this bill is related to our knowledge that in the insurance realm we have had coinsurance. On the same page of the proceedings of the banking and commerce committee of the other place Mr. Thomas said:
The policy of insurance-
That has hitherto been the function of the corporation.
-is subjected to terms and conditions and to a co-insurance which is normally-[DOT]

I want to emphasize the word "normally". I continue:
-not in excess of 85 per cent of any loss which might be suffered by the exporter-
I was curious about the word "normal". Have there been policies of insurance undertaken by the corporation where the coinsurance by the exporter was less than 15 per cent? In addition I would ask the minister to tell us today or on a subsequent occasion when we are debating the clauses of the bill how guarantees are going to fit into the traditional experience of coinsurance. With respect to endorsing a promissory note, for instance, does the minister conceive that he can endorse or guarantee that paper on a percentage basis rather than in entirety as to the face value of the paper guaranteed? I think there is great merit in retaining an interest on the part of the exporter in repayment and the proper eventual success of the transaction. I am wondering whether or not under this form of financing the corporation is likely to get into the position of being 100 per cent interested, without a co-interest on the part of the exporter himself.
We have some knowledge, of course, as to the competitive position that Canada is in which necessitates and makes desirable legislation of this kind. In the matter of down payments, what is the likely requirement in the view of the minister in this respect? I understand that with respect to insurance facilities in the United States a down payment there is required where the cover will not exceed 60 per cent. What is the minister's advice to his corporation in this respect? In so far as rates are concerned, is the minister contemplating that rates of insurance will continue to be standard without differentiation with respect to individual transactions? I believe there is now something in the nature of a trade union among government export insurers, and the firm convention provides for a maximum term of loan contracts of five years. There are some countries at least that are competitors of ours which do not belong to this association, notably Italy, and there are some others.
What is the possibility of getting competitors of this kind into the Berne organization? Notwithstanding the Berne convention and agreements I believe that in the United States, by virtue of the export-import bank, an extremely important competitor there has an opportunity to assist exports by means of development loans. I think this avoids the Berne agreement to the extent that these development loans could be for a term of as long as 20 years. Does that not appeal to
Export Credits Insurance Act the minister as an additional reason for perhaps separating the financing and putting that in a separate statute, such as is the case in the United States, rather than including it in a statute that is basically an export credit insurance act?
The minister, of course, will be very well aware of the fact that Germany has been extremely aggressive in this field and through its reconstruction loan corporation is a competitor. I question whether it is desirable that we be in the Berne agreement with respect to credit insurance and have terms that might be related to insurance in some way interpreted by our friendly competitors in other countries as being bound as a result of that statute, whereas they are really finance matters which these other countries have handled by separate statutes and separate organizations, notably the Export-Import bank of the United States.


Mr. W. H. McMillan (Welland):: I just want to ask two or three questions on these amendments. They seem to come under two categories; first, to make a change in the management of the corporation; and second, to increase the powers of the corporation. Under these amendments the corporation will be assuming greater liability in respect of each individual exporter. My understanding is that the corporation will guarantee the exporter unconditionally for the full amount of his account. That has not been true heretofore. As was stated by the hon. member for Kenora-Rainy River previously we had co-insurance where the exporter carried 15 per cent of the loss, if any. Will this coinsurance apply in the future? My understanding is that the corporation will insure unconditionally up to 100 per cent of the amount.
There is one other question that comes to my mind. I wonder whether the corporation is utilized by exporters in shipping to the United States? No reference has been made to that matter. When the matter was debated previously two years ago, I think, some reference was made to making use of this corporation for exporting to the United States, but at that time it was said that no use was being made of this corporation in that respect. I should like the minister to comment on that matter.
The hon. member for Ottawa West referred to the fact that small businesses did not have the same advantage in making use of the export credit corporation. I might say that I have had larger businesses come to me and say they had difficulty in getting the services of this corporation to handle smaller orders. This happens to be a large company that was shipping products costing under $100,000 to Brazil, and it was hard for

Export Credits Insurance Act them to get the services of the corporation to look after this comparatively small order.


William Moore Benidickson: Was that on long term credit?


William Hector McMillan: On long term credit. I should like to ask the minister to make some comment in connection with that matter.
As to the change in management, I think if the governor of the Bank of Canada continued to be on the board of directors of this corporation, in so far as he might have business with the corporation through his position with the bank, he might have a dual capacity. I assume that is the reason the government is changing the board of directors. I should like the minister to comment on that matter.


William Moore Benidickson: The central bank in
France does the rediscount.


William Hector McMillan: Yes. I thought it would probably be better to ask these questions at this point and to have the minister answer them now.


Gordon Minto Churchill: Mr. Speaker-


Mr. Speaker:: I must inform the house that if the minister speaks now he will close the debate. I should also, if I may interrupt the minister, ask him to deal with the preliminary point which was made and which, if it is a valid point of order, would be fatal to the passage of this bill. I refer to the point that was made by the hon. member for Ottawa West to the effect that this bill is authorizing the expenditure of new money. If it is, it comes under standing order 61. As a motion for public aid or a charge upon the people which can only be introduced by a resolution. It also comes under standing order 63, which is an extremely important consideration to this house and which reads as follows:
63. All aids and supplies granted to Her Majesty by the parliament of Canada, are the sole gift of the House of Commons, and all bills for granting such aids and supplies ought to begin with the house, as it is the undoubted right of the house to direct, limit, and appoint in all such bills, the ends, purposes, considerations, conditions, limitations and qualifications of such grants, which are not alterable by the Senate.
The point having been raised, I feel that the minister should deal with it first so the house can assure itself that its privileges are not being eroded.


Gordon Minto Churchill: Mr. Speaker, on the first point raised by the hon. member for Ottawa West may I say that I think it is based on a misunderstanding, perhaps owing to a reply I gave to a question he asked me just at one o'clock. I misunderstood his question.


He asked me whether there was any limitation on the amount of guaranteed export paper, if you can use that term, which might be bought and I said no. I thought his reference was as to whether there was any specified amount within the over-all or overriding limitation of $200 million which would be appropriated or set aside for that particular purpose. But as he indicated in the course of his remarks, the proposed amendment under section 21B states as follows:
21B. (1) The aggregate of
(a)	the liability of the corporation under contracts of insurance entered into under section 21 and outstanding, and
(b)	the liability of the importers under all outstanding guaranteed instruments,
shall not at any time exceed two hundred million dollars, . . .
Therefore there has been no increase and there is no increase in financial obligation in any other portion of the bill. I had this looked at when we were considering the introduction of the measure and our conclusion was that a resolution would not be required in the House of Commons because no extra financial obligation was imposed upon the crown. These limits continue to be maintained. The situation was different two years ago when I introduced an amendment raising the total amount available from $100 million to $200 million. Therefore I think that the point of order was raised under a misunderstanding due perhaps to the answer I gave just at one o'clock.


William Moore Benidickson: Would the minister permit a question? In the opinion of the minister does this new function involve a fairly substantial increase in employment of staff for the new function?


Gordon Minto Churchill: No, not at all. That again is something we looked at and the present staff will be able to handle the business which will arise under this new arrangement if approved by the House of Commons.


Lionel Chevrier: May I ask the minister a question? Did the amendment he referred to a moment ago contemplate the introduction of a resolution?


Gordon Minto Churchill: When we raised the amount from $100 million to $200 million I moved on December 4, 1957, as found at page 1867 of Hansard, that the house go into committee to consider the following resolution. The resolution was considered on that day and subsequently the bill came up for second reading.


Lionel Chevrier: Does it not follow that having done that on a previous occasion a resolution is required now when the minister brings in this bill having a different purpose, even though it does not increase the amount?


Gordon Minto Churchill: That would be a matter tor Mr. Speaker to determine. I do not see it that way at all. My understanding is that a new and entirely different increase in expenditure must be involved. May's Parliamentary Practice, 16th edition, page 754, says that the charge must be new and distinct. Here there is no new and distinct charge suggested.


Mr. Speaker:: May I say that as I understood the hon. member for Ottawa West he was not contending that the guaranteeing liability might exceed the $200 million now authorized but that the power to purchase guaranteed instruments was not limited to the $200 million which had been authorized. As I recall what was said, that seems to me to be the only point which requires an answer. I am not concerned so much about additional staff or the question of the change in character of the purposes for which the money already voted may be used. But if the legislation as it is to be amended would permit the corporation to incur expenditures through the purchase of obligations which would exceed the authorized limit of $200 million then there would in effect be authority to spend new money and that might raise the question of order.


George James McIlraith: That was one of the two
points I raised. You see, the present act provides for insuring export credits. That is the purpose of the act. The new bill provides for guaranteeing, buying and selling instruments. Instruments are a different thing altogether from what is insured. "Instrument" is defined in the bill as a promissory note, bill of exchange and so on. It is discount paper. It is a wholly new operation distinct from the business of insurance of contracts for the payment for export commodities and capital goods. Therefore my first point is that the procedure is not in accordance with section 54 of the British North America Act because the purpose of the bill is wholly new. The bill undoubtedly creates a charge because guaranteeing up to $200 million is admittedly a charge, so even if the total liability is not increased the purpose is wholly new. That was the first point.
The second point was a little different.


Mr. Speaker:: It is the second point that concerns me. I think the first point can be and has been answered by the reference to May. The general purpose of the appropriation of $200 million is the facilitation of export trade, in the old bill by insurance and in the new bill by insurance plus the guaranteeing of instruments. Therefore I think that point is perhaps not worth pursuing, subject to what authorities the hon. member
Export Credits Insurance Act may cite, but the second point is one on which I should like to be satisfied, namely that the buying of instruments is also limited to the $200 million.


George James McIlraith: I have stated my first point and I am not going to press it unduly at the moment. But Your Honour can see how far we could go astray by permitting the introduction of a wholly new purpose in an amending bill. If you had an act respecting housing, then instead of introducing new legislation the government could change the purpose and build railroads with the amount of money voted for housing. I will not develop that argument further but I thought it should be raised.
My second point is that the total liability that can be a charge on the public funds at any one time under section 21 of the existing act is $200 million. That is the maximum amount of liability outstanding at any one time. The act uses the expression, "shall not at any time exceed $200 million". The new legislation provides for the corporation engaging in three new activities that are different from insurance. As I submitted in my previous argument, they are wholly different in purpose. They are the guaranteeing of promissory notes, bills of exchange and other negotiable instruments, the buying of such instruments and the selling of such instruments. The limit of liability in the new bill will be found at the bottom of page 2 where it says that the liability of the importers under all outstanding guaranteed instruments-that is just the liability of the guarantees outstanding at any one time-shall not, together with the existing liability under the act, exceed $200 million so that the amount is the same $200 million. However there is no limitation whatever under the buying provision.
Let me take an example of what could be done under the bill in order to illustrate my point. Assume that the bill is passed and next month we guarantee paper to the extent of $200 million. They can then buy all the guaranteed negotiable instruments. They can buy and sell; they can incur a loss, but the continuing guarantee stays at $200 million, that is clear. It is limited. However, in the buying and selling they can buy guaranteed paper and incur a loss on it by selling, which loss would be a charge on the taxpayer. This buying and selling operation is a trading operation and it is not limited to the $200 million.
If we could reduce an example to an absurdity in order to illustrate the point, Mr. Speaker, I would say they could buy $200 million of guaranteed paper and next month sell it for $190 million. Then they could come right back and guarantee $200

Export Credits Insurance Act million worth of paper, so that the charge on the treasury would then become $210 million at the end of the month.


Mr. Speaker:: If I might interrupt, I should like to ask the hon. gentleman a question. I think he has overlooked one factor, and if so I should like to be clear about it because it may save time. The instruments that may be purchased are instruments guaranteed by the corporation. If that is so, then the amount of the guarantee of any instrument, that is a debt of any importer which has been guaranteed, is already charged against the $200 million. If the corporation then buys that instrument it is not adding anything to the liabilities of the corporation, but is presumably replacing its liability for the guarantee of the debt. However, there is no change in the obligation of the corporation, and the corporation cannot go beyond the $200 million limit.


George James McIlraith: They can sell the instrument and take a loss; it is a trading operation. They are really going into commercial discount banking operations. The only thing that is limited is the amount they can guarantee, but in any trading operation they can be taking very severe losses, regularly. This is the significant point that concerns us, the gross charge on the treasury can far exceed the $200 million on guaranteed instruments and that $200 million is the limit in the act.


Mr. Speaker:: Perhaps I could hear the minister on this point.


Gordon Minto Churchill: I answered the first question earlier, and I did deal with the second one. My hon. friends cannot have it both ways. The hon. member for Kenora-Rainy River (Mr. Benidickson) was arguing just a few minutes ago that if we were going to do more business we would have to increase the financial resources of the corporation.


William Moore Benidickson: But I expect that you would use a resolution to do so.


Gordon Minto Churchill: The wording of section 2 IB of the act definitely limits the liability under contracts and guarantees. I have already read the section which says:
The aggregate of
(a)	the liability of the corporation under contracts of insurance entered into under section 21 and outstanding, and
(b)	the liability of the importers under all outstanding guaranteed instruments,
shall not at any time exceed two hundred million dollars-[DOT]
Now, all of this was considered, Mr. Speaker, before the bill was introduced and it is because no authority is granted the corporation to exceed that ceiling that we decided no resolution was required.


Mr. Speaker:: I am inclined to think that the minister's advice was sound. It is always difficult to know with these bills which authorize complicated transactions, whether or not new money is involved. I think that the argument is really concluded by section 2 IB which defines how the $200 million already authorized by parliament can be applied in the future. It can be applied to existing purposes of the corporation, that is the liability of the corporation under contracts of insurance entered into under section 21 and -not or-the liability of importers under all outstanding guaranteed instruments. In effect, therefore, this bill divides the $200 million already authorized between the old purpose and the new purpose and to that extent it cuts down the amount available for insurance and makes some part of the $200 million available to guarantee the liability of importers.
Now, let us look at the guarantee provisions. The corporation may purchase guaranteed instruments under subsection 2 of section 21 A, and if you look at what a guaranteed instrument is you will find it means an instrument the payment of which is guaranteed by the corporation under this section. What the corporation, in effect, is doing is purchasing its own guarantee, and to that extent it does not increase the liability of the corporation which is already limited to $200 million because the instrument which it has guaranteed is an instrument of liability of some importer. It is that liability of the importers which is included in the $200 million which is involved in this purchase.


George James McIlraith: Thank you, Mr. Speaker. My purpose in referring to the matter lies in the importance of the bill and not in any desire to delay the passage of the bill in any way. It was rather a point that I thought should be raised because of its importance and this was the sole purpose I had in mind.
There is another rather interesting point at which the house should look when any such bill is presented in the future, and that is the fact that there is no limitation on the price at which these negotiable instruments can be purchased. It may be two cents on the dollar.


Mr. Speaker:: Perhaps the minister would like to speak now?


Gordon Minto Churchill: I fully appreciate the points raised by my hon. friends opposite. I am well aware of the fact that they favour the Export Credits Insurance Corporation because they had something to do with its origin. They

have been impressed, as I am sure all the rest of us have been with the success of this corporation over the ensuing years. I have already explained what we intend to do. Perhaps I should not, at this stage, answer some of the questions which were raised because obviously they could be better answered in the committee stage. However, generally, I can say this on some points raised by those who spoke: There was no question about- I use the phrase of the hon. member for Assiniboia (Mr. Argue) now- dropping the head of the Bank of Canada. My understanding was that the pressure of business precluded him from giving the close attention to this organization he desired to give it. I judge he knows best the time that is available to him and so we saw no reason to raise any serious objections to that.
The directors of the corporation have carried on very successfully and although the head of the bank will not be present in the future, you still have the deputy minister of finance attending directors' meetings.
This is a new departure under the present terms of the act but it is allied in some measure to part 2 of the original act which lapsed some years ago. When the act was passed in 1944 there was a part 2 which authorized the making of rehabilitation loans to foreign governments and that authority expired in 1947. So although this suggestion we are putting forward now is not exactly the same as that nevertheless we thought in view of that experience with the act we could introduce this other feature now of guaranteeing export paper without having to create a new corporation or set up a separate act for this purpose.


William Moore Benidickson: Would the minister permit a question at this stage? As regards long term credit, who does the minister contemplate will be the original lenders, the commercial banks?


Gordon Minto Churchill: The chartered banks.
The hon. member for Ottawa West (Mr. Mcllraith) suggested that by this proposed amendment we were, as he put it, diverting the corporation from its main purpose of insuring. That does not necessarily follow. The insurance work of the corporation may continue to be the larger part of its work. We will know better a year from now as the experiment is carried forward, but the intention was not to change, alter or diminish the activities of the corporation, which in the past have been very successful insurance activities. We were not able to go as far as the Export-Import bank of the United States. That question was looked into very carefully. As has been pointed out on more than one occasion, we have not the capital for export
Export Credits Insurance Act that the United States has. We are an importer of capital. The Export-Import bank has been able to export capital on very long terms which are at the moment beyond the capacity of our country. So having examined the activities of the Export-Import bank of the United States, we decided that at this stage in Canada's development we could not enter that field. We felt that this other plan would in the interval provide additional facilities to our exporters that they do not now have at their disposal.
Nor did we consider that we would be in competition, as I think someone suggested, with the export finance corporation recently set up. We may be dealing in different fields. The representations which have been made to us over the last two years have indicated that there is a field here for the guarantee of export paper that has not been adequately covered in the past. All sorts of investigations have been carried out. Consultations have been held with leading businessmen of this country, and we feel that by introducing this measure we have taken a step in the right direction. I think that with a year's experience behind us we may discover that perhaps more capital or more backing for the Export Credits Insurance Corporation is required. As suggested by the hon. member for Kenora-Rainy River (Mr. Benidickson), it depends how our export business develops. We are in a highly competitive world and other countries are supporting their exporters beyond the field of just insurance, and consequently we want to do that too.
The hon. member for Assiniboia gave an instance to the house of the difficulties faced. He used the example of wheat, where he mentioned that a proposed sale of $28 million of wheat to Poland on a long term basis was being financed by West Germany. That is not the first instance which has occurred along that line, where the Export Credits Insurance corporation has been prepared to insure a sale of Canadian products abroad but the financing was not able to be done in Canada; the financing had to be done from, say, New York, or in this instance, West Germany, or perhaps Switzerland. Now our hope is that Canadian finances may be available under this guarantee plan so that Canadian exporters may take full advantage of the opportunities that come to their notice.
I listened with interest to the remarks of the hon. member for Welland (Mr. McMillan) who talked about the question of co-insurance and wondered whether some great change was being made there. That matter was dealt with when it was up before the banking and commerce committee of the
5292	HOUSE OF
Export Credits Insurance Act Senate, and the hon. member for Welland read out the answer given by the head of the Export Credit Insurance Corporation. At the present time, under the insurance plan 15 per cent is carried by the exporter and 85 per cent by the corporation. But after the operation has reached a much more advanced stage-that is, after the goods have been delivered by the exporter and accepted by the buyer-then the guarantees become operative and it is at that stage that the guarantee reaches 100 per cent.
A question was asked with regard to our trade with the United States and whether the corporation afforded facilities to our exporters to deal with the United States. That has not been necessary in the past. The first instance was brought to our attention just recently when I announced the sale of certain aircraft to the United States under the export credits insurance arrangement based on section 21 of the present act. But most of our transactions in the past with the United States have not required the assistance of this corporation.
Those, I think, Mr. Speaker, are the main points which were raised by my hon. friends. Other matters if unanswered, or other questions which may arise in their minds, might be dealt with at the committee stage.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. MacEwan in the chair.
On clause 1-Export Credits Insurance Corporation.
William Moore Benidickson: Mr. Chairman, this stage gives us a further opportunity to question the minister. We do appreciate the answers he has given so far to such questions as were asked on second reading; but naturally when one is restricted in that debate one, if dissatisfied as to the completeness of the answer, must take advantage at this stage to ask a few additional questions. I am very concerned about this question of whether this bill is really going to change the situation. We have evidence given before the Senate committee which considered this matter that in the opinion of the officers of the corporation this is merely a matter of a guarantee, and I think that is confirmed by the fact that additional financial liability is not sought in this measure. On page 8 of the minutes of the banking and commerce committee of the Senate, the assistant general manager of the corporation said this:
The intent is not to finance the export transaction. The exporter would still have to arrange his own financing with any lender who would lend him the money he requires.
It is not my impression that banks, particularly during a period of tight money when


they have more requests for money on short term than they can satisfy, are likely by reason of this guarantee to do anything different from what they did in the past to aid exporters.
Mr. Muir, the president of the Royal Bank of Canada, had something to say about this on the occasion of the last annual meeting of the bank. In January, 1958, he said this:
What he requires is the discount of paper maturing over a period of years or a term loan for a similar period secured by that paper. During a period of tight money, the chartered banks do not have available in any quantity funds for this purpose.
In addition I ask the minister in so far as credit desirability in the hands of the chartered banks is concerned, what is there additional to the guarantee which was not in the existing legislation, which was an insurance, except for the possible difference that the guarantee may be at the rate of 100 per cent, and the evidence is that the insurance has had a co-insurance feature under which the exporter was liable to the extent of 15 per cent. These questions have to be answered. I said something yesterday about window dressing. I want to be assured that measure has some substance. If the intention is not to put up any money but to guarantee money which is put up by some other lender, then I ask: who is the other lender? The banks say that in a period of tight money they cannot lend for long terms because they cannot at the moment fulfil the demands of short term borrowers who are the people they look to first. In other words, is this another blank cartridge, a way of avoiding a problem which everybody recognizes, namely that we are facing worldwide competition with regard to financing long term credit for exports?
In his reply before we reached the committee stage the minister suggested that this matter of the guarantee became effective after the goods were delivered. Let us be practical. I suggest to the minister that this is utter nonsense. If the manufacturer, or seller, or exporter is contemplating a sale which he has not commenced, is there anyone in this committee who thinks that it is not prior to the delivery of the goods that he makes arrangements about the ultimate success of the transaction, including credit? Of course, it is not after the goods are delivered that we come to the question of a guarantee. Before any deal is made whatsoever the seller and the foreign buyer are each going to know what the arrangement is, not only whether or not they are going to get insurance under the legislation we have had in effect for some years but also whether or not they are going to get a guarantee. I say it is

fatuous to assert that this question of guarantee comes up only after the goods have been delivered.
The next question I wish to reiterate in the hope of something more definite from the minister by way of an answer, is this: the minister has indicated that the governor of the Bank of Canada is no longer to be a member of the board of this corporation and he has told the committee this was due to the fact that the governor had intimated that he did not have time in which to fulfil this obligation. But I want the minister to be more positive in this respect. Will he assure the committee that the governor of the Bank of Canada has not shown in any way any distaste for this particular legislation and that his desire to be relieved of his responsibilities in this connection is entirely due to obligations elsewhere and not to any distaste with respect to the amendments before us today.


Gordon Minto Churchill: The hon. member for Ken-ora-Rainy River is wondering whether this measure is going to be effective at all, and suggests there is no money available for this purpose-


William Moore Benidickson: The bankers say there is not. I quoted an eminent banker as saying there is no money available for this purpose.


Gordon Minto Churchill: Yet much of this was discussed with banks during the last year or so, and the bankers association in consultation with our officials have assured us that they are satisfied that the banks will be able to provide credit when there are guarantees by the government. This is a question of having to wait and see what will happen, but if we have this legislation before us, if it is passed, and the corporation has the authority to guarantee these advances, the exporter is in a position to approach his bankers and discuss the matter with them. At the present time he is not in that favourable position because he has no guarantee available. I suggest it is speculation on the part of the hon. member for Kenora-Rainy River to say that nothing can happen under this legislation. We are prepared to wait and see.


William Moore Benidickson: I did not say that. I said I was sceptical. I want you to encourage me.


Gordon Minto Churchill: The hon. gentleman is a sceptic but we shall prove to him that he is wrong before 12 months are out. With regard to the other point he made, he suggested there was something fatuous-I think that was what he said-with regard to the procedure which I outlined briefly-


William Moore Benidickson: Your statement as to the procedure.
Export Credits Insurance Act


Gordon Minto Churchill: I made that statement this morning and perhaps the wording might have been altered.


William Moore Benidickson: I was referring to what you said this afternoon.


Gordon Minto Churchill: In the first instance, the policy of insurance will be available to the exporter during the time he is getting his goods ready to ship and the guarantee becomes applicable after the goods are accepted by the buyer. One can use the word "accepted" or the word "delivered". The hon. gentleman understands the use of the terms. But naturally-and I think this would be understood-when the exporter is arranging his deal he would ordinarily request a guarantee from the Export Credits Insurance Corporation at the time he was telling them about his prospect and asking for insurance on his proposed transaction, and the corporation, having examined all the factors in the case, as they do now with regard to insurance, would indicate to the exporter whether or not they would be prepared to guarantee the deal. I think that covers the point which was raised. Was there a third question my hon. friend raised or have I covered all points?


William Moore Benidickson: There was another question with which the minister has not dealt. I outlined in quoting the president of the largest commercial bank in this country that banks find difficulty in lending for long periods of time and particularly in a period of tight money. I asked him what was more attractive and more likely to induce these banks to change their attitude in this respect by reason of this legislation which refers to a guarantee in contrast to an insurance coverage to the extent of 85 per cent in the event of possible loss to the original vendor in Canada under the existing legislation? What is more attractive in this legislation to a commercial bank to dissolve the objections I quoted Mr. Muir as outlining as reasons why the commercial banks are not interested in financing four or five year term loans for exporters?


Gordon Minto Churchill: I think the answer to that is that the guarantee makes it more attractive and the fact that the corporation is empowered to buy back under certain circumstances with regard to these guaranteed loans. Therefore the chartered banks would consider that any doubts in their mind would be dispelled because of the possibility of selling to the corporation that loan they had made. That seems to me to give the attractiveness about which my hon. friend is somewhat worried and I believe it represents a slightly better condition than that which prevails at the present time.

Export Credits Insurance Act


William Moore Benidickson: It occurs to me that it would be only a very small bit better unless my original suggestion has some validity and that is that the new guarantee may take the original vendor completely off the hook. In other words, the government would assume 100 per cent liability in contrast to the previous insurance liability which was limited to a co-insurance in the relationship of 85 per cent government and 15 per cent to the original vendor.


Gordon Minto Churchill: There is one matter that should be kept in mind. Although there is 100 per cent liability under the guarantee period that applies in instances where the purchaser has accepted the goods. Under the insurance arrangements a loss might be incurred or a transaction might break down before the goods have been accepted.


William Moore Benidickson: Has it some relationship to the down payment which I referred to in my remarks on second reading? Will they be subject to regulations? Will there be a protection in the matter of down payments just as I indicated was the situation in the United States where the maximum liability is really only 60 per cent in relation to the invoice price?


Gordon Minto Churchill: The experience over the past has been that there has been a minimum of 20 to 25 per cent cash in hand before the goods are shipped.


George James McIlraith: The minister in his remarks has indicated the need for some assistance to exporters at this time because of the developing competition particularly in the fields of financing and credit for exports and everyone agrees with the need. The question now is that of getting the best possible bill to meet that need. Our criticism of the bill is directed to that purpose and does not apply to any question of the need for assistance to exporters.
When we were talking about the guarantees under the bill the minister indicated that the banks as a source of financing would be guaranteed payment. In his preparation of this bill has the minister had in mind any sources of financing other than the commercial banks?


Gordon Minto Churchill: I was perhaps a little careless in my phraseology on that point. Throughout our discussions I intended to convey the thought that any lender is considered to be suitable as far as this proposed amendment is concerned.


George James McIlraith: The banks being allegedly short of funds for commercial loans now, they will become even shorter if they start buying long term government guaranteed


discount paper. They are already in some difficulty because they hold so many government bonds of terms longer than those in which their funds are usually tied up. That is possibly one difficulty. However, I do not suppose there is too much point in stressing the difficulties we may foresee. However, I do not think the minister should assume that this provides an easy solution for all the problems in this field.
The minister came before the house last year with amending legislation to the Export Credits Insurance Act to increase the amount of liability under section 21 of the act from $100 million to $200 million. The effect of this new bill is to reduce the liability that can be available for insurance under that section. Could the minister enlighten us as to why, in the light of the remarks he made last year on the point, he now feels there is no need for the authority for insurance under that section for the increased amount of $200 million?


Gordon Minto Churchill: I do not quite follow the hon. gentleman in his question. We still commence with the insurance principle and then follow that up with a guarantee. This will not take anything away from the activities of the corporation under section 21 as they have been carried out in the past.


George James McIlraith: As I understand it the insurance will have ended at the time the guarantee takes over, is that not correct?


Gordon Minto Churchill: Yes, that is quite true. The insurance ends when the guarantee commences, but, vice versa, in some of these instances there would be no insurance unless we were prepared to guarantee.


George James McIlraith: What I am coming to is this. Dealing only with section 21 of the act, the minister is now authorized to insure under that section to the extent of $200 million of insurance contracts outstanding at any one time. The gross liability now being provided is only $200 million for both the insurance contracts and the guaranteed negotiable instruments. In other words, to the extent that you have guaranteed negotiable instruments you have reduced the amount available for insurance purposes under this section. When the guarantee operation comes into effect the insurance contract has terminated. If you use up $100 million for the guarantee on your negotiable instruments then you have only $100 million available for the insurance provision under section 21. If the minister's argument a year ago was correct and if we needed to increase the amount to $200 million, we are in effect now reducing the amount.


Gordon Minto Churchill: I do not see the matter in quite that way.


George James McIlraith: That is the point I wish
to have clarified.


Gordon Minto Churchill: If the guarantee was not
established, the insurance would continue. The one replaces the other. There is no change in the total sum. There is no reduction in the amount of money available for insurance. Let us consider a concrete example. Aircraft are being exported to another country under an insurance policy. As time elapses and the terms are suitable, the guarantee is applied rather than the insurance. That is the only difference. The amount of money is the same.


George James McIlraith: I think I have not succeeded in elucidating my point. Under the existing law, when exporters are not able to finance their exports or are having difficulty in doing so-or else we would not have had this legislation-we authorize the insurance of export credits up to the amount of $200 million. Now we are seeking to help the exporters still more to obtain contracts they cannot at present obtain because they cannot meet the long term credit financing arrangements given by competitors in other countries. We are therefore seeking to enlarge the export business by this measure. If we have provided for that additional business by way of guaranteeing long term credit or long term negotiable instruments, then surely that reduces the amount available for the export insurance features of the existing act.


Gordon Minto Churchill: We looked at it in this way. We thought it would make it easier for the exporter to get the money required to finance the sale of his goods abroad. It is additional to the insurance factor which has been extremely helpful up to the present time. But this provision goes one step beyond that and is an inducement to the lender to give assistance to exporters.


George James McIlraith: It will undoubtedly assist
the exporter. I have some hopes of the bill doing a good deal to help him. However, I still think that the net effect of it is to reduce the funds available for the insurance features of the act as it now exists. In any event, perhaps I could come at the point in another way. There may not be a need over the present limit under section 21 of the act. It may be that the amount authorized under that section is larger than was actually needed. Perhaps we can come at that point in another way. Would the minister give to me the total amount of insurance policies outstanding for general commodities, outstanding for capital goods policies and outstanding under section 21, if he has it available in that form, or in whatever form he has it available for the latest period?
66968-9-336
Export Credits Insurance Act


William Moore Benidickson: Since the annual report.


Gordon Minto Churchill: We will have the answers
in just a minute. Under section 21 the total outstanding is $42,798,873. Yesterday two policies were issued in a total amount of $50 million, raising that total under section 21 to $92,798,873.


William Moore Benidickson: One of those policies was an aircraft policy, was it?


Gordon Minto Churchill: Both were aircraft policies.


George James McIlraith: Were those aircraft policies additional to the aircraft policies covered by the orders in council of June 11, 1959 covering the purchases by the Flying Tiger Line, Inc., and Seaboard and Western Airlines, Inc. from Canadair Limited?


Gordon Minto Churchill: The same ones as mentioned in those orders in council.


George James McIlraith: That means that there is only $108 million available for the additional insurance under section 21 and for the guaranteeing and buying of paper?


Gordon Minto Churchill: That is right.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Board of directors.
George James McIlraith: The present set-up of directors under the present legislation is that in addition to the deputy minister of finance, the deputy minister of trade and commerce and the governor of the Bank of Canada, there shall be four other directors. The new legislation provides that the deputy minister of finance and the deputy minister of trade and commerce shall be directors and that there shall be five other directors. Those four other directors were all public servants; that is to say, they were either the president of the corporation or associate deputy minister of trade and commerce and so on. What I want to ask the minister is this. Does the minister contemplate replacing the governor of the Bank of Canada by a civil servant or does he propose to replace him by a director appointed from outside the public service of Canada?


Gordon Minto Churchill: That matter has not been given consideration. My thought at the moment is that we would more than likely continue the present practice of having senior civil servants as members of the board of directors. The present chairman is Mr. John H. English, deputy minister of trade and commerce; Mr. K. W. Taylor, deputy minister of finance; Mr. L. C. Audette, chairman of the Canadian Maritime Commission; Mr. A. F. W. Plumptre, assistant deputy minister of

Export Credits Insurance Act finance; Mr. J. A. Roberts, associate deputy minister of trade and commerce; and Mr. H. T. Aitken, who is president and general manager. I think the vacancy would be filled from among experienced civil servants.


George James McIlraith: May I point out that at the very time the minister is authorizing the corporation to engage in wholly new operations which are by their nature commercial banking operations, he is removing from the board of directors the only banking authority we have on it. I would ask him to bear that point in mind. I realize that there would be no point in my going further in this matter. I express to him the hope that he would seek to acknowledge the need for experience in the commercial banking field on the board of directors.


[Stage Direction]
Clause agreed to.
Clause 4 agreed to.
On clause 5-Definitions.
George James McIlraith: I want to ask the minister about the buying and selling of instruments under clause 5. What does he contemplate as the extent to which the corporation will be expected to engage in the buying and selling of instruments?


Gordon Minto Churchill: The privilege is there and it is a case of looking toward the future. The present thinking of the corporation is that we will not be buying, and there it rests. Experience will show whether or not that is a correct forecast.


George James McIlraith: Under the form of the bill the buying and selling of guaranteed instruments is in exactly the same position as the right to guarantee. I take it from what the minister has said today and from the evidence given before the banking and commerce committee in the other place that it is the intention of the minister that under the new legislation the corporation will be engaged primarily in the guaranteeing part of the operation as opposed to the buying part.


Gordon Minto Churchill: That is quite correct. My hon. friend has summarized it very accurately.


George James McIlraith: There is one question here that I think should be clarified. It is interesting that the provision of the right to buy and sell this type of paper, for which there is great need, should be brought before the house by the government shortly after parliament has granted a charter to a private corporation by special act to engage in the buying and selling of this type of paper. If it is a fair question, I should like to ask the minister if at the time the bill was brought forward in the first instance he knew about

the private legislation on this subject or had it been brought forward at that time?


Gordon Minto Churchill: I was not aware that a priv-vate bill was coming forward when steps were taken leading up to the bill now before the house. As a matter of fact, this matter goes back quite some time. I raised this problem with the officials of the department early in the fall of 1957. The hon. member for Greenwood, Minister without Portfolio, spent a great deal of time working on the problem and consulting with experienced people in the business world. In the early conversations we had he expressed the hope to me that something would be done by private financial institutions or private individuals along the line we are now suggesting. Subsequently as the matter carried on month after month, I reached the conclusion and he concurred that there was no assurance that a corporation would be set up under private auspices and therefore we should go ahead with the proposal now before the committee. The direct answer to my hon. friend's question is that at the time we laid the foundation for this bill and commenced drafting it we were not aware that the other measure was going to come before the house.


George James McIlraith: I think the minister has dealt satisfactorily with the point that was troubling me and has made it quite clear that it is not the intention of the government to enter unduly into direct competition with the private corporation set up in this field. He has indicated that while technically he has the right to do so it is not what he contemplated in bringing the bill forward.
I wish to pursue one other point for a moment. The minister indicated that it was proposed to guarantee instruments of more than $250,000 in amount and two years in duration. I assume that the amount is set by regulation under the act and I would ask him to consider reducing it. My information is that there is a volume of business available in Canada for small manufacturers by way of increased exports and that these small manufacturers who do not have the financial resources who may need assistance in order to make a start in the export field.
I have in mind particularly export to the United States. These firms are so small in size that they just do not have the financial resources to enter into the export market. I think there is a field for expansion there which should be examined very carefully. I know that there has been practically no need for the insurance provisions of the act to be used for exports to the United States. I am aware of that, but it seems to me there is this other new field where there is a good possibility of expanding our exports and I

would hope that as time goes on and experience is gained with this legislation the minister will bear that in mind and consider reducing the amount of $250,000 if the circumstances warrant.


Gordon Minto Churchill: I appreciate the hon. member's interest in this matter and his very reasonable suggestion. It will be borne in mind. Up to the present time the experience of the corporation is that there has not been too much difficulty with amounts under the one I mentioned in the course of my remarks or in the case of terms less than two years. There has not been too much difficulty in getting the banks to assist and exporters to the United States can get credit insurance from private insurance corporations. Nevertheless, the enlargement of our exports to the United States is a matter of prime importance and the corporation will take note of these remarks today and if it is necessary to modify the suggestion I made I am sure it could be modified.


George James McIlraith: I have one more point in connection with the minister's reply. I know of one exporter to the United States who is paying a rate exceeding 13 per cent to discount insured export instruments. It is a very real and practical problem. If something can be done to get that class of exporter into the export business in a larger way it would be a very important step and guarantees under this legislation could be very helpful.
I have one other point I should like to raise. The very last part of the bill deals with the requirement for tabling orders in council made under sections 21 and 21 A. As was pointed out by the minister, it provides that orders in council made while parliament is in session shall be laid before parliament during such session. In other words, orders in council passed at the commencement of a session need not be tabled until the last day in order to comply with the legislation. I am not asking for an amendment of that clause, but the minister rather neatly pointed up this difficulty for me some days ago when I asked for the orders in council in connection with the sale of grain to Poland. Would the minister consider having the practice adopted by the corporation of tabling these orders in council as soon after they are passed as is practicable?


Gordon Minto Churchill: I think that might well be adopted as a practice by the corporation. There is no need for any delay in tabling them, and the information is important and quite valuable and is an indication of the extent of our export business.
66968-9-336i
Criminal Code


William Moore Benidickson: I was interested, Mr. Chairman, in the remarks of the minister in answer to a question asked by the hon. member for Ottawa West just a few minutes ago. The minister related some of the background preparation for this bill and referred to conversations he had or the assistance he had from the Minister without Portfolio, the hon. member for Greenwood, concerning the possibility of enlarging export trade and the relationship of the timing with the development of a private corporation doing some rediscounting in this field. I may say that after reading the speech delivered at the annual meeting of the Royal Bank, I think it was in 1956, by Mr. Muir, I drew to the attention of some senior officials of government his opinion as to the desirability of something of this nature. I have already indicated to the committee that I am rather sceptical that the commercial banks are likely to be very important primary lenders in this field, and I am concerned about the actual results we will shortly see flowing from this legislation if, in the opinion of the corporation and in accordance with the evidence officials gave before the banking and commerce committee of the Senate, they are really looking forward to being merely guarantors of the lending that is done by other sources.
My question is this: Is this new private corporation, which was incorporated at this session a lender that would find it possible to obtain guarantees under the terms of this legislation?


Gordon Minto Churchill: Yes, that is quite right; it could be a lender and it could ask for a guarantee from export credits insurance.


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


Some hon. Members:: By leave.


Gordon Minto Churchill: the third reading of the bill.


[Stage Direction]
Motion agreed to, bill read the third time and passed.

Hon. E. D. Fulton (Minister of Justice) moved: the second reading of Bill No. C-58, to amend the Criminal Code.
(Translation) :


Mr. Raymond Eudes (Hochelaga):: Mr. Speaker, this bill involves 37 variously significant amendments to the Criminal Code.

Criminal Code
At this stage of our discussions, I shall be satisfied to comment, as briefly as possible, on amendments to the chapters of the Criminal Code under the headings "Offensive weapons" and "Offences tending to corrupt morals".
Section 5 of this bill amends section 82 of the Criminal Code, dealing with the possession of weapons, assimilating the imitation thereof to the genuine offensive weapon. That amendment will I am sure, receive unanimous endorsement in this house.
In recent years, more and more thefts have been committed by bandits who, in order to frighten or overpower their victims, used nothing more than an imitation firearm. This imitation weapon achieves the same result as would a real one. It is therefore logical to consider that the possession of an imitation weapon constitutes an offence identical to the possession of a real one. That is precisely the purpose of section 5 which, we hope, will help remedy a situation which, in the field of crime is becoming quite alarming.
As for sections 6, 7 and 8 of this bill, they amend sections 90, 91 and 94 in the same chapter of the Criminal Code and their purpose is to impose further restrictions on the use of firearms. Indeed the growing use of firearms is causing general anxiety.
In La Presse for April 21 last, Hon. Justice Wilfrid Lazure, president of the Queen's Bench Court, is quoted as saying:
There should be a law prohibiting the sale and use of revolvers in this country. During my 20 years on the bench, I have found, as everybody has, that 75 per cent of crimes are caused by firearms.
Prisoners at the bar state that they never had the intention of using their gun; yet they always do.
This solemn statement from so qualified an authority cannot fail to impress the legislator or the public.
A reporter from the Montreal Gazette wrote on June 1st:
(Text):
Police officers in a position to know estimate that upwards of 2,000 Montreal hoodlums are habitually armed with concealed weapons; and each one of them constitutes a threat to innocent bystanders, a fact proven by the fatal wounding of a young man in St. Henry last week. The identity of nearly all these hoodlums is known; but efforts to disarm them are made futile by the fact only minor penalties are called for in the law covering concealed weapons unless they are actually used in the commission of a crime, when the penalty is more severe. For each shooting incident which finds its way into a police report, there are several which are unreported, according to detectives who know of such shootings but who can't make a case on them because no one will talk. More teeth in the law covering concealed weapons would be most

welcome to police, who could then make things tough for armed hoodlums, a thing they can't do under present laws.
(Translation):
Yet, that impressive number of firearms does not take into account thousands of others belonging to citizens of good repute.
Is it actually necessary that so many people should legally be in possession of a firearm? Those firearms which the law allows people to possess are too frequently, in fact, the cause of fatal accidents and deplorable crimes.
How many crimes would have been avoided if people who committed them had not been in possession, even legally, of a firearm?
How is it that, in spite of the minute precautions with which law-makers have surrounded the manufacture, sale, use and exchange of firearms, any self-respecting bandit manages to get one, and often several, of those dangerous objects?
Either the law is not stringent enough, or it is not adequately enforced.
The proposed amendments embodied in sections 6 and 7 of the bill are an improvement on the present legislation which will henceforth extend to persons who lend a firearm or are engaged in the business of repairing firearms.
Let us hope those amendments will help reduce the number of arms which, somehow come into the possession of people who should not have them.
One should not, however, overlook the necessity, for the sake of public safety, of a frequent review of the situation in that field as well as the enforcement of the law in all its rigour.
Now, Mr. Speaker, may I be allowed to make a few remarks on sections 11, 12 and 13 of bill C-58 amending the Criminal Code under the chapter entitled "Offences tending to corrupt morals".
(Text):


Mr. Speaker:: I wonder if the hon. member would consider dealing with these specific items in committee? I appreciate the bill proposes a number of unrelated amendments and there is no general idea to discuss. If the hon. member wishes to group clauses together he may do so, but it seems to me we would have more orderly discussion of the amendments if the clauses were discussed as they are called in committee when there can be debate on each particular item as it comes up.


Lionel Chevrier: Mr. Speaker, may I draw your attention to the fact that the hon. member has been selected to be the spokesman for the opposition, and it did appear to us at the time that if he made a statement on

the first clause the minister would not disagree with that course, because it will save a great deal of time later on.


Mr, Speaker:: I am not objecting to the
course followed. I think the hon. member is endeavouring to deal with the bill as it should be dealt with on second reading, I simply-asked the hon. member if he might deal with it the other way.


Edmund Davie Fulton: May I just say a word, Mr. Speaker? I particularly do not want to appear discourteous to hon. members, in that I have not made a statement on second reading. I did not do it for the very reason Your Honour mentioned, namely because it seems impossible to isolate the principle of this bill to be debated on second reading because it consists of a number of detailed amendments to various sections of the Criminal Code. I wanted to make that explanation to let the house know that that is the reason why I did not make a statement.
However, having said that, I have no objection at all if any hon. member wishes to discuss matters general on clause 1; but I would ask hon. members to endeavour not to get into discussion on details because I think we can wait until we discuss specific clauses.


Raymond Pierre Eudes: May I continue in a general way, Mr. Speaker?


Mr. Speaker:: Yes.
(Translation):


Raymond Pierre Eudes: In the last ten years especially, the public has been aroused by the ravages caused, at all population levels, by obscenity.
Groups of investigators and workers have cropped up all over the world to fight literature, entertainment shows, newspapers, in short all vehicles of human thought which, under the pretext of educating or entertaining, do in fact corrupt or deprave society. However, these problems raised by obscenity are nothing new.
For centuries, every government, and particularly Christian governments, have been concerned with this problem and have tried to cope with it. Recently, ini 1951, the international union for the protection of public morality was established in Paris. This union, which now includes 74 organizations from 17 different countries, steadily strives to coordinate efforts made in the various countries to protect public morality.
Its first international convention, held at Cologne in May 1955, was attended by 250
Criminal Code
delegates from all parts of the world, who studied the problem of children and young people against the background of public immorality.
The second convention, which dealt with "public opinion and public morality", was held last July at Freiburg, in Switzerland.
It will be seen that everywhere public opinion is concerned with the serious problems raised by obscenity and immorality.
Our own responsibility, as lawmakers, is mainly to seek more efficient legislation to prevent and stop the circulation of obscene matter. Legislation, indeed, is necessary to insure the preservation of morality.
It would, however, be foolish to assume that the state can check immorality through legislation alone.
This objective can be reached only with the active co-operation of individuals. Insuring an atmosphere of healthy morality within the community is indeed a primary responsibility of the individual, through the priority of natural law. If every individual watched his own morals, the problem of obscenity would not arise.
For several years in Canada, a commendable campaign has been going on, in every section of the community and in every part of the country, to increase the efficiency of present legislation in the field of obscenity.
The lack of a clear definition of the word "obscene" in our legislation is an obstacle to legal action, because decisions are thus left to the often hesitant interpretation of a court or jury.
However, it is quite a task to work out a legal definition of the term obscenity.
Obscenity is that which offends modesty; and modesty is a feeling of honest shame, caused by apprehension of what can cause offence to sexual decency.
How can we derive from these two concepts a definition of obscenity which would be all at once precise, useful and practical for judges, juries and law enforcement officers?
Then, too, the subjective and relative character inherent in the concept of obscenity makes the definition extremely difficult. What one person considers as obscene might not seem so to someone else. To determine the obscenity of a certain production, for instance, one must examine the character, the education, the background and experience of the person who is reached by it. Thus do opinions about the obscenity of a certain thing vary from one court to the other, from one country to another.
Then too, one must guard against giving of the word obscene a definition so comprehensive that it would stifle the creation and diffusion of artistic production.

Private Bills
In spite of the technical difficulty of that definition of obscenity, legislators in general have striven to enact the best possible legislation to fight obscenity and check immorality.
A quick survey of legislation in other countries will enlighten us on the meaning they ascribe to the word obscene and the importance they attach to problems arising out of obscenity.
Since 1868, in England, the courts have faithfully abided in their judgments relating to trials on charges of obscenity, by the standard established by Judge Cockburn in the famous case of The Queen v. Hicklin, and I quote:
The matter alleged obscene must tend to deprave and corrupt those whose mind is amenable to such immoral influences and into whose hands such a publication may fall.
That criterion makes it possible to condemn a publication without considering it as a whole, so long as a single passage of that publication tends to deprave and corrupt. That criterion requires-in legal parlance-as an essential element of the offence of obscenity, the tendency to deprave and corrupt.
Some moralists have had no hesitation in calling it obsolete, antisocial and ill founded. Indeed, how many timeless masterpieces born of the human mind, and expressing man's position and problems in relation to the absolute, would escape condemnation if that criterion were applied to the letter?
Shakespeare and Racine, for instance, and the Bible itself, would be cast aside.
Interest in this matter has created a reaction among English lawmakers. On November 18, 1958 after three years of unsuccessful attempts, the member for Birmingham, Stech-ford, Mr. Roy Jenkins, introduced in the House of Commons, in London:
(Text):
A Bill to amend the law relating to the publication of obsene matter; to provide for the protection of literature; and to strengthen the law concerning pornography.


Mr. Speaker:: Will this be a convenient place for the hon. member to break his address?


Raymond Pierre Eudes: Yes.


Mr. Speaker:: It being five o'clock the house will now proceed to the consideration of private and public bills, the former having precedence, pursuant to section 3 of standing order 15.



PRIVATE BILLS

Robert Jardine McCleave: Mr. Speaker, filling in this afternoon for the hon. member for York West (Mr. Hamilton), I understand that one member who sponsors item No. 74

on the order paper, the second reading of Bill S-28, wishes to join the company who are going to greet Her Majesty in a short while, and I wonder if with the unanimous consent of the house that item could be called first.


Mr. Speaker:: The suggestion is that item No. 74 be taken ahead of all others?


Robert Jardine McCleave: Yes, Your Honour. The other items are items for committee.


Mr. Speaker:: Is the house agreeable to the suggested course?


Some hon. Members:: Agreed.



STANDARD TRUST COMPANY

Mr. B. C. Thompson (Northumberland) moved: the second reading of Bill S-28 to incorporate Standard Trust Company.
He said: Mr. Speaker, I thank hon. members for their indulgence and I wish to explain briefly the objects and effects of this bill. The bill is drafted along the normal lines described in the Trust Companies Act and the object is to incorporate those persons who are named in clause 1 as a corporation under the name of the Standard Trust Company to carry on the business of a trust company.
All the petitioners have had extensive business experience and are, in my view, well qualified to direct and manage a company of this kind. I might briefly refer to the names and occupations of each petitioner for the benefit of the house. First, is Mr. Stephen B. Roman, president of a number of mining companies which own and operate properties in the province of Ontario. He resides on a large farm adjacent to Unionville, Ontario. Bertram E. Willoughby, the second sponsor, resides in Toronto. He is a well known real estate agent in that city, and is an officer and director of a number of mining companies. Wilbur C. Cochrane also resides at Toronto. He is president of Cochrane Dunlop Hardware Company Limited, a well known wholesale hardware firm doing business throughout Ontario, as well as being a director of a number of companies. Harry A. Willis is a solicitor residing at Belfountain, Ontario. He carries on his law practice in the city of Toronto, and is a senior member of the well known legal firm of Willis and Dingwall. He is a member of the board of governors of McMaster University and a director of a number of companies doing business in Ontario. Murray Axmith is an executive and a chartered accountant, and a director and officer of a number of companies in Ontario; he resides in the township of Etobicoke. Wesley G. Thompson is a large farmer and the owner and operator of a feed mill in

western Ontario. He is a former member of the legislative assembly of the province of Ontario, and for a period of three years served as minister of lands and forests for the province of Ontario. Mr. Thompson resides at Ridgetown in south western Ontario. George G. Rodanz resides at Stouffville, Ontario. He is a large farmer and is a director of the royal agricultural winter fair and the Canadian national exhibition, as well as being past president of the Ontario hereford association. John Bull, the last named sponsor is a large farmer and breeder of purebred Jersey cattle. He resides at Brampton, Ontario.
Hon. members will note that it is provided in clause 3 that the capital stock of the company shall be $3 million which may be increased to $5 million. In clause 4 it is provided that $500,000 must be subscribed before the provisional directors can call a general meeting of shareholders for the purpose of organizing the company. Clause 5 provides that the company shall not commence business until at least $1 million of the capital stock has been subscribed, and at least $1 million paid thereon. These provisions all come well within the terms of the Trust Companies Act.
I understand that the name "Standard Trust Company" is satisfactory to the officials of the federal department of insurance and also to the officials of the Department of the Secretary of State but should it occur at any stage of the proceedings that the name does not meet with the approval of those concerned, the petitioners are willing to have the name changed. In closing, I might add that it is provided in clause 7 of the bill that the company shall have all the powers, privileges and immunities and shall be subject to all the limitations, liabilities and provisions conferred by the Trust Companies Act.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on banking and commerce.

Robert Jardine McCleave: that the house go into committee on Bill No. S-27 to incorporate the Free Methodist Church in Canada.
Motion agreed to and the house went into committee thereon, Mr. MacEwan in the chair.
On clause 1-Merger and Incorporation.


Robert Jardine McCleave: Again, if I may be allowed a brief word of comment, I am substituting for another member who has been in Toronto on the occasion of the visit of Her Majesty the Queen. I have some familiarity with the
Private Bills-Divorce
legal aspect of this bill in the sense that it came before the committee over which I have the honour to preside as chairman and at that time we had the advantage of the appearance before us of the reverend gentlemen representing the two churches involved in this merger, as well as parliamentary counsel. Perhaps it would be of interest to the committee if I noted very briefly that the terms set forth in this bill are similar to those in the bill which incorporated the United Church of Canada over a quarter of a century ago which have been used as a precedent whenever two large congregations or two churches with a large number of members are merged into one.
The interesting provisions in the bill are those which provide for the protection of certain congregations which may not wish to go along with the union. We went very carefully in committee into this question of the protection of any dissentients, and that is the point I wanted to mention to the committee this afternoon.


[Stage Direction]
Clause agreed to.
Clauses 2 to 14 agreed to.
Schedules agreed to.
Preamble agreed to.
Bill reported, read the third time and passed.

The Acting Chairman (Mr. MacEwan):: Is
it agreed that Bills Nos. SD-340 to SD-348 inclusive be considered as a group?


Some hon. Members:: Agreed.
Bill SD-340, for the relief of Timothy Allan Moran. (Without Amendment).-Mr. McCleave.
Bill SD-341, for the relief of Antonio Choma. (Without Amendment).-Mr. McCleave.
Bill SD-342, for the relief of Helen Ruby Riley Onions. (Without Amendment) .-Mr. McCleave.
Bill SD-343, for the relief of Simone Alberta Chretien Welsh. (Without Amendment).- Mr. McCleave.
Bill SD-344, for the relief of Edward John Mendelsohn. (Without Amendment).-Mr. McCleave.
Bill SD-345, for the relief of Marcus Gil-mour. (Without Amendment).-Mr. McCleave.
Bill SD-346, for the relief of Joyce Rosemary Hudson Plam. (Without Amendment). -Mr. McCleave.

Private Bills-Divorce
Bill SD-347, for the relief of Bernard Lawrence Boire. (Without Amendment).- Mr. McCleave.
Bill SD-348, for the relief of Marie Madeleine Marielle Faust Morin. (Without Amendment).-Mr. McCleave.


Howard Russell MacEwan: Does the committee agree to consider as a group Bills Nos. SD-19 to SD-291 inclusive, being items Nos. 61 to 73 at page 12 of today's order paper?


Some hon. Members:: Agreed.
Bill SD-19, for the relief of Ruth Georgina Potts Dobie. (Without Amendment).-Mr. McCleave.
Bill SD-20, for the relief of Patricia Burnell Fraser Rosensweig. (Without Amendment).- Mr. McCleave.
Bill SD-98, for the relief of Dawn Jean McKenzie Barr. (Without Amendment).- Mr. McCleave.
Bill SD-99, for the relief of Helen Ann Kovach Ujvary. (Without Amendment).-[DOT] Mr. McCleave.
Bill SD-100, for the relief of David Scott Brown. (Without Amendment).-Mr. McCleave.
Bill SD-101, for the relief of Doris Margaret Turner Smiley. (Without Amendment).-Mr. McCleave.
Bill SD-104, for the relief of Angelo Ciamarro. (Without Amendment).-Mr. McCleave.
Bill SD-110, for the relief of Gustave Rene Gosselin. (Without Amendment).-Mr. McCleave.
Bill SD-111, for the relief of Marie Berthe Jeannine Quesnel Patenaude. (Without Amendment).-Mr. McCleave.
Bill SD-136, for the relief of Mary Athanas Copis. (Without Amendment).-Mr. McCleave.
Bill SD-275, for the relief of Greta Liben-stein Goldfeder. (Without Amendment).-Mr. McCleave.
Bill SD-276, for the relief of Andre Maurice Petit. (Without Amendment).-Mr. McCleave.
Bill SD-291, for the relief of Jean Huard DeRoberval. (Without Amendment).-Mr. McCleave.


Robert Jardine McCleave: Mr. Chairman, I have a reason for asking that separate consideration be given to this particular group of divorce bills which appears at page 12 of the routine proceedings and orders of the day. Hon. members who read the numbers of the bills will see that they go all the way from No. 19 to No. 291. Some time ago on the debate
[The Acting Chairman (Mr. MacEwan).]
on divorce bills I had occasion to mention that a dozen or so bills were being held back by the committee for special consideration. Perhaps the committee may be interested at this time in having a special report as to why this unusual course was adopted.
The other day, I think for the first time in the memory of anyone who is in parliament in the chamber at either this end or the other end of the building, there was a joint meeting of committee members who are charged with the difficult task of looking after the divorce petitions which come before parliament. While this meeting was an informal one in the sense that it was held without the sanction of either chamber it was none the less a highly important one in my opinion and I think perhaps hon. members of this committee will agree with me when I relate to them the kind of discussion we held and the results that were achieved.
So that I may be perfectly in order, Mr. Chairman, I can assure you that what we did discuss was based in each case on points that arose during consideration of the cases that are now being considered by the committee. Unless I am specifically asked to I should not like to single out these special cases by name but I do promise and assure you, sir, that I will not deviate from the practice of dealing strictly with points that arose in the consideration of bills that are on the order paper this afternoon.
It was the purpose of the meeting to have both groups get to know each other better and to assist in appreciating the problems that arise in the first instance at trial, and of course the trials for the most part are conducted by the divorce committee of the other place. A secondary purpose was to give hon. gentlemen of that committee from the other place some appreciation of the problems that we as members of parliament have when we read the record of proceedings over there and have to make our own decision as to whether or not to grant divorce to the petitioners.
In some of these cases the problem that confronts us could be placed under the general category of an incomplete record. That is to say that some of our members felt there were not enough questions and answers on the record of proceedings of the other place to give us a complete story so that we would be justified in recommending that a divorce be granted. For example, in five or six of the cases that are before us this afternoon hon. members felt that the petitioners had not specifically negatived the three C's in divorce practice; that is, collusion, condonation and connivance. This particular groups of cases was discussed with

hon. gentlemen of the other place. We attempted to understand their problems in conducting the trial. They have a great number of them during the course of the year. They could see our point that if the records are incomplete it renders it difficult to reach a judicial decision on our part at this end of the hallway.
In another case we considered, the point of major concern was that of the inference that is to be drawn when certain parties are found together. The case that gave the committee of this house the most concern involved a man who appeared to be so intoxicated that he hardly knew what he was doing and there were grave doubts that he could do anything at all. We discussed the question of the inference that could be drawn from finding a man in such a condition even though he was found in the compromising position of being with a woman in a hotel room. There was a useful discussion on the law concerning the inference that is to be drawn from evidence.
Another point brought before hon. gentlemen of the other place on which we had the advantage of an exchange of views concerned the burden of evidence that must be produced by a party seeking relief in parliament from a marriage that has broken up. This particular case involved two parties where a husband and the wife of another man had misconducted themselves in a motel. About the only evidence that they had done so came from the mouths of these parties themselves. Our committee was concerned that there was no independent evidence to lend a little more veracity to their statement. The question of obtaining independent evidence in some of these cases was explored.
Another point we discussed with hon. gentlemen of the other place concerned the legal definition of connivance. One case involved a husband who had watched his wife enter a cabin by the beach with another man and while under ordinary circumstances this would undoubtedly constitute some form of connivance it was pointed out that here the husband had some ground for suspecting his wife over previous months and that in effect he was merely closing the trap that brought him the final evidence he needed for his divorce.
One very basic point that was raised in the discussions, and hon. gentlemen of the other place have agreed to consider it in examining their divorce rules, was the fact of domicile. As I pointed out some time ago, Mr. Chairman, years ago a person could not come before parliament by private petition if he or she had a remedy in some other way. If you construe this in reference to divorce practice a person should not come 66968-9-337
Private Bills-Divorce
before parliament and burden us with his problems if there is a remedy available in the provincial courts. As everybody knows there are only two provinces where such a remedy is not available in the courts and these are the provinces of Quebec and Newfoundland. It is interesting to point out that 342 of the 345 cases that came before us, properly came before us. Once in a while we encounter a case where it appears that the action should have been brought in Ontario or New Brunswick-those are the two provinces bordering on Quebec-or some other province where the husband might have acquired legal domicile. These cases give us a great deal of concern. We thought that the divorce committee of the other place might have relaxed the gate somewhat and let in some of the doubtful cases but we were informed that their practice is to look at the petition and if a doubt about domicile is raised they make it a rule to suggest to the party that he proceed in a provincial court.
This is done before the party expends the sum of money that is necessary for a parliamentary divorce which, as hon. members know, involves the filing of $200 for the privilege of appearing in parliament and also involves other expenses ranging upwards of $1,000 for the employing of lawyers and detectives. As I say, some of these cases- two of them, in fact-concerned the point of domicile. It was the first time that our committee had been aware of that particular practice that was carried out by the divorce committee in the other place to see that there was a proper screening. As a result, we came away a great deal happier on that point alone.
Finally, there are two points I wish to mention. Several times during the year we have had difficulty when we found out that there were prior legal proceedings which affected the marriage but which were not disclosed to parliament either in the petition or in the evidence that was taken in the other place. In some provinces it is the practice to require that such information be set forth in the petition. In other provinces it is apparently not the practice to do so. After considerable discussion the hon. gentlemen on the committee of the other place agreed that they would look into this matter and possibly amend the divorce rules so that the parties in Quebec would be perfectly sure of what they were required to disclose in bringing their petitions before parliament.
The final case in point concerned a case which was contested in the Senate but which was not contested on our side, in which there was some evidence by the wife that she had been beguiled into an affair with the corespondent on the suggestion of the husband,

Canada Elections Act
that is that the wife had taken directions from her husband to go out and commit an offence which in effect was adultery. This ordinarily would not have given the committee concern because the senators in the other place had heard the evidence and had made a finding after listening to the words of the wife and weighing all the evidence. But we were concerned and worried about this case because a child was involved. We therefore took the rather unusual course of simply holding up discussion in our committee until we could talk to the gentlemen of the other place who had seen the witnesses and had observed the demeanour, mien and conduct of the parties. We were reassured by them that they had made their finding only after the most anxious considerations and that they truly believed that the woman was telling a put-up story in making the defence that she made. With that information the committee was able to reach a decision.
To sum the matter up briefly, we went over a great number of points that had bothered us during the past two years during which I and other members of the committee have been seized of this rather difficult bit of business. We have taken up some points with these people and they have found out our problems and we have found out their problems. I think certain changes will be made in the rules of the other place so that in this business, dismal as it is-because it must come before parliament and cannot go elsewhere-the practice will be made a better practice.



SECOND READINGS


[Stage Direction]
Bill SD-349, for the relief of Charles Guy Comeau.-Mr. McCleave.
Bill SD-350, for the relief of Juanita Patricia Hamilton Long.-Mr. McCleave.
Bill SD-351, for the relief of Benjamin Gordon Davidson.-Mr. McCleave.
Bill SD-352, for the relief of Margaret Isabella MacKellar Thomas.-Mr. McCleave.
Bill SD-353, for the relief of Philip Joseph Kelly.-Mr. McCleave.


[Stage Direction]
The house resumed, from Friday, March 13, consideration of the motion of Mr. Howard for the second reading of Bill No. C-17, to amend the Canada Elections Act (election expenses).
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, in resuming debate on this bill I should like to make the point that from a

personal point of view I have gone into the question of election expenses in considerable detail and I feel that this bill would serve a useful purpose. One of the things that rather shocks one in examining a present list of expenses, as they are set out in the returns made to the chief returning officer, is the tremendous variation in the totals of election expenses. The variations are so great that one cannot doubt that many of the returns are not a completely true picture of the election expenses. I can think of certain constituencies where one can only laugh at the returns that are given in so far as election expense totals are concerned. If this aspect of the election expenses is laughable,-as I think most hon. members will admit that it is-I think it is perhaps the most honest part of election expenses and election campaigns. The real intent of this bill is to get at the much larger expenses that are undertaken by the parties during the campaign, especially the expenses of the national organizations. I totalled all the expenses returned by the Conservative candidates and if you can believe the returns, which I suggest you cannot-I do not mean that as a reflection on the Conservative candidates; it is a reflection on all candidates- the total for Conservative candidates is pretty close to $3 million. In the last campaign the Liberal candidates had less money and their total was around $2 million. Those martyrs who fought for the C.C.F. declared total expenses of approximately $600,000.
I must confess I was disappointed that so many candidates, including C.C.F. candidates, had not submitted election expense returns. I think this is another indication of the fact that they do not take the whole matter of election expenses seriously enough. The hon. member who introduced the bill had the intention of both the British Columbia legislation and the British legislation in mind where there are very definite limits, especially in Great Britain, on the amount of money that candidates and organizations can spend, and one gathers from the British press that there are no breaches, that this is honoured by the parties concerned.
It seems to me that one of the things that a true declaration of election expenses would reveal would be the basis of support of the political parties. I have been intrigued that several of our newspapers have become very concerned over the fact that no one really knows what are the sources of party funds. It was interesting that in the last Ontario provincial election Premier Frost, when queried on this point, took the same stand as Right Hon. Mackenzie King took years ago, that after all this was not something in which he had any interest. I believe Mr. Frost's words were that he, in relation

to the raising of money to support his party, was something like a clergyman in a church. One point I felt like putting before Mr. Frost and which I think should have been put to Mackenzie King is that in a church they do pass the plate and usually at the end of the year they give an indication of where the money comes from.
Recently several newspapers, including that majestic morning paper in Toronto, have become concerned about the fact that our political parties, primarily the Conservative and Liberal parties from their point of view, do not have a broad enough financial base, and they have been campaigning for the Conservative and Liberal parties to set about securing for themselves a genuine base in terms of money in their membership and not to count upon the aid of large corporations which, as these papers have pointed out, could properly be considered as the kind of influence or commitment that it is not good to have in a democracy. We all observed with a great deal of humour, I think, except perhaps some of those involved, the situation of the Liberal party in the last provincial election in Ontario as to expenses when it was revealed that they were broke. They made much out of this fact saying that it was an indication that they were really a grass roots party because the corporations were no longer coming through and backing them.
If a political party must count upon secret donations of various kinds I think the thought will always remain in the minds of many people that there are possibilities of undue influence. I should like to say that in checking over all the expenses turned in in the last federal election I was much impressed with the returns from the province of British Columbia where there are certainly many indications not only from the totals of expenses but from the collection lists turned in by the candidates of all parties that they do try to treat the matter pretty fairly. One member from Vancouver who is in the chamber looked over these returns with me and I think we both agreed that there was a much greater tendency toward honesty in the reporting of such things in British Columbia. I think this sort of thing should permeate the whole political structure of Canada in every province.
I know I went into one constituency in Ontario and pointed out to some people at a public meeting that the elected member of parliament from that constituency, a very famous one by the way, had only declared total expenses amounting to $3,400. That caused the best laugh I have ever drawn at any political meeting. They were in an uproar 66968-9-337J
Canada Elections Act
at the very idea of this man ever carrying on a campaign for the meagre sum of $3,400.
This is another indication of the general disrepute in which politicians and political parties tend to place themselves as long as they do not and are not prepared to give a clear and honest accounting of their election expenses and the sources of their funds. It is for that reason I should like to suggest to hon. members that they could well support this bill. Certainly it is one that could stand reference to the standing committee which is considering this act and planning to consider it in the future.
I certainly believe too that we should have a further expression of views by other members to indicate whether they agree with this idea. The question of putting more morality or, let us say, more honesty into political campaigning revolves to quite an extent around the whole question of money. There are many myths abroad in the land about where the money comes from and why people donate money, and I think this would tend to clear them up.
I would particularly like to point out to my Conservative friends that, with the volume of support they have enjoyed in the past two elections, they should have no fears or hesitation about their ability both to raise the money to fight a campaign without keeping the sources secret and also to keep within the limitations of that money and to account for the spending of it honestly. In northwestern Ontario I have never heard any serious accusations flying back and forth between the parties about election money being used in a dishonest way. I wish I could say the same for other parts of the country. Yet at the same time I would hesitate to speak about other parts of the country. I might draw to the attention of some hon. members of the house who may not have noticed it that in 1956 two gentlemen of the clergy in Quebec came forward with a pamphlet that was very widely reprinted which indicated that in the province of Quebec there was certain electoral corruption and one manifestation of this electoral corruption was the use of election funds to bribe people to vote in a certain way and to indulge in that practice that I do not quite understand-


Mr, Ricard:: What about St. Paul's riding?


Douglas Mason Fisher: These gentlemen are raising issues on which I am not informed.


Mr. Ricard:: Do not speak about them then.


Douglas Mason Fisher: I am just referring to the fact that two worthy gentlemen of the clergy raised this matter, indicating that it was a

Canada Elections Act
serious problem in another part of the country. I certainly would not want to interpret what they said but I do feel that the very fact that they said it and that it has caused considerable discussion in that part of the country is a very good reason for members of the house to give serious consideration to this bill.


Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, my first reaction is to refute the suggestion made on the floor of the house by the hon. member for Port Arthur (Mr. Fisher). As a member of the house I do not like the aspersions he has cast on the part of the country from which I come. I do not feel that political morality in the province I happen to represent is in general any worse or better than in the rest of the country.


Douglas Mason Fisher: On a point of privilege, Mr. Speaker-


William Heward Grafftey: I remind the hon. member for Port Arthur that I have the floor.
The Acling Speaker (Mr. McCleave): Order. I would ask both gentlemen to resume their seats. The hon. member for Port Arthur is rising on a question of privilege.


Douglas Mason Fisher: I did not, Mr. Speaker, accuse anybody or make any particular charges. I referred to the issues that had been raised by two other hon. gentlemen, and I certainly feel the hon. gentleman should recall his words charging me with casting these aspersions.


The Acting Speaker (Mr. McCleave):: think the matter that the hon. gentlemen are discussing is more a matter of debate. I do not believe the words used by the hon. member are serious enough to justify the Chair requesting him to withdraw those words. They were strong words, perhaps, but not of the kind I feel the Chair should ask for withdrawal.


William Heward Grafftey: Thank you, Mr. Speaker. Before entering into the merits of this particular bill I want to make quite clear the stand I should take, according to my point of view, after a remark of that nature.
Before, as I say, dealing with the merits of this particular bill I feel we should, once more, read the explanatory note. It reads:
The purpose of this bill is to provide that the central committee of political parties in Canada shall be required to file a return with the chief electoral officer showing the source-
I underline that word "source".
*-and amounts of campaign fund contributions and to provide that such returns shall be laid before parliament.
I can only say, Mr. Speaker, that this is the second time within the space of approximately a week that hon. members have had

the opportunity of debating legislation introduced by members opposite concerning our electoral system. I should like at this time to make exactly the same remark as I made during last week's debate on absentee voting, namely that we are dealing with a very important aspect of our political life, our electoral laws. I feel that since we are doing that and since this particular matter relates in general to our electoral laws the matter should be taken seriously by all hon. members of the house. As 1 said before, and as I repeat now, our electoral laws-I hope I do not say this with too much self-satisfaction-within our parliamentary system are second to none within the western world.
I was very interested in noting that the hon. member for Port Arthur mentioned morality in discussing this particular bill, because I feel that is one thing which lies at the basis of this whole discussion. Often in this federal parliament we legislate on criminal law as such; often, Mr. Speaker, we legislate on what we might term administrative law; often I doubt the ability of a central, federal House of Commons to legislate on those matters which we might call morality per se. It is at this point I fundamentally differ with members of the C.C.F. party. I feel that every law involving morality should have a sanction, and if there is a sanction for this particular piece of legislation, I happen to think it only exists in their cynicism, in their forebodings and in their imagination.
The simple question I ask myself, as perhaps many other members do, is this: Why introduce this legislation? What has gone wrong in the past in so far as election expenses are concerned, in particular or in general, that they feel this legislation would rectify? Oh, we have heard inferences from this self-styled quasi-intellectual from Port Arthur, but not one particular complaint or general complaint has been made to give cause for the introduction of this legislation. I say it is typical of hon. members opposite that they try to see the worst in human nature. They look down at what they feel is the low estate of man, while I feel that our party, as well as many other parties in this house, have a little more faith in human nature. I put forward very generally, therefore, the very brief argument that on matters of semi-morality it is very difficult to legislate, especially after hearing the remarks of hon. members opposite and I, for one, fail to see any particular sanction for such a law.
I can say this right now. I well remember during the last session of this house when the hon. member for Port Arthur was discussing the radio bill he said, in a holier than thou spirit, that the C.C.F. party was going

into the next election with increased money muscles. We all know that they intend, or they want, to get this money by deducting union dues from the pockets of labourers who never had, or do or will support their movement, but at the same time this is the whole concept to which they are referring in this debate.
The hon. member who has just spoken stated that in the United Kingdom and in many of the provinces election expenses are limited. The fact is that such is not the case in Canada. Speaking for myself, Mr. Speaker, and I believe I can speak for many hon. members in this house, I appoint an agent to conduct my election campaign and look after election expenses. Therefore, unlike the hon. member for Port Arthur, I am relatively ignorant, as members of parliament should be, concerning my election expenses because agents are appointed, as we all know, in each and every constituency to handle that very matter. However, I believe that people all across the country realize, as do companies, that elections do cost money. The Liberals, in their sour grapes attitude not so long ago, criticized our very efficient advertising during the last two elections. I, for one, have no apologies to make about that very good advertising put forward by the Progressive Conservative party. We promised to take our message to the people, to bring government back to the people, and we did that.


The Acting Speaker (Mr. McCleave):: point out to the hon. member that the principle of the bill involves the public filing of election expenses and campaign fund contributions.


William Heward Grafftey: I realize that, Your Honour, but I do feel the principle of the bill involves indirectly what members opposite choose to call aspects of morality, and I feel I have to draw on this background material in order to come to the point. I realize that election donations, per se, given by companies are not deductible for taxation purposes as are bona fide charitable donations, and the donor of a charitable donation is allowed to remain anonymous. I believe we could apply the same standard of public morality to those individuals who want to give to political parties. I can say, that if I were able or I took the trouble to look at the list of people who made donations in my own constituency I would find that they were not people who had any axe to grind. They were people who donated to our party because they felt it was the best party in the interests of the nation and they gave that money with no strings attached.
Canada Elections Act
So I say to hon. members opposite, with all the inferences they have drawn from a bill of this nature, what is to be gained? What is the purpose of the bill? I sound as if I am going round and round the point, but that is the point they brought up by inference, that they are putting this legislation on the floor of the house because of a moral consideration. But they hedge around this question. There are some people who unashamedly realize that elections cost a lot of money and they give to both parties. They are public spirited people who are realistic and realize in this day and age, with a small population and lengthy communications from coast to coast, that television, direct mail, motor transport, loud speakers and all these things which I do not need to repeat because all hon. members know they cost a lot of money. Certain people realize this and choose in the interest of their country and their party to donate. I fail to understand why hon. members opposite wish to attach what I call so many moral connotations to this legislation.
This is not a peculiar reaction, or perhaps I should say action, on the part of the C.C.F. party. I can only say that if this is the reason they are proposing this legislation, I am sorry they have this attitude,
because if ever-and I underline "if ever"_____
they get all the union dues they wish to get from unwilling labour I hope they do not think labour's attitude is a narrow one because it is not, because the labour attitude I have always run up against is one which recognizes the national interest as well as labour s interest. But you would never know that by listening to hon. members opposite.
I also heard, both in the corridors and outside this house, that the C.C.F. are most interested in this bill. If they are that interested, Mr. Speaker, I cannot help but wonder why not one of them is in the house at the present time. At any rate, I commend them for the bill they brought before this house last week. Unfortunately, Mr. Speaker, I cannot say the same about either the draftsmanship or the spirit of the particular piece of legislation which we are considering at this present time.


Ernest James Broome: Mr. Speaker, in speaking to this bill I find myself in a certain amount of sympathy with both previous speakers. When the mover of this bill in his opening statement made the statement, that the publishing of the funds of political parties would make known the elements of society, if any, which are attempting to subvert political parties, I think he did himself and the bill an injustice. We all know that we require funds to operate political

Criminal Code
parties. We know also that the party system is the heart and core of our parliamentary system, and if it were not for the fact that ipublic spirited companies and individuals did contribute funds, political parties would waste away.
On the other hand, there is a certain amount of sympathy for those with limited campaign funds opposing a candidate with a tremendous amount of money for campaigning purposes. I was interested in what the hon. member for Brandon-Souris (Mr. Dinsdale) said when the bill was debated last time, when he pointed out that in the United Kingdom expenditures are limited to so much per voter in each riding plus a flat sum allowed for the national campaign. It seems to me that that is aiming at the essence of the problem. It is some sort of yardstick which determines the amount of money that a candidate or a party should spend on a campaign.
As far as the bill itself is concerned, I think it would have been on much better ground if it had concentrated on that philosophy of control of expenses rather than what has been put in the bill, because I believe the bill is unworkable. We all know that political parties have staffs who operate all year, not just during election times, and undoubtedly political parties are gathering funds all the time because they have these continuing expenses. One point which gives me the most difficulty, I think, is to know who contributes funds to political parties. I know in my own election campaign that at the conclusion of voting day I was not even allowed to buy coffee for my workers. My agent said that treating was not allowed under the elections act. Personally, I do not want to know who contributes to my election campaign. I think if one does know then perhaps involuntarily one feels under an obligation. I think that secrecy in this matter is to be desired. I think also that control is to be desired as well in the amount of funds which can be expended. I think the bill itself is not a moral bill but in effect an immoral bill in that respect.
Mr. Speaker, may I call it six o'clock?


The Acting Speaker (Mr. McCIeave):: The
hour for private public bills having expired, the house will now revert to the business which was interrupted at five o'clock.



CRIMINAL CODE

[Stage Direction]
The house resumed consideration of the motion of Mr. Fulton for the second reading of Bill No. C-58, to amend the Criminal Code.
i At six o'clock the house took recess.
[Stage Direction]
AFTER RECESS

The house resumed at 8.05 p.m.
The Acting Speaker (Mr. McCIeave):: The
hon. member for Port Arthur-


Edmund Davie Fulton: Mr. Speaker, I understand that the hon. member who was speaking when the house adjourned at five o'clock is on his way down to the chamber. Could the hon. member for Port Arthur defer for a moment or two?


Douglas Mason Fisher: Certainly.
(Translation):


Raymond Pierre Eudes: Mr. Speaker, I thank the hon. member for Port Arthur (Mr. Fisher) for letting me have the floor.
When the house suspended the consideration of Bill C-58 at five o'clock, I was referring to a piece of legislation that was introduced in the House of Commons in London, on November 18, 1958, by Mr. Roy Jenkins, the member for Birmingham, Stechford. This bill received third reading on April 24, 1959.
The first section of this bill defines obscenity as follows:
(Text):
For the purposes of this act an article shall be deemed to be obscene if its effect is, if taken as a whole, such as to tend to deprave and corrupt persons who are likely, having regard to all relevant circumstances, to read, see or hear the matter contained or embodied in it.
(Translation) :
The definition of obscenity as contained in this new act requires, as opposed to the Cockburn criterion, that in order to be considered obscene a publication must be considered as a whole.
This definition does however maintain as the essential element of the the offence, the tendency to deprave and to corrupt.
In the United States, for more than half a century, the courts have relied on the Cock-burn criterion to decide upon the obscenity of a publication.
Numerous studies on this matter have been published by jurists, moralists, theologians, often criticizing the narrow-mindedness upon which the Cockburn criterion is based.
In 1934, in the case initiated by the United States government concerning a book entitled "Ulysses" Judge Hand said in his decision:
Are not obscene publications-
(Text):
___where the presentation when viewed objectively is sincere and the erotic matter is not introduced to promote lust and does not furnish the dominant note in the publication. The question in each case is whether the publication, taken as a whole, has a libidinous effect.
(Translation):
American courts, in their decisions on obscenity trials, are now guided by this Hand

formula, more liberal in its outlook and more in keeping with the concept of individual freedom than the Cockburn criterion.
Let us bear in mind that in the Hand formula there are two essential requirements for a publication to be labelled as obscene: the consideration of the work as a whole, and the libidinous impulses it arouses.
The New Hampshire State has given this definition of obscenity:
Whatever tends, in its main theme or a large part of it. to impair, corrupt or deprave the moral behaviour of any person who sees it or reads it.
In France are considered as obscene publications of any kind involving a hazard for public morality on account of their obscene, indecent, lewd, licentious, pornographic character or involving detailed recitals of real or imaginary crimes, horror stories where there is a prevalence of sadistic cruelty and sexual perversion.
That definition widens the field of matter that may be considered obscene and also contains two essential elements: the character of the publication and the harm that it might do to public morals.
In Italy, publications which offend the modesty, reserve and restraint which must stand at the basis of sexual relations and publications relating lewd actions or sexual relations in terms such as to provoke excitement or emotion in people lacking modesty and disgust in others.
Before ruling any publication obscene, the Italian court also considers the author's intent.
The Italian concept has the advantage of considering the subjective character of obscenity.
This brief study shows the interest that legislators and lawyers in every country attach to that problem and also reveal how difficult it is to come to a clear definition of the term "obscenity".
That clear definition does not exist in our Criminal Code.
Section 150 which deals with the matter contains a single definition, in subsection 7, that of the term "crime comic", a definition which seems to have remained a dead letter, for never have we seen as many stories of crime, in newspapers and everywhere in our cities, as there are now.
I would suggest that this definition be amended so as to include crime films. How many of the films shown in cinemas and on T.V. are nothing but the glorification of crime, filling our young people with the ambition to become, some day, that strong man who despises established law and imposes his own rules at the point of a gun. How many are the young criminals today who owe their objectionable calling to those films which should be banished.
Criminal Code
On the whole, section 150 does not give any intrinsic definition of the term "obscenity". It merely lists actions which the law considers offences tending to corrupt morals.
The amendment proposed in section 11 of bill C-58, suggests a definition of the word "obscene" by adding an 8th subsection to section 150, worded as follows:
For the purposes of this act, any publication a dominant characteristic of which is the undue exploitation of sex, or of sex and any one or more of the following subjects, namely, crime, horror, cruelty and violence, shall be deemed to be obscene."
As a result of the words "dominant characteristic", that definition is at variance with the Cockburn criterion.
Henceforth, to be deemed obscene, the publication will have to be judged as a whole. Obscenity in an isolated passage of a publication will no longer be sufficient to describe it as obscene.
That definition is therefore closer to the Hand formula.
So as to assess it better, let us anticipate its effects. It will probably enlarge the field of obscenity.
What will its effects be, however, if it is strictly applied?
The summary survey I made earlier of relevant legislation in a few other countries which, no less than ourselves, have been concerned with this problem, shows that in order to determine the obscenity of a publication, the examination must bear both on its character and on its possible effects.
The definition now being submitted to us does consider the nature of the publication as a whole, but completely disregards its effects.
So far, however, jurisprudence established by our courts has always required, for a publication to be deemed obscene, that it be such as to corrupt or deprave morals. Yet the definition contained in section 11 completely ignores that requirement. Is this a practical and desirable omission? Time and experience will decide.
From now on, it will be enough for a publication to be considered obscene, that its dominant characteristic be the undue exploitation of sexual matters, regardless of whether the publication might deprave or corrupt a person considered as normal. That definition would bar-as an instance that comes readily to my mind-Racine's immortal masterpiece: "Britannicus".
Let us consider now the difficulties of interpretation which will follow upon that definition. Just how can the predominant characteristic of a work be determined?

Criminal Code
Where could we draw the line between what is undue exploitation of sexual matters and that which is not? Will that amendment contribute efficiently to check immorality? Is it the practical definition the Minister of Justice (Mr. Fulton) has been promising to us for more than a year and, in particular, in the resounding speech he made on June 15, 1958 at St. Joseph's Oratory on Mount Royal?
How will that definition help the judge, the jury, the law enforcement officer and allow them to decide if this or that publication or entertainment or play is obscene?
As in the past, the judge or the jury will have to ponder at length before ruling a publication obscene because on their lone judgment will fall the difficult task of determining the predominant characteristic of the publication and drawing the line between what constitute undue exploitation of sexual matters and what does not.
In short, we are no further ahead in our fight against obscenity, if indeed an explicit definition of the word "obscene" is an essential weapon in this fight.
It seems that the Minister of Justice, in introducing this bill to the house, was anxious to keep the promises made in his many speeches when, echoing the leagues and committees dedicated to the fight against immorality, he alarmed the population about the havoc wrought by obscene literature, especially among young people.
His department, he said repeatedly, considers that fight against obscenity from four different angles:
(1)	first, a practical definition of obscenity;
(2)	seizure of all obscene matter, without formal charges, so as to get an order from a court for the confiscation of such matter;
(3)	prohibition of the special conditional sales or, in other words, of the compulsory mass sale of publications in order to force the buyer to accept delivery of certain obscene publications;
(4)	finally, to make the law stricter for the printers of obscene matters.
Clause 12 of this bill adds to the criminal code sections 150 (a) and 150 (b), covering the second and third aspects considered by the Minister of Justice in the fight against obscenity, and I think the minister is to be commended in this regard.
Bill C-58, however, makes no amendment to the present act with regard to printers.
Under subsection (1) of section 150, in the present act, everyone commits an offence who:
(a) makes, prints, publishes, distributes, circulates, or has in his possession for the purpose of publica-
[Mr. Eudes.3
tion, distribution or circulation any obscene written matter, picture, model, phonograph record or other thing whatsoever, or
(b) makes, prints, publishes, distributes, sells or has in his possession for the purpose of publication, distribution or circulation, a crime comic.
I do not know what the Minister of Justice had in mind when he thought of making the act stricter for printers. In any event, the bill now before us makes absolutely no change to this section 150 in regard to printers.
As regards section 11 of this bill, which defines obscenity, I will only say that the Minister of Justice, in undertaking an extremely difficult task, overestimated his capabilities.
On the whole, however, while the minister has failed to give us the clear, precise and practical definition of obscenity he led us to expect, I think this bill should receive the support of the house, subject to certain amendments to be put forward when the matter reaches the committee stage.
(Text):


Douglas Mason Fisher: Mr. Speaker, I should begin these remarks by bringing to the attention of the house a resolution passed at the annual meeting of the Canadian Library Association as reported in the Edmonton Journal of Friday, June 26, 1959. The article reads in part:
The Canadian Library Association Thursday passed a resolution asking the Canadian Minister of Justice to delay action on a proposed bill to amend the definition of obscene literature and regulations of its sale and distribution.
The association asked for the delay so that interested groups might have the opportunity to study the amendments and present their views to parliament.
The resolution stated the association was in accord with the intention of the amendment but feared the definition of obscenity may serve to impede freedom of expression and free access to works of value and literary merit. Control of undesirable literature should require that judgment be based on the merits of a work as a whole.
I think the last part of the sentence "of the merits of a work as a whole" underlines the worry that the librarians have in this regard, which I suggest is of interest in dealing with this particular matter.


Edmund Davie Fulton: Mr. Speaker, with reluctance I raise a point of order. I wonder whether my hon. friend would not have his purpose well served if we discussed the matter, which I understand he wants discussed, on the amending clause itself. I recognize that earlier it was suggested we have some general discussion on the provisions of the bill with Your Honour in the chair. If, as I understand it now my hon. friend from Port Arthur wishes to discuss exclusively the provision relating to obscenity. I suggest that we might be well served if we went into committee and discussed it on the clause when I can deal

in detail with the provisions of the clause and the arguments for and against.


Douglas Mason Fisher: I will refrain from going into detail. I just wanted to put a general case as to why people who are involved in books and traffic in books are so worried about this particular question of a definition.
The Minister of National Revenue (Mr. Nowlan) was good enough last year when I put the question to him to give me an over-all list of all the books that had been rejected by the customs department. There are two aspects to the censorship problem, if you want to look at it-


Edmund Davie Fulton: Mr. Speaker, I again suggest to you that if my hon. friend wants to discuss this problem I am prepared to engage in a general debate on this problem on the clause in question. I am not going to try to narrow it there, but I do suggest that if we are going to debate this question of obscenity and the pros and cons of censorship, and so on, which this clause is designed to obviate -that is, censorship-then I think we should wait until we get to the clause.


The Acting Speaker (Mr. McCleave):: The
Chair was about to raise a question as to whether the Minister of Justice was raising a point of order or making request to the member which could or could not be heeded. I take it the Minister of Justice is asking for a ruling on the point of order as to whether the hon. member should proceed on the lines upon which he has started. If that is so, and the Minister of Justice indicates that, a ruling will have to be made.


Edmund Davie Fulton: Yes, Mr. Speaker. If no other hon. member wishes to speak on the provisions of the bill in general and my hon. friend wishes to narrow it down to the provisions of the clause which provides a definition of obscenity, then I suggest we should wait until we get to the clause itself.


Lionel Chevrier: Mr. Speaker, perhaps you will remember the ruling that was made by Mr. Speaker on an earlier occasion this afternoon when the hon. member for Hochelaga (Mr. Eudes) was speaking.


Edmund Davie Fulton: He did speak on other matters as well.


Lionel Chevrier: He was speaking on other matters and the point was taken that perhaps he might deal with the clauses seriatim, and I suggested that because the hon. member was speaking for the opposition it would be unfortunate if he were not allowed to make his general remarks on the first clause, and I suppose that argument applies to the hon. member for Port Arthur as well.
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Edmund Davie Fulton: As I understand it, he wishes to deal only with the question of obscenity. I wish to accommodate the house. If no other hon. member wishes to speak on the bill generally and the desire now is to debate this clause on obscenity I think the house would be better served if we waited until we got to that clause in committee.


The Acting Speaker (Mr. McCleave):: Order. It strikes me that the Minister of Justice has answered the point of order himself, but he does make a point in the nature of a request. The Chair cannot rule that discussion on the particular matter of obscenity is out of order. There are a great many clauses in the bill. It appears that the debate is going to be confined to the particular one dealing with obscene matters, and any discussion on that falls into the line of general principles on the second reading when debate is in order. I would ask hon. members to try to refrain from getting into specific details until the bill is considered in committee.


Douglas Mason Fisher: Mr. Speaker, the reasons for the minister introducing the bill are, I believe, general ones. If I might just refer to the problem of keeping of pornographic or obscene books out of the hands of Canadians centres on two points. One is publishing outside of Canada and the other is publishing inside of Canada. We publish very little in Canada. As a matter of fact, it is almost impossible to find any books that could be defined as obscene that are published in Canada. The main worry is the books that come from outside. Therefore, as I said earlier, the minister provided me with a list of those books that had been ruled out by the customs department under tariff item 1201. This item reads:
Books, printed paper, drawings, paintings, prints, photographs or representations of any kind of a treasonable or seditious, or of an immoral or indecent character.
What I am trying to suggest is that the main problem in terms of literature is that we have another definition that we operate on, namely this definition in the tariff item of immoral and indecent literature that seeks to say, first of all, what books on Canadian library shelves should come from outside of Canada. This is one of the greatest areas of difficulty. We did have an interesting case in connection with "Peyton Place" a few years ago. We had a very complicated situation in connection with "Lolita" which was banned originally by the department before the present minister took over. I have never been able to figure out where the shift was made, but with the present minister "Lolita" was allowed in. I think the explanation is that the Olympia Press

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in Paris which originally published "Lolita" in French has a notorious reputation and almost any book that is published by that firm is banned automatically. I think that is why "Lolita" suffered. I think the present people in the customs department probably recognized the literary merit of the book when it was published in English.


Mr. Brunsden:: Will the hon. gentleman permit a question? Has he read "Lolita"? If so, what is his impression of it?


Douglas Mason Fisher: I have; I think it is irrelevant.


The Acting Speaker (Mr. McCleave):: Order.


Edmund Davie Fulton: It is a fair question.


The Acting Speaker (Mr. McCleave):: Let us
try to continue the discussion on general lines and not engage on a discussion of works of literary merit.


Douglas Mason Fisher: As a librarian, Mr. Speaker, I have always taken the view that we must be very careful in what we censor. I think almost any librarian always goes by Milton's "Areopagitica" the words from which are very strongly against the imposition of any kind against the liberty of any man to express in a written way his feelings, thoughts and ideas.
Because of the nature of the list which I got from the Minister of National Revenue when I was in Paris last fall with the NATO group I was able at the end to spend a day down in the bookstores on the Seine going through and checking those books that were barred by this tariff item, and I had to agree that almost every one of them was of such a kind that I certainly would not want to see them in Canada. I must say quite frankly that this was a bit of a shock to me. I had not realized that I was so inexperienced in so far as such books were concerned.


Mr. Bell (Saint John-Albert):: And in a
good many other things.


Douglas Mason Fisher: There were many books that filthy and that bad. On that particular day I was in conversation with an author in one of the stores who explained to me that this particular press, the Olympia Press, that puts out most of those books, had recently had a court case in connection with "Lolita". He told me the basic defence that this firm had put up for choosing to publish "Lolita" was I thought, most intriguing.
The first point in the defence was that after all these books were printed in English and could have no effect upon French morality. The second point was that they were sold to Englishmen and Americans, brought in good foreign exchange and were thus of commercial value to France. The third argument, which of course was usually the key one, was

that some of these books had literary merit. If as a result of the change in the act we get a definition that is going to impede-


Edmund Davie Fulton: I am sorry, Mr. Speaker, but I must ask you for a ruling. My hon. friend is now discussing the effect that would be produced if the clause in question carries. Indeed, as I have suggested before, his discussion relates exclusively to one particular clause of the bill. As I say, when we reach the clause I will not attempt in any way, or ask the chairman in any way, to narrow or confine the debate. We can have a full debate on that question then but the bill itself relates to a very great number of questions having no connection with obscenity and I do not want to indulge at the second reading stage in a debate confined exclusively to the question of the definition of obscenity. I do ask Your Honour for a ruling because I am satisfied that the debate will be well served and the interests of the house will be better served if we wait for this discussion until we get to the clause in question.


The Acting Speaker (Mr. McCleave):: I
thought the Chair had made it abundantly clear before that the Minister of Justice had made a request to members and that it is the opinion of the Chair that members can, if they wish, disregard that request although it would undoubtedly add to the expediency with which we can deal with this matter. Members are entitled to discuss particular parts of the bill on the basis of principle following the rules that pertain to debates on second reading. However, I must ask the hon. member who has taken his seat to bring his remarks closer to the principles that are set forth even when dealing with a particular part of the amendments to the Criminal Code. Questions of foreign trade and other extraneous matters seem to be creeping into his remarks.


Edmund Davie Fulton: The hon. member was about to discuss the effect of the change and we will not be able to discuss the effect of the change until we get to the clause.


Mr. Howard:: Why not?


Edmund Davie Fulton: Because it is out of order to discuss the provisions of a clause on second reading, and that is what my hon. friend is doing. He is talking about the changes that will be made by a particular provision of the bill. Mr. Speaker, I do not usually raise and press points of order but I do refer Your Honour-


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: No, not at this stage.


Lionel Chevrier: You are wrong again.


Edmund Davie Fulton: I do refer Your Honour to the well understood rule that on second reading members must debate the principle of the bill and not the details. I suggest to you that my hon. friend, in discussing as he has the effect of one particular clause of the bill is entirely out of order on second reading. Otherwise-there are 37 clauses in the bill- we could have 37 separate debates on second reading and that would become absurd. We can have full debate and discussion in committee on this clause because, of course, I do not make the rules of the house and I could not stop it if I wanted to, and I do not want to stop it. I want a full debate but I want it relevant to the clause in question when I can give the answers. I do suggest to Your Honour that we should not have 37 separates debates on second reading.


Lionel Chevrier: May I speak to the point of order and say this in reply to what the Minister of Justice has just said? While it is true that on second reading the discussion must pertain to the principle of the bill, I ask the minister to state where there is any principle involved in these amendments to the Criminal Code. There are several amendments to the Criminal Code and they are entirely different in their nature and aspect, and if you want to adhere to the principle of the bill then you cannot do that. That rule of procedure cannot be put into effect at this time, and that is why the ruling you have made is quite correct and in order. It seems to me that the hon. member who has the floor or any other hon. members on this side of the house who desire to speak on any of these clauses have the right to do so now.


Edmund Davie Fulton: That is quite wrong and that is exactly why on a bill of this type amending the Criminal Code there is a very limited debate on second reading and the debate is confined to the clauses.


Lionel Chevrier: What is the principle?


Edmund Davie Fulton: My hon. friend will remember that when bills amending the Criminal Code have been before the house on any occasion he wishes to mention there has been a very limited debate on second reading and the discussion has been almost exclusively confined to the debate on the particular clauses in committee. I realize perfectly well that you cannot distil a principle out of a bill of this sort and that is why I think it is quite out of order for an hon. member to discuss the details of a clause as the hon. member for Port Arthur will be bound to do. I do not have in front of me the advisers of the government with all the details of the questions that my hon. friend will raise, to which I should like to give answers and
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to which I am prepared to answer. It is a waste of the time of the house to try to have this debate on second reading. I am not trying to stop debate on the clause or on the merits of the situation which my hon. friend wants to discuss. All I say is, let us have it at the right time when we can have the debate with the best profit to all members who are here.


The Acting Speaker (Mr. McCleave):: In
looking over Bill No. C-58 I notice there are at least two sections and an addition to another section which deal with the matter of obscenity. I also notice that the procedure to be adopted is based upon a separate act of the British parliament. It seems to me that what we have here is a number of changes in the Criminal Code and that in dealing with obscenity something of relatively large scope is being introduced into the Criminal Code by way of amendment. I therefore have allowed the hon. member to continue. I would ask that his remarks be relevant to the bill and in general terms. The Minister of Justice is right that in dealing with these particular clauses we are dealing with them in general on the basis of principle rather than in the detail that is customary in committee.


Douglas Mason Fisher: Mr. Speaker, the reason I want to speak is that I feel there is a principle involved here and I certainly gathered from the remarks the minister has made that he feels there is a principle involved.


Edmund Davie Fulton: There are 37 separate principles.


Mr. Lennard:: What is the matter? Are you going to be away next week?


Douglas Mason Fisher: I am no more likely to be away than the hon. member.


Frank Exton Lennard: Oh, I probably will and I am asking the hon. member.


Frank Howard: It will not make any difference whether or not you are.


Mr. Fraser:: That is a stupid remark.


Frank Exton Lennard: From a stupid person.


Douglas Mason Fisher: Censorship is something which changes with the times. I noticed in the remarks the minister has made in a couple of his public addresses that he is very much aware of that. In the speech he made to the Quebec union of municipalities on May 17 he emphasized that this is a problem that has been created by the modern situation, increased transportation facilities, increased wealth, cheaper methods of manufacturing, which are some of the by-products of progress. But despite the creation by modern times of this particular problem modern times have also created a different attitude toward some

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of the classic examples of books that have been ruled as obscene in the past. I should like to point out to the minister, if it has not been done already, that at one time a book of Shaw's, "Mrs. Warren's Profession", dealing as it does with prostitution, was under the pale in England. If you want other examples you can easily find them in a play such as Ibsen's "Ghosts", a theme of which is venereal disease. It is examples like this used by advocates of censorship that have created in the world of librarians and literary figures a distrust of any changes that have to do with the idea of obscenity. I do not want to belabour the particular point except to tell the minister that there is very deep concern amongst people who deal with books about the consequences of this change the minister is introducing. When we can deal with the details of this particular clause, I should like to point out some of the reasons for my statement based on the wording.
In conclusion of my remarks, which I think are on the principle involved in this amendment, I should like to read from a statement that was made before the tariff board by Frank A. Underhill on January 29, 1958. This appeared in the Canadian Library Association bulletin for July, 1958, the same bulletin or at least the same magazine which, on another date, featured a statement by the minister, as well as other people, on this censorship or obscenity problem. At one point, Mr. Underhill said this:
The point that I am trying to make is that modern literary artists, in their concentration on sex, violence and societies in decay, are not just exploting these themes for the sake of vulgar notoriety and best-seller profits. They are trying, seriously and intensely, to say something significant about the condition of man in our day. They are impressed chiefly by his inability to discipline his unruly passions and his almost infinite capacity for evil. If they look on the black side, and present painful or repulsive pictures of human beings in action, can anyone blame them who has been sensitive to the experience of our age?
This points up the problem involved in so far as the literature of our time is concerned. I know that principally this particular change has to do with another kind of book altogether, another kind of literature, and I am sure that the minister is going to receive general commendation from most people in the nation for trying to make this change. However, in so far as one can examine the general principle that is involved in this particular change, it comes down to the attempt he has made to define obscenity, I must suggest that in that particular regard I have certain qualms about the definition. The hon. member who spoke before me indicated that his group was going to move certain amendments in conection with that,

and I should like to say that we are going to have amendments, or at least one amendment, to it.
In concluding my remarks on the principle of the bill, I would say we are glad the minister did not decide to try to set up some kind of censorship board. I know that was a demand because I was reviewing the evidence given before the Senate committee in 1952 and 1953 and I found the suggestion came up there. I read also the minister's evidence before that committee and I find his views then are generally consistent with the statement that he has made. At that time he was against the general idea of a censorship board, and he was against all the problems that are inherent in defining obcenity. This group, as a whole approves of the idea of keeping the matter of determining obscenity in the courts rather than giving it to a censorship board. It is not so sure that this particular change is going to make the task of the judges any easier. It regrets that some way has not been found, in the change that has been made, to take some of the onus from the customs officials.
Last year we were given an indication by the Minister of National Revenue (Mr. Nowlan) that he hoped the department would get out from under this particular chore. There is no indication that these changes are going to do that, except in a sort of delayed reaction fashion, in that there may be rulings coming out of the courts which will give enlightenment and advice to the customs officials. Of course some enlightenment and advice could have come from the tariff board if anyone had bothered to take any appeals to it. However, this was never done.
In conclusion, Mr. Speaker, I would say that I may have given the minister the impression by talking on his bill at this stage that I was impeding its progress. I am sure if he intends to bring it in and push it through, it is going to go through and become law. We will see just how it is going to work. After the experience which some of us in this house had this afternoon in viewing with a certain amount of consternation a piece of legislation we passed last year after the minister's assurance that everything-


Edmund Davie Fulton: This minister?


Douglas Mason Fisher: No, another minister-was
going to be fine, we are going to be a little more sceptical about such assurances this session. I am sure the intention is excellent and we hope it will have an effect upon the kind of literature at which the minister is aiming. Certainly, however, when the

minister is making his explanation I wish he would consider pointing out very clearly to us how it is going to do that, and how the principles with which the librarians are concerned are not going to be affected by these alterations?


Frank Howard: I wonder if I might make one very brief comment with respect to the bill before us, and upon what I consider to be a failure in the bill itself. I thought that the minister, with the assistance and guidance of the officials in his department, would have been able to come up with a provision in this particular bill that would give statutory clarification to some of the confusion in the act with regard to bingo games. I doubt if there is anything that is more confusing than what is in the minds of those who operate bingo games, the R.C.M. Police who are expected to enforce these sections in areas where they have jurisdiction, and the police court and stipendiary magistrates when cases of infraction of the Criminal Code as it relates to bingo games come before them.
I have discussed this question with a stipendiary magistrate, with an officer in the R.C.M. Police and a lawyer to determine what the rules are in so far as bingo games are concerned. Not one of them could give me a clear idea, and I would appreciate it if the minister would get some clarification of that section relating to bingo games.


Edmund Davie Fulton: Is that all?


Frank Howard: That is all.


Mr. Leon Crestohl (Cartier):: I wanted to make some observations on the bill because I find that the amendments do carry some novelty. I find, for example, that the amendments propose something new in the Criminal Code and that is setting up a system of paying penalties on the instalment plan.


Edmund Davie Fulton: That is not new.


Leon David Crestohl: It is not new, but the amendment is creating it in a form that will make it new. Certainly, it becomes novel. Of course, the courts have latitude now to allow a penalty to be paid with some delay. But to legislate directly a section in the code that will allow the payment of penalties on the instalment plan I think could encourage crime because offenders will know that they might not have to go to jail if delays are allowed under the amendment to pay those penalties. I do not want to go into detail at the present time in discussing the bill in its general form; we will be able to do that when we reach the particular clauses.
I also find in the bill a clause which introduces again something new, and that is a
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clause dealing with offences committed on aircraft. When we reach that clause I imagine we will be able to discuss it in more detail, but I wonder whether the minister would explain before we finally get to the bill itself the origin of this clause and the question of jurisdiction in regard to it. The bill goes into some detail, but I think there could be very many improvements to the measure.
I also think that clauses 9 and 10 of the bill, which deal with some shifting of the burden of proof in offences where the male is not more to blame than the female, are very helpful and can be useful; but since there is a change in principle, would the minister be good enough to give the house the benefit of the reasoning of his officials or of the minister himself and what it was that motivated these changes in basic principles in our criminal law? It would be helpful to us when we come to the clauses if the minister would be good enough to tell the house the background of some of these innovations.
I do not want at the present time to go into the countless arguments which the minister must have already received and no doubt will continue to receive in defining "obscenity". I would prefer to leave my observations on that to when we reach the clause. Some of the definitions are very serious, but some of them can be very amusing. We were discussing a short while ago how the minister proposed to interpret the difference between an undue exploitation of sex and a due exploitation of sex. I would like to know which is which, when it is a due exploitation and when it is an undue exploitation. If the minister before we get into the clauses of the bill would give the house the benefit of some of the background to these innovations we would be most grateful.
(Translation):


Mr. Azellus Denis (St. Denis):: Mr. Speaker, we are now discussing a bill which touches upon many sections of the Criminal Code. I wonder how we could discuss the principle of a bill with such a variety of topics. I wonder why we do not have a separate bill for each of the proposed amendments to the Criminal Code? The Minister of Justice (Mr. Fulton) might as well ask us to amend the Revised Statutes of Canada.
In my opinion, to streamline the procedure, he should have introduced a bill for each of the individual amendments instead of introducing a bill which touches upon so many subject matters of the Criminal Code.

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I do not believe the minister wants to prevent us from discussing the principle of this bill which he is introducing and, when discussing it, we will not be able, during the consideration of the part which has to do with obscenity, to refrain from talking about drunkenness, for instance, and other subjects. The bill as submitted to the house contains sections dealing among other things, with offensive weapons. I fail to see how offensive weapons have anything to do with obscene literature.
I see here, for instance, that there is a new procedure concerning the accused, because of the publication of evidence brought up at the preliminary investigation. Incidentally, this is a very good thing. I also note that under this amendment, the magistrate may order that the decision rendered with regard to the publication of evidence be modified. Then, I wonder, Mr. Chairman, how we could deal with the principle of the bill-


An hon. Member:: Do so.


Azellus Denis: But I shall simply point out to the minister-
Hon. E. D. Fulton (Minister of Justice: Yes, in committee.


Azellus Denis: I shall point out to the
minister that if we intend to criticize, or approve certain things, I hope that the Minister of Justice will be kind enough to take notes, so that when the various sections are submitted to the committee, he will be better able to answer our objections. In this way, I think, all those who want to go on leave or get in touch with their families again, could do so sooner. When the sections are called in committee, the minister will have found the answers, which will simplify discussion.


Edmund Davie Fulton: Precisely.


Azellus Denis: I shall not deal with all amendments to the Criminal Code. I shall, for instance, only mention firearms and permits. Under section 8, I read:
A permit in Form 42, 43 or 45 may be issued by a local registrar of firearms.
That is all right. But you give more latitude to those who issue permits. However, I have no objection to that. As a matter of fact, this will help those who are responsible for giving out those licences. This means, in other words, that we can obtain those permits more easily.

But, it is not those who issue the permits who are dangerous: it is those to whom those firearms are given. If the minister had wished to afford better protection to society, instead of amending the Criminal Code in such a way as to know whether or not such and such a person is entitled to issue permits, in accordance with forms 42, 43 or 45, he should have required a more detailed inquiry about those to whom permits are granted. At present, under the existing legislation, permits may be granted for the possession of firearms to protect one's life or property.


Edmund Davie Fulton: Mr. Speaker, I am not allowed to answer the hon. member now, but I can assure him that I shall answer him when the house is in committee.


Azellus Denis: Quite so; what I want is an answer. But before the house goes into committee, I am directing questions to the minister in order that he may give me satisfactory answers.
A firearm permit may be obtained to protect one's life or property, but it is a matter of knowing how, or for what reason, one must protect one's life and what is the value of the property one has to protect, before being entitled to an offensive weapon.
Anyone may obtain a firearm, in accordance with subclause (a) of section 94. But 1 would suggest to the hon. minister that the danger does not lie with those who issue the permits but rather with those who obtain them. I am convinced that there is some lack of control, that the investigation made is not adequate; I am convinced that there is lack of consistency towards those who are really in need of protection.
For instance, I have in my possession a hunting gun. I have had it for the last 20 years perhaps.


Mr. Rodrigue Bourdages (Laval):: You do
not know how to shoot.


Azellus Denis: Never mind, in the next elections, there will be so many Conservatives that even if I am a poor shot, I will surely hit a few.
So I would respectfully say to the hon. minister that the threat is not from those who issue licences, but those who are issued licences. An investigation must also be conducted to discover whether a person has made improper use of a firearm. Personally, I have not made improper use of my firearm because I have wounded none of the hon. members opposite. However, there is a limit.


An hon. Member:: Words are more dangerous.


Azellus Denis: I therefore ask the hon.
minister to conduct a more thorough investigation when a person applies for a licence to own a firearm. Before a person is licensed to own a firearm, care should be taken to ascertain what use is to be made of the firearm.
Mr. Speaker, I cannot discuss the principle of the bill without going into all those things.
However, allow me to revert to the subject of obscene literature. The hon. Minister of Justice was quite prepared to improve this act.


An hon. Member:: He still is.


Azellus Denis: I recognize, with the hon. member for Laval, that the minister still has good intentions, but that does not prove that he has improved it. He is still prepared to improve it, but he is actually making no improvement.
But, Mr. Speaker, when the hon. minister was sitting on the opposition side, he claimed that should he some day be a member of the cabinet, he would improve the act to such an extent that it would be impossible for Canadian citizens to be contaminated by such obscene things. But, what did the minister do? He merely changed the clause which includes the definition of the word "obscenity".
In fact, Mr. Speaker, obscenity as defined by the hon. Minister of Justice is a source of income for the lawyers because it is more complicated than if we had no definition at all. Interpretations have been offered by hundreds depending on what such and such persons think about such and such things regarding the obscene literature and also depending on the various provinces where he lives.
Section 11 of the bill now before us reads as follows:
Section 150 of the said act is amended by adding thereto, immediately after subsection (7) thereof, the following subsection-


Edmund Davie Fulton: Mr. Speaker, I rise on a point of order. At this stage, a member should not discuss a particular clause in the bill-


Azellus Denis: For the purposes of this act, any publication-
(Text):


Mr. Speaker:: Order. I am sorry I cannot hear both members at the same time.


Edmund Davie Fulton: My point, Mr. Speaker, as I have said before to no avail, is that it is out of order to refer to the detailed provisions of the bill on second reading and I have let the hon. member go on just to prove how absurd he is. He is now trying to discuss on second reading the detailed provisions of
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the bill and, as I have said all along, I am prepared to discuss details when we are in committee and I have my officers here and can answer the questions which the hon. gentleman asks.
They are all trying to get up now, and that shows exactly how out of order they are and how absurd this whole farce is, and I suggest that while the House of Commons is a friendly chamber it is really time we stopped wasting time and got down to details.


Lionel Chevrier: I, too, rise on a point of order and I suggest to you, Mr. Speaker, that it is not in order for the minister to refer to the hon. member who has just been speaking by saying how absurd he is. After all, the minister rose on a point of order


Mr. Speaker:: The hon. gentleman reminded me the other day that two points of order cannot be discussed at the same time. The point of order is whether the hon. member for St. Denis (Mr. Denis) is in order in discussing the definition of obscenity in detail.


Lionel Chevrier: And I suggest it is, because Your Honour decided earlier in the course of the afternoon that there is no principle contained in the course of the various clauses before the house and so it is impossible to discuss the principle of the bill per se. For that reason the hon. member, as have various other members during the course of this debate, has discussed several clauses seriatim having been allowed to do so previously by the Chair. I suggest that he be permitted to continue. May I add for the benefit of the Minister of Justice, that if he thinks he is going to help the passage of this bill by nonsensical points of order such as he has raised, he is mistaken.


Mr. Speaker:: There is no doubt in my mind that some things have been and are out of order. The hon. member for St. Denis (Mr. Denis) has indicated his difficulty in discussing the principle of this bill because it deals with a number of unrelated amendments. The same difficulty arose for the hon. member for Hochelaga (Mr. Eudes). I think one can discuss the principle that relates to the application of the law against obscenity on second reading, but I do not think it is in order to discuss the detail of the definition and the wording of the clause. That can more properly be done in committee. The hon. member for Hochelaga dealt with the two or three clauses that related to obscenity together, and tried to indicate a general approach to the problem, as he did in connection with the problem of firearms, and I think that can be done, but when it comes to an exact definition I think the hon. member might leave that to the committee stage where he will have ample opportunity.

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Azellus Denis: I think I can do that, but before continuing in accordance with your ruling I should like to ask the Minister of Justice whether, when he used the expression "absurd", he was referring to the hon. member for St. Denis or to his own bill?


Mr. Speaker:: The hon. member need not take offence at a statement of that kind. I have heard much worse than that in the house without objection.


Azellus Denis: I will continue in French, if I may, because we have this new simultaneous translation and before it gets lost I think I will use it.
(Translation):
Mr. Speaker, the reason why I read clause 11 is that the hon. minister boasts of having added something by including a definition in which he uses but 5, 6 or 7 words, but he has not given a specific definition. For instance, the matter of principle is very important and the minister talks about:
-sex and any one of more of the following subjects, namely, crime, horror, cruelty and violence.


An hon. Member:: Order.


Azellus Denis: Mr. Speaker, how could we interpret that section? For instance, what is the definition of cruelty, of violence, of horror? Is it correlative, when it deals with obscene matter?
For instance, Mr. Speaker, if my hon. friend from St. Hyacinthe-Bagot (Mr. Ricard) is not satisfied with me, while on the other hand, I am not satisfied with him, and if a discussion arises between us, and if, after that, I give him a thrashing that looks like horror, does that prove that the assault I make on my hon. friend, even if he deserves it, comes under the act?
In any event, Mr. Speaker, I respectfully submit that the definition mentioned in section 11 is far from being satisfactory. It is vague, imperfect and indefinite. Besides, it includes other words that need to be defined and that the minister does not define.
Furthermore, I will not rely only on my own opinion-


Rodrigue Bourdages: On the opinion of Mr. Lamontagne?


Azellus Denis: Mr. Speaker, I think I have recognized the voice of my hon. friend from Laval (Mr. Bourdages) and I am sure he will not rise in this house, except to make interruptions, and even at that, he keeps seated when he makes them. Therefore, I would ask him, as a Conservative member, who wishes to help the Minister of Justice, to prepare something on that matter so that we could know if he is satisfied with the

definition of obscene literature, or what improvements he could bring about. Or does he want, on the contrary, to keep that rather vague definition, so that he may benefit by the act as it existed before?
In any event-


An hon. Member:: He is not to blame; he is not blue yet.


Azellus Denis: I read in the Gazette of June 17, 1959, that the members of the clergy have held an important meeting during which they have stated:
(Text):
Proposed federal legislation defining obscenity in relation to literature was attacked today by three clergymen here for the eleventh annual summer school of religion as indefinite and unnecessary.
This is what they think about the definition of obscenity.
Dr. James T. Cleland of Duke University was further quoted as saying:
Besides, the legislation proposed leaves the matter wide open by its wording. The lawyers will have a field day with it.
(Translation):
Not that I have any grudge against my fellow lawyers but while the minister meant to clarify the act he only succeeded in making it more complicated, especially if I am to believe the statements made by those members of the clergy.
In conclusion, I should say that when the Minister of Justice came to Montreal, he listed all the improvements and all the amendments, four in number, he wished to make to the Criminal Code. Here is the report published in the Montreal Gazette of June 18, 1958 and I quote:
(Text):
The first is a "practical" definition of the word obscene for article 150 of the Criminal Code.
(Translation):
Then, as I already mentioned, Mr. Speaker, this definition lends itself to an infinite variety of interpretations, with all due deference to the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon) who instead of making faces should rather look after his tobacco in St. Thomas and see to it that the premier of Quebec let his farmers have the benefit of crop insurance legislation.
(Text):


Mr. Speaker:: Order. Our rules of procedure call for a discussion of the bill before the house.
(Translation):


Azellus Denis: Mr. Speaker, you can not imagine how difficult it is to speak in this house when one is the target of a member who is making faces. I do not know if he is grinning on account of the amendment-


Mr. Speaker:: I suggest that the hon. member proceed with a discussion of the bill. (Translation):


Azellus Denis: I thank you, Mr. Speaker, and above all-
(Text):
Finally, Mr. Fulton said, "We are considering the possibility of including the printers of obscene publications in prosecutions, much more than is done today."
(Translation):
Here is the cause of all the trouble. To prevent the publication and distribution of these obscene books, the minister should have appealed to printers and publishers.
Yet, there is nothing in the present act likely to prevent printers and publishers from keeping on printing, publishing and distributing those immoral books either to wholesalers or to any other corporation in charge of their sale or distribution. I recognize that the minister wishes to find a solution to this problem. According to some press reports, it is a step in the right direction, and as was reported in another paper:
(Text):
"Better half a loaf than no loaf at all". (Translation):
Therefore we will not object to this motion, but I would request the minister to take note of our remarks so that next year, if he still be the Minister of Justice, he will be able to profit by the remarks made by the members of the opposition. It is claimed that the government does not receive suggestions from the opposition. The trouble is that we offer too many of them and they do not know which one to take to be helpful to the population. They do not want the Liberals or the opposition to have the credit for the only pieces of legislation which can help the people.
Well, when the time comes to discuss this measure in committee, as was suggested by the minister-and by the way I thank Mr. Speaker, who was kind enough to let me make these few observations, a fact which enabled me to give to the minister a preview of the arguments which we will put forward when we study this bill in committee. I hope the minister will be better informed and in a better position to reply to the various questions directed to him by members of the opposition. And if, next year, if not this one, a better definition of the word obscenity is found, and if a better protection in regard to the possession of firearms is achieved, the whole country will be satisfied, even if the Conservative party should be given all the credit for that. (Text):


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


Edmund Davie Fulton: Mr. Speaker, as I have said on a number of occasions in the course of this-shall I call it debate-on second reading I shall be prepared to answer in detail and seriously any questions which have been raised when we reach the clauses in committee.
I have observed that most of the discussion thus far in this debate on second reading has been related to the provisions of the bill which deal with the definition of obscenity. I make no criticism of the fact, but I could not fail to note that the matter was treated with some levity, particularly by the hon. members of the Liberal party from the province of Quebec. I am not, of course, suggesting that the definition we have achieved is perfect. It is the best definition that we could achieve; it is an attempt to deal seriously with a serious subject. I think the house will be interested to note, and I think the country will be interested to note, and I think the province of Quebec particularly will be interested to note that members of the Liberal party from the province of Quebec treated this whole thing, with one exception, in an atmosphere of levity. As I say, I make no criticism of that. The hon. member for Hochelaga (Mr. Eudes) dealt with the matter seriously. The other members of his party from the province of Quebec, where I am aware that this matter is regarded with a great deal of seriousness, dealt with it as a subject deserving nothing but laughter.


Lionel Chevrier: That is not so, and you know it. All the minister has been doing is raising points of order.


Edmund Davie Fulton: What I say hits my hon. friends a little hard but they recognize that their attitude towards this bill tonight has not done them credit, and that, of course, is a matter of which I am quite sure their compatriots will take notice. As I say, I make no criticism. Perhaps my hon. friends do not think the definition is very good. I shall be interested in hearing what they have to say in committee. My whole purpose in this debate has been to advance the bill along into committee so that we might hear what constructive suggestions my hon. friends have to offer, because certainly their attitude so far has been far from constructive. I think, Mr. Speaker, that there is really nothing more I need to say. I am quite certain that the house and the people of the country beyond the house will note the attitude of my hon. friends of the Liberal party toward a serious subject and a serious attempt to deal with a serious subject.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. McCleave in the chair.
[Stage Direction]
Criminal Code
On clause 1-Magistrate.
Raymond Pierre Eudes: Mr. Chairman, by provincial statute in the province of Quebec a recorder in most cases I believe is now termed a municipal judge and the recorder courts as municipal courts. I am wondering whether the definition proposed by this clause of this bill amending paragraph 22 of section 2 of the Criminal Code should not also include the words "municipal judge" in order to meet the effect of the proposed amendment. This would also include those who are given authority or jurisdiction under section 225 of the Criminal Code which is being amended by clause 16 of this bill.


Edmund Davie Fulton: Mr. Chairman, I am not aware that there is any problem with respect to provincial judges. The amendment is designed to deal exclusively with the problem that arises in the Northwest Territories and the Yukon Territory. I do not think any problem of this nature has been brought to my attention with respect to provincial magistrates or judges.


Mr. Roberge:: Mr. Chairman, if I read
the clause aright it says that paragraph (22) of section 2 of the Criminal Code is repealed and the following substituted therefor. Line eight does have reference to a recorder. Right now in the province of Quebec there is no such thing as a recorder. Those who used to be known years ago as recorders are no longer recorders; they are municipal judges. Therefore I think the minister should take advantage of the repealing of the old section to include municipal judges.


Edmund Davie Fulton: Mr. Chairman, on that point it may be that the word "recorder" is out of date. However, the only purpose of the amendment was to take care of a situation in the territories. We were not looking at it from the point of view of bringing up to date the provision with respect to any provincial arrangements that may exist. I would rather look at it in detail and at leisure, if I may put it that way, and see if we should remove the word "recorder". It is not creating any difficulty that I am aware of, and I would prefer just to leave it for the time being.


Gabriel Roberge: I agree with that but right now a recorder does not exist in the province of Quebec. Therefore, a municipal judge would not have the authority of a magistrate as contemplated in this clause. That is the point the hon. member for Hochelaga is trying to make.


Edmund Davie Fulton: If I understand my hon. friend and the hon. member for Hochelaga aright, the suggestion is that the municipal judge should be included in the definition. On
[Mr. Fulton.)
that point I would prefer to look at this, as I say, and to study it carefully and to hear the opinion of and any recommendations from the provincial attorney general.


Gabriel Roberge: Would it be possible to include this recommendation in any amendment that may be made in the other place?


Edmund Davie Fulton: If we have time we shall certainly draw the remarks of the hon. member to the attention of the provincial authorities and if there is time and we have a recommendation accordingly we would be prepared to recommend an amendment in the other place.


Gabriel Roberge: I might suggest that no time would be lost because the prime minister from Quebec is also the attorney general. He will be here on Monday along with the assistant minister of finance, so that no time will be lost.


Edmund Davie Fulton: I imagine that the mind of the attorney general of Quebec will be occupied with other problems because he will be coming here in another capacity. If we have an opportunity we will bring this to his attention and have a discussion.


Gabriel Roberge: Maybe at luncheon time.


Edmund Davie Fulton: As I say, his mind will still be occupied with other matters.


[Stage Direction]
Clause agreed to.
On clause 2.
(Translation):
Raymond Pierre Eudes: Section 2 of this new bill
gives the pilot in command of an aircraft registered in Canada, while the aircraft is in flight, the same authority as a peace officer.
I wonder if it would not be desirable to extend the same powers, in similar circumstances, to the captain or commander of a ship at sea. Section 44 of the Criminal Code authorizes the captain, or master or officer in command of a vessel on a voyage to use force for the purpose of maintaining good order and discipline on the vessel. That suggestion, as far as I am concerned, would seem to complete the powers already granted to the captain of a ship, by the Criminal Code.
(Text):


Edmund Davie Fulton: This amendment, I think, will be better understood when read in conjunction with the proposed amendment contained in clause 3. The object of both clause 2 and clause 3 is to fill a gap which it is felt exists now in the criminal law of Canada with respect to jurisdiction over crimes committed on aircraft. It is my understanding that a committee of the international civil aviation organization is studying the whole question of crimes committed on aircraft with a view to recommending a code or provision which

might be adopted by all the countries which are subscribers to that organization. If these recommendations are accepted then there will be uniform measures in all the countries which subscribe, but in the meantime there is a gap in our legislation. It is to plug that gap on a unilateral basis, it is admitted, but none the less to plug a gap which we feel might be a serious one that we are acting now unilaterally in accordance with these suggested amendments.


Gabriel Roberge: I should like to address myself to clause 2. As the minister has said, clause 3 is related to this matter also.


Robert Jardine McCleave: Perhaps it would be convenient if clauses 2 and 3 were called together.


Gabriel Roberge: I was going to suggest that.


Some hon. Members:: Agreed.
On clause 3-Offences committed on aircraft.


Gabriel Roberge: Mr. Chairman, I know you will not mind if I speak in French. I have been speaking English for the last three weeks.


Azellus Denis: You do not have to ask
permission.
(Translation) :


Gabriel Roberge: Under section 2 of this bill, the intention is to add a new sub-paragraph, sub-paragraph (e), which would give the powers of a peace officer to a pilot flying an aircraft of Canadian registry according to the regulations made under the aeronautics Act, when the plane is in flight.
Now a problem arises,-I think the minister has perhaps answered this question in part: is the pilot in question a Canadian citizen or a foreigner? It is possible that an airplane of Canadian registry be flown by an airman who is not a Canadian citizen? It can also happen that a non-Canadian airplane be flown by an airman who is a Canadian citizen or a foreigner.
I shall now go on to section 3 of this bill. I find that offences or infringements of the Criminal Code may be committed by everyone who violates the provisions of the Criminal Code on an aircraft registered in Canada under the regulations, ... while the aircraft is in flight, and according to subsection (b) of section 5a, on any aircraft, while the aircraft is in flight, and this flight is to be terminated in Canada. If that person commits a criminal offence listed in the present Criminal Code-and I understand that by this new section 5a the territorial jurisdiction of magistrates or justices of
Criminal Code
peace, or of judges of the sessions of the peace is to be extended-the new provisions will apply.
I tried to sum up the two sections in a few words and found one possibility, or rather 16 possibilities, according to whether it is a Canadian aircraft starting in Canada to go elsewhere, or a Canadian aircraft starting elsewhere to come to Canada; or whether it is a non-Canadian aircraft flying from Canada to go elsewhere; or else a nonCanadian aircraft flying from elsewhere to come here; or whether it is the case of a Canadian citizen on board such an aircraft; or else a foreign aircraft coming over here or going elsewhere.
Therefore, I have discovered 16 possibilities. Those possibilities differ depending on whether the pilot is a Canadian or not. Now, I believe, that those various cases which I have just submitted to the committee are so much different cases, and several of those are not provided under this legislation. It may be, however, that those various cases are provided under international agreements, under the international aviation rules, but there is nothing in the bill to say so.
The first case that occurs to me-and I am still referring to clauses 2 and 3 under discussion-involves a Canadian citizen who boards a Canadian aircraft flying out of Canada and is piloted by a Canadian. If he commits an offence, he is subject to arrest because the pilot is a Canadian and it is a Canadian aircraft. However, where can he be brought to court? Here we have a Canadian in a Canadian craft, piloted by a Canadian, flying to a foreign land; he commits an offence on the plane. Will he be held in the foreign airport? Will he be held in custody inside the aircraft upon arrival in the foreign port? Will he be brought back to Canada, or will he be allowed to escape into this foreign country and seek asylum?
There is the second case-I hope the committee will bear with me, because I have 16-


Mr. Fortin:: We will make a special code for that, it is worth the trouble.


Gabriel Roberge: If the hon. member for Montmagny-L'Islet (Mr. Fortin) wants to have a special case, he might perhaps go to Montmagny-L'Islet where special elections are being held.
I understand that this bill-I shall get away from the subject matter, because I know I can talk law without the hon. member for Joliette-L'Assomption-Montcalm understanding a word. But when the hon. member for Joliette-L'Assomption-Montcalm talks tobacco, I keep mum.

Criminal Code
The second case refers to a Canadian citizen on board a Canadian aircraft, flying from Canada, but piloted-and the case may occur-by a non-Canadian pilot. Unless this proposed legislation, makes of a non-Canadian pilot an officer of the peace, that pilot will not be able to arrest the Canadian citizen,
i.e. the Canadian passenger who is on board and who is committing an offence against the Criminal Code. Then, an offence is committed, but the pilot may not have the culprit arrested except, as I said, if he is an officer of the peace. And as he starts in Canada to go elsewhere, he cannot be brought to court either.
In the third case, which is perhaps the same as that of my friend from Joliette-L'Assomption-Montcalm, he is, no doubt, a Canadian citizen who may be a passenger on a Canadian aircraft. The passenger starts from Europe or elsewhere to come back to this country and the plane will have a Canadian pilot. If the passenger commits some offence-I think he will not do so, but I am told that he possibly may, I don't know-but if he were to commit some offence, he could be arrested, because the pilot would be a Canadian and peace officer. He also may be indicted because he would land in Canada.
Then, there is the fourth case, that of a Canadian citizen on a Canadian aircraft coming to Canada, but piloted by a non-Canadian. In that case, the pilot, not being a Canadian, cannot, I imagine, be a peace officer because Canada probably is not authorized to name anyone a peace officer who is not a Canadian citizen.
So an offence will be committed; there will be no way of arresting the accused, yet a trial may be held. How can such a thing happen? I think the Minister of Justice should give us an explanation on this point.
Turning to the fifth case-bear with me, Mr. Chairman, I have 16-this involves a Canadian citizen travelling on an aircraft not registered in Canada-"any aircraft", it says, from any country other than Canada-and flying out of Canada with a Canadian pilot in charge. Such a situation can arise, because during the war, Canadian flyers were seen piloting British or other foreign planes. Such pilots had not yet been naturalized in the countries concerned; they still retained their Canadian citizenship.
Consequently, according to the bill now introduced and following the study I made of it, there would not be any offence and, of course, the Canadian pilot would not be empowered to arrest a person who for in-

stance would make an assault against another passenger. Moreover, there could not be any judicial proceedings.
The sixth case I want to bring to the attention of the house is perhaps a bit similar. There again, it has to do with a Canadian citizen who is travelling aboard an aircraft which is not of Canadian registry but which would be, this time, flown by a pilot who is not a Canadian citizen. Then there would not be any offence, since this airplane leaves this country for another country, and the pilot, not being a Canadian citizen, would not be empowered to arrest the individual who would commit an offence. Consequently, there would not be any trial either.
The seventh case has to do with a Canadian citizen who is traveling aboard a Canadian aircraft on its way to Canada. Subclause (b), of section 5a, provides for a similar case but the airplane is flown by a Canadian pilot. Then, there would be an offence; the Canadian pilot being a peace officer, could arrest the delinquent and, being in Canada, a trial could be held of course-under the new section-where the plane landed. And for the information of the hon. member for Montmagny-L'Islet (Mr. Fortin) paragraph 4 of section 5a provides that the plane is stopped when it stops.
Mr. Chairman, the eighth case on which I want to bring the attention of the house concerns a Canadian citizen-I know that the hon. member for Montmagny-L'Islet is never able to stop-


An hon. Member:: It is like the hon. member for Joliette-L'Assomption-Montcalm.


Gabriel Roberge: Mr. Chairman I have at least up to ten o'clock.


Edmund Davie Fulton: Mr. Chairman, perhaps the
hon. member will allow me to answer him immediately, because I am sure he has forgotten the main point, namely that the pilot must be in charge of a Canadian registered aircraft. If the aircraft is not under Canadian registration, the pilot has no authority under the bill now before us.
(Text):


Gabriel Roberge: Mr. Chairman, if I look at clause 2 of the bill-


An hon. Member:: Look at clause 3.


Gabriel Roberge: I shall look at clause 3 later, but clause 2 of the bill says that a pilot in command of an aircraft registered in Canada is a peace officer-


Edmund Davie Fulton: He is the only one who has the power to arrest anyone on his aircraft.


Gabriel Roberge: But the bill does not say whether the pilot is a Canadian citizen or a foreign citizen.


Edmund Davie Fulton: No, that is true, but the aircraft requires to be registered in Canada before the pilot has this authority. His authority is that of a peace officer, and all he has is the authority of arrest. I suggest that if any Canadian citizen wishes to board an aircraft registered in Canada, then he must be prepared to submit himself to the authority of the pilot with respect to events taking place on that aircraft. The pilot has no power to try or dispose of the case; his only authority is that of arrest for an offence. I see nothing derogatory of Canadian sovereignty. If a Canadian voluntarily boards an aircraft which is registered in Canada, then he submits himself to the authority of the pilot of that aircraft, only with respect to events taking place on that aircraft and only with respect to the power of arrest and not the power of disposing of the case.


Gabriel Roberge: I agree with that, Mr. Chairman. The pilot, whether or not he is a Canadian, has no power to try the ofEender but just the power of arrest. The point about which I am concerned, and that is why I am putting all these cases before the committee, is that our legislation as proposed is going to give a non-Canadian the power of arrest of a Canadian aboard not only a Canadian aircraft but any aircraft.


Louis Fortin: What is wrong with that?


Edmund Davie Fulton: My hon. friend should recall also that the law of the sea, which is accepted by all nations, gives the skipper of a vessel the immediate power of arrest and confinement over any passenger on his ship. With respect to aircraft, therefore, we are not doing anything more than is done now in connection with the law of the sea, but we are confining this power to aircraft registered in Canada.


Gabriel Roberge: I should like to put some more of these cases before the committee, and these cases are non-Canadian. I should like to do so in French.
(Translation):
Mr. Chairman, the case I want to point out now concerns particularly a non-Canadian citizen leaving Canada aboard a Canadian aircraft flown by a Canadian pilot. If this Canadian citizen should commit an offence, he might be put under arrest but he cannot be brought before the court for trial because he is outside Canada, unless the minister tells us that the international regulations provide that the alleged criminal may be kept under custody aboard the aircraft, near the aircraft
Criminal Code
or in the air terminal of the country he is visiting.


Louis Fortin: It is exactly the same thing as under the maritime law.


Louis-Joseph Pigeon: I do not think he is a competent lawyer.


Gabriel Roberge: The tenth case concerns a non-Canadian citizen flying from Canada aboard a Canadian aircraft which is under the command of a foreign pilot. That citizen may commit an offence and the Minister of Justice just told me that the foreign pilot would be authorized to put that non-Canadian citizen under arrest. However, I do not think any trial would be possible since the aircraft will land in a foreign country, unless the minister informs the committee that under certain international agreements that citizen who committed the offence may be taken into custody and brought back to Canada or be tried in a country other than that where the offence was committed.
Then there is the eleventh case-I urge the hon. members to be patient, I have 16 of these cases, and I have reached the eleventh. There are 5 left and I realize that we have 5 more minutes to go yet.


Edmund Davie Fulton: Hurry up! What are the other five?
(Text):


Gabriel Roberge: I am sure that the minister will be very interested to know, and I would like to go on.
(Translation):
The 11th case has to do with a non-Canadian citizen aboard a Canadian aircraft coming to Canada and piloted by a Canadian pilot. If an offence is committed, the pilot will have the power to arrest the offender and the trial might take place, because the aircraft is coming to Canada. In such a case there is no problem.
The 12th case is somewhat different; but the minister has just told us that the foreign pilot will have the powers of a peace officer. An offence is committed by a non-Canadian citizen aboard a Canadian aircraft coming to Canada under a foreign pilot. In such a case, an arrest could be made and a trial could take place in Canada.
The 13th case is a little different-


An hon. Member:: That of Montreal-St. Denis.


Gabriel Roberge: It concerns a non-Canadian citizen aboard an aircraft which is not registered in Canada, but which leaves Canada for a foreign country, under a Canadian pilot. There is no offence there, but if it were a Canadian or a non-Canadian violating the provisions of the Criminal Code, there would be an offence-


Louis Fortin: It is a foreign aircraft.

Criminal Code


Gabriel Roberge: In such a case there could be neither an arrest nor a trial.
The 14th case-it is not that of the hon. member for Joliette-L'Assomption-Montcalm
__has to do with a non-Canadian citizen
aboard a foreign aircraft leaving Canada and piloted by a foreign pilot. There again, there could be neither an offence nor an arrest, nor a trial. That situation is not a problem.
The 15th case-


An hon. Member:: Montreal-St. Denis.


Azellus Denis: Carrier pigeon.


Gabriel Roberge: Mr. Chairman, there are only three minutes to go, and I have two more cases to submit to the Minister of Justice. The 15th case concerns a non-Canadian citizen aboard an aircraft not registered in Canada but flying into Canada and piloted by a Canadian. If he commits a criminal offence he can be arrested because the pilot is a Canadian, and he can be put on trial.
According to what the minister said, the sixteenth case is no problem either. It is the last one. I think, with some imagination, we might go up to question No. 64 but this would keep us here till after ten o'clock.
The 16th case deals with a non-Canadian citizen travelling in an aircraft not registered in Canada, or registered in Canada but flown by a foreign pilot. The minister tells us that the foreign pilot could not escape the law. If the passenger were to commit some offence, he could not only be arrested but also be brought to trial.
Mr. Chairman, the Minister of Justice had some fun, and so did I. I wanted to give this illustration because, according to my understanding, there seems to be in the bill before us-


Louis-Joseph Pigeon: What do you mean by "understanding"?


Gabriel Roberge: The hon. member for
Joliette-L'Assomption-Montcalm is asking me what I mean by "understanding." I mean intelligence, and intelligence means comprehension; I therefore mean "to understand something".
I have tried to understand that section 3 of the bill, but I realized that there were certain gaps, the main one being, in my opinion, the following: a Canadian citizen or a non-Canadian commits an offence on board a Canadian aircraft or a non-Canadian air-

craft, but on board an aircraft flying from Canada, to go elsewhere-this is so complicated that it is hard to understand!


An hon. Member:: There is no possible "understanding".


Gabriel Roberge: He commits such an offence while flying from Canada to go elsewhere.
I wonder how-especially if the offence is committed on board a Canadian aircraft or on board an aircraft whose pilot is not a Canadian, such person could be brought before the courts when he is not in Canada, at the airport, or will not come back to Canada anyway.
(Text):


Edmund Davie Fulton: Mr. Chairman, I regret indeed that the hon. gentleman has so completely misunderstood the effect of this legislation, because the 16 cases to which he made reference are 16 complete non sequiturs. They do not arise out of the legislation which we have proposed here, and not one of them has any bearing on the discussion which should be before the committee.
The simple intent and effect of this legislation is to fill a gap in the present law by providing that the pilot in command of an aircraft registered under regulations made pursuant to the Aeronautics Act, which is a Canadian statute, while that aircraft is in flight shall have the power of a peace officer with respect to any crimes committed on the aircraft of which that pilot is in charge. The effect of that clause is precisely the same as the present law with respect to the situation on vessels at sea. The party of my hon. friend was in power for 22 years while the maritime law has had those provisions, and I never heard them suggest that there was any derogation of Canadian sovereignty as a result of those provisions. They were not prepared-whether by reason of ineptitude or laziness I do not know-to take the necessary action to make the same situation prevail with respect to aircraft. We are now filling the hole that my hon. friends left for 22 years.
Clause 3 of the bill is to the effect that any offence committed on an aircraft in flight, which flight terminates in Canada, shall be triable in a Canadian court. We are merely conferring a jurisdiction now lacking upon Canadian courts to try persons committing offences under the law of Canada on aircraft, the flight of which aircraft terminates in Canada. It will be noted that we are not asserting any jurisdiction over persons who are not citizens of Canada with respect to their trials unless the attorney general of Canada authorizes the prosecution. So that is the simple effect of the legislation, and it makes nonsense of the 16 cases put up by my

hon. friend, and I will not comment upon his motives for putting up these 16 cases. I will simply say that these cases, raised out of order, have no relation to the provisions of the legislation. The legislation is good legislation requested by responsible aviation associations in Canada including the Canadian pilots association, and the opposition of the hon. gentleman is, to me, incomprehensible.


Robert Jardine McCleave: Shall the clause carry?


Some hon. Members:: Ten o'clock.


Robert Jardine McCleave: The
hon. minister has just been grounded.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: May I ask the leader of the house what the business is for tomorrow and perhaps for Friday and Monday as well?


Mr. Green:: Tomorrow we will continue with consideration of the amendments to the
Business of the House Criminal Code and then take item 10, an act to amend the Prisons and Reformatories Act; then item 16, second reading of the bill to amend the Maritime Coal Production Assistant Act-I understand the resolution went through this afternoon-then item No. 2 and item No. 11 which deal with agreements between the government of Canada and the governments of New Brunswick and Nova Scotia in respect to Indian reserves. The house is sitting only tomorrow morning, so we probably will not be able to do very much business. On Thursday we will commence the estimates of the Department of National Defence and continue with those and the estimates of the Department of Defence Production.


Lionel Chevrier: After item No. 2, did the minister add another one?


An hon. Member:: No. 5.


Howard Charles Green: It is No. 5 on my list and No. 11
on the order paper.


[Stage Direction]
It being six minutes past 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. McWilliam: 1.	Were legal services engaged by the government, from outside government departments, in connection with the purchase of the Stratton property, Sack-ville, New Brunswick?
2.	If so, what is the name or names of those engaged and what were the amount or amounts, of the fees paid by the government?
Answer by: Hon. G. R. Pearkes (Minister of National Defence):
1.	Yes.
2.	The agent, who was engaged by the Department of Justice on behalf of the Department of National Defence, was Mr. Horace
B. Trites of Moncton, New Brunswick. His account has not yet been received by the Department of National Defence.


&quot;NOVA SCOTIA (S.E. COAST) AND BAY OF FUNDY PILOT&quot;
Mr. Morris: 1.	In what year was the second edition of "Nova Scotia (S.E. coast) and Bay of Fundy Pilot" published?
2.	How many supplements have been published and when?
3.	When will a third edition be published?
Answer by: Hon. Paul Comlois (Minister of Mines and Technical Surveys):
1.	Dated 1944; published 1945.
2.	Four. June, 1949; May, 1953; November, 1956; April, 1959.
3.	Manuscript in preparation. Expected to be published in 1960.



Wednesday, July 1, 1959